CelLynx 10QSB 2006 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, 2005

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

For the transition period from _____ to _____

COMMISSION FILE NUMBER000-27147

NORPAC TECHNOLOGIES, INC.
(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 xNo ¨

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

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:As of November 16, 2005, the Issuer had outstanding 32,565,390 Shares of Common Stock.

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

PART I - FINANCIAL INFORMATION

ITEM 1.                FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the quarterly period ended September 30, 2005 are not necessarily indicative of the results that can be expected for the year ending June 30, 2006.

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

2

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

FINANCIAL STATEMENTS

SEPTEMBER 30, 2005

F-1

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

BALANCE SHEETS

		September 30,			June 30,
		2005			2005
		(unaudited)			(audited)
ASSETS
CURRENT ASSETS:
Cash	$	-		$	307
Available-for-sale securities		3,375			2,250
Total Current Assets		3,375			2,557
AVAILABLE-FOR-SALE SECURITIES		375,000			250,000
INTANGIBLES, NET		9,000			9,600
	$	387,375		$	262,157
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Checks issued in excess of cash in bank	$	184		$	-
Accounts payable		230,194			223,157
Loans payable		88,290			73,290
Accounts payable, stockholder		125,347			110,347
Total Current Liabilities		444,015			406,794
STOCKHOLDERS’ DEFICIT:
Common stock, .001 par value, 200,000,000 shares authorized,
32,565,390 and 32,565,390 shares issued and outstanding, respectively		32,565			32,565
Additional paid in capital		2,363,585			2,363,585
Deficit accumulated during the development stage		(2,646,715	)		(2,608,587	)
Accumulated other comprehensive income		193,925			67,800
		(56,640	)		(144,637	)
	$	387,375		$	262,157

See Notes to Financial Statements.
F-2

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

								Period From
								Inception
								(April 1, 1998)
		Three Months Ended						Through
		September 30,						September 30,
		2005			2004			2005
Revenues	$	-		$	-		$	238,000
Administrative pre-opening and
development expenses		(38,128	)		(50,211	)		(1,518,849	)
Interest expense		-			(58,766	)		(679,541	)
Impairment of intangibles		-			-			(20,000	)
Stock compensation expense		-			-			(624,000	)
Realized loss on available-for-sale securities		-			(38,065	)		(42,325	)
Net loss		(38,128	)		(147,042	)		(2,646,715	)
Unrealized gain (loss) on available-for-sale securities		126,125			(56,760	)		193,925
Comprehensive income (loss)	$	87,997		$	(203,802	)	$	(2,452,790	)
Basic loss per common share	$	-		$	(.07	)	$	(1.07	)
Diluted loss per common share	$	-		$	(.07	)	$	(1.07	)
Weighted average outstanding shares		32,565,390			1,977,000			2,477,723

See Notes to Financial Statements.
F-3

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 30,
		2005			2004			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(38,128	)	$	(147,042	)	$	(2,646,715	)
Amortization expense		600			600			15,000
Compensation expense, options to nonemployees		-			-			504,000
Receipt of available-for-sale securities		-			-			(238,000	)
Excess of fair value of common stock issued over
carrying amount of debt		-			-			120,000
Realized loss on sales of available-for-sale securities		-			38,025			42,325
Amortization of original issue discount		-			45,273			550,000
Impairment loss on intangibles		-			-			20,000
Increase in accounts payable		7,037			28,804			298,992
Increase in accrued interest		-			13,359			127,380
Increase in accounts payable, stockholders		15,000			9,131			359,346
Increase (decrease) in due to stockholders		-			-			20,776
Net cash flows used in operating activities		(15,491	)		(11,850	)		(826,896	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of available-for-sale securities		-			10,275			11,225
Purchase of intangibles		-			-			(44,000	)
Net cash flows from (used in) operating activities		-			10,275			(32,775	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Collection of subscription receivable		-			-			10,000
Issuance of common stock		-			-			329,769
Net change in checks issued in excess of cash in bank		184			-			184
Net proceeds from due to stockholders		-			-			348,928
Proceeds from loan payable		15,000			2,674			88,290
Issuance of convertible notes		-			-			82,500
Net cash flows from financing activities		15,184			2,674			859,671
Increase (decrease) in cash		(307	)		1,099			-
Cash:
Beginning		307			256			-
Ending	$	-		$	1,355		$	-
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash paid for interest	$	8		$	134		$	2,169
NONCASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for amount due to stockholders	$	-		$	-		$	205,000
Stock issued for accounts payable	$	-		$	-		$	10,000
Conversion of accounts payable, stockholders and
due to stockholders and issuance of subscription
receivable for convertible notes	$	-		$	-		$	467,500
Stock issued for conversion of notes payable	$	-		$	-		$	550,000
Stock issued for accrued interest on notes payable	$	-		$	-		$	127,381

