Registration No. 333-90031
Amendment No. 9
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form SB-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NORTHSTAR ELECTRONICS, INC.
(Name of Small Business Issuer in its Charter)
Delaware #33-0803434 3679
(State or other Jurisdiction of (I.R.S. Employer (Primary Standard
Incorporation or organization) Identification Number) Industrial
Classification Code)
Suite 1455-409 Granville Street
Vancouver, BC
V6C 1T2
(604) 685-0364
(Address, including zip code and telephone number, including area code and
registrant's principal executive office and principal place of business)
Mr. Jeffrey A. Nichols
388 Market Street, Suite 500
Capital Law Group
San Francisco, CA 94111
(415) 433-1178
(Address, including zip code and telephone number, including area code, of
agent for service)
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this
registration statement
If any of the securities registered on this form are to be offered on a delayed
or continuing basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box. / X /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective delaying amendment filed pursuant to Rule
462[c] under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
Calculation of Registration Fee
Title of each Class Offering price Maximum Dollar Amount Proposed Amount of
Of Securities to be per share to be Registered registration fee
Registered
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Common Stock $1.00 $800,000 $287
Common Stock(1) $1.00 $200,000 $130
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(1)The registration of 200,000 shares is being done on behalf of a selling
security holder. There is no current market for the shares and the offering
price per share, of $1.00 is an estimate based on the offering price of the
shares to be sold by the company. The figure of $130 is based on an estimated
maximum dollar amount to be registered of $200,000.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
Disclosure Alternative Used: Alternative 1__ Alternative 2 /X/
Northstar Electronics, Inc.
Mailing Address:
Suite 1455-409 Granville Street
Vancouver, BC
V6C 1T2
(604) 685-0364
As filed with the United States Securities and Exchange Commission on November
1, 1999
Description of Securities Offered: Up to 800,000 shares of common stock, par
value $0.0001, to be offered by the company at a price of $1.00US per share and
up to 200,000 shares of common stock, par value $0.0001 to be offered by a
selling security holder on a delayed or continuous basis following the
effective date of this prospectus. All costs incurred in the registration of
the shares are being paid by the company.
These securities involve a high degree of risk. See "Risk Factors" contained
in this prospectus,
Neither the Securities and Exchange Commission has approved or disapproved of
these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Distribution Spread for Shares offered by the Company
Price to Public Underwriting discount Proceeds to issuer or
and commissions other persons
Per Unit $1.00US $0 $1.00US
Total $800,000 $0 $800,000
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Distribution Spread of Shares offered by the Selling Security Holder
Price to Public Underwriting discount Proceeds to
and commissions other persons
Per Unit Unknown n/a Unknown
Total Unknown n/a Unknown
-----------------------------------------------------------------------------
Approximate date of proposed sale to the public: As soon as practicable
following effective date of this registration statement.
Closing Date: November 30, 2000 for the offering by the company; open for the
offering by the selling security holder.
Table of Contents
3 Prospectus Cover Page
5 Prospectus Summary
6 Risk Factors
8 Plan of Distribution
8 Dilution
9 Use of Proceeds
10 Northstar's Business
13 Management's Discussion and Analysis or Plan of Operations
15 Changes in or Disagreements with Accountants on Accounting and Financial
Disclosure
15 Security Ownership of Management and Certain Security Holders
17 Directors Officers and Significant Employees
19 Remuneration of Directors and Officers
19 Interest of Management and Others in Certain Transactions
20 Litigation
Financial Statements
23 Part II Information Not Required in the Prospectus
Prospectus Summary
The Issuer:
Northstar Electronics, Inc., a Delaware corporation is the parent of Northstar
Technical Inc. NTI
Subsidiary Business:
NTI is a high technology developer and electronics manufacturer, with corporate
offices in British Columbia, Canada and research and development and production
operations in Newfoundland, Canada.
Securities Offered: Up to 800,000 shares of common stock, par value $0.0001, to
be offered by the company; and up to 200,000 shares of common stock, par value
$0.0001, to be offered by a selling security holder.
Minimum Number of Securities Offered: There is no minimum
Offering Price: $1.00US per share, for the 800,000 shares offered by the
company; price(s) to be determined by the selling security holder for 200,000
shares offered by him.
Residency Limitation: No limitations
Use of Proceeds: Net proceeds from this offering of up to $800,000 will be used
for:
(a) Marketing and promotion of products
(b) Business development
(c) Production of products
(d) Operating capital
Total common shares issued and outstanding: 7,604,481
Total common shares after sale of offering: 8,404,481
Closing Date: November 30, 2000
for the 800,000 shares offered by the company and an open closing for 200,000
shares offered by the selling security holder.
Risk Factors
Northstar's business carries substantial risks. Northstar's securities should
be purchased only by those who can afford to lose their entire investment. You
should consider the following risk factors and other information in this
prospectus before investing in our common stock.
Because our operating history is limited and includes financial losses, our
future business may continue to be unprofitable
The auditors for Northstar's operating subsidiary, NTI, have deemed NTI a going
concern. However, we have only a limited operating history upon which an
evaluation of our business and future prospects can be based. We have never
been profitable and future profits may never occur. This lack of profitability
would seriously impede our ability to continue as an operating company.
Increased expenses could lead to curtailment of operations
We plan to expand operations and to conduct additional research and development-
all of which will increase company expenses. If revenues do not rise in
conjunction with expenses, we may have to curtail operations or halt operations
completely.
Inadequate manufacturing performance could damage our business
Unanticipated technical or quality control problems on the Lockheed Martin
contract could delay payments from Lockheed Martin that could cause us
financial problems and may curtail operations.
Failure to obtain manufacturing components in a timely fashion may curtail
product productions
Our manufacturing operations, both NETMIND and contract, depend on reliable
suppliers who can provide electronic and mechanical parts promptly. We have
limited experience with our suppliers and no long-term contracts or direct
control over these suppliers, which are independent third parties. In our
brief experience with these suppliers, we have found ourselves waiting for
parts. Long interruptions may curtail production operations.
Any disruption to our computerized inventory ordering system due to software
and hardware failures would delay component ordering and may curtail production
operations.
Failure to attract new personnel or replace leaving personnel may curtail
operations
Competition for personnel in the high technology industry is strong. Because
we are a relatively new company with a limited operating history and limited
financial resources, we may not be able to retain key technical, sales and
management employees or be able to recruit qualified electronic engineers,
technicians and managers that we may need in the near future. This could impede
our ability to produce additional products to meet any increased demand that
the company might develop through its marketing efforts and limit our ability
to keep up to date with our research and development efforts.
