CelLynx 10QSB 2005 Q1 Quarterly report (small business)

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

FORM 10-QSB

(Mark One)

x Quarterly Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
For the quarterly period endedSeptember 30, 2004

¨ Transition Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934
For the transition period from _____ to _____

COMMISSION FILE NUMBER 000-27147

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

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

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

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:As of December 17, 2004, the Issuer had 1,977,000 shares of common stock outstanding.

Transitional Small Business Disclosure Format (check one): Yes ¨     No x

PART 1 - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the quarterly period ended September 30, 2004 are not necessarily indicative of the results that can be expected for the year ending June 30, 2005.

As used in this Quarterly Report, the terms "we", "us", "our", and “our company” mean NorPac Technologies, Inc. (formerly Cool Can Technologies, Inc.), unless otherwise indicated.

2

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

BALANCE SHEETS

ASSETS		September 30,			June 30,
		2004			2004
		(unaudited)			(audited)
CURRENT ASSETS:
Cash	$	1,355		$	256
Available-for-sale securities		2,940			18,000
Total Current Assets		4,294			18,256
AVAILABLE-FOR-SALE SECURITIES		210,000			300,000
INTANGIBLES, NET		11,400			12,000
	$	225,695		$	330,256
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	183,873		$	155,069
Loan payable		27,892			25,218
Accounts payable, stockholder		68,137			59,006
Accrued interest		88,100			74,741
Total Current Liabilities		368,002			314,034
CONVERTIBLE NOTES, NET OF ORIGINAL ISSUE DISCOUNT		300,051			254,778
STOCKHOLDERS’ DEFICIT:
Common stock, .001 par value, 200,000,000 shares authorized,
1,977,000 and 1,977,000 shares issued and outstanding, respectively		1,977			1,977
Additional paid in capital		1,739,384			1,739,384
Deficit accumulated during the development stage		(2,206,959	)		(2,059,917	)
Accumulated other comprehensive income		23,240			80,000
		(442,358	)		(238,556	)
	$	225,695		$	330,256

See Notes to Financial Statements.

F-1

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)

								Period From
								Inception
								(April 1, 1998)
		Three Months Ended						Through
		September 30,						September 30,
		2004			2003			2004
Revenues	$	-		$	-		$	238,000
Administrative pre-opening and
development expenses		(50,211	)		(35,382	)		(1,350,515	)
Interest expense		(58,766	)		(60,719	)		(412,379	)
Impairment of intangible		-			-			(20,000	)
Stock compensation expense		-			-			(624,000	)
Realized loss on available-for-sale securities		(38,065	)		-			(38,065	)
Net loss		(147,042	)		(96,101	)		(2,206,959	)
Comprehensive income (loss)
Unrealized gain (loss) on available-for-sale securities, net of
reclass adjustment of $38,065, $0, and $38,065, respectively		(56,760	)		(3,000	)		23,240
Comprehensive loss	$	(203,802	)	$	(99,101	)	$	(2,183,719	)
Basic loss per common share	$	(.12	)	$	(.10	)	$	(2.51	)
Diluted loss per common share	$	(.12	)	$	(.10	)	$	(2.51	)
Weighted average outstanding shares		1,977,000			967,648			880,018

See Notes to Financial Statements.

F-2

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

STATEMENTS OF CASH FLOWS
(Unaudited)

								Period From
								Inception
								(April 1, 1998)
		Three Months Ended						Through
		September 30,						September 31,
		2004			2003			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(147,042	)	$	(96,101	)	$	(2,206,959	)
Amortization expense		600			600			12,600
Compensation expense, options to nonemployees		-			-			504,000
Receipt of available-for-sale securities for
agreement extension		-			-			(238,000	)
Excess of fair value of common stock issued over
carrying amount of debt		-			-			120,000
Realized loss on investments		38,025			-			38,025
Amortization of original issue discount		45,273			46,981			320,051
Impairment loss on intangibles		-			-			20,000
Increase (decrease) in accounts payable		28,804			(18,626	)		252,671
Increase in accrued interest		13,359			13,738			90,691
Increase in accounts payable, stockholders		9,131			5,725			302,136
Decrease in due to stockholders		-			(326	)		20,776
		(11,850	)		(48,009	)		(764,009	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of available-for-sale securities		10,275			-			10,275
Purchase of intangibles		-			-			(44,000	)
		10,275			-			(33,725	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Collection of subscription receivable		-			10,000			10,000
Issuance of common stock		-			-			329,769
Net proceeds from due to stockholders		-			-			348,928
Proceeds from loan payable		2,674			-			27,892
Issuance of convertible notes		-			-			82,500
		2,674			10,000			799,089
Increase (decrease) in cash		1,099			(38,009	)		1,355
Cash:
Beginning		256			55,043			-
Ending	$	1,355		$	17,034		$	1,355
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash paid for interest	$	134		$	-		$	951
NONCASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for amount due to stockholders	$	-		$	-		$	205,000
Stock issued for accounts payable	$	-		$	-		$	10,000
Conversion of accounts payable, stockholders and
due to stockholders and issuance of subscription
receivable for convertible notes	$	-		$	-		$	467,500

