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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended June 30, 2007

[   ] 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.)
|                                                               |                                     
|Suite 410  103 East Holly St.                                 |                                     
|Bellingham, WA                                                 | 98225                               
|(Address of principal executive offices)                       | (Zip Code)                          
|                                                               |                                     
|(360) 201-9591                                                 |                                     
|Issuer's telephone number                                      |                                     

|Securities registered under Section 12(b) of the Exchange
      Act: | NONE.                                          
|-------------------------------------------------------------------- | -----------------------------------------------
|                                                                     |                                                
|Securities registered under Section 12(g) of the Exchange
      Act: | Common Stock, $0.001 Par Value Per
      Share.

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 [   ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [X]

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

State issuers revenues for its most recent fiscal year:
$15,000

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average bid and asked price of such
common equity, as of a specified date within the past 60 days: $8,130,504
on the basis of the average of the closing bid price of $0.12 and the
closing ask price of $0.35 of the registrants common stock on June 27, 2007.

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date:
37,597,890, as at October 1, 2007

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

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NORPAC TECHNOLOGIES, INC. ANNUAL REPORT ON FORM 10-KSB
FOR THE YEAR ENDED JUNE 30, 2007 TABLE OF CONTENTS

|               |          |                                                                                                                                                      | PAGE
|-------------- | -------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|               |          |                                                                                                                                                      |     
|PART I         | 3       
|               |          |                                                                                                                                                      |     
|               | Item 1.  | Description Of Business                                                                                                                              | 3   
|               |          |                                                                                                                                                      |     
|               | Item 2.  | Description Of Property                                                                                                                              | 5   
|               |          |                                                                                                                                                      |     
|               | Item 3.  | Legal Proceedings.                                                                                                                                   | 5   
|               |          |                                                                                                                                                      |     
|               | Item 4.  | Submission Of Matters To A Vote Of Security Holders.                                                                                                 | 5   
|               |          |                                                                                                                                                      |     
|PART II        | 6       
|               |          |                                                                                                                                                      |     
|               | Item 5.  | Market For Common Equity And Related Stockholder Matters
      And Small Business Issuer Purchases Of Equity Securities.                             | 6   
|               |          |                                                                                                                                                      |     
|               | Item 6.  | Management's Discussion And Analysis Or Plan Of Operation.                                                                                           | 7   
|               |          |                                                                                                                                                      |     
|               | Item 7.  | Financial Statements                                                                                                                                 | 12  
|               |          |                                                                                                                                                      |     
|               | Item 8.  | Changes In And Disagreements With Accountants On Accounting
      And Financial Disclosure                                                           | 13  
|               |          |                                                                                                                                                      |     
|               | Item 8A. | Controls And Procedures                                                                                                                              | 13  
|               |          |                                                                                                                                                      |     
|               | Item 8B. | Other Information.                                                                                                                                   | 13  
|               |          |                                                                                                                                                      |     
|PART III       | 14      
|               |          |                                                                                                                                                      |     
|               | Item 9.  | Directors, Executive Officers, Promoters And Control Persons
      And Corporate Governance; Compliance With Section 16(A) Of The Exchange
      Act | 14  
|               |          |                                                                                                                                                      |     
|               | Item 10. | Executive Compensation.                                                                                                                              | 15  
|               |          |                                                                                                                                                      |     
|               | Item 11. | Security Ownership Of Certain Beneficial Owners And Management
      And Related Stockholder Matters.                                                | 16  
|               |          |                                                                                                                                                      |     
|               | Item 12. | Certain Relationships And Related Transactions, And Director
      Independence.                                                                     | 17  
|               |          |                                                                                                                                                      |     
|               | Item 13. | Exhibits                                                                                                                                             | 18  
|               |          |                                                                                                                                                      |     
|               | Item 14. | Principal Accountant Fees And Services.                                                                                                              | 19  
|               |          |                                                                                                                                                      |     
|**SIGNATURES** | 20      

2

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PART I

Certain statements contained in this Annual Report on Form
10-KSB constitute forward-looking statements. These statements, identified by
words such as plan, anticipate, believe, estimate, should, expect
and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These
statements reflect the current views of management with respect to future events
and are subject to risks, uncertainties and other factors that may cause our
actual results, performance or achievements or industry results to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption Managements Discussion
and Analysis or Plan of Operation and elsewhere in this Form 10-KSB. 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 Quarterly
Reports on Form 10-QSB and our Current Reports on Form 8-K.

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

ITEM
1.               
DESCRIPTION OF BUSINESS.

CORPORATE BACKGROUND

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

Until recently, we had been in the business of developing and
marketing a proprietary technology for self-chilling beverage containers (the
Cool Can Technology). However, it has come to our attention that our patents
for the Cool Can Technology have expired. As a result, our management has
decided to abandon the development of the Cool Can Technology. We are currently
in the process of reorganizing our business and are in the process of seeking
and evaluating alternative business opportunities.

In November, 2006, we had entered into an Agreement and Plan of
Merger (the Merger Agreement) with Nextdigital Corp. (Nextdigital), pursuant
to which we had planned to acquire Nextdigital, a corporation engaged in the
development of a smart card business. In anticipation of completing the
acquisition of Nextdigital, we loaned Nextdigital a total of $612,000. On
February 15, 2007, Nextdigital informed us that they had decided not to proceed
with the proposed merger because it believed that its shareholders would not
approve the transaction. We are currently negotiating for the repayment of all
amounts loaned to Nextdigital.

LICENSE AGREEMENT WITH BALSAM VENTURES, INC.

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

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

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

3

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| | (b) | a license royalty equal to 5% of revenues received by
      Balsam from sub-licensing our proprietary
technology.
| | --- | -----------------------------------------------------------------------------------------------------------------

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

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

During our fiscal year ended June 30, 2007, we received Minimum
Royalty Payments of $15,000 from Balsam. In June, 2007, we notified Balsam that
our intellectual property rights to the Cool Can Technology possibly expired. As
a result, Balsam suspended the Minimum Royalty Payments. As we have now
confirmed that our patent rights to the Cool Can Technology have indeed expired,
Balsam has informed us that they intend to terminate the License Agreement. We
are currently negotiating with Balsam to settle their rights under the License
Agreement.

PATENTS AND TRADEMARKS

We had previously been granted patent protection for our Cool
Can Technology in the United States and certain foreign countries. However,
because we failed to pay the necessary maintenance fees, all of our patent
rights have expired. As a result, we do not have patent protection for any of
our technologies.

We filed 14 trademark applications with the United States
Patent and Trademark Office in June, 1998. We received a response from the
Patent Office with a request to more narrowly define the scope of the product.
We received a notice of allowance to utilize 11 of the 14 trademarks that were
applied for, including trademarks for the terms InstaCool, Cool Can, and
Cool Can Technologies, which means that the examining attorney did not find
any registered or pending marks which would prevent registration. These
trademark names describe both the product and the process involved in the
manufacture of a self chilling beverage container. We have, in the past, applied
for and been granted several extensions of the trademark names. Due to the costs
involved in applying for and receiving extensions from the U.S. Patent and
Trademark Office, and the uncertainty relating to the successful
commercialization of our technology, we ceased applying for trademark extensions
in September of 2001. At present, we have not been made aware of any of the
trademarks actually being in commercial use, and we believe that we could
re-institute ownership of the trademarks, or the equivalent thereof should we
choose to do so in the future.

EMPLOYEES

We currently do not have any employees. Mr. Thornton, our
President, Secretary and Treasurer, Chief Executive Officer, and Chief Financial
Officer, provides management consulting services to us and is paid as a
consultant. We conduct our business largely through agreements with consultants
and arms-length third parties.

RESEARCH AND DEVELOPMENT

Due to our limited financial resources, no expenses on research
and development activities were incurred during the fiscal years ended June 30,
2007 and 2006. As we are currently in the process of reorganizing our business
and are seeking out new business opportunities, we cannot, at this time, provide
any estimates on the amounts that we may spend on research and development in
the future. See Item 6. Managements Discussion and Analysis or Plan of
Operation  Liquidity and Financial Condition.

4

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ITEM
2.               
DESCRIPTION OF PROPERTY.

Our corporate headquarters, consisting of approximately 500
square feet, are located at Suite 410  103 East Holly St., Bellingham, WA,
where our principal executive functions are carried out. We are currently
operating under a month to month lease at the rate of $368 per month. We do not
own any real estate. We believe that all of our facilities are adequately
maintained and suitable for their present use.

ITEM
3.               
LEGAL PROCEEDINGS.

None.

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

None.

5

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PART II

ITEM
5.               
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

In April, 2005, our shares of common stock commenced trading on
the Over-The-Counter Bulletin Board (the OTCBB) under the symbol NRPT. Our
shares traded on the Over-The-Counter Pink Sheets under the stock symbol CCTI
from November 20, 2002 to April, 2005. The high and the low bid prices for our
shares for the last two fiscal years of actual trading, as reported by the
OTCBB, were:

QUARTER
      HIGH ($)
      LOW ($)1st Quarter 2006
    $0.25
    $0.062nd Quarter 2006
    $0.25
    $0.113rd Quarter 2006
    $0.55
    $0.094th Quarter 2006
    $0.55
    $0.151st Quarter 2007
    $0.25
    $0.252nd Quarter 2007
    $0.62
    $0.253rd Quarter 2007
    $0.65
    $0.284th Quarter 2007
    $0.31
    $0.11


The trades reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not represent actual transactions.

Holders of Common Stock

As of June 30, 2007, there were 194 registered shareholders of
our common stock.

Dividends

We have not declared any dividends on our common stock since
our inception. Our current policy is to retain any earnings in order to finance
the expansion of our operations. Our board of directors will determine future
declaration and payment of dividends, if any, in light of the then-current
conditions they deem relevant and in accordance with applicable corporate law.
There are no dividend restrictions that limit our ability to pay dividends on
our common stock in our Articles of Incorporation or Bylaws. Chapter 78 of the
Nevada Revised Statutes (the NRS), does provide certain limitations on our
ability to declare dividends. Section 78.288 of Chapter 78 of the NRS prohibits
us from declaring dividends where, after giving effect to the distribution of
the dividend:

|(a) | we would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(b) | except as may be allowed by our Articles of
      Incorporation, our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed, if we were to be
      dissolved at the time of the distribution, to satisfy the preferential
      rights upon dissolution of stockholders who may have preferential rights
      and whose preferential rights are superior to those receiving the
      distribution.

We have not declared any dividends and we do not plan to
declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities

All unregistered sales of our equity securities made during the
fiscal year ended June 30, 2007 have been previously reported in our Quarterly
Reports on Form 10-QSB and our Current Reports on Form 8-K.

6

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ITEM
6.               
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

PLAN OF OPERATION

Our patents for the Cool Can Technology have expired. After
learning that our patent rights had expired, our management decided to
re-evaluate our business plan and has decided to abandon the development of the
Cool Can Technology. Instead, we are seeking out and evaluating alternative
business opportunities.

