U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011
[ ] 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[ ]
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 12, 2011: 44,149,578
Transitional Small Business Disclosure Format (check one):
Yes[] NO[X]
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNAUDITED - PREPARED BY MANAGEMENT
NORTHSTAR ELECTRONICS, INC. Consolidated Financial Statements
Consolidated Balance Sheets at June 30, 2011 and at December 31, 2010
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2011 and
2010
Consolidated Statements of Changes in Stockholders' Equity for the Six Months Ended June 30,
2011
Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2011 and
2010
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
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
JUNE 30
December 31
2011 2010
UNAUDITED audited
ASSETS
CURRENT
Cash and cash equivalents $ 29,343 $ 135,311
Accounts receivable 92,757 51,088
Inventory 215,054 121,311
Prepaid expenses 24,802 7,967
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361,956 315,677
DEFERRED CONTRACT COSTS 51,158 56,977
INTANGIBLE ASSET 11,197 12,120
EQUIPMENT 44,405 44,920
--------------------------------------------------------------------------------------------------------
$ 468,716 $ 429,694
================================
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 2,183,951 $ 1,969,659
Loans payable 843,170 580,830
Due to Cabot Management Limited 56,509 55,049
Due to Directors 1,103,200 1,208,265
Deferred revenue 30,627 34,883
Current portion of long-term debt 1,290,225 1,318,587
--------------------------------------------------------------------------------------------------------
5,507,682 5,167,273
LONG-TERM DEBT 925,762 706,393
--------------------------------------------------------------------------------------------------------
6,433,444 5,873,366
--------------------------------------------------------------------------------------------------------
STOCKHOLDERS' DEFICIT
Authorized:
100,000,000 Common shares with a par value of $0.0001 each
20,000,000 Preferred shares with a par value of $0.0001 each
Issued and outstanding:
43,457,709 Common shares (36,143,942 - December 31, 2010) 4,346 3,614
488,586 Preferred series A shares (488,586 - December 31, 2010) 409,299 409,299
ADDITIONAL PAID-IN CAPITAL 6,483,121 5,764,443
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (836,677) (649,153)
ACCUMULATED DEFICIT (12,024,817) (10,972,175)
-----------------------------------------------------------------------------------------------------------
$ 468,716 $ 429,694
===================================
See notes to the consolidated financial statements
NORTHSTAR ELECTRONICS, INC.
Consolidated Statements of Operations
Three and Six Months Ended June 30, 2011 and 2010
Unaudited
U.S.Dollars
Three Months Six Months
----------------------------------------------
2011 2010 2011 2010
------- ------ ------- ------
Sales $136,800 $953,099 $320,775 $2,239,071
Cost of goods sold 92,116 686,244 182,960 1,676,082
------------------------------------------------------------------------------------------------------
Gross margin 44,684 266,855 137,815 562,989
Recovery of development costs 16,530 0 16,530 0
Other income (expense) (9,559) (7,122) 2,837 0
------------------------------------------------------------------------------------------------------
51,655 259,733 157,182 562,989
------------------------------------------------------------------------------------------------------
EXPENSES
Salaries 208,948 215,263 448,254 432,186
Management and administration fees 45,000 45,000 90,000 90,000
Financial consulting 0 4,500 0 6,000
Professional fees 86,059 2,920 89,087 10,826
Rent 34,872 27,606 69,562 62,971
Research and development 0 0 0 0
Investor relations 25,213 16,802 36,113 23,552
Office and administration 47,249 33,140 65,268 70,857
Travel and business development 0 18,750 0 34,102
Interest on debt 32,495 83,031 243,574 100,992
Telephone and utilities 7,840 7,625 14,658 14,836
Amortization (7,095) 4,715 8,808 9,595
Finance fees 42,500 (19,994) 144,500 10,967
------------------------------------------------------------------------------------------------------
Total expenses 523,081 439,358 1,209,824 866,884
-------------------------------------------------------------------------------------------------------
Net loss for period $(471,426) $(179,625) $(1,052,642) $(303,895)
Net loss per share $ (0.01) $ (0.01) $ (0.00) $ (0.00)
Weighted average number of shares outstanding 33,629,875 39,096,432 38,374,600 34,358,568
See notes to the consolidated financial statements
NORTHSTAR ELECTRONICS, INC.
