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

FORM 10-QSB

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

For the quarterly period ended March 31, 2007

[ ] Transition Report Under 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 small business issuer as specified in its
charter)

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

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

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

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

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

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

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of May 10,
2007, 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.
|------- | ---------------------

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders equity in conformity with accounting
principles generally accepted in the United States. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature. Operating results for the
quarterly period ended March 31, 2007 are not necessarily indicative of the
results that can be expected for the year ending June 30, 2007.

As used in this Quarterly Report on Form 10-QSB, the terms
we, us, our, NorPac, and the Company mean NorPac Technologies, Inc.,
unless otherwise indicated. All dollar amounts in this Quarterly Report are in
U.S. dollars unless otherwise stated.

2

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

FINANCIAL STATEMENTS

(Unaudited)

MARCH 31, 2007

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

BALANCE SHEET
  (unaudited)

|                                                              |   | March 31,  |  
|------------------------------------------------------------- | - | ---------- | -
|                                                              |   | 2007       |  
|ASSETS                                                        |   |            |  
|                                                              |   |            |  
|CURRENT ASSETS:                                               |   |            |  
|Cash                                                          | $ | 816        |  
|Accounts receivable                                           |   | 15,000     |  
|                                                              |   |            |  
|Total
      Current Assets                                    |   | 15,816     |  
|                                                              |   |            |  
|AVAILABLE-FOR-SALE SECURITIES (Note 4)                        |   | 443,600    |  
|                                                              |   |            |  
|LOANS RECEIVABLE (Note 5)                                     |   | 626,492    |  
|                                                              |   |            |  
|INTANGIBLE ASSETS, NET (Note 6)                               |   | 5,400      |  
|                                                              | $ | 1,091,308  |  
|                                                              |   |            |  
|                                                              |   |            |  
|                                                              |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                          |   |            |  
|                                                              |   |            |  
|CURRENT LIABILITIES:                                          |   |            |  
|Accounts payable and accrued liabilities                      | $ | 96,490     |  
|                                                              |   |            |  
|STOCKHOLDERS EQUITY (Note 8):                                |   |            |  
|                                                              |   |            |  
|Authorized:                                                   |   |            |  
|100,000,000 shares of common stock, $0.001 par value          |   |            |  
|100,000,000
      shares of preferred stock, $0.001 par value |   |            |  
|Issued and outstanding:                                       |   |            |  
|37,597,890
      shares of common stock                       |   | 37,597     |  
|Additional paid-in
      capital                              |   | 3,467,383  |  
|Deficit accumulated during the development
      stage        |   | (2,739,312 | )
|Accumulated other
      comprehensive income                  |   | 229,150    |  
|                                                              |   | 994,818    |  
|                                                              |   |            |  
|                                                              | $ | 1,091,308  |  

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 INCOME (LOSS) 
  (Unaudited)

|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   | Period From     |  
|---------------------------------------------- | - | ------------------ | - | - | ----------------- | - | - | ---------- | - | - | ---------- | - | - | --------------- | -
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   | Inception       |  
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   | (April 1, 1998) |  
|                                               |   | Three Months Ended |   |   | Nine Months Ended |   |   | Through    |  
|                                               |   | March 31,          |   |   | March 31,         |   |   | March 31,  |  
|                                               |   | 2007               |   |   | 2006              |   |   | 2007       |   |   | 2006       |   |   | 2007            |  
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Revenues                                       | $ | 15,000             |   | $ | 50,000            |   | $ | 15,000     |   | $ | 50,000     |   | $ | 303,000         |  
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Administrative pre-opening and                 |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|development expenses                           |   | (38,096            | ) |   | (15,268           | ) |   | (116,631   | ) |   | (98,981    | ) |   | (1,690,938      | )
|Interest expense                               |   | -                  |   |   | -                 |   |   | -          |   |   | -          |   |   | (679,541        | )
|Impairment of intangibles                      |   | -                  |   |   | -                 |   |   | -          |   |   | -          |   |   | (20,000         | )
|Stock compensation expense                     |   | -                  |   |   | -                 |   |   | -          |   |   | -          |   |   | (624,000        | )
|Realized loss on available-for-sale securities |   | -                  |   |   | -                 |   |   | -          |   |   | -          |   |   | (42,325         | )
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Income (loss) before interest income           |   | (23,096            | ) |   | 34,732            |   |   | (101,631   | ) |   | (48,981    | ) |   | (2,753,804      | )
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Interest income                                |   | 11,007             |   |   | -                 |   |   | 14,492     |   |   | -          |   |   | 14,492          |  
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Net income (loss)                              |   | (12,089            | ) |   | 34,732            |   |   | (87,139    | ) |   | (48,981    | ) |   | (2,739,312      | )
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Unrealized gain (loss) on available-for-sale   |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|securities                                     |   | 55,450             |   |   | 511,803           |   |   | (110,900   | ) |   | 562,253    |   |   | 229,150         |  
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Comprehensive income (loss)                    | $ | 43,361             |   | $ | 546,535           |   | $ | (198,039   | ) | $ | 513,272    |   | $ | (2,510,162      | )
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Basic and diluted net income (loss) per        |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|common share                                   | $ | -                  |   | $ | -                 |   | $ | -          |   | $ | -          |   |   |                 |  
|                                               |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|Weighted average number of outstanding         |   |                    |   |   |                   |   |   |            |   |   |            |   |   |                 |  
|shares                                         |   | 37,573,862         |   |   | 32,565,390        |   |   | 36,190,071 |   |   | 32,565,390 |   |   |                 |  

