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

FORM 10-QSB

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

For the quarterly period ended December 31, 2005

** ̈**
  Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of
  1934

For the transition period from _______________ to
_______________

COMMISSION FILE NUMBER 000-27147

NORPAC TECHNOLOGIES, INC.(Name of small business issuer in its charter)

|NEVADA                                                               | 95-4705831                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|698 Seymour Street, Suite 311                                        |                                     
|Vancouver, British Columbia                                          | V6B 3K6                             
|(Address of principal executive offices)                             | (Zip Code)                          
|                                                                     |                                     
|                                                                     |                                     
|(604) 688-8619                                                       |                                     
|Issuer's telephone number                                            |                                     

NOT APPLICABLEFormer name, former address and
former fiscal year, if changed since last report

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

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

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of
February 13, 2006, the Issuer had outstanding 32,565,390 Shares of Common
Stock.

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 of America. 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 December 31, 2005 are not necessarily indicative of the
results that can be expected for the year ending June 30, 2006.

As used in this Quarterly Report, the terms "we", "us", "our",
and the company mean NorPac Technologies, Inc., unless otherwise
indicated.

2

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|NORPAC TECHNOLOGIES, INC.    
|-----------------------------
|(A Development Stage Company)
|                             
|FINANCIAL STATEMENTS         
|                             
|DECEMBER 31, 2005            

F-1

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

|                                                                            |   | December 31, |   |   | June 30,   |  
|--------------------------------------------------------------------------- | - | ------------ | - | - | ---------- | -
|                                                                            |   | 2005         |   |   | 2005       |  
|                                                                            |   | (unaudited)  |   |   | (audited)  |  
|ASSETS                                                                      |   |              |   |   |            |  
|                                                                            |   |              |   |   |            |  
|CURRENT ASSETS:                                                             |   |              |   |   |            |  
|Cash                                                                        | $ | 2,278        |   | $ | 307        |  
|Available-for-sale securities                                               |   | 2,700        |   |   | 2,250      |  
|                                                                            |   |              |   |   |            |  
|Total
      Current Assets                                                  |   | 4,978        |   |   | 2,557      |  
|                                                                            |   |              |   |   |            |  
|AVAILABLE-FOR-SALE SECURITIES                                               |   | 300,000      |   |   | 250,000    |  
|                                                                            |   |              |   |   |            |  
|INTANGIBLES, NET                                                            |   | 8,400        |   |   | 9,600      |  
|                                                                            | $ | 313,378      |   | $ | 262,157    |  
|                                                                            |   |              |   |   |            |  
|                                                                            |   |              |   |   |            |  
|                                                                            |   |              |   |   |            |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                       |   |              |   |   |            |  
|                                                                            |   |              |   |   |            |  
|CURRENT LIABILITIES:                                                        |   |              |   |   |            |  
|Accounts payable                                                            | $ | 249,341      |   | $ | 223,157    |  
|Loans payable                                                               |   | 101,590      |   |   | 73,290     |  
|Accounts payable, stockholder                                               |   | 140,347      |   |   | 110,347    |  
|Total Current Liabilities                                                   |   | 491,278      |   |   | 406,794    |  
|                                                                            |   |              |   |   |            |  
|STOCKHOLDERS DEFICIT:                                                      |   |              |   |   |            |  
|                                                                            |   |              |   |   |            |  
|Common stock, .001
      par value, 200,000,000 shares authorized,          |   |              |   |   |            |  
|32,565,390
      and 32,565,390 shares issued and outstanding, respectively |   | 32,565       |   |   | 32,565     |  
|Additional paid
      in capital                                            |   | 2,363,585    |   |   | 2,363,585  |  
|Deficit accumulated during the development
      stage                      |   | (2,692,300   | ) |   | (2,608,587 | )
|Accumulated other
      comprehensive income                                |   | 118,250      |   |   | 67,800     |  
|                                                                            |   | (177,900     | ) |   | (144,637   | )
|                                                                            |   |              |   |   |            |  
|                                                                            | $ | 313,378      |   | $ | 262,157    |  

|See Notes to Financial Statements.
|----------------------------------
|F-2                               

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

|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   | Period From     |   
|---------------------------------------------- | - | ------------------ | - | - | ---------------- | - | - | ------------ | - | - | --------- | - | - | --------------- | --
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   | Inception       |   
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   | (April 1, 1998) |   
|                                               |   | Three Months Ended |   |   | Six Months Ended |   |   | Through      |  
|                                               |   | December 31,       |   |   | December 31,     |   |   | December 31, |  
|                                               |   | 2005               |   |   | 2004             |   |   | 2005         |   |   | 2004      |   |   | 2005            |   
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Revenues                                       | $ | -                  |   | $ | -                |   | $ | -            |   | $ | -         |   | $ | 238,000         |   
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Administrative pre-opening and                 |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|development expenses                           |   | (45,585            | ) |   | (45,620          | ) |   | (83,713      | ) |   | (95,831   | ) |   | (1,564,434      | ) 
|Interest expense                               |   | -                  |   |   | (58,771          | ) |   | -            |   |   | (117,537  | ) |   | (679,541        | ) 
|Impairment of intangibles                      |   | -                  |   |   | -                |   |   | -            |   |   | -         |   |   | (20,000         | ) 
|Stock compensation expense                     |   | -                  |   |   | -                |   |   | -            |   |   | -         |   |   | (624,000        | ) 
|Realized loss on available-for-sale securities |   | -                  |   |   | (4,260           | ) |   | -            |   |   | (42,325   | ) |   | (42,325         | ) 
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Net loss                                       |   | (45,585            | ) |   | (108,651         | ) |   | (83,713      | ) |   | (255,693  | ) |   | (2,692,300      | ) 
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Unrealized gain (loss) on available-for-sale   |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|securities                                     |   | (75,675            | ) |   | (51,295          | ) |   | 50,450       |   |   | (108,055  | ) |   | 118,250         |   
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Comprehensive (loss)                           | $ | (121,260           | ) | $ | (159,946         | ) | $ | (33,263      | ) | $ | (363,748  | ) | $ | (2,574,050      | ))
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Basic loss per common share                    | $ | -                  |   | $ | (0.05            | ) | $ | -            |   | $ | (0.13     | ) | $ | (0.77           | ) 
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Diluted loss per common share                  | $ | -                  |   | $ | (0.05            | ) | $ | -            |   | $ | (0.13     | ) | $ | (0.77           | ) 
|                                               |   |                    |   |   |                  |   |   |              |   |   |           |   |   |                 |   
|Weighted average outstanding shares            |   | 32,565,390         |   |   | 1,977,000        |   |   | 32,565,390   |   |   | 1,977,000 |   |   | 3,488,334       |   

