CelLynx 10-Q 2008 Q2 Quarterly report

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

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedMarch 31, 2008

[   ] TRANSITION REPORT PURSUANT TO 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.
(Exact name of registrant as specified in its charter)

NEVADA	95-4705831
(State or other jurisdiction of incorporation or organization)	(I.R.S Employer Identification No.)
Suite 410 - 103 East Holly Street
Bellingham, WA	98225
(Address of principal executive offices)	(Zip Code)

(360) 201-9591
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]  No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]	Accelerated filer [   ]
Non-accelerated filer [   ] (Do not check if a smaller reporting company)	Smaller reporting company [ X ]

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest
practicable date:As of May 12, 2008, the issuer had 37,597,890 shares of Common Stock outstanding.

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

PART I - FINANCIAL INFORMATION

ITEM 1.               FINANCIAL STATEMENTS.

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

FINANCIAL STATEMENTS

(Unaudited)

MARCH 31, 2008

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

BALANCE SHEETS

		March 31,			June 30,
		2008			2007
		(unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	997		$	1,089
Loans receivable, net of allowance of $331,829 (Note 5)		331,829			-
Total Current Assets		332,826			1,089
AVAILABLE-FOR-SALE SECURITIES (Note 4)		110,900			526,775
LOANS RECEIVABLE (Note 5)		-			638,698
	$	443,726		$	1,166,562
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	$	196,363		$	101,339
Loans payable (Note 7)		77,016			10,000
Total Current Liabilities		273,379			111,339
STOCKHOLDERS’ EQUITY (Note 9):
Authorized:
100,000,000 shares of common stock, $0.001 par value
100,000,000 shares of preferred stock, $0.001 par value
Issued and outstanding:
March 31, 2008 and June 30, 2007
-37,597,890 shares of common stock		37,597			37,597
Additional paid-in capital		3,467,383			3,467,383
Deficit accumulated during the development stage		(3,231,083	)		(2,762,082	)
Accumulated other comprehensive income (loss)		(103,550	)		312,325
		170,347			1,055,223
					��
	$	443,726		$	1,166,562

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

F-2

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)

														Period From
														Inception
														(April 1, 1998)
		Three Months Ended						Nine Months Ended						Through
		March 31,						March 31,						March 31,
		2008			2007			2008			2007			2008
Revenues	$	-		$	15,000		$	-		$	15,000		$	303,000
Administrative pre-opening and
development expenses		(65,586	)		(38,096	)		(161,236	)		(116,631	)		(1,882,350	)
Interest expense		(751	)		-			(896	)		-			(680,437	)
Impairment of intangibles		-			-			-			-			(24,800	)
Stock-based expenses		-			-			-			-			(624,000	)
Realized loss on available-for-sale securities		-			-			-			-			(42,325	)
Loss reserve on loans receivable		-			-			(331,829	)		-			(331,829	)
Loss before interest income		(66,337	)		(23,096	)		(493,961	)		(101,631	)		(3,282,741	)
Interest income		-			11,007			24,960			14,492			51,658
Net loss		(66,337	)		(12,089	)		(469,001	)		(87,139	)		(3,231,083	)
Unrealized gain (loss) on available-for-sale
securities		(221,800	)		55,450			(415,875	)		(110,900	)		(103,550	)
Comprehensive income (loss)	$	(288,137	)	$	43,361		$	(884,876	)	$	(198,039	)	$	(3,334,633	)
Basic and diluted net loss per common share	$	-		$	-		$	(0.01	)	$	-
Weighted average number of outstanding
shares		37,597,890			37,573,862			37,597,890			36,190,071

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

F-3

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

STATEMENTS OF CASH FLOWS
(unaudited)

								Period From
								Inception
								(April 1, 1998)
		Nine Months Ended						Through
		March 31,						March 31,
		2008			2007			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(469,001	)	$	(87,139	)	$	(3,231,083	)
Adjustments to reconcile net loss to net cash flows from operating activities:
Amortization expense		-			1,800			19,200
Compensation expense, options to nonemployees		-			-			504,000
Receipt of available-for-sale securities		-			-			(268,000	)
Fair value of common stock issued over carrying amount of debt		-			-			120,000
Realized loss on sales of available-for-sale securities		-			-			42,325
Amortization of original issue discount		-			-			550,000
Impairment loss on intangibles		-			-			24,800
Loss reserve on loans receivable		331,829			-			331,829
Changes in operating assets and liabilities:
Increase in accounts receivable		-			(15,000	)		-
Increase in accrued interest receivable		(24,960	)		(14,492	)		(51,658	)
Increase in accounts payable and accrued liabilities		95,024			38,260			276,144
Increase in accrued interest payable		896			-			128,276
Increase in accounts payable, stockholders		-			-			369,346
Increase in due to stockholders		-			-			20,776
Net cash flows from operating activities		(66,212	)		(76,571	)		(1,164,045	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of available-for-sale securities		-			-			11,225
Advances under loan receivable agreements		-			(612,000	)		(612,000	)
Purchase of intangibles		-			-			(44,000	)
Net cash flows from investing activities		-			(612,000	)		(644,775	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Collection of subscription receivable		-			-			10,000
Issuance of common stock		-			673,000			1,292,269
Net proceeds from due to stockholders		-			-			348,928
Proceeds from (repayment of) loans payable		66,120			(500	)		76,120
Issuance of convertible notes		-			-			82,500
Net cash flows from financing activities		66,120			672,500			1,809,817
Increase (decrease) in cash		(92	)		(16,071	)		997
Cash:
Beginning		1,089			16,887			-
Ending	$	997		$	816		$	997
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash paid for interest	$	-		$	-		$	2,182
NONCASH INVESTING AND FINANCING ACTIVITIES:
Stock issued for amount due to stockholders	$	-		$	-		$	233,125
Stock issued for accounts payable	$	-		$	-		$	10,000
Conversion of accounts payable, stockholders and due to stockholders
and issuance of subscription receivable for convertible notes	$	-		$	-		$	467,500
Stock issued for conversion of notes payable	$	-		$	-		$	550,000
Stock issued for accrued interest on notes payable	$	-		$	-		$	127,381

