U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM N/A to N/A
333-90031
Commission file number
NORTHSTAR ELECTRONICS, INC.
Exact name of small business issuer as specified in its charter
DELAWARE
State or other jurisdiction of organization
#33-0803434
IRS Employee incorporation or Identification No.
SUITE # 410 - 409 GRANVILLE STREET,
VANCOUVER, BRITISH COLUMBIA, CANADA V6C 1T2
Address of principal executive offices
(604) 685-0364
Issuer's telephone number
NOT APPLICABLE
Former name, former address and former fiscal year, if changed since last report
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or 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[ ]
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
SIGNATURES
NORTHSTAR ELECTRONICS, INC.
Consolidated Balance Sheets - U.S. Dollars
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):
[ ]Large accelerated filer [ ]Accelerated filer [X]NON-ACCELERATED FILER
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). [ ]Yes [X]NO
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes[] No[] NOT APPLICABLE
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
COMMON SHARES AS OF AUGUST 4, 2009: 30,450,738
Transitional Small Business Disclosure Format (check one):Yes[] NO[X]
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NORTHSTAR ELECTRONICS, INC. Consolidated Financial Statements UNAUDITED -
PREPARED BY MANAGEMENT
Consolidated Balance Sheets at June 30, 2009 and at December 31, 2008
Consolidated Statements of Operations for the Three and Six Months Ended June
30, 2009 and 2008
Consolidated Statements of Changes in Stockholders' Equity for the Three and Six
Months Ended June 30, 2009
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and
2008
Notes to Consolidated Financial Statements
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
ITEM 3. CONTROLS AND PROCEDURES
PART II OTHER INFORMATION
June 30 December 31
2009 2008
ASSETS UNAUDITED Audited
---------------------------
Current
Cash and cash equivalents $ 63,040 $ 210,348
Accounts receivable 691,781 347,798
Inventory - work in process 187,679 85,732
Investment tax credits receivable 27,520 33,317
Prepaid expenses 31,430 48,037
-----------------------------
Total Current Assets 1,001,450 725,232
Pre contract costs 276,865 330,223
Intangible asset 17,200 16,332
Equipment 51,032 48,972
-----------------------------
Total Assets $1,346,547 $1,120,759
-----------------------------
LIABILITIES
Current
Accounts payable and accrued liabilities $1,829,984 $1,453,259
Loans payable 179,808 142,422
Deferred revenue 119,455 59,839
Due to Cabot Management Limited 46,873 44,507
Due to Directors 1,095,373 952,084
Current portion of long term debt 525,783 497,170
----------------------------
Total Current Liabilities 3,797,276 3,149,281
Long term debt 1,604,291 1,516,988
-----------------------------
Total Liabilities $5,401,567 $4,666,269
Going Concern (note 1), Contingencies (note 5)
STOCKHOLDERS' EQUITY
Authorized
100,000,000 shares of common stock with a par value of $0.0001 each
20,000,000 shares of preferred stock with a par value of $0.0001 each
Issued and outstanding
30,450,738 shares of common stock 3,045 2,997
(29,960,370 December 31, 2008)
Nil shares of preferred stock - -
Subscribed - 110,100 preferred series A 110,100 51,600
(51,600 December 31, 2008)
Additional paid in capital 5,051,023 4,954,639
Cumulative other comprehensive income (loss) (61,664) 88,935
Deficit (9,157,524) (8,643,681)
-------------------------------
Total Stockholders' Equity (Deficit) (4,055,020) (3,545,510)
-------------------------------
Total Liabilities and Stockholders' Equity $1,346,547 $1,120,759
===============================
See notes to the consolidated financial statements
NORTHSTAR ELECTRONICS, INC.
