10QSB 1 balsamtenqsb.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2002 [ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period ___________ to ____________ Commission File Number 000-32011 --------- BALSAM VENTURES, INC. ----------------------------------------------------------------- (Exact name of small Business Issuer as specified in its charter) NEVADA 52-2219056 ------------------------------- -------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 810 PEACE PORTAL DRIVE, SUITE 200, BLAINE, WASHINGTON 98230 --------------------------------------- --------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: 866-277-7772 ------------ former address: Suite 12, 5880 Hampton Place Vancouver, British Columbia, Canada V6T 2E9 former telephone number 604-222-2657 --------------------------------------- (Former name, former address and former fiscal year end 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 Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [X] Yes [ ] No State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 20,200,000 shares of common stock, $0.001 par value outstanding as of August 12, 2002. 1 PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and Item 310 (b) of Regulation S-B, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the 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 six months ended June 30, 2002 are not necessarily indicative of the results that can be expected for the year ending December 31, 2002. 2 BALSAM VENTURES INC. (A Development Stage Company) FINANCIAL STATEMENTS JUNE 30, 2002 (Unaudited) (Stated in U.S. Dollars) 3
BALSAM VENTURES INC. (A Development Stage Company) BALANCE SHEET (Unaudited) (Stated in U.S. Dollars) ------------------------------------------------------------- JUNE 30 DECEMBER 31 2002 2001 ------------------------------------------------------------- ASSETS Current Cash $ - $ 14,877 Software Development Costs 8,675 8,675 License (Note 3) - - ------------------------- $ 8,675 $ 23,552 ============================================================= LIABILITIES Current Accounts payable $ 24,986 $ 1,809 ------------------------- SHAREHOLDER'S (DEFICIENCY) EQUITY Share Capital Authorized: 100,000,000 common shares, par value with $0.001 per share Issued and outstanding: 20,200,000 common shares 20,200 10,100 Additional paid-in capital 64,900 64,900 Deficit Accumulated During The Development Stage (101,411) (53,257) ------------------------- (16,311) 21,743 ------------------------- $ 8,675 $ 23,552 =============================================================
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BALSAM VENTURES INC. (A Development Stage Company) STATEMENT OF LOSS AND DEFICIT (Unaudited) (Stated in U.S. Dollars) ---------------------------------------------------------------------------------------------------------- INCEPTION AUGUST 17 THREE MONTHS ENDED SIX MONTHS ENDED 1999 TO JUNE 30 JUNE 30 JUNE 30 2002 2001 2002 2001 2002 ---------------------------------------------------------------------------------------------------------- Expenses Consulting services $ 2,700 $ - $ 2,827 $ - $ 2,927 Domain registration - - 46 - 251 Professional fees 14,400 7,800 22,168 9,407 70,402 Office and sundry 2,441 205 2,863 534 5,153 Regulatory 7,500 - 7,500 - 7,500 Stock transfer services 2,650 - 2,650 - 5,078 ----------------------------------------------------------- Net Loss For The Period 29,691 8,005 38,054 9,941 $91,311 ========================================================================================================== Net Loss Per Share $ 0.01 $ 0.01 $ 0.01 $ 0.01 ================================================================================================== Weighted Average Number Of Shares Outstanding 20,200,000 20,200,000 20,200,000 20,200,000 ==================================================================================================
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BALSAM VENTURES INC. (A Development Stage Company) STATEMENT OF CASH FLOWS (Unaudited) (Stated in U.S. Dollars) ---------------------------------------------------------------------------------------------------------- INCEPTION AUGUST 17 THREE MONTHS ENDED SIX MONTHS ENDED 1999 TO JUNE 30 JUNE 30 JUNE 30 2002 2001 2002 2001 2002 ---------------------------------------------------------------------------------------------------------- Cash Flows From Operating Activities Net loss for the period $(29,691) $(8,005) $(38,054) $(9,941) $(91,311) Adjustments To Reconcile Net Loss To Net Cash Used By Operating Activities Change in accounts payable 18,565 2,394 23,177 2,729 24,986 --------------------------------------------------- (11,126) (5,611) (14,877) (7,212) (66,325) --------------------------------------------------- Cash Flows From Investing Activity Software development costs - - - - (8,675) --------------------------------------------------- Cash Flows From Financing Activity Share capital - - - - 75,000 --------------------------------------------------- Increase (Decrease) In Cash (11,126) (5,611) (14,877) (7,212) - Cash, Beginning Of Period 11,126 36,999 14,877 38,600 - --------------------------------------------------- Cash, End Of Period $ - $31,388 $ - $31,388 $ - ==========================================================================================================
