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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, 2006

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

For the transition period from _____ to_____

COMMISSION FILE NUMBER 000-27147

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

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

|698 Seymour Street, Suite 311            |           
|---------------------------------------- | ----------
|Vancouver, British Columbia              | V6B 3K6   
|(Address of principal executive offices) | (Zip Code)

(604) 688-8619Issuer'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:
$50,000

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: $8,845,482 on the
basis of the average of the bid and ask price of the registrants common stock
on October 10, 2006.

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: 35,165,390,
as at October 10, 2006

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

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TABLE OF CONTENTS

|           |                                                                                                                              | PAGE
|---------- | ---------------------------------------------------------------------------------------------------------------------------- | ----
|           |                                                                                                                              |     
|PART I     |                                                                                                                              | 3   
|ITEM 1.    | DESCRIPTION OF BUSINESS.                                                                                                     | 3   
|ITEM 2.    | DESCRIPTION OF
      PROPERTY                                                                                                | 11  
|ITEM 3.    | LEGAL PROCEEDINGS                                                                                                            | 11  
|ITEM 4.    | SUBMISSION OF
      MATTERS TO A VOTE OF SECURITY HOLDERS.                                                                   | 11  
|PART II    |                                                                                                                              | 12  
|ITEM 5.    | MARKET FOR COMMON
      EQUITY AND RELATED STOCKHOLDER MATTERS.                                                              | 12  
|ITEM 6.    | MANAGEMENT'S DISCUSSION AND
      ANALYSIS OR PLAN OF OPERATION.                                                             | 13  
|ITEM 7.    | FINANCIAL STATEMENTS.                                                                                                        | 22  
|ITEM 8.    | CHANGES IN AND DISAGREEMENTS
      WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                   | 23  
|ITEM 8A.   | CONTROLS AND
      PROCEDURES.                                                                                               | 23  
|ITEM 8B.   | OTHER INFORMATION.                                                                                                           | 23  
|PART III   |                                                                                                                              | 24  
|ITEM 9.    | DIRECTORS, EXECUTIVE OFFICERS,
      PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT. | 24  
|ITEM 10.   | EXECUTIVE COMPENSATION                                                                                                       | 25  
|ITEM 11.   | SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                        | 27  
|ITEM 12.   | CERTAIN RELATIONSHIPS
      AND RELATED TRANSACTIONS                                                                         | 29  
|ITEM 13.   | EXHIBITS                                                                                                                     | 30  
|ITEM 14.   | PRINCIPAL ACCOUNTANT
      FEES AND SERVICES                                                                                 | 31  
|SIGNATURES |                                                                                                                              | 32  

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

We are in the business of developing and marketing a patented
unique proprietary technology which is intended to allow for the licensing and
manufacture of a commercially viable self-chilling beverage container. We are
currently in the development stage of our business. We are in the process of
taking our planned product from the conceptual stage of development to the
production of a prototype of a self-chilling beverage container that we can use
for testing purposes. If our testing efforts are successful, we will then
proceed to the marketing phase of our plan of operation which involves marketing
the self-chilling beverage container to beverage manufacturers. We have not
completed the development of a commercially viable self-chilling beverage
container to date, nor have we achieved any revenues to date. Our ability to
pursue our plan of operation, as discussed below, is contingent upon us
achieving substantial financing, of which there is no assurance. If we are not
able to obtain additional financing on acceptable terms, we may pursue other
business opportunities.

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.

RECENT CORPORATE DEVELOPMENTS

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

|1. | On September 7, 2006, we engaged Peterson Sullivan PLLC
      as our new independent registered public accounting firm to audit our
      financial statements. See Item 8. Changes In and Disagreements With
      Accountants On Accounting And Financial Disclosure.                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | On June 9, 2006, we completed a private placement of
      2,600,000 shares of our common stock to three investors at a price of
      $0.12 per share. 187,500 of the shares issued pursuant to the offering
      were issued in settlement of amounts owed to a former officer/director of
      NorPac. The private placement was completed pursuant to the provisions of
      Regulation S promulgated under the Securities Act of 1933.          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3. | Effective June 7, 2006, Mr. Bruce T. Leitch resigned as
      our President, Secretary, Treasurer, Chief Executive Officer, Chief
      Financial Officer and a member of our board of directors. In Mr. Leitchs
      place, Mr. John P. Thornton, a member of our board of directors, was
      appointed as our President, Secretary, Treasurer, Chief Executive Officer
      and Chief Financial Officer. Mr. Leitch resigned in order to
  pursue

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|   | other business opportunities. There was no disagreement
      between Mr. Leitch and us regarding any matter relating to our operations,
      policies or practices.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4. | On April 18, 2006, we appointed Mr. John P. Thornton as a
      member of our board of directors. Mr. Thornton has been a self-employed
      business man 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|5. | On January 14, 2006, we entered into an agreement (the
      Extension Agreement) with Balsam Ventures, Inc. (Balsam), pursuant to
      which NorPac and Balsam agreed to amend the terms of their exclusive
      licensing agreement dated November 30, 2003 (the License Agreement).
      Under the terms of the License Agreement, Balsam was to pay us minimum
      royalties in the amount of $5,000 per month (the Minimum Royalty
      Payments), commencing on January 15, 2006. Under the Extension Agreement,
      we agreed to extend the date on which Balsam is required to commence
      paying the Minimum Royalty Payments to January 15, 2007 in exchange for
      the following consideration: 500,000 shares of Balsams common stock; and
      a payment of $20,000 to us. We received the payment of $20,000 and the
      500,000 shares of Balsams common stock during the year ended June 30,
      2006. See License Agreement with Balsam Ventures, Inc.,
  below.

REORGANIZATION

Our current cash reserves are only sufficient to enable us to
operate on a short term basis. We continue to require additional financing if we
are to continue as a going concern and to finance our business operations. As of
June 30, 2006, we had cash on hand of $16,887 and a working capital deficit of
$37,343. Our inability to achieve substantial financing forced us to continue to
further reduce our business operations during the year ended June 30, 2006.

Following the conversion of all of our convertible notes into
common shares (the Convertible Notes), and the elimination of our interest
expense and Convertible Note debt obligation at maturity date during the fiscal
year ended June 30, 2005, we believe that our reorganization activities are now
complete. We intend to raise the necessary financing for completion of
production ready samples of our Cool Can product through collaboration with a
strategic industry partner as a joint venture. In the event we are unable to
reach agreement with a joint venture partner for completion of our plan of
operation as stated, we anticipate that additional financing would be obtained
through the sales of our common stock or other equity-based securities. We do
not have any arrangements or agreements in place with respect to a joint venture
and/or for the sale of any of our securities and there is no assurance that we
will be able to raise the additional capital that we require to continue our
operations.

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

LICENSE AGREEMENT WITH BALSAM VENTURES, INC.

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

4

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

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

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

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

We received the payment of $20,000 and the 500,000 shares of
Balsams common stock during our fiscal year ended June 30, 2006.

OUR BUSINESS PLAN

We are in the business of developing and marketing a patented
unique proprietary technology for a self-chilling beverage container, which is
intended to allow for the licensing and manufacture of a commercially viable
self-chilling beverage container (the Cool Can Technology). The ability to
chill a beverage is based on the theory of the latent heat of evaporation of
liquefied gasses and the cooling of those gasses due to rapid expansion. The
basic principles of evaporation and heat transfer dictate that as liquid coolant
is vaporized it draws heat from the surrounding area, lowering the temperature
of nearby materials.

Our proposed product is referred to by us as the Cool Can
product and consists of a module for insertion in an aluminum beverage container
that incorporates a cartridge of liquid carbon dioxide (CO2) that is held in
place by a cartridge holder. The unit is then placed in a can and the can
subsequently is filled and sealed. The cooling device will displace
approximately 3.0 ounces of the fluid, so a 12-ounce can will contain 9.0 ounces
of beverage with the cooling device installed.

The module consists of proprietary technology for which we have
been granted patent protection. The module would be inserted in an aluminum
beverage container during an automated canning process. Containers incorporating
the Cool Can product would be identified and sold as self-chilling beverage
containers. To start the chilling process, a consumer would pull the tab off the
container as with a regular non-chilling beverage container. When the tab on the
lid of the can is pulled, a valve mechanism within the can triggers the CO2
capsule causing the gas to be discharged through diffusers of porous plastic
into the beverage. The escaping CO2 forms into small particles of frozen snow at
extremely cold temperatures and rapidly imparts a chilling action to the
beverage, while simultaneously carbonating the beverage. The amount of chilling
and carbonation are adjustable depending on the requirements of the
manufacturer. Greater chilling may be obtained by increasing the amount of
liquid CO2. The amount of carbonation may be adjusted from no carbonation to
several levels greater than now used in manufactured soft drinks.

The anticipated additional retail cost for the device is
estimated to be $0.25 - $0.30 per can, and is proposed to be used on a 12-ounce
can or a 16-ounce can. The estimate is based on preliminary quotes from
manufacturers of the component parts. The targeted result is that the consumer
may purchase a beverage and enjoy it cold without

5

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having to purchase it from a cooler or purchase ice to cool the
beverage. The consumer will not have the option to deactivate the device on the
can.

The manufacturer of the beverage may sell the beverage without
the concern of satisfying the consumer preference of a cold beverage by
providing a vending machine or other method of cooling the beverage. The
consumer may purchase the beverage and enjoy it at a later time without the
requirement of an ice chest or other method of cooling his drink, as opposed to
having to drink the beverage right after purchase as is the case with one
purchased from a vending machine or cooler. The consumer may purchase the
beverage and enjoy it hours later while in a boat or on a golf course, or during
other leisure activities.

The Cool Can Technology is intended to be used by the
manufacturer on a high speed canning line with little impact on the speed of the
canning line. The usual canning process involves two parts: the main part of the
can, which is filled with the drink, and the lid which is sealed shut during the
seaming process after the can has been filled. Initial engineering diagrams have
been completed for equipment which will successfully integrate the inclusion of
the chilling module insert into a high speed canning line. There can be,
however, no assurance that the product can be successfully incorporated into a
high speed canning line.

PATENTS AND TRADEMARKS

We have obtained patent protection for our concept of a
self-chilling beverage container. The patent application filed in 1995 was
subsequently approved and Patent No. 5,609,038 was issued to us on March 11,
1997. The issued patent includes 24 claims regarding a self-chilling beverage
container and parts thereof. The patent expires on August 21, 2015, 20 years
from the original filing date of August 22, 1995.