Consolidated Statements of Operations
Three and Six Months Ended June 30, 2009 and 2008
Unaudited
U.S.Dollars
Three Months Six Months
2009 2008 2009 2008
--------------------------------------------
Sales $879,565 $533,332 $1,382,396 $916,234
Cost of goods sold 677,368 354,826 995,744 579,178
----------------------------------------------
Gross margin 202,197 178,506 386,652 337,056
Recovery of development costs 0 30,605 0 71,248
Other income (expense) (12,442) (1,906) 0 6,983
---------------------------------------------
189,755 207,205 386,652 415,287
--------------------------------------------
EXPENSES
Salaries 201,989 260,464 377,499 567,504
Management and administration fees 45,000 67,605 93,090 67,605
Financial consulting 0 42,650 5,000 42,650
Professional fees 42,946 4,783 49,072 27,015
Rent 30,404 15,299 63,468 31,221
Research and development 0 13,791 0 13,791
Investor relations 0 10,500 12,500 21,150
Office and administration 30,436 10,397 57,428 40,171
Travel and business development 2,072 19,084 14,517 84,065
Interest on debt 89,565 46,862 168,282 66,158
Telephone and utilities 9,018 15,857 16,275 30,211
Amortization 28,800 5,236 31,934 10,370
Finance fees 10,430 0 11,430 49,500
---------------------------------------------
Total expenses 490,660 432,811 900,495 795,550
---------------------------------------------
Net loss for period $(300,905) $(321,114) $(513,843) $(668,203)
-----------------------------------------------
Net loss per share $ (0.01) $ (0.01) $ (0.02) $ (0.02)
Weighted average number of shares
outstanding 30,322,737 24,577,319 30,171,273 23,998,844
See notes to the consolidated financial statements
NORTHSTAR ELECTRONICS, INC.
Consolidated Statement of Changes in Stockholders' Equity
Six Months Ended June 30, 2009
Unaudited
U.S. Dollars
Additional Other
Paid in Comprehensive Accumulated Total Stockholder
Shares Amount Capital Income Deficit (Deficit)
-------------------------------------------------------------------------------------------------------------
Balance
December 31,
2008 29,960,370 $2,997 $4,954,639 $88,935 $(8,643,681) $(3,597,110)
Net loss for
three months - - - - (513,843) (513.843)
Currency
translation
adjustment - - - (150,599) - (150,599)
Issuance of
common stock:
- for debt 225,833 22 23,478 - - 23,500
- for cash 138,625 14 61,486 - - 61,500
- for services 125,910 12 11,420 - - 11,432
-----------------------------------------------------------------------------------------------------------
Balance
June 30,
2009 30,045,073 $3,045 $5,051,023 ($61,664) $(9,157,524) $(4,165,120)
------------------------------------------------------------------------------------------------------------
Series A shares of preferred stock - subscribed 110,100
==========
Total stockholders' equity (deficit) $(4,055,020)
=============
See notes to the consolidated financial statements
NORTHSTAR ELECTRONICS, INC.
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2009 and 2008
Unaudited
U.S.Dollars
2009 2008
Operating Activities -----------------------------
Net income (loss) $(513,843) $(668,203)
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Amortization 31,934 10,302
Write down of deferred start up costs 30,167 0
Issuance of common stock for services 11,432 68,227
Changes in operating assets and liabilities 52,567 237,772
---------------------------
Net cash (used) provided by operating activities (387,743) (351,902)
---------------------------
Investing Activities
Property and equipment (8,194) (3,849)
---------------------------
Net cash (used) provided by investing activities (8,194) (3,849)
---------------------------
Financing Activities
Issuance of common shares for cash (net of costs) 61,500 115,000
Increase (repayment) of long term debt 115,916 49,231
Advances from (repayment to) directors 143,289 179,225
----------------------------
Net cash (used) provided by financing activities 320,705 343,456
----------------------------
Effect of foreign exchange on translation (72,076) 5,615
---------------------------
Inflow (outflow) of cash (147,308) (6,680)
Cash, beginning of period 210,348 34,053
---------------------------
Cash, end of period $ 63,040 $ 27,373
---------------------------
Supplemental information
Interest paid $168,282 $ 66,158
Shares issued for services $ 11,432 $ 78,227
Corporate income taxes paid $ 0 $ 0
See notes to the consolidated financial statements
NORTHSTAR ELECTRONICS, INC.