See Notes to Financial Statements.

F-3

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

Note 1. Nature of Business and Summary of Significant Accounting Policies: Financial Statements: The balance sheet of Norpac Technologies, Inc. (the Company) as of September 30, 2004 and the statements of operations and cash flows for the periods ended September 30, 2004 and 2003 have been prepared by the Company, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows at September 30, 2004 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2004 audited financial statements. The results of operations for the period ended September 30, 2004 are not necessarily indicative of the operating results for the full year. Organization and activities: Norpac Technologies, Inc. (the Company) was originally incorporated on April 1, 1998 in the state of Minnesota. On July 12, 2004 the Company was reorganized and became a Nevada Corporation (Note 11). 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 parts therefore. 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 operations. Research and development costs are expensed as incurred. A summary of the Company’s significant accounting policies follows: Income taxes: Deferred taxes are provided on the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of the enactment.

F-4

Note 1. Nature of Business and Summary of Significant Accounting Policies (continued): Intangibles: Intangible assets (Note 6) are amortized using the straight-line method over 10 years. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” as circumstances dictate, the Company evaluates whether changes have occurred that would require revision of the remaining estimated lives of recorded long-lived assets, including intangibles, or render those assets not recoverable. If such circumstances arise, recoverability is determined by comparing the undiscounted net cash flows of long-lived assets to their respective carrying values. The amount of impairment, if any, is measured based on the projected discounted cash flows using an appropriate discount rate. At this time, the Company believes that no significant impairment of the remaining intangibles has occurred and that no reduction of the estimated useful lives of such assets is warranted (see Note 6). Amortization expense for each of the quarters ended September 30, 2004 and 2003 was $600. Accumulated amortization was $12,600 and $12,000 at September 30, 2004 and June 30, 2004, respectively. Estimated annual amortization expense is $2,400 for each of the next five years. Stock-based compensation: The Company applies Accounting Principles Board (APB) Opinion 25 “Accounting for Stock Issued to Employees” and related Interpretations in accounting for its stock options. Accordingly, no compensation cost has been recognized for stock options issued to employees for the three months ended September 30, 2004 and 2003 or the period from inception through September 30, 2004. Stock options and warrants issued to nonemployees are recorded at fair value, as required by SFAS No. 123, using the Black Scholes pricing model. Had compensation costs for the Company's stock options been determined based on the fair value at the grant dates consistent with the method of SFAS No. 123, the Company's net loss and loss per common share would have been changed to the pro forma amounts indicated below:

								Perod From
								Inception (April
								1, 1998)
		Three Months Ended						Through June
		September 30,						30,
		2004			2003			2004
Net loss	$	(147,042	)	$	(96,101	)	$	(2,206,959	)
Pro forma net loss		(147,042	)		(96,101	)		(2,206,959	)
Stock based compensation
As reported		0			0			0
Pro forma		0			0			0
Basic and diluted loss per common share
As reported		($0.12	)		($ 0.10	)		($ 2.51	)
Pro forma		($0.12	)		($ 0.10	)		($ 2.52	)

The fair value of each option was estimated using the Black-Scholes option-pricing model with the following assumptions for the three months ended September 30, 2004 and 2003:

