---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

(Mark One)

[ X ]Quarterly Report Under Section 13 Or 15(d) Of The
Securities Exchange Act Of 1934

For the quarterly period ended December 31,
2007

[ ] Transition Report Under Section 13 Or 15(d) Of The Exchange
Act

For the transition period from _____to _____

COMMISSION FILE NUMBER000-27147

NORPAC TECHNOLOGIES,
INC.(Exact name of small business issuer as specified in its
charter)

|NEVADA                                                               | 95-4705831                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

Suite 410 - 103 East Holly Street Bellingham, WA
98225(Address of principal executive offices)

(360) 201-9591(Issuer's telephone number)

N/A(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 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.Yes [ X ]No [ ]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of February
12, 2008, the issuer had 37,597,890 shares of Common Stock outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [
] No [ X ]

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PART I - FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS.
|------- | ---------------------

2

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

FINANCIAL STATEMENTS

(Unaudited)

DECEMBER 31, 2007

****

****

F-1

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|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|BALANCE SHEET                
|(unaudited)                  

|                                                              |   | December 31, |  
|------------------------------------------------------------- | - | ------------ | -
|                                                              |   | 2007         |  
|ASSETS                                                        |   |              |  
|                                                              |   |              |  
|CURRENT ASSETS:                                               |   |              |  
|Cash                                                          | $ | 397          |  
|Loans receivable,
      net of allowance of $244,882 (Note 5) |   | 244,882      |  
|Total
      Current Assets                                    |   | 245,279      |  
|                                                              |   |              |  
|AVAILABLE-FOR-SALE SECURITIES (Note 4)                        |   | 332,700      |  
|                                                              |   |              |  
|LOANS RECEIVABLE, net of allowance of $86,947 (Note 5)        |   | 86,947       |  
|                                                              |   |              |  
|                                                              | $ | 664,926      |  
|                                                              |   |              |  
|                                                              |   |              |  
|                                                              |   |              |  
|LIABILITIES
      AND STOCKHOLDERS EQUITY                    |   |              |  
|                                                              |   |              |  
|CURRENT LIABILITIES:                                          |   |              |  
|Accounts payable
      and accrued liabilities                | $ | 175,997      |  
|Loans payable (Note 7)                                        |   | 30,445       |  
|Total Current Liabilities                                     |   | 206,442      |  
|                                                              |   |              |  
|STOCKHOLDERS EQUITY (Note 9):                                |   |              |  
|Authorized:                                                   |   |              |  
|100,000,000 shares of common stock, $0.001 par value          |   |              |  
|100,000,000
      shares of preferred stock, $0.001 par value |   |              |  
|Issued and outstanding:                                       |   |              |  
|37,597,890
      shares of common stock                       |   | 37,597       |  
|Additional paid-in
      capital                              |   | 3,467,383    |  
|Deficit accumulated during the development
      stage        |   | (3,164,746   | )
|Accumulated other
      comprehensive income                  |   | 118,250      |  
|                                                              |   | 458,484      |  
|                                                              |   |              |  
|                                                              | $ | 664,926      |  

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

F-2

---

|NORPAC TECHNOLOGIES, INC.                      
|-----------------------------------------------
|(A Development Stage Company)                  
|                                               
|STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|(unaudited)                                    

|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   | Period From     |  
|---------------------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ------------ | - | - | ---------- | - | - | --------------- | -
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   | Inception       |  
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   | (April 1, 1998) |  
|                                               |   | Three Months Ended |   |   | Six Months Ended |   |   | Through      |  
|                                               |   | December 31,       |   |   | December 31,     |   |   | December 31, |  
|                                               |   | 2007               |   |   | 2006             |   |   | 2007         |   |   | 2006       |   |   | 2007            |  
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Revenues                                       | $ | -                  |   | $ | -                |   | $ | -            |   | $ | -          |   | $ | 303,000         |  
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Administrative pre-opening and                 |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|development expenses                           |   | (54,810            | ) |   | (44,406          | ) |   | (95,650      | ) |   | (78,535    | ) |   | (1,816,764      | )
|Interest expense                               |   | (145               | ) |   | -                |   |   | (145         | ) |   | -          |   |   | (679,686        | )
|Impairment of intangibles                      |   | -                  |   |   | -                |   |   | -            |   |   | -          |   |   | (24,800         | )
|Stock-based expenses                           |   | -                  |   |   | -                |   |   | -            |   |   | -          |   |   | (624,000        | )
|Realized loss on available-for-sale securities |   | -                  |   |   | -                |   |   | -            |   |   | -          |   |   | (42,325         | )
|Loss reserve on loans receivable               |   | (331,829           | ) |   | -                |   |   | (331,829     | ) |   | -          |   |   | (331,829        | )
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Loss before interest income                    |   | (386,784           | ) |   | (44,406          | ) |   | (427,624     | ) |   | (78,535    | ) |   | (3,216,404      | )
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Interest income                                |   | 12,619             |   |   | 3,485            |   |   | 24,960       |   |   | 3,485      |   |   | 51,658          |  
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Net loss                                       |   | (374,165           | ) |   | (40,921          | ) |   | (402,664     | ) |   | (75,050    | ) |   | (3,164,746      | )
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Unrealized gain (loss) on available-for-sale   |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|securities                                     |   | -                  |   |   | -                |   |   | (194,075     | ) |   | (166,350   | ) |   | 118,250         |  
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Comprehensive loss                             | $ | (374,165           | ) | $ | (40,921          | ) | $ | (596,739     | ) | $ | (241,400   | ) | $ | (3,046,496      | )
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Basic and diluted net loss per common share    | $ | (0.01              | ) |   | -                |   | $ | (0.01        | ) |   | -          |   |   |                 |  
|                                               |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|Weighted average number of outstanding         |   |                    |   |   |                  |   |   |              |   |   |            |   |   |                 |  
|shares                                         |   | 37,597,890         |   |   | 35,861,042       |   |   | 37,597,890   |   |   | 35,513,216 |   |   |                 |  

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

F-3

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|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|STATEMENTS OF CASH FLOWS     
|(unaudited)                  