See Notes to Financial Statements.
F-4

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, 2005 and the statements of operations and cash flows for the periods ended September 30, 2005 and 2004 have been prepared by the Company, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows at September 30, 2005 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2005 audited financial statements. The results of operations for the period ended September 30, 2005 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 12). The Company was formed to act as a holding company for manufacturing companies and since inception, has devoted its efforts to raising capital and pre-opening activities. The Company owns a patent for a self-chilling beverage container and related component parts.
	The Company is considered to be in the development stage and the accompanying financial statements represent those of a development stage enterprise, and therefore, are subject to the usual business risks of development stage companies. The Company has had no revenue from operations. Research and development costs are expensed as incurred.
	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-5

Note 1.	Nature of Business and Summary of Significant Accounting Policies (continued):
	Intangibles:
	Intangible assets (Note 6) are amortized using the straight-line method over 10 years. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” as circumstances dictate, the Company evaluates whether changes have occurred that would require revision of the remaining estimated lives of recorded long-lived assets, including intangibles, or render those assets not recoverable. If such circumstances arise, recoverability is determined by comparing the undiscounted net cash flows of long-lived assets to their respective carrying values. The amount of impairment, if any, is measured based on the projected discounted cash flows using an appropriate discount rate. At this time, the Company believes that no significant impairment of the remaining intangibles has occurred and that no reduction of the estimated useful lives of such assets is warranted (see Note 8). Amortization expense for each of the quarters ended September 30, 2005 and 2004 was $600 and accumulated amortization was $15,000 and $12,600, respectively. Estimated amortization expense is $2,400 for each of the next three years and $1,800 for the fourth year.
	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, 2005 and 2004 or the period from inception through September 30, 2005. Stock options and warrants issued to non-employees are recorded at fair value, as required by SFAS No. 123, using the Black Scholes pricing model.
	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:

								Period From
								Inception
								(April 1,
								1998)
		Three Months Ended						Through
		September 30,						June 30,
		2005			2004			2005
Net loss	$	(38,128	)	$	(147,042	)	$	(2,646,715	)
Pro forma net loss	$	(38,128	)	$	(147,042	)	$	(2,694,715	)
Stock based compensation
As reported	$	-		$	-		$	504,000
Proforma	$	-		$	-		$	48,000
Basic and diluted loss per common share
As reported	$	-		$	(0.07	)	$	(1.07	)
Pro forma	$	-		$	(0.07	)	$	(1.09	)

There were no options issued or vested during the three months ended September 30, 2005 and 2004.

F-6

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 the three months ended September 30, 2005 and 2004, and $14,662 for the period from inception through September 30, 2005.
	Comprehensive loss:
	SFAS No. 130 “Reporting Comprehensive Income” establishes standards for reporting and presentation of comprehensive loss and its components in a full set of financial statements. Comprehensive loss consists of the Company’s net loss and unrealized gain (loss) on available- for-sale securities and is presented in the statements of operations and comprehensive loss. Statement 130 only requires additional disclosure in the financial statements; it does not affect the Company’s financial position or results of operations.
	Estimates and assumptions:
	The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Significant estimates include the valuation of stock issued. Actual results could differ from these estimates.
	Start-up costs:
	Costs incurred in connection with start-up activities are charged to expense as incurred.
	Carrying value of financial instruments:
	The carrying value of the Company’s financial instruments approximates fair value at September 30, 2005 and June 30, 2005.
	Reclassifications:
	Certain amounts reported in the prior periods have been reclassified to conform to the current year presentation.

F-7

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

		2005			2004
Expected benefit at statutory rate	$	(12,964	)	$	(52,935	)
State tax effects		(2,288	)		(10,293	)
Increase in valuation allowance		15,252			63,228
	$	-		$	-

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,
		2005			2005
Deferred tax assets:
Pre-opening costs	$	1,087,943		$	1,072,691
Valuation allowance		(1,087,943	)		(1,072,691	)
	$	-		$	-

Note 3.	Stockholders’ Equity:
	The Board of Directors have the power and authority to fix by resolution any designation, class, series, voting power, preference, right, qualification, limitation, restriction, dividend, time and place of redemption, and conversion right with respect to any stock of the Company.
Note 4.	Related Party Transactions:
	The Company currently has a consulting arrangement with an officer/stockholder. Such consulting fees totaled $15,000 for each of the three months ended September 30, 2005 and 2004, respectively. Consulting fees from inception through September 30, 2005 totaled $573,000. The balance due to the officer/stockholder at September 30, 2005 and June 30, 2005 was $125,347 and $110,347, respectively. Amounts due to the officer/ stockholder are unsecured, non-interest bearing, and due on demand.