Internationally, we have been granted patent coverage in some
foreign countries and others are pending. National phase patent applications
were filed on June 20, 1999 so that patent protection may be granted in 87
countries. These applications are pending. National phase patent protection is
patent treaty language that indicates that we are beginning the process of
filing for patent protection in foreign countries. Depending on the country, the
grant of patent protection may take from 1 to 8 years. In the interim,
preliminary protection by priority is established as of the filing date.

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 have 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 applied for and have
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 will be able to re-institute ownership of the trademarks, or
the equivalent thereof, once we are in a position to complete our product
development program.

On April 18, 2001, we attempted to acquire a patent pending for
the PET Container Technology. We determined not to meet our obligations under
the license agreement for this technology and the rights to the patent pending
for the PET Container Technology that we acquired reverted back to the owners
due to non-payment.

PRODUCT DEVELOPMENT

We intend to implement the following procedural plan in order
to complete final design specifications for the Cool Can product and then build
and test the prototype. This process is planned to be accomplished in the
following manner:

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|(1) | Build a fully functioning prototype from the working
      drawings in the issued patent. During this period the existing design will
      be thoroughly reviewed and any modifications which will improve
      efficiency, reduce cost, or decrease the occupied volume of the chilling
      module insert will be implemented.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                    
|(2) | Conduct various safety tests by putting the prototype
      through several stress tests such as exposure to heat, testing a sealed
      can complete with insert, by dropping it from various heights, and testing
      the integrity and durability of the chilling module insert.                                             
|    |                                                                                                                                                                                                                                                                                                                                    
|(3) | Pre-production design generating both computer modeling
      of all parts and engineering drawings incorporating any design
      modifications.                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                    
|(4) | Pre-production prototype construction. Three-dimensional
      construction of all parts including preliminary rubber molds.                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                    
|(5) | Testing of pre-production prototypes.                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                    
|(6) | Refine designs to incorporate test results and finalize
      production specifications and drawings.                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                    
|(7) | Begin to source factory production facilities for all
      customized parts and molding requirements.                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                    
|(8) | Generate manufacturing pricing data.                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                    
|(9) | Final consultation with all parties involved in the
      production of finished goods-aluminum can manufacturers, filler
      manufacturers and beverage canners.                                                                                                                                                                

In December, 1998, we entered into an agreement with the
California Manufacturing Technology Center (CMTC) to manage our product
development program. The first phase of our product development program was
completed in October, 1999 at a cost of $30,000, with CMTC providing prototype
drawings on AutoCad, and assistance in the execution of our product development
and manufacturing processes plan. The second phase of our product development
program consisted of the development of product specifications with tolerances,
optimization evaluation of design concept, and an in-depth thermal analysis
conducted at the University of California at Irvine. The second phase was
completed by CMTC in October, 2000 at a cost of $20,000.

Following completion of the second phase of our product
development program, we obtained a proposal from LNE Engineering Co. (LNE) in
November, 2002 to assist us with the development of our product development
program and prototype fabrication and testing. However, due to lack of
financing, we were unable to engage LNE to continue the next phase of our
program. As a result, prototype fabrication and testing has been put on hold
pending receipt of further financing. LNEs proposal is for the prototype and
fabrication of aluminum cans only. See Item 6. Managements Discussion and
Analysis or Plan of Operation  Plan of Operation.

MARKETING PLANS

We are in the process of taking our planned product from the
conceptual stage of development to the production of a prototype of a
self-chilling beverage container that we can use for testing purposes. If our
prototype development efforts are successful, we will then proceed to the
marketing phase of our plan of operation which involves marketing the
self-chilling beverage container to beverage manufacturers. We have not
completed the development of a commercially viable self-chilling beverage
container to date, nor have we achieved any revenues to date. Our ability to
pursue our plan of operation, as discussed below, is contingent upon us
achieving substantial financing, of which there is no assurance. See Item 6.
Managements Discussion and Analysis or Plan of Operation  Plan of Operation.

Our principal marketing strategy is comprised of two major
components that we plan to undertake once development of our technology is
complete:

| | (1) | the licensing of beverage companies worldwide for the use
      of the Cool Can Technology and associated trademarks;
and
| | --- | -------------------------------------------------------------------------------------------------------------------------

7

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| | (2) | the licensing of major aluminum can manufacturers for
      actual manufacturing of the chilling module insert so that it can be
      subsequently sold to beverage companies as a special insert or included
      with the can as one unit.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In the interim, while we plan to implement the process of
licensing beverage companies and can manufacturers, we plan to rent production
line time and co-pack product samples at an existing beverage canning facility
that will be used for research and development. The primary purpose is to
demonstrate an actual canning process placing chilling module inserts in both
12-ounce and 16-ounce cans. The facility will serve to demonstrate to beverage
executives the viability of high speed canning using the insert. The secondary
purpose is to develop a facility with the capacity to package small runs of
various beverage products. This will allow beverage companies to test market
the concept without making any capital investment in new equipment or altering
their own production facility.

SALES AND LICENSING STRATEGY

Our primary task is licensing of the Cool Can Technology and
fully developed designs of the chilling module inserts, as well as the automatic
insert feeding machines which will be incorporated into present beverage canning
lines. We intend to manufacture in our own plant certain key components of the
triggering mechanism. We feel that by actually supplying a key component to
licensees we can more accurately track the number of units sold by licensees,
particularly those in foreign countries. The sale of these units also has the
potential to be a significant profit center.

Our strategy is to appoint a master licensee in each country or
designated region once development of our Cool Can product is complete. The
master licensee is planned to have the right to appoint sub-distributors,
subject to our approval.

The typical licensing agreement is planned to have several
components. We will issue a master license on an exclusive territorial basis to
Company X. Company X will be required to pay an up-front fee to acquire the
master license. This initial fee will be based primarily on two factors: (i)
total population and (ii) per capita beverage consumption within the designated
territory. During the term of the contract, Company X will also be required to
forward a percentage of the initial fees paid by sub-licensees to us once they
have recovered their initial investment. Additionally there is planned to be a
commitment to pay $0.005 per unit ($0.12 per case of 24) in royalties for each
unit sold in the territory. Company X will be required to purchase a minimum
number of units per year in order to maintain their exclusive contractual
agreement. We plan to directly manufacture certain key components of the insert
in order to effectively track international sales and provide an additional
revenue stream.

Concurrently, we will license packaging equipment manufacturers
to develop, build and produce the automatic insert feeding machine and any other
required equipment for integration into beverage canning lines.

ADVERTISING AND PROMOTION

Phase one of our advertising campaign will be in support of the
initial licensing effort and is planned to consist of advertising in beverage
industry publications and international business journals seeking qualified
prospective master licensees in each country, and market sector. We also plan to
have a significant presence at major beverage trade shows through distribution
of promotional materials and demonstrating the Cool Can Technology to
prospective licensees.

The second phase of advertising is planned to be more consumer
oriented. We do not intend to advertise specific product or brand, but only the
technology to make consumers aware that they may purchase beverages in a self
chilling container. Our intention is to drive consumer awareness of both the
term InstaCool as well as the visual identification on the can which indicates
the inclusion of the chilling module. There is no assurance that the advertising
will be successful. The estimated cost of phase two of our advertising campaign
is unknown at this time.

A percentage of the licensing revenues from the per-can income
is planned to be allocated for consumer advertising by us and also by master
licensees who will be obligated under the terms of their master license

8

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agreement to allocate a pre-determined percentage of revenues
to consumer advertising in respective countries and market areas.

MANUFACTURING AND PRODUCTION

We plan to continue to license the self-chilling beverage
container technology to large beverage producers and aluminum can manufacturers.
We believe that this strategy will provide material benefits, including use of
the greater manufacturing, marketing, and distribution expertise of such
companies and potential reduction of substantial manufacturing costs. Our
objective is to enter into agreements whereby the licensees are responsible for
purchasing the raw materials, manufacturing or contracting for the manufacture
of the container, as well as labeling, filling, marketing, selling, and
distribution of the self-chilling beverage container technology and other
related technologies licensed by us. See Item 1. Description of Business.

During the initial research and development phase, we intend to
rent production line time from a local soft drink manufacturer. Many soft drink
manufacturers have excess capacity and are willing to rent production line time
on an hourly basis. Included in the hourly fee will be the ability to utilize
the collective input of the facilities production personnel, most of whom have
years of experience in the beverage bottling and canning field. It would be
virtually impossible for us to acquire this caliber of expertise individually
due to availability and cost. This arrangement will allow us to continue to fine
tune and develop both the chilling module insert and more importantly to
troubleshoot and identify any obstacles or situations which may impede the
successful integration of the Cool Can Technology into a high-speed beverage
canning operation. Also, it will alleviate the requirement to make significant
capital expenditures on canning equipment of our own until there is some
certainty as to both future production requirements and the degree of
specialized or custom equipment that may need to be developed.

During the second phase of the pre-production period, we intend
to establish administration offices and a research and development facility. The
purpose of the facility will be to demonstrate the commercial viability of our
manufacturing processes, to supply self-chilling beverage containers for
additional testing and market studies, and to produce self-chilling beverage
containers, which can be sold directly to beverage companies. It is anticipated
that containers sold directly to these companies will be filled, packaged and
distributed by them. Should the due diligence period dictate the need for
production of highly specialized equipment in order to produce finished goods,
we will undertake to purchase our own canning line. The acquisition of a canning
line to co-pack would be conditional upon significant interest from smaller
beverage companies without the financial capability to purchase the packaging
equipment required to produce the product. A canning line used for research and
development purposes would not have the volume capability to be used in a
commercial arrangement.

Once the beverage canning line is operational in the new
facility, we will have the capability to co-pack product for customers whose
limited volumes would preclude purchase of the required custom equipment
themselves. Co-packing means that the production facility assumes the
responsibility for packaging another companys brand. The costs of such a
facility will not be determined until potential customers and the projected
volume have been determined. Our production facility will be designed to allow
for assembly of the component parts for the chilling module insert so that they
may be distributed from our facility. All of the components will be manufactured
off-site. We believe that our production facility will assist in
commercialization efforts as it is anticipated that the ability to produce the
insert, place it in the can, and have the container filled and seamed will
assist in further refinement of the finished product.

We will complete final design and development tasks for the
molds, dies and tooling required for volume manufacturing of the trigger
mechanism and hardware for support of the CO2 capsules. There will also be
intensive consultation with companies who make both fillers and filler heads in
order to make certain there is no potential conflict with the insert during this
critical aspect of the production process. Extensive testing will be carried out
during the initial research and development stage in order to produce a
zero-defect product which can be manufactured daily on a world wide basis at
high production volumes.