|See Notes to Financial Statements.
|----------------------------------
|F-3                               

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

|                                                              |   |                  |   |   |              |   |   | Period From     |  
|------------------------------------------------------------- | - | ---------------- | - | - | ------------ | - | - | --------------- | -
|                                                              |   |                  |   |   |              |   |   | Inception       |  
|                                                              |   |                  |   |   |              |   |   | (April 1, 1998) |  
|                                                              |   | Six Months Ended |   |   | Through      |  
|                                                              |   | December 31,     |   |   | December 31, |  
|                                                              |   | 2005             |   |   | 2004         |   |   | 2005            |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                         |   |                  |   |   |              |   |   |                 |  
|Net loss                                                      | $ | (83,713          | ) | $ | (255,693     | ) | $ | (2,692,300      | )
|Amortization expense                                          |   | 1,200            |   |   | 1,200        |   |   | 15,600          |  
|Compensation expense,
      options to nonemployees           |   | -                |   |   | -            |   |   | 504,000         |  
|Receipt of available-for-sale securities                      |   | -                |   |   | -            |   |   | (238,000        | )
|Excess of fair value
      of common stock issued over        |   |                  |   |   |              |   |   |                 |  
|carrying
      amount of debt                                 |   | -                |   |   | -            |   |   | 120,000         |  
|Realized loss on
      sales of available-for-sale securities |   | -                |   |   | 42,325       |   |   | 42,325          |  
|Amortization of original issue discount                       |   | -                |   |   | 90,546       |   |   | 550,000         |  
|Impairment loss
      on intangibles                          |   | -                |   |   | -            |   |   | 20,000          |  
|Increase in accounts payable                                  |   | 26,184           |   |   | 34,717       |   |   | 318,139         |  
|Increase in accrued
      interest                            |   | -                |   |   | 26,718       |   |   | 127,380         |  
|Increase in accounts payable, stockholders                    |   | 30,000           |   |   | 22,135       |   |   | 374,346         |  
|Increase (decrease)
      in due to stockholders              |   | -                |   |   | -            |   |   | 20,776          |  
|Net cash flows used in operating activities                   |   | (26,329          | ) |   | (38,052      | ) |   | (837,734        | )
|                                                              |   |                  |   |   |              |   |   |                 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                         |   |                  |   |   |              |   |   |                 |  
|Proceeds form sale
      of available-for-sale securities     |   | -                |   |   | 11,225       |   |   | 11,225          |  
|Purchase of intangibles                                       |   | -                |   |   | -            |   |   | (44,000         | )
|Net cash flows from (used
      in) operating activities      |   | -                |   |   | 11,225       |   |   | (32,775         | )
|                                                              |   |                  |   |   |              |   |   |                 |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                         |   |                  |   |   |              |   |   |                 |  
|Collection of subscription receivable                         |   | -                |   |   | -            |   |   | 10,000          |  
|Issuance of common
      stock                                |   | -                |   |   | -            |   |   | 329,769         |  
|Net proceeds from due to stockholders                         |   | -                |   |   | -            |   |   | 348,928         |  
|Proceeds from loan
      payable                              |   | 28,300           |   |   | 26,922       |   |   | 101,590         |  
|Issuance of convertible notes                                 |   | -                |   |   | -            |   |   | 82,500          |  
|Net cash flows from financing
      activities                |   | 28,300           |   |   | 26,922       |   |   | 872,787         |  
|                                                              |   |                  |   |   |              |   |   |                 |  
|Increase (decrease) in cash                                   |   | 1,971            |   |   | 95           |   |   | 2,278           |  
|Cash:                                                         |   |                  |   |   |              |   |   |                 |  
|Beginning                                                     |   | 307              |   |   | 256          |   |   | -               |  
|                                                              |   |                  |   |   |              |   |   |                 |  
|Ending                                                        | $ | 2,278            |   | $ | 351          |   | $ | 2,278           |  
|                                                              |   |                  |   |   |              |   |   |                 |  
|SUPPLEMENTAL CASH FLOWS INFORMATION:                          |   |                  |   |   |              |   |   |                 |  
|                                                              |   |                  |   |   |              |   |   |                 |  
|Cash paid
      for interest                                  | $ | 24               |   | $ | 273          |   | $ | 2,185           |  
|                                                              |   |                  |   |   |              |   |   |                 |  
|                                                              |   |                  |   |   |              |   |   |                 |  
|NONCASH INVESTING AND FINANCING ACTIVITIES:                   |   |                  |   |   |              |   |   |                 |  
|                                                              |   |                  |   |   |              |   |   |                 |  
|Stock issued for amount due to stockholders                   | $ | -                |   | $ | -            |   | $ | 205,000         |  
|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         |  