|                                                                                     |   |                  |   |   |              |   |   | Period From     |  
|------------------------------------------------------------------------------------ | - | ---------------- | - | - | ------------ | - | - | --------------- | -
|                                                                                     |   |                  |   |   |              |   |   | Inception       |  
|                                                                                     |   |                  |   |   |              |   |   | (April 1, 1998) |  
|                                                                                     |   | Six Months Ended |   |   | Through      |  
|                                                                                     |   | December 31,     |   |   | December 31, |  
|                                                                                     |   | 2007             |   |   | 2006         |   |   | 2007            |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                |   |                  |   |   |              |   |   |                 |  
|Net loss                                                                             | $ | (402,664         | ) | $ | (75,050      | ) | $ | (3,164,746      | )
|Adjustments to reconcile
      net loss to net cash flows from operating activities: |   |                  |   |   |              |   |   |                 |  
|Amortization expense                                                                 |   | -                |   |   | 1,200        |   |   | 19,200          |  
|Compensation expense,
      options to nonemployees                                  |   | -                |   |   | -            |   |   | 504,000         |  
|Receipt of available-for-sale securities                                             |   | -                |   |   | -            |   |   | (268,000        | )
|Fair value of common
      stock issued over carrying amount of debt                 |   | -                |   |   | -            |   |   | 120,000         |  
|Realized loss on sales of available-for-sale
      securities                        |   | -                |   |   | -            |   |   | 42,325          |  
|Amortization of
      original issue discount                                        |   | -                |   |   | -            |   |   | 550,000         |  
|Impairment loss on intangibles                                                       |   | -                |   |   | -            |   |   | 24,800          |  
|Loss reserve on
      loans receivable                                               |   | 331,829          |   |   | -            |   |   | 331,829         |  
|Changes in operating assets and
      liabilities:                                   |   |                  |   |   |              |   |   |                 |  
|Increase in accrued
      interest receivable                                        |   | (24,960          | ) |   | (3,485       | ) |   | (51,658         | )
|Increase in accounts payable and
      accrued liabilities                           |   | 74,658           |   |   | 15,939       |   |   | 255,778         |  
|Increase in accrued
      interest payable                                           |   | 145              |   |   | -            |   |   | 127,525         |  
|Increase in accounts payable, stockholders                                           |   | -                |   |   | -            |   |   | 369,346         |  
|Increase in due
      to stockholders                                                |   | -                |   |   | -            |   |   | 20,776          |  
|Net cash flows from operating activities                                             |   | (20,992          | ) |   | (61,396      | ) |   | (1,118,825      | )
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                |   |                  |   |   |              |   |   |                 |  
|Proceeds from sale
      of available-for-sale securities                            |   | -                |   |   | -            |   |   | 11,225          |  
|Advances under loan receivable agreements                                            |   | -                |   |   | (450,000     | ) |   | (612,000        | )
|Purchase of intangibles                                                              |   | -                |   |   | -            |   |   | (44,000         | )
|Net cash flows from investing activities                                             |   | -                |   |   | (450,000     | ) |   | (644,775        | )
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                |   |                  |   |   |              |   |   |                 |  
|Collection of subscription
      receivable                                          |   | -                |   |   | -            |   |   | 10,000          |  
|Common stock issuable                                                                |   | -                |   |   | 103,000      |   |   | -               |  
|Issuance of common
      stock                                                       |   | -                |   |   | 500,000      |   |   | 1,292,269       |  
|Net proceeds from due to stockholders                                                |   | -                |   |   | -            |   |   | 348,928         |  
|Proceeds from (repayment
      of) loans payable                                     |   | 20,300           |   |   | (500         | ) |   | 30,300          |  
|Issuance of convertible notes                                                        |   | -                |   |   | -            |   |   | 82,500          |  
|Net cash flows from financing
      activities                                       |   | 20,300           |   |   | 602,500      |   |   | 1,763,997       |  
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|Increase (decrease) in cash                                                          |   | (692             | ) |   | 91,104       |   |   | 397             |  
|Cash:                                                                                |   |                  |   |   |              |   |   |                 |  
|Beginning                                                                            |   | 1,089            |   |   | 16,887       |   |   | -               |  
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|Ending                                                                               | $ | 397              |   | $ | 107,991      |   | $ | 397             |  
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|SUPPLEMENTAL CASH FLOWS INFORMATION:                                                 |   |                  |   |   |              |   |   |                 |  
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|Cash paid
      for interest                                                         | $ | -                |   | $ | -            |   | $ | 2,182           |  
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|NONCASH INVESTING AND FINANCING ACTIVITIES:                                          |   |                  |   |   |              |   |   |                 |  
|                                                                                     |   |                  |   |   |              |   |   |                 |  
|Stock issued for amount
      due to stockholders                                    | $ | -                |   | $ | -            |   | $ | 233,125         |  
|Stock issued for accounts payable                                                    | $ | -                |   | $ | -            |   | $ | 10,000          |  
|Conversion of accounts
      payable, stockholders and due to stockholders           |   |                  |   |   |              |   |   |                 |  
|and issuance of subscription
      receivable for convertible notes                  | $ | -                |   | $ | -            |   | $ | 467,500         |  
|Stock issued for conversion
      of notes payable                                   | $ | -                |   | $ | -            |   | $ | 550,000         |  
|Stock issued for accrued interest on notes
      payable                             | $ | -                |   | $ | -            |   | $ | 127,381         |  

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

F-4

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|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|1. | History and Organization of the Company
|-- | ---------------------------------------

NorPac Technologies, Inc. (the “Company”)
  was originally incorporated on April 1, 1998 in the State of Minnesota. On July
  12, 2004 the Company was reorganized and became a Nevada corporation. The Company
  was formed to act as a holding company for manufacturing companies and since
  inception, has devoted its efforts to raising capital and pre-opening activities.
  The Company previously owned a patent for a self-chilling beverage container
  and related component parts (the “Cool Can Technology”) in the United
  States and certain foreign countries. Since the patents for the Cool Can Technology
  have expired, management has decided to abandon the development of the Cool
  Can Technology and is in the process of reorganizing the Company’s business
  and is seeking and evaluating alternative business opportunities.

On November 7, 2006, the Company entered
  into an Agreement and Plan of Merger (Merger Agreement) for a merger
  with Nextdigital Corp. (Nextdigital), a Nevada company engaged in
  the provision of smart card solutions to the international marketplace. Under
  the terms of the Merger Agreement, the Company would have merged with Nextdigital
  and changed its name to Nextdigital Corporation. On February 15, 2007 the Company
  received notice from Nextdigital that it was electing not to proceed with the
  Merger Agreement because it believed its shareholders would not approve it.
  During the year ended June 30, 2007, the Company made advances to Nextdigital
  amounting to $612,000 under a series of unsecured loan agreements. At December
  31, 2007, management determined that the collectibility of the loans was in
  doubt and based on its best estimate, recorded a loss reserve equal to 50% of
  the total loans receivable and accrued interest receivable totaling $331,829.
  Also on December 31, 2007, the Company ceased accruing interest on the loans
  receivable (see Note 5).

The Company is considered to be in the
  development stage. The accompanying financial statements represent those of
  a development stage enterprise and therefore, are subject to the usual business
  risks of development stage companies. The Company has had no significant revenue
  from operations. Research and development costs are expensed as incurred.

These financial statements have been
  prepared in conformity with accounting principles generally accepted in the
  United States for interim financial information. The accompanying financial
  statements do not include all information and footnote disclosures required
  for a complete presentation prepared under accounting principles generally accepted
  in the United States. The interim period financial statements should be read
  together with the audited financial statements and the accompanying notes for
  the year ended June 30, 2007 included in the Companys annual report on
  form 10-KSB. In the opinion of management, all adjustments (consisting solely
  of normal recurring accruals) considered necessary for a fair presentation of
  financial position, results of operations and cash flows as of December 31,
  2007 and for all periods presented have been included. Interim results for the
  period ended December 31, 2007 are not necessarily indicative of the results
  that may be expected for the fiscal year as a whole.

F-5

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|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|2. | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The accompanying financial statements have
        been prepared in conformity with accounting principles generally accepted
        in the United States, which contemplate continuation of the Company as
        a going concern. However, the Company has sustained substantial losses
        and is still in the development stage. These financial statements do not
        include any adjustments that might result from this uncertainty.                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company intends to arrange for the sale
        of additional shares of stock to obtain additional operating capital for
        at least the next twelve months. There can be no assurance the Company
        will be able to raise the necessary capital to continue in business.                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|3. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The financial statements of the Company have
        been prepared in conformity with accounting principles generally accepted
        in the United States and are stated in U.S. dollars. The significant accounting
        policies adopted by the Company are as follows:                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The preparation of financial statements in
        conformity with accounting principles generally accepted in the United
        States requires management to make estimates and assumptions that affect
        the reported amount of assets and liabilities and the disclosure of contingent
        assets and liabilities at the date of the financial statements and the
        reported amount of revenues and expenses during the reporting period.
        Actual results could differ from these estimates.                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The functional currency of the Company is
        the U.S. dollar. Monetary assets and liabilities denominated in a foreign
        currency are translated at the exchange rate in effect at the balance
        sheet date while non-monetary assets and liabilities are translated at
        historical rates. Revenue and expense items denominated in a foreign currency
        are translated at exchange rates prevailing when such items are recognized
        in the statement of operations. Exchange gains and losses arising on transactions
        denominated in foreign currency are included in the statement of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company considers cash held at banks and
        all highly liquid investments with original maturities of three months
        or less to be cash and cash equivalents. As of December 31, 2007, cash
        and cash equivalents consists of cash only.                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Loans receivable are reported at the outstanding
        principal balance adjusted for any charge-offs and reserve for loan losses.
        Management recorded a reserve amounting to $331,829 for loans receivable
        and accrued interest receivable at December 31, 2007. When determining
        the reserve for loan losses, management considers if any events or changes
        in circumstances indicate uncollectibility. When a loan is                                                                                                                                                                                      