As a result, we are unable to provide an accurate estimate of
our financial requirements for the next twelve months. However, we currently
have a working capital deficit of $110,250 and will need substantial financing
in the near term in order to meet our current obligations as they become due and
to meet our ongoing reporting obligations under the Securities Exchange Act of
1934 (the Exchange Act). In addition, if our management is successful in
identifying a suitable business opportunity for us to pursue, we will likely
need significantly more financing in order to pursue the new business
opportunity.

RESULTS OF OPERATIONS

|Summary of Year End Results |            |                          |                    
|--------------------------- | ---------- | ------------------------ | -------------------
|                            |            | Year
      Ended June 30 |                    
|                            |            |                          | Percentage         
|                            | 2007       | 2006                     | Increase / Decrease
|Revenue                     | $15,000    | $50,000                  | (70.0)%            
|Expenses                    | (146,807)  | (93,586)                 | 56.9%              
|Impairment of Intangibles   | (4,800)    | -                        | n/a                
|Interest Income             | 26,698     | -                        | n/a                
|Net Loss                    | $(109,909) | $(43,586)                | 152.2%             

Revenues

During the year ended June 30, 2007, we had revenues of $15,000
on account of the Minimum Royalty Payments received from Balsam Ventures, Inc.
under the terms of the License Agreement. Revenues recognized during the year
ended June 30, 2006 relate to the consideration received by us from Balsam in
connection with the extension of the License Agreement.

We have not earned any revenues from sales of our products to
date. As disclosed above, our patent rights to the Cool Can Technology have
expired. As such, we do not expect to earn any additional royalty payments under
the License Agreement with Balsam nor do we expect to earn revenues from any
other source in the near future.

Administrative Pre-Operating and Development Expenses

Our administrative pre-operating and development expenses for
the years ended June 30, 2007 and June 30, 2006 included the following:

|                |          |                          |                    
|--------------- | -------- | ------------------------ | -------------------
|                |          | Year
      Ended June 30 |                    
|                |          |                          | Percentage         
|                | 2007     | 2006                     | Increase / Decrease
|Accounting      | $43,398  | $14,379                  | 201.8%             
|Amortization    | 2,400    | 2,400                    | n/a                
|Management Fees | 12,000   | 32,500                   | (63.1)%            
|Consulting Fees | 30,000   | 30,000                   | n/a                
|Legal           | 36,123   | 12,400                   | 191.3%             
|Rent            | 5,981    | (9,447)                  | 163.3%             
|Other           | 16,905   | 11,354                   | 48.9%              
|Total           | $146,807 | $93,586                  | 56.9%              

7

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The increase in our administrative expenses for the year ended
June 30, 2007 when compared to the year ended June 30, 2006, was primarily
attributable to increases in our accounting and legal expenses. The increased
legal and accounting expenses are primarily attributable to services provided in
connection with our failed acquisition of Nextdigital Corp. and to the higher
fees charged by our new principal independent accountants, Peterson Sullivan
PLLC, for the review and audit of our financial statements as compared to our
previous principal independent accountants.

Impairment of Intangibles

We recorded an impairment loss of $4,800 as a result of the
expiration of our patent rights to the Cool Can Technology.

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital           |                        |                        |                    
|------------------------- | ---------------------- | ---------------------- | -------------------
|                          |                        |                        | Percentage         
|                          | At
      June 30, 2007 | At
      June 30, 2006 | Increase / Decrease
|Current Assets            | $1,089                 | $21,387                | (94.9)%            
|Current Liabilities       | (111,339)              | (58,730)               | 89.6%              
|Working Capital (Deficit) | $(110,250)             | $(37,343)              | 195.2%             

|Cash Flows                                    |                          |           
|--------------------------------------------- | ------------------------ | ----------
|                                              | Year
      Ended June 30
|                                              | 2007                     | 2006      
|Net Cash From Operating Activities            | $(86,298)                | $(200,130)
|Net Cash From Investing Activities            | (612,000)                | --        
|Net Cash From Financing Activities            | 682,500                  | 216,710   
|Net Increase (Decrease) In Cash During Period | $(15,798)                | $16,580   

During our fiscal year ended June 30, 2007, we raised financing
from the following sales of our equity securities:

|(a) | On November 30, 2006, we issued 2,000,000 shares of our
      common stock at a price of $0.25 for total proceeds of $500,000. The sale
      was made pursuant to Rule 506 of Regulation D of the Securities Act to two
      subscribers, each of whom was an accredited investor as such term is
      defined in Rule 501 of Regulation D.                                                                                                                                                                                                                                           
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(b) | On January 7, 2007, we issued 432,000 units at a price of
      $0.40 for total proceeds of $173,000. Each unit consisted of one share of
      our common stock and one share purchase warrant. Each warrant entitles the
      holder thereof to acquire one additional share of our common stock at a
      price of $0.40 for a period of one year from the date of issuance. The
      sale was completed pursuant to Regulation S of the Securities Act on the
      basis that each subscriber represented to us that that it was a non-US
      person, as defined in Regulation S.

During the year, we loaned a total of $612,000 to Nextdigital
in anticipation of closing our proposed acquisition of and merger with
Nextdigital. However, Nextdigital ultimately decided not to proceed with the
proposed acquisition. We are currently seeking to negotiate the repayment of all
amounts owed by Nextdigital. The amounts owed by Nextdigital bear interest at a
rate of 8% per annum, are unsecured with various due dates between November 7,
2008 and January 30, 2009.

Financing Requirements

We require additional financing if we are to continue. In
addition, if we identify and pursue any business opportunities identified by our
management, we anticipate that our financing needs will increase.

8

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Although our management believes that the amounts owed to us by
Nextdigital will ultimately be recoverable, there are no assurances that these
amounts will be repaid by Nextdigital when they become due or that they will be
repaid at all. In addition, although we own 5,545,000 shares of Balsam Ventures,
Inc., the fair value of which was recorded at $526,775 as of June 30, 2007,
there are no assurances that we will be able to sell enough of these shares to
meet our short term financing requirements as the trading volume for Balsams
shares is extremely limited.

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

OFF-BALANCE SHEET ARRANGEMENTS

None.

CRITICAL ACCOUNTING POLICIES

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

Use of Estimates

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

Fair Value of Financial Instruments

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

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. The carrying value of all intangible
assets was written off during the year ended June 30, 2007.

Comprehensive Loss

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

9

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RISKS AND UNCERTAINTIES

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

We have earned substantial losses for each of the years ended
June 30, 2007 and 2006, and we have an accumulated deficit of $2,762,082 as of
June 30, 2007. Although the financial statements for each of these periods were
prepared assuming that we would continue as a going concern, in the view of our
independent auditors, these conditions raise substantial doubt about our ability
to continue as a going concern. Furthermore, since we do not expect to generate
any significant revenues for the foreseeable future, our ability to continue as
a going concern depends, in large part, on our ability to raise additional
capital through equity or debt financing transactions. If we are unable to raise
additional capital, stockholders may lose their investment.

Our patent rights to the Cool Can Technology have expired
and we have no specific business plan.

We have abandoned the development of the Cool Can Technology.
We have no business assets or business operations. Our business plan currently
consists solely of seeking out and evaluating alternative business
opportunities. There are no assurances that we will be able to identify any
suitable business opportunities. Even if we do identify potential business
opportunities, there is no assurance that we will be able to acquire those
opportunities.

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

We had a working capital deficit of $110,250 as of our fiscal
year end. Although we are owed $638,698 from Nextdigital, there are no
assurances that we will be able to collect the amounts owed to us. In addition,
although we own 5,545,000 shares of Balsam Ventures, Inc. that have been
recorded on our balance sheet as available-for-sale securities with a fair
value of $526,775 as at June 30, 2007, there is no assurance that we will be
able to sell any or all of these shares. As such, we may not be able to meet our
short term financial needs from our existing assets. If we are not able to
obtain financing in an amount sufficient to enable us to pay our liabilities and
expenses as they come due, we may not be able to continue as a going concern.

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

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

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

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

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

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

Because our securities constitute "penny stocks" within the
meaning of the rules, the rules apply to us and to our securities. The rules may
further affect the ability of owners of shares to sell our securities in any
market that might develop for them. As long as the trading price of our common
stock is less than $5.00 per share, the

10

---

common stock will be subject to Rule 15g-9 under the Exchange
Act. The penny stock rules require a broker-dealer, prior to a transaction in a
penny stock, to deliver a standardized risk disclosure document prepared by the
SEC, that:

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

The broker-dealer also must provide, prior to effecting any
transaction in a penny stock, the customer with: (a) bid and offer quotations
for the penny stock; (b) the compensation of the broker-dealer and its
salesperson in the transaction; (c) the number of shares to which such bid and
ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (d) a monthly account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that, prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading
activity in the secondary market for our stock.

11

---

ITEM
7.               
FINANCIAL STATEMENTS.

|**Index to Financial Statements:**                                 | Page                                                                                                                                                                            
|------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                   |                                                                                                                                                                                 
|Audited financial statements as of June 30, 2007,
      including: |                                                                                                                                                                                 
|                                                                   |                                                                                                                                                                                 
|1.                                                                 | Report of Peterson Sullivan PLLC, Independent Registered
      Public Accounting Firm;                                                                                          
|                                                                   |                                                                                                                                                                                 
|2.                                                                 | Balance Sheet as of June 30, 2007;                                                                                                                                              
|                                                                   |                                                                                                                                                                                 
|3.                                                                 | Statements of Operations and Comprehensive Income (Loss)
      for the years ended June 30, 2007 and 2006 and the period from inception
      on April 1, 1998 to June 30, 2007;
|                                                                   |                                                                                                                                                                                 
|4.                                                                 | Statements of Cash Flows for the years ended June 30, 2007
      and 2006 and the period from inception on April 1, 1998 to June 30, 2007;                                      
|                                                                   |                                                                                                                                                                                 
|5.                                                                 | Statements of Stockholders Equity for the period
      from inception on April 1, 1998 to June 30, 2007; and                                                                   
|                                                                   |                                                                                                                                                                                 
|6.                                                                 | Notes to the Financial Statements.                                                                                                                                              

12

---











NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

FINANCIAL STATEMENTS

JUNE 30, 2007 and 2006









F-1

---





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders 
  NorPac Technologies, Inc.

We have audited the accompanying balance sheet of NorPac Technologies,
  Inc. (a development stage company) as of June 30, 2007, and the related statements
  of operations and comprehensive income (loss), cash flows, and stockholders'
  equity (deficit) for each of the years in the two-year period then ended, and
  for the period from April 1, 1998 (date of inception) to June 30, 2007. These
  financial statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based
  on our audits. The Company's financial statements for the period from April
  1, 1998 (date of inception) through June 30, 2005, were audited by other auditors
  whose report, dated September 22, 2005, expressed an unqualified opinion on
  those statements and included an explanatory paragraph that referred to substantial
  doubt about the Company's ability to continue as a going concern. The financial
  statements for the period from April 1, 1998 (date of inception) through June
  30, 2005, reflect a net loss of $2,608,587, which amount is included in the
  accumulated deficit as of June 30, 2007. The other auditors' report has been
  furnished to us, and our opinion, insofar as it relates to the amounts included
  for such prior periods, is based solely on the report of such other auditors.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audit to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. The Company has
  determined that it is not required to have, nor were we engaged to perform,
  an audit of its internal control over financial reporting. Our audit included
  consideration of internal control over financial reporting as a basis for designing
  audit procedures that are appropriate in the circumstances, but not for the
  purpose of expressing an opinion on the effectiveness of the Company's internal
  control over financial reporting. Accordingly, we express no such opinion. An
  audit includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements. An audit also includes assessing the
  accounting principles used and significant estimates made by management, as
  well as evaluating the overall financial statement presentation. We believe
  that our audits provide a reasonable basis for our opinion.

