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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

COMMISSION FILE NUMBER000-27147

NORPAC TECHNOLOGIES, INC.(Exact name of registrant as specified in its charter)

|NEVADA                                                               | 95-4705831                         
|-------------------------------------------------------------------- | -----------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S Employer Identification No.)
|                                                                     |                                    
|Suite 410 - 103 East Holly Street                                    |                                    
|Bellingham, WA                                                       | 98225                              
|(Address of principal executive offices)                             | (Zip Code)                         

(360) 201-9591(Registrant's telephone number,
including area code)

N/A(Former name, former address and
former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
  reports required to be filed by Section 13 or 15(d) of the 
  Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the 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 large
accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [   ]                                                   | Accelerated filer [   ]        
|------------------------------------------------------------------------------- | -------------------------------
|Non-accelerated filer [   ] (Do not check if a
      smaller reporting company) | Smaller reporting company [ X ]

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

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As
of May 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.

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

FINANCIAL STATEMENTS

(Unaudited)

MARCH 31, 2008





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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

BALANCE SHEETS

|                                                              |   | March 31,   |   |   | June 30,   |  
|------------------------------------------------------------- | - | ----------- | - | - | ---------- | -
|                                                              |   | 2008        |   |   | 2007       |  
|                                                              |   | (unaudited) |   |   |            |  
|ASSETS                                                        |   |             |   |   |            |  
|                                                              |   |             |   |   |            |  
|CURRENT ASSETS:                                               |   |             |   |   |            |  
|Cash                                                          | $ | 997         |   | $ | 1,089      |  
|Loans receivable,
      net of allowance of $331,829 (Note 5) |   | 331,829     |   |   | -          |  
|Total
      Current Assets                                    |   | 332,826     |   |   | 1,089      |  
|                                                              |   |             |   |   |            |  
|AVAILABLE-FOR-SALE SECURITIES (Note 4)                        |   | 110,900     |   |   | 526,775    |  
|                                                              |   |             |   |   |            |  
|LOANS RECEIVABLE (Note 5)                                     |   | -           |   |   | 638,698    |  
|                                                              |   |             |   |   |            |  
|                                                              | $ | 443,726     |   | $ | 1,166,562  |  
|                                                              |   |             |   |   |            |  
|                                                              |   |             |   |   |            |  
|                                                              |   |             |   |   |            |  
|LIABILITIES
      AND STOCKHOLDERS EQUITY                    |   |             |   |   |            |  
|                                                              |   |             |   |   |            |  
|CURRENT LIABILITIES:                                          |   |             |   |   |            |  
|Accounts payable
      and accrued liabilities                | $ | 196,363     |   | $ | 101,339    |  
|Loans payable (Note 7)                                        |   | 77,016      |   |   | 10,000     |  
|Total Current Liabilities                                     |   | 273,379     |   |   | 111,339    |  
|                                                              |   |             |   |   |            |  
|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:                                       |   |             |   |   |            |  
|March
      31, 2008 and June 30, 2007                        |   |             |   |   |            |  
|-37,597,890 shares of common stock                            |   | 37,597      |   |   | 37,597     |  
|Additional paid-in capital                                    |   | 3,467,383   |   |   | 3,467,383  |  
|Deficit accumulated
      during the development stage        |   | (3,231,083  | ) |   | (2,762,082 | )
|Accumulated other comprehensive
      income (loss)           |   | (103,550    | ) |   | 312,325    |  
|                                                              |   | 170,347     |   |   | 1,055,223  |  
|                                                              |   |             |   |   |            |  
|                                                              | $ | 443,726     |   | $ | 1,166,562  |  

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

F-2

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 
  (unaudited)

Period FromInception(April 1, 1998)Three Months Ended
      
      
      Nine Months Ended
      
      
      ThroughMarch
        31,
      
      
      March
        31,
      
      
      March 31,2008
      
      
      2007
      
      
      2008
      
      
      2007
      
      
      2008Revenues
      $
      -
      
      $
      15,000
      
      $
      -
      
      $
      15,000
      
      $
      303,000Administrative pre-opening anddevelopment expenses
      
      (65,586
      )
      
      (38,096
      )
      
