10-Q

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, 2017

[  ]  TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: ________ to _________

333-90031

Commission file number

Northstar Electronics, Inc.

Exact name of small business issuer as specified in its charter

Delaware	33-0803434
State or other jurisdiction of organization	IRS Employee incorporation or Identification No.

1130 West Pender Street, Suite 950

Vancouver, BC, Canada  V6E 4A4

Address of principal executive offices

(778) 838-3313

Issuer's telephone number

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, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer” “accelerated filer,” ”smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]
Emerging growth company	[  ]

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 [X]

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 July 30, 2017: 93,924,815

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

2

Table of Contents

PART I - FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Consolidated Balance Sheets	4
Consolidated Statements of Operations	5
Consolidated Statement of Changes in Stockholders’ Equity	6
Consolidated Statements of Cash Flows	7
Notes to Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis or Plan of Operation.	11
Item 3. Controls and Procedures	13
PART II - OTHER INFORMATION	14
Item 1. Legal Proceedings.	14
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	14
Item 3. Defaults Upon Senior Securities.	14
Item 4. Submission of Matters to a Vote of Security Holders.	14
Item 5. Other Information.	14
Item 6. Exhibits	14
SIGNATURES	15

3

PART I - FINANCIAL INFORMATION

Item 1. Interim Consolidated Financial Statements

NORTHSTAR ELECTRONICS, INC.

Consolidated Balance Sheets

(U.S. Dollars)

		June 30, 2017		December 31, 2016
		unaudited		audited
Assets
Current
Cash and cash equivalents	$	6,725	$	6,078
Prepaid expenses		7,292		7,292
		14,017		13,370
Total assets	$	14,017	$	13,370
Liabilities
Current
Accounts payable and accrued liabilities	$	849,946	$	806,445
Loans payable		434,291		434,291
Due to Directors		367,739		314,550
Legal liability		2,772,973		2,706,869
Total liabilities		4,424,949		4,262,155
Stockholders’ Deficit
Authorized:
200,000,000 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:
93,924,815 Common shares (86,887,609 - December 31, 2016)		9,343		8,639
597,716 Preferred shares (629,626 - December 31, 2016)		404,299		436,209
Additional Paid-in Capital		8,282,943		8,194,737
Accumulated Deficit		(13,107,517)		(12,888,370)
Total stockholders’ deficit		(4,410,932)		(4,248,785)
	$	14,017	$	13,370

See notes to the interim consolidated financial statements

Nature of operations and going concern (note 1)

4

NORTHSTAR ELECTRONICS, INC.

Interim Consolidated Statements of Operations

Three and Six Months Ended June 30, 2017 and 2016

Unaudited

U.S. Dollars

		Three Months				Six Months
		2017		2016		2017		2016
Expenses
Management fees	$	30,000	$	12,500	$	45,000	$	25,000
Administrative fees		15,000		6,250		30,000		12,500
Professional fees		17,500		5,625		24,250		13,500
Foreign exchange (gain) loss		(6,086)		371		17,180		300
Engineering research and development		-		84,000		15,000		84,000
Investor relations		25,490		2,050		26,275		2,050
Interest		24,605		4,364		48,670		4,364
Marketing and sales		-		42,000		-		42,000
Office		6,241		7,138		12,772		11,179
Total expenses		112,750		164,298		219,197		194,893
Net loss for the period	$	(112,750)	$	(164,298)	$	(219,197)	$	(194,893)
Basic and diluted loss per common share	$	(0.00)		(0.00)	$	(0.00)	$	(0.00)
Weighted average number of shares outstanding		93,551,482		80,751,807		90,593,537		80,074,327

See notes to the interim consolidated financial statements

5

NORTHSTAR ELECTRONICS, INC.