Our inability to compete with established competitors may limit sales of the
NETMIND product
We may not be able to effectively compete with established competitors, such as
Furuno and Scanmar, and NETMIND sales may not increase very much, or at all.
This could mean that Northstar will never be profitable.
Possible fishing industry fluctuations could hurt NETMIND sales
Our NETMIND product is reliant on a single industry, fishing, which fluctuates
significantly. The industry's operational fluctuations result in periods of
low sales revenues. If we do not adequately forecast sales, we may face
unforeseen periods of cash shortages.
Possible defense industry downturns could hurt contract manufacturing
opportunities
Downturns in the defense industry in the United States and Canada-our target
market- occur from time to time; this in turn could hurt our potential for
future contract manufacturing opportunities.
Current legal claims against Northstar could result in financial difficulties
We are currently the defendant in a lawsuit commenced by our company's former
master distributor, First Watch Marine, Inc. that company alleges that we
interfered with its ability to sell products and claims $1.3 million in relief,
plus damages. We have filed a counterclaim of $100,000, which we contend First
Watch owes, plus damages. We consider our case strong, but court proceedings
are unpredictable, time-consuming and costly.
Our dependency on one product could lead to curtailment of Northstar's business
NETMIND is our only commercial product and the success of Northstar is highly
dependent upon the commercial viability of the NETMIND product as it compares
to other similar products available in the market. To date, we have not sold
NETMIND on a profitable basis. If, for whatever reason, we are not able to
produce, market and sell the NETMIND product profitably, we may not have the
financial resources to maintain the company's business.
If we do not raise funds in the next six months, we will have significant
delays in the development of new products and may be forced to substantially
curtail operations
We are attempting to raise funds that are necessary for further development of
our business plan. If we are unsuccessful in the next six months, we will face
risks including the following:
We would be forced to curtail our operations and delay development of new
products.
Our business development activities would be curtailed, which would severely
limit our ability to generate revenues to cover current and future operating
expenses.
Resale offering by the selling security holder could adversely impact
Northstar's offering
Sales of the shares offered by the selling security holder, or even the
potential of such sales, may have an adverse effect on the market price of the
common stock of Northstar. This could result in our offering
being only partially successful with minimal funds raised.
Receipt of minimal funds from the offering could restrict Northstar's future
business
If minimal funds are raised from the current offering, we will not likely be
able to carry out the planned growth-oriented activities, such as increasing
NETMIND marketing, NETMIND production capacity, and contract manufacturing
business development. Inability to carry out these activities would heavily
restrict growth for the next two years or longer and could negatively affect
the ability of Northstar to stay in business.
Plan of Distribution
Principal Underwriters: None
Discounts and Commissions Paid to Dealers: None
Plan of Distribution for Securities Offered through Brokers or Dealers: None
Securities to be Offered for the Account of Security Holders: 200,000 common
shares
Arrangements for Return of Funds to Subscribers: None
Material Delays in the Payment of Proceeds of the Offering: None
We plan to sell Northstar's 800,000 shares in privately negotiated transactions
at the offering price.
Northstar's securities will be sold by Dr.Wilson Russell, President/Principal
Financial Officer, and Mr. Frank Power Vice-President of Northstar. Both Dr.
Russell and Mr. Power as directors of Northstar are associated persons as
defined in Rule 3(a) 4-1and will rely on 3(a) 4-1 subparagraphs (a)(1)-(3) and
(a)(4)(i) of the rule.
The selling security holder may offer the 200,000 shares covered in this
registration statement in the over-the-counter market, in privately negotiated
transactions, or by a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to the prevailing market
prices or at negotiated market prices.
The shares are being sold by the selling security holder and Northstar has no
agreements or understandings with any broker or dealer for the sale of such
shares. The selling security holder may use a broker-dealer in the sale of his
securities and the commission to be paid, if any, will be determined at that
time. Prior to the involvement of any such broker-dealer, such broker-dealer
must seek and obtain clearance of the compensation arrangements from the
National Association of Securities Dealers, Inc. In such an event, Northstar
will file a post-effective amendment identifying such broker-dealer(s).
Northstar will receive no proceeds from the sale of the shares of the selling
security holder.
The proposed sale of the Northstar shares and the selling security holder
shares will be made as soon as practicable following the effectiveness of the
registration statement.
Dilution
The net tangible book value of the company, as of , December 31 1999 was
($562,585) or approximately ($0.07) per share. Giving effect to the sale by
Northstar of shares at the offering price, the pro forma net tangible book
value of Northstar would be approximately $237,415or approximately $0.03 per
share, which would represent an immediate increase in net tangible book value
of approximately $0.10 per share to present shareholders and an immediate
dilution of approximately $0.97 per share, or approximately 97% to new
investors.
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ASSUMING MAXIMUM SHARES SOLD
Offering Price (before deduction of operating expenses) $1.00 per share
Net tangible book value before offering ($0.07) per share
Net tangible book value after offering $0.03 per share
Dilution to new investors $0.97 per share
Dilution as a percentage 97%
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Use of Proceeds
We estimate that Northstar will use the maximum funds of $800,000 as follows :
Production (Marine Electronics) $150,000
Production (Contract Manufacturing) $200,000
Marketing (Marine Electronics) $100,000
Business Development (Contract Manufacturing) $100,000
Operating Capital $250,000
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Total $800,000
Production/Marine Electronics refers to the manufacture of our NETMIND system.
The company plans to increase production from approximately four systems per
month to 8-10 per month, by adding additional electronic equipment, increasing
the size of the plant's electronics section by about 1,500 square feet, and
hiring three new full-time production workers.
Production/Contract Manufacturing refers to our manufacture of other companies'
systems, under contract. The company intends to establish a separate
production operation for this. The space required is about 2,000 square feet to
accommodate component inventory, manufacturing, administration, storage of
finished goods and shipping. Equipment will be purchased for electronic and
mechanical assembly and for testing of both incoming components and finished
goods. Northstar plans to hire up to five new contract employees in 2000/2001.