|See Notes to Financial Statements.
|----------------------------------
|F-4                               

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

|Note 1. | Nature of Business and Summary of Significant
      Accounting Policies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | Financial Statements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | The balance sheet
        of Norpac Technologies Inc. (the Company) as of December 31,
        2005 and the statements of operations and cash flows for the periods ended
        December 31, 2005 and 2004 have been prepared by the Company, without
        audit. In the opinion of management, all adjustments (which include only
        normal recurring adjustments) necessary to present fairly the financial
        position, results of operations and changes in cash flows at December
        31, 2005 and for all periods presented have been made. Certain information
        and footnote disclosures normally included in financial statements prepared
        in accordance with accounting principles generally accepted in the United
        States of America have been condensed or omitted. It is suggested that
        these condensed financial statements be read in conjunction with the financial
        statements and notes thereto included in the Companys June 30, 2005
        audited financial statements. The results of operations for the period
        ended December 31, 2005 are not necessarily indicative of the operating
        results for the full year.
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|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | Organization and Activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | 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 (Note 12). 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | The Company is considered
        to be in the development stage and 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 revenue from operations. Research and development costs
        are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | A summary of the Companys significant accounting
      policies follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | Income Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | Deferred taxes are
        provided on the liability method whereby deferred tax assets are recognized
        for deductible temporary differences and operating loss and tax credit
        carryforwards and deferred tax liabilities are recognized for taxable
        temporary differences. Temporary differences are the differences between
        the reported amounts of assets and liabilities and their tax basis. 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 the enactment.                                                                                                                                                                                                                                                                                                                                                                                                            
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F-5

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|Note 1. | Nature of Business and Summary of Significant
      Accounting Policies (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | Intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | Intangible assets
        (Note 6) 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, the Company evaluates 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, 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 (see Note 8). Amortization expense
        for each of the quarters ended December 31, 2005 and 2004 was $600 and
        accumulated amortization was $15,600 and $13,200, respectively. Estimated
        amortization expense is $2,400 for each of the next three years and $1,200
        for the fourth year.
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|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | Stock-Based Compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | The Company applies
        Accounting Principles Board (APB) Opinion 25 Accounting for Stock
        Issued to Employees and related Interpretations in accounting for
        its stock options. Accordingly, no compensation cost has been recognized
        for stock options issued to employees for the six months ended December
        31, 2005 and 2004 or the period from inception through December 31 2005.
        Stock options and warrants issued to non-employees are recorded at fair
        value, as required by SFAS No. 123, using the Black Scholes pricing model.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
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|        | Had compensation
        costs for the Company's stock options been determined based on the fair
        value at the grant dates consistent with the method of SFAS No. 123, the
        Company's net loss and loss per common share would have been changed to
        the pro forma amounts indicated below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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| |                            |   |                    |   |   |                  |   |   |              |   |   |          |   |   | Period From      |  
| | -------------------------- | - | ------------------ | - | - | ---------------- | - | - | ------------ | - | - | -------- | - | - | ---------------- | -
| |                            |   |                    |   |   |                  |   |   |              |   |   |          |   |   | Inception (April |  
| |                            |   |                    |   |   |                  |   |   |              |   |   |          |   |   | 1, 1998)         |  
| |                            |   | Three Months Ended |   |   | Six Months Ended |   |   | Through      |  
| |                            |   | December 31,       |   |   | December 31,     |   |   | December 31, |  
| |                            |   | 2005               |   |   | 2004             |   |   | 2005         |   |   | 2004     |   |   | 2005             |  
| |                            |   |                    |   |   |                  |   |   |              |   |   |          |   |   |                  |  
| | Net loss                   | $ | (45,585            | ) | $ | (108,651         | ) | $ | (83,713      | ) | $ | (255,693 | ) | $ | (2,692,300       | )
| | Pro forma net loss         | $ | (45,585            | ) | $ | (108,651         | ) | $ | (83,713      | ) | $ | (255,693 | ) | $ | (2,740,300       | )
| |                            |   |                    |   |   |                  |   |   |              |   |   |          |   |   |                  |  
| | Stock based                |   |                    |   |   |                  |   |   |              |   |   |          |   |   |                  |  
| | compensation               |   |                    |   |   |                  |   |   |              |   |   |          |   |   |                  |  
| | As reported                | $ | -                  |   | $ | -                |   | $ | -            |   | $ | -        |   | $ | 504,000          |  
| | Proforma                   | $ | -                  |   | $ | -                |   | $ | -            |   | $ | -        |   | $ | 48,000           |  
| |                            |   |                    |   |   |                  |   |   |              |   |   |          |   |   |                  |  
| | Basic and diluted loss per |   |                    |   |   |                  |   |   |              |   |   |          |   |   |                  |  
| | common share               |   |                    |   |   |                  |   |   |              |   |   |          |   |   |                  |  
| | As reported                | $ | -                  |   | $ | (0.05            | ) | $ | -            |   | $ | (0.13    | ) | $ | (0.77            | )
| | Pro forma                  | $ | -                  |   | $ | (0.05            | ) | $ | -            |   | $ | (0.13    | ) | $ | (0.79            | )

There were no options issued or vested during the six
  months or three months ended December 31, 2005 and 2004.