Interim Consolidated Statement of Changes in Stockholders’ Deficit

Six Months Ended June 30, 2017

Unaudited

U.S. Dollars

	Number of Shares		Par Value		Additional Paid-In Capital		Accumulated Deficit		Preferred Shares		Total Stockholders’ Deficit
Balance, December 31, 2015	79,396,847	$	7,940	$	8,105,572	$	(12,325,082)	$	456,209	$	(3,755,361)
Issuance for cash	1,278,520		128		15,050		-		-		15,178
Issuance on conversion of preferred C shares	1,747,435		125		19,875		-		(20,000)		-
Issuance for debt	181,833		18		4,346		-		-		4,364
Issuance for goodwill	1,400,000		140		27,860		(28,000)		-		-
Net loss	-		-		-		(194,893)		-		(194,893)
Balance, June 30, 2016	84,004,635		8,351		8,172,703		(12,547,975)		436,209		(3,930,712)
Issuance for cash	2,882,974		288		22,034		-		-		22,322
Net loss	-		-		-		(340,395)		-		(340,395)
Balance, December 31,2016	86,887,609		8,639		8,194,737		(12,888,370)		436,209		(4,248,785)
Issuance for cash	2,500,000		250		24,750		-		-		25,000
Issuance on conversion of preferred B shares	2,037,206		204		31,706		-		(31,910)		-
Issued for cash	750,000		75		7,425		-		-		7,500
Issued for services	1,750,000		185		19,315		-				19,500
Fair value of warrants issued for services	-		-		5,000		-		-		5,000
Net loss	-		-		-		(219,147)		-		(219,147)
Balance, June 30, 2017	93,924,815	$	9,343		$8,282,943	$	(13,107,517)	$	404,299	$	(4,410,932)

See notes to the interim consolidated financial statements

6

NORTHSTAR ELECTRONICS, INC.

Interim Consolidated Statements of Cash Flows

Six Months Ended June 30, 2017 and 2016

Unaudited

U.S. Dollars

		2017		2016
Operating Activities
Net loss	$	(219,147)	$	(194,893)
Items not involving cash
Foreign exchange loss		17,434		-
Non-cash interest		48,670		4,364
Non-cash investor relations		24,500		-
Changes in non-cash working capital
Changes in operating assets and liabilities		96,690		163,503
Net cash used in operating activities		(31,853)		(27,026)
Financing Activities
Issuance of common shares for cash (net of costs)		32,500		32,500
Loans payable		-		(25,000)
Increases in debt (repayment to) directors		-		(339)
Net cash provided by financing activities		32,500		7,161
Increase (decrease) in cash		647		(19,865)
Cash, beginning		6,078		23,752
Cash, ending	$	6,725	$	3,887
Non-cash Transactions
Shares issued for services	$	19,500	$	-
Warrants issued for services		5,000		-
	$	24,500	$	-

See notes to the interim consolidated financial statements

7

NORTHSTAR ELECTRONICS, INC.

Notes to Interim Consolidated Financial Statements

Six Months Ended June 30, 2017

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 audited consolidated financial statements filed as part of the Company’s December 31, 2016 Form 10-K.

The results of operations for the six months ended June 30, 2017 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 six months to June 30, 2017 the Company incurred a net loss of $219,147 and at June 30, 2017 had a working capital deficiency of $4,410,932.

Management has undertaken initiatives for the Company to continue as a going concern; for example: the Company is attempting to secure an equity financing in the short term. Management is unable to predict the results of its initiatives at this time. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

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.

8

2.  SHARE CAPITAL

COMMON STOCK

During the six months ended June 30, 2017, the Company issued 2,500,000 shares of common stock for cash of $25,000.

During the six months ended June 30, 2017, the Company issued 750,000 common stock for cash of $7,500. Each common stock is attached with a warrant with an exercise price of $0.04 per common stock for a period of two years.  No value was attributed to these warrants.

During the six months ended June 30, 2017, the Company issued 2,037,206 shares of common stock for conversion of 31,910 preferred class B shares.

During the six months ended June 30, 2017 the Company issued 1,750,000 shares of common stock with a fair value of $19,500 for consulting services.  Each common stock is attached with a warrant with an exercise price of $0.04 per common stock for a period of two years.  The fair value of the warrants was determined to be $5,000 using the Black-Scholes Pricing Model with the following assumptions: dividend yield - 0%, volatility - 282%, risk-free rate - 1%, and expected life - 2 years.  