Risk-free interest rate	2.5-3.0%
Expected lives	1-2 years
Volatility	95%

F-5

Note 1. Nature of Business and Summary of Significant Accounting Policies (continued): Loss per common share: Loss per share is computed based on the weighted average number of common shares outstanding. Potential issuances that would reduce loss per common share are considered anti-dilutive and are excluded from the computation. Advertising: Advertising costs, if any, are expensed as they occur. Advertising costs were $0 for each of the three months ended September 30, 2004 and 2003, and $14,662 for the period from inception (April 1, 1998) through September 30, 2004. Comprehensive loss: SFAS No. 130 “Reporting Comprehensive Income” establishes standards for reporting and presentation of comprehensive loss and its components in a full set of financial statements. Comprehensive loss consists of the Company’s net loss and unrealized gain (loss) on available-for-sale securities and is presented in the statements of operations and comprehensive loss. Statement 130 only requires additional disclosure in the financial statements; it does not affect the Company’s financial position or results of operations. Estimates and assumptions: The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Significant estimates include the valuation of stock issued. Actual results could differ from these estimates. Start-up costs: Start-up costs incurred in connection with start-up activities are charged to expense as incurred. Carrying value of financial instruments: The carrying value of the Company’s financial instruments approximates fair value at September 30, 2004 and June 30, 2004.

F-6

Note 2. Income Taxes: For income tax purposes, pre-opening costs are generally deferred and amortized to expense in future tax returns. Accordingly, the Company has no tax loss carryforwards. For financial reporting purposes, realization of the value of book vs. tax temporary differences is dependent upon the Company generating sufficient taxable income in future years. Because of the development stage nature of the Company, lack of operating history and potential future stock sales (which may limit the value of loss carryforwards) management has eliminated the deferred tax value of pre-opening costs by a valuation allowance. The benefit for income taxes differs from the amount computed by applying the U.S. federal income tax rate to loss before income taxes for the three months ended September 30:

 

		2004			2003
Expected tax (benefit) at statutory rate	$	(52,935	)	$	(32,700	)
State tax effects		(10,293	)		(5,800	)
Increase (decrease) in valuation allowance		63,228			38,500
	$	-		$	-

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:

		September 30,			June 30,
		2004			2004
Deferred tax assets:
Pre-opening costs	$	916,451		$	853,223
Valuation allowance	$	(916,451	)		(853,223	)
	$	-		$	-

 

Note 3.

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

Note 4.

Related Party Transactions: The Company currently has a consulting arrangement with an officer/stockholder. Such consulting fees totaled $15,000 for the three months ended September 30, 2004 and 2003, respectively. Consulting fees from inception through September 30, 2004 totaled $513,000. In 2003, amounts due to the officer/stockholder for consulting services rendered totaling $137,510 were transferred to third parties to settle debts of the officer/stockholder (which were subsequently converted into convertible notes, and $96,490 was converted into convertible notes by the officer/stockholder (Note 9). The balance due to the officer/stockholder at September 30, 2004 and June 30, 2004 was $68,137 and $59,006, respectively. Amounts due to the officer/ stockholder are unsecured, non-interest bearing, and due on demand.

F-7

Note 5.	Available-for-sale Securities: The Company records available-for-sale securities at market value. In November 2002, the Company received securities valued at $63,000. Pursuant to the license agreement described in Note 7, the Company received additional securities valued at $175,000. In August and September of fiscal year 2005, the Company sold 230,000 shares at a loss of $38,685 and received proceeds of $10,275. The remaining securities consist of 5,070,000 shares of Balsam Ventures, Inc. The market value of the securities was $212,940 as of September 30, 2004. Accordingly, the Company recorded an unrealized loss on available-for-sale securities.
Note 6.	Intangibles: A United States patent for a self-chilling beverage container and parts therefore 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. 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) 150,000 shares of the Company’s common stock upon the grant of a patent in connection with the acquired patent pending; and (ii) an additional 90,000 shares for each country in respect of which the Company grants a license of the acquired technology, for the first ten countries, and 60,000 shares for each additional country, to a maximum of 1,500,000 shares under the acquisition agreement. The Company was to also pay an ongoing royalty to the stockholders based on sales of products incorporating the technology as follows: (i) 4.5% of gross profits achieved by the Company on products incorporating the technology; and (ii) 15% of any licensing revenues or royalty payments earned by the Company on licenses of the acquired technology. The Company had agreed to use its best efforts to commercialize the acquired technology and to apply to the United States Patent Office for a grant of a patent relating to the patent pending. The agreement was cancelled due to the Company’s default under the agreement on June 14, 2003 as such, an impairment loss of $20,000 was recorded for the year ended June 30, 2003.
Note 7.	License Agreement: The Company has entered into an exclusive licensing agreement (the "Agreement") with Balsam Ventures, Inc. ("Balsam"), dated for reference November 30, 2003, granting Balsam the exclusive right and license (the “License”), for a period of 40 years, to use, commercialize and exploit the Company’s proprietary trademarks, patents, process information, technical information, designs and drawings associated with the Company’s self-chilling beverage container technology (the "Technology") including the right to manufacture, use and sell apparatus and products embodying the Technology within the countries comprising the European Union and the Republic of China. Balsam also has the right to sub-license the right to manufacture, use and sell products embodying the Technology. The consideration for the Agreement is as follows:

1.