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       |  
|                                                                                  |   | Nine Months |   |   | Nine Months |   |   | (April 1, 1998) |  
|                                                                                  |   | Ended       |   |   | Ended       |   |   | Through         |  
|                                                                                  |   | March 31,   |   |   | March 31,   |   |   | March 31,       |  
|                                                                                  |   | 2007        |   |   | 2006        |   |   | 2007            |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |   |             |   |   |             |   |   |                 |  
|Net loss                                                                          | $ | (87,139     | ) | $ | (48,981     | ) | $ | (2,739,312      | )
|Adjustments to reconcile
      net loss to net cash used in operating activities: |   |             |   |   |             |   |   |                 |  
|Amortization expense                                                              |   | 1,800       |   |   | 1,800       |   |   | 18,600          |  
|Compensation expense,
      options to nonemployees                               |   | -           |   |   | -           |   |   | 504,000         |  
|Receipt of available-for-sale securities                                          |   | -           |   |   | (30,000     | ) |   | (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                                                    |   | -           |   |   | -           |   |   | 20,000          |  
|Changes in operating
      assets and liabilities:                                |   |             |   |   |             |   |   |                 |  
|Increase in accounts receivable                                                   |   | (15,000     | ) |   |             |   |   | (15,000         | )
|Increase in accrued
      interest receivable                                     |   | (14,492     | ) |   | -           |   |   | (14,492         | )
|Increase in accounts payable and
      accrued liabilities                        |   | 38,260      |   |   | 23,928      |   |   | 176,271         |  
|Increase in accrued
      interest payable                                        |   | -           |   |   | -           |   |   | 127,380         |  
|Increase in accounts payable, stockholders                                        |   | -           |   |   | 25,000      |   |   | 369,346         |  
|Increase in due
      to stockholders                                             |   | -           |   |   | -           |   |   | 20,776          |  
|Net cash used in operating activities                                             |   | (76,571     | ) |   | (28,253     | ) |   | (1,088,106      | )
|                                                                                  |   |             |   |   |             |   |   |                 |  
|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 used in 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                                  |   | (500        | ) |   | 28,300      |   |   | -               |  
|Issuance of convertible
      notes                                               |   | -           |   |   | -           |   |   | 82,500          |  
|Net cash provided by financing activities                                         |   | 672,500     |   |   | 28,300      |   |   | 1,733,697       |  
|                                                                                  |   |             |   |   |             |   |   |                 |  
|Increase (decrease) in cash                                                       |   | (16,071     | ) |   | 47          |   |   | 816             |  
|                                                                                  |   |             |   |   |             |   |   |                 |  
|Cash, beginning of period                                                         |   | 16,887      |   |   | 307         |   |   | -               |  
|                                                                                  |   |             |   |   |             |   |   |                 |  
|Cash, end of period                                                               | $ | 816         |   | $ | 354         |   | $ | 816             |  
|                                                                                  |   |             |   |   |             |   |   |                 |  
|SUPPLEMENTAL CASH FLOWS INFORMATION:                                              |   |             |   |   |             |   |   |                 |  
|                                                                                  |   |             |   |   |             |   |   |                 |  
|Cash paid for interest                                                            | $ | -           |   | $ | 25          |   | $ | 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 owns a patent for a self- chilling beverage container
        and related component parts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 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. The Merger Agreement
        also provided that the Company would have issued one share of the Companys
        common stock in exchange for each outstanding share of common stock of
        Nextdigital. Nextdigital currently has 21,421,600 shares of common stock
        outstanding. The parties verbally agreed to extend the agreement, however,
        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. The Company is presently negotiating
        with Nextdigital the repayment of all amounts loaned to Nextdigital, and
        intends to continue to pursue its development of the Cool Can Technology
        (see Note 5).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company is considered to be in the development
        stage. The accompanying financial statements represent those of a development
        stage enterprise and therefore, are subject to the usual business risks
        of development stage companies. The Company has had no significant revenue
        from operations. Research and development costs are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | These financial statements have been prepared in conformity
        with accounting principles generally accepted in the United States for
        interim financial information. The accompanying financial statements do
        not include all information and footnote disclosures required for a complete
        presentation prepared under accounting principles generally accepted in
        the United States. The interim period financial statements should be read
        together with the audited financial statements and the accompanying notes
        for the year ended June 30, 2006 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, 2007 and for all periods presented have been included. Interim results
        for the period ended March 31, 2007 are not necessarily indicative of
        the results that may be expected for the fiscal year as a whole.                                                                                              

F-5

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS 
  (unaudited)

|2. | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The accompanying financial statements have
        been prepared in conformity with accounting principles generally accepted
        in the United States, which contemplate continuation of the Company as
        a going concern. However, the Company has sustained substantial losses
        and is still in the development stage. These financial statements do not
        include any adjustments that might result from this uncertainty.                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Additional funding will be necessary to continue
        development and marketing of the self-chilling beverage container. The
        Company intends to arrange for the sale of additional shares of stock
        to obtain additional operating capital for at least the next twelve months.
        There can be no assurance the Company will be able to raise the necessary
        capital to continue in business.                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The financial statements of the Company have
        been prepared in conformity with accounting principles generally accepted
        in the United States and are stated in US 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 United States 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, 2007, cash and
        cash equivalents consists of cash only.                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Intangible assets are recorded at cost. Amortization
        is calculated using the straight-line method over 10 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-6

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS 
  (unaudited)

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company expenses advertising costs as
        incurred. There were no advertising expenses incurred by the Company for
        the periods ended March 31, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Deferred taxes are recorded using the liability
        method. A deferred tax asset or liability is recorded for all temporary
        differences between financial and tax reporting and net operating loss
        carryforwards. Deferred tax expenses (benefit) result from the net change
        during the period of deferred tax assets and liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Deferred tax assets are reduced by a valuation
        allowance when, in the opinion of management, it is more likely than not
        that some portion or all of the deferred tax assets will not be realized.
        Deferred tax assets and liabilities are adjusted for the effects of changes
        in tax laws and rates on the date of enactment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company's financial instruments consist
        of cash, available-for-sale securities, accounts receivable, loans receivable
        and accounts payable and accrued liabilities. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Effective January 1, 2006, the Company adopted
        Statement of Financial Accounting Standards (SFAS) 123(R),
        "Share-Based Payment," and related interpretations which superseded
        Accounting Principles Board (APB) Opinion 25, Accounting
        for Stock Issued to Employees. SFAS 123(R) requires that all
        stock-based compensation be recognized as an expense in the financial
        statements and that such cost be measured at the fair value of the award.
        This statement was adopted using the modified prospective method, which
        requires the Company to recognize compensation expense on a prospective
        basis. The fair value of stock-based compensation is determined using
        the Black-Scholes valuation model, which is consistent with the Companys
        valuation techniques previously utilized for stock-based awards in footnote
        disclosures required under SFAS 123, Accounting for Stock-Based
        Compensation. Prior to January 1, 2006, the Company accounted
        for share-based compensation under the recognition and measurement provisions
        of APB Opinion 25, as permitted by SFAS 123. Under APB Opinion 25, compensation
        expense was recorded using the intrinsic method where compensation expense
        under fixed term option plans was recorded at the date of grant only to
        the extent that the market value of the underlying stock at the date of
        grant exceeded the exercise price. As a result of adopting SFAS 123(R)
        on January 1, 2006, the Companys net loss for the period ended March
        31, 2007 was no different than if it had continued to account for stock-based
        compensation under SFAS 123. Basic and diluted loss per share for the
        period ended March 31, 2007 was no different than if it had continued
        to account for share-based compensation under SFAS 123.