PREFERRED SHARES

At June 30, 2017, the outstanding number of preferred Classes A, B and C shares are 582,716 (December 31, 2016: 582,716), 15,000 (December 31, 2016: 46,910) and nil (December 31, 2016: nil), respectively

WARRANTS

	Number of Warrants	Exercise Price per Share
Balance December 31, 2016	829,940	$0.15 - $0.75
Issued	1,300,000	$0.004
Balance June 30, 2017	2,129,940	$0.64

As at June 30, 2017 the outstanding warrants are as follows:

Expiry Date	Exercise Price	June 30, 2017	December 31, 2016
Open (1)	$ 0.50	389,170	389,170
Open (1)	$ 0.75	389,170	389,170
Open (2)	$ 0.25	51,600	51,600
April 17, 2019	$0.004	1,300,000	-
Total outstanding and exercisable		2,129,940	829,940
Weighted average outstanding life of options (years)		Open	Open

9

3.  LEGAL LIABILITY

During 2000 to 2008, the Company’s former subsidiaries North Star Technical Inc. (“NTI”) and Northstar Network Ltd. (“NNL”) received funding from Atlantic Canada Opportunities Agency (“ACOA”) to fund their projects. In accordance with agreements signed between NTI, NNL and the Company, the Company was jointly and severally liable for the obligations.   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$3,666,697 ($2,752,570).  Further, the claim amount bears a daily interest of $358 from February 15, 2013 to settlement. During the six months ended June 30, 2017, the Company recorded interest expenses of $48,670.

4.  RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2017, the Company accrued management fees payable of $45,000 in total to a director of the company.

At June 30, 2017, there is a balance of $367,739 (December 31, 2016: $314,550) owing to a director of the Company for management fees and expenses reimbursement.  The balance is included in accounts payable and accrued liabilities.

5.  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.

6.  SUBSEQUENT EVENT

There were no material events outside of the normal course of business.

10

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, 2017 and June 30, 2016 prepared by management and the consolidated financial statements for the year ended December 31, 2016 as presented in the Form 10K as filed.

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

We continue to move in a new direction whereby we intend to build our own systems in the civilian aviation sector. We believe that this affords improved control over our business outcomes.

The Company is working on plans to obtain rights to a single engine turbo prop airplane with industrial applications. If successful, we intend to manufacture the airplane and market it internationally. We also intend to provide Maintenance, Repair and Overhaul (MRO) services in close proximity to customers. The Company’s wholly owned subsidiary, National Five Holding Ltd, is a 60% shareholder of Northstar Sealand Enterprises Ltd (NSEL). The constituent parts of NSEL have experience in working on certified commercial aircraft and government military contracts, and have access to an established aircraft parts manufacturing facility.

Results of Operations

Comparison of the three and six months ended June 30, 2017 with the three and six months ended June 30, 2016:

The net loss for the three month period ended June 30, 2017 was $(112,750) compared to a net loss of $(164,298) for the three months ended June 30, 2016.  The decrease in net loss for the three and six month period was in part due to the fact the Company incurred engineering expenses in the prior period related to its venture  development  and sales/marketing expense in determining market acceptance of its venture.  

11

Comparison of Financial Position at June 30, 2017 with December 31, 2016

The Company’s working capital deficiency increased at June 30, 2017 to $4,410,932 with current liabilities of $4,424,949 which are in excess of current assets of $14,017. At December 31, 2016 the Company had a working capital deficiency of $4,248,785. See also contingent liabilities, note 3 to the financial statements for the six months ended June 30, 2017.

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, 2016. 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 from operations for the six months ended June 30, 2017 was $(31,853) compared to an outflow of cash of $(27,026) in the comparative prior six months ended June 30, 2016. During the current period, the Company received $32,500 ($32,500 in the comparative prior period) from equity funding and received $0 (received $0 in the comparative period) long term debt leaving cash on hand at June 30, 2017 of $6,725 compared to cash on hand of $3,887 at December 31, 2016. Until the Company receives revenues from its new potential business it will be dependent upon equity funding and loan financings to compensate for the outflow of cash anticipated from operations.

At this time, although the Company is in discussions with potential equity investing companies, no commitment for funding has yet 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.

12

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. The disclosure controls were effective at June 30, 2017.

(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.

13

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

No change since previous filing.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the six months ended June 30, 2017 the Company issued the following shares of common stock:

During the three months ended March 31, 2017, the Company issued 2,500,000 shares of common stock for cash of $25,000.

During the three months ended March 31, 2017, the Company issued 2,037,206 shares of common stock for conversion of 31,910 preferred class B shares.

On April 6, 2017, the Company issued 1,200,000 shares of common stock for consulting services.

