Item 1. Condensed Consolidated Financial Statements
NORTHSTAR ELECTRONICS, INC.
Interim Consolidated Balance Sheets
U.S. Dollars
|
March 31
2021
|
|
December 31
2020
|
|
unaudited
|
|
audited
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
Cash
|
$
|
19,210
|
|
$
|
21,596
|
Total Assets
|
$
|
19,210
|
|
$
|
21,596
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
881,092
|
|
$
|
880,436
|
Loans payable
|
|
442,916
|
|
|
442,916
|
Due to directors and a former director
|
|
949,252
|
|
|
949,852
|
Legal liability
|
|
3,129,268
|
|
|
3,136,886
|
Total liabilities
|
|
5,402,528
|
|
|
5,410,090
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
200,000,000 Common shares authorized, with a par value of $0.0001, 127,838,231 Common shares issued and outstanding (127,838,231 - December 31, 2020)
|
|
12,784
|
|
|
12,784
|
20,000,000 Preferred shares authorized, with a par value of $0.0001597,716 Preferred series A, B and C shares issued and outstanding (597,716 - December 31, 2020)
|
|
404,299
|
|
|
404,299
|
Additional paid-in capital
|
|
8,608,875
|
|
|
8,608,875
|
Accumulated deficit
|
|
(14,409,276)
|
|
|
(14,414,452)
|
Total stockholders’ deficit
|
|
(5,383,318)
|
|
|
(5,388,494)
|
Total liabilities and stockholders’ deficit
|
$
|
19,210
|
|
$
|
21,596
|
Nature of operations and going concern (Note 1)
See notes to the condensed consolidated financial statements
4
NORTHSTAR ELECTRONICS, INC.
Interim Consolidated Statements of Operations
Three Months Ended March 31, 2021 and 2020
Unaudited
U.S. Dollars
|
2021
|
|
2020
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
Administration
|
$
|
-
|
|
$
|
15,000
|
Professional fees
|
|
-
|
|
|
2,126
|
Management fees
|
|
-
|
|
|
-
|
Engineering
|
|
-
|
|
|
-
|
Rent
|
|
276
|
|
|
2,250
|
Investor relations
|
|
-
|
|
|
-
|
Office
|
|
955
|
|
|
1,910
|
Foreign exchange (gain) loss
|
|
(6,407)
|
|
|
(263,484)
|
Interest
|
|
-
|
|
|
24,244
|
Total expenses
|
|
(5,176)
|
|
|
(217,954)
|
|
|
|
|
|
|
Net income (loss) for the period
|
$
|
5,176
|
|
$
|
217,954
|
|
|
|
|
|
|
Basic and diluted gain (loss) per common share
|
$
|
0.00
|
|
$
|
(0.00)
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
127,838,231
|
|
|
127,838,231
|
See notes to the condensed consolidated financial statements
5
NORTHSTAR ELECTRONICS, INC.
Interim Consolidated Statement of Changes in Stockholders’ Deficit
Three Months Ended March 31, 2021
Unaudited
U.S. Dollars
|
Number
of
Shares
|
|
Par
Value
|
|
Additional
Paid-In
Capital
|
|
Subscriptions
receivable
|
|
Accumulated
Deficit
|
|
Preferred
Shares
|
|
Total
Stockholders’
Deficit
|
Balance,
December 31, 2017
|
98,579,815
|
|
$
|
9,858
|
|
$
|
8,333,396
|
|
$
|
(5,035)
|
|
$
|
(13,527,495)
|
|
$
|
404,299
|
|
$
|
(4,784,977)
|
Issued for services
|
1,000,000
|
|
|
100
|
|
|
9,900
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10,000
|
Issuance for cash
|
28,258,416
|
|
|
2,826
|
|
|
265,579
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
268,405
|
Subscription collected
|
-
|
|
|
-
|
|
|
-
|
|
|
5,035
|
|
|
-
|
|
|
-
|
|
|
5,035
|
Net loss
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(257,946)
|
|
|
-
|
|
|
(257,946)
|
Balance,
December 31, 2018
|
127,838,231
|
|
$
|
12,784
|
|
$
|
8,608,875
|
|
$
|
-
|
|
$
|
(13,785,441)
|
|
$
|
404,299
|
|
$
|
(4,759,483)
|
Net loss
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(580,344)
|
|
|
-
|
|
|
(580,344)
|
Balance,
December 31, 2019
|
127,838,231
|
|
$
|
12,784
|
|
$
|
8,608,875
|
|
$
|
-
|
|
$
|
(14,365,785)
|
|
$
|
404,299
|
|
$
|
(5,339,827)
|
Net loss
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(48,667)
|
|
|
-
|
|
|
(48,667)
|
Balance,
December 31, 2020
|
127,838,231
|
|
$
|
12,784
|
|
$
|
8,608,875
|
|
$
|
-
|
|
$
|
(14,414,452)
|
|
$
|
404,299
|
|
$
|
(5,388,494)
|
Net gain
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5,176
|
|
|
-
|
|
|
5,176
|
Balance,
March 31, 2021
|
127,838,231
|
|
$
|
12,784
|
|
$
|
8,608,875
|
|
$
|
-
|
|
$
|
(14,409,276)
|
|
$
|
404,299
|
|
$
|
(5,383,318
|
See notes to the condensed consolidated financial statements
6
NORTHSTAR ELECTRONICS, INC.