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BALSAM VENTURES INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY JUNE 30, 2002 (Unaudited) (Stated in U.S. Dollars) COMMON STOCK --------------------------------- ADDITIONAL SHARE PAID-IN SUBSCRIPTIONS SHARES AMOUNT CAPITAL RECEIVABLE DEFICIT TOTAL ------------------------------------------------------------------------------------------------- Shares issued for cash at $0.001 5,000,000 $ 5,000 $ - $ - $ - $ 5,000 Shares issued for cash at $0.01 5,000,000 5,000 45,000 - - 50,000 Shares issued for cash at $0.20 100,000 100 19,900 - - 20,000 Subscriptions receivable - - - (2,500) - (2,500) Net loss for the period - - - - (2,926) (2,926) --------------------------------------------------------------------- Balance, December 31, 1999 10,100,000 10,100 64,900 (2,500) (2,926) 69,574 Subscriptions receivable - - - 2,500 - 2,500 Net loss for the year - - - - (31,342) (31,342) --------------------------------------------------------------------- Balance, December 31, 2000 10,100,000 10,100 64,900 - (34,268) 40,732 Net loss for the year - - - - (18,989) (18,989) --------------------------------------------------------------------- Balance, December 31, 2001 10,100,000 10,100 64,900 - (53,257) 21,743 Stock split (2 for 1) 10,100,000 10,100 - - (10,100) - Net loss for the period - - - - (38,054) (38,054) --------------------------------------------------------------------- Balance, June 30, 2002 20,200,000 $ 20,200 $64,900 $ - $(101,411) $(16,311) =====================================================================
7 BALSAM VENTURES INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2002 (Unaudited) (Stated in U.S. Dollars) 1. BASIS OF PRESENTATION AND OPERATIONS Basis of Presentation The unaudited financial statements as of June 30, 2002 included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. It is suggested that these financial statements be read in conjunction with the December 31, 2001 audited financial statements and notes thereto. Operations a) Organization The Company was incorporated in the State of Nevada, U.S.A., on August 17, 1999. b) Development Stage Activities i) The Company plans to launch a free information website to assist and attract the people wanting information on immigration to the USA. The Company plans to use the website to earn income from companies who are prepared to pay to have web advertising in the form of a button or banners on the website selling their products or services. The Company plans to solicit advertisers who are targeting sales of their products and services at people using the Company's website. ii) The Company plans to commercialize and exploit the self-chilling beverage container technology that it has acquired pursuant to the license agreement detailed in Note 3. The Company is in the development stage, therefore, recovery of its assets is dependent upon future events, the outcome of which is indeterminable. In addition, successful completion of the Company's development program and its transition, ultimately to the attainment of profitable operations is dependent upon obtaining adequate financing to fulfil its development activities and achieve a level of sales adequate to support its cost structure. 8 BALSAM VENTURES INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2002 (Unaudited) (Stated in U.S. Dollars) 1. BASIS OF PRESENTATION AND OPERATIONS (Continued) c) Going Concern The Company will need additional working capital to be successful in its planned activities and to service its current debt for the coming year and, therefore, continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to accomplish its objective. Management has developed a strategy, which it believes will accomplish this objective, and is presently engaged in seeking various sources of additional working capital including equity funding through a private placement and long term financing. 2. SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below: a) Development Stage Company The Company is a developed stage company as defined in the Statements of Financial Accounting Standards No. 7. The Company is devoting substantially all of its present efforts to establishing new businesses and none of its planned principal operations have commenced. All losses accumulated since inception have been considered as part of the Company's development stage activities. b) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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 the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates. 9 BALSAM VENTURES INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2002 (Unaudited) (Stated in U.S. Dollars) 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) c) Software Development Costs Software development costs represent capitalized costs of design, configuration, coding, installation and testing of the Company's website up to its initial implementation. Upon implementation the asset will be amortized to expense over its estimated useful life of three years using the straight line method. Ongoing website post-implementation costs of operation, including training and application maintenance, will be charged to expense as incurred. d) License Fee License fee represents costs incurred to secure the license. These costs will be amortized on a straight-line basis over the estimated useful life of the license. e) Income Taxes The Company has adopted Statement of Financial Accounting Standards No. 109 - "Accounting for Income Taxes" (SFAS 109). This standard requires the use of an asset and liability approach for financial accounting and reporting on income taxes. If it is more likely than not that some portion or all if a deferred tax asset will not be realized, a valuation allowance is recognized. f) Financial Instruments The Company's financial instruments consist of cash and accounts payable. Unless otherwise noted, it is management's opinion that this Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximate their carrying values, unless otherwise noted. g) Net Loss Per Share Net loss per share is calculated using the weighted average number of common shares outstanding during the period. Fully diluted loss per share is not presented, as the impact of the exercise of options is anti-dilutive. 