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

F-4

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

1.	History and Organization of the Company
	NorPac Technologies, Inc. (the “Company”) was originally incorporated on April 1, 1998 in the State of Minnesota. On July 12, 2004 the Company was reorganized and became a Nevada corporation. The Company was formed to act as a holding company for manufacturing companies and since inception, has devoted its efforts to raising capital and pre-opening activities. The Company previously owned a patent for a self-chilling beverage container and related component parts (the “Cool Can Technology”) in the United States and certain foreign countries. Since the patents for the Cool Can Technology have expired, management has decided to abandon the development of the Cool Can Technology and is in the process of reorganizing the Company’s business and is seeking and evaluating alternative business opportunities.
	On November 7, 2006, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) for a merger with Nextdigital Corp. (“Nextdigital”), a Nevada company engaged in the provision of smart card solutions to the international marketplace. Under the terms of the Merger Agreement, the Company would have merged with Nextdigital and changed its name to Nextdigital Corporation. On February 15, 2007 the Company received notice from Nextdigital that it was electing not to proceed with the Merger Agreement because it believed its shareholders would not approve it. During the year ended June 30, 2007, the Company made advances to Nextdigital amounting to $612,000 under a series of unsecured loan agreements. At December 31, 2007, management determined that the collectibility of the loans was in doubt and based on its best estimate, recorded a loss reserve equal to 50% of the total loans receivable and accrued interest receivable totaling $331,829. Also on December 31, 2007, the Company ceased accruing interest on the loans receivable (see Note 5).
	On January 3, 2008, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Cellynx, Inc. (“Cellnyx”), a California company engaged in the development of plug-and-play cell phone signal-amplification technology. Under the terms of the Exchange Agreement, the Company will issue shares of the Company’s common stock for each Cellnyx shareholder’s pro-rata portion of the total Cellynx shares. In the event that there is an insufficient number of authorized but unissued Company common stock to issue to the Cellnyx shareholders, the Company shall issue all available authorized but unissued common stock among the Cellnyx shareholders in a pro-rata manner. The Company shall then establish a class of series A preferred stock and issue to the Cellnyx shareholders that number of Company series A preferred stock that may be convertible into the remaining equivalent common stock. Immediately after closing, the Company shall amend its articles of incorporation to increase the authorized number of shares of common stock to 200,000,000 or such other number sufficient to enable the Cellnyx shareholders to convert their series A preferred stock into common stock. The Company’s common shares outstanding before closing shall equal 30.1% of the outstanding shares of the Company’s common stock at the time of closing. Closing of the Exchange Agreement is subject to certain conditions, including delivery of required financial statements by Cellynx and completion of due diligence by the Company and Cellynx. The Exchange Agreement may be terminated (i) by mutual consent of the parties, (ii) by either party if the transaction has not been consummated by April 30, 2008, (iii) by either party if the transaction is prohibited by government order or action or (iv) by either party upon a material breach of any representation, warranty, covenant or agreement by the other party. Subsequent to March 31, 2008, the Company and Cellnyx began discussions to extend the closing of the Exchange Agreement.

F-5

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

1.	History and Organization of the Company (continued)
	The Company is considered to be in the development stage. The accompanying financial statements represent those of a development stage enterprise and therefore, are subject to the usual business risks of development stage companies. The Company has had no significant revenue from operations. Research and development costs are expensed as incurred.
	These financial statements have been prepared in conformity with accounting principles generally accepted in the United States for interim financial information. The accompanying financial statements do not include all information and footnote disclosures required for a complete presentation prepared under accounting principles generally accepted in the United States. The interim period financial statements should be read together with the audited financial statements and the accompanying notes for the year ended June 30, 2007 included in the Company’s annual report on form 10-KSB. In the opinion of management, all adjustments (consisting solely of normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows as of March 31, 2008 and for all periods presented have been included. Interim results for the period ended March 31, 2008 are not necessarily indicative of the results that may be expected for the fiscal year as a whole.
2.	Going Concern
	The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation of the Company as a going concern. However, the Company has sustained substantial losses and is still in the development stage. These financial statements do not include any adjustments that might result from this uncertainty.
	The Company intends to arrange for the sale of additional shares of stock to obtain additional operating capital for at least the next twelve months. There can be no assurance the Company will be able to raise the necessary capital to continue in business.

F-6

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

3.	Significant Accounting Policies
	The financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States and are stated in U.S. dollars. The significant accounting policies adopted by the Company are as follows:
	(a)	Use of estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates.
	(b)	Foreign currency translation
	The functional currency of the Company is the U.S. dollar. Monetary assets and liabilities denominated in a foreign currency are translated at the exchange rate in effect at the balance sheet date while non-monetary assets and liabilities are translated at historical rates. Revenue and expense items denominated in a foreign currency are translated at exchange rates prevailing when such items are recognized in the statement of operations. Exchange gains and losses arising on transactions denominated in foreign currency are included in the statement of operations.
	(c)	Cash and cash equivalents
	The Company considers cash held at banks and all highly liquid investments with original maturities of three months or less to be cash and cash equivalents. As of March 31, 2008 and June 30, 2007, cash and cash equivalents consists of cash only.
	(d)	Loans receivable
	Loans receivable are reported at the outstanding principal balance adjusted for any charge-offs and reserve for loan losses. Management recorded a reserve amounting to $331,829 for loans receivable and accrued interest receivable at December 31, 2007. When determining the reserve for loan losses, management considers if any events or changes in circumstances indicate uncollectibility. When a loan is determined to be uncollectible, it is charged against the loss reserve. Loans are not collateralized. Because of inherent uncertainties in estimating the reserve for loan losses, it is at least reasonably possible that the estimates used will change in the near term. Interest on loans is recognized when earned. Interest on loans is generally not recognized when loans become past due. Thereafter, no interest is taken into income until such time as the borrower demonstrates the ability to resume payments. There were no past due loans at March 31, 2008 and June 30, 2007. Based on current loan interest rates, management does not believe exposure to interest rate sensitivity is significant. Management periodically reviews loans outstanding to determine if any loans are impaired. Impaired loans, if any, are adjusted to estimated net realized value through the loan loss reserve. At March 31, 2008, loans receivable amounting to $306,000 were on nonaccrual status.