      (161,236
      )
      
      (116,631
      )
      
      (1,882,350
      )Interest expense
      
      (751
      )
      
      -
      
      
      (896
      )
      
      -
      
      
      (680,437
      )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
      )Loss before interest income
      
      (66,337
      )
      
      (23,096
      )
      
      (493,961
      )
      
      (101,631
      )
      
      (3,282,741
      )Interest income
      
      -
      
      
      11,007
      
      
      24,960
      
      
      14,492
      
      
      51,658Net loss
      
      (66,337
      )
      
      (12,089
      )
      
      (469,001
      )
      
      (87,139
      )
      
      (3,231,083
      )Unrealized gain (loss) on available-for-salesecurities
      
      (221,800
      )
      
      55,450
      
      
      (415,875
      )
      
      (110,900
      )
      
      (103,550
      )Comprehensive income (loss)
      $
      (288,137
      )
      $
      43,361
      
      $
      (884,876
      )
      $
      (198,039
      )
      $
      (3,334,633
      )Basic and diluted net loss per common share
      $
      -
      
      $
      -
      
      $
      (0.01
      )
      $
      -Weighted average number of outstandingshares
      
      37,597,890
      
      
      37,573,862
      
      
      37,597,890
      
      
      36,190,071


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) |  
|                                                                                     |   | Nine Months Ended |   |   | Through   |  
|                                                                                     |   | March
      31,   |   |   | March 31, |  
|                                                                                     |   | 2008              |   |   | 2007      |   |   | 2008            |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                |   |                   |   |   |           |   |   |                 |  
|Net loss                                                                             | $ | (469,001          | ) | $ | (87,139   | ) | $ | (3,231,083      | )
|Adjustments to reconcile net loss
      to net cash flows from operating activities: |   |                   |   |   |           |   |   |                 |  
|Amortization expense                                                                 |   | -                 |   |   | 1,800     |   |   | 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 accounts receivable                                                      |   | -                 |   |   | (15,000   | ) |   | -               |  
|Increase in accrued
      interest receivable                                        |   | (24,960           | ) |   | (14,492   | ) |   | (51,658         | )
|Increase in accounts payable and
      accrued liabilities                           |   | 95,024            |   |   | 38,260    |   |   | 276,144         |  
|Increase in accrued
      interest payable                                           |   | 896               |   |   | -         |   |   | 128,276         |  
|Increase in accounts payable, stockholders                                           |   | -                 |   |   | -         |   |   | 369,346         |  
|Increase in due
      to stockholders                                                |   | -                 |   |   | -         |   |   | 20,776          |  
|Net cash flows from operating activities                                             |   | (66,212           | ) |   | (76,571   | ) |   | (1,164,045      | )
|                                                                                     |   |                   |   |   |           |   |   |                 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                |   |                   |   |   |           |   |   |                 |  
|Proceeds from sale
      of available-for-sale securities                            |   | -                 |   |   | -         |   |   | 11,225          |  
|Advances under loan receivable agreements                                            |   | -                 |   |   | (612,000  | ) |   | (612,000        | )
|Purchase of intangibles                                                              |   | -                 |   |   | -         |   |   | (44,000         | )
|Net cash flows from investing activities                                             |   | -                 |   |   | (612,000  | ) |   | (644,775        | )
|                                                                                     |   |                   |   |   |           |   |   |                 |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                |   |                   |   |   |           |   |   |                 |  
|Collection of subscription
      receivable                                          |   | -                 |   |   | -         |   |   | 10,000          |  
|Issuance of common stock                                                             |   | -                 |   |   | 673,000   |   |   | 1,292,269       |  
|Net proceeds from
      due to stockholders                                          |   | -                 |   |   | -         |   |   | 348,928         |  
|Proceeds from (repayment of) loans
      payable                                     |   | 66,120            |   |   | (500      | ) |   | 76,120          |  
|Issuance of convertible
      notes                                                  |   | -                 |   |   | -         |   |   | 82,500          |  
|Net cash flows from financing activities                                             |   | 66,120            |   |   | 672,500   |   |   | 1,809,817       |  
|                                                                                     |   |                   |   |   |           |   |   |                 |  
|Increase (decrease) in cash                                                          |   | (92               | ) |   | (16,071   | ) |   | 997             |  
|Cash:                                                                                |   |                   |   |   |           |   |   |                 |  
|Beginning                                                                            |   | 1,089             |   |   | 16,887    |   |   | -               |  
|                                                                                     |   |                   |   |   |           |   |   |                 |  
|Ending                                                                               | $ | 997               |   | $ | 816       |   | $ | 997             |  
|                                                                                     |   |                   |   |   |           |   |   |                 |  
|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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 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. The Exchange
        Agreement may be terminated (i) by mutual consent of the parties, (ii)
        by either party if the transaction has not been consummated 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. Subsequent
        to March 31, 2008, the Company and Cellnyx began discussions to extend
        the closing of the Exchange Agreement.