10 BALSAM VENTURES INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS JUNE 30, 2002 (Unaudited) (Stated in U.S. Dollars) 3. LICENSE Pursuant to an exclusive license agreement, dated June 5, 2002, the Company has acquired the exclusive worldwide license to use, commercialize and license the technology for self-chilling beverage containers. In consideration of the grant of the exclusive license, the Company agreed to: a) Pay a license fee of US$200,000 within 90 days following the date of execution of the agreement; b) Incur the development expenditures not less than $1,800,000 within 24 months following the date of execution of two agreements; c) Pay royalties on the following basis: i) a sales royalty on the sale of products equal to 5% of gross profits; and ii) a license royalty on revenues from sub-licensing equal to 5% of gross license revenue. The royalties in respect of any fiscal year following the fiscal year ended June 30, 2004 shall not be less than $200,000 per year. 4. SHARE CAPITAL During the period, the Company increased its issued and outstanding share capital by way of a two for one split of the Company's common stock. The stock split was effected by the completion of a stock dividend to each of the Company's shareholders of one common share for every one common share held. 11 Item 2. Management's Discussion and Analysis or Plan of Operations FORWARD LOOKING STATEMENTS The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks described below, and, from time to time, in other reports the Company files with the SEC. These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. OVERVIEW USACitizenship.Net Web Site We have developed a free Internet web site at our "www.usacitizenship.net" domain that provides a reliable source of information on immigration into the United States. Our business plan is to draw users to our web site so that we can sell and generate revenues from the sale of web site advertisements. We believe that the an Internet web site which offers free information on the process of immigrating into the United States would attract substantial usage. We believe that if we are successful in attracting people to our web site, we will be able to generate revenues from advertisers who are interested in the demographics of our web site users. We have completed the development of our web site and our web site is now operational. We have yet to achieve any sales of advertising on our web site. Our business plan is to solicit advertisers whose target market includes the users of our web site in order to generate revenues, however we have postponed these plans to concentrate on development of the InstaCool technology as discussed below. Accordingly, our business operations are in a start-up phase and we have not earned any revenues to date. License of Cool Can Technology On June 6, 2002, we entered into an exclusive licensing agreement (the "Agreement") with Cool Can Technologies, Inc., ("Cool Can") pursuant to which we were granted the exclusive worldwide right and license, for a period of 40 years, to enjoy, commercialize and exploit Cool Can's proprietary Instacool self-chilling beverage container technology (the "Technology"). The licensed rights include the right to manufacture, use and sell apparatus and products embodying the Technology and the right to grant sub-licenses of our right to manufacture, use and sell products embodying the Technology. The consideration we have agreed to pay to Cool Can pursuant to the Agreement is as follows: 12 1. we must pay Cool Can a license fee of $200,000 by September 4, 2002; 2. we must expend $1,800,000 to develop and commercialize the Technology within 24 months of June 6, 2002; and 3. we must pay ongoing royalties to Cool Can equal to 5% of gross profits from sales of products or 5% of gross licensing revenues subject to minimum royalty payments of $200,000 per year in each of our fiscal years following the fiscal year ended June 30, 2004. Subject to the license, the patents and trademarks included in the Technology (the "Intellectual Property") remain the property of Cool Can however, we have a right of first refusal to acquire the Intellectual Property should Cool Can seek to dispose of the Technology during the currency of the Agreement. Cool Can's proposed product is referred to as the "InstaCool" product and consists of a module for insertion in an aluminium 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 Cool Can has been granted patent protection. The module would be inserted in an aluminium beverage container during an automated canning process. Containers incorporating the InstaCool 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. PLAN OF OPERATIONS Our plan of operations for the next twelve months will include