Consolidated Statement of Changes in Stockholders' Equity
Six Months Ended June 30, 2011
Unaudited
U.S. Dollars
Other
Additional Compre- Accumu- Total
Paid in hensive lated Stockholder
Shares Amount Capital Income Deficit Equity (Deficit)
---------------------------------------------------------------------------------------------------
Balance
December 31,
2010 36,143,942 $3,614 $5,764,443 $(649,153) $(10,972,175) $(5,853,271)
Net loss for
six months - - - - (1,052,642) (1,052,642)
Currency
translation
adjustment - - - (187,524) - (187,524)
Issuance of
common stock:
- for loans 1,111,112 111 199,889 - - 200,000
- for cash 4,792,859 479 339,521 - - 340,000
- for services 1,409,796 142 179,268 - - 179,410
---------------------------------------------------------------------------------------------------
Balance
June 30,
2011 43,457,709 $4,346 $6,483,121 $(836,677) $(12,024,817) $(6,374,027)
====================================================================================================
Series A shares of preferred stock -balance December 31, 2010 409,299
Series A shares of preferred stock - converted -
Series A shares of preferred stock - subscribed -
----------------------------------------------------------------------------------------------------
Total stockholders' equity (deficit) June 30, 2011 $(5,964,728)
===========
See notes to the consolidated financial statements
NORTHSTAR ELECTRONICS, INC.
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2011 and 2010
Unaudited
U.S.Dollars
2011 2010
Operating Activities ----------------------------
Net income (loss) $(1,052,642) $(303,895)
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Amortization 8,808 9,595
Write down of deferred start up costs 6,974 113,698
Issuance of common stock for services 179,410 56,091
Changes in operating assets and liabilities (8,877) 175,507
------------------------------
Net cash (used) provided by operating activities (866,327) 50,996
------------------------------
Investing Activities
Property and equipment disposal (purchase) (5,894) 1,197
------------------------------
Net cash (used) provided by investing activities (5,894) 1,197
------------------------------
Financing Activities
Issuance of common shares for cash (net of costs) 340,000 375,000
Loans payable 209,179 0
Increase (repayment) of long term debt 126,273 (405,761)
Advances from (repayment to) directors 80,034 (86,727)
-------------------------------
Net cash (used) provided by financing activities 755,486 (117,488)
-------------------------------
Effect of foreign exchange on translation 10,767 (2,299)
-------------------------------
Inflow (outflow) of cash (105,968) (67,594)
Cash, beginning of period 135,311 108,486
-------------------------------
Cash, end of period $ 29,343 $ 40,892
--------------------------------
Supplemental information
Interest paid $ 53,574 $100,992
Shares issued for prepaid expense $ 0 $ 97,000
Shares issued for loan repayment $200,000 $ 6,600
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, 2011
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"). 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. All intercompany balances and
transactions are eliminated.
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, 2010 Form 10-K
and amendments.
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, 2011 and the consolidated results of
operations and the consolidated cash flows for the six months then ended. For the
six months ended June 30, 2011, 100% of the Company's revenues were generated from
contracts with two major customers. The Company is continually marketing its
services for new and follow-on contracts.
The results of operations for the six months ended June 30, 2011 are not
necessarily indicative of the results to be expected for the entire fiscal year.
The accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern, which contemplates the realization of
assets and satisfaction of liabilities in the normal course of business. During
the six months to June 30, 2011 the Company incurred a net loss of $1,052,642 and
at June 30, 2011 had a working capital
deficiency (an excess of current liabilities over current assets) of $5,091,349
(December 31, 2010: $4,851,596), including $1,290,225 of long term debt due within
one year (December 31, 2010: $1,318,587). Management has undertaken initiatives
for the Company to continue as a going concern, for example: the Company is
negotiating to secure an equity financing in the short term and is in discussions
with several financing firms. The Company also expects to increase contract
revenues. The Company continues to seek manufacturing assembly contracts to
increase revenue. These initiatives are in recognition that in order for the
Company to continue as a going concern it 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, 2011 the following shares of common stock
were issued:
For services: 1,409,796 shares fairly valued at $179,410 - the market value of
those services
For cash: 4,792,859 shares fairly valued for cash of $340,000.