Marketing/Marine Electronics refers to the NETMIND marketing. Northstar
intends to increase activities in 2000/2001, primarily in Western North
America, the Gulf of Mexico and the US Eastern Seabord, which it's hoped will
lead to increased sales. Additionally, Northstar wants to start marketing in
overseas countries such as Australia, Chile, Thailand, Korea and China. It will
exhibit at trade shows, advertise in trade magazines, find new dealers, and
provide guidance and support to these dealers.
Business Development/Contract Manufacturing refers to the activities designed
to gain new contracts. The main focus in 2000/2001 will be large prime and
defense communications contractors in the United States and Canada. The
company intends to hire two people, each with 15-20 years experience in these
industries, to identify opportunities. They will meet with prime contractors
exhibit at defense and communications trade shows, and prepare qualifications
documents and bids.
Northstar may not be able to raise the full amount of the offering proceeds. If
only 25%, 50%, or 75% were raised, the proceeds would be allocated as follows:
Amount Raised
25% 50% 75%
Production (Marine Electronics) $100,000 $150,000 $150,000
Production (Contract Manufacturing) $ 50,000 $100,000 $200,000
Marketing (Marine Electronics) $ 50,000 $100,000 $100,000
Business Development (Contract Man.)-------- $ 50,000 $100,000
Operating Capital -------- -------- $ 50,000
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Total $200,000 $400,000 $550,000
If only minimal proceeds, that is 25% are raised, or less the company will
likely require the additional funds in mid-2000 in order to achieve the
expected growth. Northstar estimates that approximately one year after
successful completion of the offering, that is, in early to mid 2001, it will
likely require additional funds for accelerated growth. We are exploring ways
and means of raising the funds, and as of yet, we have no plans in place.
Northstar's Business
Northstar's business is currently that of its subsidiary NTI. Northstar was
incorporated on May 11, 1998 as Scientific Technologies, Inc. under the laws of
the state of Delaware. The name of the company was changed to Northstar
Electronics, Inc. in September, 1999.
Corporate Facilities: The company Northstar maintains its principal corporate
offices at #1455-409 Granville Street, Vancouver, British Columbia, Canada V6C
1T2.
NTI Corporate Information: NTI is a corporation incorporated under the laws of
Newfoundland, Canada on July 5, 1989 and extra-provincially registered in
British Columbia on April 1, 1997. The registered and records offices of NTI
are located at 10 Fort William Place, P.O. Box 5939, St. John's, Newfoundland,
A1C 5X4 Telephone:(709) 722-8735, Facsimile: (709) 722-1763). NTI's head
office is located at Suite 1455, 409 Granville Street, Vancouver, British
Columbia, Canada, V6C 1T2 Telephone: (604) 685-0364, Facsimile: (604)
689-8337.
NTI-General Development and History: NTI was founded in 1989 by Dr. Wilson
Russell as a technology development and manufacturing company. It effectively
became an operating company in 1994. NTI acquired the initial technology for
the NETMIND system from the receiver of National Petroleum and Marine
Consultants Limited and Altair Marine Systems Limited for the sum of $1.00.
The companies had spent an aggregate $1,183,000 on the partial development of
the technology.
NTI has since completed the development and commercialization of the NETMIND
system and established a production operation. The first product was ready for
the market in August 1996. The plant has manufactured over fifty systems.
NETMIND system customers include the National Oceanics and Atmospheric
Administration NOAA in the United States, the United States Department of the
Interior and Fishery Products International FPI in Canada. Sales to these
organizations, to date, are as follows: NOAA $187,016; US Department of the
Interior $37,257; and FPI $99,539.
In 1995, NTI signed a teaming agreement with Loral Librascope -now Lockheed
Martin of Manassas, Virginia- of Glendale, California pursuant to which, if
Loral were successful in a proposal to the Canadian Navy, NTI would assemble
and test multi-function work stations and submarine control consoles. In 1997,
Lockheed Martin entered into a contract with NTI pursuant to which NTI assisted
Lockheed Martin with the production of the first prototype console on their
premises. Lockheed-Martin was eventually successful with its proposal to the
Canadian Navy; NTI signed a $2.0 million contract with Lockheed Martin, on
October 19, 1999. The contract calls for NTI to assemble, test and deliver 11
consoles by August 2000. Lockheed Martin will provide NTI the parts list,
suppliers list, testing instructions and assembly instructions. Payment is
subject to inspection for final acceptance by Lock heed Martin.
Background Technology: NTI has developed a communications technology that can
send information from one place in the ocean to another place. Electronic
devices take certain measurements that are then transmitted using underwater
sound waves to a receiving system which processes the data and displays it
on a computer monitor. The technology has many potential uses in a variety of
industries including offshore oil and gas, defense, marine transportation,
oceanography, environmental and fishing. a core technology for underwater
communications, which has applications in the fishery, offshore oil and The
basic engines are underwater sensors which take measurements and transmit them
the information back to a receiver on board a ship or oil production platform.
Each sensor is equipped with one or more acoustic transducers, depending on its
function. These transducers are used to send the sound signals. Analog and
digital signal processing and power management functions are performed by the
sensor electronics. The telemetered data are received by a device mounted on
the bottom of the ship for transmission via cable to the deck unit
processor/display, a small cabinet mounted at a convenient location on the
bridge of the ship. The processor portion of the deck unit decodes the signals
and converts them into engineering units for display on a high resolution color
monitor.
The NETMIND System: The first application of NTI's core technology is the
NETMIND system for the world's commercial fishing industry.
The NETMIND Market: NETMIND was introduced to the fishing industry marketplace
in 1996 and approximately 50 sales have been made in North America and Europe.
The targeted customers have been strategic in that they are industry leaders
and government agencies. They include the following:
National Oceanics and Atmospheric Administration (NOAA)
United States Department of the Interior (U.S. Geological Survey)
Department of Fisheries and Oceans, Government of Canada
Fisheries and Marine Institute of Memorial University of Newfoundland &
Labrador, St. John's, Newfoundland, Canada
Fishery Products International, St. John's, Newfoundland, Canada
National Sea Products Ltd., Lunenberg, Nova Scotia, Canada
We have received positive written feedback from some of our customers. Four of
these are shown in Exhibit 3.13. In summary, they say that the NETMIND system
enhances efficiency, reduces gear damage and improves quality.