F-6

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|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | determined to be uncollectible, it is charged
        against the loss reserve. Loans are not collateralized. Because of inherent
        uncertainties in estimating the reserve for loan losses, it is at least
        reasonably possible that the estimates used will change in the near term.
        Interest on loans is recognized when earned. Interest on loans is generally
        not recognized when loans become past due. Thereafter, no interest is
        taken into income until such time as the borrower demonstrates the ability
        to resume payments. There were no past due loans at December 31, 2007.
        Based on current loan interest rates, management does not believe exposure
        to interest rate sensitivity is significant. Management periodically reviews
        loans outstanding to determine if any loans are impaired. Impaired loans,
        if any, are adjusted to estimated net realized value through the loan
        loss reserve. At December 31, 2007, loans receivable amounting to $306,000
        were on nonaccrual status.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Intangible assets are recorded at cost. Amortization
        is calculated using the straight-line method over the useful lives of
        the assets. In accordance with Statement of Financial Accounting Standards
        (SFAS) 144, Accounting for the Impairment or Disposal
        of Long-Lived Assets, the Company reviews all long-lived assets
        for impairment whenever events or changes in circumstances indicate that
        the carrying amount of an asset may not be recoverable. Recoverability
        of assets to be held and used is measured by a comparison of the carrying
        amount of an asset to future net cash flows expected to be generated by
        the assets. If such assets are considered to be impaired, the impairment
        recognized is measured by the amount by which the carrying amount of the
        assets exceeds the fair value of the assets. Assets to be disposed of
        are reported at the lower of the carrying amount or fair value less costs
        to sell.                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Deferred taxes are recorded using the liability
        method. A deferred tax asset or liability is recorded for all temporary
        differences between financial and tax reporting and net operating loss
        carryforwards. Deferred tax expenses (benefit) result from the net change
        during the period of deferred tax assets and liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Deferred tax assets are reduced by a valuation
        allowance when, in the opinion of management, it is more likely than not
        that some portion or all of the deferred tax assets will not be realized.
        Deferred tax assets and liabilities are adjusted for the effects of changes
        in tax laws and rates on the date of enactment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company's financial instruments consist
        of cash, available-for-sale securities, loans receivable, accounts payable
        and accrued liabilities and loans payable. It is management's opinion
        that the Company is not exposed to significant interest, currency or credit
        risks arising from these financial instruments. The fair value of these
        financial instruments, other than available-for-sale securities, approximates
        their carrying values because of the short-term nature of these financial
        instruments. Available-for-sale securities are recorded at their fair
        market values determined by quoted market prices.                                                                                                                                                                                                                                                                                                                                                                                                     

F-7

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company expenses advertising costs as
        incurred. There were no advertising expenses incurred by the Company for
        the periods ended December 31, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Effective January 1, 2006, the Company adopted
        SFAS123(R), "Share-Based Payment," and related interpretations
        which superseded Accounting Principles Board (APB) Opinion
        25, Accounting for Stock Issued to Employees. SFAS
        123(R) requires that all stock-based compensation be recognized as an
        expense in the financial statements and that such cost be measured at
        the fair value of the award. This statement was adopted using the modified
        prospective method, which requires the Company to recognize compensation
        expense on a prospective basis. The fair value of stock-based compensation
        is determined using the Black-Scholes valuation model, which is consistent
        with the Companys valuation techniques previously utilized for stock-based
        awards in footnote disclosures required under SFAS 123, Accounting
        for Stock-Based Compensation. Prior to January 1, 2006, the
        Company accounted for share-based compensation under the recognition and
        measurement provisions of APB Opinion 25, as permitted by SFAS 123. Under
        APB Opinion 25, compensation expense was recorded using the intrinsic
        method where compensation expense under fixed term option plans was recorded
        at the date of grant only to the extent that the market value of the underlying
        stock at the date of grant exceeded the exercise price. As a result of
        adopting SFAS 123(R) on January 1, 2006, the Companys net loss for
        the period ended December 31, 2007 and 2006 were no different than if
        it had continued to account for stock-based compensation under SFAS 123.
        Basic and diluted loss per share for the periods ended December 31, 2007
        and 2006 were no different than if it had continued to account for share-based
        compensation under SFAS 123.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The following table shows the pro forma effect
        on net loss prior to the adoption of SFAS123(R) had compensation expense
        been determined based on the fair value at the award grant date, in accordance
        with SFAS 123:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

| |                          |   |                     |  
| | ------------------------ | - | ------------------- | -
| |                          |   | Period From         |  
| |                          |   | Inception (April 1, |  
| |                          |   | 1998) Through       |  
| |                          |   | December 31,        |  
| |                          |   | 2007                |  
| |                          |   |                     |  
| | Net loss                 | $ | (2,832,917          | )
| |                          |   |                     |  
| | Pro forma net loss       | $ | (2,880,917          | )
| |                          |   |                     |  
| | Stock based compensation |   |                     |  
| | As reported              | $ | 504,000             |  
| | Proforma                 | $ | 552,000             |  

There were no options granted or vested
  during the three and six months ended December 31, 2007 and 2006.

F-8

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Basic net loss per share is computed by dividing
        the net loss for the period by the weighted average number of shares of
        common stock outstanding during the period. Diluted earnings per share
        takes into consideration shares of common stock outstanding (computed
        under basic earnings per share) and potentially dilutive securities. As
        of December 31, 2007, the 432,500 warrants outstanding have been excluded
        from diluted net loss per common share as they were anti-dilutive.                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company has adopted SFAS 130, Reporting
        Comprehensive Income, which establishes guidelines for the reporting
        and display of comprehensive income (loss) and its components in financial
        statements. Comprehensive loss consists of the Companys net loss
        and unrealized gain (loss) on available-for-sale securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company is a development stage company
        as defined in SFAS 7, Accounting and Reporting by Development
        Stage Enterprises,as it is devoting substantially all of its
        efforts to establish a new business and planned principal operations have
        not yet commenced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In July 2006, the FASB issued FIN 48, Accounting
        for Uncertainty in Income Taxes-an Interpretation of SFAS 109.This
        Interpretation provides guidance for recognizing and measuring uncertain
        tax positions, as defined in SFAS 109, Accounting for Income
        Taxes.FIN 48 prescribes a threshold condition that a tax position
        must meet for any of the benefit of an uncertain tax position to be recognized
        in the financial statements. Guidance is also provided regarding derecognition,
        classification and disclosure of uncertain tax positions. FIN 48 is effective
        for fiscal years beginning after December 15, 2006. The Company adopted
        FIN 48 effective July 1, 2007 and there was no impact on financial position,
        results of operations or cash flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In September 2006, the FASB issued SFAS 157,
        Fair Value Measurements. SFAS 157 establishes a framework
        for measuring the fair value of assets and liabilities. This framework
        is intended to provide increased consistency in how fair value determinations
        are made under various existing accounting standards which permit, or
        in some cases require, estimates of fair market value. SFAS 157 is effective
        for fiscal years beginning after November 15, 2007, and interim periods
        within those fiscal years. Earlier application is encouraged, provided
        that the reporting entity has not yet issued financial statements for
        that fiscal year, including any financial statements for an interim period
        within that fiscal year.                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In February 2007, the FASB issued SFAS 159,
        The Fair Value Option for Financial Assets and Financial Liabilities,which permits an instrument election to account for selected financial
        assts and liabilities at fair value. SFAS 159 is effective for fiscal
        years beginning after November 15, 2007, with early adoption permitted
        as of January 1, 2007. The Company is currently evaluating the impact
        of SFAS 159 will have on the Statements of Operations and Balance Sheet.                                                                                                                                                                                                                                                                                                                         

F-9

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|4. | Available-for-sale Securities
|-- | -----------------------------

Investments held by the Company are classified
  as available-for-sale securities. Available-for-sale securities are reported
  at fair value with all unrealized gains or losses included in other comprehensive
  income (loss). The fair value of the securities was determined by quoted market
  prices of the underlying security. For purposes of determining gross realized
  gains or losses, the cost of available-for-sale securities is based on specific
  identification.

| |                                       |   |                  |  |   |            |  |   |            |  |   |         | 
| | ------------------------------------- | - | ---------------- |  | - | ---------- |  | - | ---------- |  | - | ------- | 
| |                                       |   |                  |  |   | Gross      |  |   | Gross      |  |   |         | 
| |                                       |   | Aggregate        |  |   | unrealized |  |   | unrealized |  |   |         | 
| |                                       |   | fair
      value |  |   | gains      |  |   | losses     |  |   | Cost    | 
| |                                       |   |                  |  |   |            |  |   |            |  |   |         | 
| | Equity securities  December 31, 2007 | $ | 332,700          |  | $ | 118,250    |  | $ | -          |  | $ | 214,450 | 

In November 2002, the Company received
  securities valued at $63,000. Pursuant to the license agreement described in
  Note 14, the Company received additional securities valued at $175,000 in November
  2003, and securities valued at $30,000 in January 2006. Securities with a cost
  of $53,550 were sold prior to July 1, 2005. There were no sales of available-for-sale
  securities during the three and six months ended December 31, 2007 and 2006.