Additionally, final design and development of several types of
automatic insert feed mechanisms, which can be integrated into high-speed
beverage canning lines, will be completed. We plan to accomplish this in
consultation with several major beverage companies, but will retain ownership of
the technology and manufacturing rights.

9

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RAW MATERIALS AND SUPPLIERS

The primary raw materials we anticipate using in the
manufacture of our chilling module inserts are a steel or aluminum CO2
cartridge, plastic cartridge holder, polymer cartridge piercer, polymer piercer
body and a resilient polymer foam pad.

We anticipate that we will enter into agreements with certain
raw material suppliers and that the projected unit volumes required will cause
the price of the insert to continue to decrease in price as licensing efforts
expand. Once certain economies of scale are achieved and long term supplier
agreements are solidified, we believe that the cost of the chilling inserts will
be reduced, although we can provide no assurances.

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.

COMPETITION

We believe that the market for a self-chilling beverage
container is an emerging market. The opportunity for a beverage company to
incorporate a technology, which allows a consumer to have a cold drink at any
place and at any time is significant and compelling.

We are aware of three other companies that are currently
attempting to manufacture and market a similar technology. We believe that the
competitors use either a combination of gasses to create a chilling effect or a
CO2 based reactant system, and hold one or more U.S. patents on their designs.
As of yet, none of these companies appear to have produced a commercially viable
product available for purchase. All three of the competitors are private
companies and little is known about their size or financial capabilities.

We believe that success in marketing a self-chilling beverage
container will be based primarily on price, ease of use, quality, product
awareness, product safety, and ultimately an endorsement by one or more major
beverage companies. There can be no assurance that we will be able to
successfully compete against our competitors.

The competitor's designs are somewhat more complex applications
in that their chilling unit must be attached to the bottom of the can and
activated by turning the can upside down and then pushing a button or pulling a
tab. This application mandates that their version of a self-chilling can must be
produced specifically for beverage companies through one of the major can
manufacturers because the external device must be added in some manner, which
would require another step in the manufacturing process. Our Cool Can
Technology, on the other hand, is considerably more versatile in that the
chilling module is an insert which can be delivered to either the can
manufacturer or the beverage canning facility for use with any standardized can
out of general inventory as long as it is identified with the InstaCool label.
What differentiates the Cool Can Technology from its competition is the unique
valving and activation system by which the reactant gas is released. The
consumer is not required to push any buttons or do anything specific to activate
the Cool Can other than the normal process of opening the can, thus making the
Cool Can Technology much more user friendly.

GOVERNMENT REGULATIONS AND ENVIRONMENT

All of the currently projected uses for our self-chilling
beverage container fall under the authority of the United States Food and Drug
Administration (the FDA). The key element and the only substance which mixes
with the beverage is the CO2 which has always been present in beverages and is
an accepted substance by the FDA for the beverage industry. The FDA regulates
the material content of all beverage containers and packages.

The materials used in manufacturing the Cool Can products are
similar to present canning materials and are fully compliant with FDA
requirements. FDA approval is not required as long as there is compliance with
all currently published guidelines. We also expect that licensees who will be
filling the Cool Can products with beverages will

10

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comply with the appropriate FDA regulations. All licensees will
have a contractual obligation to produce products consistent with the laws of
their country, as well as additional quality control measures requested by us,
though specific usage is unknown at this time.

The Environmental Protection Agency (EPA), in their efforts
to protect the stratospheric ozone, have determined that a self-chilling
beverage can utilizing CO2 as the refrigerant has a minimal impact on the ozone
layer. In the Notice of Acceptability published in the Federal Register
effective February 24, 1998, it was also determined that self-chilling cans
utilizing CO2 either recovered as a by-product from other industrial activities
or taken from the atmosphere will further reduce the net impact. The EPA has not
specifically approved our product design, but, although we can provide no
assurance, it does meet the standards of the EPA. There have been no costs to
date associated with compliance, nor are any anticipated.

Various safety features are incorporated into the design and
manufacture of the Cool Can product. The primary safety feature becomes
important in a situation such as throwing the can in a fire. The gasses in the
cylinder will harmlessly escape at a certain temperature through a safety valve.

Additionally, the Cool Can Technology is designed to be in full
compliance with all recycling requirements since the component parts will be
manufactured utilizing only recyclable materials.

RESEARCH AND DEVELOPMENT

Due to a lack of working capital, no expenses on research and
development activities were incurred during the fiscal years ended June 30, 2006
and 2005. We estimate further research and development costs of approximately
$350,000 over the next twelve months in order to carry out our plan of
operation, subject to financing. See Item 6. Managements Discussion and
Analysis or Plan of Operation  Liquidity and Financial Condition.

SUBSIDIARIES

We do not have any subsidiaries.

|ITEM 2. | DESCRIPTION OF PROPERTY.
|------- | ------------------------

Our corporate headquarters, consisting of approximately 500
square feet, are located at 698 Seymour Street, Suite 311, Vancouver, British
Columbia, where our principal executive functions are carried out. We are
currently operating under a month to month lease at the rate of $802 CDN per
month (US$719). 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.

11

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PART II

|ITEM 5. | MARKET FOR COMMON EQUITY AND RELATED
      STOCKHOLDER MATTERS.
|------- | ---------------------------------------------------------------

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
or as quoted in the Over-The-Counter Pink Sheets, as applicable, were:

QUARTER
      HIGH ($)
      LOW ($)1st Quarter 2005
    $0.26
    $0.012nd Quarter 2005
    $0.20
    $0.0053rd Quarter 2005
    $0.06
    $0.00014th Quarter 2005
    $0.25
    $0.051st Quarter 2006
    $0.25
    $0.062nd Quarter 2006
    $0.25
    $0.113rd Quarter 2006
    $0.55
    $0.094th Quarter 2006
    $0.55
    $0.15


The above quotations have been adjusted to reflect our 20-for-1
reverse stock split effective July 12, 2004. 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, 2006, there were 192 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

During the year ended June 30, 2006, we completed the sales of
the following securities that were not registered pursuant to the Securities Act
of 1933 (the Securities Act):

| | 1. | On June 9, 2006, we completed a private placement of
      2,600,000 shares of our common stock to three investors at a price of
      $0.12 per share. 187,500 of the shares issued pursuant to the offering
      were issued
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

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in settlement of amounts owed to a former officer/director of
NorPac. The private placement was completed pursuant to the provisions of
Regulation S promulgated under the Securities Act. We did not engage in a
distribution of this offering in the United States. Each of the investors has
represented that they were not US persons as defined in Regulation S.

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

PLAN OF OPERATION

Our plan of operation for the next twelve months, subject to
our receiving the necessary additional financing, includes the following
components:

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

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

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

We anticipate spending approximately $690,000 on our plan of
operation over the next twelve months, of which $345,000 is anticipated to be
spent over the next six months, subject to our receiving the necessary financing
to enable us to pursue our plan of operation. We will not be able to proceed
with our plan of operation unless we obtain significant additional financing. If
we obtain sufficient additional financing, of which there is no assurance,

13

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then the estimated cost and timeframe for completion of each of
the above components of our plan of operation will be as follows:

|1. | Product development is estimated to be completed over a
      timeframe of 7.5 months at an estimated cost of $350,000, and is intended
      to result in the manufacturing of 2,000 industry demonstration
    samples.                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                               
|2. | Consultation feedback is estimated to take place over a
      timeframe of three months following completion of phase one at an
      estimated cost of $50,000.                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                               
|3. | Marketing and licensing will follow Phase 2 and is
      estimated to take three months at an estimated cost of $50,000.                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                               
|4. | General expenditures over the next twelve months are
      estimated to be $20,000 per month, consisting of $15,000 per month in
      general administrative expenses and $5,000 per month in legal and
      accounting expenses relating to compliance with our reporting obligations
      under the Exchange Act of 1934.

We have cash of $16,887 and a working capital deficit of
$37,343 as of June 30, 2006. Accordingly, we will require additional financing
in order to proceed with our plan of operation, see Liquidity and Capital
Resources below. If we obtain financing that is less than that required to
pursue our stated plan of operation, then we will scale back our plan of
operation to concentrate solely on the product development phase of our plan of
operation. In this event, we will pursue product development to the extent of
our financial resources.

RESULTS OF OPERATIONS

Summary of Year End Results

|                  |  | Year Ended June 30 | 
|----------------- |  | ------------------ | 
|                  |  |                    | 
|                  |  | 2006               | 
|Revenue           |  | $50,000            | 
|Expenses          |  | (93,586)           | 
|Net Income (Loss) |  | $(43,586)          | 

Revenues

Our revenues during the year ended June 30, 2006 were due to
our receipt of 500,000 restricted shares of Balsam common stock (the "Balsam
Shares") valued at $30,000 and cash of $20,000, in connection with our granting
of the extension to the License Agreement during the current fiscal year. We did
not earn any revenues during the year ended June 30, 2005.

We have not earned any revenues from sales of our products to
date. We do not anticipate earning revenues from the sale of our products until
such time as we have completed commercial development of products incorporating
our Cool Can Technology. We are presently in the development stage of our
business and we can provide no assurance that we will be able to complete
commercial development or successfully sell or license products incorporating
our Cool Can Technology once development is complete.

14

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Operating Expenses

Our operating expenses for the years ended June 30, 2006 and
June 30, 2005 included the following expenses:

|                                    |  | Year Ended June 30 | 
|----------------------------------- |  | ------------------ | 
|                                    |  |                    | 
|                                    |  | 2006               | 
|Administrative pre-opening and      |  | $93,586            | 
|development expenses                |  |                    | 
|Interest expense                    |  | --                 | 
|Realized loss on available-for-sale |  | --                 | 
|securities                          |  |                    | 
|Total                               |  | $93,586            | 

| | (1) | The interest expense total for the year ended June 30,
      2005, as shown in the table above includes the original issue discount
      amount of $275,000 to reflect a total interest expense of $325,928 for the
      year ended June 30, 2005.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The decreases in our total expenses for the year ended June 30,
2006 when compared to our total expenses for the year ended June 30, 2005, were
primarily attributable to: (i) a decrease in our administrative pre-opening and
development expenses, (ii) the fact that we did not incur any interest expense
relating to the outstanding convertible notes as a result of all of our
Convertible Notes being converted into our common stock, and (iii) the fact we
had no realized loss on available for sale securities. The decrease in our
administrative pre-opening and development expenses for the year ended June 30,
2006 compared to the previous year ended June 30, 2005, was due to a decrease in
professional and management fees. Our interest expenses for the year ended June
30, 2005, consisted of the amortization of original issue discount for our 10%
convertible notes and accrued interest to holders of our 10% convertible notes.