Competition: The NETMIND system has two main competitors, Furuno in Japan and
Scanmar in Norway, both of which are private companies. Very little
information is available to the public on these companies', for example, number
of employees, research and development spending, and overall financial
condition. We believe that NETMIND has technical advantages over each. This
belief is based on our testing program from 1996-1999 which established our
technical specifications and on information gleaned from Furuno's website,
ww.furuno.com, and from Scanmar's website, www.scanmar.com. We have no direct
access to any competitor's test data.
Both the Furuno and Scanmar systems consist of wireless acoustic sensors used
underwater in a similar fashion to the NETMIND system. The Furuno C-24 system
is a net recorder used for mid-water and deep-water trawlers. The Scanmar net
monitoring system operates the same way, that is, by illustrating how the
fishing net is behaving while being towed. However, unlike these products,
NETMIND sensors are fully serviceable. The electronic circuitry is contained in
stainless steel cylinders within each component and is easily removed for
repair by opening the end cap.
We believe, that NETMIND components have longer battery life: 150-200 hours
before recharging compared to approximately 20-150 hours for Scanmar and 10-15
hours for Furuno. As well, the NETMIND system has proven to be very effective
at distances up to 2000 metres while, we believe, competitive systems fall
short of this feature. This is because underwater sound waves can be detected
at greater distances if their frequency is low. The telemetry frequency for
NETMIND is 28Khz, compared to 40Khz for Furuno and 40.8-43.4 for Scanmar. We
believe the rugged design of various NETMIND components has surpassed
competitors' designs in that NETMIND's unique components require very little
maintenance.
While NTI is continuing to grow, we believe the company is smaller in size and
resources when compared to its competitors. NTI's staff numbers fourteen, while
we believe Scanmar and Furuno each employ many times that number. As well, we
believe these companies' facilities are substantially larger than NTI's. We
also believe that Scanmar and Furuno have each achieved worldwide sales of
several thousand systems through well developed dealer networks. We base these
beliefs on the general reputations of these companies in the marketplace over
the past five years and on verbal discussions our staff has had, from time to
time, with electronics dealers in Canada, the United States, Iceland and Norway
over the past five years.
Distribution of the NETMIND system: NETMIND is sold directly to customers by
our own sales staff and through marine electronics dealers. There are
currently no exclusive dealer arrangements for particular geographical areas.
We operate on the principle, "Let the best dealer win," and we encourage dealer
competition. We now have dealer representation in Canada, the United States
and Scotland.
We pay commissions to dealers ranging from 20-28%, based on the value of their
sales over a month period. The more they sell, the higher the commission.
We support the sales effort with a product brochure, pamphlets citing customer
testimonials, and attendance at trade shows such as FISH EXPO in Seattle. We
also advertise in trade magazines, notably "The Navigator" in which we
currently have a monthly advertisement and "Fishing News International" where
we placed advertisements in 1997 and 1998.
Technology Protection: Since commercializing NETMIND in 1996, NTI has made many
enhancements to the system. These activities have resulted in an optimum design
for which a patent application is intended to be submitted in late 2000 or
early 2001. The technology is difficult to replicate because of its
sophistication and, regardless of patent protection, it is expected it would
take several years for a new player to catch up to the present system.
Northstar has obtained Canadian Trademark rights to the name NETMIND
registration number TMA515,009 24-Aug-1999, effective for 15 years from
24-Aug-1999. No other intellectual property related applications have been
filed or prepared. In the meantime, NTI is developing new innovative NETMIND
products which should help ensure a competitive edge.
Future Opportunities for NTI's technology: NTI's second technology application
will likely be for the multi-billion dollar offshore oil and gas industry. One
potential product is for the remote control of subsea wellheads that transfer
petroleum from the field back to the offshore production platform. This is
especially important as the industry goes into deeper and deeper water to find
and produce petroleum.
NTI envisages further business opportunities are in the defense, marine
transportation, oceanographic approximately $400,000 in the form of research
grants and interest free loans through the National Research Council and the
Atlantic Canada Opportunities Agency. The possibilities include docking
systems for large ocean going ships, positioning systems for oils and gas
drilling platforms, acoustic measurements of ocean currents, and diver to diver
communications for the recreational diving industry.
NTI would likely look to alliances with other companies and government agencies
to reduce technological risks and open doors to new markets. At this time, NTI
has not entered into, nor is contemplating any specific strategic alliances.
Historical Financial Information: NTI has spent over $1,233,000 to complete the
development and commercialization of the NETMIND system. NTI has received
$311,775 in Scientific Research and Experimental Development refunds from
Revenue Canada.
Funding support from the major shareholder and private investors total
approximately $1,065,000 in the form of share purchases or loans. The federal
Government of Canada has provided support totaling
Projected Revenues: NTI anticipates sales revenues of approximately $2.0
million in the first year upon following completion of the offering based on
the $2.0 million contract with Lockheed Martin. Existing work mentioned
earlier.
Plant Equipment and Operations: The manufacturing plant is located in St.
John's Newfoundland. The plant, is approximately 3,000 square feet in area, and
is comprised of an electronics shop, a mechanical engineering shop, a molding
room, a component inventory area, a finished goods area, research and
development offices and administrative offices. The plant possesses equipment
typical of an electronics manufacturing operation, i.e., oscilloscopes,
soldering stations, computers, flume hood, molding equipment, drill press and
specialty testing and assembly tools. The inventory system is computerized with
a rigorous quality program in place which covers incoming components, assembly
testing and finished goods testing. NTI uses the program TANGO for its computer
aided design (CAD) activities. Lockheed Martin Federal Systems in Manassas,
Virginia has supplied to NTI proprietary hardware and software for the testing
of submarine control consoles. NTI uses outsourcing as much as possible to
keep overhead and staffing levels low. For example, most of the mechanical
assemblies for the NETMIND system are supplied by a local mechanical shop.
The assemblies are then incorporated into the molding of plastic housings
which are produced in-house.
Northstar's business activities do not involve the discharge of materials into
the environment.
Consequently, we do not intend to spend money for environmental control
facilities.
Employees
As of December 31, 1999, Northstar had fourteen full-time employees and three
part-time engineering consultants. None of Northstar's employees are
represented by a labour union, and Northstar considers its employee relations
to be good. Competition for qualified personnel in Northstar's industry is
intense, particularly for software development and other technical staff.
Northstar believes that its future success will depend in part on its continued
ability to attract, hire and retain qualified personnel.