F-5

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**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|1. | History and Organization of the Company (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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 March
        31, 2008 and for all periods presented have been included. Interim results
        for the period ended March 31, 2008 are not necessarily indicative of
        the results that may be expected for the fiscal year as a whole.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-6

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**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|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 March 31, 2008 and June
        30, 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 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 March 31, 2008 and June 30, 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 March 31, 2008, loans receivable amounting to $306,000 were
        on nonaccrual status.

F-7

---

**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Effective July 1, 2007, the Company adopted
        Financial Accounting Standards Board (FASB) Interpretation
        No. 48, "Accounting for Uncertainty in Income Taxes"("FIN 48"),
        which clarifies the accounting for uncertainty in income taxes recognized
        in the financial statements in accordance with SFAS 109, "Accounting
        for Income Taxes."FIN 48 provides guidance on the financial statement
        recognition and measurement of a tax position taken or expected to be
        taken in a tax return. FIN 48 also provides guidance on derecognition,
        classification, interest and penalties, accounting in interim periods,
        disclosures, and transition. In accordance with FIN 48, a tax position
        is a position in a previously filed tax return or a position expected
        to be taken in a future tax filing that is reflected in measuring current
        or deferred income tax assets and liabilities. Tax positions shall be
        recognized only when it is more likely than not (likelihood of greater
        than 50%), based on technical merits, that the position would be sustained
        upon examination. Tax positions that meet the more likely than not threshold
        should be measured using a probability-weighted approach as the largest
        amount of tax benefit that is greater than 50% likely of being realized
        upon settlement. The adoption of FIN 48 did not have a material impact
        on the Companys financial position, results of operations or cash
        flows. Income taxes are accounted for using an asset and liability approach
        that requires the recognition of deferred tax assets and liabilities for
        the expected future tax consequences of events that have been recognized
        in our financial statements or tax returns. A valuation allowance is established
        to reduce deferred tax assets if all, or some portion, of such assets
        will more than likely not be realized.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company expenses advertising costs as
        incurred. There were no advertising expenses incurred by the Company for
        the periods ended March 31, 2008 and 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-8

---

**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (i)        Stock-based
        compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | 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 periods ended
        March 31, 2008 and 2007 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 March 31, 2008 and 2007 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 SFAS 123(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       |  
| |                          |   | March 31,           |  
| |                          |   | 2008                |  
| |                          |   |                     |  
| | Net loss                 | $ | (3,231,083          | )
| |                          |   |                     |  
| | Pro forma net loss       | $ | (3,279,083          | )
| |                          |   |                     |  
| | Stock based compensation |   |                     |  
| | As reported              | $ | 504,000             |  
| | Proforma                 | $ | 552,000             |  
| |                          |   |                     |  

There were no options granted or vested
  during the three and nine months ended March 31, 2008 and 2007.