F-2

---

In our opinion, based on our audits and the report of other auditors,
  the financial statements referred to above present fairly, in all material respects,
  the financial position of NorPac Technologies, Inc. (a development stage company)
  as of June 30, 2007, and the results of its operations and its cash flows for
  each of the years in the two-year period then ended, and for the period from
  April 1, 1998 (date of inception) to June 30, 2007, in conformity with accounting
  principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 2 to the
  financial statements, the Company is in the development stage; planned principal
  operations have not yet commenced. Management's plans in regard to these matters
  are also discussed in Note 2. Successful development of the Company is dependent
  upon its ability to obtain additional funding through contributions of equity
  or debt issuances. These conditions raise substantial doubt about the Company's
  ability to continue as a going concern. The financial statements do not include
  any adjustments that might result from the outcome of this uncertainty.

/S/ PETERSON SULLIVAN PLLC

October 10, 2007 
  Seattle, Washington

F-3

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

BALANCE SHEET 
  June 30, 2007

|ASSETS                                                     |   |            |  
|---------------------------------------------------------- | - | ---------- | -
|                                                           |   |            |  
|CURRENT ASSETS:                                            |   |            |  
|Cash                                                       | $ | 1,089      |  
|Total Current Assets                                       |   | 1,089      |  
|                                                           |   |            |  
|AVAILABLE-FOR-SALE SECURITIES (Note 4)                     |   | 526,775    |  
|                                                           |   |            |  
|LOANS RECEIVABLE (Note 5)                                  |   | 638,698    |  
|                                                           |   |            |  
|                                                           | $ | 1,166,562  |  
|                                                           |   |            |  
|                                                           |   |            |  
|                                                           |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                       |   |            |  
|                                                           |   |            |  
|CURRENT LIABILITIES:                                       |   |            |  
|Accounts payable and accrued liabilities                   | $ | 101,339    |  
|Loan payable (Note
      7)                                |   | 10,000     |  
|Total
      Current Liabilities                            |   | 111,339    |  
|                                                           |   |            |  
|STOCKHOLDERS EQUITY (Note 9):                             |   |            |  
|Authorized:                                                |   |            |  
|100,000,000
      shares of common stock, $0.001 par value |   |            |  
|100,000,000 shares of preferred stock, $0.001 par value    |   |            |  
|Issued and outstanding:                                    |   |            |  
|37,597,890 shares of common stock                          |   | 37,597     |  
|Additional paid-in capital                                 |   | 3,467,383  |  
|Deficit accumulated
      during the development stage     |   | (2,762,082 | )
|Accumulated other comprehensive
      income               |   | 312,325    |  
|                                                           |   | 1,055,223  |  
|                                                           |   |            |  
|                                                           | $ | 1,166,562  |  

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

F-4

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

|                                                              |   |            |   |   |            |   |   | Period From     |  
|------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | --------------- | -
|                                                              |   |            |   |   |            |   |   | Inception       |  
|                                                              |   |            |   |   |            |   |   | (April 1, 1998) |  
|                                                              |   | Year Ended |   |   | Year Ended |   |   | Through         |  
|                                                              |   | June 30,   |   |   | June 30,   |   |   | June 30,        |  
|                                                              |   | 2007       |   |   | 2006       |   |   | 2007            |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Revenues                                                      | $ | 15,000     |   | $ | 50,000     |   | $ | 303,000         |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Administrative pre-opening and development
      expenses     |   | (146,807   | ) |   | (93,586    | ) |   | (1,721,114      | )
|Interest expense                                              |   | -          |   |   | -          |   |   | (679,541        | )
|Impairment of intangibles                                     |   | (4,800     | ) |   | -          |   |   | (24,800         | )
|Stock-based expenses                                          |   | -          |   |   | -          |   |   | (624,000        | )
|Realized loss on available-for-sale securities                |   | -          |   |   | -          |   |   | (42,325         | )
|                                                              |   |            |   |   |            |   |   |                 |  
|Loss before interest income                                   |   | (136,607   | ) |   | (43,586    | ) |   | (2,788,780      | )
|                                                              |   |            |   |   |            |   |   |                 |  
|Interest income                                               |   | 26,698     |   |   | -          |   |   | 26,698          |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Net loss                                                      |   | (109,909   | ) |   | (43,586    | ) |   | (2,762,082      | )
|                                                              |   |            |   |   |            |   |   |                 |  
|Unrealized gain (loss) on available-for-sale
      securities |   | (27,725    | ) |   | 272,250    |   |   | 312,325         |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Comprehensive income (loss)                                   | $ | (137,634   | ) | $ | 228,664    |   | $ | (2,449,757      | )
|                                                              |   |            |   |   |            |   |   |                 |  
|                                                              |   |            |   |   |            |   |   |                 |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Basic and diluted net income (loss) per common
      share    | $ | (0.00      | ) | $ | (0.00      | ) |   |                 |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Weighted average number of outstanding shares                 |   | 36,542,246 |   |   | 32,722,103 |   |   |                 |  

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

F-5

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

STATEMENTS OF CASH FLOWS

|                                                                                  |   |            |   |   |            |   |   | Period From     |  
|--------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | --------------- | -
|                                                                                  |   |            |   |   |            |   |   | Inception       |  
|                                                                                  |   |            |   |   |            |   |   | (April 1, 1998) |  
|                                                                                  |   | Year Ended |   |   | Year Ended |   |   | Through         |  
|                                                                                  |   | June 30,   |   |   | June 30,   |   |   | June 30,        |  
|                                                                                  |   | 2007       |   |   | 2006       |   |   | 2007            |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |   |            |   |   |            |   |   |                 |  
|Net loss                                                                          | $ | (109,909   | ) | $ | (43,586    | ) | $ | (2,762,082      | )
|Adjustments to reconcile net loss
      to net cash used in operating activities: |   |            |   |   |            |   |   |                 |  
|Amortization expense                                                              |   | 2,400      |   |   | 2,400      |   |   | 19,200          |  
|Compensation expense, options to
      nonemployees                               |   | -          |   |   | -          |   |   | 504,000         |  
|Receipt of available-for-sale
      securities                                    |   | -          |   |   | (30,000    | ) |   | (268,000        | )
|Fair value of common stock issued
      over carrying amount of debt              |   | -          |   |   | -          |   |   | 120,000         |  
|Realized loss on
      sales of available-for-sale securities                     |   | -          |   |   | -          |   |   | 42,325          |  
|Amortization of original issue discount                                           |   | -          |   |   | -          |   |   | 550,000         |  
|Impairment loss
      on intangibles                                              |   | 4,800      |   |   | -          |   |   | 24,800          |  
|Changes in operating assets and
      liabilities:                                |   |            |   |   |            |   |   |                 |  
|Increase in accrued
      interest receivable                                     |   | (26,698    | ) |   | -          |   |   | (26,698         | )
|Increase (decrease) in accounts
      payable and accrued liabilities             |   | 43,109     |   |   | (153,944   | ) |   | 181,120         |  
|Increase in accrued
      interest payable                                        |   | -          |   |   | -          |   |   | 127,380         |  
|Increase in accounts payable, stockholders                                        |   | -          |   |   | 25,000     |   |   | 369,346         |  
|Increase in due
      to stockholders                                             |   | -          |   |   | -          |   |   | 20,776          |  
|Net cash flows from operating activities                                          |   | (86,298    | ) |   | (200,130   | ) |   | (1,097,833      | )
|                                                                                  |   |            |   |   |            |   |   |                 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |   |            |   |   |            |   |   |                 |  
|Proceeds from sale
      of available-for-sale securities                         |   | -          |   |   | -          |   |   | 11,225          |  
|Advances under loan receivable agreements                                         |   | (612,000   | ) |   | -          |   |   | (612,000        | )
|Purchase of intangibles                                                           |   | -          |   |   | -          |   |   | (44,000         | )
|Net cash flows from investing activities                                          |   | (612,000   | ) |   | -          |   |   | (644,775        | )
|                                                                                  |   |            |   |   |            |   |   |                 |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |   |            |   |   |            |   |   |                 |  
|Collection of subscription
      receivable                                       |   | -          |   |   | -          |   |   | 10,000          |  
|Issuance of common stock                                                          |   | 673,000    |   |   | 289,500    |   |   | 1,292,269       |  
|Net proceeds from
      due to stockholders                                       |   | -          |   |   | -          |   |   | 348,928         |  
|Proceeds from (repayment of) loans
      payable                                  |   | 9,500      |   |   | (72,790    | ) |   | 10,000          |  
|Issuance of convertible
      notes                                               |   | -          |   |   | -          |   |   | 82,500          |  
|Net cash flows from financing activities                                          |   | 682,500    |   |   | 216,710    |   |   | 1,743,697       |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|Increase (decrease) in cash                                                       |   | (15,798    | ) |   | 16,580     |   |   | 1,089           |  
|Cash:                                                                             |   |            |   |   |            |   |   |                 |  
|Beginning                                                                         |   | 16,887     |   |   | 307        |   |   | -               |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|Ending                                                                            | $ | 1,089      |   | $ | 16,887     |   | $ | 1,089           |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|SUPPLEMENTAL CASH FLOWS INFORMATION:                                              |   |            |   |   |            |   |   |                 |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|Cash paid for interest                                                            | $ | -          |   | $ | 21         |   | $ | 2,182           |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|NONCASH INVESTING AND FINANCING ACTIVITIES:                                       |   |            |   |   |            |   |   |                 |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|Stock issued for amount due to stockholders                                       | $ | -          |   | $ | 28,125     |   | $ | 233,125         |  
|Stock issued for accounts
      payable                                           | $ | -          |   | $ | -          |   | $ | 10,000          |  
|Conversion of accounts payable, stockholders
      and due to stockholders        |   |            |   |   |            |   |   |                 |  
|and issuance
      of subscription receivable for convertible notes               | $ | -          |   | $ | -          |   | $ | 467,500         |  
|Stock issued for conversion
      of notes payable                                | $ | -          |   | $ | -          |   | $ | 550,000         |  
|Stock issued
      for accrued interest on notes payable                          | $ | -          |   | $ | -          |   | $ | 127,381         |  

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

F-6

---

NORPACTECHNOLOGIES,INC.(A Development Stage Company)