Notes to Consolidated Financial Statements
Six Months Ended June 30, 2009
Unaudited
U.S. Dollars
1. NATURE OF OPERATIONS AND ABILITY TO CONTINUE AS A GOING CONCERN
These consolidated financial statements include the accounts of Northstar
Electronics, Inc. ("the Company") and its wholly owned subsidiaries Northstar
Technical Inc. ("NTI") and Northstar Network Ltd. ("NNL"). All intercompany
balances and transactions are eliminated. The Company was incorporated May 11,
1998 in the State of Delaware and had no operations other than organizational
activities prior to the January 2000 merger with NTI described as follows: On
January 26, 2000 the Company completed the acquisition of 100% of the shares of
NTI. The Company, with the former shareholders of NTI receiving a majority of the
total shares then issued and outstanding, effected the merger through the issuance
of 4,901,481 shares of common stock from treasury. The transaction has been
accounted for as a reverse takeover resulting in the consolidated financial
statements including the results of operations of the acquired subsidiary prior to
the merger.
The Company's business activities are conducted principally in Canada but these
financial statements are prepared in accordance with accounting principles
generally accepted in the United States with all figures translated into United
States dollars for reporting purposes.
These unaudited consolidated interim financial statements have been prepared by
management in accordance with accounting principles generally accepted in the
United States for interim financial information, are condensed and do not include
all disclosures required for annual financial statements. The organization and
business of the Company, accounting policies followed by the Company and other
information are contained in the notes to the Company's audited consolidated
financial statements filed as part of the Company's December 31, 2008 Form 10-K.
In the opinion of the Company's management, this consolidated interim financial
information reflects all adjustments necessary to present fairly the Company's
consolidated financial position at June 30, 2009 and the consolidated results of
operations and the consolidated cash flows for the six months then ended. For the
six months ended June 30, 2009: 97% of the Company's revenues were generated from
contracts with subsidiaries of a major US customer. The Company is continually
marketing its services for follow on contracts.
The results of operations for the six months ended June 30, 2009 are not
necessarily indicative of the results to be expected for the entire fiscal year.
The accompanying consolidated interim financial statements have been prepared
assuming the Company will continue as a going concern and contemplates the
realization of assets and satisfaction of liabilities in the normal course of
business. During the six months to June 30, 2009 the Company incurred a net loss
of $513,843 (year to December 31, 2008: $1,740,630) and at June 30, 2009 had a
working capital deficiency (an excess of current liabilities over current
assets) of $2,795,826 (December 31, 2008: $2,424,049), including $525,783 of long
term debt due within one year (December 31, 2008: $497,170).
Management has undertaken initiatives for the Company to continue as a going
concern: for example, the Company continues to negotiate to secure an equity
financing in the short term and is in discussions with several possible accredited
investors. The Company expects to increase revenues from product and contract
sales. As well, the Company continues to seek larger manufacturing assembly
contracts that will result in increased revenue and profits. These initiatives are
in recognition that the Company to continue as a going concern must generate
sufficient cash flow to cover its obligations and expenses. In addition,
management believes these initiatives can provide the Company with a solid base
for profitable operations, positive cash flows and reasonable growth. Management
is unable to predict the results of its initiatives at this time. Should
management be unsuccessful in its initiative to finance its operations, the
Company's ability to continue as a going concern is not certain. These financial
statements do not give effect to any adjustments to the amounts and
classifications of assets and liabilities which might be necessary should the
Company be unable to continue its operations as a going concern.
2. SHARE CAPITAL
COMMON STOCK
During the six months ended June 30, 2009 the following shares of common stock
were issued:
For services: 125,910 shares fairly valued at $11,432 - the market value of those
services
For cash: 138,625 shares fairly valued for cash of $61,500.