The Companys net unrealized holding
  loss was $0 and $0 for the three months ended December 31, 2007 and 2006, respectively
  and $(194,075) and ($166,350) for the six months ended December 31, 2007 and
  2006, respectively. The reclassification adjustment was $0 and $0 for the three
  months ended December 31, 2007 and 2006, respectively and $0 and $0 for the
  six months ended December 31, 2007 and 2006, respectively and $40,800 for the
  period from inception through December 31, 2007. On an ongoing basis, the Company
  evaluates its investment in available-for-sale securities if a decline in fair
  value is other than temporary. There have been no other-than-temporary declines
  in fair value through December 31, 2007.

At December 31, 2007, the Company held
  5,545,000 common shares of Balsam Ventures, Inc. (Balsam) for an
  ownership percentage of 15.3% . This investment in Balsam was not accounted
  for under the equity method in accordance with APB Opinion 18, The
  Equity Method of Accounting for Investments in Common Stock,because
  the Company is unable to exercise significant influence over the operating and
  financial policies of the investee.

F-10

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|5. | Loans Receivable
|-- | ----------------

During the year ended June 30, 2007,
  several unsecured loans were granted to Nextdigital, totaling $612,000. The
  loans bear interest at 8% per annum and are due as follows:

| |                             |   |           |  |  |                   | 
| | --------------------------- | - | --------- |  |  | ----------------- | 
| | Grant Date                  |   | Principal |  |  | Due Date          | 
| |                             |   |           |  |  |                   | 
| | November 7, 2006            | $ | 100,000   |  |  | November 7, 2008  | 
| | November 20, 2006           |   | 75,000    |  |  | November 20, 2008 | 
| | December 4, 2006            |   | 275,000   |  |  | December 4, 2008  | 
| | January 30, 2007            |   | 162,000   |  |  | January 30, 2009  | 
| |                             | $ | 612,000   |  |  |                   | 
| | Accrued Interest receivable |   | 51,658    |  |  |                   | 
| |                             | $ | 663,658   |  |  |                   | 

Interest income related to these loans
  receivable totaled $12,619 and $3,485 for the three months ended December 31,
  2007 and 2006, respectively and $24,960 and $3,485 for the six months ended
  December 31, 2007 and 2006, respectively and $51,658 for the period from inception
  through December 31, 2007.

As discussed in Note 1, the Merger Agreement
  with Nextdigital was terminated. The Company is presently negotiating with Nextdigital
  the repayment of all amounts loaned to Nextdigital. Principal payments under
  all loan agreements are due during the year ended June 30, 2009.

At December 31, 2007, management determined
  that the collectibility of the loans was in doubt and based on its best estimate,
  recorded a loss reserve equal to 50% of the total loans receivable and accrued
  interest receivable totaling $331,829. Also on December 31, 2007, the Company
  ceased accruing interest on the loans receivable.

F-11

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|6. | Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | A United States patent for a self-chilling beverage
        container and related component parts was obtained by a founding stockholder
        on March 11, 1997. During 1998, the patent and patent holder rights thereunder
        were sold to the Company for $1. Subsequent costs in June 1999 of $24,000
        to file foreign patent applications were similarly capitalized. Since
        the patents have expired, an impairment loss of $4,800 was recorded in
        the year ended June 30, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In April 2001, the Company acquired a patent pending
        from certain stockholders which expanded on the patent described above.
        The acquisition agreement required the payment by the Company to the stockholders
        of $20,000. In addition, the Company was to issue to the stockholders:
        (i) 7,500 shares of the Companys common stock upon the grant of
        a patent in connection with the acquired patent pending; and (ii) an additional
        4,500 shares for each country in respect of which the Company grants a
        license of the acquired technology, for the first ten countries, and 3,000
        shares for each additional country, to a maximum of 75,000 shares under
        the acquisition agreement. The Company was to also pay an ongoing royalty
        to the stockholders based on sales of products incorporating the technology
        as follows: (i) 4.5% of gross profits achieved by the Company on products
        incorporating the technology; and (ii) 15% of any licensing revenues or
        royalty payments earned by the Company on licenses of the acquired technology.
        The Company had agreed to use its best efforts to commercialize the acquired
        technology and to apply to the United States Patent Office for a grant
        of a patent relating to the patent pending. The agreement was cancelled
        due to the Companys default under the agreement on June 14, 2003
        and as such, an impairment loss of $20,000 was recorded for the year ended
        June 30, 2003.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|7. | Loans Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the six months ended December 31, 2007, two loans
        were granted from a third party company for $10,000 and $2,500. The loans
        are unsecured, bear interest at 10% and are due on demand. Interest expense
        accrued for the three and six months ended December 31, 2007 totaled $104
        and $104, respectively and $104 for the period from inception through
        December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended June 30, 2007, a loan was granted
        from a third party company for $10,000. During the six months ended December
        31, 2007, a second loan was granted from the same third party company
        for $5,000. Both loans are unsecured, non-interest bearing, and due on
        demand. During the six months ended December 31, 2007, a third loan was
        granted from the same third party company for $2,800. The loan is unsecured,
        bears interest at 10% and is due on demand. Interest expense accrued for
        the three and six months ended December 31, 2007 totaled $41 and $41,
        respectively and $41 for the period from inception through December 31,
        2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended June 30, 2006, several loans were
        granted from and repaid to a third party. The balance due at June 30,
        2006 was $500. During the year ended June 30, 2007, the loan was repaid.
        The loans were unsecured, non-interest bearing, and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

F-12

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|8. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Consulting fees paid to an officer and director totaled
        $3,000 and $3,000 for the three months ended December 31, 2007 and 2006,
        respectively and $6,000 and $6,000 for the six months ended December 31,
        2007 and 2006, respectively. Consulting fees paid to an officer and director
        from inception through December 31, 2007 totaled $20,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Consulting fees paid to a former officer and director
        from inception through December 31, 2007 totaled $588,000. During the
        period of inception through December 31, 2007, a former officer and director
        settled accounts payable of $146,330 in exchange for 187,500 common shares
        of the Company with a fair value of $28,125. The difference between the
        carrying amount of the accounts payable and the fair value of the common
        shares issued of $118,205 was recorded as an increase to additional paid
        in capital.                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | At December 31, 2007, included in accounts payable and
        accrued liabilities was $53, owed to a former officer and director of
        the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|9. | Stockholders Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Board of Directors has the power and authority to
        fix by resolution any designation, class, series, voting power, preference,
        right, qualification, limitation, restriction, dividend, time and place
        of redemption, and conversion right with respect to any stock of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On November 30, 2006, the Company issued 2,000,000 shares
        of common stock at a price of $0.25 per share for total proceeds of $500,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On January 5, 2007, the Company issued 432,500 units
        at a price of $0.40 per unit for total proceeds of $173,000. Each unit
        consists of one share of the Companys common stock and one share
        purchase warrant. Each warrant entitles the holder to purchase an additional
        share of the Companys common stock at a price of $0.40 per share
        and expires January 5, 2008. The relative fair value of the common stock
        was estimated to be approximately $103,800 and the relative fair value
        of the warrants was estimated to be approximately $69,200 as determined
        based on the relative fair value allocation of the proceeds received.
        The warrants were valued using the Black-Scholes option pricing model.
        The warrants expired on January 5, 2008.