F-9

---

**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. During
        the three and nine months ended March 31, 2007, the 432,500 warrants outstanding
        have been excluded from diluted net loss per common share as they were
        anti- dilutive. There were no potentially dilutive securities during the
        three and nine months ended March 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | (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 income (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 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 2008, the FASB issued Staff Position
        157-2, Effective Date of FASB Statement No. 157,that
        deferred the effective date of SFAS 157 for one year for nonfinancial
        assets and liabilities recorded at fair value on a non-recurring basis.
        The Company does not believe that the adoption of SFAS 157 will have a
        material impact on the financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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 financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-10

---

**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | (m)        Recent
        accounting pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In December 2007, the FASB issued SFAS 141 (revised
        2007), "Business Combinations"(SFAS 141R). Under SFAS
        141R, a company is required to recognize the assets acquired, liabilities
        assumed, contractual contingencies and contingent consideration at their
        fair value at the acquisition date. It further requires that acquisition-related
        costs are to be recognized separately from the acquisition and expensed
        as incurred. Among other changes, SFAS 141R also requires that negative
        goodwill be recognized in earnings as a gain attributable to the
        acquisition, and any deferred tax benefits resulting from a business combination
        be recognized in income from continuing operations in the period of the
        combination. SFAS 141R is effective for business combinations for which
        the acquisition date is on or after the beginning of the first annual
        reporting period beginning on or after December 15, 2008. The Company
        is evaluating what impact SFAS 141R will have on the financial statements.                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In December 2007, the FASB issued SFAS 160, "Noncontrolling
        Interests in Consolidated Financial Statements  an amendment of
        ARB No. 51"(SFAS 160). SFAS 160 requires a company to
        clearly identify and present ownership interests in subsidiaries held
        by parties other than the company in the consolidated financial statements
        within the equity section but separate from the companys equity.
        It also requires the amounts of consolidated net income attributable to
        the parent and to the noncontrolling interest to be clearly identified
        and presented on the face of the consolidated statement of operations;
        changes in ownership interest to be accounted for as equity transactions;
        and when a subsidiary is deconsolidated, any retained noncontrolling equity
        investment in the former subsidiary and the gain or loss on the deconsolidation
        of the subsidiary must be measured at fair value. SFAS 160 is effective
        for fiscal years, and interim periods within those fiscal years, beginning
        on or after December 15, 2008. The Company is evaluating what impact SFAS
        160 will have on the financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In March 2008, the FASB issued SFAS No. 161, Disclosures
        about Derivative Instruments and Hedging Activities, an amendment of FASB
        Statement No. 133(SFAS 161). SFAS 161 requires
        enhanced disclosures about an entitys derivative instruments and
        hedging activities including: (1) how and why an entity uses derivative
        instruments; (2) how derivative instruments and related hedged items are
        accounted for under SFAS 133 and its related interpretations; and (3)
        how derivative instruments and related hedged items affect an entitys
        financial position, financial performance, and cash flows. SFAS 161 is
        effective for financial statements issued for fiscal years and interim
        periods beginning after November 15, 2008, with earlier application encouraged.
        The Company is evaluating what impact SFAS 161 will have on the financial
        statements.                                                                                                                                                                                                                                                                                          

F-11

---

**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 March 31, 2008       | $ | 110,900          |  | $ | -          |  | $ | 103,550    |  | $ | 214,450 | 
| | Equity securities
       June 30, 2007 | $ | 526,775          |  | $ | 312,325    |  | $ | -          |  | $ | 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 nine months ended March 31, 2008 and 2007.

The Companys net unrealized holding
  gain (loss) was $(221,800) and $55,450 for the three months ended March 31,
  2008 and 2007, respectively and $(415,875) and $(110,900) for the nine months
  ended March 31, 2008 and 2007, respectively. The reclassification adjustment
  was $0 and $0 for the three months ended March 31, 2008 and 2007, respectively
  and $0 and $0 for the nine months ended March 31, 2008 and 2007, respectively
  and $40,800 for the period from inception through March 31, 2008. 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 March 31, 2008.

At both March 31, 2008 and June 30, 2007,
  the Company held 5,545,000 common shares, respectively, 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-12

---

**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|5. | Loans Receivable                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                          
|   | During the year ended June 30, 2007, four 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   |   |  |  |  |  |                   | 
| | Loss reserve                |   | (331,829  | ) |  |  |  |  |                   | 
| |                             | $ | 331,829   |   |  |  |  |  |                   | 

Interest income related to these loans
  receivable totaled $Nil and $11,007 for the three months ended March 31, 2008
  and 2007, respectively and $24,960 and $14,492 for the nine months ended March
  31, 2008 and 2007, respectively and $51,658 for the period from inception through
  March 31, 2008.