STATEMENTSOFSTOCKHOLDERSEQUITY

|                                                                                    |                    |  |   |        |  |   |            |  |  |              |  |   |               |   |   |               |   |   | Deficit     |  
|----------------------------------------------------------------------------------- | ------------------ |  | - | ------ |  | - | ---------- |  |  | ------------ |  | - | ------------- | - | - | ------------- | - | - | ----------- | -
|                                                                                    |                    |  |   |        |  |   | Additional |  |  | Amount       |  |   |               |   |   | Accumulated   |   |   | Accumulated |  
|                                                                                    |                    |  |   |        |  |   | Paid       |  |  | Per          |  |   | Stock         |   |   | Other         |   |   | During the  |  
|                                                                                    | Common
      Stock |  |   | In     |  |   | Share/     |  |  | Subscription |  |   | Comprehensive |   |   | Development   |  
|                                                                                    | Shares             |  |   | Amount |  |   | Capital    |  |  | Unit         |  |   | Receivable    |   |   | Income (Loss) |   |   | Stage       |  
|                                                                                    |                    |  |   |        |  |   |            |  |  |              |  |   |               |   |   |               |   |   |             |  
|Balance, April 1, 1998                                                              | -                  |  | $ | -      |  | $ | -          |  |  |              |  | $ |               |   | $ | -             |   | $ | -           |  
|Net loss                                                                            | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | -             |   |   | (6,345      | )
|Balance, June 30, 1998                                                              | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | -             |   |   | (6,345      | )
|Shares issued for cash - July and August 1998                                       | 891,000            |  |   | 891    |  |   | 16,929     |  |  | 0.02         |  |   | -             |   |   | -             |   |   | -           |  
|Shares issued for cash - September 1998                                             | 10,000             |  |   | 10     |  |   | 99,990     |  |  | 10.00        |  |   | -             |   |   | -             |   |   | -           |  
|Shares issued for cash - April 1999                                                 | 1,841              |  |   | 2      |  |   | 55,228     |  |  | 30.00        |  |   | -             |   |   | -             |   |   | -           |  
|Shares issued for receivable - April 1999                                           | 3,557              |  |   | 4      |  |   | 106,715    |  |  | 30.00        |  |   | (106,719      | ) |   | -             |   |   | -           |  
|Payment on receivable                                                               | -                  |  |   | -      |  |   | -          |  |  |              |  |   | 106,719       |   |   | -             |   |   | -           |  
|Net loss                                                                            | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | -             |   |   | (228,505    | )
|Balance, June 30, 1999                                                              | 906,398            |  |   | 907    |  |   | 278,862    |  |  |              |  |   | -             |   |   | -             |   |   | (234,850    | )
|Net loss                                                                            | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | -             |   |   | (174,236    | )
|Balance, June 30, 2000                                                              | 906,398            |  |   | 907    |  |   | 278,862    |  |  |              |  |   | -             |   |   | -             |   |   | (409,086    | )
|Net loss                                                                            | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | -             |   |   | (307,225    | )
|Balance, June 30, 2001                                                              | 906,398            |  |   | 907    |  |   | 278,862    |  |  |              |  |   | -             |   |   | -             |   |   | (716,311    | )
|Shares issued for stockholder debt - October
      2001                             | 25,000             |  |   | 25     |  |   | 274,975    |  |  | 11.00        |  |   | -             |   |   | -             |   |   | -           |  
|Shares issued for cash - October 2001                                               | 6,250              |  |   | 6      |  |   | 49,994     |  |  | 8.00         |  |   | -             |   |   | -             |   |   | -           |  
|Shares issued for stockholder debt - November
      2001                            | 25,000             |  |   | 25     |  |   | 49,975     |  |  | 2.00         |  |   | -             |   |   | -             |   |   | -           |  
|Shares issued for accounts payable - November 2001                                  | 5,000              |  |   | 5      |  |   | 9,995      |  |  | 2.00         |  |   | -             |   |   | -             |   |   | -           |  
|Shares issued for rounding up of fractional
      shares related to merger          | 451                |  |   | -      |  |   | -          |  |  |              |  |   |               |   |   |               |   |   |             |  
|Stock option compensation expense                                                   | -                  |  |   | -      |  |   | 504,000    |  |  |              |  |   | -             |   |   | -             |   |   | -           |  
|Net loss                                                                            | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | -             |   |   | (840,330    | )
|Balance, June 30, 2002                                                              | 968,099            |  |   | 968    |  |   | 1,167,801  |  |  |              |  |   | -             |   |   | -             |   |   | (1,556,641  | )
|Beneficial conversion of convertible notes
      issued  January 2003 to June 2003 | -                  |  |   | -      |  |   | 550,000    |  |  |              |  |   | -             |   |   | -             |   |   | -           |  
|Net loss                                                                            | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | -             |   |   | (225,141    | )
|Other comprehensive loss on available-for-sale
      securities                     | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |   |   | (48,000       | ) |   | -           |  
|Balance, June 30, 2003                                                              | 968,099            |  |   | 968    |  |   | 1,717,801  |  |  |              |  |   | -             |   |   | (48,000       | ) |   | (1,781,782  | )

F-7

---

NORPACTECHNOLOGIES,INC.(A Development Stage Company)

STATEMENTSOFSTOCKHOLDERSEQUITY

|                                                                                          |                    |  |  |        |  |  |            |  |  |              |  |  |               |  |  |               |   |  | Deficit     |  
|----------------------------------------------------------------------------------------- | ------------------ |  |  | ------ |  |  | ---------- |  |  | ------------ |  |  | ------------- |  |  | ------------- | - |  | ----------- | -
|                                                                                          |                    |  |  |        |  |  | Additional |  |  | Amount       |  |  |               |  |  | Accumulated   |   |  | Accumulated |  
|                                                                                          |                    |  |  |        |  |  | Paid       |  |  | Per          |  |  | Stock         |  |  | Other         |   |  | During the  |  
|                                                                                          | Common
      Stock |  |  | In     |  |  | Share/     |  |  | Subscription |  |  | Comprehensive |  |  | Development   |  
|                                                                                          | Shares             |  |  | Amount |  |  | Capital    |  |  | Unit         |  |  | Receivable    |  |  | Income (Loss) |   |  | Stage       |  
|                                                                                          |                    |  |  |        |  |  |            |  |  |              |  |  |               |  |  |               |   |  |             |  
|Shares issued for conversion of note payable
       April 23, 2004                       | 1,000,000          |  |  | 1,000  |  |  | 19,000     |  |  | 0.02         |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for accrued interest on note payable  April
      23, 2004                 | 8,901              |  |  | 9      |  |  | 2,583      |  |  | 0.29         |  |  | -             |  |  | -             |   |  | -           |  
|Net loss                                                                                  | -                  |  |  | -      |  |  | -          |  |  |              |  |  | -             |  |  | -             |   |  | (278,135    | )
|Other comprehensive gain on available-for-sale securities                                 | -                  |  |  | -      |  |  | -          |  |  |              |  |  | -             |  |  | 128,000       |   |  | -           |  
|Balance, June 30, 2004                                                                    | 1,977,000          |  |  | 1,977  |  |  | 1,739,384  |  |  |              |  |  | -             |  |  | 80,000        |   |  | (2,059,917  | )
|Shares issued for conversion of notes payable 
      May 26, 2005 to June 27, 2005       | 26,500,000         |  |  | 26,500 |  |  | 503,500    |  |  | 0.02         |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for accrued interest on notes
      payable  May 26, 2005 to June 27, 2005 | 2,300,646          |  |  | 2,301  |  |  | 46,013     |  |  | 0.021        |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for accrued interest on notes payable 
      May 26, 2005 to June 27, 2005 | 1,514,286          |  |  | 1,514  |  |  | 51,486     |  |  | 0.035        |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for accrued interest on notes
      payable  May 26, 2005 to June 27, 2005 | 72,848             |  |  | 73     |  |  | 2,987      |  |  | 0.042        |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for accrued interest on notes payable 
      May 26, 2005 to June 27, 2005 | 42,869             |  |  | 43     |  |  | 4,758      |  |  | 0.112        |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for accrued interest on notes
      payable  May 26, 2005 to June 27, 2005 | 67,551             |  |  | 67     |  |  | 7,971      |  |  | 0.119        |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for accrued interest on notes payable 
      May 26, 2005 to June 27, 2005 | 90,190             |  |  | 90     |  |  | 7,486      |  |  | 0.084        |  |  | -             |  |  | -             |   |  | -           |  
|Net loss                                                                                  | -                  |  |  | -      |  |  | -          |  |  |              |  |  | -             |  |  | -             |   |  | (548,670    | )
|Other comprehensive loss on available-for-sale securities                                 | -                  |  |  | -      |  |  | -          |  |  |              |  |  | -             |  |  | (12,200       | ) |  | -           |  
|Balance, June 30, 2005                                                                    | 32,565,390         |  |  | 32,565 |  |  | 2,363,585  |  |  |              |  |  | -             |  |  | 67,800        |   |  | (2,608,587  | )
|Shares issued for cash June 2006                                                         | 2,412,500          |  |  | 2,413  |  |  | 287,087    |  |  | 0.12         |  |  | -             |  |  | -             |   |  | -           |  
|Shares issued for stockholder accounts payable
      June 2006                           | 187,500            |  |  | 187    |  |  | 146,143    |  |  |              |  |  | -             |  |  | -             |   |  | -           |  
|Net loss                                                                                  | -                  |  |  | -      |  |  | -          |  |  |              |  |  | -             |  |  | -             |   |  | (43,586     | )
|Other comprehensive gain on available-for-sale
      securities                           | -                  |  |  | -      |  |  | -          |  |  |              |  |  | -             |  |  | 272,250       |   |  | -           |  
|Balance, June 30, 2006                                                                    | 35,165,390         |  |  | 35,165 |  |  | 2,796,815  |  |  |              |  |  | -             |  |  | 340,050       |   |  | (2,652,173  | )

F-8

---

NORPACTECHNOLOGIES,INC.(A Development Stage Company)

STATEMENTSOFSTOCKHOLDERSEQUITY

|                                                                |                    |  |   |        |  |   |            |  |  |              |  |   |               |  |   |               |   |   | Deficit     |  
|--------------------------------------------------------------- | ------------------ |  | - | ------ |  | - | ---------- |  |  | ------------ |  | - | ------------- |  | - | ------------- | - | - | ----------- | -
|                                                                |                    |  |   |        |  |   | Additional |  |  | Amount       |  |   |               |  |   | Accumulated   |   |   | Accumulated |  
|                                                                |                    |  |   |        |  |   | Paid       |  |  | Per          |  |   | Stock         |  |   | Other         |   |   | During the  |  
|                                                                | Common
      Stock |  |   | In     |  |   | Share/     |  |  | Subscription |  |   | Comprehensive |  |   | Development   |  
|                                                                | Shares             |  |   | Amount |  |   | Capital    |  |  | Unit         |  |   | Receivable    |  |   | Income (Loss) |   |   | Stage       |  
|                                                                |                    |  |   |        |  |   |            |  |  |              |  |   |               |  |   |               |   |   |             |  
|Shares issued for cash November 2006                           | 2,000,000          |  |   | 2,000  |  |   | 498,000    |  |  | 0.25         |  |   | -             |  |   | -             |   |   | -           |  
|Shares issued for cash January 2007                            | 432,500            |  |   | 432    |  |   | 103,368    |  |  | 0.40         |  |   | -             |  |   | -             |   |   | -           |  
|Issuance of warrants January 2007                              | -                  |  |   | -      |  |   | 69,200     |  |  |              |  |   | -             |  |   | -             |   |   | -           |  
|Net loss                                                        | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |  |   | -             |   |   | (109,909    | )
|Other comprehensive loss on available-for-sale
      securities | -                  |  |   | -      |  |   | -          |  |  |              |  |   | -             |  |   | (27,725       | ) |   | -           |  
|Balance, June 30, 2007                                          | 37,597,890         |  | $ | 37,597 |  | $ | 3,467,383  |  |  |              |  | $ | -             |  | $ | 312,325       |   | $ | (2,762,082  | )