the following components, subject to our achieving the required financing: (1) We plan to defer proceeding with an advertising and marketing campaign for our web site in order to concentrate our efforts and financial resources on the InstaCool technology. We anticipate spending approximately $6,000 over the next twelve months on ongoing operating and administrative expenses associated with maintaining our web site. (2) We plan to raise the required $200,000 to pay for the payment under our license agreement for the InstaCool technology due on September 4, 2002; (3) We plan to spend approximately $300,000 to develop the InstaCool Technology. We plan to proceed with product development and production of samples of our self-chilling beverage container modules. These costs will be accounted for under our license agreement with Cool Can towards the expenditures for the development of the Technology to be incurred by us pursuant to the license agreement. This phase of development will include the following elements and will take approximately nine months once financing is in place: 13 (a) Product fabrication, including testing and studying design concepts, making required design modifications, developing and building a fully functioning prototype self-chilling beverage container. (b) Follow on prototype development including, analysis, testing and fine tooling required for production and finalizing all production drawings and specifications. (c) Producing high-volume production cost estimates and methods, including estimation of tooling costs, sourcing production facilities and requesting bids for tender from potential manufacturers of component parts and analysis and cost estimates for projected method of assembling of chilling module. (4) We anticipate spending approximately $20,000 on professional fees over the next twelve months in complying with our reporting obligations under the Securities Exchange Act of 1934. We anticipate that we will be spend approximately $526,000 over twelve-month period pursuing our stated plan of operations. Of these anticipated expenditures, we anticipate that $363,000 will be spent on our plan of operations over the next six months. Our present cash reserves are not sufficient for us to carry out our plan of operations without substantial additional financing. We are currently attempting to arrange for an equity financing that would enable us to proceed with our plan of operations. However, we do not have any financing arrangements in place and there is no assurance that we will be able to achieve the required financing. If we are not able to complete a financing to pay for the $200,000 due under our license agreement on September 4, 2002, then our license agreement will terminate and we will lose all rights to the InstaCool Technology. We are currently negotiating a short term extension agreement for this payment, although there is no assurance CoolCan will agree to an extension. If we are successful in acquiring a license of the Cool Can technology, there is no assurance that we will be able to achieve sufficient financing that would be required to commercialize this technology and to earn revenues. Our actual expenditures and business plan may differ from the one stated above. Our board of directors may decide not to pursue this plan. In addition, we may modify the plan based on available financing. RESULTS OF OPERATIONS We did not earn any revenues during the period ended June 30, 2002. We do not anticipate earning revenues until we commence sales of advertising on our immigration web site or we are successful completing the development of the InstaCool technology and are successful in commercializing this technology. We are presently in the development stage and we can provide no assurance that we will be successful in earning revenues from our immigration web site or from the InstaCool technology even if we achieve the financing to develop this technology. We incurred operating expenses in the amount of $38,054 for the six months ended June 30, 2002 as compared to $9,941 for the six months ended June 30, 2001. For the period ended June 30, 2002, these operating expenses were comprised primarily of professional fees in the amount of $22,168 associated with our acquisition for the license of the InstaCool Technology. We also incurred office and sundry expenses in the amount of $2,863 during this period compared to $534 for the same period last year. Additional expenses included consulting services of $2,827 and domain registration costs of $46 for the period ending June 30, 2002; these costs were not incurred in the quarter ended June 30, 2001. Our operating costs will increase without any corresponding increase 14 in revenues if we achieve the financing necessary to proceed with the development of the InstaCool technology. We incurred a loss of $38,054 for the six months ended June 30, 2002 compared to $9,941 for the three months ended June 30, 2001. Our net loss was attributable entirely to our operating expenses. FINANCIAL CONDITION Liquidity and Financial Condition We had cash of $0 as of June 30, 2002, compared to cash of $14,877 as of December 31, 2001. We had a working capital deficit of $24,986 as of June 30, 2002, compared to positive working capital as of $13,068 as of December 31, 2001. We will require additional financing if we are to continue operations as we have yet to realize revenues from our Internet web site operations, the InstaCool technology is still in the development stage and our plan of operations calls for expenses in the amount of $526,000 over the next twelve months. We have postponed marketing of our immigration web site as we pursue the financing and development of the InstaCool Technology. Accordingly, we anticipate that we will not earn any revenues over the next twelve months from this web site unless we determine at a later date to initiate a marketing plan for our immigration web site. We anticipate that any additional financing that we require to complete our plan of operations would be an equity financing achieved through the sale of our common stock. We do not have any arrangement in place for any debt or equity financing. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our company. In the event we are not successful in obtaining such financing when necessary, we may not be able to proceed with our plan of operations and we may lose our license agreement for the InstaCool technology. We anticipate continuing operating losses in the foreseeable future. We base this expectation in part on the fact that we will incur substantial operating expenses in completing our stated plan of operations before we will have the opportunity to earn revenues. Our future financial results are also uncertain due to a number of factors, many of which are outside our control. These factors include, but are not limited to: (1) our ability to successfully develop the InstaCool Technology with Cool Can; (2) our ability to successfully commercialize the InstaCool Technology if the development work is successful in establishing a feasible product; (3) our ability to successfully finance development of the InstaCool Technology; (4) our ability to convince commercial beverage manufactures to incorporate the InstaCool Technology into their product lines. There is no assurance that development efforts undertaken with respect to the InstaCool Technology will result in the production of a functioning prototype product that we can market to potential purchasers of the Technology. Even if a functioning prototype is developed, there is no assurance that the InstaCool Technology can be incorporated into commercial beverage canning processes at a marketable cost. In addition, commercial beverage companies may determine that consumers are not prepared to purchase a product incorporating the InstaCool Technology. In view of these factors, there is no assurance that we will earn revenues even if we can proceed with the development of the InstaCool Technology. 15 PART II - OTHER INFORMATION Item 1. Legal Proceedings We are not a party to any material legal proceedings and to our knowledge, no such proceedings are threatened or contemplated. Item 2. Changes in Securities We did not complete any unregistered sales of our common stock during our fiscal quarter ended June 30, 2002. Item 3. Defaults upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of our security holders during our second quarter ended June 30, 2002. Item 5. Other Information We issued a stock dividend to our shareholders of record on April 10, 2002. Each shareholder of record was issued an additional one share of our common stock for each share held prior to the record date. Our common stock was approved for trading on a post-split basis effective as of April 12, 2002. As a result of this stock dividend, the issued and outstanding shares of our common stock increased from 10,100,000 shares to 20,200,000 shares as of April 10, 2002. On July 4, 2002, Mr. John Boschert, as purchaser, and Mr. Robert Smith, as seller, entered into a stock purchase agreement pursuant to which Mr. Boschert has acquired 10,000,000 shares of our common stock (representing approximately 49.5% of the outstanding shares of our common stock) for an aggregate purchase price of $42,000. The consideration for the acquisition was paid from the personal funds of Mr. Boschert. The purchase of the shares of common stock by Mr. Boschert from Mr. Smith was consummated in a private transaction and Mr. Boschert may now be considered to be in "control" the Company. As a condition of the Stock Purchase Agreement, Mr. Smith resigned as president, secretary and treasurer and as a director of the Company on July 22, 2002. Mr. Boschert was appointed as president, secretary and treasurer and as a director of the Company on July 22, 2002 concurrent with Mr. Smith's resignation. 16 Item 6. Exhibits and Reports on Form 8-K. EXHIBITS None. REPORTS ON FORM 8-K Date of Filing of Form 8-K Description of Form 8-K -------------------------- ---------------------------------------- June 20, 2002 Form 8-K announcing Cool Can license agreement dated June 5, 2002 17 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 authorised. BALSAM VENTURES, INC. Date: August 13, 2002 By: /s/ John Boschert ---------------------------------- JOHN BOSCHERT, President, Secretary and Treasurer CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, John Boschert, as chief executive officer and chief financial officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-QSB of Balsam Ventures, Inc. for the quarterly period ended June 30, 2002 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Quarterly Report on Form 10-QSB fairly presents in all material respects the financial condition and results of operations of Balsam Ventures, Inc. By: /s/ John Boschert --------------------------------- Name: JOHN BOSCHERT Title: Chief Executive Officer Date: August 13, 2002