F-8

Note 5.	Available-for-sale Securities:
	Investments held by the Company are classified as available-for-sale securities. Available-for-sale securities are reported at fair value with all unrealized gains or losses included in other comprehensive income (loss). The fair value of the securities was determined by quoted market prices of the underlying security. For purposes of determining gross realized gains or losses, the cost of available-for-sale securities is based on specific identification.
	In November 2002, the Company received securities valued at $63,000. Pursuant to the license agreement described in Note 8, the Company received additional securities valued at $175,000. In fiscal year 2005, the Company sold 255,000 shares for proceeds of $11,225 and a loss of 42,325 was included in net loss for the year ended June 30, 2005. The remaining securities consist of 5,045,000 shares of Balsam Ventures, Inc. The market value of the remaining securities was $378,375 as of September 30, 2005. On an ongoing basis, the Company evaluates its investment in available-for-sale securities if a decline in fair value is other than temporary. There has been no other than temporary declines through September 30, 2005.
Note 6.	Intangibles:
	A United States patent for aself-chilling beverage container and parts thereforewas obtained by a founding stockholder on March 11, 1997. During 1998, the patent and patent holder rights thereunder were sold to the Company for $1. Subsequent costs in June 1999 of $24,000 to file foreign patent applications have been similarly capitalized.
	In April 2001, the Company acquired a patent pending from certain stockholders which expands on the above patent. The acquisition agreement required the payment by the Company to the stockholders of $20,000. In addition, the Company was to issue to the stockholders: (i) 7,500 shares of the Company’s common stock upon the grant of a patent in connection with the acquired patent pending; and (ii) an additional 4,500 shares for each country in respect of which the Company grants a license of the acquired technology, for the first ten countries, and 3,000 shares for each additional country, to a maximum of 75,000 shares under the acquisition agreement. The Company was to also pay an ongoing royalty to the stockholders based on sales of products incorporating the technology as follows: (i) 4.5% of gross profits achieved by the Company on products incorporating the technology; and (ii) 15% of any licensing revenues or royalty payments earned by the Company on licenses of the acquired technology. The Company had agreed to use its best efforts to commercialize the acquired technology and to apply to the United States Patent Office for a grant of a patent relating to the patent pending. The agreement was cancelled due to the Company’s default under the agreement on June 14, 2003 as such, an impairment loss of $20,000 was recorded for the year ended June 30, 2003.

F-9

Note 7.	Stock Option Plan:
	The Company adopted a Stock Option Plan on June 21, 2000 which authorizes an initial 3,600,000 shares for issuance of incentive and non-qualified stock options to non-employees. The maximum aggregate number of shares that may be optioned and sold under the Plan will increase each quarter upon conditions outlined in the Plan. Options expire as determined by the Company but in no event later than ten years after the date the options are granted.
	Information relating to stock options is as follows:

				Weighted
	Number of			Average
	Shares			Exercise
Under option, June 30, 2001	177,500		$	7.50
Granted	30,000			.50
Exercised – conversion of debt and accounts payable	(55,000	)		1.50
Cancelled	(27,500	)		3.00
Under option, June 30, 2002	125,000			2.65
Expired	(100,000	)		2.20
Cancelled	(25,000	)		3.00
Under option, June 30, 2003	-			-
Granted	-			-
Expired	-			-
Cancelled	-			-
Under option, June 30, 2004
Granted
Expired
Cancelled
Under option, June 30, 2005
Granted
Expired
Cancelled
Under option, September 30, 2005	-			-
Weighted average fair value of options granted during the
period ended June 30, 2001			$	-
Weighted average fair value of options granted during the
period ended June 30, 2002			$	-
Weighted average fair value of options granted during the
period ended June 30, 2003			$	-
Weighted average fair value of options granted during the
period ended June 30, 2004			$	-
Weighted average fair value of options granted during the
period ended June 30, 2005			$	-
Weighted average fair value of options granted during the
period ended September 30, 2005			$	-