For conversion of loans: 1,111,112 fairly valued at $200,000
PREFERRED STOCK
Issued for cash:
In prior periods 488,586 series A shares of preferred stock were issued for
$409,299. 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.
3. LONG TERM DEBT
Balance owing December 31, 2010 $2,024,980
Increase 126,273
Effect of foreign exchange on translation to US 64,734
------------------------------------------------------------------
Balance due June 30, 2011 2,215,987
Less current portion (1,290,225)
------------------------------------------------------------------
$ 925,762
=============
4. REVENUE
Six months Six months
2011 2010
-----------------------
Revenue consists of:
Product sales $ 0 $ 0
Contract sales 320,775 2,239,071
Government assistance 16,530 0
Other 2,837 0
------------------------
$340,142 $ 2,239,071
========================
5. CONTINGENCIES
(i) The Company is contingently liable to repay $2,294,755 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, 2011
the Company has accrued $197,609 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, 2011 and June 30, 2010 prepared by management and the audited consolidated
financial statements for the twelve months ended December 31, 2010 as presented in
the Form 10K as filed.
Although the Company has experienced a net loss this quarter, it continues to
expend effort to secure additional contracts for the manufacture and assembly of
military/government systems, submarine command and control consoles, sonar
systems, precision, machined parts and other components for aerospace and 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,
a defense electronics contract manufacturer (CM) and a defense systems integrator
(DSI).
UNDERWATER SONAR PRODUCTS AND TECHNOLOGIES
A) PROJECT X
The company developed, under contract to Lockheed Martin Canada, a specialized
underwater sonar system and built a prototype unit. Further contract work on this
program is anticipated in 2011.
B) DEFENSE SONAR SYSTEMS
The Company was a subcontractor on Lockheed Martin's anti-terrorism Swimmer
Detection System (SDS). The SDS is a wide band high frequency sonar system
designed specifically to detect and classify underwater terrorist threats. The
design and technology is applicable to innovative military sonar products.
DEFENSE CONTRACT MANUFACTURING
The Company, with its updated facilities, completed further details and reviews
for prospective new submarine console work from Lockheed Martin Manassas MS2, and
was awarded a first contract.
The Company's wholly owned subsidiary, Northstar Network Ltd., continued work on
the original Master Purchase Order for the Wing Assembly Upgrade Components for
the P-3 ORION aircraft from Lockheed Martin Aeronautics and is presently preparing
to start work on the recent $9.1M addition to the Master Purchase Order. The
Company is manufacturing components for new production service life extension kits
for this Lockheed Martin Service Life Extension Program.
In addition to the P3 Project, work continued with some delays for the
manufacture/assembly of the new Machine Control Consoles and new Trainer Consoles
for L3 Communication MAPPS Ltd. for the Canadian Navy Frigate Upgrade program.
Over 60 units will be delivered under this contract. The delays were a result of
the Company's lack of working capital in the quarter which is presently improving.
SYSTEMS INTEGRATION
The Company continues to enhance 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 and the L3 Communications MAPPS
Ltd. contract are examples of how Systems Integration works for us. In these
projects, six subcontractors carry out various tasks, with Northstar bringing all
component parts together for engineering, testing, quality control and delivery to
the customer.
RESULTS OF OPERATIONS
Comparison of the three and six months ended June 30, 2011 with the three and
six months ended June 30, 2010:
Gross revenues from sales, miscellaneous income and recovery of research and
development for the three month period ended June 30, 2011 were $143,771
compared to $945,977 in the comparative prior three month period. Gross revenues
from sales, miscellaneous income and recovery of research and development for
the six month period ended June 30, 2011 were $340,142 compared to $2,239,071 in
the comparative prior six month period.
