10-Q

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, 2018

[  ] 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.

355 Burrard Street, Suite 1000

Vancouver, BC, Canada  V6C 2G8

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 emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated Filer [  ]	Accelerated Filer [  ]
Non-accelerated filer    [  ]	Smaller reporting Company [X]
(Do not check if a smaller reporting company)	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 August 13, 2018: 101,569,815

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, 2018		December 31, 2017
		unaudited		audited
Assets
Current
Cash and cash equivalents	$	8,729	$	16,438
		8,729		16,438
Total assets	$	8,729	$	16,438
Liabilities
Current
Accounts payable and accrued liabilities	$	1,055,115	$	941,115
Loans payable		439,166		434,291
Due to Director		478,299		424,538
Legal liability		2,908,711		3,001,471
Total liabilities		4,881,291		4,801,415
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:
101,569,815 Common shares (98,579,815 - December 31, 2017)		10,157		9,858
597,716 Preferred shares (597,716 - December 31, 2017)		404,299		404,299
Additional Paid-in Capital		8,361,502		8,333,396
Subscription  Receivable		-		(5,035)
Accumulated Deficit		(13,648,521)		(13,527,495)
Total stockholders’ deficit		(4,872,563)		(4,784,977)
	$	8,729	$	16,438

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, 2018 and 2017

Unaudited

U.S. Dollars

		Three Months				Six Months
		2018		2017		2018		2017
Expenses
Management fees	$	30,000	$	30,000	$	60,000	$	45,000
Administrative fees		15,000		15,000		30,000		30,000
Professional fees		10,570		17,500		15,750		24,250
Foreign exchange (gain) loss		(57,136)		(6,086)		(141,372)		17,180
Engineering research and   development		28,000		-		60,000		15,000
Investor relations		475		25,490		1,250		26,275
Interest		25,237		24,605		50,709		48,670
Marketing and sales		12,000		-		24,000		-
Office		9,740		6,241		20,689		12,772
Total expenses		73,886		112,750		121,026		219,147
Net loss for the period	$	(73,886)	$	(112,750)	$	(121,026)	$	(219,147)
Basic and diluted loss per   common share	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
Weighted average number   of shares outstanding		100,321,244		93,551,482		99,455,340		90,593,537

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, 2018

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)
Subscription collected (note 2)	-	-	-	5,035	-	-	5,035
Issuance for cash	2,990,000	299	28,106	-	-	-	28,405
Net loss	-	-	-	-	(121,026)	-	(121,026)
Balance June 30, 2018	101,569,815	$ 10,157	$ 8,361,502	$                    -	$(13,648,521)	$  404,299	$  (4,872,563)

See notes to the interim consolidated financial statements

6

NORTHSTAR ELECTRONICS, INC.

Interim Consolidated Statements of Cash Flows

Six Months Ended June 30, 2018 and 2017

Unaudited

U.S. Dollars

		2018		2017
Operating Activities
Net loss	$	(121,026)	$	(219,147)
Items not involving cash
Foreign exchange (gain) loss		(141,372)		17,434
Non-cash interest		50,709		48,670
Non-cash investor relations		-		24,500
Changes in non-cash working capital
Changes in operating assets and liabilities		116,939		96,690
Net cash used in operating activities		(94,750)		(31,853)
Financing Activities
Issuance of common shares for cash (net of costs)		28,405		32,500
Loans payable		4,875		-
Increases in debt to directors		53,761		-
Net cash provided by financing activities		87,041		32,500
Increase (decrease) in cash		(7,709)		647
Cash, beginning		16,438		6,078
Cash, ending	$	8,729	$	6,725
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, 2018

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, 2017 Form 10-K.

The results of operations for the six months ended June 30, 2018 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, 2018, the Company incurred a net loss of $121,026 and at June 30, 2018 had a working capital deficiency of $4,872,562.

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, 2018 the Company issued 2,990,000 units for cash proceeds of $28,405. Each unit consists of one common share and half a share purchase warrants. Each share purchase warrant can be exercised at $0.05 per share for a period of one year. The Company received a subscription of $5,035 related to issuance in prior year.

PREFERRED SHARES

All classes of the preferred shares bear interest at 10% per annum paid semiannually 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, 2018, the outstanding number of preferred Classes A, B and C shares are 582,716 (December 31, 2017: 582,716), 15,000 (December 31, 2017: 15,000) and nil (December 31, 2017: nil), respectively.