Balsam must issue 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.

F-8

Note 7.	License Agreement (Continued): The Technology and the Company patents and trademarks included in the Technology remain the property of the Company subject to the terms of the License granted under the Agreement. However, Balsam has a right of first refusal to acquire the intellectual property subject to the Agreement should the Company seek to dispose of the Technology during the currency of the Agreement. The Agreement supersedes all prior arrangements and agreements between the Company and Balsam in respect of the Technology.
Note 8.	Loan Payable: The Company received a loan from a company controlled by an independent consultant. The loan is unsecured, non-interest bearing, and due on demand. The balance due at September 30 2004 and June 30, 2004 was $27,892 and $25,218.
Note 9.	Convertible Notes: During the period from January through June 2003, the Company issued $550,000 of 10% convertible notes pursuant to Regulation S of the Securities Act of 1933. The convertible notes are due on or before December 31, 2005 and the holder of the note has the right to convert the note into the Company’s common stock at any time prior to the maturity date. The note is convertible at the lesser of $.02 or 50% of the average trading price of the Company’s common stock for the 10 trading days preceding the date of conversion. The proceeds and conversion of accounts payable, accounts payable-stockholder and due to stockholders of $550,000 were allocated between the note and the beneficial conversion, which were valued using the Black Scholes pricing model. The resulting fair value of the beneficial conversion of the note payable into common stock as defined in Emerging Issues Task Force (EITF) 00-27 "Application of Issue No. 98-5 to Certain Convertible Instruments", in the amount of $550,000 is being amortized over the life of the note using the straight-line method, which approximates the interest method. The entire proceeds were allocated to the beneficial conversion right. The notes may be converted at the holder's sole option. The Company may at its option elect to pay a portion of the interest due by issuing the Company’s common stock as defined in the convertible note agreement. On April 23, 2004, an officer/stockholder converted a portion of a convertible note in the amount of $20,000. In accordance with the convertible note agreement, the Company has issued 1,000,000 common shares for the conversion and an additional 8,901 common shares to satisfy the accrued interest payable on the note. The fair value of the beneficial conversion is as follows:

		September 30,			June 30,
		2004			2004
Outstanding convertible notes payable	$	530,000		$	530,000
Less: beneficial conversion		(229,949	)		(275,222	)
Convertible notes, net of original issue discount	$	300,051		$	254,778

The convertible notes subscription receivable of $10,000 was collected during the months of July and August 2003.

Note 10.

Company’s Continued Existence: The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has sustained substantial losses and is still in the development stage. Additional funding will be necessary to continue development and marketing of the product. The Company intends to arrange for the sale of additional shares of stock to obtain additional operating capital for at least the next twelve months. There can be no assurance the Company will be able to raise the necessary capital to continue in business.

F-9

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD-LOOKING STATEMENTS

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

OVERVIEW

We are in the business of developing and marketing a patented unique proprietary technology which is intended to allow for the licensing and manufacture of a commercially viable self-chilling beverage container. We are currently in the development stage of our business. We are in the process of taking our planned product from the conceptual stage of development to the production of a prototype of a self-chilling beverage container that we can use for testing purposes. If our testing efforts are successful, we will then proceed to the marketing phase of our plan of operations 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 from sales of our products to date. Our ability to pursue our plan of operations, as discussed below, is contingent upon us achieving substantial financing, of which there is no assurance.

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

In November, 2003 we entered into a license agreement (the “License Agreement”) with Balsam Ventures, Inc. (“Balsam”), pursuant to which we granted Balsam an exclusive license (the “License”) for a term of 40 years to manufacture, use, exploit and sell our proprietary technology within the countries comprising the European Union and China (the “Exclusive Region”). We also granted Balsam a right of first refusal (the “Right of First Refusal”) to purchase our proprietary technology and to license that technology for countries that are not a party to the North American Free Trade Agreement and are outside of the Exclusive Region. In consideration of the grant of the License and Right of First Refusal, Balsam agreed to:

(1)	issue 5,000,000 shares of its common stock to us; and
(2)	pay us the following royalties:
	(a)	a sales royalty equal to 2% of gross profits from sales of all apparatus incorporating our proprietary technology and/or commercial goods or products incorporating our proprietary technology, and

3

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

We are to receive minimum royalty payments of $5,000 per month under the License Agreement, commencing on January 15, 2006. Any minimum royalty payments made to us are to be credited towards all other royalties payable by Balsam under the License Agreement.