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

F-10

Note 8.	License Agreement:
	The Company has entered into an exclusive licensing agreement (the "Agreement") with Balsam Ventures, Inc. ("Balsam"), dated for reference November 30, 2003, granting Balsam the exclusive right and license (the “License”), for a period of 40 years, to use, commercialize and exploit the Company’s proprietary trademarks, patents, process information, technical information, designs and drawings associated with the Company’s self-chilling beverage container technology (the "Technology") including the right to manufacture, use and sell apparatus and products embodying the Technology within the countries comprising the European Union and the Republic of China. Balsam also has the right to sub-license the right to manufacture, use and sell products embodying the Technology.
	The consideration for the Agreement was as follows:
	1.	Balsam issued to the Company 5,000,000 restricted shares of its common stock; and
	2.	Balsam must pay the Company the following royalties: (a) a sales royalty equal to 2% of gross profits from sales of all apparatus incorporating the Technology and/or commercial goods or products incorporating the Technology, (b) a license royalty equal to 5% of revenues received by Balsam from sub-licensing the Technology, and (c) a minimum royalty payment of $5,000 per month commencing on January 15, 2006, which is to be credited towards all royalty payments under the Agreement that have been paid by Balsam or become payable by Balsam during the course of the Agreement.
	The Technology and the Company patents and trademarks included in the Technology remain the property of the Company subject to the terms of the License granted under the Agreement. However, Balsam has a right of first refusal to acquire the intellectual property subject to the Agreement should the Company seek to dispose of the Technology during the currency of the Agreement. The Agreement supersedes all prior arrangements and agreements between the Company and Balsam in respect of the Technology.
Note 9.	Loans Payable:
	In 2005 and 2004, the Company received loans from four parties. The loans are unsecured, non- interest bearing, and due on demand. The balance due at September 30, 2005 and June 30, 2005 was $88,290 and $73,290, respectively.

F-11

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

		September 30,		June 30,
		2005		2004
Outstanding convertible notes payable	$	-	$	530,000
Less: beneficial conversion		-		(275,222	)
Convertible notes, net of original issue discount	$	-	$	254,778

Note 11.

Company’s Continued Existence:

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

F-12

Note 12.	Merger:
	On June 21, 2004, stockholders of the Company approved an agreement with an effective date of July 12, 2004 to merge with NorPac Technologies, Inc. (NorPac), a Nevada Corporation. On closing of the Merger Agreement:
	•	NorPac was the surviving corporation of the Merger and continues to operate the Company's business
	•	The Company's shareholders received one share of common stock of NorPac for each 20 shares of the Company's common stock they own.
	The impact of the merger was accounted for on a retroactive basis in the Company’s financial statements.

F-13

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

FORWARD-LOOKING STATEMENTS

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

OVERVIEW

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

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

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 restricted shares of its common stock to us; and

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(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
	(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.

Recent Corporate Developments

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 September 30, 2005, we had no cash available and a working capital deficit of $440,640. Our inability to achieve substantial financing has forced us to continue to reduce our business operations. We believe that market conditions and the unwillingness of investors to finance junior technology companies such as NorPac have contributed to our inability to raise additional capital.

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

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

PLAN OF OPERATION

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

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

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

3.

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

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

1.	Product development is estimated to be completed over a timeframe of 7.5 months at an estimated cost of $350,000, and is intended to result in the manufacturing of 2,000 industry demonstration samples.
2.	Consultation feedback is estimated to take place over a timeframe of three months following completion of phase one at an estimated cost of $50,000.
3.	Marketing and licensing will follow phase two and is estimated to take three months at an estimated cost of $50,000.

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4. General expenditures over the next twelve months are estimated to be $20,000 per month, consisting of $15,000 per month in general administrative expenses and $5,000 per month in legal and accounting expenses relating to compliance with our reporting obligations.

RESULTS OF OPERATIONS

Summary of First Quarter Results

	Three Months Ended September 30
			Percentage
	2005	2004	Increase / (Decrease)
Revenue	$0	$0	N/A
Expenses	(38,128)	(147,042)	(74.07)%
Net Loss	$(38,128)	$(147,042)	(74.07)%

Our net loss for the three month period ended September 30, 2005 was comprised entirely of operating expenses. The decrease in net loss over the comparable period ended September 30, 2004 is due primarily to the fact that we did not incur any interest expense relating to the conversion of all of our outstanding convertible notes during the period ended September 30, 2005 as compared to the period ended September 30, 2004 As well, our net loss for the three month period ended September 30, 2005 decreased over the comparative period in 2004 due to the fact that we did not incur a realized loss on available for sale securities.

Revenues

We do not anticipate earning revenues from the sale of our products until such time as we have completed commercial development of products incorporating our Cool Can technology. We did not generate any revenues during the three months ended September 30, 2005. 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 total losses of $2,452,790 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.