Management's Discussion and Analysis or Plan of Operations
Overview of the Business Plan
As described elsewhere in this registration statement we have completed the
development of our first product. The estimated amount spent on company-
sponsored research and development activities was $46,430 in fiscal year-end
December 31, 1999, $14,192 in fiscal year-end December 31, 1998, $195,878
in fiscal year-end March 31, 1998, $221,429 in fiscal year-end March 31, 1997
and $440,300 in fiscal year-end March 31, 1996.
Our revenues were $462,659 in fiscal year-end December 31, 1999, $193,913 in
fiscal year-end December 31, 1998, $181,764 in fiscal year-end and March 31,
1998 and $174,200 in fiscal year-end March 31, 1997.
We plan to devote our efforts in the next twelve months to increasing our sales
network, marketing and promoting our product and maintaining, to the extent our
funds allow, the production of our products to meet anticipated demand.
In contract manufacturing, we have signed the contract with Lockheed Martin.
We plan to complete that contract in the next twelve months. We also plan to
increase our business development activities with the objective to secure new
contracts in the defense industry.
We plan to increase our staff to twelve full-time employees in the next twelve
months with the addition of a project manager, two business development
personnel, and three manufacturing personnel.
The following discussion and analysis should be read in conjunction with
Northstar's financial statements and notes included elsewhere in this
registration statement. The discussion of results do not imply any
conclusion that such results will necessarily continue in the future.
Results of Operations-Twelve Months Ended Dec. 31/99 vs. Twelve Months Ended
Dec. 31/98
NTI's wholesale revenues were $462,659 for the twelve months ending December
31, 1999 vs. $193,913 for the twelve months ending December 31, 1998. The gross
profit for the twelve months ending December 31, 1999 was 55% vs. 48% for the
twelve months ending December 31, 1999. Expenses totaled $646,032 for the
twelve months ended December 31, 1999 vs. $295,595 for the twelve months ended
December 31, 1998. Northstar's assets as of December 31, 1999 totaled $508,636
and its current liabilities totaled $160,119. Long-term debt of $501,114
consists of government interest-free loans and a loan of $160,000 payable to
Pathfinder Enterprises Inc., a company controlled by a shareholder of
Northstar, with monthly interest payments only to July 2002, secured by a
floating charge debenture. There are shareholder loans of $159,448 with no
fixed terms of repayment. Northstar has an accumulated deficit of $1,572,356 as
of December 31, 1999. The amount spent on research and development in the last
two fiscal years was $60,622 . The amount of receivables subsequently
collected in cash, after December 1999, was $31,438.
Our financial statements include the accounts of NTI for all periods and the
accounts of Northstar commencing January, 1999. Northstar had no operations
other than organizational activities prior to the January, 1999 merger.
Revenues increased from $193,313 in fiscal 1998 to $462,659 in fiscal 1999 as a
result of increased sales of our NETMIND system. Gross profit in 1999 was
55.4% compared to 48.2% for 1998 because the manufacturing operations had
improved productivity. Wages were $145,649 in 1999 compared to $33,229 in 1998
due to increased production and sales. The company recorded a bad debt
provision of $90,281 in fiscal 1999 as the result of non-collection of accounts
receivable from a former distributor. Consulting fees of $65,815 were
increased in 1999 as pertaining to services contracted for investor relations,
financial advice and engineering design support. The company paid commissions
in fiscal 1999 of $46,300 related to financings obtained. Professional fees
in 1999 increased by $23,398 over 1998 as a result of the merger and filing
the SB-1 with the United States Securities and Exchange Commission. Contract
manufacturing costs decreased from $90,168 for 1999 to $26,638 for 1999 because
in 1998 we had a contract with Lockheed Martin to provide manufacturing
services whereas in 1999 no contract services were provided.
The company continued to experience negative operating cash flow, ($548,327) in
1999 compared to ($40,371) in 1998, as a result of increases in expenses namely
salaries and wages, bad debts, consulting expenses, commissions, an increase in
inventory and work in progress and reductions in accounts payable, accrued
liabilities and loans payable coupled with a small increase in receivables and
prepaids. The negative operating cash flow was covered by proceeds of a share
issuance and an increase in long-term debt.
In 2000 there should be significant improvement. We currently have about
$2,170,000 worth of firm contracts on our books to be completed in the year
2000: the $2,000,000 contract with Lockheed Martin and the remainder ($170,000)
of the contract with the United States government agency NOAA for our NETMIND
systems. In addition 13 vessels are already outfitted with our NETMIND
shipboard receivers. This means they should purchase the full system this year
which would translate into additional revenues of $260,000, approximately. We
are also conducting new marketing activities in 2000 for the NETMIND system
which we believe will result in more sales.
Changes in or Disagreements with Accountants on Accounting and Financial
Disclosure
Northstar's board of directors approved a decision in December, 1999, to change
accountants. The primary reason was that we require a firm in close proximity
to our corporate offices.
Jones, Jensen and Company, LLC, had carried out the audits prior to the reverse
acquisition, when the company was called Scientific Technologies, Inc.
Statements prepared by Jones, Jensen and Company contained no adverse opinion
or disclaimer of opinion, nor were they modified as to uncertainty, audit scope
or accounting principles.
There were no disagreements between Northstar's management and Jones and Jensen
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure. A letter to that effect from Jones
Jensen is shown in the exhibits.
Northstar has engaged a new accounting firm, Pennell Kerr Forster, an
international association of accounting firms to carry out future audits.
Security Ownership of Management and Certain Security Owners
The following table sets forth, as of September 15, 1999, the beneficial
ownership of Northstar's common stock by each officer and director of Northstar
and by each person known by Northstar to own beneficially more than 5% of
Northstar's the common stock outstanding and by the officers and directors of
Northstaras a group. Except as otherwise indicated, all stocks are owned
directly.
Title of Class Name and Number of Percentage Number of Shares
Percentage Of Address of Shares of Shares Before After
Shares After Beneficial Before Offering(1) Offering
Offering(2) Owner Offering
Common Stock Frank Power 990,000 13.37% 990,000 11.78%
998 Riverside Drive
Port Coquitlam, B.C.
Canada V3B 7Y4
Common Stock Wilson Russell 964,883 13.03% 964,883 11.48%
4742 Collingwood St.
Vancouver, B.C.
Canada V6S 2B4
Common Stock Lee Meyer 100,000 1.35% 100,000 1.19%
9629 Alene Drive
Tujunga, CA 91042
Common Stock Ladner 597,900 8.08% 597,900 6.35%
Enterprises
Ltd(3)
60 Market Square
P.O Box 364
Belize City
Belize, C.A.