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

Net Loss

We recorded a net loss of $43,586 for the year ended June 30,
2006, compared to a net loss of $548,670 for the year ended June 30, 2005. The
decrease in net loss is due primarily to (i) the consideration that we received
from Balsam in connection with the extension that was granted by us consisting
of cash of $20,000 and 500,000 shares of Balsams common stock, and (ii)
decrease in our administrative expenses and interest expenses.

LIQUIDITY AND FINANCIAL CONDITION

|Working Capital           |  |                        |  |  |                        |  |  |                     | 
|------------------------- |  | ---------------------- |  |  | ---------------------- |  |  | ------------------- | 
|                          |  |                        |  |  |                        |  |  | Percentage          | 
|                          |  | At June
      30, 2006 |  |  | At June
      30, 2005 |  |  | Increase / Decrease | 
|Current Assets            |  | $21,387                |  |  | $2,557                 |  |  | 736.4%              | 
|Current Liabilities       |  | (58,730)               |  |  | (406,794)              |  |  | (85.6)%             | 
|Working Capital (Deficit) |  | $(37,343)              |  |  | $(404,237)             |  |  | (90.8)%             | 

15

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|Cash Flows                                   |  |                    |  |  |           | 
|-------------------------------------------- |  | ------------------ |  |  | --------- | 
|                                             |  | Year Ended June 30 | 
|                                             |  | 2006               |  |  | 2005      | 
|Net Cash Used In Operating Activities        |  | $(200,130)         |  |  | $(59,246) | 
|Net Cash From (Used In) Investing Activities |  | --                 |  |  | 11,225    | 
|Net Cash From Financing Activities           |  | 216,710            |  |  | 48,072    | 
|Net Decrease In Cash During Period           |  | $16,580            |  |  | $51       | 

The decrease in our working capital deficit for the fiscal year
ended June 30, 2006 is primarily attributable to a 85.6% decrease in our current
liabilities which decreased during the year ended June 30, 2006 due to our
settling of accounts payable in the amount of $146,330 in exchange for 187,500
shares of our common stock with a fair value of $28,125.

On June 9, 2006, we completed a private placement (the June
Private Placement) of 2,600,000 shares of our common stock to three investors
at a price of $0.12 per share pursuant to Regulation S of the Securities Act of
1933. 187,500 of the shares issued pursuant to the offering were issued in
settlement of amounts owed to a former officer/director of NorPac. The loan to
the stockholder arose from our unpaid management fees for management services
provided to us by our former officer and director. The settlement resulted in a
fair value of common stock issued under the carrying amount of debt of $118,205
during the year ended June 30, 2006 which was included in additional paid in
capital. The proceeds of the June Private Placement were used to pay out
existing debts and for ongoing working capital purposes.

Our current monthly cash requirements are approximately $20,000
per month. Our current cash reserves of $16,887 are not sufficient to enable us
to operate even on a short term basis. Further, we require approximately
$690,000 in order to carry out our plan of operation over the next twelve
months. We intend to raise the necessary financing for completion of production
ready samples of our Cool Can product through collaboration with a strategic
industry partner as a joint venture. In the event we are unable to reach
agreement with a joint venture partner for completion of our plan of operation
as stated, we anticipate that additional financing would be obtained through the
sales of our common stock or other equity-based securities. We do not have any
arrangements or agreements in place with respect to a joint venture and/or for
the sale of any of our securities and there is no assurance that we will be able
to raise the additional capital that we require to continue our operations.

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

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

Financing Requirements

We require additional financing if we are to continue as a
going concern and to finance our business operations. We anticipate that any
additional financing would be through the sales of our common stock or other
equity-based securities. We are presently in the process of negotiating private
placements of securities to raise working capital

16

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to finance our operations. However, we do not have any
arrangements in place for the sale of any of our securities and there is no
assurance that we will be able to raise the additional capital that we require
to continue operations. In the event that we are unable to raise additional
financing on acceptable terms, we intend to reduce our product development
efforts and may implement additional actions to reduce expenditures.

The financial statements accompanying this Annual Report
contemplate our continuation as a going concern. However, we have sustained
substantial losses and are still in the development stage. Additional funding
will be necessary to continue development and marketing of our product. We
intend to arrange for the sale of additional shares of our common stock to
obtain additional operating capital for at least the next twelve months. There
can be no assurance that we will be able to raise the necessary capital to
continue in business.

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

Intangibles

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

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.

17

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RISKS AND UNCERTAINTIES

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

We have had net losses for each of the years ended June 30,
2006 and 2005, and we have an accumulated deficit as of June 30, 2006. Since 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, we may be forced to discontinue our business.

We require additional financing to continue our plan of
operation.

Our plan of operation calls for significant expenses in
connection with the development of our Cool Can product. Our current operating
funds are insufficient to complete our plan of operation which will require an
estimated $690,000 to be spent over the next 12 months developing and marketing
a prototype of our Cool Can product in order to accomplish our goals. As of June
30, 2006, being the date of our most recent financial statements, we had cash in
the amount of $16,887 and a working capital deficit of $37,343. Therefore, we
will need to obtain additional financing in order to complete our prototype
development. We will also require additional financing if the costs of our Cool
Can product development are greater than anticipated. There is no assurance that
actual cash requirements will not exceed our estimates. In particular,
additional capital may be required in the event that:

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

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

We may experience delays in the construction of our
prototype.

If we are able to obtain sufficient financing, of which there
are no assurances, we expect to begin construction of a prototype of the Cool
Can product within the next twelve months. Development and testing of the
prototype is expected to take approximately 6 months to complete. However,
development projects of this type often experience delays and technical
difficulties. Our ability to complete the development on schedule is dependent
on many circumstances, some of which may be outside of our control. These
factors may include, but are not limited to, factors such as the availability of
outside contractors, materials and equipment. In addition, although we believe
that the principles underlying the design of our Cool Can Technology are sound,
problems can arise when attempting to manufacture an actual product from the
prototype. Even if we are able to complete development of the prototype as
scheduled, there are no assurances that the prototype will perform as expected.

Our product development program may not be successful.

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

18

---

Our operations may be subject to extensive government
regulations.

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

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

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

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

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

To date, we have entered into only one licensing agreement with
respect to our Cool Can Technology. Our success will depend on the acceptance of
our Cool Can Technology by the beverage industry, as well as by related
businesses and the general public. Achieving such acceptance will require
significant research and development investment. Our technology generally, and
our proposed Cool Can product specifically, may not achieve widespread
acceptance by businesses in general, or by major beverage suppliers, beverage
manufacturers or agents thereof, which could limit our ability to develop and
expand our business. The market for self-chilling beverages is relatively new
and is evolving. Our ability to generate revenue in the future depends on the
acceptance by both our customers and beverage manufacturers in general. The
adoption of our Cool Can product could be hindered by the perceived costs of
this new technology to consumers and beverage brand owners. Accordingly, in
order to achieve commercial acceptance, we will have to educate prospective
customers, including large, established beverage manufacturers, about the uses
and benefits of our Cool Can Technology. If these efforts fail, or if our Cool
Can product does not achieve commercial acceptance, our business could be
harmed.

We have a limited operating history.

We have a relatively short operating history and we are
involved in a rapidly evolving and unpredictable industry. As of June 30, 2006,
being the date of our most recent financial statements, we had a working capital
deficit of $37,343. We will need to generate significant revenues to achieve
profitability, which may not occur. We expect operating expenses to increase as
a result of the further implementation of our business plan. Even if we achieve
profitability, we may be unable to sustain or increase profitability on a
quarterly or annual basis in the future. It is possible that we will never
achieve profitability.

19

---

We are dependent on key personnel.

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

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

Our executive officer is employed on a full time basis by other
companies. Because we are in the early stages of our business, 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 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.                                                                              

20

---

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.

21

---

|ITEM 7. | FINANCIAL STATEMENTS.
|------- | ---------------------



|**Index to Financial Statements:**                                 | Page                                                                                                                                                                            
|------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                   |                                                                                                                                                                                 
|Audited financial statements as of June 30, 2006,
      including: |                                                                                                                                                                                 
|                                                                   |                                                                                                                                                                                 
|1.                                                                 | Report of Peterson
      Sullivan PLLC ,Independent Registered Public Accounting Firm;                                                                                          
|2.                                                                 | Report of Virchow, Krause &
      Company, LLP, Independent Registered Public Accounting Firm;                                                                                  
|3.                                                                 | Balance Sheets
      as of June 30, 2006;                                                                                                                                       
|4.                                                                 | Statements of Operations and
      Comprehensive Income (Loss) for the years ended June 30, 2006 and 2005 and
      the period from inception on April 1, 1998 to June 30, 2006;
|5.                                                                 | Statements
      of Cash Flows for the years ended June 30, 2006 and 2005 and the period
      from inception on April 1, 1998 to June 30, 2006;                                
|6.                                                                 | Statements of Stockholders
      Equity (Deficit) for years ended June 30, 2006 and 2005 and the period from
      inception on April 1, 1998 to June 30, 2006; and            
|7.                                                                 | Notes to the
      Financial Statements.                                                                                                                                        

22

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NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

FINANCIAL STATEMENTS

JUNE 30, 2006 and 2005



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, 2006, and the related statements
  of operations and comprehensive income (loss), stockholders' equity (deficit)
  and cash flows for the year then ended, and for the period from April 1, 1998
  (date of inception) to June 30, 2006. 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 audit. 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, 2006. 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 audit 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 audit provides a reasonable basis for our opinion.

In our opinion, based on our audit 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, 2006, and the results of its operations and its cash flows for
  the year then ended, and for the period from April 1, 1998 (date of inception)
  to June 30, 2006, in conformity with accounting principles generally accepted
  in the United States.

F-2

---

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. Successful development of the Company is
  dependent upon its ability to obtain additional funding through contributions
  of equity or debt issuance. 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

PETERSON SULLIVAN PLLC

September 18, 2006
  Seattle, Washington

F-3

---

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 Nevada corporation, (a development stage company) as of June 30, 2005,
  and the related statements of operations and comprehensive loss, stockholders'
  deficit and cash flows for the year then ended. 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 audit.

We conducted our audit 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. 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 audit provides
  a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of Norpac Technologies,
  Inc. as of June 30, 2005 and the results of its operations and its cash flows
  for the year then ended, in conformity with accounting principles generally
  accepted in the United States of America.