F-7

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS 
  (unaudited)

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                         
|   | (h)                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                         
|   | The following table shows the pro forma
        effect on 2006 net income (loss) and net income (loss) per share, had
        compensation expense been determined based on the fair value at the award
        grant date, in accordance with SFAS 123:

| |                                         |   |              |  |   |              |   |   | Period From         |  
| | --------------------------------------- | - | ------------ |  | - | ------------ | - | - | ------------------- | -
| |                                         |   | Three        |  |   | Nine         |   |   | Inception (April 1, |  
| |                                         |   | Months Ended |  |   | Months Ended |   |   | 1998) Through       |  
| |                                         |   | March 31,    |  |   | March 31,    |   |   | March 31,           |  
| |                                         |   | 2006         |  |   | 2006         |   |   | 2007                |  
| |                                         |   |              |  |   |              |   |   |                     |  
| | Net income (loss)                       | $ | 34,732       |  | $ | (48,981      | ) | $ | (2,739,312          | )
| |                                         |   |              |  |   |              |   |   |                     |  
| | Pro forma net income (loss)             | $ | 34,732       |  | $ | (48,891      | ) | $ | (2,787,312          | )
| |                                         |   |              |  |   |              |   |   |                     |  
| | Stock based compensation                |   |              |  |   |              |   |   |                     |  
| | As reported                             | $ | -            |  | $ | -            |   | $ | 504,000             |  
| | Proforma                                | $ | -            |  | $ | -            |   | $ | 552,000             |  
| |                                         |   |              |  |   |              |   |   |                     |  
| | Basic and diluted net income (loss) per |   |              |  |   |              |   |   |                     |  
| | common share                            |   |              |  |   |              |   |   |                     |  
| | As reported                             | $ | 0.00         |  | $ | (0.00        | ) |   |                     |  
| | Pro
      forma                         | $ | 0.00         |  | $ | (0.00        | ) |   |                     |  

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                            
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------
| | There were no options granted or vested during
      the three and nine months ended March 31, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                            
| | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Loss per common share      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                            
| | Basic net income (loss) per share is computed
      by dividing the net income (loss) for the period by the weighted average
      number of shares of common stock outstanding during the period. Diluted
      earnings per share takes into consideration shares of common stock outstanding
      (computed under basic earnings per share) and potentially dilutive securities.
      As of March 31, 2007, the 432,500 warrants outstanding have been excluded
      from diluted net income (loss) per common share as they were anti-dilutive.
      As of March 31, 2006, there were no potentially dilutive securities outstanding.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                            
| | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Comprehensive income (loss)
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                            
| | 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.                                                                                                                                                                                                                                                                                

F-8

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
  (unaudited)

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In June 2005, the FASB issued SFAS 154, Accounting
        Changes and Error Corrections, which replaces APB Opinion 20,
        Accounting Changes, and SFAS 3, Reporting Accounting
        Changes in Interim Financial Statements.SFAS 154 changes the
        requirements for the accounting and reporting of a change in accounting
        principle. APB Opinion 20 previously required that most voluntary changes
        in accounting principles be recognized by including the cumulative effect
        of the new accounting principle in net income of the period of change.
        SFAS 154 now requires retrospective application of changes in accounting
        principle to prior period financial statements, unless it is impractical
        to determine either the period-specific effects or the cumulative effect
        of the change. The statement is effective for fiscal years beginning after
        December 15, 2005. The Company does not expect that this Statement will
        have a material impact on their financial position, results of operations
        or cash flows.
      In February 2006, the FASB issued SFAS 155, Accounting
        for Certain Hybrid Financial Instruments  an amendment of SFAS 133
        and 140. SFAS 155 permits fair value remeasurement for any hybrid
        financial instrument that contains an embedded derivative that otherwise
        would require bifurcation, clarifies which interest-only strips and principal-only
        strips are not subject to the requirements of SFAS 133, and establishes
        a requirement to evaluate interests in securitized financial assets to
        identify interests that are freestanding derivatives or that are hybrid
        financial instruments that contain an embedded derivative requiring bifurcation.
        In addition, SFAS 155 clarifies that concentrations of credit risk in
        the form of subordination are not embedded derivatives and amends SFAS
        140 to eliminate the prohibition on a qualifying special purpose entity
        from holding a derivative financial instrument that pertains to a beneficial
        interest other than another derivative financial instrument. SFAS 155
        is effective for all financial instruments acquired or issued after the
        beginning of an entitys first fiscal year that begins after September
        15, 2006. The Company does not expect that this Statement will have a
        material impact on their financial position, results of operations or
        cash flows.
      In March 2006, the FASB issued SFAS 156, Accounting
        for Servicing of Financial Assetsan amendment of SFAS 140.
        SFAS 156 requires that an entity separately recognize a servicing asset
        or a servicing liability when it undertakes an obligation to service a
        financial asset under a servicing contract in certain situations. Such
        servicing assets or servicing liabilities are required to be initially
        measured at fair value, if practicable. SFAS 156 also allows an entity
        to choose either the amortization method or the fair value measurement
        method to account for servicing assets and servicing liabilities within
        the scope of this Statement. SFAS 156 is effective after the beginning
        of an entitys first fiscal year that begins after September 15,
        2006. The Company does not expect that this Statement will have a material
        impact on their financial position, results of operations or cash flows.

F-9

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
  (unaudited)

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In April 2006, the FASB issued FASB Staff
        Position (FSP) FIN 46R-6, Determining the Variability to Be Considered
        in Applying FASB Interpretation No. (FIN) 46(R).FIN 46R-6 addresses
        certain implementation issues related to FIN 46R (revised December 2003),
        Consolidation of Variable Interest Entities. Specifically,
        FIN 46R-6 addresses how a reporting enterprise should determine the variability
        to be considered in applying FIN 46R. The variability that is considered
        in applying FIN 46R affects the determination of (a) whether an entity
        is a variable interest entity (VIE), (b) which interests are variable
        interests in the entity, and (c) which party, if any, is the primary
        beneficiary of the VIE. That variability affects any calculation of expected
        losses and expected residual returns, if such a calculation is necessary.
        The Company is required to apply the guidance in FIN 46R-6 prospectively
        to all entities (including newly created entities) and to all entities
        previously required to be analyzed under FIN 46R when a reconsideration
        event has occurred, beginning July 1, 2006. The Company will evaluate
        the impact of this FSP at the time any such reconsideration event
        occurs and for any new entities created.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In July 2006, the FASB issued FIN 48,
        Accounting for Uncertainty in Income Taxes-an Interpretation
        of SFAS 109.This Interpretation provides guidance for recognizing
        and measuring uncertain tax positions, as defined in SFAS 109, Accounting
        for Income Taxes.FIN 48 prescribes a threshold condition that
        a tax position must meet for any of the benefit of an uncertain tax position
        to be recognized in the financial statements. Guidance is also provided
        regarding derecognition, classification and disclosure of uncertain tax
        positions. FIN 48 is effective for fiscal years beginning after December
        15, 2006. The Company does not expect that this Interpretation will have
        a material impact on their financial position, results of operations or
        cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In September 2006, the SEC issued Staff
        Accounting Bulletin (SAB) No. 108, Considering the
        Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements. SAB No. 108 provides guidance
        on how prior year misstatements should be taken into consideration when
        quantifying misstatements in current year financial statements for purposes
        of determining whether the current years financial statements are
        materially misstated. SAB No. 108 is effective for fiscal years ending
        on or after November 15, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In September 2006, the FASB issued SFAS
        No. 157, Fair Value Measurements.SFAS No. 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 No. 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 September 2006, the FASB issued Statement
        of Financial Accounting Standards No. 158, Employers Accounting
        for Defined Benefit Pension and Other Postretirement Plans, (FAS
        158). FAS 158 requires an employer to recognize the overfunded or
        underfunded status of a defined benefit postretirement plan (other than
        a multiemployer plan) as an asset or liability in its statement of financial
        position and to recognize changes in that funded status in the year in
        which the changes occur through comprehensive income. FAS 158 is effective
        for financial statements as of December 31, 2006. The adoption of FAS
        No. 158 is expected to have no impact on the Company's financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