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-13

---

**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 nine months ended March 31, 2008, a loan
        was granted from a third party company for $15,000. The loan is unsecured,
        bears interest at 10% and is due on demand. Interest expense accrued for
        the three and nine months ended March 31, 2008 totaled $131 and $131,
        respectively and $131 for the period from inception through March 31,
        2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the nine months ended March 31, 2008, a loan
        was granted from a third party company for $1,000 of which $680 was repaid
        in the same period. The loan is unsecured, non-interest bearing and is
        due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the nine months ended March 31, 2008, several
        loans were granted from a third party company totaling $43,000. The loans
        are unsecured, bear interest at 10% and are due on demand. Interest expense
        accrued for the three and nine months ended March 31, 2008 totaled $550
        and $654, respectively and $654 for the period from inception through
        March 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended June 30, 2007, a loan was granted
        from a third party company for $10,000. During the nine months ended March
        31, 2008, 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 nine months ended March 31, 2008, 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 nine months ended March 31, 2008 totaled $70 and $111, respectively
        and $111 for the period from inception through March 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-14

---

**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|7. | Loans Payable (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|8. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Consulting fees paid to an officer and director totaled
        $3,000 and $3,000 for the three months ended March 31, 2008 and 2007,
        respectively and $9,000 and $9,000 for the nine months ended March 31,
        2008 and 2007, respectively. Consulting fees paid to an officer and director
        from inception through March 31, 2008 totaled $23,500.                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Consulting fees paid to a former officer and director
        from inception through March 31, 2008 totaled $588,000. During the period
        of inception through March 31, 2008, 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 March 31, 2008, included in accounts payable and
        accrued liabilities was $52, 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 entitled the holder to purchase an additional
        share of the Companys common stock at a price of $0.40 per share
        and expired 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.

F-15

---

**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, March 31, 2008                              |  | -               |   |   | -        | 
| |                                                           |  |                 |   |   |          | 

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

F-16

---

**NORPAC TECHNOLOGIES, INC.**(A Development Stage Company)

**NOTES TO FINANCIAL STATEMENTS 
  (unaudited)**

|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 nine months ended March 31, as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| |                                 |   | Three
      Months Ended |   |   | Nine Months
      Ended |  
| | ------------------------------- | - | ------------------------ | - | - | ----------------------- | -
| |                                 |   | March
      31,          |   |   | March
      31,         |  
| |                                 |   | 2008                     |   |   | 2007                    |  
| | Expected tax benefit at         |   |                          |   |   |                         |  
| | statutory rate                  | $ | (22,555                  | ) | $ | (4,110                  | )
| | State tax effects               |   | (3,980                   | ) |   | (725                    | )
| | Increase in valuation allowance |   | 26,535                   |   |   | 4,835                   |  
| |                                 |   |                          |   |   |                         |  
| |                                 | $ | -                        |   | $ | -                       |  

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:

| |                            |   | March
      31, |   |   | June 30,   |  
| | -------------------------- | - | --------------- | - | - | ---------- | -
| |                            |   | 2008            |   |   | 2007       |  
| |                            |   |                 |   |   |            |  
| | Deferred tax assets:       |   |                 |   |   |            |  
| | Deferred pre-opening costs | $ | (1,166,423      | ) | $ | (1,138,089 | )
| | Valuation allowance        |   | 1,166,423       |   |   | 1,138,089  |  
| |                            |   |                 |   |   |            |  
| |                            | $ | -               |   | $ | -          |  

F-17

---

**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-18

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS 
  (unaudited)

|15. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | 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 for providing 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.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|16. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | On April 1, 2008, a loan was granted from a third party
        company for $7,500. The loan is unsecured, bears interest at 10% and is
        due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | On April 25, 2008, a loan was granted from a third party
        company for $3,000. The loan is unsecured, bears interest at 10% and is
        due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-19

---

ITEM
2.              
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR RESULTS OF
OPERATIONS.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form
10-Q constitute "forward-looking statements." These statements, identified by
words such as plan, "anticipate," "believe," "estimate," "should," "expect"
and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These
statements reflect the current views of management with respect to future events
and are subject to risks, uncertainties and other factors that may cause our
actual results, performance or achievements, or industry results, to be
materially different from those described in the forward-looking statements.
Such risks and uncertainties include those set forth under the caption Part II
 Item 1A. Risk Factors 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 or Form 10-K, our Quarterly Reports on Form 10-QSB or Form 10-Q
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

3

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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.