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. Successful continued development of the Company
  is dependent upon its ability to obtain additional financing through contributions
  of equity capital and/or debt issuance. These factors raise substantial doubt
  about its 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/ Virchow, Krause & Company, LLP

Virchow, Krause & Company, LLP

Minneapolis, Minnesota
  September 22, 2005

F-4

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

BALANCE SHEET
  June 30, 2006

|ASSETS                                                                      |   |            |  
|--------------------------------------------------------------------------- | - | ---------- | -
|                                                                            |   |            |  
|CURRENT ASSETS:                                                             |   |            |  
|Cash                                                                        | $ | 16,887     |  
|Available-for-sale
      securities (Note 4)                                |   | 4,500      |  
|                                                                            |   |            |  
|Total Current Assets                                                        |   | 21,387     |  
|                                                                            |   |            |  
|AVAILABLE-FOR-SALE SECURITIES (Note 4)                                      |   | 550,000    |  
|                                                                            |   |            |  
|INTANGIBLE ASSETS, NET (Note 5)                                             |   | 7,200      |  
|                                                                            | $ | 578,587    |  
|                                                                            |   |            |  
|                                                                            |   |            |  
|                                                                            |   |            |  
|LIABILITIES
      AND STOCKHOLDERS EQUITY (DEFICIT)                        |   |            |  
|                                                                            |   |            |  
|CURRENT LIABILITIES:                                                        |   |            |  
|Accounts payable
      and accrued liabilities                              | $ | 58,230     |  
|Loans payable (Note 6)                                                      |   | 500        |  
|Total Current Liabilities                                                   |   | 58,730     |  
|                                                                            |   |            |  
|STOCKHOLDERS EQUITY (DEFICIT) (Note 8):                                    |   |            |  
|                                                                            |   |            |  
|Common stock, $0.001
      par value, 200,000,000 shares authorized,        |   |            |  
|35,165,390
      and 32,565,390 shares issued and outstanding, respectively |   | 35,165     |  
|Additional paid-in
      capital                                            |   | 2,796,815  |  
|Deficit accumulated during the development
      stage                      |   | (2,652,173 | )
|Accumulated other
      comprehensive income                                |   | 340,050    |  
|                                                                            |   | 519,857    |  
|                                                                            |   |            |  
|                                                                            | $ | 578,587    |  

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

F-5

---

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,        |  
|                                                              |   | 2006       |   |   | 2005       |   |   | 2006            |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Revenues                                                      | $ | 50,000     |   | $ | -          |   | $ | 288,000         |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Administrative pre-opening and development
      expenses     |   | (93,586    | ) |   | (180,417   | ) |   | (1,574,307      | )
|Interest expense                                              |   | -          |   |   | (325,928   | ) |   | (679,541        | )
|Impairment of intangibles                                     |   | -          |   |   | -          |   |   | (20,000         | )
|Stock compensation expense                                    |   | -          |   |   | -          |   |   | (624,000        | )
|Realized loss on available-for-sale securities                |   | -          |   |   | (42,325    | ) |   | (42,325         | )
|                                                              |   |            |   |   |            |   |   |                 |  
|Net loss                                                      |   | (43,586    | ) |   | (548,670   | ) |   | (2,652,173      | )
|                                                              |   |            |   |   |            |   |   |                 |  
|Unrealized gain (loss) on available-for-sale
      securities |   | 272,250    |   |   | (12,200    | ) |   | 340,050         |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Comprehensive income (loss)                                   | $ | 228,664    |   | $ | (560,870   | ) | $ | (2,312,123      | )
|                                                              |   |            |   |   |            |   |   |                 |  
|                                                              |   |            |   |   |            |   |   |                 |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Basic net loss per common share                               | $ | (0.00      | ) | $ | (0.12      | ) |   |                 |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Diluted net loss per common share                             | $ | (0.00      | ) | $ | (0.12      | ) |   |                 |  
|                                                              |   |            |   |   |            |   |   |                 |  
|Weighted average number of outstanding shares                 |   | 32,722,103 |   |   | 4,421,519  |   |   |                 |  

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

F-6

---

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,        |  
|                                                                                  |   | 2006       |   |   | 2005       |   |   | 2006            |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |   |            |   |   |            |   |   |                 |  
|Net loss                                                                          | $ | (43,586    | ) | $ | (548,670   | ) | $ | (2,652,173      | )
|Adjustments to reconcile
      net loss to net cash used in operating activities: |   |            |   |   |            |   |   |                 |  
|Amortization expense                                                              |   | 2,400      |   |   | 2,400      |   |   | 16,800          |  
|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     |   |   | 42,325          |  
|Amortization of
      original issue discount                                     |   | -          |   |   | 275,222    |   |   | 550,000         |  
|Impairment loss on intangibles                                                    |   | -          |   |   | -          |   |   | 20,000          |  
|Changes in operating
      assets and liabilities:                                |   |            |   |   |            |   |   |                 |  
|Increase (decrease) in accounts
      payable and accrued liabilities             |   | (153,944   | ) |   | 68,088     |   |   | 138,011         |  
|Increase in accrued
      interest                                                |   | -          |   |   | 50,048     |   |   | 127,380         |  
|Increase in accounts payable, stockholders                                        |   | 25,000     |   |   | 51,341     |   |   | 369,346         |  
|Increase (decrease)
      in due to stockholders                                  |   | -          |   |   | -          |   |   | 20,776          |  
|Net cash used in operating activities                                             |   | (200,130   | ) |   | (59,246    | ) |   | (1,011,535      | )
|                                                                                  |   |            |   |   |            |   |   |                 |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |   |            |   |   |            |   |   |                 |  
|Proceeds from sale
      of available-for-sale securities                         |   | -          |   |   | 11,225     |   |   | 11,225          |  
|Purchase of intangibles                                                           |   | -          |   |   | -          |   |   | (44,000         | )
|Net cash provided by (used
      in) investing activities                         |   | -          |   |   | 11,225     |   |   | (32,775         | )
|                                                                                  |   |            |   |   |            |   |   |                 |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |   |            |   |   |            |   |   |                 |  
|Collection of subscription receivable                                             |   | -          |   |   | -          |   |   | 10,000          |  
|Issuance of common
      stock                                                    |   | 289,500    |   |   | -          |   |   | 619,269         |  
|Net proceeds from due to stockholders                                             |   | -          |   |   | -          |   |   | 348,928         |  
|Proceeds from (repayment
      of) loans payable                                  |   | (72,790    | ) |   | 48,022     |   |   | 500             |  
|Issuance of convertible notes                                                     |   | -          |   |   | -          |   |   | 82,500          |  
|Net cash provided by financing
      activities                                   |   | 216,710    |   |   | 48,072     |   |   | 1,061,197       |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|Increase in cash                                                                  |   | 16,580     |   |   | 51         |   |   | 16,887          |  
|Cash:                                                                             |   |            |   |   |            |   |   |                 |  
|Beginning                                                                         |   | 307        |   |   | 256        |   |   | -               |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|Ending                                                                            | $ | 16,887     |   | $ | 307        |   | $ | 16,887          |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|SUPPLEMENTAL CASH FLOWS INFORMATION:                                              |   |            |   |   |            |   |   |                 |  
|                                                                                  |   |            |   |   |            |   |   |                 |  
|Cash paid
      for interest                                                      | $ | 21         |   | $ | 658        |   | $ | 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                                | $ | -          |   | $ | 530,000    |   | $ | 550,000         |  
|Stock issued for accrued
      interest on notes payable                          | $ | -          |   | $ | 124,789    |   | $ | 127,381         |  

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

F-7

---

NORPACTECHNOLOGIES,INC.(A Development Stage Company)

STATEMENTSOFSTOCKHOLDERSEQUITY(DEFICIT)

|                                                                                    |              |  |   |         |     |   |            |              |  |   |               |   |   |               |   |   | Deficit     |  
|----------------------------------------------------------------------------------- | ------------ |  | - | ------- | --- | - | ---------- | ------------ |  | - | ------------- | - | - | ------------- | - | - | ----------- | -
|                                                                                    |              |  |   |         |     |   |            |              |  |   |               |   |   | Accumulated   |   |   | Accumulated |  
|                                                                                    |              |  |   |         |     |   | Additional | Amount       |  |   | Stock         |   |   | Other         |   |   | During the  |  
|                                                                                    | Common Stock |  |   | Paid In | Per |   |            | Subscription |  |   | Comprehensive |   |   | Development   |  
|                                                                                    | Shares       |  |   | Amount  |     |   | Capital    | Share        |  |   | 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     | .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-8

---

NORPACTECHNOLOGIES,INC.(A Development Stage Company)

STATEMENTSOFSTOCKHOLDERSEQUITY(DEFICIT)

DeficitAccumulated
      
      
      AccumulatedAdditional
      Amount
      
      Stock
      
      
      Other
      
      
      During theCommon Stock
      
      
      Paid In
      Per
      
      Subscription
      
      
      Comprehensive
      
      
      DevelopmentShares
      
      
      Amount
      
      
      Capital
      Share
      
      Receivable
      
      
      Income (Loss)
      
      
      StageShares issued for conversion of note
        payable  April 23, 2004
      1,000,000
      
      
      1,000
      
      
      19,000
      .02
      
      -
      
      
      -
      
      
      -Shares issued for accrued interest
        on note payable  April 23, 2004
      8,901
      
      
      9
      
      
      2,583
      .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
      .02
      
      -
      
      
      -
      
      
      -Shares issued for accrued interest
        on notes payable  May 26, 2005 to June 27, 2005
      2,300,646
      
      
      2,301
      
      
      46,013
      .021
      
      -
      
      
      -
      
      
      -Shares issued for accrued interest
        on notes payable  May 26, 2005 to June 27, 2005
      1,514,286
      
      
      1,514
      
      
      51,486
      .035
      
      -
      
      
      -
      
      
      -Shares issued for accrued interest
        on notes payable  May 26, 2005 to June 27, 2005
      72,848
      
      
      73
      
      
      2,987
      .042
      
      -
      
      
      -
      
      
      -Shares issued for accrued interest
        on notes payable  May 26, 2005 to June 27, 2005
      42,869
      
      
      43
      
      
      4,758
      .112
      
      -
      
      
      -
      
      
      -Shares issued for accrued interest
        on notes payable  May 26, 2005 to June 27, 2005
      67,551
      
      
      67
      
      
      7,971
      .119
      
      -
      
      
      -
      
      
      -Shares issued for accrued interest
        on notes payable  May 26, 2005 to June 27, 2005
      90,190
      
      
      90
      
      
      7,486
      .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
      )


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 owns a patent for a self-chilling beverage container and related
  component parts.

The Company is considered to be in the
  development stage and the accompanying financial statements represent those
  of a development stage enterprise and therefore, are subject to the usual business
  risks of development stage companies. The Company has had no 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.