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

F-9

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|1. | History and Organization of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | NorPac Technologies, Inc. (the Company) was originally
        incorporated on April 1, 1998 in the state of Minnesota. On July 12, 2004
        the Company was reorganized and became a Nevada Corporation. The Company
        was formed to act as a holding company for manufacturing companies and
        since inception, has devoted its efforts to raising capital and pre-opening
        activities. The Company previously owned a patent for a self-chilling
        beverage container and related component parts in the United States and
        certain foreign countries. Subsequent to June 30, 2007, the Company determined
        that the patents for the Cool Can Technology have expired. As a result,
        management has decided to abandon the development of the Cool Can Technology
        and is in the process of reorganizing the Companys business and
        is in the process of seeking and evaluating alternative business opportunities.                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On November 7, 2006, the Company entered into an Agreement
        and Plan of Merger (Merger Agreement) for a merger with Nextdigital
        Corp. (Nextdigital), a Nevada company engaged in the provision
        of smart card solutions to the international marketplace. Under the terms
        of the Merger Agreement, the Company would have merged with Nextdigital
        and changed its name to Nextdigital Corporation. The Merger Agreement
        also provided that the Company would have issued one share of the Companys
        common stock in exchange for each outstanding share of common stock of
        Nextdigital. At the Merger Agreement date, Nextdigital had 21,421,600
        shares of common stock outstanding. On February 15, 2007 the Company received
        notice from Nextdigital that it was electing not to proceed with the Merger
        Agreement because it believed its shareholders would not approve it. During
        the year ended June 30, 2007, the Company made advances to Nextdigital
        amounting to $612,000 under a series of unsecured loan agreements. The
        Company is presently negotiating with Nextdigital the repayment of all
        amounts loaned to Nextdigital, and intends to continue to pursue its development
        of the Cool Can Technology (see Note 5).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company is considered to be in the development stage.
        The accompanying financial statements represent those of a development
        stage enterprise and therefore, are subject to the usual business risks
        of development stage companies. The Company has had no significant revenue
        from operations. Research and development costs are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2. | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The accompanying financial statements have been prepared
        in conformity with accounting principles generally accepted in the United
        States, which contemplate continuation of the Company as a going concern.
        However, the Company has sustained substantial losses and is still in
        the development stage. These financial statements do not include any adjustments
        that might result from this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company intends to arrange for the sale of additional
        shares of stock to obtain additional operating capital for at least the
        next twelve months. There can be no assurance the Company will be able
        to raise the necessary capital to continue in business.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-10

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The financial statements of the Company have
        been prepared in conformity with accounting principles generally accepted
        in the United States and are stated in U.S. dollars. The significant accounting
        policies adopted by the Company are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The preparation of financial statements in
        conformity with accounting principles generally accepted in the United
        States requires management to make estimates and assumptions that affect
        the reported amount of assets and liabilities and the disclosure of contingent
        assets and liabilities at the date of the financial statements and the
        reported amount of revenues and expenses during the reporting period.
        Actual results could differ from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The functional currency of the Company is
        the United States dollar. Monetary assets and liabilities denominated
        in a foreign currency are translated at the exchange rate in effect at
        the balance sheet date while non-monetary assets and liabilities are translated
        at historical rates. Revenue and expense items denominated in a foreign
        currency are translated at exchange rates prevailing when such items are
        recognized in the statement of operations. Exchange gains and losses arising
        on transactions denominated in foreign currency are included in the statement
        of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company considers cash held at banks and
        all highly liquid investments with original maturities of three months
        or less to be cash and cash equivalents. As of June 30, 2007 and 2006,
        cash and cash equivalents consists of cash only.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Loans receivable are reported at outstanding
        principal balance adjusted for any charge-offs and the reserve for loan
        losses. Management does not believe a reserve for loan losses is necessary
        at June 30, 2007. When determining the reserve for loan losses, management
        considers if any events or changes in circumstances indicate uncollectibility.
        When a loan is determined to be uncollectible, it is charged against the
        loss reserve. Loans are not collateralized. Because of inherent uncertainties
        in estimating the reserve for loan losses, it is at least reasonably possible
        that the estimates used will change in the near term. Interest on loans
        is recognized when earned. Interest on loans is generally not recognized
        when loans become past due. Thereafter, no interest is taken into income
        until such time as the borrower demonstrates the ability to resume payments.
        There were no past due loans at June 30, 2007. Based on current loan interest
        rates, management does not believe exposure to interest rate sensitivity
        is significant. Management periodically reviews loans outstanding to determine
        if any loans are impaired. Impaired loans, if any, are adjusted to estimated
        net realized value through the loan loss reserve.

F-11

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Intangible assets are recorded at cost. Amortization
        is calculated 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,
        the Company reviews all long-lived assets for impairment whenever events
        or changes in circumstances indicate that the carrying amount of an asset
        may not be recoverable. Recoverability of assets to be held and used is
        measured by a comparison of the carrying amount of an asset to future
        net cash flows expected to be generated by the assets. If such assets
        are considered to be impaired, the impairment recognized is measured by
        the amount by which the carrying amount of the assets exceeds the fair
        value of the assets. Assets to be disposed of are reported at the lower
        of the carrying amount or fair value less costs to sell.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company expenses advertising costs as
        incurred. There were no advertising expenses incurred by the Company for
        the years ended June 30, 2007 and 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Deferred taxes are recorded using the liability
        method. A deferred tax asset or liability is recorded for all temporary
        differences between financial and tax reporting and net operating loss
        carryforwards. Deferred tax expenses (benefit) result from the net change
        during the period of deferred tax assets and liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Deferred tax assets are reduced by a valuation
        allowance when, in the opinion of management, it is more likely than not
        that some portion or all of the deferred tax assets will not be realized.
        Deferred tax assets and liabilities are adjusted for the effects of changes
        in tax laws and rates on the date of enactment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company's financial instruments consist
        of cash, available-for-sale securities, loans receivable, accounts payable
        and accrued liabilities and loan payable. It is management's opinion that
        the Company is not exposed to significant interest, currency or credit
        risks arising from these financial instruments. The fair value of these
        financial instruments, other than available-for-sale securities, approximates
        their carrying values because of the short-term nature of these financial
        instruments. Available-for-sale securities are recorded at their fair
        market values determined by quoted market prices.                                                                                                                                                                                                                                                                                                                           

F-12

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (i)        Stock-based
        compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective January 1, 2006, the Company adopted SFAS123(R),
        "Share-Based Payment," and related interpretations which superseded
        Accounting Principles Board (APB) Opinion 25, Accounting
        for Stock Issued to Employees. SFAS 123(R) requires that all
        stock-based compensation be recognized as an expense in the financial
        statements and that such cost be measured at the fair value of the award.
        This statement was adopted using the modified prospective method, which
        requires the Company to recognize compensation expense on a prospective
        basis. The fair value of stock-based compensation is determined using
        the Black-Scholes valuation model, which is consistent with the Companys
        valuation techniques previously utilized for stock-based awards in footnote
        disclosures required under SFAS 123, Accounting for Stock-Based
        Compensation. Prior to January 1, 2006, the Company accounted
        for share-based compensation under the recognition and measurement provisions
        of APB Opinion 25, as permitted by SFAS 123. Under APB Opinion 25, compensation
        expense was recorded using the intrinsic method where compensation expense
        under fixed term option plans was recorded at the date of grant only to
        the extent that the market value of the underlying stock at the date of
        grant exceeded the exercise price. As a result of adopting SFAS 123(R)
        on January 1, 2006, the Companys net loss for the years ended June
        30, 2007 and 2006 were no different than if it had continued to account
        for stock-based compensation under SFAS 123. Basic and diluted loss per
        share for the years ended June 30, 2007 and 2006 were no different than
        if it had continued to account for share-based compensation under SFAS
        123.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The following table shows the pro forma effect on net
        loss and net loss per common share, had compensation expense been determined
        based on the fair value at the award grant date, in accordance with SFAS
        123:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                             |   |            |   |   | Period
      From   |  
| | ------------------------------------------- | - | ---------- | - | - | ------------------- | -
| |                                             |   |            |   |   | Inception (April 1, |  
| |                                             |   | Year Ended |   |   | 1998) Through       |  
| |                                             |   | June 30,   |   |   | June 30,            |  
| |                                             |   | 2006       |   |   | 2007                |  
| |                                             |   |            |   |   |                     |  
| | Net loss                                    | $ | (43,586    | ) | $ | (2,772,082          | )
| |                                             |   |            |   |   |                     |  
| | Pro forma net loss                          | $ | (43,586    | ) | $ | (2,820,082          | )
| |                                             |   |            |   |   |                     |  
| | Stock based compensation                    |   |            |   |   |                     |  
| | As reported                                 | $ | -          |   | $ | 504,000             |  
| | Proforma                                    | $ | -          |   | $ | 552,000             |  
| |                                             |   |            |   |   |                     |  
| | Basic and diluted net loss per common share |   |            |   |   |                     |  
| | As reported                                 | $ | (0.00      | ) |   |                     |  
| | Pro forma                                   | $ | (0.00      | ) |   |                     |  

There were no options granted or vested
  during the years ended June 30, 2007 and 2006.