F-13

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|10. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company adopted a Stock Option Plan on June 21,
        2000, which authorizes an initial 3,600,000 shares for issuance of incentive
        and non-qualified stock options to non-employees. The maximum aggregate
        number of shares that may be optioned and sold under the Plan may increase
        each quarter upon conditions outlined in the Plan. Options expire as determined
        by the Company but in no event later than ten years after the date the
        options are granted.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Information relating to stock options is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                                           |  |           |   |   |          | 
| | --------------------------------------------------------- |  | --------- | - | - | -------- | 
| |                                                           |  | Number of |   |   | Weighted | 
| |                                                           |  | Shares    |   |   | Average  | 
| |                                                           |  |           |   |   | Exercise | 
| | Under option, June 30, 2001                               |  | 177,500   |   | $ | 7.50     | 
| | Granted                                                   |  | 30,000    |   |   | 0.50     | 
| | Exercised  conversion of
      debt and accounts payable |  | (55,000   | ) |   | 1.50     | 
| | Cancelled                                                 |  | (27,500   | ) |   | 3.00     | 
| | Under option, June 30, 2002                               |  | 125,000   |   |   | 2.65     | 
| | Expired                                                   |  | (100,000  | ) |   | 2.20     | 
| | Cancelled                                                 |  | (25,000   | ) |   | 3.00     | 
| | Under option, June 30, 2003                               |  | -         |   |   | -        | 
| | Granted                                                   |  | -         |   |   | -        | 
| | Expired                                                   |  | -         |   |   | -        | 
| | Cancelled                                                 |  | -         |   |   | -        | 
| | Under option, December 31, 2007                           |  | -         |   |   | -        | 
| |                                                           |  |           |   |   |          | 

During the year ended June 30, 2002,
  based on the decrease in the market price of the Companys common stock,
  the Company re-priced its stock options. There was no accounting consequence
  or compensation for the options repriced. All outstanding options were cancelled
  or expired during the year ended June 30, 2003. On October 10, 2007, the Company
  terminated the 2000 Stock Option Plan.

|11. | Warrants
|--- | --------

The following is a summary of warrants
  outstanding at December 31, 2007:

| |                 |         |             |                |                       
| | --------------- | ------- | ----------- | -------------- | ----------------------
| | Date            | Issued  | Outstanding | Exercise Price | Expiry Date           
| |                 |         |             |                |                       
| | January 5, 2007 | 432,500 | 432,500     | $ 0.40         | January 5, 2008       
| |                 |         |             |                | (subsequently expired)

F-14

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|12. | Segment Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Companys business is considered as operating
        in one segment based upon the Companys organization structure, the
        way in which the operation is managed and evaluated, the availability
        of separate financial results and materiality considerations.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|13. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | For income tax purposes, pre-opening costs are generally
        deferred and amortized to expense in future tax returns. Accordingly,
        the Company has no significant tax loss carryforwards. For financial reporting
        purposes, realization of the value of book versus tax temporary differences
        is dependent upon the Company generating sufficient taxable income in
        future years. Because of the development stage nature of the Company,
        lack of operating history and potential future stock sales (which may
        limit the value of loss carryforwards), management has eliminated the
        deferred tax value of pre-opening costs with a valuation allowance.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The benefit for income taxes differs from the amount
        computed by applying the U.S. federal income tax rate to loss before income
        taxes for the three and six months ended December 31, as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                       |   |                    |   |   |                  |  
| | ------------------------------------- | - | ------------------ | - | - | ---------------- | -
| |                                       |   | Three Months Ended |   |   | Six Months Ended |  
| |                                       |   | December 31,       |   |   | December 31,     |  
| |                                       |   | 2007               |   |   | 2006             |  
| | Expected tax benefit at               |   |                    |   |   |                  |  
| | statutory rate                        | $ | (14,530            | ) | $ | (13,913          | )
| | State tax effects                     |   | (2,564             | ) |   | (2,455           | )
| | Increase in valuation
      allowance |   | 17,094             |   |   | 16,368           |  
| |                                       |   |                    |   |   |                  |  
| |                                       | $ | -                  |   | $ | -                |  

Tax law provides for limitation on the
  use of future loss carryovers should significant ownership changes occur.

The following is a summary of deferred
  taxes at December 31:

| |                            |   |            |  
| | -------------------------- | - | ---------- | -
| |                            |   | 2007       |  
| |                            |   |            |  
| | Deferred tax assets:       |   |            |  
| | Deferred pre-opening costs | $ | (1,166,423 | )
| | Valuation allowance        |   | 1,166,423  |  
| |                            |   |            |  
| |                            | $ | -          |  

F-15

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|14. | License Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company has entered into an exclusive
        licensing agreement (the "Agreement") with Balsam Ventures, Inc. ("Balsam"),
        dated for reference November 30, 2003, granting Balsam the exclusive right
        and license (the License), for a period of 40 years, to use,
        commercialize and exploit the Companys proprietary trademarks, patents,
        process information, technical information, designs and drawings associated
        with the Companys self-chilling beverage container technology (the
        "Cool Can Technology") including the right to manufacture, use and sell
        apparatus and products embodying the Cool Can Technology within the countries
        comprising the European Union and the Republic of China. Balsam also has
        the right to sub- license the right to manufacture, use and sell products
        embodying the Cool Can Technology.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The consideration for the Agreement was as
        follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | On January 14, 2006, the Company entered into
        an agreement (the Extension Agreement) with Balsam, to amend
        the terms of the Agreement dated November 30, 2003. Under the Extension
        Agreement, the Company agreed to extend the date on which Balsam is required
        to commence paying the minimum royalty payments to January 15, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The consideration for the Extension Agreement
        was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Cool Can Technology and the Company patents
        and trademarks included in the Cool Can Technology remain the property
        of the Company subject to the terms of the License granted under the Agreement.
        However, Balsam has a right of first refusal to acquire the intellectual
        property subject to the Agreement should the Company seek to dispose of
        the Cool Can Technology during the currency of the Agreement. The Agreement
        supersedes all prior arrangements and agreements between the Company and
        Balsam in respect of the Cool Can Technology.                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | In June, 2007, the Company notified Balsam
        that its intellectual property rights to the Cool Can Technology possibly
        expired. As a result, Balsam suspended payment of the minimum royalty
        amounts required under the Agreement effective April 1, 2007. As the patents
        for the Cool Can Technology have expired, Balsam has advised the Company
        that they intend to terminate the Agreement. The Company is currently
        negotiating with Balsam to settle their rights under the Agreement.                                                                                                                                                                                                                                                                                                                                                                                   

F-16

---

|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|(unaudited)                  

|15. | Subsequent Events
|--- | -----------------

On January 3, 2008, the Company entered
  into a Share Exchange Agreement (the “Exchange Agreement”) with
  Cellynx, Inc. (“Cellnyx”), a California company engaged in the development
  of plug-and-play cell phone signal-amplification technology. Under the terms
  of the Exchange Agreement, the Company will issue shares of the Company’s
  common stock for each Cellnyx shareholder’s pro-rata portion of the total
  Cellynx shares. In the event that there is an insufficient number of authorized
  but unissued Company common stock to issue to the Cellnyx shareholders, the
  Company shall issue all available authorized but unissued common stock among
  the Cellnyx shareholders in a pro-rata manner. The Company shall then establish
  a class of series A preferred stock and issue to the Cellnyx shareholders that
  number of Company series A preferred stock that may be convertible into the
  remaining equivalent common stock. Immediately after closing, the Company shall
  amend its articles of incorporation to increase the authorized number of shares
  of common stock to 200,000,000 or such other number sufficient to enable the
  Cellnyx shareholders to convert their series A preferred stock into common stock.
  The Company’s common shares outstanding before closing shall equal 30.1%
  of the outstanding shares of the Company’s common stock at the time of
  closing. Closing of the Exchange Agreement is subject to certain conditions,
  including delivery of required financial statements by Cellynx and completion
  of due diligence by the Company and Cellynx.

On February 3, 2008, the Company entered
  into a Consulting Agreement (the Consulting Agreement) with Mountain
  View Holdings, LLC (Mountain View), a Colorado Limited Liability
  Company. Under the terms of the Consulting Agreement, Mountain View is to be
  paid $1,500 per month in consideration of which Mountain View is to provide
  the Company with various investor relation services for a six month period ending
  on August 31, 2008. The Consulting Agreement shall automatically renew in 30-day
  period intervals thereafter. Either party shall have the right to terminate
  this Consulting Agreement, beginning in the first monthly renewal period, upon
  15 days advance written notice. In addition to the monthly consulting fee, the
  Company is required to pay Mountain View a transaction fee as a result of any
  transaction between the Company and any other party introduced or put into contact
  with by Mountain View whereby a sale of stock, issuance of debt, sale of assets,
  consolidation or other similar transaction or series or combination of transactions
  occurs. The transaction fee shall be equal to 3% of the dollar value of the
  transaction, which Is based on the total value of the consideration, securities,
  property, business, assets or other value given, paid, transferred or contributed
  by, or to, the Company.