To settle accounts payable: 225,833 fairly valued at $23,500
PREFERRED STOCK
For cash: 110,100 series A shares of preferred stock for $110,100 (inclusive of
65,000 shares for $58,500 received during the six months ended June 30, 2009). The
preferred shares bear interest at 10% per annum paid semi annually not in advance
and are convertible to shares of common stock of the Company after two years from
receipt of funds at a 20% discount to the then current market price of the
Company's common stock. The preferred shares may be converted after six months and
before two years under similar terms but with a 15% discount to market. At June
30, 2009 the Company had received $110,000 for 110,100 preferred shares but had
not issued the shares.
3. LONG TERM DEBT
Balance owing December 31, 2008 $2,014,158
Increase in funding 115,916
----------
Balance due June 30, 2009 2,130,074
Less current portion (525,783)
----------
$1,604,291
==========
4. REVENUE
Six months 2009 Six months 2008
------------------------------------
Revenue consists of:
Product sales $ 39,393 $ 163,861
Contract sales 1,343,003 752,373
Government assistance 0 71,248
Other 0 6,983
------------------------------------
$ 1,382,396 $ 994,465
=====================================
5. CONTINGENCIES
(i) The Company is a defendant in a lawsuit commenced against them in 1999
by their former master distributor. The former distributor has alleged that the
Company interfered with the ability of the former distributor to sell products.
The Company has filed a counter claim for monies owing by the former distributor
to the Company. There has been no action from either side to date.
(ii) The Company is contingently liable to repay $1,997,144 in assistance
received under the Atlantic Innovation Fund. The assistance is repayable annually
at the rate of 5% of gross revenues from sales of products resulting from the
Aquacomm research and development project. Gross revenues are to be calculated for
the fiscal year immediately preceding the due date of the respective payment.
Repayment is to continue until the assistance is repaid in full. At June 30, 2009
the Company has accrued $47,686 as repayable.
6. NEW ACCOUNTING PRONOUNCEMENTS
Management does not believe that any recently issued, but not yet effective
accounting pronouncements if currently adopted would have a material effect on
the accompanying consolidated financial statements.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion should be read in conjunction with the accompanying
unaudited consolidated financial information for the six month periods ended June
30, 2009 and June 30, 2008 prepared by management and the audited consolidated
financial statements for the twelve months ended December 31, 2008 as presented in
the Form 10K as filed.
Although the Company has experienced a net loss this quarter, it continues to
expend considerable effort in securing additional contracts for the contract
manufacture and assembly of military/government systems, submarine command and
control consoles, multi mode fiber optic cables and precision machined parts and
other components for defense systems.
The Company believes that its overall business prospects look promising and
anticipates increased revenues in the near to medium future.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements in this report and elsewhere (such as in other filings by the
Company with the Securities and Exchange Commission ("SEC"), press releases,
presentations by the Company of its management and oral statements) may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," and "should," and variations of these
words and similar expressions, are intended to identify these forward-looking
statements. Actual results may materially differ from any forward-looking
statements. Factors that might cause or contribute to such differences include,
among others, competitive pressures and constantly changing technology and market
acceptance of the Company's products and services. The Company undertakes no
obligation to publicly release the result of any revisions to these forward-
looking statements, which may be made to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
THE COMPANY'S SERVICES
The Company, through its subsidiaries, is an underwater sonar technology developer
(USTD), a defense electronics contract manufacturer (CM) and a defense systems
integrator (DSI).
UNDERWATER SONAR PRODUCTS AND TECHNOLOGIES
A) THE NETMIND SYSTEM
The Company's underwater sonar product based on core technology is the NETMIND
system. NETMIND's market is the world's commercial fishing industry and government
oceanic research agencies. One of our largest customers has been the United States
National Oceanic and Atmospheric Administration (NOAA).
NETMIND is both a conservation tool as well as an efficiency tool. Electronic
sensors attached to a fishing trawl measure the height and width of the net
opening, the water temperature, the depth of the net and the amount of fish caught
plus other parameters. The sensor information is transmitted via a wireless
communications link back to the ship.
NETMIND helps prevent over fishing and allows fishermen to catch fewer fish and
still make profits. This gives regulators flexibility in reducing quotas when
attempting to conserve limited fish stocks. NETMIND sales decreased from the same
period last year due to a shortfall in operating capital and thereby delaying
marketing and production of NETMIND orders during the quarter.