F-7

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

3.	Significant Accounting Policies (continued)
	(e)	Intangible assets
	Intangible assets are recorded at cost. Amortization is calculated using the straight-line method over the useful lives of the assets. In accordance with Statement of Financial Accounting Standards (“SFAS”) 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company reviews all long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
	(f)	Income taxes
	Effective July 1, 2007, the Company adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48,"Accounting for Uncertainty in Income Taxes"("FIN 48"), which clarifies the accounting for uncertainty in income taxes recognized in the financial statements in accordance with SFAS 109,"Accounting for Income Taxes."FIN 48 provides guidance on the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition. In accordance with FIN 48, a tax position is a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions shall be recognized only when it is more likely than not (likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination. Tax positions that meet the more likely than not threshold should be measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. The adoption of FIN 48 did not have a material impact on the Company’s financial position, results of operations or cash flows. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized.
	(g)	Fair value of financial instruments
	The Company's financial instruments consist of cash, available-for-sale securities, loans receivable, accounts payable and accrued liabilities and loans payable. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments, other than available-for-sale securities, approximates their carrying values because of the short-term nature of these financial instruments. Available-for-sale securities are recorded at their fair market values determined by quoted market prices.
	(h)	Advertising expenses
	The Company expenses advertising costs as incurred. There were no advertising expenses incurred by the Company for the periods ended March 31, 2008 and 2007.

F-8

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

3.	Significant Accounting Policies (continued)
	(i)        Stock-based compensation
	Effective January 1, 2006, the Company adopted SFAS123(R), "Share-Based Payment," and related interpretations which superseded Accounting Principles Board (“APB”) Opinion 25, “Accounting for Stock Issued to Employees.” SFAS 123(R) requires that all stock-based compensation be recognized as an expense in the financial statements and that such cost be measured at the fair value of the award. This statement was adopted using the modified prospective method, which requires the Company to recognize compensation expense on a prospective basis. The fair value of stock-based compensation is determined using the Black-Scholes valuation model, which is consistent with the Company’s valuation techniques previously utilized for stock-based awards in footnote disclosures required under SFAS 123, “Accounting for Stock-Based Compensation.” Prior to January 1, 2006, the Company accounted for share-based compensation under the recognition and measurement provisions of APB Opinion 25, as permitted by SFAS 123. Under APB Opinion 25, compensation expense was recorded using the intrinsic method where compensation expense under fixed term option plans was recorded at the date of grant only to the extent that the market value of the underlying stock at the date of grant exceeded the exercise price. As a result of adopting SFAS 123(R) on January 1, 2006, the Company’s net loss for the periods ended March 31, 2008 and 2007 were no different than if it had continued to account for stock-based compensation under SFAS 123. Basic and diluted loss per share for the periods ended March 31, 2008 and 2007 were no different than if it had continued to account for share-based compensation under SFAS 123.
	The following table shows the pro forma effect on net loss prior to the adoption of SFAS 123(R) had compensation expense been determined based on the fair value at the award grant date, in accordance with SFAS 123:

		Period From
		Inception (April 1,
		1998) Through
		March 31,
		2008
Net loss	$	(3,231,083	)
Pro forma net loss	$	(3,279,083	)
Stock based compensation
As reported	$	504,000
Proforma	$	552,000

There were no options granted or vested during the three and nine months ended March 31, 2008 and 2007.

F-9

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

3.	Significant Accounting Policies (continued)
	(j)	Loss per common share
	Basic net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share takes into consideration shares of common stock outstanding (computed under basic earnings per share) and potentially dilutive securities. During the three and nine months ended March 31, 2007, the 432,500 warrants outstanding have been excluded from diluted net loss per common share as they were anti- dilutive. There were no potentially dilutive securities during the three and nine months ended March 31, 2008.
	(k)	Comprehensive income (loss)
	The Company has adopted SFAS 130, “Reporting Comprehensive Income,” which establishes guidelines for the reporting and display of comprehensive income (loss) and its components in financial statements. Comprehensive income (loss) consists of the Company’s net loss and unrealized gain (loss) on available- for-sale securities.
	(l)	Development stage
	The Company is a development stage company as defined in SFAS 7,“Accounting and Reporting by Development Stage Enterprises,”as it is devoting substantially all of its efforts to establish a new business and planned principal operations have not yet commenced.
	(m)	Recent accounting pronouncements
	In September 2006, the FASB issued SFAS 157, “Fair Value Measurements.” SFAS 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. SFAS 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. In February 2008, the FASB issued Staff Position 157-2, “Effective Date of FASB Statement No. 157,”that deferred the effective date of SFAS 157 for one year for nonfinancial assets and liabilities recorded at fair value on a non-recurring basis. The Company does not believe that the adoption of SFAS 157 will have a material impact on the financial statements.
	In February 2007, the FASB issued SFAS 159,“The Fair Value Option for Financial Assets and Financial Liabilities,”which permits an instrument election to account for selected financial assts and liabilities at fair value. SFAS 159 is effective for fiscal years beginning after November 15, 2007, with early adoption permitted as of January 1, 2007. The Company is currently evaluating the impact of SFAS 159 will have on the financial statements.

F-10

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

3.	Significant Accounting Policies (continued)
	(m)        Recent accounting pronouncements (continued)
	In December 2007, the FASB issued SFAS 141 (revised 2007),"Business Combinations"(“SFAS 141R”). Under SFAS 141R, a company is required to recognize the assets acquired, liabilities assumed, contractual contingencies and contingent consideration at their fair value at the acquisition date. It further requires that acquisition-related costs are to be recognized separately from the acquisition and expensed as incurred. Among other changes, SFAS 141R also requires that “negative goodwill” be recognized in earnings as a gain attributable to the acquisition, and any deferred tax benefits resulting from a business combination be recognized in income from continuing operations in the period of the combination. SFAS 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company is evaluating what impact SFAS 141R will have on the financial statements.
	In December 2007, the FASB issued SFAS 160,"Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51"(“SFAS 160”). SFAS 160 requires a company to clearly identify and present ownership interests in subsidiaries held by parties other than the company in the consolidated financial statements within the equity section but separate from the company’s equity. It also requires the amounts of consolidated net income attributable to the parent and to the noncontrolling interest to be clearly identified and presented on the face of the consolidated statement of operations; changes in ownership interest to be accounted for as equity transactions; and when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary and the gain or loss on the deconsolidation of the subsidiary must be measured at fair value. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company is evaluating what impact SFAS 160 will have on the financial statements.
	In March 2008, the FASB issued SFAS No. 161,“Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133”(“SFAS 161”). SFAS 161 requires enhanced disclosures about an entity’s derivative instruments and hedging activities including: (1) how and why an entity uses derivative instruments; (2) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations; and (3) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with earlier application encouraged. The Company is evaluating what impact SFAS 161 will have on the financial statements.