WARRANTS

	Number of Warrants	Average Exercise Price per Share
Balance December 31, 2017	5,157,440	$0.13
Issued	1,495,000	$0.01
Balance June 30, 2018	6,652,440	$0.12

As at June 30, 2018 the outstanding warrants are as follows:

Expiry Date	Exercise Price	June 30, 2018	December 31, 2017
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 21, 2019	$ 0.04	2,500,000	2,500,000
November 7, 2018	$ 0.05	1,562,500	1,562,000
December 25, 2018	$ 0.05	265,000	265,000
May 18, 2019	$ 0.05	1,495,000	--
Total outstanding and exercisable		6,652,440	5,157,440
Weighted average outstanding life of options (years)		0.61 - Open	0.94 - Open

(1)

These warrants were issued in 2005. The expiry date of the warrants are six months after the closing bid price for the common stock of the Company has been over $0.65 and $1.00 per share respectively for five consecutive trading days.

(2)

These warrants were issued in 2008 and they do not have an expiry date.

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$3,079,475 ($2,338,553). Further, the claim amount bears a daily interest of $358 from February 15, 2013 to settlement. During the six months ended June 30, 2018, the Company recorded interest expenses of $50,709.

4. RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2018, the Company accrued management fees payable of $60,000 in total to a director of the company.

At June 30, 2018, there is a balance of $478,299 (December 31, 2017: $424,538) 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, 2018 and June 30, 2017 prepared by management and the consolidated financial statements for the year ended December 31, 2017 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 currently working on plans to obtain ownership 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, 2018 with the three and six months ended June 30, 2017:

The net loss for the three month period ended June 30, 2018 was $(73,886) compared to a net loss of $(112,750) for the three months ended June 30, 2017.

11

The net loss for the six month period ended June 30, 2018 was $(121,026) compared to a net loss of $(219,147) for the six months ended June 30, 2017.

The decrease in net loss for the three and six month period was in part due to the fact the Company incurred a foreign exchange gain.

Comparison of Financial Position at June 30, 2018 with December 31, 2017

The Company’s working capital deficiency increased at June 30, 2018 to $(4,872,562) with current liabilities of $4,881,291 which are in excess of current assets of $8,729. At December 31, 2017 the Company had a working capital deficiency of $(4,784,977). See also contingent liabilities, note 3 to the financial statements for the six months ended June 30, 2018.

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, 2017. 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, 2018 was $(94,750) compared to an outflow of cash of $(31,853) in the comparative prior six months ended June 30, 2017. During the current period, the Company received $28,405 ($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, 2018 of $8,729 compared to cash on hand of $16,438 at December 31, 2017. 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.

12

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. The disclosure controls were effective at June 30, 2018.

(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, 2018 the Company issued 2,990,000 units for cash proceeds of $28,405. Each unit consists of one common share and half a share purchase warrants.  Each share purchase warrant can be exercised at $0.05 per share for a period of one year.  The Company received a subscription of $5,035 related to issuance in prior year.

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 13, 2018	Northstar Electronics, Inc.
	(Registrant)
	By: /s/ Wilson Russell
	Wilson Russell, PhD, President and Chief Financial Officer

15

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Wilson Russell certify that:

1.  I have reviewed this Quarterly Report on Form 10-Q of Northstar Electronics, Inc. for the quarter ended June 30, 2018;

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.  The registrant’s other certifying officer and I are 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 our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 our 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.  The registrant’s other certifying officer and I have disclosed, based on our 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.

Date: August 13, 2018	/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. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Northstar Electronics, Inc. (the “Registrant”) on Form 10-Q for the quarter ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer of the Registrant, certifies, in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report, to which this certification is attached as Exhibit 32.1, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant

Dated: August 13, 2018	/s/ Wilson Russell
	Wilson Russell
	Chief Executive Officer and Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 13, 2018
Document and Entity Information
Entity Registrant Name	NORTHSTAR ELECTRONICS INC
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Entity Central Index Key	0001082027
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		101,569,815
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	2018
Document Fiscal Period Focus	Q2
Trading Symbol	neik

XML

BALANCE SHEETS - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 8,729	$ 16,438
Total current assets	8,729	16,438
Total assets	8,729	16,438
Current liabilities:
Accounts payable and accrued liabilities	1,055,115	941,115
Loans payable	439,166	434,291
Due to Directors	478,299	424,538
Legal liability	2,908,711	3,001,471
Total current liabilities	4,881,291	4,801,415
Long-term liabilities:
Total liabilities	4,881,291	4,801,415
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock value	404,299	404,299
Common stock value	10,157	9,858
Additional paid-in capital	8,361,502	8,333,396
Subscriptions receivable		(5,035)
Accumulated deficit	(13,648,521)	(13,527,495)
Total stockholders' equity (deficit)	(4,872,563)	(4,784,977)
Total liabilities and stockholders' equity (deficit)	$ 8,729	$ 16,438