On April 25, 2017, the Company issued 1,300,000 shares of common stock for cash and consulting services.

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

14

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 21, 2017	Northstar Electronics, Inc.
	(Registrant)
	By: /s/ Wilson Russell
	Wilson Russell, PhD, President and Chief Financial Officer

15

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Wilson Russell, Chief Executive Officer of Northstar Electronics, Inc., certify that:

1.  I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2017 of Northstar Electronics, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 21, 2017

/s/ Wilson Russell

Wilson Russell, Chief Executive Officer and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Solely for the purposes of complying with, and the extent required by 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies, in his capacity as the Chief Executive Officer and Chief Financial Officer of Northstar Electronics, Inc., that, to his knowledge, the quarterly report of the company on Form 10-Q for the period ended June 30, 2017 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 report fairly presents, in all material respects, the company’s financial condition and results of operations.

August 21, 2017

/s/ Wilson Russell

Wilson Russell, Chief Executive Officer and Chief Financial Officer

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2017 shares
Document and Entity Information
Entity Registrant Name	NORTHSTAR ELECTRONICS INC
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Entity Central Index Key	0001082027
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	93,924,815
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Trading Symbol	neik

XML

BALANCE SHEETS - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 6,725	$ 6,078
Prepaid expenses	7,292	7,292
Total current assets	14,017	13,370
Total assets	14,017	13,370
Current liabilities:
Accounts payable and accrued liabilities	849,946	806,445
Loans payable	434,291	434,291
Due to Directors	367,739	314,550
Legal liability	2,772,973	2,706,869
Total current liabilities	4,424,949	4,262,155
Long-term liabilities:
Total liabilities	4,424,949	4,262,155
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock value	404,299	436,209
Common stock value	9,343	8,639
Additional paid-in capital	8,282,943	8,194,737
Accumulated deficit	(13,107,517)	(12,888,370)
Total stockholders' equity (deficit)	(4,410,932)	(4,248,785)
Total liabilities and stockholders' equity (deficit)	$ 14,017	$ 13,370

XML

BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Balance Sheets
Preferred Stock, Par Value	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	20,000,000	20,000,000
Preferred Stock, Issued	597,716	629,626
Common Stock, Par Value	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Issued	91,924,815	86,887,609
Common Stock, Outstanding	91,924,815	86,887,609

XML

STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Expenses:
Management fees	$ 30,000	$ 12,500	$ 45,000	$ 25,000
Administration	15,000	6,250	30,000	12,500
Professional fees	17,500	5,625	24,250	13,500
Foreign exchange gain (loss)	6,086	(371)	(17,180)	(300)
Research and development		84,000	15,000	84,000
Investor relations	25,490	2,050	26,275	2,050
Interest expense	24,605	4,364	48,670	4,364
Marketing and sales		42,000		42,000
Office and administration	6,241	7,138	12,772	11,179
Total expenses	112,750	164,298	219,197	194,893
Net income (loss)	$ (112,750)	$ (164,298)	$ (219,147)	$ (194,893)
Net income (loss) per share - basic and diluted	$ 0	$ 0	$ 0	$ 0
Weighted average number of common shares outstanding - basic and diluted	93,551,482	80,751,807	90,593,537	80,074,327

XML

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($)	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total Stockholders' Equity
Beginning Balance, shares at Dec. 31, 2015		79,396,847
Beginning Balance, amount at Dec. 31, 2015	$ 456,209	$ 7,940	$ 8,105,572	$ (12,325,082)	$ (3,755,361)
Stock issued for conversion of preferred, shares		1,747,435
Stock issued for conversion of preferred, value	(20,000)	$ 125	19,875
Stock issued for cash, shares		1,278,520
Stock issued for cash, value		$ 128	15,050		15,178
Stock issued for interest, shares		181,833
Stock issued for interest, value		$ 18	4,346		4,364
Stock issued for goodwill, shares		1,400,000
Stock issued for goodwill, value		$ 140	27,860	(28,000)
Net loss for the period				(194,893)	(194,893)
Ending Balance, shares at Jun. 30, 2016		84,004,635
Ending Balance, amount at Jun. 30, 2016	436,209	$ 8,351	8,172,703	(12,547,975)	(3,930,712)
Stock issued for cash, shares		2,882,974
Stock issued for cash, value		$ 288	22,034		22,322
Net loss for the period				(340,395)	(340,395)
Ending Balance, shares at Dec. 31, 2016		86,887,609
Ending Balance, amount at Dec. 31, 2016	436,209	$ 8,639	8,194,737	(12,888,370)	(4,248,785)
Stock issued for conversion of preferred, shares		2,037,206
Stock issued for conversion of preferred, value	(31,910)	$ 204	31,706
Stock issued for cash, shares		3,250,000
Stock issued for cash, value		$ 325	32,175		32,500
Stock issued for services, shares		1,750,000
Stock issued for services, value		$ 175	19,325		19,500
Fair value of warrants issued for services			5,000		5,000
Net loss for the period				(219,147)	(219,147)
Ending Balance, shares at Jun. 30, 2017		93,924,815
Ending Balance, amount at Jun. 30, 2017	$ 404,299	$ 9,343	$ 8,282,943	$ (13,107,517)	$ (4,410,982)