F-10

---

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, 2007 | $ | 443,600          |  | $ | 229,150    |  | $ | -          |  | $ | 214,450 | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In November 2002, the Company received securities valued
        at $63,000. Pursuant to the license agreement described in Note 13, the
        Company received additional securities valued at $175,000 in November
        2003, and securities valued at $30,000 in January 2006. There were no
        sales of available-for-sale securities during the nine months ended March
        31, 2007 and 2006.
      The Companys net unrealized holding gain (loss) was
        $55,450 and $511,803 for the three months ended March 31, 2007 and 2006,
        respectively and ($110,900) and $562,253 for the nine months ended March
        31, 2007 and 2006, respectively. The reclassification adjustment was $0
        and $0 for the three months ended March 31, 2007 and 2006, respectively
        and $0 and $0 for the nine months ended March 31, 2007 and 2006, respectively
        and $40,800 for the period from inception through March 31, 2007. On an
        ongoing basis, the Company evaluates its investment in available-for-sale
        securities if a decline in fair value is other than temporary. There have
        been no other-than-temporary declines in fair value through March 31,
        2007.
      At March 31, 2007, the Company held 5,545,000 common shares
        of Balsam Ventures, Inc. 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-11

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
  (unaudited)

|5. | Loans Receivable
      During the nine months ended March 31, 2007, several 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   |  |  |                   | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Interest income for the three and nine months ended March
        31, 2007 totaled $11,007 and $14,492, respectively.
      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.                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|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 have been similarly capitalized. Estimated
        amortization expense is $2,400 for each of the next two years and $600
        in the third year.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                          |   | March 31, |  
| | ------------------------ | - | --------- | -
| |                          |   | 2007      |  
| |                          |   |           |  
| | Patent                   | $ | 24,000    |  
| | Accumulated amortization |   | (18,600   | )
| |                          |   |           |  
| | Net book value           | $ | 5,400     |  

In April 2001, the Company acquired
  a patent pending from certain stockholders which expands on the above patent.
  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

F-12

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
  (unaudited)

|6. | Intangible Assets (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In the event that facts and circumstances indicate
        that the carrying amount of an asset may not be recoverable and an estimate
        of future undiscounted cash flows is less than the carrying amount of
        the asset, an impairment loss will be recognized. Management's estimates
        of revenues, operating expenses, and operating capital are subject to
        certain risks and uncertainties which may affect the recoverability of
        the Company's investments in its assets. Although management has made
        its best estimate of these factors based on current conditions, it is
        possible that changes could occur which could adversely affect management's
        estimate of the net cash flow expected to be generated from its operations.
        At March 31, 2007, the Company believes that no significant impairment
        of the remaining intangibles has occurred and that no reduction of the
        estimated useful lives of such assets is warranted.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|7. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Consulting fees paid to an officer and director totaled
        $3,000 and $0 for the three months ended March 31, 2007 and 2006,
        respectively and $9,000 and $0 for the nine months ended March
        31, 2007 and 2006, respectively. Consulting fees paid to an officer and
        director from inception through March 31, 2007 totaled $11,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Consulting fees paid to a former officer and director
        totaled $0 and $0 for the three months ended March 31, 2007 and
        2006, respectively and $0 and $30,000 for the nine months ended
        March 31, 2007 and 2006, respectively. Consulting fees paid to a former
        officer and director from inception through March 31, 2007 totaled $588,000.
        During the period of inception through March 31, 2007, a former officer
        and director settled accounts payable of $146,330 in exchange for
        187,500 common shares of the Company with a fair value of $28,125.
        The difference between the carrying amount of the accounts payable and
        the fair value of the common shares issued of $118,205 was recorded
        as an increase to additional paid in capital.                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | At March 31, 2007, included in accounts payable was
        $46, owed to a former officer and director of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8. | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-13

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS 
  (unaudited)

|8. | Stockholders Equity (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On January 5, 2007, the Company issued 432,500 units
        at a price of $0.40 per unit, with each unit consisting of one share of
        the Companys common stock and one share purchase warrant. Each warrant
        entitles the holder to purchase an additional share of the Companys
        common stock at a price of $0.40 per share and expires January 5, 2008.                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|9. | 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, June 30, 2004                               |  | -         |   |   | -        | 
| | Granted                                                   |  | -         |   |   | -        | 
| | Expired                                                   |  | -         |   |   | -        | 
| | Cancelled                                                 |  | -         |   |   | -        | 
| | Under option, June 30, 2005                               |  | -         |   |   | -        | 
| | Granted                                                   |  | -         |   |   | -        | 
| | Expired                                                   |  | -         |   |   | -        | 
| | Cancelled                                                 |  | -         |   |   | -        | 
| | Under option, June 30, 2006                               |  | -         |   |   | -        | 
| | Granted                                                   |  | -         |   |   | -        | 
| | Expired                                                   |  | -         |   |   | -        | 
| | Cancelled                                                 |  | -         |   |   | -        | 
| | Under option, March
      31, 2007                        |  | -         |   |   | -        | 