Common Stock Adventure 533,633 7.02% 533,633 7.11%
Capital Inc.
9 Power Place
St. John's NFLD
Canada
Common Stock Dr. Michel 400,000 5.26% 200,000(5) 2.38%(5)
Ghanadian(4)
CH. Didotai 10
1223 Cologny,
Switzerland
Common Stock Monaco 1,000,000 13.51% 1,000,000 11.90%
Ventures Ltd. (3)
60 Market Square
P.O Box 364
Belize City
Belize, C.A.
Common Stock London 700,000 9.45% 700,000 8.33%
Enterprises
Ltd. (3)
60 Market Square
P.O Box 364
Belize City
Belize, C.A.
Common Stock All officers 2,054,883 27.02% 2,054,883 24.45%
and Directors
as a Group
(3 persons)
Number of shares of common stock after the offering: 8,404,481
Percentage of common stock after the offering: 24.45%
(1)Based on 7,604,481 shares of common stock of Northstar issued and
outstanding on November 30, 1999.
(2)Based on 8,404,481 shares, if all shares in the offering are sold.
(3) The beneficial owners of Ladner Enterprises Ltd., Monaco Ventures,
Adventure Capital, Inc., and London Enterprises Ltd, are:
LADNER, Mr. Sean Isles, Leslie Lewis Building, Mount Tout, Grand Anse,
St. George's W.I.
MONACO, Ms. Brenda McKay, Suite 71, Grand Anse, St. George's W.I.
ADVENTURE, Dr. Carl Wesolowski, 9 Power Place, St. John's
Newfoundland, Canada
LONDON, Ms. Michele Grey, 269 Morne Rouge Road, Grand Anse, St.
George's, Grenada, W.I.
(4) Selling security holder for 200,000 shares of common stock.
(5)Assumes all 200,000 shares being offered will be sold. Because the selling
security holder may sell all or some, or none of the shares that he holds, the
actual number of shares that will be held by the selling security holder upon
or prior to termination of this offering may vary.
6) Compensatory stock options: 40,000 options with a two year term were granted
to an independent management consulting firm, Big 8 Management Consulting Ltd.,
during 1999. The exercise prices for these options are $0.90 per share in the
first year and $1.035 per share in the second year. The first 20,000
options were granted in January,1999 and the second 20,000 in June, 1999. As
of the date of this filing, no options have been exercised.
The following directors and officers of Northstar have been granted options to
purchase shares of Northstar's stock as follows:
Optionee Position Options Option Price Per Share
-------- -------- ------- ----------------------
Wilson Russell Director 250,000 $0.50
Frank Power Director 100,000 $0.50
(1) Record owners of and beneficial owners of 5% or more of any class of our
securities: See Table Above.
(2) Promoters: None, except for officers and directors
(3) Affiliates: None
(4) Type of securities underlying the options: common shares
(5) Exercised options: None
Directors, Officers and Significant Employees
The following information sets forth the names of the officers and directors
of Northstar, their present positions with Northstar, and their biographical
information. Each director will serve until the next annual meeting of
shareholders, and thereafter if re-elected.
Name of Director Age
---------------- ---
Dr. Wilson Russell 54
Mr. Frank Power 56
Mr. Lee Meyer 54
Name of Officer Officer
Dr. Wilson Russell, President and Principal Financial Officer
Mr. Frank Power Vice-President
As a Delaware corporation, the final responsibility for the management of the
affairs of Northstar rests with the board of directors. The board currently
consists of three directors. Those directors are elected at an annual meeting
of the shareholders and serve for an annual term until they resign or are
replaced. Those directors meet or otherwise consult with one another on a
regular basis. To review the affairs of the company and to adopt or confirm
any resolutions which are necessary to grant contractual and other authority
to administrative officers. The directors may, and probably will, designate an
executive committee to which they will grant limited authority to make certain
ministerial decisions on behalf of the board.
The following sets forth information as to the principal occupation and
business experience for at least the past five years of each of those
directors and officers.
Dr. Wilson Russell: Dr. Russell received a Master's Degree in Engineering and
in Physics from Memorial University of Newfoundland and a Doctorate in
Engineering Physics from the University of Aix-Marseille in France. Dr.
Russell's numerous positions include: geophysicist with Pan-American Petroleum
AMOCO in Calgary, Alberta 1968; professor and researcher at Memorial University
1968 to 1977; Director of Engineering at NORDCO Ltd. 1977 to 1980; and
Associate Director of the Newfoundland Petroleum Directorate; 1980 to 1983.
After starting his own consulting and technology development firm in 1983, Dr.
Russell has also managed the preparation of the a development plan for the $6
billion Hibernia development which was for submission to the government for
approval of the project; invented, developed and commercialized the Hydroball
current profiling system, a unique phased array ocean current profiling system
which won the silver medal at the Canada Awards for Business Excellence in
1986; and developed a fibre optic modem for TRW in the United States. Dr.
Russell founded NowTech Instruments Ltd., in partnership with a subsidiary of
Bell Canada and was the first chairman of the board of directors of Seabright
Corporation. Dr. Russell has also acted as a consultant for the Canadian
federal government, the provincial governments of British Columbia and
Newfoundland, the Canadian Consul in Boston, Massachusetts, Mobil Oil, the
Defense Research Establishment Pacific and the French Navy.
Dr. Russell founded NTI in 1989 and serves as both chairman and chief executive
officer. He is has also been as the director and president of Cabot Management
Ltd. since 1989. And, until recently, From 1994-1998, Dr. Russell was a
director at the University of Victoria's Innovation and Development
Corporation. In addition, Dr. Russell has been a director with Cinemage
Systems Corporation since 1998. Currently, as of 1999, he is the president
and principal financial officer of Northstar. Dr. Russell has served as a
director of Northstar since May of 1998.
Mr. Frank Power: Mr. Power, a business management consultant, has managed and
administered several public companies for the last 15 years. Since 1984, Mr.
Power has provided services, including strategic planning, management,
administration, design and construction of major mining projects both
nationally and internationally. He has owned and operated several consulting
companies which have been providing comprehensive services in the industrial
and high-technology fields as well as the mining field. His expertise also
includes re-activating public companies, project acquisitions, public and
private funding, as well as developing and taking private companies public.