F-17

---

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN
      OF OPERATION.
|------- | ----------------------------------------------------------------

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 this Item 2 "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 (the SEC), particularly our Annual
Reports on Form 10-KSB, our Quarterly Reports on Form 10-QSB and our Current
Reports on Form 8-K.

As used in this Quarterly Report, the terms "we," "us," "our,
and Norpac mean Norpac Technologies, Inc. unless otherwise indicated. All
dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise
stated.

CORPORATE BACKGROUND

We were incorporated under the laws of the State of Minnesota
on April 1, 1998, under the name Cool Can Technologies, Inc. Effective July
12, 2004, we merged (the Merger) with NorPac Technologies, Inc., our wholly
owned subsidiary (Nevada Sub), for the purpose of reincorporating our company
in Nevada. The Merger was completed effective July 12, 2004, with Nevada Sub as
the surviving corporation. Upon completion of the Merger, our name was changed
to NorPac Technologies, Inc.

Until recently, we had been in the business of developing and
marketing a proprietary technology for self-chilling beverage containers (the
Cool Can Technology). However, our patents for the Cool Can Technology have
expired. As a result, our management has decided to abandon the development of
the Cool Can Technology.

Share Exchange Agreement

On January 3, 2008, we entered into a share exchange agreement
(the Exchange Agreement) with Cellynx, Inc., a California corporation
(Cellynx), and each of the shareholders of Cellynx (each, a Cellynx
Shareholder, and collectively, the Cellynx Shareholders).

Upon consummation of the transactions set out in the Exchange
Agreement (the Share Exchange), each of the Cellynx Shareholders will transfer
the shares of Cellynx owned by them, which collectively constitutes all of the
issued and outstanding capital stock of Cellynx (the Cellynx Shares), to us in
exchange for newly issued shares of our common stock (the New Norpac Shares).
The total number of New Norpac Shares to be issued to the Cellynx Shareholders
will be determined on the basis that our existing shareholders, immediately
prior to closing of the Share Exchange, are to own 30.1% of the outstanding
shares of our common stock upon completion of the Share Exchange. Each Cellynx
Shareholder will receive that number of New Norpac Shares as is proportionate to
the number of Cellynx Shares owned by them.

3

---

In the event that we do not have a sufficient number of
authorized but unissued shares of common stock available to complete the Share
Exchange in accordance with the prior paragraph, then we will issue to the
Cellynx Shareholders all of our available authorized but unissued shares of
common stock pro rata to the number of Cellynx Shares owned by them. Our Board
of Directors will then establish a class of Series A Preferred Stock that shall
be convertible into shares of our common stock. We will then issue shares of
Series A Preferred Stock that will be convertible into the remainder of the
shares of our common stock to which the Cellynx Shareholders are entitled. After
closing, we will then amend our Articles of Incorporation to increase our
authorized common stock to 200,000,000 shares, or such other number as shall be
sufficient to enable each of the Cellynx Shareholders to convert their shares of
Series A Preferred Stock into shares of our common stock, and to permit all
options, warrants and convertible notes to purchase or acquire Cellynx Shares to
be exercised or converted into shares of our common stock.

All options, warrants or convertible notes to purchase or
acquire Cellynx Shares will be converted into options, warrants or convertible
notes to purchase or acquire shares of our common stock in the same proportion
at which the outstanding Cellynx Shares will be converted into shares of our
common stock upon closing of the Share Exchange.

Closing of the Share Exchange is subject to a number of terms
and conditions including, but not limited to, the following:

| | (a) | the delivery by Cellynx of those audited and, if
      necessary, unaudited financial statements as are necessary to allow us to
      meet our reporting obligations under the Securities Exchange Act of 1934
      (the Exchange Act);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                            
| | (b) | Cellynx having obtained an aggregate of $1.8 million in
      equity financing as follows:                                                                                                                                                 
| |     |                                                                                                                                                                                                                                            
| |     | $100,000 on or before January 15, 2008 $225,000 on or
      before January 25, 2008 $225,000 on or before February 8, 2008
      $1,250,000 on or before March 18, 2008                                                                    
| |     |                                                                                                                                                                                                                                            
| | (c) | Cellynx and us having completed our respective due
      diligence investigations into the affairs of the other to each of our
      reasonable satisfaction.                                                                              

The Exchange Agreement may be terminated: (i) by the mutual
consent of the parties, (ii) by either party if the transaction has not been
consummated for any reason by April 30, 2008, (iii) by either party if the
transaction is prohibited by government order or action, or (iv) by either party
upon a material breach of any representation, warranty, covenant or agreement by
the other party, or if any representation or warrant of the other party shall
have become materially untrue.

Upon the closing of the Share Exchange, Mr. John Thornton will
resign as Norpacs sole executive officer and director and Mr. Tareq Risheq and
Mr. Daniel Ash will be appointed as officers and directors of Norpac.

If we are able to complete the transactions contemplated in the
exchange Agreement, then:

| | (a) | we will acquire the business and operations of Cellynx,
      with Cellynx becoming our wholly-owned subsidiary, and our principal
      business activities will consist of the Cellynx business;
  and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4

---

| | (b) | the former shareholders of Cellynx will own approximately
      70% of our issued and outstanding common stock.
| | --- | ---------------------------------------------------------------------------------------------------------------

Closing of the Share Exchange is expected to take place on or
about March 18, 2008, or such other date as may be mutually agreed upon, however
there is no assurance that the Share Exchange will be completed as contemplated
in the Exchange Agreement, or at all.

PLAN OF OPERATION

Until recently, we had been in the business of developing and
marketing the Cool Can Technology. However, our patents for the Cool Can
Technology have expired. As a result, our management has decided to abandon the
development of the Cool Can Technology. We are currently in the process of
reorganizing our business. We have entered into the Exchange Agreement with
Cellynx and the shareholders of Cellynx. If the transactions set out in the
Exchange Agreement are completed as contemplated, Cellynx will become our wholly
owned subsidiary, and our principal business operations will consist of the
Cellynx business. However, there is no assurance that the transactions set out
in the Exchange Agreement will be completed as contemplated, or at all.

As a result, we are unable to provide an accurate estimate of
our financial requirements for the next twelve months. However, we currently
have a working capital of $38,837 and will need substantial financing in the
near term in order to meet our current obligations as they become due and to
meet our ongoing reporting obligations under the Securities Exchange Act of 1934
(the Exchange Act). If we are able to complete the transactions set out in the
Exchange Agreement, of which there is no assurance, we anticipate that our
financing requirements will increase significantly.

RESULTS OF OPERATIONS

Six Months Summary

|                   |   | Three Months Ended December 31, |   |   | Six Months Ended December 31, |  
|------------------ | - | ------------------------------- | - | - | ----------------------------- | -
|                   |   |                                 |   |   |                               |  
|                   |   | 2007                            |   |   | 2006                          |  
|Revenue            | $ | --                              |   | $ | --                            |  
|Expenses           |   | (386,784                        | ) |   | (44,406                       | )
|Interest Income    |   | 12,619                          |   |   | 3,485                         |  
|                   |   |                                 |   |   |                               |  
|Unrealized loss on |   | --                              |   |   | --                            |  
|available for sale |   |                                 |   |   |                               |  
|securities         |   |                                 |   |   |                               |  
|Comprehensive loss | $ | (374,165                        | ) | $ | (40,921                       | )

Revenues

We did not earn any revenues during the six months ended
December 31, 2007 or December 31, 2006. There are no assurances that we will
earn any revenues in the foreseeable future.

5

---

Expenses

Our expenses for the six months ended December 31, 2007 and
2006 consisted of the following:

|                      |   | Three Months Ended December 31, |  |   | Six Months Ended December 31, | 
|--------------------- | - | ------------------------------- |  | - | ----------------------------- | 
|                      |   |                                 |  |   |                               | 
|                      |   | 2007                            |  |   | 2006                          | 
|Accounting            | $ | 19,062                          |  | $ | 18,318                        | 
|Amortization          |   | --                              |  |   | 600                           | 
|Management Fees       |   | 3,000                           |  |   | 3,000                         | 
|Consulting Fees       |   | 15,000                          |  |   | --                            | 
|Legal                 |   | 14,015                          |  |   | 16,301                        | 
|Rent                  |   | 825                             |  |   | 1,436                         | 
|Other                 |   | 2,908                           |  |   | 4,751                         | 
|Interest              |   | 145                             |  |   | --                            | 
|Loss Reserve on Loans |   | 331,829                         |  |   | --                            | 
|Receivable            |   |                                 |  |   |                               | 
|Total                 | $ | 386,784                         |  | $ | 44,406                        | 

The increase in our administrative expenses for the six months
ended December 31, 2007 when compared to the six months ended December 31, 2006,
was primarily attributable to a loss reserve recorded in respect of loans
granted to Nextdigital Corp. between November, 2006 and January, 2007. At
December 31, 2007, our management determined that the collectibility of these
lowas was in doubt. As a result, we recorded a loss reserve of $331,829, equal
to 50% of the total loans receivable and accrued interest receivable from
Nextdigital.