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

F-14

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
  (unaudited)

|10. | Warrants
      The following is a summary of warrants at March 31, 2007:
|--- | ------------------------------------------------------------------------

| | Date            | Issued  | Oustanding | Exercise Price | Expiry Date    
| | --------------- | ------- | ---------- | -------------- | ---------------
| | January 5, 2007 | 432,500 | 432,500    | $ 0.40         | January 5, 2008

|11. | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|12. | 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,         |  
| |                                       |   | 2007               |   |   | 2006              |  
| |                                       |   |                    |   |   |                   |  
| | Expected tax liability (benefit) at   | $ | (4,110             | ) | $ | (11,809           | )
| | statutory rate                        |   |                    |   |   |                   |  
| | State tax effects                     |   | (725               | ) |   | (2,084            | )
| | Increase in valuation
      allowance |   | 4,835              |   |   | 13,893            |  
| |                                       |   |                    |   |   |                   |  
| |                                       | $ | -                  |   | $ | -                 |  

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

F-15

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
  (unaudited)

|12. | Income Taxes (continued)
      The following is a summary of deferred taxes at March 31,
        2007:
|--- | ------------------------------------------------------------------------------------------------------

| |                      |   | 2007       |  
| | -------------------- | - | ---------- | -
| |                      |   |            |  
| | Deferred tax assets: |   |            |  
| | Net operating loss   | $ | (1,124,980 | )
| | Valuation allowance  |   | 1,124,980  |  
| |                      |   |            |  
| |                      | $ | -          |  

|13. | 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
        "Technology") including the right to manufacture, use and sell apparatus
        and products embodying the 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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-16

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS 
  (unaudited)

|13. | License Agreement (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Technology and the Company patents and trademarks
        included in the 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 Technology
        during the currency of the Agreement. The Agreement supersedes all prior
        arrangements and agreements between the Company and Balsam in respect
        of the Technology.

F-17

---

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

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Managements Discussion
and Analysis or Plan of Operation and other sections of this quarterly report
constitute forward-looking statements. These statements, identified by words
such as plan, anticipate, believe, estimate, should, expect and
similar expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. We advise you
to carefully review the reports and documents we file from time to time with the
Securities and Exchange Commission (the SEC), particularly our Annual Reports
on Form 10-KSB, our Quarterly Reports on Form 10-QSB and our Current Reports on
Form 8-K.

INTRODUCTION

We are in the business of developing and marketing a patented
unique proprietary technology for a self-chilling beverage container (the Cool
Can Technology). We are currently in the development stage of our business. We
are in the process of taking our planned product from the conceptual stage of
development to the production of a prototype of a self-chilling beverage
container that we can use for testing purposes.

We have not completed the development of a commercially viable
self-chilling beverage container to date, nor have we achieved any revenues to
date. Our ability to pursue our plan of operation, as discussed below, is
contingent upon us achieving substantial financing, of which there is no
assurance. If we are not able to obtain additional financing on acceptable
terms, our business may fail.

Recent Corporate Developments

Since the completion of our second fiscal quarter ended
December 31, 2006, we have experienced the following corporate developments:

|1. | In January, 2007 we changed the address of our head
      office to Suite 410-103 East Holly St. Bellingham, WA 98225. We rent the
      new office space consisting of 400 square feet on a month to month basis
      at a rate of $275 per month.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | On January 5, 2007, we closed a private placement of
      432,500 units at a price of $0.40 per unit for gross proceeds of $173,000.
      Each unit consisted of one share of our common stock and one share
      purchase warrant. Each warrant entitles the holder thereof to acquire one
      additional share of our common stock at a price of $0.40 for a period of
      one year from the date of issuance. The issuance was completed pursuant to
      Regulation S of the Securities Act on the basis that each subscriber
      represented to us that that it was a non-US person, as defined in
      Regulation S of the Securities Act. See Item 2. Unregistered Sales of
      Equity Securities and Use of Proceeds.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|3. | On January 30, 2007, we loaned $162,000 to Nextdigital
      Corp. (Nextdigital). The loan to Nextdigital is for a term of two years,
      maturing January 30, 2009, and accrues interest at a rate of 8% per annum.
      The loan is unsecured and is evidenced by a promissory
  note.                                                                                                                                                                                                                                                                                                                                                                                                                                               

3

---

|4. | On February 15, 2007 we received notice from Nextdigital
      that it was electing not to proceed with our proposed merger with
      Nextdigital, because it believed its shareholders would not approve it. We
      are presently negotiating with Nextdigital the repayment of all amounts
      loaned to Nextdigital, and intend to continue to pursue our development of
      the Cool Can Technology.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cool Can Technology

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

License Agreement with Balsam Ventures, Inc.

In November, 2003, we entered into a license agreement (the
License Agreement) with Balsam Ventures, Inc. (Balsam), pursuant to which we
granted Balsam an exclusive license (the License) for a term of 40 years to
manufacture, use, and sell our proprietary technology within the countries
comprising the European Union and China (the Exclusive Region). We also
granted Balsam a right of first refusal (the Right of First Refusal) to
purchase our proprietary technology and to license that technology for countries
that are not a party to the North American Free Trade Agreement and are outside
of the Exclusive Region. The License Agreement supersedes the original licensing
agreement that we had with Balsam dated June 5, 2002.

In consideration of the grant of the License and the Right of
First Refusal, Balsam agreed to:

|(1) | issue 5,000,000 restricted shares of its common stock to
      us; and
|--- | ----------------------------------------------------------------------
|    |                                                                       
|(2) | pay us the following royalties:                                       
|    |                                                                       
|    | (a)                                                                   
|    |                                                                       
|    | (b)                                                                   

Pursuant to the terms of the License Agreement, we were to
receive minimum royalty payments of $5,000 per month under the License
Agreement, commencing on January 15, 2006 (the Minimum Royalty Payments). We
entered into an extension agreement with Balsam on January 14, 2006, pursuant to
which we agreed to amend the terms of the License Agreement to extend the date
on which Balsam was required to commence paying the Minimum Royalty Payments to
January 15, 2007 in exchange for the following consideration:

4

---

| | (a) | 500,000 restricted shares of Balsams common stock;
      and
| | --- | -------------------------------------------------------------
| |     |                                                              
| | (b) | $20,000.                                                     

We received the payment of $20,000 and the 500,000 shares of
Balsams common stock during our previous fiscal year ended June 30, 2006. On
April 19, 2007 we received a payment of $15,000 from Balsam representing
Balsams outstanding minimum royalty payments for January, February and March,
2007.

PLAN OF OPERATION

We are presently a development stage company in the business of
developing and marketing a patented unique proprietary technology for a
self-chilling beverage container. We are in the process of taking our planned
product from the conceptual stage of development to the production of a
prototype of a self-chilling beverage container that we can use for testing
purposes. We have not completed the development of a commercially viable
self-chilling beverage container to date, nor have we achieved any revenues to
date.