F-11

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

4.

Available-for-sale Securities

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

				Gross		Gross
		Aggregate		unrealized		unrealized
		fair value		gains		losses		Cost
Equity securities –March 31, 2008	$	110,900	$	-	$	103,550	$	214,450
Equity securities – June 30, 2007	$	526,775	$	312,325	$	-	$	214,450

In November 2002, the Company received securities valued at $63,000. Pursuant to the license agreement described in Note 14, the Company received additional securities valued at $175,000 in November 2003, and securities valued at $30,000 in January 2006. Securities with a cost of $53,550 were sold prior to July 1, 2005. There were no sales of available-for-sale securities during the three and nine months ended March 31, 2008 and 2007.

The Company’s net unrealized holding gain (loss) was $(221,800) and $55,450 for the three months ended March 31, 2008 and 2007, respectively and $(415,875) and $(110,900) for the nine months ended March 31, 2008 and 2007, respectively. The reclassification adjustment was $0 and $0 for the three months ended March 31, 2008 and 2007, respectively and $0 and $0 for the nine months ended March 31, 2008 and 2007, respectively and $40,800 for the period from inception through March 31, 2008. On an ongoing basis, the Company evaluates its investment in available-for-sale securities if a decline in fair value is other than temporary. There have been no other-than-temporary declines in fair value through March 31, 2008.

At both March 31, 2008 and June 30, 2007, the Company held 5,545,000 common shares, respectively, of Balsam Ventures, Inc. (“Balsam”) for an ownership percentage of 15.3% . This investment in Balsam was not accounted for under the equity method in accordance with APB Opinion 18,“The Equity Method of Accounting for Investments in Common Stock,”because the Company is unable to exercise significant influence over the operating and financial policies of the investee.

F-12

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

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

Grant Date		Principal		Due Date
November 7, 2006	$	100,000		November 7, 2008
November 20, 2006		75,000		November 20, 2008
December 4, 2006		275,000		December 4, 2008
January 30, 2007		162,000		January 30, 2009
	$	612,000
Accrued interest receivable		51,658
		663,658
Loss reserve		(331,829	)
	$	331,829

Interest income related to these loans receivable totaled $Nil and $11,007 for the three months ended March 31, 2008 and 2007, respectively and $24,960 and $14,492 for the nine months ended March 31, 2008 and 2007, respectively and $51,658 for the period from inception through March 31, 2008.

As discussed in Note 1, the Merger Agreement with Nextdigital was terminated. The Company is presently negotiating with Nextdigital the repayment of all amounts loaned to Nextdigital. Principal payments under all loan agreements are due during the year ended June 30, 2009.

At December 31, 2007, management determined that the collectibility of the loans was in doubt and based on its best estimate, recorded a loss reserve equal to 50% of the total loans receivable and accrued interest receivable totaling $331,829. Also on December 31, 2007, the Company ceased accruing interest on the loans receivable.

F-13

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

6.	Intangible Assets
	A United States patent for a self-chilling beverage container and related component parts was obtained by a founding stockholder on March 11, 1997. During 1998, the patent and patent holder rights thereunder were sold to the Company for $1. Subsequent costs in June 1999 of $24,000 to file foreign patent applications were similarly capitalized. Since the patents have expired, an impairment loss of $4,800 was recorded in the year ended June 30, 2007.
	In April 2001, the Company acquired a patent pending from certain stockholders which expanded on the patent described above. The acquisition agreement required the payment by the Company to the stockholders of $20,000. In addition, the Company was to issue to the stockholders: (i) 7,500 shares of the Company’s common stock upon the grant of a patent in connection with the acquired patent pending; and (ii) an additional 4,500 shares for each country in respect of which the Company grants a license of the acquired technology, for the first ten countries, and 3,000 shares for each additional country, to a maximum of 75,000 shares under the acquisition agreement. The Company was to also pay an ongoing royalty to the stockholders based on sales of products incorporating the technology as follows: (i) 4.5% of gross profits achieved by the Company on products incorporating the technology; and (ii) 15% of any licensing revenues or royalty payments earned by the Company on licenses of the acquired technology. The Company had agreed to use its best efforts to commercialize the acquired technology and to apply to the United States Patent Office for a grant of a patent relating to the patent pending. The agreement was cancelled due to the Company’s default under the agreement on June 14, 2003 and as such, an impairment loss of $20,000 was recorded for the year ended June 30, 2003.
7.	Loans Payable
	During the nine months ended March 31, 2008, a loan was granted from a third party company for $15,000. The loan is unsecured, bears interest at 10% and is due on demand. Interest expense accrued for the three and nine months ended March 31, 2008 totaled $131 and $131, respectively and $131 for the period from inception through March 31, 2008.
	During the nine months ended March 31, 2008, a loan was granted from a third party company for $1,000 of which $680 was repaid in the same period. The loan is unsecured, non-interest bearing and is due on demand.
	During the nine months ended March 31, 2008, several loans were granted from a third party company totaling $43,000. The loans are unsecured, bear interest at 10% and are due on demand. Interest expense accrued for the three and nine months ended March 31, 2008 totaled $550 and $654, respectively and $654 for the period from inception through March 31, 2008.
	During the year ended June 30, 2007, a loan was granted from a third party company for $10,000. During the nine months ended March 31, 2008, a second loan was granted from the same third party company for $5,000. Both loans are unsecured, non-interest bearing, and due on demand. During the nine months ended March 31, 2008, a third loan was granted from the same third party company for $2,800. The loan is unsecured, bears interest at 10% and is due on demand. Interest expense accrued for the three and nine months ended March 31, 2008 totaled $70 and $111, respectively and $111 for the period from inception through March 31, 2008.