Additional funding will be necessary
  to continue development and marketing of the product. The Company intends to
  arrange for the sale of additional shares of stock to obtain additional operating
  capital for at least the next twelve months. There can be no assurance the Company
  will be able to raise the necessary capital to continue in business.

|3. | Significant Accounting Policies
|-- | -------------------------------

The financial statements of the Company
  have been prepared in conformity with accounting principles generally accepted
  in the United States and are stated in US dollars. The significant accounting
  policies adopted by the Company are as follows:

| | (a) | **Use of estimates**
| | --- | --------------------

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) | **Foreign currency translation**
| | --- | --------------------------------

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 translation of foreign currency
  items are included in the statement of operations.

F-10

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)
|-- | -------------------------------------------

| | (c) | **Cash and cash equivalents**
| | --- | -----------------------------

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, 2006 and 2005, cash and
  cash equivalents consists of cash only.

| | (d) | **Intangible assets**
| | --- | ---------------------

Intangible assets are recorded at cost.
  Amortization is calculated using the straight-line method over 10 years.

| | (e) | **Advertising expenses**
| | --- | ------------------------

The Company expenses advertising costs
  as incurred. There were no advertising expenses incurred by the Company for
  the years ended June 30, 2006 and 2005.

| | (f) | **Income taxes:**
| | --- | -----------------

Deferred taxes are recorded using the
  liability method. A deferred tax asset or liability is recorded for all temporary
  differences between financial and tax reporting and net operating loss carryforwards.
  Deferred tax expenses (benefit) result from the net change during the period
  of deferred tax assets and liabilities.

Deferred tax assets are reduced by a
  valuation allowance when, in the opinion of management, it is more likely than
  not that some portion or all of the deferred tax assets will not be realized.
  Deferred tax assets and liabilities are adjusted for the effects of changes
  in tax laws and rates on the date of enactment.

| | (g) | **Fair value of financial instruments**
| | --- | ---------------------------------------

The Company's financial instruments consist
  of cash, available-for-sale securities, accounts payable and accrued liabilities
  and loans payable. It is management's opinion that the Company is not exposed
  to significant interest, currency or credit risks arising from these financial
  instruments. The fair value of these financial instruments approximates their
  carrying values because of the short-term nature of these financial instruments.

| | (h) | **Stock-based compensation**
| | --- | ----------------------------

Effective January 1, 2006, the Company
  adopted Statement of Financial Accounting Standards (SFAS) 123(R),
  "Share-Based Payment" ("SFAS 123(R)"), 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

F-11

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)
|-- | -------------------------------------------

| | (h) | **Stock-based compensation (continued)**
| | --- | ----------------------------------------

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 year ended
  June 30, 2006 was no different than if it had continued to account for stock-based
  compensation under SFAS 123. Basic and diluted loss per share for the year ended
  June 30, 2006 was 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 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 |   |   | Year Ended |   |   | 1998) Through       |  
| |                                         |   | June 30,   |   |   | June 30,   |   |   | June 30,            |  
| |                                         |   | 2006       |   |   | 2005       |   |   | 2006                |  
| |                                         |   |            |   |   |            |   |   |                     |  
| | Net loss                                | $ | (43,586    | ) | $ | (548,670   | ) | $ | (2,652,173          | )
| |                                         |   |            |   |   |            |   |   |                     |  
| | Pro forma net loss                      | $ | (43,586    | ) | $ | (548,670   | ) | $ | (2,700,173          | )
| |                                         |   |            |   |   |            |   |   |                     |  
| | Stock based compensation                |   |            |   |   |            |   |   |                     |  
| | As reported                             | $ | -          |   | $ | -          |   | $ | 504,000             |  
| | Proforma                                | $ | -          |   | $ | -          |   | $ | 552,000             |  
| |                                         |   |            |   |   |            |   |   |                     |  
| | Basic and diluted loss per common share |   |            |   |   |            |   |   |                     |  
| | As reported                             | $ | (0.00      | ) | $ | (0.12      | ) |   |                     |  
| | Pro forma                               | $ | (0.00      | ) | $ | (0.12      | ) |   |                     |  

There were no options granted or vested
  during the years ended June 30, 2006 and 2005.

| | (i) | **Loss per common share:**
| | --- | --------------------------

Basic net loss per share is computed
  by dividing the net loss for the period by the weighted average number of shares
  of common stock outstanding during the period. Diluted earnings per share takes
  into consideration shares of common stock outstanding (computed under basic
  earnings per share) and potentially dilutive securities. As of June 30, 2006
  and 2005, there were no potentially dilutive securities outstanding.

| | (j) | **Comprehensive loss**
| | --- | ----------------------

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

F-12

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)
|-- | -------------------------------------------

| | (k) | **Development stage**
| | --- | ---------------------

The Company is a development stage company
  as defined in SFAS 7, Accounting and Reporting by Development Stage
  Enterprises,as it is devoting substantially all of its efforts to
  establish a new business and planned principal operations have not yet commenced.

| | (l) | **Recent accounting pronouncements**
| | --- | ------------------------------------

In June 2005, the FASB issued SFAS 154,
  “*Accounting Changes and Error Corrections,*” which replaces
  APB Opinion 20, “Account Changes,” and SFAS 3, Reporting Accounting
  Changes in Interim Financial Statements.” SFAS 154 changes the requirements
  for the accounting and reporting of a change in accounting principle. APB Opinion
  20 previously required that most voluntary changes in accounting principles
  be recognized by including the cumulative effect of the new accounting principle
  in net income of the period of change. SFAS 154 now requires retrospective application
  of changes in accounting principle to prior period financial statements, unless
  it is impractical to determine either the period-specific effects or the cumulative
  effect of the change. The statement is effective for fiscal years beginning
  after December 15, 2005. The Company does not expect that this Statement will
  have a material impact on their financial position, results of operations or
  cash flows.

In February 2006, the FASB issued SFAS.155,
  Accounting for Certain Hybrid Financial Instruments  an amendment
  of SFAS 133 and 140. SFAS 155 permits fair value remeasurement for
  any hybrid financial instrument that contains an embedded derivative that otherwise
  would require bifurcation, clarifies which interest-only strips and principal-only
  strips are not subject to the requirements of SFAS 133, and establishes a requirement
  to evaluate interests in securitized financial assets to identify interests
  that are freestanding derivatives or that are hybrid financial instruments that
  contain an embedded derivative requiring bifurcation. In addition, SFAS 155
  clarifies that concentrations of credit risk in the form of subordination are
  not embedded derivatives and amends SFAS 140 to eliminate the prohibition on
  a qualifying special purpose entity from holding a derivative financial instrument
  that pertains to a beneficial interest other than another derivative financial
  instrument. SFAS 155 is effective for all financial instruments acquired or
  issued after the beginning of an entitys first fiscal year that begins
  after September 15, 2006. The Company does not expect that this Statement will
  have a material impact on their financial position, results of operations or
  cash flows.

F-13

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|3. | Significant Accounting Policies (continued)
|-- | -------------------------------------------

| | (l) | **Recent accounting pronouncements
      (continued)**
| | --- | ------------------------------------------------------

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.

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.

F-14

---

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, 2006       | $ | 554,500          |  | $ | 340,050    |  | $ | -          |  | $ | 214,450 | 
| | Equity securities
      - June 30, 2005 | $ | 252,250          |  | $ | 67,800     |  | $ | -          |  | $ | 184,450 | 

In November 2002, the Company received
  securities valued at $63,000. Pursuant to the license agreement described in
  Note 12, the Company received additional securities valued at $175,000 in November
  2003, and securities valued at $30,000 in January 2006. Proceeds of $0 and $11,225
  were received and a loss on sale for available-for-sale securities of $0 and
  $42,325 was included in net loss for the years ended June 30, 2006 and 2005,
  respectively.

The Companys net unrealized holding
  gain (loss) was $272,250 and ($12,200) for the years ended June 30, 2006 and
  2005, respectively. The reclassification adjustment was $0 and $40,800 for the
  years ended June 30, 2006 and 2005, respectively and $40,800 for the period
  from inception through June 30, 2006. 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, 2006.

The Company held 5,545,000 and 5,045,000
  common shares of Balsam Ventures, Inc. for an ownership percentage of 21.3%
  and 19.8% for the years ended June 30, 2006 and 2005, respectively. The 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-15

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|5. | Intangible Assets
|-- | -----------------

A United States patent for a self-chilling
  beverage container and related component parts was obtained by a founding stockholder
  on March 11, 1997. During 1998, the patent and patent holder rights thereunder
  were sold to the Company for $1. Subsequent costs in June 1999 of $24,000 to
  file foreign patent applications have been similarly capitalized. Estimated
  amortization expense is $2,400 for each of the next three years.

| |                          |   | 2006    |   |   | 2005    |  
| | ------------------------ | - | ------- | - | - | ------- | -
| | Patent                   | $ | 24,000  |   | $ | 24,000  |  
| | Accumulated amortization |   | (16,800 | ) |   | (14,400 | )
| | Net book value           | $ | 7,200   |   | $ | 9,600   |  

In April 2001, the Company acquired a
  patent pending from certain stockholders which expands on the above patent.
  The acquisition agreement required the payment by the Company to the stockholders
  of $20,000. In addition, the Company was to issue to the stockholders: (i) 7,500
  shares of the Companys common stock upon the grant of a patent in connection
  with the acquired patent pending; and (ii) an additional 4,500 shares for each
  country in respect of which the Company grants a license of the acquired technology,
  for the first ten countries, and 3,000 shares for each additional country, to
  a maximum of 75,000 shares under the acquisition agreement. The Company was
  to also pay an ongoing royalty to the stockholders based on sales of products
  incorporating the technology as follows: (i) 4.5% of gross profits achieved
  by the Company on products incorporating the technology; and (ii) 15% of any
  licensing revenues or royalty payments earned by the Company on licenses of
  the acquired technology. The Company had agreed to use its best efforts to commercialize
  the acquired technology and to apply to the United States Patent Office for
  a grant of a patent relating to the patent pending. The agreement was cancelled
  due to the Companys default under the agreement on June 14, 2003 and as
  such, an impairment loss of $20,000 was recorded for the year ended June 30,
  2003.

In the event that facts and circumstances
  indicate that the carrying amount of an asset may not be recoverable and an
  estimate of future undiscounted cash flows is less than the carrying amount
  of the asset, an impairment loss will be recognized. Management's estimates
  of revenues, operating expenses, and operating capital are subject to certain
  risks and uncertainties which may affect the recoverability of the Company's
  investments in its assets. Although management has made its best estimate of
  these factors based on current conditions, it is possible that changes could
  occur which could adversely affect management's estimate of the net cash flow
  expected to be generated from its operations. At June 30, 2006, the Company
  believes that no significant impairment of the remaining intangibles has occurred
  and that no reduction of the estimated useful lives of such assets is warranted.