F-6

---

|Note 1. | Nature of Business and Summary of Significant Accounting
      Policies (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | New Accounting Pronouncements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | The Financial Accounting
        Standards Board (FASB) has issued Statement No. 123R, Share-Based
        Payment(SFAS 123R), which requires companies to measure and recognize
        compensation expense for all stock-based payments at fair value. SFAS
        123R is effective for the Company starting with the quarter ending September
        30, 2006. Early adoption is encouraged and retroactive application of
        the provisions of SFAS 123R to the beginning of the fiscal year that includes
        the effective date is permitted, but not required. Since the Company does
        not have any stock options or other stock-based compensation agreements,
        the impact of SFAS 123R is not applicable.
|
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Loss Per Common Share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Loss per share is
        computed based on the weighted average number of common shares outstanding.
        Potential issuances that would reduce loss per common share are considered
        anti-dilutive and are excluded from the computation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Advertising:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Advertising costs,
        if any, are expensed as they occur. Advertising costs were $0 for the
        three months and six months ended December 31, 2005 and 2004, and $14,662
        for the period from inception through December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Comprehensive Loss:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | SFAS No. 130 Reporting
        Comprehensive Income establishes standards for reporting and presentation
        of comprehensive loss and its components in a full set of financial statements.
        Comprehensive loss consists of the Companys net loss and unrealized
        gain (loss) on available-for-sale securities and is presented in the statements
        of operations and comprehensive loss. Statement 130 only requires additional
        disclosure in the financial statements; it does not affect the Companys
        financial position or results of operations.                                                                                                                                           
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Estimates and Assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | The preparation
        of the financial statements in conformity with accounting principles generally
        accepted in the United States of America requires management to make estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and disclosure of contingent assets and liabilities at the date of the
        financial statements and revenues and expenses during the reporting period.
        Significant estimates include the valuation of stock issued. Actual results
        could differ from these estimates.                                                                                                                                                           
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Start-Up Costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Costs incurred in connection with start-up activities are
      charged to expense as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | Carrying Value of Financial Instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | The carrying value of the Companys financial
      instruments approximates fair value at December 31, 2005 and June 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|

F-7

---

|Note 1. | Nature of Business and Summary of Significant Accounting
      Policies (continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | Reclassifications:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | Certain amounts reported in the prior periods have
      been reclassified to conform to the current year presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 2. | 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 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 by a valuation allowance.
|
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        | The benefit for
        income taxes differs from the amount computed by applying the U.S. federal
        income tax rate to loss before income taxes for the three and six months
        ended December 31 as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|

| |                                 |   | Three Months Ended |   |  |   | Six Months Ended |  
| | ------------------------------- | - | ------------------ | - |  | - | ---------------- | -
| |                                 |   | December 31,       |   |  |   | December 31,     |  
| |                                 |   | 2005               |   |  |   | 2004             |  
| |                                 |   |                    |   |  |   |                  |  
| | Expected tax (benefit) at       |   |                    |   |  |   |                  |  
| | statutory rate                  | $ | (15,499            | ) |  | $ | (39,114          | )
| | State tax effects               |   | (2,735             | ) |  |   | (7,606           | )
| | Increase in valuation allowance |   | 18,234             |   |  |   | 46,720           |  
| |                                 | $ | -                  |   |  | $ | -                |  

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

The following is a summary of deferred
  taxes:

| |                      |   | December 31, |   |  |   | June 30,   |  
| | -------------------- | - | ------------ | - |  | - | ---------- | -
| |                      |   | 2005         |   |  |   | 2005       |  
| |                      |   | (unaudited)  |   |  |   | (audited)  |  
| | Deferred tax assets: |   |              |   |  |   |            |  
| | Pre-opening costs    | $ | 1,106,177    |   |  | $ | 1,072,691  |  
| | Valuation allowance  |   | (1,106,177   | ) |  |   | (1,072,691 | )
| |                      | $ | -            |   |  | $ | -          |  

|Note 3. | Stockholders Equity:                                                                                                                                                                                                                                                                                                   
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                         
|        | The Board of Directors have
        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.
|
|

F-8

---

|Note 4. | Related Party Transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | The Company currently has a
        consulting arrangement with an officer/stockholder. Such consulting fees
        totaled $15,000 for each of the three months ended December 31, 2005 and
        2004, respectively, and $30,000 for each of the six months ended December
        31, 2005 and 2004, respectively. Consulting fees from inception through
        September 30, 2005 totaled $588,000. The balance due to the officer/stockholder
        at December 31, 2005 and June 30, 2005 was $140,347 and $110,347, respectively.
        Amounts due to the officer/stockholder are unsecured, non-interest bearing,
        and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 5. | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | In November 2002, the Company
        received securities valued at $63,000. Pursuant to the license agreement
        described in Note 8, the Company received additional securities valued
        at $175,000. In fiscal year 2005, the Company sold 255,000 shares for
        proceeds of $11,225 and a loss of $42,325 was included in net loss for
        the year ended June 30, 2005. The remaining securities consist of 5,045,000
        shares of Balsam Ventures, Inc. The market value of the remaining securities
        was $302,700 as of December 31, 2005. 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 has been no other than temporary
        declines through December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
|
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Note 6. | Intangibles:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | A United States patent for a
        self-chilling beverage container and parts thereforewas 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        | 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 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; as such, an impairment loss
        of $20,000 was recorded for the year ended June 30, 2003.
|
|
|
|
|
|
|
|
|
|
|
|
|
|