B) DEFENSE SONAR SYSTEMS
The Company, in collaboration with Lockheed Martin Canada, is involved in the
design of a wide band sonar projector. The design and technology is applicable
to innovative military sonar products one of which the Company is developing
under contract to Lockheed Martin.
DEFENSE CONTRACT MANUFACTURING
The Company completed its submarine command and control console contract issued by
Lockheed Martin Naval Electronics and Surveillance Systems, Manassas, Virginia in
2005. A manufacturing contract for seven submarine consoles was received in March
and could lead to additional similar console manufacturing contracts.
The Company's wholly owned subsidiary, Northstar Network Ltd., continued work on
the Master Purchase Order for the Wing Assembly Upgrade Component for the P-3
ORION aircraft from Lockheed Martin Aeronautics totaling US$6,821,847. This work
extends to the year 2012 and the Company is manufacturing components for new
production service life extension kits for this Lockheed Martin Service Life
Extension Program. These components will add more than 15,000 flying hours to
each aircraft, representing 15 to 20 additional years of service for this critical
maritime patrol and reconnaissance resource.
SYSTEMS INTEGRATION
The Company is developing its approach to securing and executing large defense
contracts by bringing together affiliate companies. The overall affiliate
capability, which is substantial, is presented to the prime contractors. Marketing
efforts continue in this area to broaden our exposure for manufacturing
opportunities.
The aforementioned P3 ORION Master Purchase Order is an example of how Systems
Integration works for us. In this project, six subcontractors carry out various
tasks, with Northstar bringing all the component parts together for testing,
quality control and delivery to the customer.
RESULTS OF OPERATIONS
Comparison of the three and six months ended June 30, 2009 with the three and
six months ended June 30, 2008:
Gross revenues from sales, miscellaneous and research and development recovery
for the three month period ended June 30, 2009 were $867,123 compared to
$562,031 in the comparative prior three month period. Gross revenues from sales,
miscellaneous and research and development recovery for the six month period
ended June 30, 2009 were $1,382,396 compared to $994,465 in the comparative
prior six month period.
Sales revenue for the three month period ended June 30, 2009 was $879,565 (60%
increase) compared to $533,332 of sales revenue recorded during the same three
month period of the prior year. This comparative increase is the direct result
of the Lockheed Martin P3 contract and the Lockheed Martin Project X contract.
Sales revenue for the six month period ended June 30, 2009 was $1,382,396 (66%
increase) comparable to $916,234 in the prior period. Gross margins were
$337,056 (37%) in the prior six month period compared to $386,652 (28%) in the
current six month period.
The net loss for the three month period ended June 30, 2009 was $(300,905)
compared to a net loss of $(321,114) for the three months ended June 30, 2008.
The loss resulted from expenses associated with new staff and expenses
associated with the new L3 contract. Over this past quarter, the Company
continued to invest considerable resources in seeking out additional and future
contract manufacturing opportunities and is confident that the efforts will
return positive results to the Company over the ensuing months and years.
Travel and business development costs were $14,517 for the six months and
$84,065 for the comparative prior period ended June 30, 2008 as the Company
continues to reduce its variable costs. During the three month period, the
company maintained lower operating costs for NETMIND operations.
The Company is actively pursuing contracts for its sonar capabilities in
military and anti terrorist applications. As well, the Company is preparing bids
on several military contract manufacturing and commercial contract
opportunities.
Salaries were $377,499 for the six months ended June 30, 2009 compared to
salaries of $576,504 (35% decrease) for the comparative prior six months ended
June 30, 2008 as the Company reduced its workforce on the NETMIND system.
Salaries may increase with new projects anticipated in the aeronautics area,
commensurate with corresponding increases in revenues.
Cost recoveries of $nil were down from $71,248 recovered in the comparative
prior six month period.