Operating Expenses

Our operating expenses for the interim periods ended September 30, 2004 and 2005 consisted of the following:

	First Quarter Ended September 30
			Percentage
	2005	2004	Increase / (Decrease)
Administrative Pre-Opening and	$(38,128)	$(50,211)	(24.06)%
Development Expenses
Interest Expense	0	(58,766)	(100)%
Realized Loss on Available-For-Sale	0	(38,065)	(100)%
Securities
Total Operating Expenses	$(38,128)	$(147,042)	(74.07)%

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The decrease in our total expenses for the three months ended September 30, 2005 when compared to our total expenses for the three months ended September 30, 2004, were primarily attributable to: (i) a decrease in our administrative pre-opening and developments expenses, (ii) the fact that we did not incur any interest expense due to the conversion into common shares of all of the outstanding convertible notes, and (iii) we had no realized loss on available for sale securities. The decrease in our administrative pre-opening and development expenses for the quarter ended September 30, 2005 compared to the quarter ended September 30, 2004, was due to a decrease in professional fees.

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

LIQUIDITY AND FINANCIAL CONDITION

Working Capital

			Percentage
	At September 30, 2005	At June 30, 2005	Increase / (Decrease)
Current Assets	$3,375	$2,557	31.99%
Current Liabilities	(444,015)	(406,794)	9.15%
Working Capital (Deficit)	$(440,640)	$(404,237)	9.01%

Cash Flows

	Three Months Ended September 30
	2005	2004
Cash Flows From (Used In) Operating Activities	$(15,491)	$(11,850)
Cash Flows From (Used In) Investing Activities	0	10,275
Cash Flows From (Used In) Financing Activities	15,184	2,674
Net Increase (Decrease) In Cash During Period	$(307)	$1,099

The increase in our working capital deficit for the three months ended September 30, 2005 is primarily attributable to a 9.15% increase in our current liabilities which increased during the three months ended September 30, 2005 due to amounts payable incurred in connection with our operating and business development activities. Our current monthly cash requirements are approximately $20,000 per month. Our current cash reserves are not sufficient to enable us to operate even on a short term basis. Further, we require approximately $690,000 in order to carry out our plan of operation over the next twelve months.

We intend to raise the necessary financing for completion of production ready samples of our Cool Can product through collaboration with a strategic industry partner as a joint venture. In the event we are unable to reach agreement with a joint venture partner for completion of our plan of operation as stated, we anticipate that additional financing would be through the sales of our common stock or other equity-based securities. We do not have any arrangements or agreements in place with respect to a joint venture and/or for the sale of any of our securities and there is no assurance that we will be able to raise the additional capital that we require to continue our operations.

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

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

The financial statements accompanying this quarterly report contemplate our continuation as a going concern. However, we have sustained substantial losses and are still in the development stage. Additional funding will be necessary to continue development and marketing of our product. There can be no assurance that we will be able to raise the necessary capital to continue our business.

OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES

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

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

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.

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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 Operation

Our plan of operation calls for significant expenses in connection with the development of our Cool Can product. Our current operating funds are insufficient to complete our plan of operation which will require an estimated $690,000 to be spent over the next twelve months developing and marketing a prototype of our Cool Can product in order to accomplish our goals.

As of September 30, 2005, being the date of our most recent financial statements, we had no cash available and a working capital deficit of $440,640. Therefore, we will need to obtain additional financing in order to complete our prototype development and to repay the outstanding principal on any Convertible Notes not converted into shares of our common stock. 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 operation. If we are unable to obtain additional financing in the amounts and on terms deemed acceptable to us, our business and future success may be adversely affected.

Our Product Development Program May Not Be Successful

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

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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, 2005, being the date of our most recent financial statements, we had a working capital deficit of $440,640. We will need to generate significant revenues to achieve profitability, which may not occur. We expect operating expenses to increase as a result of the further implementation of our business plan. Even if we achieve profitability, we may be unable to sustain or increase profitability on a quarterly or annual basis in the future. It is possible that we will never achieve profitability.

ITEM 3.                CONTROLS AND PROCEDURES.

Evaluation Of Disclosure Controls And Procedures

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

Changes In Internal Controls Over Financial Reporting

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

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PART II - OTHER INFORMATION

ITEM 1.                LEGAL PROCEEDINGS.

None.

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

None.

ITEM 3.                DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5.                OTHER INFORMATION.

None.

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

(a)           Exhibits

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

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

Notes:

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

(b)           Reports on Form 8-K:

None.

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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: November 17, 2005