F-14

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

7.	Loans Payable (continued)
	During the year ended June 30, 2006, several loans were granted from and repaid to a third party. The balance due at June 30, 2006 was $500. During the year ended June 30, 2007, the loan was repaid. The loans were unsecured, non-interest bearing, and due on demand.
8.	Related Party Transactions
	Consulting fees paid to an officer and director totaled $3,000 and $3,000 for the three months ended March 31, 2008 and 2007, respectively and $9,000 and $9,000 for the nine months ended March 31, 2008 and 2007, respectively. Consulting fees paid to an officer and director from inception through March 31, 2008 totaled $23,500.
	Consulting fees paid to a former officer and director from inception through March 31, 2008 totaled $588,000. During the period of inception through March 31, 2008, a former officer and director settled accounts payable of $146,330 in exchange for 187,500 common shares of the Company with a fair value of $28,125. The difference between the carrying amount of the accounts payable and the fair value of the common shares issued of $118,205 was recorded as an increase to additional paid in capital.
	At March 31, 2008, included in accounts payable and accrued liabilities was $52, owed to a former officer and director of the Company.
9.	Stockholders’ Equity
	The Board of Directors has the power and authority to fix by resolution any designation, class, series, voting power, preference, right, qualification, limitation, restriction, dividend, time and place of redemption, and conversion right with respect to any stock of the Company.
	On November 30, 2006, the Company issued 2,000,000 shares of common stock at a price of $0.25 per share for total proceeds of $500,000.
	On January 5, 2007, the Company issued 432,500 units at a price of $0.40 per unit for total proceeds of $173,000. Each unit consists of one share of the Company’s common stock and one share purchase warrant. Each warrant entitled the holder to purchase an additional share of the Company’s common stock at a price of $0.40 per share and expired January 5, 2008. The relative fair value of the common stock was estimated to be approximately $103,800 and the relative fair value of the warrants was estimated to be approximately $69,200 as determined based on the relative fair value allocation of the proceeds received. The warrants were valued using the Black-Scholes option pricing model.

F-15

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

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

	Number of			Weighted
	Shares			Average
				Exercise
Under option, June 30, 2001	177,500		$	7.50
Granted	30,000			0.50
Exercised – conversion of debt and accounts payable	(55,000	)		1.50
Cancelled	(27,500	)		3.00
Under option, June 30, 2002	125,000			2.65
Expired	(100,000	)		2.20
Cancelled	(25,000	)		3.00
Under option, June 30, 2003	-			-
Granted	-			-
Expired	-			-
Cancelled	-			-
Under option, March 31, 2008	-			-

	During the year ended June 30, 2002, based on the decrease in the market price of the Company’s common stock, the Company re-priced its stock options. There was no accounting consequence or compensation for the options repriced. All outstanding options were cancelled or expired during the year ended June 30, 2003. On October 10, 2007, the Company terminated the 2000 Stock Option Plan.
12.	Segment Information
	The Company’s business is considered as operating in one segment based upon the Company’s organization structure, the way in which the operation is managed and evaluated, the availability of separate financial results and materiality considerations.

F-16

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

13.	Income Taxes
	For income tax purposes, pre-opening costs are generally deferred and amortized to expense in future tax returns. Accordingly, the Company has no significant tax loss carryforwards. For financial reporting purposes, realization of the value of book versus tax temporary differences is dependent upon the Company generating sufficient taxable income in future years. Because of the development stage nature of the Company, lack of operating history and potential future stock sales (which may limit the value of loss carryforwards), management has eliminated the deferred tax value of pre-opening costs with a valuation allowance.
	The benefit for income taxes differs from the amount computed by applying the U.S. federal income tax rate to loss before income taxes for the three and nine months ended March 31, as follows:

		Three Months Ended						Nine Months Ended
		March 31,						March 31,
		2008			2007			2008			2007
Expected tax benefit at
statutory rate	$	(22,555	)	$	(4,110	)	$	(159,460	)	$	(29,627	)
State tax effects		(3,980	)		(725	)		(28,140	)		(5,228	)
Increase in valuation allowance		26,535			4,835			187,600			34,855
	$	-		$	-		$	-		$	-

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:

		March 31,			June 30,
		2008			2007
Deferred tax assets:
Deferred pre-opening costs	$	(1,166,423	)	$	(1,138,089	)
Valuation allowance		1,166,423			1,138,089
	$	-		$	-

F-17

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

14.	License Agreement
	The Company has entered into an exclusive licensing agreement (the "Agreement") with Balsam Ventures, Inc. ("Balsam"), dated for reference November 30, 2003, granting Balsam the exclusive right and license (the “License”), for a period of 40 years, to use, commercialize and exploit the Company’s proprietary trademarks, patents, process information, technical information, designs and drawings associated with the Company’s self-chilling beverage container technology (the "Cool Can Technology") including the right to manufacture, use and sell apparatus and products embodying the Cool Can 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 Cool Can 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 Cool Can Technology and/or commercial goods or products incorporating the Cool Can Technology, (b) a license royalty equal to 5% of revenues received by Balsam from sub-licensing the Cool Can Technology, and (c) a minimum royalty payment of $5,000 per month commencing on January 15, 2006, which is to be credited towards all royalty payments under the Agreement that have been paid by Balsam or become payable by Balsam during the course of the Agreement.
	On January 14, 2006, the Company entered into an agreement (the “Extension Agreement”) with Balsam, to amend the terms of the Agreement dated November 30, 2003. Under the Extension Agreement, the Company agreed to extend the date on which Balsam is required to commence paying the minimum royalty payments to January 15, 2007.
	The consideration for the Extension Agreement was as follows:
	1.	Balsam issued to the Company 500,000 restricted shares of its common stock; and
	2.	Balsam paid the Company $20,000.
	The Cool Can Technology and the Company patents and trademarks included in the Cool Can 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 Cool Can Technology during the currency of the Agreement. The Agreement supersedes all prior arrangements and agreements between the Company and Balsam in respect of the Cool Can Technology.
	In June, 2007, the Company notified Balsam that its intellectual property rights to the Cool Can Technology possibly expired. As a result, Balsam suspended payment of the minimum royalty amounts required under the Agreement effective April 1, 2007. As the patents for the Cool Can Technology have expired, Balsam has advised the Company that they intend to terminate the Agreement. The Company is currently negotiating with Balsam to settle their rights under the Agreement.