F-13

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (j)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Basic net loss per share is computed by dividing
        the net loss for the year by the weighted average number of shares of
        common stock outstanding during the year. Diluted earnings per share takes
        into consideration shares of common stock outstanding (computed under
        basic earnings per share) and potentially dilutive securities. As of June
        30, 2007, the 432,500 warrants outstanding have been excluded from diluted
        net income (loss) per common share as they were anti-dilutive. As of June
        30, 2006, there were no potentially dilutive securities outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (k)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company has adopted SFAS 130, Reporting
        Comprehensive Income, which establishes guidelines for the reporting
        and display of comprehensive income (loss) and its components in financial
        statements. Comprehensive loss consists of the Companys net loss
        and unrealized gain (loss) on available-for-sale securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (l)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company is a development stage company
        as defined in SFAS 7, Accounting and Reporting by Development
        Stage Enterprises,as it is devoting substantially all of its
        efforts to establish a new business and planned principal operations have
        not yet commenced.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | (m)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In February 2006, the FASB issued SFAS 155,
        Accounting for Certain Hybrid Financial Instruments  an
        amendment of SFAS 133 and 140. SFAS 155 permits fair value remeasurement
        for any hybrid financial instrument that contains an embedded derivative
        that otherwise would require bifurcation, clarifies which interest-only
        strips and principal-only strips are not subject to the requirements of
        SFAS 133, and establishes a requirement to evaluate interests in securitized
        financial assets to identify interests that are freestanding derivatives
        or that are hybrid financial instruments that contain an embedded derivative
        requiring bifurcation. In addition, SFAS 155 clarifies that concentrations
        of credit risk in the form of subordination are not embedded derivatives
        and amends SFAS 140 to eliminate the prohibition on a qualifying special
        purpose entity from holding a derivative financial instrument that pertains
        to a beneficial interest other than another derivative financial instrument.
        SFAS 155 is effective for all financial instruments acquired or issued
        after the beginning of an entitys first fiscal year that begins
        after September15, 2006. The Company does not expect that this Statement
        will have a material impact on their financial position, results of operations
        or cash flows.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In March 2006, the FASB issued SFAS 156, Accounting
        for Servicing of Financial Assetsan amendment of SFAS 140.
        SFAS 156 requires that an entity separately recognize a servicing asset
        or a servicing liability when it undertakes an obligation to service a
        financial asset under a servicing contract in certain situations. Such
        servicing assets or servicing liabilities are required to be initially
        measured at fair value, if practicable. SFAS 156 also allows an entity
        to choose either the amortization method or the fair value measurement
        method to account for servicing assets and servicing liabilities within
        the scope of this Statement. SFAS 156 is effective after the beginning
        of an entitys first fiscal year that begins after September 15,
        2006. The Company does not expect that this Statement will have a material
        impact on their financial position, results of operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-14

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | (m) Recent accounting pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In April 2006, the FASB issued FASB Staff Position (FSP)
        FIN 46R-6, Determining the Variability to Be Considered in Applying
        FASB Interpretation No. (FIN) 46(R).FIN 46R-6 addresses certain
        implementation issues related to FIN 46R (revised December 2003), Consolidation
        of Variable Interest Entities. Specifically, FIN 46R-6 addresses
        how a reporting enterprise should determine the variability to be considered
        in applying FIN 46R. The variability that is considered in applying FIN
        46R affects the determination of (a) whether an entity is a variable interest
        entity (VIE), (b) which interests are variable interests in
        the entity, and (c) which party, if any, is the primary beneficiary of
        the VIE. That variability affects any calculation of expected losses and
        expected residual returns, if such a calculation is necessary. The Company
        is required to apply the guidance in FIN 46R-6 prospectively to all entities
        (including newly created entities) and to all entities previously required
        to be analyzed under FIN 46R when a reconsideration event
        has occurred, beginning July 1, 2006. The Company will evaluate the impact
        of this FSP at the time any such reconsideration event occurs
        and for any new entities created.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In July 2006, the FASB issued FIN 48, Accounting
        for Uncertainty in Income Taxes-an Interpretation of SFAS 109.This
        Interpretation provides guidance for recognizing and measuring uncertain
        tax positions, as defined in SFAS 109, Accounting for Income
        Taxes.FIN 48 prescribes a threshold condition that a tax position
        must meet for any of the benefit of an uncertain tax position to be recognized
        in the financial statements. Guidance is also provided regarding derecognition,
        classification and disclosure of uncertain tax positions. FIN 48 is effective
        for fiscal years beginning after December 15, 2006. The Company does not
        expect that this Interpretation will have a material impact on their financial
        position, results of operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In September 2006, the FASB issued SFAS 157, Fair
        Value Measurements. SFAS 157 establishes a framework for measuring
        the fair value of assets and liabilities. This framework is intended to
        provide increased consistency in how fair value determinations are made
        under various existing accounting standards which permit, or in some cases
        require, estimates of fair market value. SFAS 157 is effective for fiscal
        years beginning after November 15, 2007, and interim periods within those
        fiscal years. Earlier application is encouraged, provided that the reporting
        entity has not yet issued financial statements for that fiscal year, including
        any financial statements for an interim period within that fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In February 2007, the FASB issued SFAS 159, The
        Fair Value Option for Financial Assets and Financial Liabilities,which permits an instrument election to account for selected financial
        assts and liabilities at fair value. SFAS 159 is effective for fiscal
        years beginning after November 15, 2007, with early adoption permitted
        as of January 1, 2007. The Company is currently evaluating the impact
        of SFAS 159 will have on the Statements of Operations and Balance Sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In June 2007, the Emerging Issues Task Force (EITF)
        of the FASB issued EITF Issue No. 07-03,Accounting for Nonrefundable
        Advance Payments for Goods or Services to be Used in Future Research and
        Development Activities,which is effective for fiscal years
        beginning after December 15, 2007. EITF Issue No. 07-03 requires that
        nonrefundable advance payments for future research and development activities
        be deferred and capitalized. Such amounts will be recognized as an expense
        as the goods are delivered or the related services are performed. The
        Company does not expect the adoption of EITF Issue No 07-03 to have a
        material impact on the financial results of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-15

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|4. | Available-for-sale Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Investments held by the Company are classified as available-for-sale
        securities. Available-for-sale securities are reported at fair value with
        all unrealized gains or losses included in other comprehensive income
        (loss). The fair value of the securities was determined by quoted market
        prices of the underlying security. For purposes of determining gross realized
        gains or losses, the cost of available-for-sale securities is based on
        specific identification.

| |                                   |   |                  |  |   | Gross      |  |   | Gross      |  |   |         | 
| | --------------------------------- | - | ---------------- |  | - | ---------- |  | - | ---------- |  | - | ------- | 
| |                                   |   | Aggregate        |  |   | unrealized |  |   | unrealized |  |   |         | 
| |                                   |   | fair
      value |  |   | gains      |  |   | losses     |  |   | Cost    | 
| |                                   |   |                  |  |   |            |  |   |            |  |   |         | 
| | Equity securities  June 30, 2007 | $ | 526,775          |  | $ | 312,325    |  | $ | -          |  | $ | 214,450 | 

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

The Companys net unrealized holding
  gain (loss) was $(27,725) and $272,250 for the years ended June 30, 2007 and
  2006, respectively. The reclassification adjustment was $0 and $0 for the years
  ended June 30, 2007 and 2006, respectively and $40,800 for the period from inception
  through June 30, 2007. On an ongoing basis, the Company evaluates its investment
  in available-for-sale securities if a decline in fair value is other than temporary.
  There have been no other-than-temporary declines in fair value through June
  30, 2007.

At June 30, 2007, the Company held 5,545,000
  common shares of Balsam Ventures, Inc. (Balsam) for an ownership
  percentage of 15.3% . This investment in Balsam was not accounted for under
  the equity method in accordance with APB Opinion 18, The Equity Method
  of Accounting for Investments in Common Stock,because the Company
  is unable to exercise significant influence over the operating and financial
  policies of the investee.

F-16

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|5. | Loans Receivable                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                             
|   | During the year ended June 30, 2007, several unsecured
        loans were granted to Nextdigital, totaling $612,000. The loans bear interest
        at 8% per annum and are due as follows:

| | Grant Date                  |   | Principal |  |  |  |  |  | Due
      Date    | 
| | --------------------------- | - | --------- |  |  |  |  |  | ----------------- | 
| |                             |   |           |  |  |  |  |  |                   | 
| | November 7, 2006            | $ | 100,000   |  |  |  |  |  | November 7, 2008  | 
| | November 20, 2006           |   | 75,000    |  |  |  |  |  | November 20, 2008 | 
| | December 4, 2006            |   | 275,000   |  |  |  |  |  | December 4, 2008  | 
| | January 30, 2007            |   | 162,000   |  |  |  |  |  | January 30, 2009  | 
| |                             | $ | 612,000   |  |  |  |  |  |                   | 
| | Accrued Interest receivable |   | 26,698    |  |  |  |  |  |                   | 
| |                             | $ | 638,698   |  |  |  |  |  |                   | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Interest income related to these loans receivable for
        the year ended June 30, 2007 totaled $26,698.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | As discussed in Note 1, the Merger Agreement with Nextdigital
        was terminated. The Company is presently negotiating with Nextdigital
        the repayment of all amounts loaned to Nextdigital. Principal payments
        under all loan agreements are due during the year ended June 30, 2009.                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|6. | Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | A United States patent for a self-chilling beverage
        container and related component parts was obtained by a founding stockholder
        on March 11, 1997. During 1998, the patent and patent holder rights thereunder
        were sold to the Company for $1. Subsequent costs in June 1999 of $24,000
        to file foreign patent applications were similarly capitalized. Subsequent
        to June 30, 2007, the Company determined that the patents for the Cool
        Can Technology have expired. As such, an impairment loss of $4,800 was
        recorded for the year ended June 30, 2007.

| |                          |   | 2007 |  |   | 2006    |  
| | ------------------------ | - | ---- |  | - | ------- | -
| |                          |   |      |  |   |         |  
| | Patent                   | $ | -    |  | $ | 24,000  |  
| |                          |   |      |  |   |         |  
| | Accumulated amortization |   | -    |  |   | (16,800 | )
| |                          |   |      |  |   |         |  
| | Net book value           | $ | -    |  | $ | 7,200   |  

F-17

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|6. | Intangible Assets (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | In April 2001, the Company acquired a patent pending
        from certain stockholders which expanded on the patent described above.
        The acquisition agreement required the payment by the Company to the stockholders
        of $20,000. In addition, the Company was to issue to the stockholders:
        (i) 7,500 shares of the Companys common stock upon the grant of
        a patent in connection with the acquired patent pending; and (ii) an additional
        4,500 shares for each country in respect of which the Company grants a
        license of the acquired technology, for the first ten countries, and 3,000
        shares for each additional country, to a maximum of 75,000 shares under
        the acquisition agreement. The Company was to also pay an ongoing royalty
        to the stockholders based on sales of products incorporating the technology
        as follows: (i) 4.5% of gross profits achieved by the Company on products
        incorporating the technology; and (ii) 15% of any licensing revenues or
        royalty payments earned by the Company on licenses of the acquired technology.
        The Company had agreed to use its best efforts to commercialize the acquired
        technology and to apply to the United States Patent Office for a grant
        of a patent relating to the patent pending. The agreement was cancelled
        due to the Companys default under the agreement on June 14, 2003
        and as such, an impairment loss of $20,000 was recorded for the year ended
        June 30, 2003.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|7. | Loan Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended June 30, 2007, a loan was granted
        from a third party for $10,000. The loan is unsecured, non-interest bearing,
        and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended June 30, 2006, several loans were
        granted from and repaid to a third party. The balance due at June 30,
        2006 was $500. During the year ended June 30, 2007, the loan was repaid.
        The loans were unsecured, non-interest bearing, and due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|8. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Consulting fees paid to an officer and director totaled
        $12,000 and $2,500 for the years ended June 30, 2007 and 2006, respectively.
        Consulting fees paid to an officer and director from inception through
        June 30, 2007 totaled $14,500.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Consulting fees paid to a former officer and director
        totaled $0 and $30,000 for the years ended June 30, 2007 and 2006, respectively.
        Consulting fees paid to a former officer and director from inception through
        June 30, 2007 totaled $588,000. During the period of inception through
        June 30, 2007, a former officer and director settled accounts payable
        of $146,330 in exchange for 187,500 common shares of the Company with
        a fair value of $28,125. The difference between the carrying amount of
        the accounts payable and the fair value of the common shares issued of
        $118,205 was recorded as an increase to additional paid in capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | At June 30, 2007, included in accounts payable and accrued
        liabilities was $50, owed to a former officer and director of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-18