He is equally skilled to function in the public markets of both Canada and
the United States.
Mr. Power is president and owner of Pow Con Management since 1981 and Premier
Enterprises Ltd. Since since 1994. These companies manage , administrate and
finance reporting companies. He served as president and director of several
Vancouver reporting companies and publicly listed companies since from
1986 to present. Since 1992, Mr. Power has served as pPresident of World
Organics Inc., listed on the Vancouver Stock Exchange. From 1996 to 1997, Mr.
Power served as president and director of Accuimage Diagnostics and he is also
the past president of Security Industries, Inc. These companies are traded on
the OTC Bulletin Board.
Mr. Power has served as a director of Northstar since May of 1998.
Mr. Lee Meyer: Mr. Meyer, since completing his Business Administration Degree
from Arizona State University in 1946, has held positions as managing director
of Omni International since 1988; vice-president and director of World
Organics, Inc., a reporting company; Secretary and Treasurer of Tec Industries
Corp., a specialty equipment rental agency from 1980 through 1990; and owner
and president of Stretchcoat from 1973 to 1984, a national manufacturer and
marketer of specialty products. Present positions include president of WOI
since 1991, a producer and marketer of agricultural amendments;
Vice-President and 50% owner of Bio-Organics, Inc., an international
manufacturer and marketer of micro-biological products. Mr. Meyer has also
represented major principals selling products nationally.
Mr. Meyer has served as a director of Northstar since May of 1998.
Name of Significant Employee Age Title
Dr. David Buttle 51 Technical Director
Mr. Brian Gamberg 47 Senior Electronics Engineer
Mr. James Hall 33 Electronics Technologist
Ms. Philomena Kavanagh 40 Office Manager
Dr. David Buttle: is NTI's Technical Director and one of the world's leaders in
developing and manufacturing ocean instrumentation for the defense industry. In
1977, Dr. Buttle founded Marine Acoustics which designed and manufactured sonar
transducers for OEM use and subsea computers for the control of subsea rock
drills. In 1985, Marine Acoustics was recognized as Marine Acoustics, Ltd.
Marine Acoustics Ltd., produced numerous sonar systems, including exercise mine
acoustic telemetry systems, which are used by the British, United States,
Australian, Belgian, Canadian and Egyptian Navies. Dr. David Buttle supervised
the design of the NETMIND system and advises NTI on production and value
engineering.
Mr. Brian Gamberg: P.Eng., Senior Electronics Engineer, has over 20 years
experience developing marine systems, computer and communications systems and
in project management. He has been involved in the design, development and
implementation of both hardware and software elements of tracking radar
systems, geophysical sounding systems, and distributed computing systems.
Geographical Information systems and embedded instrumentation systems. Mr.
Gamberg is responsible for the development of new NETMIND technologies and any
other underwater communications products.
Mr. James Hall: is an Electronics Technologist and NTI's Production Manager.
Mr. Hall is responsible for all production activities including inventory
control, electronic and mechanical production, testing, quality control and
shipping.
Ms. Philomena Kavanagh: has extensive experience in office management and has
worked for companies such as Coopers Lybrand, A.H. Murray Ltd. and Atlantic
Specialties Ltd. Ms. Kavanagh is responsible for all of NTI's financial and
product shipment administration.
Remuneration of Directors and Officers
The following table sets out certain information as to the company's three
highest paid officers and directors for the period from the commencement of
Northstar's business in February, 1999 to December 31, 1999. No other
compensation was paid to any such officer or director other than the cash
compensation set forth below:
Summary Compensation Table
--------------------------
Name of Individual(s) Capacities in which Aggregate Remuneration
Remuneration was Received
Dr. Wilson Russell Director and President $16,300
Mr. Frank Power Director and Vice-President $14,000
Mr. Lee Meyer Director N/L
Directors and Officers $30,300
of Northstar as a
Group
The compensation paid to the president is believed by Northstar to be below
market rates for the services provided by the directors and officers, having
regard to their experience and qualifications. Northstar anticipates
compensation being increased to market rates upon Northstar achieving
sufficient revenues and/or financing to pay such increased compensation. In
particular, Northstar believes that the going rate for Dr. Russell, who is
currently full-time with the company, should be in the range of $100,000 per
annum. An uncompensated value for services from February 1999, to September 30,
1999 of $21,200 is included in the financial statements of the company. For
Mr. Power, who spends approximately ten hours per month on Northstar business,
the current rate of $2,000 per month is considered reasonable.
Interest of Management and Others in Certain Transactions
There are no material contracts entered into by Northstar within the two years
preceding the date hereof which are still in effect, except as follows:
Completion of the previous offering: Northstar completed an offering of 363,000
shares on January 26, 1999. The proceeds of the offering were US$363,000.
Acquisition of NTI: Northstar acquired NTI in January 1999, pursuant to an
agreement dated July 31, 1998.
Northstar purchased all of the issued and outstanding shares of NTI in exchange
for 4,901,481 shares of its common stock which were issued from treasury. At
the time of the acquisition, NTI had a 10% loan payable to Pathfinder
Enterprises, Inc. in monthly interest payments only to July 5, 2002 by a
floating debenture. The beneficial owner of Pathfinder Enterprises, Inc. is
Dr. Carl Wesolowski who is also the beneficial owner of Adventure Capital
Inc., a 7.02% shareholder of Northstar. This loan is still in effect.
Except for the acquisition of NTI, Northstar, none of the following persons has
any direct or indirect material interest in any transaction to which Northstar
is a party since the incorporation of Northstar in May, 1998 or in any proposed
transaction to which Northstar is proposed to be a party:
(A) any director or officer of the party
(B) any proposed nominee for election as a director of Northstar
(C) any person who beneficially owns, directly or indirectly, shares carrying
more than 5% of the voting rights attached to Northstar common stock; or
(D) any relative or spouse of any of the foregoing persons, or any relative of
such spouse, who has the same house as such person or who is a director or
officer of any parent or subsidiary of Northstar
Available Information:
The public may read and copy any materials filed with the SEC at the SEC's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC also maintains a website that
contains reports, proxys and other information regarding issuers that file
electronically with the SEC. The address is (http://www.sec.gov).