F-9

---

|Note 7. | Stock Option Plan:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 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 will 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:                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                                                                 |  |           |   |   | Weighted | 
| | --------------------------------------------------------------- |  | --------- | - | - | -------- | 
| |                                                                 |  | Number of |   |   | Average  | 
| |                                                                 |  | Shares    |   |   | Exercise | 
| | Under option, June 30, 2001                                     |  | 177,500   |   | $ | 7.50     | 
| | Granted                                                         |  | 30,000    |   |   | .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, December 31, 2005                                 |  | -         |   |   | -        | 
| | Weighted average fair value of options granted
      during the |  |           |   |   |          | 
| | period ended June 30, 2001                                      |  |           |   | $ | -        | 
| | Weighted average fair value of options granted
      during the |  |           |   |   |          | 
| | period ended June 30, 2002                                      |  |           |   | $ | -        | 
| | Weighted average fair value of options granted
      during the |  |           |   |   |          | 
| | period ended June 30, 2003                                      |  |           |   | $ | -        | 
| | Weighted average fair value of options granted
      during the |  |           |   |   |          | 
| | period ended June 30, 2004                                      |  |           |   | $ | -        | 
| | Weighted average fair value of options granted
      during the |  |           |   |   |          | 
| | period ended June 30, 2005                                      |  |           |   | $ | -        | 
| | Weighted average fair value of options granted
      during the |  |           |   |   |          | 
| | period ended December 31, 2005                                  |  |           |   | $ | -        | 

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-10

---

|Note 8. | 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. | Balsam issued to the Company 5,000,000 restricted shares
        of its common stock; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 2. | Balsam must pay the Company the following royalties:
        (a) a sales royalty equal to 2% of gross profits from sales of all apparatus
        incorporating the Technology and/or commercial goods or products incorporating
        the Technology, (b) a license royalty equal to 5% of revenues received
        by Balsam from sub-licensing the Technology, and (c) a minimum royalty
        payment of $5,000 per month commencing on January 15, 2006, which is to
        be credited towards all royalty payments under the Agreement that have
        been paid by Balsam or become payable by Balsam during the course of the
        Agreement.

|        | 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 (Note 13).
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 9. | Loans Payable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | In 2005 and 2004, the Company
        received loans from four parties. The loans are unsecured, non-interest
        bearing, and due on demand. The balance due at December 31, 2005 and June
        30, 2005 was $101,590 and $73,290, respectively.                                                                                                                                                                                                                                                                                                                                
|
|

F-11

---

|Note 10. | Convertible Notes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         | During the period from January
        through June 2003, the Company issued $550,000 of 10% convertible notes
        pursuant to Regulation S of the Securities Act of 1933. The convertible
        notes are due on or before December 31, 2005 and the holder of the note
        has the right to convert the note into the Companys common stock
        at any time prior to the maturity date. The note is convertible at the
        lesser of $.02 or 50% of the average trading price of the Companys
        common stock for the 10 trading days preceding the date of conversion.
        The proceeds and conversion of accounts payable, accounts payable-stockholder
        and due to stockholders of $550,000 were allocated between the note and
        the beneficial conversion, which were valued using the Black Scholes pricing
        model. The resulting fair value of the beneficial conversion of the note
        payable into common stock as defined in Emerging Issues Task Force (EITF)
        00-27 "Application of Issue No. 98-5 to Certain Convertible Instruments",
        in the amount of $550,000 is being amortized over the life of the note
        using the straight-line method, which approximates the interest method.
        The entire proceeds were allocated to the beneficial conversion right.
        The notes may be converted at the holder's sole option. The Company may
        at its option elect to pay a portion of the interest due by issuing the
        Companys common stock as defined in the convertible note agreement.
|
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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         | On April 23, 2004, an officer/stockholder
        converted a portion of a convertible note in the amount of $20,000. In
        accordance with the convertible note agreement, the Company has issued
        1,000,000 common shares for the conversion and an additional 8,901 common
        shares to satisfy the accrued interest payable on the note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         | On May 26, 2005, an officer/stockholder
        converted the balance of his convertible notes in the amount of $76,490.
        In accordance with the convertible note agreement, the Company issued
        3,824,500 common shares for the conversion and an additional 647,337 common
        shares to satisfy the accrued interest payable on the notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         | In June 2005, all of the remaining
        note holders converted their convertible notes in the amount of $453,510.
        In accordance with the convertibles note agreements the Company issued
        22,675,500 common shares for the conversion and an additional 3,441,053
        common shares to satisfy the accrued interest payable on the notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Note 11. | Companys Continued Existence:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|         | The accompanying financial statements
        have been prepared in conformity with accounting principles generally
        accepted in the United States of America, which contemplate continuation
        of the Company as a going concern. However, the Company has sustained
        substantial losses and is still in the development stage. Additional funding
        will be necessary to continue development and marketing of the product.
        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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
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|

F-12

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|Note 12. | Merger:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|         | On June 21, 2004, stockholders of the Company approved
        an agreement with an effective date of July 12, 2004 to merge with NorPac
        Technologies, Inc. (NorPac), a Nevada corporation. On closing of the Merger
        Agreement:
      NorPac was the surviving corporation of the Merger and continues
            to operate the Company's business.The Company's shareholders received one share of common stock of
            NorPac for each 20 shares of the Company's common stock they own.