F-18

NORPAC TECHNOLOGIES, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

15.	Commitments
	On February 3, 2008, the Company entered into a Consulting Agreement (the “Consulting Agreement”) with Mountain View Holdings, LLC (“Mountain View”), a Colorado Limited Liability Company. Under the terms of the Consulting Agreement, Mountain View is to be paid $1,500 per month in consideration for providing the Company with various investor relation services for a six month period ending on August 31, 2008. The Consulting Agreement shall automatically renew in 30-day period intervals thereafter. Either party shall have the right to terminate this Consulting Agreement, beginning in the first monthly renewal period, upon 15 days advance written notice. In addition to the monthly consulting fee, the Company is required to pay Mountain View a transaction fee as a result of any transaction between the Company and any other party introduced or put into contact with by Mountain View whereby a sale of stock, issuance of debt, sale of assets, consolidation or other similar transaction or series or combination of transactions occurs. The transaction fee shall be equal to 3% of the dollar value of the transaction, which is based on the total value of the consideration, securities, property, business, assets or other value given, paid, transferred or contributed by, or to, the Company.
16.	Subsequent Events
	On April 1, 2008, a loan was granted from a third party company for $7,500. The loan is unsecured, bears interest at 10% and is due on demand.
	On April 25, 2008, a loan was granted from a third party company for $3,000. The loan is unsecured, bears interest at 10% and is due on demand.

F-19

ITEM 2.               MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q constitute "forward-looking statements." These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption “Part II – Item 1A. Risk Factors” and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. 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 10-KSB or Form 10-K, our Quarterly Reports on Form 10-QSB or Form 10-Q and our Current Reports on Form 8-K.

As used in this Quarterly Report, the terms "we," "us," "our,” and “Norpac” mean Norpac Technologies, Inc. unless otherwise indicated. All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise stated.

CORPORATE BACKGROUND

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

Until recently, we had been in the business of developing and marketing a proprietary technology for self-chilling beverage containers (the “Cool Can Technology”). However, our patents for the Cool Can Technology have expired. As a result, our management has decided to abandon the development of the Cool Can Technology.

Share Exchange Agreement

On January 3, 2008, we entered into a share exchange agreement (the “Exchange Agreement”) with Cellynx, Inc., a California corporation (“Cellynx”), and each of the shareholders of Cellynx (each, a “Cellynx Shareholder”, and collectively, the “Cellynx Shareholders”).

Upon consummation of the transactions set out in the Exchange Agreement (the “Share Exchange”), each of the Cellynx Shareholders will transfer the shares of Cellynx owned by them, which collectively constitutes all of the issued and outstanding capital stock of Cellynx (the “Cellynx Shares”), to us in exchange for newly issued shares of our common stock (the “New Norpac Shares”). The total number of New Norpac Shares to be issued to the Cellynx Shareholders will be determined on the basis that our existing shareholders, immediately prior to closing of the Share Exchange, are to own 30.1% of the outstanding shares of our common stock upon completion of

3

the Share Exchange. Each Cellynx Shareholder will receive that number of New Norpac Shares as is proportionate to the number of Cellynx Shares owned by them.

In the event that we do not have a sufficient number of authorized but unissued shares of common stock available to complete the Share Exchange in accordance with the prior paragraph, then we will issue to the Cellynx Shareholders all of our available authorized but unissued shares of common stock pro rata to the number of Cellynx Shares owned by them. Our Board of Directors will then establish a class of Series A Preferred Stock that shall be convertible into shares of our common stock. We will then issue shares of Series A Preferred Stock that will be convertible into the remainder of the shares of our common stock to which the Cellynx Shareholders are entitled. After closing, we will then amend our Articles of Incorporation to increase our authorized common stock to 200,000,000 shares, or such other number as shall be sufficient to enable each of the Cellynx Shareholders to convert their shares of Series A Preferred Stock into shares of our common stock, and to permit all options, warrants and convertible notes to purchase or acquire Cellynx Shares to be exercised or converted into shares of our common stock.

All options, warrants or convertible notes to purchase or acquire Cellynx Shares will be converted into options, warrants or convertible notes to purchase or acquire shares of our common stock in the same proportion at which the outstanding Cellynx Shares will be converted into shares of our common stock upon closing of the Share Exchange.

Closing of the Share Exchange is subject to a number of terms and conditions including, but not limited to, the following:

(a)	the delivery by Cellynx of those audited and, if necessary, unaudited financial statements as are necessary to allow us to meet our reporting obligations under the Securities Exchange Act of 1934 (the “Exchange Act”);
(b)	Cellynx having obtained an aggregate of $1.8 million in equity financing as follows:
	$100,000 on or before January 15, 2008 $225,000 on or before January 25, 2008 $225,000 on or before February 8, 2008 $1,250,000 on or before March 18, 2008
(c)	Cellynx and us having completed our respective due diligence investigations into the affairs of the other to each of our reasonable satisfaction.

The Exchange Agreement may be terminated: (i) by the mutual consent of the parties, (ii) by either party if the transaction has not been consummated for any reason by April 30, 2008, (iii) by either party if the transaction is prohibited by government order or action, or (iv) by either party upon a material breach of any representation, warranty, covenant or agreement by the other party, or if any representation or warrant of the other party shall have become materially untrue.

Upon the closing of the Share Exchange, Mr. John Thornton will resign as Norpac’s sole executive officer and director and Mr. Tareq Risheq and Mr. Daniel Ash will be appointed as officers and directors of Norpac.

If we are able to complete the transactions contemplated in the exchange Agreement, then:

4

(a)	we will acquire the business and operations of Cellynx, with Cellynx becoming our wholly-owned subsidiary, and our principal business activities will consist of the Cellynx business; and
(b)	the former shareholders of Cellynx will own approximately 70% of our issued and outstanding common stock.

As of the date of this Quarterly Report, we have not completed the transactions contemplated in the Exchange Agreement. As such, the parties to the Exchange Agreement have entered into negotiations to extend the termination date for completing the Share Exchange.

PLAN OF OPERATION

Until recently, we had been in the business of developing and marketing the Cool Can Technology. However, our patents for the Cool Can Technology have expired. As a result, our management has decided to abandon the development of the Cool Can Technology. We are currently in the process of reorganizing our business. We have entered into the Exchange Agreement with Cellynx and the shareholders of Cellynx. If the transactions set out in the Exchange Agreement are completed as contemplated, Cellynx will become our wholly owned subsidiary, and our principal business operations will consist of the Cellynx business. However, there is no assurance that the transactions set out in the Exchange Agreement will be completed as contemplated, or at all.