Our plan of operation is to continue pursuing our initial
business plan which includes the following components:

|1. | The first phase will be divided into two parts and
      involves engaging LNE Engineering Co., a third party contractor, to
      proceed with prototype development and production of samples of our
      self-chilling beverage container modules. This phase will include the
      following elements:
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |        | Phase 1 Prototype Development                                      | Timeline  
| | ------ | ------------------------------------------------------------------ | ----------
| | Part 1 | Review of past progress.                                           | 1 month   
| |        | Development of coils and suppliers for the
      associated parts. | 2 months  
| |        | Development of trigger/valve
      mechanism.                      | 3 months  
| |        | Development of charging and canning system.                        | 4 months  
| |        | Fabrication of six engineering
      prototype samples.            | 5 months  
| |        | Plan, cost and schedule for production of 2,000
      industry     | 6 months  
| |        | demonstration samples.                                             |           
| |        |                                                                    |           
| | Part 2 | Production of 2,000 industry
      demonstration samples.          | 7.5 months

|2. | The second phase of our plan of operation involves
      consultation and feedback with all parties involved in the production and
      handling of our planned self-chilling beverage container. This phase would
      be undertaken upon completion of Phase 1, as outlined above. Consultation
      would include meeting and discussing our progress to date with aluminum
      can manufacturers, filler manufacturers, beverage canners and recycling
      entities. The focus of the consultation would be to determine what
      auxiliary equipment will be required for production of our planned
      self-chilling beverage containers and to develop blueprints and estimated
      costs for full-scale production.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3. | The third phase of our plan of operation is to market and
      pursue licensing of the Cool Can Technology. This phase is anticipated to
      include presentation of product-ready samples to the beverage industry. We
      would seek out qualified candidates for licensing of the
  product                                                                                                                                                                                                                                                                                                                                                                                                                                     

5

---

in various countries and/or
territories. We plan to approach beverage manufacturers for joint venture
opportunities in order to drive consumer trials and to sample the finished
product in the market.

We anticipate spending approximately $690,000 on our plan of
operation over the next twelve months, of which $380,000 is anticipated to be
spent over the next six months, subject to our receiving the necessary financing
to enable us to pursue our plan of operation. We will not be able to proceed
with our plan of operation unless we obtain significant additional financing. We
have cash of $816 and a working capital deficit of $80,674 as of March 31, 2007.
Accordingly, we will require additional financing in order to proceed with our
plan of operation, see Liquidity and Financial Condition, below. We anticipate
that, to the extent that we require additional funds to support our operations
or expansion of business, we may sell additional equity or issue debt. Any sale
of additional equity securities will result in dilution to our stockholders.
There can be no assurance that additional financing, if required, will be
available to us on acceptable terms.

RESULTS OF OPERATIONS

Third Quarter and Nine Months Summary

|                  |   | Three Months Ended |   |   |            |   | Nine Months Ended |            |   |  
|----------------- | - | ------------------ | - | - | ---------- | - | ----------------- | ---------- | - | -
|                  |   | March 31,          |   |   | Percentage |   |                   | March 31,  |   |  
|                  |   |                    |   |   |            |   |                   | Increase / |   |  
|                  |   | 2007               |   |   | 2006       |   |                   | (Decrease) |   |  
|Revenue           | $ | 15,000             |   | $ | 50,000     |   |                   | (70%       | ) | $
|Expenses          |   | (38,096            | ) |   | (15,268    | ) |                   | 149.5%     |   |  
|Interest Income   |   | 11,007             |   |   | -          |   |                   | -          |   |  
|Net Income (Loss) | $ | (12,089            | ) | $ | 34,732     |   |                   | (134.8%    | ) | $

Revenues

During the quarter ended March 31, 2007 we had revenue of
$15,000 due to royalty payments received from Balsam Ventures, Inc. in
connection with our licensing agreement with Balsam. Our revenues to date have
consisted of licensing fees received by us from the licensing of our Cool Can
product. We have not earned any significant revenues from sales of our products
to date and have incurred total losses in the amount of $2,739,312 since our
inception. We are presently in the development stage of our business and we can
provide no assurance that we will be able to complete commercial development or
successfully sell or license products incorporating our Cool Can Technology once
the development is complete.

Operating Expenses

Our operating expenses for the three and nine month periods
ended March 31, 2007 and 2006 consisted of the following:

|                     |   | Three Months Ended |   |   |            |   |  | Nine Months Ended |  |   |            |  
|-------------------- | - | ------------------ | - | - | ---------- | - |  | ----------------- |  | - | ---------- | -
|                     |   | March 31,          |   |   | Percentage |   |  | March 31,         |  |   | Percentage |  
|                     |   |                    |   |   |            |   |  | Increase /        |  |   |            |  
|                     |   | 2007               |   |   | 2006       |   |  | (Decrease)        |  |   | 2007       |  
|Administrative Pre-  | $ | (38,096            | ) | $ | (15,268    | ) |  | 149.5%            |  | $ | (116,631   | )
|Opening and          |   |                    |   |   |            |   |  |                   |  |   |            |  
|Development Expenses |   |                    |   |   |            |   |  |                   |  |   |            |  

6

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|                         |   | Three Months Ended |   |   |            |   |  | Nine Months Ended |  |   |            |  
|------------------------ | - | ------------------ | - | - | ---------- | - |  | ----------------- |  | - | ---------- | -
|                         |   | March 31,          |   |   | Percentage |   |  | March 31,         |  |   | Percentage |  
|                         |   |                    |   |   |            |   |  | Increase /        |  |   |            |  
|                         |   | 2007               |   |   | 2006       |   |  | (Decrease)        |  |   | 2007       |  
|Total Operating Expenses | $ | (38,096            | ) | $ | (15,268    | ) |  | 149.5%            |  | $ | (116,631   | )

The increase in our total expenses for the third quarter ended
March 31, 2007 when compared to our total expenses for the third quarter ended
March 31, 2006, was primarily attributable to an increase in professional fees
relating to the preparation of our periodic reports under the Exchange Act and
an increase in consulting fees. Commencing in January, 2007 we paid a fee of
$5,000 per month to an outside consultant for consulting services provided to
NorPac.

Net Loss

In November 2002, we received restricted securities valued at
$63,000. Pursuant to our license agreement with Balsam Ventures, Inc., we
received additional securities valued at $175,000 in November 2003, and
securities valued at $30,000 in January 2006. Our net unrealized holding gain
(loss) was $55,450 and $511,803 for the three months ended March 31, 2007 and
2006, respectively and ($110,900) and $562,253 for the nine months ended March
31, 2007 and 2006, respectively. At March 31, 2007, we held 5,545,000 common
shares of Balsam Ventures, Inc. representing 15.3% of the issued and outstanding
shares of Balsam.