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STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (219,147)	$ (194,893)
Items not involving cash:
Foreign exchange gain (loss)	(17,434)
Non-cash interest	48,670	4,364
Non-cash investor relation	24,500	4,364
Changes in non-cash working capital:
Changes in operating assets and liabilities	96,690	163,503
Cash used in operating activities	(31,853)	(27,026)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	32,500	32,500
Repayment of loans payable		25,000
Repayment of advances to directors		339
Cash provided by (used in) financing activities	32,500	7,161
Increase (decrease) in cash and cash equivalents	647	(19,865)
Cash and cash equivalents, beginning of period	6,078	23,752
Cash and cash equivalents, end of period	6,725	$ 3,887
NON-CASH TRANSACTION
Common shares issued for services	19,500
Fair value of warrants issued for services	$ 5,000

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Nature of Operations and Ability To Continue As A Going Concern

6 Months Ended

Jun. 30, 2017

Notes

Nature of Operations and Ability To Continue As A Going Concern

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 audited consolidated financial statements filed as part of the Company’s December 31, 2016 Form 10-K.

The results of operations for the six months ended June 30, 2017 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 six months to June 30, 2017 the Company incurred a net loss of $219,147 and at June 30, 2017 had a working capital deficiency of $4,410,932.

Management has undertaken initiatives for the Company to continue as a going concern; for example: the Company is attempting to secure an equity financing in the short term. Management is unable to predict the results of its initiatives at this time. These factors raise substantial doubt about the ability of the Company to continue as a going concern.

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.

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Share Capital, Disclosure

6 Months Ended

Jun. 30, 2017

Notes

Share Capital, Disclosure

2.  SHARE CAPITAL

COMMON STOCK

During the six months ended June 30, 2017, the Company issued 2,500,000 shares of common stock for cash of $25,000.

During the six months ended June 30, 2017, the Company issued 650,000 common stock for cash of $7,500. Each common stock is attached with a warrant with an exercise price of $0.04 per common stock for a period of two years.  No value was attributed to these warrants.

During the six months ended June 30, 2017, the Company issued 2,037,206 shares of common stock for conversion of 31,910 preferred class B shares.

During the six months ended June 30, 2017 the Company issued 1,750,000 shares of common stock with a fair value of $19,500 for consulting services.  Each common stock is attached with a warrant with an exercise price of $0.04 per common stock for a period of two years.  The fair value of the warrants was determined to be $5,000 using the Black-Scholes Pricing Model with the following assumptions: dividend yield - 0%, volatility - 282%, risk-free rate - 1%, and expected life - 2 years. 

PREFERRED SHARES

At June 30, 2017, the outstanding number of preferred Classes A, B and C shares are 582,716 (December 31, 2016: 582,716), 15,000 (December 31, 2016: 46,910) and nil (December 31, 2016: nil), respectively

WARRANTS

	Number of Warrants	Exercise Price per Share
Balance December 31, 2016	829,940	$0.15 - $0.75
Issued	1,300,000	$0.004
Balance June 30, 2017	2,129,940	$0.64

As at June 30, 2017 the outstanding warrants are as follows:

Expiry Date	Exercise Price	June 30, 2017	December 31, 2016
Open (1)	$ 0.50	389,170	389,170
Open (1)	$ 0.75	389,170	389,170
Open (2)	$ 0.25	51,600	51,600
April 17, 2019	$0.004	1,300,000	-
Total outstanding and exercisable		2,129,940	829,940
Weighted average outstanding life of options (years)		Open	Open