Consulting fees during the three and six month periods ended
December 31, 2007 were also significantly higher than in the corresponding
periods ended December 31, 2006. Consulting fees accrued during the period were
incurred with respect to general administrative and accounting work performed in
connection with our business activities and in connection with meeting our
regulatory filings.

Interest Income

Interest income for the periods ended December 31, 2007 and
2006 related to loans totaling $612,000 to granted Nextdigital Corp. between
November, 2006 and January, 2007. As discussed above, at December 31, 2007 our
management has determined that the collectibility of these loans was in doubt,
and we recorded a loss reserve of $331,829, equal to 50% of the total loans
receivable and accrued interest receivable from Nextdigital.

6

---

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital           |   |                      |   |   |                  |   |  |                       | 
|------------------------- | - | -------------------- | - | - | ---------------- | - |  | --------------------- | 
|                          |   |                      |   |   |                  |   |  | Percentage            | 
|                          |   | At December 31, 2007 |   |   | At June 30, 2007 |   |  | Increase / (Decrease) | 
|Current Assets            | $ | 245,279              |   | $ | 1,089            |   |  | 22,423.3%             | 
|Current Liabilities       |   | (206,442             | ) |   | (111,339         | ) |  | 85.4%                 | 
|Working Capital (Deficit) | $ | 38,837               |   | $ | (110,250         | ) |  | 135.2%                | 

|Cash Flows                                    |   |                               |   |   |          |  
|--------------------------------------------- | - | ----------------------------- | - | - | -------- | -
|                                              |   | Six Months Ended December 31, |  
|                                              |   | 2007                          |   |   | 2006     |  
|Cash Flows (Used In) Operating Activities     | $ | (20,992                       | ) | $ | (61,396  | )
|Cash Flows (Used In) Investing Activities     |   | --                            |   |   | (450,000 | )
|Cash Flows From Financing Activities          |   | 20,300                        |   |   | 602,500  |  
|Net Increase (Decrease) In Cash During Period | $ | (692                          | ) | $ | 91,104   |  

Our working capital increased during the six months ended
December 31, 2007 due to the fact that $244,882 in amounts owed to us by
Nextdigital were re-classified from long term assets to current assets. We have
recorded a loss reserve of $331,829, equal to 50% of the total loans receivable
(including principal and accrued interest) from Nextdigital. There is no
assurance that we will be able to collect any or all of the amounts owed to us
from Nextdigital. We had no sources of revenue during the period and the fact
that our only financing during the period came from a short term loan of
$20,300. The loan is unsecured, non-interest bearing and due on demand.

Financing Requirements

We will require additional financing if we are to continue as a
going concern. In addition, If we are able to complete the transactions set out
in the Exchange Agreement, of which there is no assurance, we anticipate that
our financing requirements will increase significantly.

We recorded a loss reserve of $331,829, equal to 50% of the
total loans receivable (including principal and accrued interest) from
Nextdigital. As of the date of filing of this Quarterly Report on Form 10-QSB,
our management believes that no further loss reserve is necessary, however there
is no assurance that we will be able to collect the remaining amounts due from
Nextdigital.

In addition, although we own 5,545,000 shares of Balsam
Ventures, Inc., that have been recorded on our balance sheet with a fair value
of $332,700 as of December 31, 2007, there are no assurances that we will be
able to sell enough of these shares to meet our short term financing
requirements as the trading volume for Balsams shares is extremely limited.

We anticipate that any external financing that we are able to
obtain will be through the sale of our common stock or other equity based
securities. We do not have any arrangements in place for the sale of any of our
securities and there is no assurance that we will be able to raise the
additional capital that we require to continue operations.

7

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OFF-BALANCE SHEET ARRANGEMENTS

None.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
disclosed in Note 3 to the interim financial statements included in this
Quarterly Report.

Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles in the United States requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Significant estimates include the
valuation of stock issued. Actual results could differ from these estimates.

Fair Value of Financial Instruments

Our financial instruments consist of cash, available-for-sale
securities, loans receivable, accounts payable and accrued liabilities and loans
payable. Unless otherwise noted, it is managements opinion that we are not
exposed to significant interest, currency or credit risks arising from these
financial instruments. The fair value of these financial instruments
approximates their carrying values.

Comprehensive Loss

We have adopted SFAS 130, Reporting Comprehensive Income,
which establishes guidelines for the reporting and display of comprehensive
income (loss) and its components in financial statements. Comprehensive loss
consists of our net loss and unrealized gain (loss) on available-for-sale
securities.

Loans Receivable

Loans receivable are reported at the outstanding principal
balance adjusted for any charge-offs and reserve for loan losses. Our management
recorded a reserve amounting to $331,829 for loans receivable and accrued
interest receivable at December 31, 2007. When determining the reserve for loan
losses, our management considers if any events or changes in circumstances
indicate uncollectibility. When a loan is determined to be uncollectible, it is
charged against the loss reserve. Loans are not collateralized. Because of
inherent uncertainties in estimating the reserve for loan losses, it is at least
reasonably possible that the estimates used will change in the near term.
Interest on loans is recognized when earned. Interest on loans is generally not
recognized when loans become past due. Thereafter, no interest is taken into
income until such time as the borrower demonstrates the ability to resume
payments. There were no past due loans at December 31, 2007. Based on current
loan interest rates, our management does not believe exposure to interest rate
sensitivity is significant. Our management periodically reviews loans
outstanding to determine if any loans are impaired. Impaired loans, if any, are
adjusted to estimated net realized value through the loan loss reserve.

8

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RISKS AND UNCERTAINTIES

Our independent auditors have substantial doubt about our
ability to continue as a going concern.

We have earned substantial losses for each of the six months
ended December 31, 2007 and 2006, and we have an accumulated deficit of
$3,164,746 as of December 31, 2007. Although the financial statements for each
of these periods were prepared assuming that we would continue as a going
concern, in the view of our independent auditors, there is a substantial doubt
about our ability to continue as a going concern. Since we do not expect to
generate any significant revenues for the foreseeable future, our ability to
continue as a going concern depends, in large part, on our ability to raise
additional capital through equity or debt financing transactions. If we are
unable to raise additional capital, stockholders may lose their investment.

Our patent rights to the Cool Can Technology have expired
and there are no assurances that we will be able to complete the acquisition of
Cellynx.

We have abandoned development of the Cool Can Technology. We
have no business assets or business operations. Although we have entered into an
agreement with Cellynx Inc. and its shareholders to acquire Cellynx, there is no
assurance that we will be able to complete the acquisition of Cellynx. If we are
unable to complete the acquisition Cellynx, we will continue to seek out and
evaluate alternative business opportunities. There are no assurances that we
will be able to identify any alternative business opportunities that are
suitable for us. Even if we do identify potential business opportunities, there
is no assurance that we will be able to acquire those opportunities.

We will require substantial financing if we are to continue
as a going concern.

We had a working capital surplus of $38,837 as of December 31,
2007 due to the fact that $244,882 in amounts owed to us by Nextdigital were
re-classified from long term assets to current assets. We have recorded a loss
reserve of $331,829, equal to 50% of the total loans receivable (including
principal and accrued interest) from Nextdigital. As of the date of filing of
this Quarterly Report on Form 10-QSB, our management believes that no further
loss reserve is necessary, however there is no assurance that we will be able to
collect any or all of the amounts due from Nextdigital. In addition, although we
own 5,545,000 shares of Balsam Ventures, Inc. that have been recorded on our
balance sheet as available-for-sale securities with a fair value of $332,700
as at December 31, 2007, there is no assurance that we will be able to sell any
or all of these shares. As such, we may not be able to meet our short term
financial needs from our existing assets. If we are not able to obtain financing
in an amount sufficient to enable us to pay our liabilities and expenses as they
come due, we may not be able to continue as a going concern.