The License Agreement supersedes a prior licensing agreement (the “Original License Agreement”) that we had with Balsam dated June 5, 2002.

PLAN OF OPERATION

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

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

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

2.

The second phase of our plan of operations involves consultation and feedback with all parties involved in the production and handling of our planned self-chilling beverage container. This phase would be undertaken upon completion of phase one, as outlined above. Consultation would include meeting and discussing our progress to date with aluminum can manufacturers, filler manufacturers, beverage canners and recycling entities. The focus of the consultation would be to determine what auxiliary equipment will be required for production of our planned self-chilling beverage containers and to develop blueprints and estimated costs for full-scale production.

3.

The third phase of our plan of operations is to market and pursue licensing of our Cool Can technology. This phase is anticipated to include presentation of product-ready samples to the beverage industry. We would seek out qualified candidates for licensing of the product in various countries and/or territories. We plan to approach beverage manufacturers for joint venture opportunities in order to drive consumer trials and to sample the finished product in the market.

4

We anticipate spending approximately $690,000 over the next twelve months, of which $380,000 is anticipated to be spent over the next six months, subject to our receiving the necessary financing to enable us to pursue our plan of operations. We will not be able to proceed with our plan of operations unless we achieve significant additional financing. If we achieve sufficient additional financing, of which there is no assurance, then the estimated cost and timeframe for completion of each of the above components of our plan of operations will be as follows:

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

As at September 30, 2004, we had cash of $1,355 and a working capital deficit of $363,708. Accordingly, we will require additional financing in order to proceed with our plan of operations, see “Liquidity and Capital Resources” below. If we do not have sufficient funds to pursue our stated plan of operations, then we will scale back our plan of operations to concentrate solely on the product development phase of our plan of operations. In this event, we will pursue product development to the extent of our financial resources.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2004 Compared To Three Months Ended September 30, 2003

First Quarter Summary

	Three Months Ended September 30
			Percentage
	2004	2003	Increase / (Decrease)
Revenue	-	-	-
Expenses	($147,042)	($96,101)	53%
Net Income (Loss)	($147,042)	($96,101)	53%

Revenues

We do not anticipate earning revenues from the sale of our products until such time as we have completed commercial development of products incorporating our Cool Can technology. We did not generate any revenues during the three months ended September 30, 2004. Our revenues to date have consisted of licensing fees received by us from the licensing of our Cool Can product.

We have not earned any revenues from sales of our products to date and have incurred losses of $2,206,959 since our inception. We are presently in the development stage of our business and we can provide no assurance that we will be able to complete commercial development or successfully sell or license products incorporating our Cool Can technology once development is complete.

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Operating Expenses

Our operating expenses for the quarterly periods ended September 30, 2004 consisted of the following:

	Three Months Ended September 30
			Percentage
	2004	2003	Increase / (Decrease)
Selling, General and	($50,211)	($35,382)	41.9%
Administrative Expenses
Interest Expense	($58,766)	($60,719)	(3.2%)
Realized Loss on available-for-sale	($38,065)	-	-
securities
Total Operating Expenses	($147,042)	($96,101)	53%

The increase in our operating expenses during the first quarter ended September 30, 2004 was primarily due to a realized loss on available-for-sale securities incurred during the quarter and an increase in professional fees incurred due to our re-organization activites. See Note 5 to our interim financial statements for the period ended September 30, 2004 included in this Quarterly Report.

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

Net Loss

	First Quarter Ended September 30
			Percentage
	2004	2003	Increase / (Decrease)
Net Loss	($147,042)	($96,101)	53%

Our net loss for the quarter was comprised entirely of operating expenses. The increase in net loss is due primarily to the fact that we recorded a realized loss on available-for-sale securities during the quarter and incurred an increase in professional fees due to our reorganization-activities.