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Legal Liability, Disclosure

6 Months Ended

Jun. 30, 2017

Notes

Legal Liability, Disclosure

3.  LEGAL LIABILITY

During 2000 to 2008, the Company’s former subsidiaries North Star Technical Inc. (“NTI”) and Northstar Network Ltd. (“NNL”) received funding from Atlantic Canada Opportunities Agency (“ACOA”) to fund their projects. In accordance with agreements signed between NTI, NNL and the Company, the Company was jointly and severally liable for the obligations. 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$3,666,697 ($2,772,973). Further, the claim amount bears a daily interest of $358 from February 15, 2013 to settlement. During the six months ended June 30, 2017, the Company recorded interest expenses of $48,670.

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Related Party Transactions, Disclosure

6 Months Ended

Jun. 30, 2017

Notes

Related Party Transactions, Disclosure

4.  RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2017, the Company accrued management fees payable of $45,000 in total to a director of the company. 

At June 30, 2017, there is a balance of $367,739 (December 31, 2016: $314,550) owing to a director of the Company for management fees and expenses reimbursement.  The balance is included in accounts payable and accrued liabilities.

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2017

Notes

New Accounting Pronouncements

5.  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.

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Subsequent Event

6 Months Ended

Jun. 30, 2017

Notes

Subsequent Event

6.  SUBSEQUENT EVENT

There were no material events outside of the normal course of business.

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Share Capital, Disclosure: Schedule of Stockholders' Equity Note, Warrants (Tables)

6 Months Ended

Jun. 30, 2017

Tables/Schedules

Schedule of Stockholders' Equity Note, Warrants

	Number of Warrants	Exercise Price per Share
Balance December 31, 2016	829,940	$0.15 - $0.75
Issued	1,300,000	$0.004
Balance June 30, 2017	2,129,940	$0.64

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Share Capital, Disclosure: Schedule of outstanding warrants (Tables)

6 Months Ended

Jun. 30, 2017

Tables/Schedules

Schedule of outstanding warrants

Expiry Date	Exercise Price	June 30, 2017	December 31, 2016
Open (1)	$ 0.50	389,170	389,170
Open (1)	$ 0.75	389,170	389,170
Open (2)	$ 0.25	51,600	51,600
April 17, 2019	$0.004	1,300,000	-
Total outstanding and exercisable		2,129,940	829,940
Weighted average outstanding life of options (years)		Open	Open

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Nature of Operations and Ability To Continue As A Going Concern (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Details
Net income (loss)	$ 112,750	$ 164,298	$ 219,147	$ 194,893
working capital deficiency	$ 4,410,932		$ 4,410,932

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Share Capital, Disclosure (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Common shares issued for services	$ 19,500
Fair value of warrants issued for services	$ 5,000
Common stock issued for cash
Common stock issued for cash	2,500,000
Proceeds from sale of common stock	$ 25,000
Common stock issued for cash(2)
Common stock issued for cash	650,000
Proceeds from sale of common stock	$ 7,500
Conversion of preferred Class B shares
Common stock issued for the conversion of preferred stock	2,037,206
Number of preferred shares converted	31,910
Common stock issued for consulting services
Common stock issued for services	1,750,000
Common shares issued for services	$ 19,500
Fair value of warrants issued for services	$ 5,000
Preferred Class A
Preferred shares outstanding	582,716	582,716
Preferred Class B
Preferred shares outstanding	15,000	46,910

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Share Capital, Disclosure: Schedule of Stockholders' Equity Note, Warrants (Details) - shares	Jun. 30, 2017	Dec. 31, 2016
Details
Warrants outstanding	2,129,940	829,940
Warrants issued during the period	1,300,000

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Legal Liability, Disclosure (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Legal liability	$ 2,772,973		$ 2,772,973		$ 2,706,869
Interest expense	24,605	$ 4,364	48,670	$ 4,364
Legal liabilities
Legal liability	$ 2,772,973		2,772,973
Interest expense			$ 48,670

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Related Party Transactions, Disclosure (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Details
Managment fees accrued from a Director of the Company	$ 45,000
Due to Directors	$ 367,739	$ 314,550