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|9.  | Stockholders Equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Board of Directors has the power and authority to
        fix by resolution any designation, class, series, voting power, preference,
        right, qualification, limitation, restriction, dividend, time and place
        of redemption, and conversion right with respect to any stock of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On November 30, 2006, the Company issued 2,000,000 shares
        of common stock at a price of $0.25 per share for total proceeds of $500,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On January 5, 2007, the Company issued 432,500 units
        at a price of $0.40 per unit for total proceeds of $173,000. Each unit
        consists of one share of the Companys common stock and one share
        purchase warrant. Each warrant entitles the holder to purchase an additional
        share of the Companys common stock at a price of $0.40 per share
        and expires January 5, 2008. The relative fair value of the common stock
        was estimated to be approximately $103,800 and the relative fair value
        of the warrants was estimated to be approximately $69,200 as determined
        based on the relative fair value allocation of the proceeds received.
        The warrants were valued using the Black-Scholes option pricing model.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company adopted a Stock Option Plan on June 21,
        2000 which authorizes an initial 3,600,000 shares for issuance of incentive
        and non-qualified stock options to non-employees. The maximum aggregate
        number of shares that may be optioned and sold under the Plan may increase
        each quarter upon conditions outlined in the Plan. Options expire as determined
        by the Company but in no event later than ten years after the date the
        options are granted.                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Information relating to stock options is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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

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

F-19

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|11. | Warrants                                                                    
|--- | ----------------------------------------------------------------------------
|    |                                                                             
|    | The following is a summary of warrants outstanding at
        June 30, 2007:

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


|12. | Segment Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Companys business is considered as operating
        in one segment based upon the Companys organization structure, the
        way in which the operation is managed and evaluated, the availability
        of separate financial results and materiality considerations.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|13. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | For income tax purposes, pre-opening costs are generally
        deferred and amortized to expense in future tax returns. Accordingly,
        the Company has no significant tax loss carryforwards. For financial reporting
        purposes, realization of the value of book versus tax temporary differences
        is dependent upon the Company generating sufficient taxable income in
        future years. Because of the development stage nature of the Company,
        lack of operating history and potential future stock sales (which may
        limit the value of loss carryforwards), management has eliminated the
        deferred tax value of pre-opening costs with a valuation allowance.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The benefit for income taxes differs from the amount
        computed by applying the U.S. federal income tax rate to loss before income
        taxes for the years ended June 30, as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                                        |   | 2007    |   |   | 2006    |  
| | -------------------------------------- | - | ------- | - | - | ------- | -
| |                                        |   |         |   |   |         |  
| | Expected tax benefit at statutory rate | $ | (40,769 | ) | $ | (14,819 | )
| | State tax effects                      |   | (7,195  | ) |   | (2,615  | )
| | Increase in valuation allowance        |   | 47,964  |   |   | 17,434  |  
| |                                        |   |         |   |   |         |  
| |                                        | $ | -       |   | $ | -       |  

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

F-20

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|13. | Income Taxes (continued)                                        
|--- | ----------------------------------------------------------------
|    |                                                                 
|    | The following is a summary of deferred taxes at June
        30:

| |                            |   | 2007       |   |   | 2006       |  
| | -------------------------- | - | ---------- | - | - | ---------- | -
| |                            |   |            |   |   |            |  
| | Deferred tax assets:       |   |            |   |   |            |  
| | Deferred pre-opening costs | $ | (1,138,089 | ) | $ | (1,090,125 | )
| | Valuation allowance        |   | 1,138,089  |   |   | 1,090,125  |  
| |                            |   |            |   |   |            |  
| |                            | $ | -          |   | $ | -          |  

|14. | License Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The Company has entered into an exclusive
        licensing agreement (the "Agreement") with Balsam Ventures, Inc. ("Balsam"),
        dated for reference November 30, 2003, granting Balsam the exclusive right
        and license (the License), for a period of 40 years, to use,
        commercialize and exploit the Companys proprietary trademarks, patents,
        process information, technical information, designs and drawings associated
        with the Companys self-chilling beverage container technology (the
        "Technology") including the right to manufacture, use and sell apparatus
        and products embodying the Technology within the countries comprising
        the European Union and the Republic of China. Balsam also has the right
        to sub-license the right to manufacture, use and sell products embodying
        the Technology.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The consideration for the Agreement was as
        follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On January 14, 2006, the Company entered into
        an agreement (the Extension Agreement) with Balsam, to amend
        the terms of the Agreement dated November 30, 2003. Under the Extension
        Agreement, the Company agreed to extend the date on which Balsam is required
        to commence paying the minimum royalty payments to January 15, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The consideration for the Extension Agreement
        was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F-21

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|14. | License Agreement (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Technology and the Company patents and trademarks
        included in the Technology remain the property of the Company subject
        to the terms of the License granted under the Agreement. However, Balsam
        has a right of first refusal to acquire the intellectual property subject
        to the Agreement should the Company seek to dispose of the Technology
        during the currency of the Agreement. The Agreement supersedes all prior
        arrangements and agreements between the Company and Balsam in respect
        of the Technology.                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | In June, 2007, the Company notified Balsam that its
        intellectual property rights to the Cool Can Technology possibly expired.
        As a result, Balsam suspended payment of the minimum royalty amounts required
        under the Agreement effective April 1, 2007. Subsequent to June 30, 2007,
        the Company determined that the patents for the Cool Can Technology have
        expired. Balsam has advised the Company that they intend to terminate
        the Agreement. The Company is currently negotiating with Balsam to settle
        their rights under the Agreement.

F-22

---

**ITEM
8.****CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.**

Resignation of Independent Registered Public Accounting Firm

On July 14, 2006, we received a notice of resignation dated
June 29, 2006 from our independent registered public accounting firm, Virchow,
Krause & Company, LLP (Virchow Krause). Virchow Krause performed the audit
of our financial statements for the years ended June 30, 2005 and June 30, 2004.
During this period and through the date of resignation of Virchow Krause, there
were no disagreements with Virchow Krause on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which disagreements if not resolved to Virchow Krauses satisfaction would have
caused Virchow Krause to make reference to the subject matter of the
disagreements in connection with Virchow Krauses report, nor were there any
"reportable events" as such term is defined in Item 304(a)(3) of Regulation S-B,
promulgated under the Exchange Act. The audit reports of Virchow Krause for the
years ended June 30, 2005 and June 30, 2004 did not contain an adverse opinion,
or a disclaimer of opinion, or qualification or modification as to uncertainty,
audit scope, or accounting principles, other than the uncertainty that we might
not be able to operate as a going concern.

On September 7, 2006, we engaged Peterson Sullivan PLLC of 601
Union Street, Suite 2300, Seattle, WA 98101 (Peterson Sullivan) as our new
independent registered public accounting firm to audit our financial statements.
The decision to engage Peterson Sullivan was approved by our board of directors.
During the period from the years ended June 30, 2004 and June 30, 2005 and
through the date of their engagement, Peterson Sullivan did not consult with us
regarding: (i) the application of accounting principles to a specific completed
or contemplated transaction or the type of audit opinion that might be rendered
on our financial statements, relating to which any written or oral advice was
provided that we concluded was an important factor in reaching a decision as to
the accounting, auditing or financial reporting issue; or (ii) any matter that
was either the subject of disagreement or an event identified in response to
paragraph (a)(1)(iv) of Item 304 of Regulation S-B, promulgated under the
Exchange Act.

ITEM
8A.              CONTROLS
AND PROCEDURES.

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

There were no changes in our internal control over financial
reporting during the year ended June 30, 2007 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

ITEM
8B.              OTHER
INFORMATION.

None.

13

---

PART III

ITEM
9.               
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE
GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGEACT.

The following information sets forth the name of our sole
officer and director, his present positions with our company, and his
biographical information.

Name of Director
    Age
    PositionJohn P. Thornton
    74
    Chief Executive
      Officer, Chief Financial Officer, President, Secretary, Treasurer and
      Director


JOHN P. THORNTON. Effective April 18, 2006, John P.
Thornton was appointed as a member of our board of directors. Mr. Thornton was
appointed as our Chief Executive Officer, Chief Financial Officer, President,
Secretary and Treasurer as of June 7, 2006. Mr. Thornton has been a
self-employed businessman and consultant in the securities industry in the
Vancouver, British Columbia area since 1986. During the past five years, Mr.
Thornton served as a director of several U.S. and Canadian public companies
listed on TSX Venture Exchange, Canadian Venture Exchange, and Over-the-Counter
Bulletin Board (OTCBB) including:

- Bonaventure Enterprises Inc., TSX Venture Exchange;
- Consolidated Odyssey Exploration Inc., TSX Venture Exchange;
- Caesars Explorations Inc., Canadian Venture Exchange;
- Goldnev Resources Inc., TSX Venture Exchange;
- Knightsbridge Resources Inc., OTCBB;
- Fairchild International Corp., OTCBB; and
- Patch International Inc., OTCBB.

Terms of Office

Our directors are appointed for one-year terms to hold office
until the next annual general meeting of the holders of our common stock or
until removed from office in accordance with our Bylaws. Our officers are
appointed by our board of directors and hold office until removed by our board
of directors.

Committees of the Board Of Directors

We currently have only one director. As such, we do not
currently have an audit committee, compensation committee, nominating committee,
an executive committee of our board of directors, stock plan committee or any
other committees.

Audit Committee Financial Expert

Our sole director does not qualify as an "audit committee
financial expert" as defined in Item 401(e) of Regulation S-B. Our sole director
believes that attracting and retaining additional board members that could be
classified as an "audit committee financial expert" is not practical at this
time due to the high cost of such director candidates.

Code of Ethics

We adopted a Code of Ethics applicable to our Chief Executive
Officer, Chief Financial Officer, Corporate Controller and certain other finance
executives, which is a "code of ethics" as defined by applicable rules of the
SEC. Our Code of Ethics is attached as an exhibit to our Annual Report on Form
10-KSB for the year ended June 30, 2003. If we make any amendments to our Code
of Ethics other than technical, administrative, or other non-substantive
amendments, or grant any waivers, including implicit waivers, from a provision
of our Code of Ethics to our Chief Executive Officer, Chief Financial Officer,
or certain other finance executives, we will disclose the nature of the
amendment or waiver, its effective date and to whom it applies in a Current
Report on Form 8-K filed with the SEC.

14

---

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who beneficially own more than 10% of our
equity securities (collectively, the Reporting Persons), to file reports of
ownership and changes in ownership with the SEC. Reporting Persons are required
by SEC regulation to furnish us with copies of all forms they file pursuant to
Section 16(a). Based on our review of the copies of such forms received by us,
other than as described below, no other reports were required for those persons.
We believe that, during the year ended June 30, 2007, all Reporting Persons
complied with all Section 16(a) filing requirements applicable to them.