LIQUIDITY AND FINANCIAL CONDITION

Working Capital

					Percentage
	At September 30, 2004		At June 30, 2004		Increase / (Decrease)
Current Assets	$4,294		$18,256		(76.4%	)
Current Liabilities	$368,002		$314,034		17.1%
Working Capital (Deficit)	($363,708	)	($295,778	)	22.9%

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Cash Flows

	Three Months Ended September 30
	2004	2003
Cash Flows from (used in) Operating Activities	($11,850)	($48,009)
Cash Flows from (used in) Investing Activities	$10,275	-
Cash Flows from (used in) Financing Activities	$2,674	$10,000
Net Increase (decrease) in Cash During Period	$1,099	($38,009)

Our current monthly cash requirements are approximately $20,000 per month. Our current cash reserves are only sufficient to enable us to operate on a short term basis. In addition, we require approximately $690,000 in order to carry out our plan of operations over the next twelve months. Accordingly, we will immediately require additional financing if we are to continue as a going concern and to finance our business operations. We anticipate that any additional financing would be through the sales of our common stock or other equity-based securities. We are presently in the process of negotiating private placements of securities to raise working capital to finance our operations. However, we do not have any arrangements in place for the sale of any of our securities and there is no assurance that we will be able to raise the additional capital that we require to continue operations. In the event that we are unable to raise additional financing on acceptable terms, we intend to reduce our product development efforts and may implement additional actions to reduce expenditures.

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 operations. Our future financial results are uncertain due to a number of factors, many of which are outside of our control. These factors include, but are not limited to:

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

The financial statements accompanying this quarterly report contemplate our continuation as a going concern. However, we have sustained substantial losses and are still in the development stage. Additional funding will be necessary to continue development and marketing of our product. 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 our business.

OFF-BALANCE SHEET ARRANGEMENTS

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

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RISK FACTORS

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

Our ability to continue as a going concern and realize the carrying value of our assets is dependent upon our ability to obtain additional financing, restructure our debt, streamline our business and reduce our costs. We are currently in the process of identifying sources of additional financing, negotiating changes to our debt structure and evaluating our strategic options. However, there are no assurances that these plans can be accomplished on satisfactory terms, or at all, or that they will provide sufficient cash to fund our operations, pay the principal of, and interest on, our indebtedness, fund our other liquidity needs or permit us to refinance our indebtedness. Our inability to obtain additional financing, restructure our indebtedness, streamline our business or reduce our costs would have a material adverse effect on our financial condition, results of operations and ability to satisfy our obligations, and may result in our pursuing a restructuring of our indebtedness either on a consensual basis or under the provisions of bankruptcy legislation, or liquidating our business and operations. Further, our inability to obtain additional financing or restructure our indebtedness, or our pursuing a restructuring of our indebtedness either on a consensual basis or under the provisions of bankruptcy legislation, may result in our securityholders losing all or a material portion of their investment in our securities.

We Require Additional Financing To Continue Our Plan Of Operations

Our plan of operations 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 operations which will require an estimated $690,000 to be spent over the next twelve months developing and marketing a prototype of our Cool Can product in order to accomplish our goals. As of September 30, 2004, being the date of our most recent financial statements, we had cash in the amount of $1,355 and a working capital deficit of $363,708. Therefore, we will need to obtain additional financing in order to complete our prototype development. We will also require additional financing if the costs of our Cool Can product development are greater than anticipated. There is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that:

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

The occurrence of any of the aforementioned events could adversely affect our ability to meet our plan of operations.

If we are unable to obtain additional financing in the amounts and on terms deemed acceptable to us, our business and future success may be adversely affected.

Our Product Development Program May Not Be Successful

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

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If We Are Unable To Achieve Market Acceptance For Our Products, We Will Be Unable To Build Our Business

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

We Have A Limited Operating History

We have a relatively short operating history and we are involved in a rapidly evolving and unpredictable industry. As of September 30, 2004, being the date of our most recent financial statements, we had a working capital deficit of $363,708. 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.

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ITEM 3.     CONTROLS AND PROCEDURES.

Evaluation Of Disclosure Controls And Procedures

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

Changes In Internal Controls Over Financial Reporting

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

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PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

We are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated.

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5.     OTHER INFORMATION.

None.

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ITEM 6.     EXHIBITS.

EXHIBITS

The following exhibits are either provided with this Quarterly Report or are incorporated herein by reference:

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

(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.

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SIGNATURES

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

NORPAC TECHNOLOGIES, INC.

By:	/s/ Bruce T. Leitch
	BRUCE T. LEITCH
	Chief Executive Officer
	and Chief Financial Officer
	(Principal Executive Officer,
	Principal Financial Officer
	and Principal Accounting Officer)
	Date: December 17, 2004