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital           |   |                   |   |   |                  |   |  |                       |  
|------------------------- | - | ----------------- | - | - | ---------------- | - |  | --------------------- | -
|                          |   |                   |   |   |                  |   |  | Percentage            |  
|                          |   | At March 31, 2007 |   |   | At June 30, 2006 |   |  | Increase / (Decrease) |  
|Current Assets            | $ | 15,816            |   | $ | 21,387           |   |  | (26.0%                | )
|Current Liabilities       |   | (96,490           | ) |   | (58,730          | ) |  | 64.3%                 |  
|Working Capital (Deficit) | $ | (80,674           | ) | $ | (37,343          | ) |  | 116.0%                |  

The increases in our working capital deficit at March 31, 2007
from June 30, 2006 is primarily as a result of the increase in our professional
fees paid in connection with preparing and filing our periodic reports under the
Exchange Act.

|Cash Flows                                    |   |                             |   |   |         |  
|--------------------------------------------- | - | --------------------------- | - | - | ------- | -
|                                              |   | Nine Months Ended March 31, |  
|                                              |   | 2007                        |   |   | 2006    |  
|Cash Flows (Used In) Operating Activities     | $ | (76,571                     | ) | $ | (28,253 | )
|Cash Flows (Used In) Investing Activities     |   | (612,000                    | ) |   | -       |  
|Cash Flows From Financing Activities          |   | 672,500                     |   |   | 28,300  |  
|Net Increase (Decrease) In Cash During Period | $ | (16,071                     | ) | $ | 47      |  

Our current monthly cash requirements are approximately $20,000
per month. Our current cash reserves are not sufficient to enable us to operate
even on a short term basis. Further, we require approximately $690,000 in order
to carry out our plan of operation over the next twelve months.

7

---

Loans

During the nine months ended March 31, 2007, several loans were
granted by NorPac to NextDigital Corp., 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  |                  

Interest income for the three and nine month periods ended
March 31, 2007 totaled $11,007 and $14,492, respectively. We are presently
negotiating with Nextdigital the repayment of all amounts loaned to Nextdigital.

Financing Requirements

We anticipate that we will continue to incur losses for the
foreseeable future as we expect to incur substantial product development,
marketing and operating expenses in implementing our plan of operation. Our
future financial results are uncertain due to a number of factors, many of which
are outside of our control. These factors include, but are not limited to:

|(a) | our ability to develop a commercially marketable Cool Can
      product;                                                               
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                        
|(b) | the success of our planned license agreements for the
      Cool Can Technology that we develop;                                       
|    |                                                                                                                                        
|(c) | our ability to raise additional capital necessary to
      implement our business strategy and plan of operation;                      
|    |                                                                                                                                        
|(d) | our ability to compete with other chilled beverage
      container technology; and                                                     
|    |                                                                                                                                        
|(e) | the success of any marketing and promotional campaign
      which we conduct for our Cool Can product once development is
    complete.

We require additional financing if we are to continue as a
going concern and to finance our business operations. We anticipate that any
additional financing would be through the sales of our common stock or other
equity-based securities. We are presently in the process of negotiating private
placements of securities to raise working capital to finance our operations.
However, 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. In the event that we
are unable to raise additional financing on acceptable terms, we intend to
reduce our product development efforts and may implement additional actions to
reduce expenditures.

The financial statements accompanying this Quarterly Report
contemplate our continuation as a going concern. However, we have sustained
substantial losses and are still in the development stage. Additional funding
will be necessary to continue development and marketing of our product. We
intend to arrange for the sale of additional shares of our common stock to
obtain additional

8

---

operating capital for the next twelve months. However, there
can be no assurance that we will be able to raise the necessary capital to
continue our business.

OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations.

Use of Estimates

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

Fair Value of Financial Instruments

Our financial instruments consist of cash, accounts receivable,
available-for-sale securities, loan receivables, accounts payable and accrued
liabilities. 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, 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.

Intangibles

Intangible assets are amortized using the straight-line method
over 10 years. In accordance with Statement of Financial Accounting Standards
(SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
as circumstances dictate, we evaluate whether changes have occurred that would
require revision of the remaining estimated lives of recorded long-lived assets,
including intangibles, or render those assets not recoverable. If such
circumstances arise, recoverability is determined by comparing the undiscounted
net cash flows of long-lived assets to their respective carrying values. The
amount of impairment, if any, is measured based on the projected discounted cash
flows using an appropriate discount rate. At this time, we believe that no
significant impairment of the remaining intangibles has occurred and that no
reduction of the estimated useful lives of such assets is warranted.

Comprehensive Income (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 income
(loss) consists of our net loss and unrealized gain (loss) on available-for-sale
securities.

9

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RISKS AND UNCERTAINTIES

We may not be able to continue our business as a going
concern.

We have had cumulative net losses of $2,739,312 from inception
  to March 31, 2007. Furthermore, 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,
  we may be forced to discontinue our business. We are currently in the process
  of identifying sources of additional financing, negotiating changes to our debt
  structure and evaluating our strategic options. However, there are no assurances
  that these plans can be accomplished on satisfactory terms, or at all, or that
  they will provide sufficient cash to fund our operations, pay the principal
  of, and interest on, our indebtedness, fund our other liquidity needs or permit
  us to refinance our indebtedness. Further, our inability to obtain additional
  financing may result in our securityholders losing all or a material portion
  of their investment in our securities. These conditions raise substantial doubt
  about our ability to continue as a going concern.

We require additional financing to continue our plan of
operation.

Our plan of operation calls for significant expenses in
connection with the development of our Cool Can product. Our current operating
funds are insufficient to complete our plan of operation which will require an
estimated $690,000 to be spent over the next twelve months developing and
marketing a prototype of our Cool Can product in order to accomplish our goals.
As of March 31, 2007, we had cash in the amount of $816 and a working capital
deficit of $80,674. Accordingly, we will need to obtain additional financing in
order to complete our prototype development. We will also require additional
financing if the costs of our Cool Can product development are greater than
anticipated. There is no assurance that actual cash requirements will not exceed
our estimates. In particular, additional capital may be required in the event
that:

|1. | we incur unexpected costs in completing the development
      of our prototype or encounter any unexpected technical or other
      difficulties;
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                  
|2. | we incur delays and additional expenses as a result of
      technology failure;                                                                 
|   |                                                                                                                                                  
|3. | we are unable to create a substantial market for our
      products; or                                                                          
|   |                                                                                                                                                  
|4. | we incur any significant unanticipated
  expenses.                                                                                               

The occurrence of any of the aforementioned events could
adversely affect our ability to meet our plan of operation. If we are unable to
obtain additional financing in the amounts and on terms deemed acceptable to us,
our business and future success may be adversely affected.

We may experience delays in the construction of our
prototype.