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         | The impact of the merger was accounted for
      on a retroactive basis in the Companys financial  statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Note 13. | Subsequent Event:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|         | On January 14, 2006, the Company
        entered into an agreement (the Extension Agreement) with Balsam
        Ventures Inc. (Balsam), to amend the terms of their exclusive
        licensing agreement (the Licensing Agreement) dated as of
        November 30, 2003 (Note 8). Under the terms of the License Agreement,
        Balsam was to pay the Company minimum royalties in the amount of $5,000
        per month (the Minimum Royalty Payments), commencing on January
        15, 2006. Under the Extension Agreement, the Company has agreed to extend
        the date on which Balsam is required to commence paying the Minimum Royalty
        Payments to January 15, 2007.
|
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|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|         | The consideration for the Extension Agreement is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| | 1. | Balsam must issue to the Company 500,000 restricted
        shares of its common stock; and
| | -- | -------------------------------------------------------------------------------------------
| |    |                                                                                            
| | 2. | Balsam must pay to the Company, $20,000 on or before
        January 31, 2006.             

F-13

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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-10KSB, our Quarterly Reports on Form 10-QSB and our Current Reports on
Form 8-K.

OVERVIEW

We are in the business of developing and marketing a patented
unique proprietary technology which is intended to allow for the licensing and
manufacture of a commercially viable self-chilling beverage container. 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. If our testing efforts are successful, we will then
proceed to the marketing phase of our plan of operation which involves marketing
the self-chilling beverage container to beverage manufacturers. 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 we may pursue other
business opportunities.

Our proposed product is 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. 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.

Recent Corporate Developments

Since the completion of our last fiscal quarter ended September
30, 2005 we have experienced the following corporate developments:

| | 1. | Effective January 14, 2006, we entered into an agreement
      (the Extension Agreement) with Balsam Ventures, Inc. (Balsam),
      pursuant to which NorPac and Balsam agreed to amend the terms of their
      exclusive licensing agreement dated as of November 30, 2003 (the License
      Agreement). Under the terms of the License Agreement, Balsam was to pay
      NorPac minimum royalties in the amount of $5,000 per month (the Minimum
      Royalty Payments), commencing on January 15, 2006. Under the Extension
      Agreement, NorPac agreed to extend the date on which Balsam is required to
      commence paying the Minimum Royalty Payments to January 15, 2007 in
      exchange for the following consideration: 500,000 shares of Balsams
      common stock; and a payment of $20,000 to NorPac.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

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| |    | We received payment of the $20,000 and the 500,000 shares
      of Balsams common stock during our fiscal third quarter. See License
      Agreement with Balsam Ventures, Inc. and Extension of License Agreement
      below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 2. | Our current cash reserves are only sufficient to enable
      us to operate on a short term basis. We continue to require additional
      financing if we are to continue as a going concern and to finance our
      business operations. As of December 31, 2005, we had no cash available and
      a working capital deficit of $486,300. Our inability to achieve
      substantial financing has forced us to continue to reduce our business
      operations. We believe that market conditions and the unwillingness of
      investors to finance junior technology companies such as NorPac have
      contributed to our inability to raise additional capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 3. | Following the conversion of all of our Convertible Notes
        into common shares, and the subsequent elimination of our quarterly interest
        expense and Convertible Note debt obligation at maturity date, we believe
        our reorganization activities are now complete. We believe that we are
        now in a better position to pursue either a joint venture with a strategic
        partner or other financing activities. We intend to raise the necessary
        financing for completion of production ready samples of our Cool Can product
        through collaboration with a strategic industry partner as a joint venture.
        In the event we are unable to reach agreement with a joint venture partner
        for completion of our plan of operation as stated, we anticipate that
        additional financing would be through the sales of our common stock or
        other equity-based securities. We do not have any arrangements or agreements
        in place with respect to a joint venture and/or 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 our operations.

Our current cash reserves are only sufficient to enable us to
operate on a short term basis. Accordingly, we will require additional financing
in order to proceed with our plan of operations, see Liquidity and Capital
Resources below. If we do not have sufficient funds to pursue our stated plan
of operations, then we will scale back our plan of operations to concentrate
solely on the product development phase of our plan of operations. In this
event, we will pursue product development to the extent of our financial
resources.

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, exploit 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 a prior licensing
agreement (the Original License Agreement) that we had with Balsam dated June
5, 2002.

In consideration of the grant of the License and 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)                                                                   

Extension of License Agreement

Pursuant to the terms of the License Agreement we were to
receive minimum royalty payments of $5,000 per

4

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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 is required to
commence paying the Minimum Royalty Payments to January 15, 2007 in exchange for
the following consideration:

|(a) | 500,000 restricted shares of Balsams common stock; and  
|--- | ---------------------------------------------------------
|(b) | $20,000, payable to NorPac on or before January 31, 2006.

We received payment of the $20,000 and the 500,000 shares of
Balsams common stock during our fiscal third quarter.