ITEM
10.               
EXECUTIVE COMPENSATION.

Summary Compensation Table

The following table sets forth the total compensation paid to
or earned by our named executive officers, as that term is defined in Item
402(a)(2) of Regulation S-B, during the fiscal year ended June 30, 2007

Name
      & Principal Position
    Year
    Salary
      ($)
    Bonus
      ($)
    Stock
      Awards
    Option
      Awards
    Non-Equity
      Incentive Plan Compen- sation
    Non-
      qualified Deferred Compen-
      sation Earnings
    All Other
      Compen- sation ($)
    Total
      ($)John P. Thornton President, CEO, CFO,
      Secretary and Treasurer
    2007
    12,000
    -
    -
    -
    -
    -
    -
    12,000


OUTSTANDING AWARDS AT FISCAL YEAR-END

As of the date of this Annual Report, we do not have any
outstanding stock option or stock appreciation rights issued to any of our Named
Executive Officers.

EMPLOYMENT CONTRACTS

We have no employment contracts, termination of employment or
change-in-control arrangements with Mr. Thornton, our sole executive officer and
director. We currently pay Mr. Thornton a fee of $1,000 per month for acting as
our sole executive officer and director.

15

---

ITEM
11.               
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of October 1,
2007 by: (i) each person (including any group) known to us to own more than five
percent (5%) of any class of our voting securities, (ii) each of our directors,
(iii) named executive officers, and (iv) officers and directors as a group.
Unless otherwise indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.

Title of Class
      Name and Address of Beneficial
        Owner
      Amount and Nature of Beneficial
        Ownership
      Percentage of Common Stock(1)Directors and OfficersCommon Stock
      John P. Thornton 
        President, CEO, CFO, Secretary, 
        Treasurer and Director 
        12500 Brunswick Place 
        Richmond, BC V7E 6J3
      3,000,000 
        Direct
      8.0%Common Stock
      All Officers and Directors as a 
        Group (1 person)
      3,000,000
      8.0%Holders of More than 5% of our Common
        StockCommon Stock
      John P. Thornton 
        President, CEO, CFO, Secretary, 
        Treasurer and Director 
        12500 Brunswick Place 
        Richmond, BC V7E 6J3
      3,000,000 
        Direct
      8.0%


|**Notes** |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)       | Applicable percentage of ownership is based on 37,597,890
      shares of common stock issued and outstanding as of October 1, 2007,
      together with securities exercisable or convertible into shares of common
      stock within 60 days of October 1, 2007 for each stockholder. Beneficial
      ownership is determined in accordance with the rules of the SEC and
      generally includes voting or investment power with respect to securities.
      Shares of common stock subject to securities exercisable or convertible
      into shares of common stock that are currently exercisable or exercisable
      within 60 days of October 1, 2007 are deemed to be beneficially owned by
      the person holding such options for the purpose of computing the
      percentage of ownership of such person, but are not treated as outstanding
      for the purpose of computing the percentage ownership of any other
      person.

Change in Control

We are not aware of any arrangement that might result in a
change in control in the future.

16

---

Securities Authorized for Issuance under Equity Compensation
Plans

The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
at June 30, 2007.

EQUITY COMPENSATION PLAN INFORMATION AS
        AT JUNE 30, 2007Plan Category
      Number of securities to 
        be issued upon exercise 
        of outstanding options, 
        warrants and rights 
        (a)
      Weighted-average 
        exercise price of 
        outstanding options, 
        warrants and rights 
        (b)
      Number of securities 
        remaining available for 
        future issuance under 
        equity compensation plans 
        (excluding securities 
        reflected in column (a)) 
        (c)Equity Compensation Plans 
        approved by security holders
      Nil
      N/A
      NilEquity Compensation Plans 
        not approved by security 
        holders
      Nil
      N/A
      5,639,684Total
      Nil
      N/A
      5,639,684


The information provided above relates to our 2000 Stock Option
Plan. Subsequent to our year end, our sole director resolved to cancel our 2000
Stock Option Plan. As of the date of filing of this Annual Report, we did not
have any authorized equity compensation plans.

ITEM
12.               
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.

Except as disclosed below, none of the following parties has,
during the last two years, had any material interest, direct or indirect, in any
transaction with us or in any presently proposed transaction that has or will
materially affect us:

- Any of our directors or officers;
- Any person proposed as a nominee for election as a director;
- Any person who beneficially owns, directly or indirectly, shares carrying
  more than 10% of the voting rights attached to our outstanding shares of
  common stock;
- Any of our promoters; and
- Any relative or spouse of any of the foregoing persons who has the same
  house as such person.

Mr. Leitch, our former President, Secretary, Treasurer, Chief
Executive Officer, Chief Financial Officer, and a director, acted as a
management consultant to our company and had been paid under the arrangement the
sum of $8,500 per month until September 30, 2002. As of January 1, 2003 Mr.
Leitch received $5,000 per month for his management consulting services provided
to our company until his resignation as our officers and director on June 7,
2006. Consulting fees for services provided by Mr. Leitch from inception through
June 7, 2007, totaled $588,000.

Consulting fees paid to Mr. Leitch totaled $nil and $30,000 for
the years ended June 30, 2007 and June 30, 2006, respectively. During the year
ended June 30, 2006, Mr. Leitch settled accounts payable $146,330 in exchange
for 187,500 common shares of the Company with a fair value of $28,125.

DIRECTOR INDEPENDENCE

Our common stock is quoted on the OTC Bulletin Board
inter-dealer quotation system, which does not have director independence
requirements. Under NASDAQ Rule 4200(a)(15), a director is not considered to be

17

---

independent if he or she is also an executive officer or
employee of the corporation. Our sole director is John Thornton, who also acts
as our sole executive officer. Accordingly, we do not have any independent
directors.

As a result of our limited operating history and minimal
resources, we believe that we will have difficulty in attracting independent
directors. In addition, we would likely be required to obtain director and
officer insurance coverage in order to attract and retain independent directors.
Our management believes that the costs associated with maintaining such
insurance is prohibitive at this time.

ITEM
13.               
EXHIBITS.

The following exhibits are either provided with this Annual
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.(3)                                                                                                                             
|        |  |                                                                                                                                                            
|3.3     |  | Bylaws as amended.(3)                                                                                                                                      
|        |  |                                                                                                                                                            
|4.1     |  | Form of Warrant
        Certificate dated January 5, 2007.(8)                                                                                              
|        |  |                                                                                                                                                            
|10.1    |  | Exclusive License
        Agreement dated for reference November 30, 2003 between Balsam Ventures,
        Inc., and Cool Can Technologies Inc.(2)         
|        |  |                                                                                                                                                            
|10.2    |  | Agreement and
        Plan of Merger Agreement dated effective May 21, 2004 among Cool Can Technologies,
        Inc. and NorPac Technologies, Inc.(4)     
|        |  |                                                                                                                                                            
|10.3    |  | Extension Agreement
        dated as of January 14, 2006 between NorPac Technologies, Inc. and Balsam
        Ventures, Inc.(5)                            
|        |  |                                                                                                                                                            
|10.4    |  | Agreement and
        Plan of Merger dated November 7, 2006 among NorPac Technologies, Inc.,
        Nextdigital Corp. and Nextdigital Acquisition Corp.(6)
|        |  |                                                                                                                                                            
|10.5    |  | Loan Agreement
        dated November 7, 2006 between NorPac Technologies, Inc. and Nextdigital
        Corp.(6)                                           
|        |  |                                                                                                                                                            
|10.6    |  | Promissory Note
        executed by Nextdigital Corp. in favor of NorPac Technologies, Inc.(6)                                                             
|        |  |                                                                                                                                                            
|10.7    |  | Loan Agreement
        dated December 4, 2006 between NorPac Technologies, Inc. and Nextdigital
        Corp.(7)                                           
|        |  |                                                                                                                                                            
|10.8    |  | Promissory Note
        executed by Nextdigital Corp. in favor of NorPac Technologies, Inc.(7)                                                             
|        |  |                                                                                                                                                            
|10.9    |  | Loan Agreement
        dated January 30, 2007 between NorPac Technologies, Inc. and Nextdigital
        Corp.(9)                                           
|        |  |                                                                                                                                                            
|10.10   |  | Promissory Note
        executed by Nextdigital Corp. in favor of NorPac Technologies, Inc.(9)                                                             
|        |  |                                                                                                                                                            
|10.11   |  | Loan Agreement
        dated November 20, 2006 between NorPac Technologies, Inc. and Nextdigital
        Corp.(10)                                         
|        |  |                                                                                                                                                            
|10.12   |  | Promissory Note
        executed by Nextdigital Corp. in favor of NorPac Technologies, Inc.(10)                                                            
|        |  |                                                                                                                                                            
|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 on January 9, 2004 as an exhibit to
      our Current Report on Form 8-K.                                          
|(3)        | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB for the fiscal period ended September 30, 2003.         
|(4)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed July 8, 2004.                                          
|(5)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed January 19, 2006.                                      
|(6)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed November 13, 2006.                                     
|(7)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed December 7, 2006.                                      
|(8)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed January 11, 2007.                                      
|(9)        | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed February 5, 2007.                                      
|(10)       | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed February 20, 2007.                                

18

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ITEM
14.               
PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

The aggregate fees billed for the two most recently completed
  fiscal years ended June 30, 2007 and 2006 for professional services rendered
  by the principal accountant for the audit of the Corporations annual financial
  statements and review of the financial statements included our Quarterly Reports
  on Form 10-QSB and services that are normally provided by the accountant in
  connection with statutory and regulatory filings or engagements for these fiscal
  periods were as follows:

Year Ended June 30, 2007
      Year Ended June 30, 2006Audit Fees
    $34,400
    $10,735Audit Related FeesTax Fees
    -
    -All Other Fees
    -
    -Total
    $34,400
    $10,735


19

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



|      |                  |  | NORPAC TECHNOLOGIES, INC.                                           
|----- | ---------------- |  | --------------------------------------------------------------------
|      |                  |  |                                                                     
|      |                  |  |                                                                     
|      |                  |  |                                                                     
|Date: | October 15, 2007 |  | /s/
      John P. Thornton                                          
|      |                  |  | JOHN P. THORNTON                                                    
|      |                  |  | Chief Executive Officer and Chief Financial
      Officer           
|      |                  |  | President, Secretary, and Treasurer                                 
|      |                  |  | (Principal Executive Officer and Principal
      Accounting Officer)



In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.



|Date: | October 15, 2007 |  | /s/
      John P. Thornton                                          
|----- | ---------------- |  | --------------------------------------------------------------------
|      |                  |  | JOHN P. THORNTON                                                    
|      |                  |  | Chief Executive Officer and Chief Financial
      Officer           
|      |                  |  | President, Secretary, and Treasurer                                 
|      |                  |  | (Principal Executive Officer and Principal
      Accounting Officer)
|      |                  |  | Director                                                            

---