COMPARISON OF FINANCIAL POSITION AT JUNE 30, 2009 WITH DECEMBER 31, 2008
The Company's working capital deficiency increased at June 30, 2009 to $2,795,826
with current liabilities of $3,797,276 which are in excess of current assets of
$1,001,450. At December 31, 2008 the Company had a working capital deficiency of
$2,424,049.
As production increased on the P3 and L3 Projects, greater purchasing of
materials and sub-contractor cost increases were the main reason for the change
in the working capital deficiency.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We have adopted various accounting policies that govern the application of
accounting principles generally accepted in the United States of America in the
preparation of our financial statements. Our significant accounting policies are
described in the footnotes to our annual financial statements at December 31,
2008. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires us to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes.
Although these estimates are based on our knowledge of current events and
actions it may undertake in the future, they may ultimately differ from
actual results. Certain accounting policies involve significant judgments and
assumptions by us and have a material impact on our financial condition and
results. Management believes its critical accounting policies reflect its
most significant estimates and assumptions used in the presentation of our
financial statements. Our critical accounting policies include revenue
recognition, accounting for stock based compensation and the evaluation of
the recoverability of long-lived and intangible assets. We do not have off-
balance sheet arrangements, financings or other relationships with
unconsolidated entities or other persons, also known as "special purpose
entities".
LIQUIDITY AND CAPITAL RESOURCES
The Company has increased its shareholders' deficit as a result of its efforts to
increase its business activity and customer base. Cash outflow for the six months
ended June 30, 2009 was $(147,308) compared to a cash outflow of $(6,680) in the
comparative prior six month period. During the six months ended June 30, 2009 the
Company received $61,500 from equity funding and received $115,916 long term debt
leaving cash on hand at June 30, 2009 of $63,040 compared to cash on hand of
$210,348 at December 31, 2008. Until the Company receives revenues from new
contracts and/or increases its product sales revenue, it will be dependent upon
equity and loan financings to compensate for the outflow of cash anticipated from
operations.
The Company has begun to raise equity funds through a private placement preferred
share offering pursuant to Regulations D and S with the expectation of obtaining
up to $5,000,000. Any funds so raised are targeted for contract financing, product
development, facilities, marketing and general working capital. At this time, no
commitment for funding has been made to the Company.
The Company's continued operations are dependent upon obtaining revenues from its
defense and commercial customers or raising additional funds through debt or
equity financing.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of disclosure controls and procedures
Based on the evaluation of the Company's disclosure controls and procedures (as
defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of
1934) as of the date of this Quarterly Report on Form 10-Q, our chief executive
officer and chief financial officer has concluded that our disclosure controls and
procedures are designed to ensure that the information we are required to disclose
in the reports we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC's rules and
forms and are operating in an effective manner.
(b) Changes in internal controls
There were no changes in our internal controls or in other factors that could
affect these controls subsequent to the date of their most recent evaluation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
No change since previous filing.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Options Granted Date Exercise Price Expiry Date
------------------------------------------------------------------------
Nil
Warrants Issued
15,000 February, 2009 $0.25 February, 2011
50,000 March, 2009 $0.25 March, 2011
55,000 April, 2009 $0.25 April, 2011
Common Stock Issued Date Consideration
80,000 January, 2009 services valued at $6,000
155,833 February, 2009 services valued at $18,500
22,077 February, 2009 cash of $1,500
62,500 March, 2009 cash of $5,000
54,048 April, 2009 cash of $55,000
115,910 May, 2009 services valued at $10,432
Preferred Stock Subscribed
65,000 series A shares, for cash of $58,500, convertible to shares of common stock -
proceeds were used in working capital.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
No change since previous filing.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No change since previous filing.
ITEM 5. OTHER INFORMATION.
No change since previous filing
ITEM 6. EXHIBITS
Exhibit 31.1 - CERTIFICATION SECTION 302
Exhibit 32.1 CERTIFICATION SECTION 906
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
August 14, 2009 Northstar Electronics, Inc.
(Registrant)
By: /s/ Wilson Russell
-------------------------
Wilson Russell, PhD, President and Chief Financial Officer