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:

4

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

As of the date of this Quarterly Report, we have not completed
the transactions contemplated in the Exchange Agreement. As such, the parties to
the Exchange Agreement have entered into negotiations to extend the termination
date for completing the Share Exchange.

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 $59,447 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

Nine Months Summary

Three
        Months Ended
      
      Nine
        Months EndedMarch 31,
      Percentage
      March 31,
      PercentageIncrease /
      
      
      Increase /2008
      2007
      (Decrease)
      2008
      2007
      (Decrease)Revenue
      $-
      $15,000
      (100)%
      $-
      $15,000
      (100)%Expenses
      (66,337)
      (38,096)
      74.1%
      (493,961)
      (116,631)
      323.5%Interest Income
      -
      11,007
      (100)%
      24,960
      14,492
      72.2%Net Income (Loss)
      $(66,337)
      $(12,089)
      448.7%
      $(469,001)
      $(87,139)
      438.2%


Revenues

We did not earn any revenues during the nine months ended March
31, 2008. During the nine months ended March 31, 2007, we had revenues of
$15,000 on account of royalty payments we received from Balsam Ventures Inc. As
our Cool Can Technology has expired, we do not expect to earn any other sources
of revenue in the near future.

5

---

Expenses

Our expenses for the nine months ended March 31, 2008 and 2007
consisted of the following:

Three
        Months Ended March 31,
      
      Nine Months Ended March 31,Percentage
      
      
      
      Percentage2008
      2007
      Increase /
      
      2008
      2007
      Increase /(Decrease)
      
      
      
      (Decrease)Accounting
      $6,473
      $6,749
      (4.1)%
      
      $43,535
      $42,233
      3.1%Amortization
      -
      600
      (100)%
      
      -
      1,800
      (100)%Management Fees
      3,000
      3,000
      n/a
      
      9,000
      9,000
      n/aConsulting Fees
      33,000
      15,000
      120%
      
      63,000
      15,000
      320%Legal
      11,785
      6,939
      69.8%
      
      26,655
      31,339
      (14.9)%Rent
      825
      838
      (1.6)%
      
      2,475
      5,157
      (52.0)%Other
      10,503
      4,978
      110%
      
      16,571
      12,102
      36.9%Interest
      750
      -
      n/a
      
      896
      -
      n/aLoss Reserve on Loans Receivable
      -
      -
      n/a
      
      331,829
      -
      n/aTotal
      $66,336
      $38,095
      74.1%
      
      $493,960
      $116,631
      323.5%


The increase in our administrative expenses for the nine months
ended March 31, 2008 when compared to the nine months ended March 31, 2007, 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 loans 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 nine month periods ended
March 31, 2008 were also significantly higher than in the corresponding periods
ended March 31, 2007. 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. The increase in consulting fees is due to the fact that we
incurred consulting fees of $18,000 to Mountain View Holdings, LLC for
performing certain investor relations services during the three months ended
March 31, 2008.

Interest Income

Interest income for the periods ended March 31, 2008 and 2007
  is related to loans totaling $612,000 granted to 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

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LIQUIDITY AND CAPITAL RESOURCES

|Working Capital           |                         |                        |                      
|------------------------- | ----------------------- | ---------------------- | ---------------------
|                          |                         |                        | Percentage           
|                          | At
      March 31, 2008 | At
      June 30, 2007 | Increase / (Decrease)
|Current Assets            | $332,826                | $1,089                 | 30,462.5%            
|Current Liabilities       | (273,379)               | (111,339)              | 145.5%               
|Working Capital (Deficit) | $59,447                 | $(110,250)             | 153.9%               

|Cash Flows                                    |                             |          
|--------------------------------------------- | --------------------------- | ---------
|                                              | Nine Months Ended March 31,
|                                              | 2008                        | 2007     
|Cash Flows (Used In) Operating Activities     | $(66,212)                   | $(76,571)
|Cash Flows (Used In) Investing Activities     | -                           | (612,000)
|Cash Flows From Financing Activities          | 66,120                      | 672,500  
|Net Increase (Decrease) In Cash During Period | $(92)                       | $(16,071)

Our working capital increased during the nine months ended
March 31, 2008 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.