Interim Consolidated Statements of Cash Flows
Three Months Ended March 31, 2021 and 2020
Unaudited
U.S. Dollars
|
2021
|
|
2020
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
Net income (loss)
|
$
|
5,176
|
|
$
|
217,954
|
Items not involving cash
|
|
|
|
|
|
Foreign exchange (gain) loss
|
|
(6,407)
|
|
|
(263,024)
|
Accrued interest
|
|
-
|
|
|
24,244
|
Changes in non-cash working capital
|
|
|
|
|
|
Changes in operating assets and liabilities
|
|
(1,155)
|
|
|
13,769
|
Net cash used in operating activities
|
|
(2,386)
|
|
|
(7,057)
|
|
|
|
|
|
|
Decrease in cash
|
|
(2,386)
|
|
|
(7,057)
|
Cash, beginning
|
|
21,596
|
|
|
40,261
|
|
|
|
|
|
|
Cash, ending
|
$
|
19,210
|
|
$
|
33,204
|
See notes to the condensed consolidated financial statements
7
NORTHSTAR ELECTRONICS, INC.
Notes to Condensed Consolidated Financial Statements
Nine Months Ended March 31, 2021
Unaudited
U.S. Dollars
1. NATURE OF OPERATIONS AND ABILITY TO CONTINUE AS A GOING CONCERN
Northstar Electronics, Inc. (the “Company”) was incorporated on May 11, 1998 in the state of Delaware. The Company is doing research and development on single engine aircrafts for business use.
The Company's business activities are conducted in Canada. However, the financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) with all figures translated into United States dollars for financial reporting purposes.
These unaudited consolidated interim financial statements have been prepared by management in accordance with GAAP 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 consolidated yearend December 31, 2020 financial statements prepared without audit.
The Company is in the process of regenerating its operations. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year. The accompanying interim 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 three months to March 31, 2021 the Company incurred a net cash outflow of $2,386 and at March 31, 2021 had a working capital deficiency of $5,383,318.
Management has undertaken initiatives for the Company to continue as a going concern; for example: management is in talks with a consulting group out of Ottawa, Canada about taking over the Airplane manufacturing opportunity it has been working on this past number of years. 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.
See also Note 5
8
2. RELATED PARTY TRANSACTIONS
a)The amount of $949,252 due to directors and a former director of the Company have no specific terms of repayment, is non-interest bearing and unsecured. See note 5 - subsequent event
b)The Company accrued management fees of $nil in total to directors of the Company for their services as officers of the Company during the three months ended March 31, 2021 (2020: $nil).
3. CONTINGENCIES
During 2000 to 2008, the Company’s former subsidiaries Northstar Technical Inc. (“NTI”) and Northstar Network Ltd. (“NNL”) received funding from Atlantic Canada Opportunities Agency (“ACOA”) to fund their projects. In 2013, ACOA filed claims against NTI, NNL and the Company for repayments of advances due to events of default. The advance and interests ACOA claims totaled CAD$3,079,475. In accordance with agreements signed between NTI, NNL and the Company, the Company was jointly and severally liable for the obligations. Further, the claim amount bears a daily interest of CAD$358 from February 15, 2013 to settlement. During the three months ended March 31, 2021, the Company the Company has ceased recording interest expenses (2019: $24,244).
4. 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.
5. SUBSEQUENT EVENT
The Company has negotiated to settle $949,252 in debts owing to a director and to current directors for the issuance of up to 46,500,000 shares of common stock, subject to regulatory approval.
Certain of the creditors and the Company have agreed to settle their debts for the issuance of 10,168,720 shares of common stock valued at $21,928.
9
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 three month periods ended March 31, 2021and March 31, 2020 prepared by management and the consolidated financial statements for the year ended December 31, 2020, prepared by management without audit.
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 has continued working on an agreement to purchase the worldwide rights to manufacture a single engine Turbo Prop airplane with industrial applications from a subsidiary of a large international aerospace company. Unfortunately, the Company was unable to obtain suitable financing for its projected plans, the agreement has not materialize and the project has been abandoned. The Company has a further agreement to retain up to a 31.5% interest in the project with an engineering firm that has expressed further interest in the project.
Results of Operations
Comparison of the three months ended March 31, 2021 with the three months ended March 31, 2020.
The net gain for the three-month period ended March 31, 2021, was $5,176 compared to $217,954 for the three months ended March 31, 2020. The positive net operating result was in large part due to foreign exchange fluctuations.
Comparison of Financial Position at March 31, 2021 with March 31, 2020
The Company’s working capital deficiency at March 31, 2021 was $5,383,318, with current liabilities of $5,402,528, which are in excess of current assets of $19,210. At December 31, 2020 the Company had a working capital deficiency of $5,388,494.
10
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, 2020. 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
Cash outflow for the first quarter ended March 31, 2021 was $2,386 compared to an outflow of cash of $7,057 in the comparative prior quarter March 31, 2020. In the quarter, the Company received $0 ($0 in the comparative prior quarter) from equity funding and received $0 (received $0 in the comparative quarter) long term debt leaving cash on hand at March 31, 2021 of $19,210 compared to cash on hand of $21,596 at December 31, 2020. Until the Company receives revenues from new contracts it will be dependent upon equity (subject to regulatory approval) and loan financings to compensate for the outflow of cash anticipated from operations.
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.