As a result, we are unable to provide an accurate estimate of our financial requirements for the next twelve months. However, we currently have a working capital of $59,447 and will need substantial financing in the near term in order to meet our current obligations as they become due and to meet our ongoing reporting obligations under the Securities Exchange Act of 1934 (the “Exchange Act”). If we are able to complete the transactions set out in the Exchange Agreement, of which there is no assurance, we anticipate that our financing requirements will increase significantly.

RESULTS OF OPERATIONS

Nine Months Summary

	Three Months Ended			Nine Months Ended
	March 31,		Percentage	March 31,		Percentage
			Increase /			Increase /
	2008	2007	(Decrease)	2008	2007	(Decrease)
Revenue	$-	$15,000	(100)%	$-	$15,000	(100)%
Expenses	(66,337)	(38,096)	74.1%	(493,961)	(116,631)	323.5%
Interest Income	-	11,007	(100)%	24,960	14,492	72.2%
Net Income (Loss)	$(66,337)	$(12,089)	448.7%	$(469,001)	$(87,139)	438.2%

Revenues

We did not earn any revenues during the nine months ended March 31, 2008. During the nine months ended March 31, 2007, we had revenues of $15,000 on account of royalty payments we received from Balsam Ventures Inc. As our Cool Can Technology has expired, we do not expect to earn any other sources of revenue in the near future.

5

Expenses

Our expenses for the nine months ended March 31, 2008 and 2007 consisted of the following:

	Three Months Ended March 31,			Nine Months Ended March 31,
			Percentage			Percentage
	2008	2007	Increase /	2008	2007	Increase /
			(Decrease)			(Decrease)
Accounting	$6,473	$6,749	(4.1)%	$43,535	$42,233	3.1%
Amortization	-	600	(100)%	-	1,800	(100)%
Management Fees	3,000	3,000	n/a	9,000	9,000	n/a
Consulting Fees	33,000	15,000	120%	63,000	15,000	320%
Legal	11,785	6,939	69.8%	26,655	31,339	(14.9)%
Rent	825	838	(1.6)%	2,475	5,157	(52.0)%
Other	10,503	4,978	110%	16,571	12,102	36.9%
Interest	750	-	n/a	896	-	n/a
Loss Reserve on Loans Receivable	-	-	n/a	331,829	-	n/a
Total	$66,336	$38,095	74.1%	$493,960	$116,631	323.5%

The increase in our administrative expenses for the nine months ended March 31, 2008 when compared to the nine months ended March 31, 2007, was primarily attributable to a loss reserve recorded in respect of loans granted to Nextdigital Corp. between November, 2006 and January, 2007. At December 31, 2007, our management determined that the collectibility of these loans was in doubt. As a result, we recorded a loss reserve of $331,829, equal to 50% of the total loans receivable and accrued interest receivable from Nextdigital.

Consulting fees during the three and nine month periods ended March 31, 2008 were also significantly higher than in the corresponding periods ended March 31, 2007. Consulting fees accrued during the period were incurred with respect to general administrative and accounting work performed in connection with our business activities and in connection with meeting our regulatory filings. The increase in consulting fees is due to the fact that we incurred consulting fees of $18,000 to Mountain View Holdings, LLC for performing certain investor relations services during the three months ended March 31, 2008.

Interest Income

Interest income for the periods ended March 31, 2008 and 2007 is related to loans totaling $612,000 granted to Nextdigital Corp. between November, 2006 and January, 2007. As discussed above, at December 31, 2007 our management has determined that the collectibility of these loans was in doubt, and we recorded a loss reserve of $331,829, equal to 50% of the total loans receivable and accrued interest receivable from Nextdigital.

6

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
			Percentage
	At March 31, 2008	At June 30, 2007	Increase / (Decrease)
Current Assets	$332,826	$1,089	30,462.5%
Current Liabilities	(273,379)	(111,339)	145.5%
Working Capital (Deficit)	$59,447	$(110,250)	153.9%

Cash Flows
	Nine Months Ended March 31,
	2008	2007
Cash Flows (Used In) Operating Activities	$(66,212)	$(76,571)
Cash Flows (Used In) Investing Activities	-	(612,000)
Cash Flows From Financing Activities	66,120	672,500
Net Increase (Decrease) In Cash During Period	$(92)	$(16,071)

Our working capital increased during the nine months ended March 31, 2008 due to the fact that $244,882 in amounts owed to us by Nextdigital were re-classified from long term assets to current assets. We have recorded a loss reserve of $331,829, equal to 50% of the total loans receivable (including principal and accrued interest) from Nextdigital. There is no assurance that we will be able to collect any or all of the amounts owed to us from Nextdigital.

During the nine months ended March 31, 2008, we had no sources of revenue. Our sole source of financing came in the form of short-term loans. We received the following short-term loans during the nine months ended March 31, 2008:

(a)	A loan of $15,000 from a third party company, bearing interest at a rate of 10% per annum and due on demand.
(b)	A loan of $1,000 from a third party company, non-interest bearing and due on demand. During the nine months ended March 31, 2008, we repaid $680 of this loan.
(c)	Loans totaling $43,000 from a third party company, bearing interest at a rate of 10% per annum and due on demand.
(d)	A loan of $5,000 from a third party company, non-interest bearing and due on demand. We also received an additional $2,800 from the same third party company. This loan bears interest at a rate of 10% per annum and is due on demand.

Financing Requirements

We will require additional financing if we are to continue as a going concern. In addition, If we are able to complete the transactions set out in the Exchange Agreement, of which there is no assurance, we anticipate that our financing requirements will increase significantly.

We recorded a loss reserve of $331,829, equal to 50% of the total loans receivable (including principal and accrued interest) from Nextdigital. As of the date of filing of this Quarterly Report on

7

Form 10-Q, our management believes that no further loss reserve is necessary, however there is no assurance that we will be able to collect the remaining amounts due from Nextdigital.

In addition, although we own 5,545,000 shares of Balsam Ventures, Inc., that have been recorded on our balance sheet with a fair value of $100,900 as of March 31, 2008, there are no assurances that we will be able to sell enough of these shares to meet our short term financing requirements as the trading volume for Balsam’s shares is extremely limited.

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

OFF-BALANCE SHEET ARRANGEMENTS

None.