During the nine months ended March 31, 2008, we had no sources
of revenue. Our sole source of financing came in the form of short-term loans.
We received the following short-term loans during the nine months ended March
31, 2008:

|(a) | A loan of $15,000 from a third party company, bearing
      interest at a rate of 10% per annum and due on demand.                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                          
|(b) | A loan of $1,000 from a third party company, non-interest
      bearing and due on demand. During the nine months ended March 31, 2008, we
      repaid $680 of this loan.                                                                               
|    |                                                                                                                                                                                                                                                          
|(c) | Loans totaling $43,000 from a third party company,
      bearing interest at a rate of 10% per annum and due on demand.                                                                                                                                  
|    |                                                                                                                                                                                                                                                          
|(d) | A loan of $5,000 from a third party company, non-interest
      bearing and due on demand. We also received an additional $2,800 from the
      same third party company. This loan bears interest at a rate of 10% per
      annum and is 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

7

---

Form 10-Q, 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 $100,900 as of March 31, 2008, 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.

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.

8

---

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 March 31, 2008 and June 30, 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.
At March 31, 2008, loans receivable amounting to $306,000 were on non-accrual
status.

ITEM
3.              
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM
4(T).          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 March 31, 2008 that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting.

9

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PART II - OTHER INFORMATION

ITEM
1.              
LEGAL PROCEEDINGS.

None.

ITEM
1A.            RISK
FACTORS.

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

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

We have earned substantial losses for each of the nine months
ended March 31, 2008 and 2007, and we have an accumulated deficit of $3,231,083
as of March 31, 2008. 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 $59,447 as of March 31,
2008 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-Q, 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 $110,900
as at March 31, 2008, 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

10

---

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.

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;                                                                                                                                                       

11

---

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

None.

ITEM
3.              
DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM
5.              
OTHER INFORMATION.

None.

12

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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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ExhibitNumber
      
      Description of Exhibit32.1
      
      Certification
          of Chief Executive Officer and Chief Financial Officer as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.


|**Notes:** |                                                                                                                                       
|---------- | --------------------------------------------------------------------------------------------------------------------------------------
|(1)        | Filed with the SEC as an exhibit to our Registration
      Statement on Form 10SB originally filed on August 26, 1999, as
    amended.
|(2)        | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB for the year ended June 30, 2001.                          
|(3)        | Filed with the SEC on June 20, 2002 as an exhibit to our
      Current Report on Form 8-K.                                            
|(4)        | Filed with the SEC on January 9, 2004 as an exhibit to
      our Current Report on Form 8-K.                                          
|(5)        | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB for the year ended June 30, 2002.                          
|(6)        | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB for the fiscal period ended September 30, 2003.         
|(7)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed July 8, 2004.                                          
|(8)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed January 19, 2006.                                      
|(9)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed November 13, 2006.                                     
|(10)       | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed December 7, 2006.                                      
|(11)       | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed January 11, 2007.                                      
|(12)       | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed February 5, 2007.                                      
|(13)       | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed February 20, 2007.                                
|(14)       | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed January 9, 2008.                                       
|(15)       | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed February 7, 2008.                                      

14

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SIGNATURES

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

|      |              |     | NORPAC TECHNOLOGIES, INC.                          
|----- | ------------ | --- | ---------------------------------------------------
|      |              |     |                                                    
|      |              |     |                                                    
|Date: | May 15, 2008 |     |                                                    
|      |              | By: | /s/
      John P. Thornton                         
|      |              |     | JOHN P. THORNTON                                   
|      |              |     | Chief Executive Officer and Chief Financial Officer
|      |              |     | (Principal Executive Officer, Principal Financial  
|      |              |     | Officer and Principal Accounting Officer)          

---