PLAN OF OPERATION

Our plan of operation for the next twelve months, subject to
our receiving the necessary additional financing, 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
      TimelinePart 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 demonstration samples.
    6 monthsPart 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 one, 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 our 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 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.                                                                                                                                                                                                               

5

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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 nine 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 achieve significant additional
financing. If we achieve sufficient additional financing, of which there is no
assurance, then the estimated cost and timeframe for completion of each of the
above components of our plan of operation will be as follows:

|1. | Product development is estimated to be completed over a
      timeframe of 7.5 months at an estimated cost of $350,000, and is intended
      to result in the manufacturing of 2,000 industry demonstration samples.                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                          
|2. | Consultation feedback is estimated to take place over a
      timeframe of three months following completion of phase one at an
      estimated cost of $50,000.                                                                                                                         
|   |                                                                                                                                                                                                                                                                                          
|3. | Marketing and licensing will follow phase two and is
      estimated to take three months at an estimated cost of $50,000.                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                          
|4. | General expenditures over the next twelve months are
      estimated to be $20,000 per month, consisting of $15,000 per month in
      general administrative expenses and $5,000 per month in legal and
      accounting expenses relating to compliance with our reporting obligations.

RESULTS OF OPERATIONS

Second Quarter and Six Months Summary

Second Quarter Ended December 31
    
    Six Months Ended December 31Percentage
    
    
    
    PercentageIncrease /
    
    
    
    Increase /2005
    2004
    (Decrease)
    
    2005
    2004
    (Decrease)Revenue
    $ --
    $ --
    N/A
    
    $ --
    $ --
    N/AExpenses
    45,585
    108,651
    (58.0)%
    
    83,713
    $255,693
    (67.3)%Net Income (Loss)
    $(45,585)
    $(108,651)
    (58.0)%
    
    $(83,713)
    $(255,693)
    (67.3)%


Our net loss for the second quarter and six month period ended
  December 31, 2005 was comprised entirely of operating expenses. The decrease
  in net loss over the comparable periods ended December 31, 2004 is due primarily
  to the fact that we did not incur any interest expense relating to our outstanding
  convertible notes during the periods ended December 31, 2005 as compared to
  the periods ended December 31, 2004. As well, our net loss for the six month
  period ended December 31, 2005 decreased over the comparative period in 2004
  due to the fact that we did not incur a realized loss on available for sale
  securities.

Revenues

We do not anticipate earning revenues from the sale of our
products until such time as we have completed commercial development of products
incorporating our Cool Can technology. We did not generate any revenues during
the six months ended December 31, 2005. Our revenues to date have consisted of
licensing fees received by us from the licensing of our Cool Can product. We
received payment of the $20,000 and the 500,000 restricted shares of Balsams
common stock in connection with our licensing agreement with Balsam during our
fiscal third quarter of 2006.

We have not earned any revenues from sales of our products to
date and have incurred total losses of $2,692,300 since our inception. We are
presently in the development stage of our business and we can

6

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provide no assurance that we will be able to complete
commercial development or successfully sell or license products incorporating
our Cool Can technology once development is complete.

Operating Expenses

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

Second Quarter Ended December 31
    
    Six Months Ended December 31Percentage
    
    
    
    Percentage2005
    2004
    Inc.
      / (Dec.)
    
    2005
    2004
    Inc.
      / (Dec.)Administrative Pre-Opening and Development
      Expenses
    $45,585
    $45,620
    (0.08)%
    
    $83,713
    $95,831
    (12.6)%Interest Expense
    --
    58,771
    (100)%
    
    --
    117,537
    (100)%Realized Loss on Available- For-Sale
      Securities
    --
    4,260
    (100)%
    
    --
    42,325
    (100)%Total Operating Expenses
    $45,585
    $108,651
    (58.0)%
    
    $83,713
    $255,693
    (67.3)%


The decrease in our total expenses for the second quarter and
six month period ended December 31, 2005 when compared to our total expenses for
the second quarter and six month period ended December 31, 2004, were primarily
attributable to: (i) a decrease in our administrative pre-opening and
development expenses, (ii) the fact that we did not incur any interest expense
relating to the outstanding convertible notes, and (iii) the fact we had no
realized loss on available for sale securities. The decrease in our
administrative pre-opening and development expenses for the quarter ended
December 31, 2005 compared to the quarter ended December 31, 2004, was due to a
decrease in professional fees.

We anticipate that our operating expenses will increase
significantly if we are able to obtain the financing necessary to continue with
the development of our Cool Can product and related technology in accordance
with our plan of operation.

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital           |                            |                        |                      
|------------------------- | -------------------------- | ---------------------- | ---------------------
|                          |                            |                        | Percentage           
|                          | At December
      31, 2005 | At
      June 30, 2005 | Increase / (Decrease)
|Current Assets            | $4,978                     | $2,557                 | 94.7%                
|Current Liabilities       | (491,278)                  | (406,794)              | 20.8%                
|Working Capital (Deficit) | $(486,300)                 | $(404,237)             | 20.3%                

|Cash Flows                                           |                              |          
|---------------------------------------------------- | ---------------------------- | ---------
|                                                     | Six Months Ended December 31
|                                                     | 2005                         | 2004     
|Cash Flows From (Used In)
      Operating Activities | $(26,329)                    | $(38,052)
|Cash Flows From (Used In) Investing
      Activities | --                           | 11,225   
|Cash Flows From (Used In)
      Financing Activities | 28,300                       | 26,922   
|Net Increase (Decrease) In Cash During Period        | $1,971                       | $95      

7

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The increase in our working capital deficit for the six months
ended December 31, 2005 is primarily attributable to a 20.8% increase in our
current liabilities which increased during the six months ended December 31,
2005 due to amounts payable incurred in connection with our operating and
business development activities. 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.