If we are able to obtain sufficient financing, of which there
are no assurances, we expect to begin construction of a prototype of the Cool
Can product within the next twelve months. Development and testing of the
prototype is expected to take approximately six months to complete. However,
development projects of this type often experience delays and technical
difficulties. Our ability to complete the development on schedule is dependent
on many circumstances, some of which may be outside of our control. These
factors may include, but are not limited to, factors such as the availability of
outside contractors, materials and equipment. In addition, although we believe
that the principles underlying the design of our Cool Can Technology are sound,
problems can arise when

10

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attempting to manufacture an actual product from the prototype.
Even if we are able to complete development of the prototype as scheduled, there
are no assurances that the prototype will perform as expected.

Our product development program may not be successful.

Once we complete our prototype development there is no
assurance that our prototype will work as expected. In the event we successfully
develop a prototype, there is no assurance that we will be able to manufacture
the prototype at a reasonable cost. Even if we are able to manufacture the
prototype at a reasonable cost, there is no assurance that the price of our Cool
Can product will not be excessive, precluding the product from generating
sufficient consumer or market acceptance.

Our operations may be subject to extensive government
regulations.

We expect that the self-chilling beverage technology will be
subject to a number of government regulations, including strict safety and
environmental guidelines. All of the currently projected uses for our
self-chilling beverage container fall under the authority of the United States
Food and Drug Administration (the FDA).The FDA regulates the material content
of all beverage containers and packages. Our Cool Can Technology also falls
under the purview of the Environmental Protection Agency, which has a mandate to
protect the stratospheric ozone. As we are still in the process of developing
the Cool Can products, the full extent to which these regulations will affect
our future business prospects is not yet fully known and there can be no
assurance that we can successfully comply with all present or future government
regulations.

Asserting and defending intellectual property rights may
impact results of operations.

The success of our business may depend on our ability to
protect our proprietary process and technology from competitors. A number of
international patent applications have been filed with respect to the Cool Can
Technology. However, there is no assurance that a final patent will be granted
for any of the patent pending technologies underlying our proposed products. If
we are not able to obtain a patent for our technology, we will only be able to
protect our products and technological processes by maintaining the secrecy of
those products and processes.

Even if we are able to obtain patents for the Cool Can
Technology, we may be required to defend our intellectual property rights
through litigation. The financial cost of such litigation could have a material
impact on our financial condition even if we are successful in developing and
marketing products and in defending any of our intellectual property rights, of
which there is no assurance. Furthermore, an adverse outcome in any litigation
or interference proceeding could subject us to significant liabilities to third
parties and require us to cease using the technology that is at issue or to
license the technology from third parties. In addition, a finding that any of
our intellectual property rights are invalid could allow competitors to more
easily and cost-effectively compete. Thus, an unfavorable outcome in any patent
litigation or interference proceeding could have a material adverse effect on
our business, financial condition and results of operations.

If we are unable to achieve market acceptance for our
products, we will be unable to build our business.

To date, we have entered into only one licensing agreement with
respect to our Cool Can Technology. Our success will depend on the acceptance of
our Cool Can Technology by the beverage industry, as well as by related
businesses and the general public. Achieving such acceptance will require
significant research and development investment. Our technology generally, and
our proposed Cool Can product specifically, may not achieve widespread
acceptance by

11

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businesses in general, or by major beverage suppliers, beverage
manufacturers or agents thereof, which could limit our ability to develop and
expand our business. The market for self-chilling beverages is relatively new
and is evolving. Our ability to generate revenue in the future depends on the
acceptance by both our customers and beverage manufacturers in general. The
adoption of our Cool Can product could be hindered by the perceived costs of
this new technology to consumers and beverage brand owners. Accordingly, in
order to achieve commercial acceptance, we will have to educate prospective
customers, including large, established beverage manufacturers, about the uses
and benefits of our Cool Can Technology. If these efforts fail, or if our Cool
Can product does not achieve commercial acceptance, our business could be
harmed.

We have a limited operating history.

We have a relatively short operating history and we are
involved in a rapidly evolving and unpredictable industry. As of March 31, 2007,
we had a working capital deficit of $80,674. We will need to generate
significant revenues to achieve profitability, which may not occur. We expect
operating expenses to increase as a result of the further implementation of our
business plan. Even if we achieve profitability, we may be unable to sustain or
increase profitability on a quarterly or annual basis in the future. It is
possible that we will never achieve profitability.

We are dependent on key personnel.

Our success will largely depend on the performance of our
management. We are currently dependent upon a limited number of employees and
consultants. As such, our success will also depend on our ability to attract and
retain highly skilled technical, research, management, regulatory compliance,
sales and marketing personnel. Competition for such personnel is intense. The
loss of the services of such personnel or the inability to attract and retain
other key personnel could impair the development of our business, operating
results and financial condition.

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, John P. Thornton,
our sole executive officer and director 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. If the demands of our business require the full
business time of Mr. Thornton, he is prepared to adjust his timetable to devote
more time to our business. However, Mr. Thornton may not be able to devote
sufficient time to the management of our business, as and when needed. It is
possible that the demands of Mr. Thorntons other interests will increase with
the result that he would no longer be able to devote sufficient time to the
management of 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
your 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

12

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we issue additional stock, investors percentage interests in
NorPac 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 United States Securities and Exchange Commission (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 trading price of our common
stock is less than $5.00 per share, the common stock will be subject to Rule
15g-9 under the Exchange Act. The penny stock rules require a broker-dealer,
prior to a transaction in a penny stock, to deliver a standardized risk
disclosure document prepared by the SEC, that:

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

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

13

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

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

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

14

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PART II - OTHER INFORMATION

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

None.

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

During the three months ended March 31, 2007, we completed the
following unregistered sales of our securities:

On January 5, 2007, we closed a private placement of 432,500
units at a price of $0.40 per unit for gross proceeds of $173,000. Each unit
consists of one share of our common stock and one share purchase warrant. Each
warrant entitles the holder to acquire one additional share of our common stock
at a price of $0.40 for a period of one year from the date of issuance. The
issuance was completed pursuant to Regulation S of the Securities Act on the
basis that each subscriber represented to us that that it was a non-US person,
as defined in Regulation S of the Securities Act. All securities issued to the
subscribers were endorsed with a restrictive legend in accordance with
Regulation S of the Securities Act.

|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

None.

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

None.

|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

None.

15

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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                                                                                                                                                   
|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)                                                                           
|31.1    | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.               

16

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

Notes:

|(1)  | 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.                                

17

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SIGNATURES

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

|      |                    |  |     | NORPAC TECHNOLOGIES, INC.                                
|----- | ------------------ |  | --- | ---------------------------------------------------------
|      |                    |  |     |                                                          
|      |                    |  |     |                                                          
|Date: | May
      14, 2007 |  | 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)                

---