Because our sole executive officer has only agreed to
provide his services on a part-time basis, he may not be able or willing to
devote a sufficient amount of time to our business operations, which may cause
our business to fail.

Our executive officer is employed on a full time basis by other
companies. Because we are in the early stages of our business, Mr. John P.
Thornton will not be spending a significant amount of time on our business. Mr.
Thornton expects to expend approximately 5 hours per week on our business.
Competing demands on his time may lead to a divergence between his interests and
the interests of other shareholders.

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We may conduct further offerings in the future in which case
investors shareholdings will be diluted.

Since our inception we have relied on equity sales of our
common stock to fund our operations. We may conduct further equity offerings in
the future to finance our current projects or to finance subsequent projects
that we decide to undertake. If common stock is issued in return for additional
funds, the price per share could be lower than that paid by our current
stockholders. We anticipate continuing to rely on equity sales of our common
stock in order to fund our business operations. If we issue additional stock,
investors percentage interest in us will be lower. This condition is often
referred to as "dilution. The result of this could reduce the value of
investors stock.

Because our stock is a penny stock, stockholders will be
more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the Nasdaq
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or quotation system.

Because our securities constitute "penny stocks" within the
meaning of the rules, the rules apply to us and to our securities. The rules may
further affect the ability of owners of shares to sell our securities in any
market that might develop for them. As long as the quotation price of our common
stock is less than $5.00 per share, the common stock will be subject to Rule
15g-9 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document prepared by the SEC, that:

|1. | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                          
|2. | contains a description of the broker's or dealer's duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation to such duties or other requirements of
      securities laws;
|   |                                                                                                                                                                                                                                          
|3. | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
|   |                                                                                                                                                                                                                                          
|4. | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
|   |                                                                                                                                                                                                                                          
|5. | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
|   |                                                                                                                                                                                                                                          
|6. | contains such other information and is in such form,
      including language, type, size and format, as the SEC shall require by
      rule or regulation.                                                                              

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special

10

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written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written acknowledgment
of the receipt of a risk disclosure statement, a written agreement to
transactions involving penny stocks, and a signed and dated copy of a written
suitability statement. These disclosure requirements may have the effect of
reducing the trading activity in the secondary market for our stock.

|ITEM 3. | CONTROLS AND PROCEDURES.
|------- | ------------------------

Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
we have evaluated the effectiveness of our disclosure controls and procedures as
required by Exchange Act Rule 13a-15(b) as of the end of the period covered by
this report. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer has concluded that these disclosure controls and procedures
are effective.

There were no changes in our internal control over financial
reporting during the quarter ended December 31, 2007 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

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PART II - OTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

None.

|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.
|------- | ------------------

On February 1, 2008, we entered into a Consulting Agreement
(the Consulting Agreement) with Mountain View Holdings, LLC, a Colorado
Limited Liability Company, maintaining its principal offices at 12510 E. Iliff
Avenue, Suite 200, Aurora, CO 80014 (Mountain View). Under the terms of the
Consulting Agreement, Mountain View is to be paid $1,500 US per month in
consideration of which Mountain View is to provide us with various investor
relation services for a six (6) month period ending on August 31, 2008. The
Consulting Agreement shall automatically renew in 30-day period intervals
thereafter. Either party shall have the right to terminate this Consulting
Agreement, beginning in the first monthly renewal period, upon 15 days advance
written notice.

In addition to the monthly consulting fee, we are required to
pay Mountain View a transaction fee as a result of any transaction between us
and any other party introduced or put into contact with by Mountain View whereby
a sale of stock, issuance of debt, sale of assets, consolidation or other
similar transaction or series or combination of transactions occurs. The
transaction fee shall be equal to 3% of the dollar value of the transaction,
which is based on the total value of the consideration, securities, property,
business, assets or other value given, paid, transferred or contributed by, or
to, us.

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|ITEM 6. | EXHIBITS.
|------- | ---------

The following exhibits are either provided with this Quarterly
Report or are incorporated herein by reference:

|Exhibit |                                                                                                                                                                          
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                   
|        |                                                                                                                                                                          
|2.1     | Share Exchange
        Agreement dated as of January 3, 2008 among Cellynx, Inc., the shareholders
        of Cellynx and Norpac Technologies, Inc.(14)                  
|3.1     | Articles of Incorporation and
        Bylaws.(1)                                                                                                                         
|3.2     | Articles of Merger.(6)                                                                                                                                                   
|3.3     | Bylaws as amended.(6)                                                                                                                                                    
|4.1     | Form of Warrant
        Certificate dated January 5, 2007.(11)                                                                                                           
|10.1    | Sale of Patent Agreement dated
        as of June 15, 1998 between Cool Can Technologies, Inc. and Edward Halimi.(1)                                                     
|10.2    | Patent and Technology
        Transfer Agreement dated April 18, 2001 among Cool Can Technologies, Inc.,
        David St. James, Melanie St. James and Edward Halimi.(2)
|10.3    | Exclusive License Agreement dated
        June 5, 2002 between Balsam Ventures, Inc., and Cool Can Technologies
        Inc.(3)                                          
|10.4    | Form of Convertible
        Note.(5)                                                                                                                                     
|10.5    | Form of Subscription Agreement
        between Cool Can Technologies, Inc. and the Convertible Noteholders.(5)                                                           
|10.6    | Exclusive License
        Agreement dated for reference November 30, 2003 between Balsam Ventures,
        Inc., and Cool Can Technologies Inc.(4)                       
|10.7    | Agreement and Plan of Merger
        Agreement dated effective May 21, 2004 among Cool Can Technologies, Inc.
        and NorPac Technologies, Inc.(7)                   
|10.8    | Extension Agreement
        dated as of January 14, 2006 between NorPac Technologies, Inc. and Balsam
        Ventures, Inc.(8)                                          
|10.9    | Agreement and Plan of Merger
        dated November 7, 2006 among Norpac Technologies, Inc., Nextdigital Corp.
        and Nextdigital Acquisition Corp.(9)              
|10.10   | Loan Agreement
        dated November 7, 2006 between Norpac Technologies, Inc. and Nextdigital
        Corp.(9)                                                         
|10.11   | Promissory Note executed by Nextdigital
        Corp in favor of Norpac Technologies, Inc.(9)                                                                            
|10.12   | Loan Agreement
        dated December 4, 2006 between Norpac Technologies, Inc. and Nextdigital
        Corp.(10)                                                        
|10.13   | Promissory Note executed by Nextdigital
        Corp in favor of Norpac Technologies, Inc.(10)                                                                           
|10.14   | Loan Agreement
        dated January 30, 2007 between Norpac Technologies, Inc. and Nextdigital
        Corp.(12)                                                        
|10.15   | Promissory Note executed by Nextdigital
        Corp in favor of Norpac Technologies, Inc.(12)                                                                           
|10.16   | Loan Agreement
        dated November 20, 2006 between Norpac Technologies, Inc. and Nextdigital
        Corp.(13)                                                       
|10.17   | Promissory Note executed by Nextdigital
        Corp in favor of Norpac Technologies, Inc.(13)                                                                           
|10.18   | Consulting Agreement
        dated February 1, 2008 between Mountain View Holdings, LLC and Norpac
        Technologies Inc.(15)                                         
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.               

13

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|Exhibit |                                                                                                                                                       
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                
|        |                                                                                                                                                       
|32.1    | Certification
      of Chief Executive Officer and Chief Financial Officer as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002.



|**Notes:**
|----------
|(1)       
|(2)       
|(3)       
|(4)       
|(5)       
|(6)       
|(7)       
|(8)       
|(9)       
|(10)      
|(11)      
|(12)      
|(13)      
|(14)      
|(15)      

14

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SIGNATURES

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

|      |                   |  | NORPAC TECHNOLOGIES,
      INC.
|----- | ----------------- |  | -------------------------------
|      |                   |  |                                
|      |                   |  |                                
|Date: | February 19, 2008 |  |                                
|      |                   |  | By:                            
|      |                   |  |                                
|      |                   |  |                                
|      |                   |  |                                
|      |                   |  |                                

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