XML

BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
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	597,716
Common Stock, Par Value	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Issued	101,569,815	98,579,815
Common Stock, Outstanding	101,569,815	98,579,815

XML

STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Expenses:
Management fees	$ 30,000	$ 30,000	$ 60,000	$ 45,000
Administration	15,000	15,000	30,000	30,000
Professional fees	10,570	17,500	15,750	24,250
Foreign exchange gain (loss)	57,136	6,086	141,372	(17,434)
Engineering research and development	28,000		60,000	15,000
Investor relations	475	25,490	1,250	26,275
Interest expense	25,237	24,065	50,709	48,670
Marketing and sales	12,000		24,000
Office	9,740	6,241	20,689	12,772
Total expenses	73,886	112,750	121,026	219,147
Net income (loss)	$ (73,886)	$ (112,750)	$ (121,026)	$ (219,147)
Net income (loss) per share - basic and diluted	$ 0	$ 0	$ 0	$ 0
Weighted average number of common shares outstanding - basic and diluted	100,321,244	93,551,482	99,455,340	90,593,537

XML

STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - 6 months ended Jun. 30, 2018 - USD ($)	Preferred Stock	Common Stock	Additional Paid-in Capital	Subsciptions	Accumulated Deficit	Total Stockholders' Equity
Beginning Balance, shares at Dec. 31, 2017	597,716	98,579,815
Beginning Balance, amount at Dec. 31, 2017	$ 404,299	$ 9,858	$ 8,333,396	$ (5,035)	$ (13,527,495)	$ (4,784,977)
Subscription collected				$ 5,035		5,035
Stock issued for cash, shares		2,990,000
Stock issued for cash, value		$ 299	28,106			28,405
Net loss for the period					(121,026)	(121,026)
Ending Balance, shares at Jun. 30, 2018	597,716	101,569,815
Ending Balance, amount at Jun. 30, 2018	$ 404,299	$ 10,157	$ 8,361,502		$ (13,648,521)	$ (4,872,563)

XML

STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (121,026)	$ (219,147)
Items not involving cash:
Foreign exchange gain (loss)	141,372	(17,434)
Non-cash interest	50,709	48,670
Non-cash investor relations		24,500
Changes in non-cash working capital:
Changes in operating assets and liabilities	116,939	96,690
Cash used in operating activities	(94,750)	(31,853)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	28,405	32,500
Proceeds from loans payable	4,875
Increases of debt to directors	53,761
Cash provided by (used in) financing activities	87,041	32,500
Increase (decrease) in cash and cash equivalents	(7,709)	647
Cash and cash equivalents, beginning of period	16,438	6,078
Cash and cash equivalents, end of period	$ 8,729	6,725
NON-CASH TRANSACTION
Shares issued for services		19,500
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, 2018

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, 2017 Form 10-K.

The results of operations for the six months ended June 30, 2018 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, 2018, the Company incurred a net loss of $121,026 and at June 30, 2018 had a working capital deficiency of $4,872,562.

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, 2018

Notes

Share Capital Disclosure

2. SHARE CAPITAL

COMMON STOCK

During the six months ended June 30, 2018 the Company issued 2,990,000 units for cash proceeds of $28,405. Each unit consists of one common share and half a share purchase warrants. Each share purchase warrant can be exercised at $0.05 per share for a period of one year. The Company received a subscription of $5,035 related to issuance in prior year.

PREFERRED SHARES

All classes of the preferred shares bear interest at 10% per annum paid semiannually 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, 2018, the outstanding number of preferred Classes A, B and C shares are 582,716 (December 31, 2017: 582,716), 15,000 (December 31, 2017: 15,000) and nil (December 31, 2017: nil), respectively.