We intend to raise the necessary financing for completion of
production ready samples of our Cool Can product through collaboration with a
strategic industry partner as a joint venture. In the event we are unable to
reach agreement with a joint venture partner for completion of our plan of
operation as stated, we anticipate that additional financing would be through
the sales of our common stock or other equity-based securities. We do not have
any arrangements or agreements in place with respect to a joint venture and/or
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 our operations.

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.

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. 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.

CRITICAL ACCOUNTING POLICIES

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

We have identified a certain accounting policy, described
below, that is most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
disclosed in Note 1 to the financial statements included in this Quarterly
Report.

8

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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, 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.
Amortization expense for each of the quarters ended December 31, 2005 and 2004
was $600 and accumulated amortization was $15,600 and $13,200, respectively.
Estimated amortization expense is $2,400 for each of the next three years and
$1,200 for the fourth year.

RISKS AND UNCERTAINTIES

We May Not Be Able To Continue Our Business As A Going
Concern

Our ability to continue as a going concern and realize the
carrying value of our assets is dependent upon our ability to obtain additional
financing, restructure our debt, streamline our business and reduce our costs.
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. Our
inability to obtain additional financing, restructure our indebtedness,
streamline our business or reduce our costs would have a material adverse effect
on our financial condition, results of operations and ability to satisfy our
obligations, and may result in our pursuing a restructuring of our indebtedness
either on a consensual basis or under the provisions of bankruptcy legislation,
or liquidating our business and operations. Further, our inability to obtain
additional financing or restructure our indebtedness, or our pursuing a
restructuring of our indebtedness either on a consensual basis or under the
provisions of bankruptcy legislation, may result in our securityholders losing
all or a material portion of their investment in our securities.

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 December 31, 2005, being the date of our most recent
financial statements, we had no cash available and a working capital deficit of
$486,300. Therefore, 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:

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

9

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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.

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.

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 proprietary 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 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 December 31,
2005, being the date of our most recent financial statements, we had a working
capital deficit of $486,300. 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.

ITEM
3.               
CONTROLS AND PROCEDURES.

Evaluation Of Disclosure Controls And Procedures

As of the end of the period covered by this report, we carried
out an evaluation, under the supervision and with the participation of Mr. Bruce
Leitch, our Principal Executive Officer, Principal Financial Officer and
Principal Accounting Officer (the Principal Officer), of the effectiveness of
the design and operation of our disclosure controls and procedures. Our
disclosure controls and procedures are designed to provide a reasonable level of
assurance of achieving our disclosure control objectives. Our Principal Officer
has concluded that our disclosure controls and procedures are, in fact,
effective at this reasonable assurance level as of the period covered.

Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls
during our last fiscal quarter, our Principal Officer has determined that there
are no changes to our internal controls over financial reporting that has
materially affected, or is reasonably likely to materially affect, our internal
controls over financial reporting.

10

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PART II - OTHER INFORMATION

ITEM
1.               
LEGAL PROCEEDINGS.

None.

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

None.

ITEM
3.               
DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM
5.               
OTHER INFORMATION.

None.

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

(a)         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)                                                                                                                                                
|               |  |                                                                                                                                                                      
|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)                   

11

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|Exhibit Number |  | Description of Exhibit                                                                                                                                    
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                           
|               |  |                                                                                                                                                           
|10.8           |  | Extension Agreement
        dated as of January 14, 2006 between NorPac Technologies, Inc. and Balsam
        Ventures, Inc.(9)                           
|               |  |                                                                                                                                                           
|14.1           |  | Code of Ethics.(8)                                                                                                                                        
|               |  |                                                                                                                                                           
|31.1           |  | Certification
        of Chief Executive Officer and Chief Financial Officer as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002.
|               |  |                                                                                                                                                           
|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 annual report on
      Form 10-QSB for the fiscal period ended September 30, 2003.        
|(7) | Filed with the SEC on July 8, 2004 as an exhibit to our
      current report on Form 8-K.                                         
|(8) | Filed with the SEC as an exhibit to our annual report on
      Form 10-KSB for the year ended June 30, 2003.                      
|(9) | Filed with the SEC as an exhibit to our current report on
      Form 8-K filed January 19, 2006.                                  

(b)        
 Reports on Form 8-K:

The following Current Reports on Form 8-K were filed since the
beginning of the quarterly period ended December 31, 2005:

Date of Reporton
      Form 8-K(YYYY/MM/DD)
      Date of Filingwith the SEC(YYYY/MM/DD)
      **Description of the Form 8-K**2006/01/14
    2006/01/19
    Item 1.01 - Entry into Extension Agreement with Balsam Ventures Inc.;
      Item 7.01 - Regulation FD Disclosure of News Release announcing
      Extension Agreement; and
      Item 9.01 - Exhibits.


12

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SIGNATURES

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

NORPAC TECHNOLOGIES, INC.

|By: | /s/ Bruce T. Leitch               | 
|--- | --------------------------------- | 
|    | BRUCE T. LEITCH                   | 
|    | Chief Executive
      Officer     | 
|    | and Chief Financial Officer       | 
|    | (Principal Executive Officer,     | 
|    | Principal Financial Officer       | 
|    | and Principal Accounting Officer) | 
|    |                                   | 
|    | Date: February 13, 2006           | 

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