CRITICAL ACCOUNTING POLICIES

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

Use of Estimates

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

Fair Value of Financial Instruments

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

Comprehensive Loss

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

8

Loans Receivable

Loans receivable are reported at the outstanding principal balance adjusted for any charge-offs and reserve for loan losses. Our management recorded a reserve amounting to $331,829 for loans receivable and accrued interest receivable at December 31, 2007. When determining the reserve for loan losses, our management considers if any events or changes in circumstances indicate uncollectibility. When a loan is determined to be uncollectible, it is charged against the loss reserve. Loans are not collateralized. Because of inherent uncertainties in estimating the reserve for loan losses, it is at least reasonably possible that the estimates used will change in the near term. Interest on loans is recognized when earned. Interest on loans is generally not recognized when loans become past due. Thereafter, no interest is taken into income until such time as the borrower demonstrates the ability to resume payments. There were no past due loans at March 31, 2008 and June 30, 2007. Based on current loan interest rates, our management does not believe exposure to interest rate sensitivity is significant. Our management periodically reviews loans outstanding to determine if any loans are impaired. Impaired loans, if any, are adjusted to estimated net realized value through the loan loss reserve. At March 31, 2008, loans receivable amounting to $306,000 were on non-accrual status.

ITEM 3.               QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4(T).          CONTROLS AND PROCEDURES.

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

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.               LEGAL PROCEEDINGS.

None.

ITEM 1A.            RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

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

We have earned substantial losses for each of the nine months ended March 31, 2008 and 2007, and we have an accumulated deficit of $3,231,083 as of March 31, 2008. Although the financial statements for each of these periods were prepared assuming that we would continue as a going concern, in the view of our independent auditors, there is a substantial doubt about our ability to continue as a going concern. Since we do not expect to generate any significant revenues for the foreseeable future, our ability to continue as a going concern depends, in large part, on our ability to raise additional capital through equity or debt financing transactions. If we are unable to raise additional capital, stockholders may lose their investment.

Our patent rights to the Cool Can Technology have expired and there are no assurances that we will be able to complete the acquisition of Cellynx.

We have abandoned development of the Cool Can Technology. We have no business assets or business operations. Although we have entered into an agreement with Cellynx Inc. and its shareholders to acquire Cellynx, there is no assurance that we will be able to complete the acquisition of Cellynx. If we are unable to complete the acquisition Cellynx, we will continue to seek out and evaluate alternative business opportunities. There are no assurances that we will be able to identify any alternative business opportunities that are suitable for us. Even if we do identify potential business opportunities, there is no assurance that we will be able to acquire those opportunities.

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

We had a working capital surplus of $59,447 as of March 31, 2008 due to the fact that $244,882 in amounts owed to us by Nextdigital were re-classified from long term assets to current assets. We have recorded a loss reserve of $331,829, equal to 50% of the total loans receivable (including principal and accrued interest) from Nextdigital. As of the date of filing of this Quarterly Report on Form 10-Q, our management believes that no further loss reserve is necessary, however there is no assurance that we will be able to collect any or all of the amounts due from Nextdigital. In addition, although we own 5,545,000 shares of Balsam Ventures, Inc. that have been recorded on our balance sheet as “available-for-sale securities” with a fair value of $110,900 as at March 31, 2008, there is no assurance that we will be able to sell any or all of these shares. As such, we may not be able to meet our short term financial needs from our existing assets. If we are not able to

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obtain financing in an amount sufficient to enable us to pay our liabilities and expenses as they come due, we may not be able to continue as a going concern.

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

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

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

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

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

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

Because our securities constitute "penny stocks" within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the quotation price of our common stock is less than $5.00 per share, the common stock will be subject to Rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

1.	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
2.	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;
3.	contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;
4.	contains a toll-free telephone number for inquiries on disciplinary actions;

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5.	defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and
6.	contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

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

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.

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

Exhibit
Number	Description of Exhibit
2.1	Share Exchange Agreement dated as of January 3, 2008 among Cellynx, Inc., the shareholders of Cellynx and Norpac Technologies, Inc.(14)
3.1	Articles of Incorporation and Bylaws.(1)
3.2	Articles of Merger.(6)
3.3	Bylaws as amended.(6)
4.1	Form of Warrant Certificate dated January 5, 2007.(11)
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)
10.8	Extension Agreement dated as of January 14, 2006 between NorPac Technologies, Inc. and Balsam Ventures, Inc.(8)
10.9	Agreement and Plan of Merger dated November 7, 2006 among Norpac Technologies, Inc., Nextdigital Corp. and Nextdigital Acquisition Corp.(9)
10.10	Loan Agreement dated November 7, 2006 between Norpac Technologies, Inc. and Nextdigital Corp.(9)
10.11	Promissory Note executed by Nextdigital Corp in favor of Norpac Technologies, Inc.(9)
10.12	Loan Agreement dated December 4, 2006 between Norpac Technologies, Inc. and Nextdigital Corp.(10)
10.13	Promissory Note executed by Nextdigital Corp in favor of Norpac Technologies, Inc.(10)
10.14	Loan Agreement dated January 30, 2007 between Norpac Technologies, Inc. and Nextdigital Corp.(12)
10.15	Promissory Note executed by Nextdigital Corp in favor of Norpac Technologies, Inc.(12)
10.16	Loan Agreement dated November 20, 2006 between Norpac Technologies, Inc. and Nextdigital Corp.(13)
10.17	Promissory Note executed by Nextdigital Corp in favor of Norpac Technologies, Inc.(13)
10.18	Consulting Agreement dated February 1, 2008 between Mountain View Holdings, LLC and Norpac Technologies Inc.(15)
31.1	Certification of Chief Executive Officer and Chief Financial Officer as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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Exhibit
Number	Description of Exhibit
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 Quarterly Report on Form 10-QSB for the fiscal period ended September 30, 2003.
(7)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed July 8, 2004.
(8)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed January 19, 2006.
(9)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed November 13, 2006.
(10)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed December 7, 2006.
(11)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed January 11, 2007.
(12)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed February 5, 2007.
(13)	Filed with the SEC as an exhibit to our Quarterly Report on Form 10-QSB filed February 20, 2007.
(14)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed January 9, 2008.
(15)	Filed with the SEC as an exhibit to our Current Report on Form 8-K filed February 7, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities 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.
Date:	May 15, 2008
		By:	/s/ John P. Thornton
			JOHN P. THORNTON
			Chief Executive Officer and Chief Financial Officer
			(Principal Executive Officer, Principal Financial
			Officer and Principal Accounting Officer)