WARRANTS

	Number of Warrants	Average Exercise Price per Share
Balance December 31, 2017	5,157,440	$0.13
Issued	1,495,000	$0.01
Balance June 30, 2018	6,652,440	$0.12

As at June 30, 2018 the outstanding warrants are as follows:

Expiry Date	Exercise Price	June 30, 2018	December 31, 2017
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 21, 2019	$ 0.04	2,500,000	2,500,000
November 7, 2018	$ 0.05	1,562,500	1,562,000
December 25, 2018	$ 0.05	265,000	265,000
May 18, 2019	$ 0.05	1,495,000	--
Total outstanding and exercisable		6,652,440	5,157,440
Weighted average outstanding life of options (years)		0.61 - Open	0.94 - Open

(1)        These warrants were issued in 2005. The expiry date of the warrants are six months after the closing bid price for the common stock of the Company has been over $0.65 and $1.00 per share respectively for five consecutive trading days.

(2)        These warrants were issued in 2008 and they do not have an expiry date.

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Legal Liability Disclosure

6 Months Ended

Jun. 30, 2018

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$3,079,475 ($2,338,553). Further, the claim amount bears a daily interest of $358 from February 15, 2013 to settlement. During the six months ended June 30, 2018, the Company recorded interest expenses of $50,709.

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Related Party Transactions Disclosure

6 Months Ended

Jun. 30, 2018

Notes

Related Party Transactions Disclosure

4. RELATED PARTY TRANSACTIONS

During the six months ended June 30, 2018, the Company accrued management fees payable of $60,000 in total to a director of the company.

At June 30, 2018, there is a balance of $478,299 (December 31, 2017: $424,538) 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, 2018

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, 2018

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 Warrants Issued (Tables)

6 Months Ended

Jun. 30, 2018

Tables/Schedules

Schedule of Warrants Issued

	Number of Warrants	Average Exercise Price per Share
Balance December 31, 2017	5,157,440	$0.13
Issued	1,495,000	$0.01
Balance June 30, 2018	6,652,440	$0.12

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Share Capital Disclosure: Schedule of Outstanding Warrants (Tables)

6 Months Ended

Jun. 30, 2018

Tables/Schedules

Schedule of Outstanding Warrants

Expiry Date	Exercise Price	June 30, 2018	December 31, 2017
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 21, 2019	$ 0.04	2,500,000	2,500,000
November 7, 2018	$ 0.05	1,562,500	1,562,000
December 25, 2018	$ 0.05	265,000	265,000
May 18, 2019	$ 0.05	1,495,000	--
Total outstanding and exercisable		6,652,440	5,157,440
Weighted average outstanding life of options (years)		0.61 - Open	0.94 - 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, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Details
Net income (loss)	$ 73,886	$ 112,750	$ 121,026	$ 219,147
working capital deficiency	$ 4,872,562		$ 4,872,562

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Share Capital Disclosure (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Common stock issued for cash
Common stock issued for cash	2,990,000
Proceeds from sale of common stock	$ 28,405
Description of equity sold for cash	Each unit consists of one common share and half a share purchase warrants
Exercise price of warrants per share	$ 0.05
Related to issuance in prior year
Subscription collected	$ 5,035
Preferred Class A
Preferred shares outstanding	582,716	582,716
Preferred Class B
Preferred shares outstanding	15,000	15,000

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Share Capital Disclosure: Schedule of Warrants Issued (Details) - $ / shares	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Details
Warrants outstanding	6,652,440	5,157,440
Average exercise price, warrants outstanding	$ 0.12	$ 0.13
Number of warrants issued	1,495,000

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Share Capital Disclosure: Schedule of Outstanding Warrants (Details) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Warrants outstanding	6,652,440	5,157,440
No expiration date (Open 1)
Exercise price of warrants per share	$ 0.50
Warrants outstanding	389,170	389,170
No expiration date (Open 2)
Exercise price of warrants per share	$ 0.75
Warrants outstanding	389,170	389,170
No expiration date (Open 3)
Warrants outstanding	51,600	51,600
Expire on April 21, 2019
Exercise price of warrants per share	$ 0.04
Warrants outstanding	2,500,000	2,500,000
Expire on November 7, 2018
Exercise price of warrants per share	$ 0.05
Warrants outstanding	1,562,500	1,562,000
Expire on December 25, 2018
Exercise price of warrants per share	$ 0.05
Warrants outstanding	265,000	265,000
Expire on May 18, 2019
Exercise price of warrants per share	$ 0.05
Warrants outstanding	1,495,000

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Legal Liability Disclosure (Details)	Jun. 30, 2018 USD ($)
Legal liabilities
Interest payable	$ 50,709

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Related Party Transactions Disclosure (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Due to Directors	$ 478,299	$ 424,538
Accrued management fees payable due to a director
Fees accrued from related parties	$ 60,000