Sales revenue for the three month period ended June 30, 2011 was $136,800 (86%
decrease) compared to $953,099 of sales revenue recorded during the same three
month period of the prior year. This comparative decrease is partially the
result of delays encountered with the release of new contract sales orders for
the P3 Mid-Life Upgrade program. During this quarter sales orders were received
and work commenced on establishing production and delivery schedules. Results of
this activity will appear in the subsequent quarter. Adding to the loss was the
delay in contract increases for the L3 Frigate Consol upgrade program.
Subsequent to the second quarter the increases were received. An overall
contributing factor to the decline in revenues was insufficient working capital
to support production on the contracts. The Company believes its working capital
position will improve with expected equity investments in the current and
following quarters which we expect will lead to significant increases in revenue
in the third and fourth quarters, along with improved margins.
Sales revenue for the six month period ended June 30, 2011 was $320,775 (86%
decrease) comparable to $2,239,071 in the prior period. Gross margins increased
18% from $562,989 (25%) in the prior six month period to $137,815 (43%) in the
current six month period but declined considerably in $'s as sales decreased.
The net loss for the three month period ended June 30, 2011 was $(471,426)
compared to a net loss of $(179,625) for the three months ended June 30, 2010.
The increase in the loss resulted from the decline in gross revenue as expenses
increased.
Salaries decreased to $394,443 for the six months ended June 30, 2011 compared
to salaries of $432,186 for the comparative prior six months ended June 30, 2010
as the Company contracted its workforce due to decreased contract sales.
Salaries may increase
with new projects anticipated in the aeronautics area, commensurate with
corresponding increases in revenues.
Travel and business development costs were $0 for the six months and $34,102 for
the comparative prior period ended June 30, 2010 as the Company attempted to
contract its outlays due to the decline in revenue.
During the period purchase orders valued at approximately $2.4M were received on
the Company's contract with Lockheed Martin for the P-3 aircraft refurbishment
program.
The Company is actively pursuing contracts for its sonar capabilities in
military and anti terrorist applications.
COMPARISON OF FINANCIAL POSITION AT JUNE 30, 2011 WITH DECEMBER 31, 2010
The Company's working capital deficiency increased at June 30, 2011 to $5,145,726
with current liabilities of $5,507,682 which are in excess of current assets of
$361,956. At December 31, 2010 the Company had a working capital deficiency of
$4,851,596.
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,
2010. 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, 2011 was negative $(866,327) compared to a cash inflow of $50,996
in the comparative prior six month period. During the six months ended June 30,
2011 the Company received $340,000 from equity funding, received $126,273 net
proceeds from long term debt, received
$209,179 from other loan proceeds and received $80,034 net from directors of the
Company leaving cash on hand at June 30, 2011 of $29,343 compared to cash on hand
of $135,311 at December 31, 2010 and $9,758 at March 31, 2011.
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 is preparing a private placement preferred share offering pursuant to
Regulations D and S with the expectation of raising up to $1,250,000. 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
outside sources 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.
a) Options Granted Date Exercise Price Expiry Date
-----------------------------------------------------------------------
Nil
b) Warrants Issued
During the six month period ended June 30, 2011 the Company issued nil share
purchase warrants.
c)
Common Stock Issued Date Consideration
---------------------------------------------------------------------------------
150,000 February, 2011 cash of $15,000
328,398 February, 2011 services valued at$39,400
650,000 March, 2011 services valued at$78,000
1,111,112 March, 2011 repayment of $200,000 loan from Director
335,000 April, 2011 finance fees valuedat $42,500
4,642,859 June, 2011 cash of $325,000
96,398 June, 2011 services valued at $19,510
d) Preferred Stock Subscribed
Nil
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
No change since previous filing.
Exhibit 31.1-CEO/CFO Certification
Exhibit 32.1-CEO/CFO Certification
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, 2011 Northstar Electronics, Inc.
(Registrant)
By: /s/ Wilson Russell
-------------------------
Wilson Russell, PhD, President and Chief Financial Officer