F-16

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|6. | Loans Payable
|-- | -------------

During the years ended June 30, 2006
  and 2005, several loans were granted from 5 parties. The loans are unsecured,
  non-interest bearing, and due on demand. The balance due at June 30, 2006 and
  2005 was $500 and $73,290, respectively.

|7. | Related Party Transactions
|-- | --------------------------

Consulting fees paid to an officer and
  director totaled $2,500 and $0 for the years ended June 30, 2006 and 2005, respectively.
  Consulting fees paid to an officer and director from inception through June
  30, 2006 totaled $2,500.

Consulting fees paid to a former officer
  and director totaled $30,000 and $60,000 for the years ended June 30, 2006 and
  2005, respectively. Consulting fees paid to a former officer and director from
  inception through June 30, 2006 totaled $588,000. The balance due to a former
  officer and director at June 30, 2006 and 2005 was $0 and $110,347, respectively.
  During the year ended June 30, 2006, a former officer and director settled accounts
  payable $146,330 in exchange for 187,500 commons 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, 2006 and 2005, included in
  accounts payable was $28 and $7,587, respectively, owed to a former officer
  and director of the Company.

|8. | Stockholders Equity
|-- | --------------------

The Board of Directors have the power
  and authority to fix by resolution any designation, class, series, voting power,
  preference, right, qualification, limitation, restriction, dividend, time and
  place of redemption, and conversion right with respect to any stock of the Company.

F-17

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|9. | Stock Options
|-- | -------------

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

Information relating to stock options
  is as follows:

| |                                                           |  |           |   |   | Weighted | 
| | --------------------------------------------------------- |  | --------- | - | - | -------- | 
| |                                                           |  | Number of |   |   | Average  | 
| |                                                           |  | Shares    |   |   | Exercise | 
| | Under option, June 30, 2001                               |  | 177,500   |   | $ | 7.50     | 
| | Granted                                                   |  | 30,000    |   |   | .50      | 
| | Exercised  conversion of
      debt and accounts payable |  | (55,000   | ) |   | 1.50     | 
| | Cancelled                                                 |  | (27,500   | ) |   | 3.00     | 
| | Under option, June 30, 2002                               |  | 125,000   |   |   | 2.65     | 
| | Expired                                                   |  | (100,000  | ) |   | 2.20     | 
| | Cancelled                                                 |  | (25,000   | ) |   | 3.00     | 
| | Under option, June 30, 2003                               |  | -         |   |   | -        | 
| | Granted                                                   |  | -         |   |   | -        | 
| | Expired                                                   |  | -         |   |   | -        | 
| | Cancelled                                                 |  | -         |   |   | -        | 
| | Under option, June 30, 2004                               |  | -         |   |   | -        | 
| | Granted                                                   |  | -         |   |   | -        | 
| | Expired                                                   |  | -         |   |   | -        | 
| | Cancelled                                                 |  | -         |   |   | -        | 
| | Under option, June 30, 2005                               |  | -         |   |   | -        | 
| | Granted                                                   |  | -         |   |   | -        | 
| | Expired                                                   |  | -         |   |   | -        | 
| | Cancelled                                                 |  | -         |   |   | -        | 
| | Under option, June 30, 2006                               |  | -         |   |   | -        | 
| |                                                           |  |           |   |   |          | 
| |                                                           |  |           |   |  

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

F-18

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|10. | 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.

|11. | 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 by a valuation allowance.

The benefit for income taxes differs
  from the amount computed by applying the U.S. federal income tax rate to loss
  before income taxes for the years ended June 30 as follows:

| |                                                          |   | 2006    |   |   | 2005     |  
| | -------------------------------------------------------- | - | ------- | - | - | -------- | -
| |                                                          |   |         |   |   |          |  
| | Expected tax liability (benefit) at statutory
      rate | $ | (14,819 | ) | $ | (186,548 | )
| | State tax effects                                        |   | (2,615  | ) |   | (32,920  | )
| | Increase (decrease) in valuation allowance               |   | 17,434  |   |   | 219,468  |  
| |                                                          |   |         |   |   |          |  
| |                                                          | $ | -       |   | $ | -        |  

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

The following is a summary of deferred
  taxes:

| |                      |   | 2006       |   |   | 2005       |  
| | -------------------- | - | ---------- | - | - | ---------- | -
| |                      |   |            |   |   |            |  
| | Deferred tax assets: |   |            |   |   |            |  
| | Pre-opening costs    | $ | (1,090,125 | ) | $ | (1,072,691 | )
| | Valuation allowance  |   | 1,090,125  |   |   | 1,072,691  |  
| |                      |   |            |   |   |            |  
| |                      | $ | -          |   | $ | -          |  

F-19

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|12. | 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 Technologywithin the countries comprising the European Union and the Republic of China.
  Balsam also has the right to sub-license the right to manufacture, use and sell
  products embodying the Technology.

The consideration for the Agreement was
  as follows:

| | 1. | Balsam issued to the Company 5,000,000 restricted shares
        of its common stock; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 2. | Balsam must pay the Company the following royalties:
        (a) a sales royalty equal to 2% of gross profits from sales of all apparatus
        incorporating the Technology and/or commercial goods or products incorporating
        the Technology, (b) a license royalty equal to 5% of revenues received
        by Balsam from sub-licensing the Technology, and (c) a minimum royalty
        payment of $5,000 per month commencing on January 15, 2006, which is to
        be credited towards all royalty payments under the Agreement that have
        been paid by Balsam or become payable by Balsam during the course of the
        Agreement.

On January 14, 2006, the Company entered
  into an agreement (the Extension Agreement) with Balsam, to amend
  the terms of the Agreement dated November 13, 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. | Balsam issued to the Company 500,000 restricted shares
        of its common stock; and
| | -- | ---------------------------------------------------------------------------------------
| |    |                                                                                        
| | 2. | Balsam paid the Company $20,000.                                                       

The Technology and the Company patents
  and trademarks included in the Technology remain the property of the Company
  subject to the terms of the License granted under the Agreement. However, Balsam
  has a right of first refusal to acquire the intellectual property subject to
  the Agreement should the Company seek to dispose of the Technology during the
  currency of the Agreement. The Agreement supersedes all prior arrangements and
  agreements between the Company and Balsam in respect of the Technology.

F-20

---

NORPAC TECHNOLOGIES, INC.(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

|13. | Convertible Notes:
|--- | ------------------

During the period from January through
  June 2003, the Company issued $550,000 of 10% convertible notes pursuant to
  Regulation S of the Securities Act of 1933. The convertible notes were due on
  or before December 31, 2005 and the holder of the note had the right to convert
  the note into the Companys common stock at any time prior to the maturity
  date. The note was convertible at the lesser of $.02 or 50% of the average trading
  price of the Companys common stock for the 10 trading days preceding the
  date of conversion. The proceeds and conversion of accounts payable, accounts
  payable-stockholder and due to stockholders of $550,000 were allocated between
  the note and the beneficial conversion, which were valued using the Black Scholes
  pricing model. The resulting fair value of the beneficial conversion of the
  note payable into common stock as defined in Emerging Issues Task Force (EITF)
  00-27 "Application of Issue No. 98-5 to Certain Convertible Instruments," in
  the amount of $550,000 was being amortized over the life of the note using the
  straight-line method, which approximated the interest method. The entire proceeds
  were allocated to the beneficial conversion right.

On April 23, 2004, an officer/stockholder
  converted a portion of a convertible note in the amount of $20,000. In accordance
  with the convertible note agreement, the Company had issued 1,000,000 common
  shares for the conversion and an additional 8,901 common shares to satisfy the
  accrued interest payable on the note.

On May 26, 2005, an officer/stockholder
  converted the balance of his convertible notes in the amount of $76,490. In
  accordance with the convertible note agreement, the Company issued 3,824,500
  common shares for the conversion and an additional 647,337 common shares to
  satisfy the accrued interest payable on the notes.

In June 2005 all of the remaining note
  holders converted their convertible notes in the amount of $453,510. In accordance
  with the convertibles note agreements the Company issued 22,675,500 common shares
  for the conversion and an additional 3,441,053 common shares to satisfy the
  accrued interest payable on the notes.

F-21

---

|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, 2006 that have materially affected, or
are reasonably likely to materially affect, our internal control over financial
reporting.

|ITEM 8B. | OTHER INFORMATION.
|-------- | ------------------

None.

23

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PART III

|ITEM 9. | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
      CONTROL PERSONS; **COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT.**
|------- | --------------------------------------------------------------------------------------------------------------------------------

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 | Position                                                                                            
| | ---------------- | --- | ----------------------------------------------------------------------------------------------------
| |                  |     |                                                                                                     
| | John P. Thornton | 73  | 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 business man 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.

Committees of the Board Of Directors

We presently do not have an audit committee, compensation
committee, nominating committee, an executive committee of our board of
directors, stock plan committee or any other committees. However, our board of
directors will consider establishing various committees during the current
fiscal year.

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.

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.

Audit Committee Financial Expert

Our board of directors has determined that none of the audit
committee members can be classified as an "audit committee financial expert" as
defined in Item 401(e) of Regulation S-B. Our board of directors does not
contain a member that can be classified as an "audit committee financial expert"
under the referenced definition. Our board

24

---

of directors believes that attracting and retaining board
members that could be classified as an "audit committee financial expert" is
unlikely at this time due to the high cost of such director candidates.

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, 2006, all Reporting Persons
complied with all Section 16(a) filing requirements applicable to them.

|ITEM 10. | EXECUTIVE COMPENSATION.
|-------- | -----------------------

Summary Compensation Table

The table below summarizes all compensation awarded to, earned
by, or paid to our executive officers for all services rendered in all
capacities to us for the fiscal period ended June 30, 2006.

SUMMARY COMPENSATION TABLEANNUAL
      COMPENSATION
    LONG TERM COMPENSATIONName
    Title
    Year
    Salary
    Bonus
    OtherAnnual Compensation
    Awards
    Payouts
    All Other CompensationRestricted Stock Awarded
    Options / SARs* (#)
    LTIP payouts ($)John P. Thornton
    President, Secretary,
      Treasurer, CEO and CFO, and Director
    2006 2005 2004
    $2,500 $0 $0
    $0 $0 $0
    $0 $0 $0
    0 0 0
    0 0 0
    $0 $0 $0
    $0 $0 $0Bruce Leitch
    Former President, Former
      Secretary, Former Treasurer, Former CEO, Former CFO, and
      Former Director(1)(2)
    2006 2005 2004
    $30,000 $60,000 $60,000
    $0 $0 $0
    $0 $0 $0
      0 
        0 0
    0 0 0
    $0 $0 $0
    $0 $0 $0


Notes:

|(1) | Mr. Leitch 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. Since January 1, 2003 Mr. Leitch had
      received $5,000 per month for his management consulting services provided
      to us until his resignation as our officers and director on June 7,
      2006.                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | We issued to Mr. Leitch a Convertible Note in the
      principal amount of $96,490 in settlement of amounts owed to Mr. Leitch
      for accrued but unpaid consultant fees. Mr. Leitch subsequently converted
      $20,000 of the principal amount of the Convertible Note on April 23, 2004
      in exchange for 1,008,901 shares of our common stock, including accrued
      interest payable on the Convertible Note. On May 26, 2005, Mr. Leitch
      converted the remaining $76,490 of the Convertible Notes held by him in
      exchange for 4,471,837 shares of common stock, including all accrued
      interest payable.

25

---

STOCK OPTION GRANTS

The following table sets forth information with respect to
stock options granted to each of our directors and officers during our most
recent fiscal year ended June 30, 2006:

OPTION / SAR GRANTS IN LAST FISCAL YEAR
        (INDIVIDUAL GRANTS)Name
      Number of Securities 
        Underlying
      Options Granted
      % of Total 
        Options Granted to
      Employees
      Exercise Price (per Share)
      Expiration DateJohn P. Thornton, President, Secretary,
      Treasurer and Director
    Nil
    N/A
    N/A
    N/ABruce Leitch, Former President, Former Secretary,
      Former Treasurer and Former Director
    Nil
    N/A
    N/A
    N/A


EXERCISES OF STOCK OPTIONS AND YEAR-END OPTION VALUES

The following is a summary of the share purchase options
exercised by our officers, directors and employees during the financial year
ended June 30, 2006:

AGGREGATED OPTION/SAR EXERCISES DURING THE
        LAST FINANCIAL YEAR END AND FINANCIAL
      YEAR-END OPTION/SAR VALUESName
      Common Shares Acquired on
      Exercise ($)
      Value Realized ($)
      Unexercised 
        Options at Financial
      Year-End (#) exercisable / unexercisable
      Value of Unexercised In- 
        The-Money
      Options/SARs at Financial Year-End ($) exercisable /
      unexercisableJohn P. Thornton, President, Secretary,
      Treasurer and Director
    Nil
    N/A
    Nil/Nil
    NilBruce Leitch, Former President, Former Secretary, Former
      Treasurer and Former Director
    Nil
    N/A
    Nil/Nil
    Nil


26

---

|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 10,
2006 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,
      Secretary, Treasurer and Director 12500 Brunswick Place
      Richmond, BC V7E 6J3
    3,000,000 Direct
    8.5%Common Stock
    All Officers and Directors as a
      Group (1 person)
    3,000,000
    8.5%Holders of More than 5% of our Common
      StockCommon Stock
    John P. Thornton President, Secretary,
      Treasurer and Director 12500 Brunswick Place Richmond, BC V7E
      6J3
    3,000,000 Direct
    8.5%


Notes

| | (1) | Applicable percentage of ownership is based on 35,165,390
      shares of common stock issued and outstanding as of October 10, 2006,
      together with securities exercisable or convertible into shares of common
      stock within 60 days of October 10, 2006 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 10, 2006 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.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Security Ownership of Management

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

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
of the most recently completed fiscal year. In June, 2000, our board of
directors approved the 2000 Stock Option Plan (the Plan). Under the Plan,
options to purchase up to 3,600,000 shares of our common stock may be granted to
our employees, officers, directors, and eligible consultants of our company. The
Plan provides that the option price be the fair market value of the stock at the
date of grant as determined by the board of directors. Options granted become
exercisable and expire as determined by the board of directors. For a more
detailed discussion, please refer to Note 9 to our financial statements attached
to this Annual Report.

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EQUITY COMPENSATION PLAN INFORMATION AS AT
        JUNE 30, 2006Plan 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 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
    NilTotal
    Nil
    N/A
    Nil


2000 Stock Option Plan

On June 21, 2000, we established our 2000 Stock Option Plan.
The purpose of the Plan is to advance the interests of our company and our
stockholders by strengthening our ability to obtain and retain the services of
the types of employees, consultants, officers and directors who will contribute
to our long term success and to provide incentives which are linked directly to
increases in stock value which will inure to the benefit of all our
stockholders. The Plan is administered by our board of directors or by a
committee of two or more non-employee directors appointed by the board of
directors (the "Administrator"). Subject to the provisions of the Plan, the
Administrator has full and final authority to grant the awards of stock options
and to determine the terms and conditions of the awards and the number of shares
to be issued pursuant thereto. Options granted under the Plan may be either
"incentive stock options," which qualify for special tax treatment under the
Internal Revenue Code of 1986, as amended, (the Code) or nonqualified stock
options.

All of our employees and members of our board of directors are
eligible to be granted options. Individuals who have rendered or are expected to
render advisory or consulting services to us are also eligible to receive
options. The maximum number of shares of our common stock with respect to which
options or rights may be granted under the Plan to any participant is 3,600,000
shares, subject to certain adjustments to prevent dilution. The maximum
aggregate number of shares of our common stock that may be optioned and sold
under the Plan increase effective the first day of each of our fiscal quarters,
beginning with the fiscal quarter commencing October 1, 2000, by an amount equal
to the lesser of: (1) The number of shares which is equal to 15% of the
outstanding shares of our common stock on the first day of the applicable fiscal
quarter, less the number of shares of common stock which may be optioned and
sold under the Plan prior to the first day of the applicable fiscal quarter; and
(2) a lesser number of shares of Common Stock determined by our board of
directors. The aggregate number of shares underlying options granted to any
eligible person during any calendar year may not exceed 3% of our issued and
outstanding common shares.

The exact terms of the option granted are contained in an
option agreement between us and the person to whom such option is granted.
Eligible employees are not required to pay anything to receive options. The
exercise price for incentive stock options and non-qualified stock options must
be no less than 85% of the fair market value of the common stock on the date of
grant. An option holder may exercise options from time to time, subject to
vesting. Options will vest immediately upon death or disability of a participant
and upon certain change of control events.

The Administrator may amend the Plan at any time and in any
manner, subject to the following: (1) no recipient of any award may, without his
or her consent, be deprived thereof or of any of his or her rights thereunder or
with respect thereto as a result of such amendment or termination; and (2) no
outstanding stock options may be modified in any manner that would cause such
option not to qualify as an incentive stock option for the purposes of Section
422 of the Code.

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The Plan terminates on June 21, 2010 unless sooner terminated
by action of the board of directors. All awards granted under the Plan expire
ten years from the date of grant, or such shorter period as is determined by the
Administrator. No option is exercisable by any person after such expiration. If
an award expires, terminates or is canceled, the shares of our common stock not
purchased thereunder shall again be available for issuance under the Plan.

We filed a registration statement on Form S-8 under the
Securities Act of 1933, as amended, to register the 3,600,000 shares of our
common stock reserved for issuance under the Plan on October 11, 2001.

|ITEM 12. | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS.
|-------- | -----------------------------------------------------

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, 2006, totaled $588,000.

Consulting fees paid to Mr. Leitch totaled $30,000 and $60,000
for the years ended June 30, 2006 and 2005, respectively. The balance due Mr.
Leitch at June 30, 2006 and 2005 was $0 and $110,347, 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.

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|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.(6)                                                                                                                                               
|3.3            | Bylaws as amended.(6)                                                                                                                                                
|10.1           | Sale of Patent Agreement dated as of June 15, 1998
      between Cool Can Technologies, Inc. an Edward Halimi.(1)                                                    
|10.2           | Patent and Technology Transfer
      Agreement dated April 18, 2001 among Cool Can Technologies, Inc., David
      St. James, Melanie St. James and Edward Halimi.(2)
|10.3           | Exclusive License Agreement dated June 5, 2002
      between Balsam Ventures, Inc., and Cool Can Technologies Inc.(3)                                                
|10.4           | Form of Convertible Note.(5)                                                                                                                                         
|10.5           | Form of Subscription Agreement between Cool Can
      Technologies, Inc. and the Convertible Noteholders.(5)                                                         
|10.6           | Exclusive License Agreement dated
      for reference November 30, 2003 between Balsam Ventures, Inc., and Cool
      Can Technologies Inc.(4)                       
|10.7           | Agreement and Plan of Merger Agreement dated effective
      May 21, 2004 among Cool Can Technologies, Inc. and NorPac Technologies,
      Inc.(7)                   
|10.8           | Extension Agreement dated as of
      January 14, 2006 between NorPac Technologies, Inc. and Balsam Ventures,
      Inc.(9)                                          
|14.1           | Code of Ethics.(8)                                                                                                                                                   
|31.1           | Certification
      of Chief Executive Officer and Chief Financial Officer as adopted pursuant
      Section 302 of the Sarbanes-Oxley Act of 2002.                  
|32.1           | Certification of Chief
      Executive Officer and Chief Financial Officer as adopted pursuant Section
      906 of the Sarbanes-Oxley Act of 2002.                  

Notes:

|(1) | Filed with the SEC as an exhibit to our Registration
      Statement on Form 10SB originally filed on August 26, 1999, as
    amended.
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(2) | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB for the year ended June 30, 2001.                          
|(3) | Filed with the SEC on June 20, 2002 as an exhibit to our
      Current Report on Form 8-K.                                            
|(4) | Filed with the SEC on January 9, 2004 as an exhibit to
      our Current Report on Form 8-K.                                          
|(5) | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB for the year ended June 30, 2002.                          
|(6) | Filed with the SEC as an exhibit to our Annual report on
      Form 10-QSB for the fiscal period ended September 30, 2003.            
|(7) | Filed with the SEC on July 8, 2004 as an exhibit to our
      Current Report on Form 8-K.                                             
|(8) | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB for the year ended June 30, 2003.                          
|(9) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed January 19, 2006.                                      

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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, 2006 and 2005 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, 2006**
      Year Ended June 30, 2005Audit Related Fees
      $10,735
    $15,255Tax Fees
      -
    -All Other Fees
      -
    $189Total
      **$10,735**
    $15,444


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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 13, 2006 |  | /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                                                            

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 13, 2006 |  | /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                                                            

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