Disclosure of Commission position on Indemnification of Securities Act
Liabilities
As per risks related to the management structure of Northstar management will
have no liability for any mistake, errors of judgment or for any act of
omission believed to be within the scope of authority conferred by Northstar's
articles unless such acts or omissions were performed or omitted fraudulently
or in bad faith, constituted gross negligence or were a violation of a
director's or officer's fiduciary obligations to Northstar. Northstar has
agreed to indemnify the officers and directors against all loss or damage even
if caused by that officer's or director's fraud, bad faith, gross negligence
or breach of fiduciary obligation.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
small business issuer pursuant to the foregoing provisions, or otherwise, the
small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
Description of Securities
General:
The securities being offered are the shares of Northstar common stock, par
value $0.0001 per share. Under Northstar articles of incorporation, the total
number of shares of all classes of stock that Northstar shall have authority
to issue is 100,000,000 shares of common stock par value $0.0001 per share the
"common stock" and 20,000,000 shares of preferred stock, par value $0.0001 per
share, the "preferred stock". As of November 30, 1999, a total of 7,604,801
shares of common stock are issued and outstanding. All issued and outstanding
shares of the common stock are fully paid and non-assessable.
Common Stock:
Holders of common stock have the right to cast one vote for each share held of
record on all matters submitted to a vote of holders of common stock, including
the election of directors. Holders of a majority of the voting power of the
capital stock issued and outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any meeting of
Northstar's stockholders, and the vote by the holders of a majority of such
outstanding shares is required to effect certain fundamental corporate changes
such as liquidation, merger or amendment of Northstar's articles of
incorporation.
Holders of common stock are entitled to receive dividends pro rata based on the
number of shares held, when, as and if declared by the board of directors, from
funds legally available therefore. In the event of the liquidation,
dissolution, or winding up of affairs of Northstar, all assets and funds of
Northstar remaining after the payment of all debts and other liabilities shall
be distributed, pro rata among the holders of the common stock. Holders of
common stock are not entitled to pre-emptive or subscription or conversion
rights, and there are no redemption or sinking fund provisions applicable to
the common stock. All outstanding shares of common stock are fully paid and
non-assessable.
At their discretion, Northstar's directors may issue additional common or
preferred shares, up to a maximum allowed by the articles of incorporation. A
majority of shareholders could also amend the articles to increase the maximum
number of shares. Shares could be issued to raise funds for Northstar's
business activities or to acquire another company or the rights to a
technology. The board could increase the shares in a series, create a new
series or establish preferences and other terms and conditions to a newly
created series.
Transfer Agent:
Signature Stock Transfer of Dallas, Texas is the transfer agent for the Shares.
14675 Midway Road-Suite 1221
Dallas, TX 75244
Tel: (972) 788-4193
Fax: (972) 788-4194
Share Purchase Warrants:
None.
Litigation
Northstar's subsidiary, NTI, is a defendant in a lawsuit commenced by our
former master distributor, First Watch Marine, Inc. First Watch alleges that
Northstar interfered with its ability to sell products. NTI, for its part, has
filed a counterclaim against First Watch for money which it says First Watch
owes it for NETMIND systems delivered to them. Northstar feels that it has a
strong case and that there is no validity to the claims against it. The case
may take up to two years or longer to go to trial.
The details are as follows:
1) Name of the court where proceedings are pending: Supreme Court of
Newfoundland, Canada
2) Date proceeding began: First Watch issued statement of claim against NTI on
July 15, 1999.
(First Watch Marine Inc.-Plaintiff and NTI-Defendant) NTI issued a statement
of claim on August 3, 1999
(NTI-Plaintiff and First Watch Marine Inc.-Defendant)
3) Principal Parties: NTI and First Watch Marine Ltd.
4) Description of facts underlying the proceedings:
First Watch alleges that NTI interfered in its ability to sell NETMIND
systems. NTI alleges that First Watch owes NTI money for delivery of NETMIND
systems by NTI to First Watch.
5) Relief sought:
First Watch-$1.3 million plus damages
NTI-$100,000 plus damages
Northstar Electronics, Inc.
(800,000 shares of Common Stock)
Prospectus
Until November 30, 2000 all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus.
Part II
Information not required in the prospectus
Item 1. Indemnification of officers and directors
As per risks related to the management structure of Northstar management will
have no liability for any mistake, errors of judgment or for any act of
omission believed to be within the scope of authority conferred by Northstar's
articles unless such acts or omissions were performed or omitted fraudulently
or in bad faith, constituted gross negligence or were a violation of a
director's or officer's fiduciary obligations to Northstar . Northstar has
agreed to indemnify the officers and directors against all loss or damage even
if caused by that officer's or director's fraud, bad faith, gross negligence or
breach of fiduciary obligation.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
small business issuer pursuant to the foregoing provisions, or otherwise, the
small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
.Item 2. Other expenses of issuance and distribution
SEC Filing Fee $ 287
Accounting fees 12,000
Legal fees 25,000
Other professional fees 10,500
Blue Sky fees and expenses 2,500
Transfer agent's fees 1,900
Printing, including registration 1,500
statement and prospectus
Miscellaneous costs and expenses 2,000
-----------
55,687
Item 3. Undertakings
Post-Effective Amendments {Regulation S-B, Item 512-(a)}
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10 (a) (3) of the Securities
Act;
(b) To reflect in the prospectus any fact or events arising after the effective
date of the Registration Statement (or most of the recent post-effective
amendment thereof) which, individually, or in the aggregate, represent a
fundamental change in the information set forth in the registration Statement;
and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement, including
(but not limited to) addition or deletion of a managing underwriter.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
Item. 4 Unregistered securities issued or sold within one year
The date, title and amount of unregistered securities sold by Northstar
formerly Scientific Technologies, Inc. are as follows:
See Exhibits
(1)Date: January, 1999
Number of shares: 363,000
Total offering price: $1.00 per share
Total proceeds: $363,000
Principal underwriter: Rogers & Partners Securities Inc.
Commissions paid: $26,300
Commissions paid to: Rogers and Partners Securities Inc. and to an
unrelated party Big 8 Management
Net Proceeds: $ 336,700
Names of Purchasers: M. Ghanadian, CT Securities, J. Hiebert
Exemption from registration: The statutory exemption which Northstar
relied on is Regulation D, Rule 504 of the United States Securities Act of
1933, as amended.
(2)Date: January 26, 1999
Number of shares:4,901,801
Total offering price: N/A. Northstar acquired all of the common shares of
NTI on the basis of 3 shares of NTI for 1 share of Northstar.
Exemption from registration: The stautory exemption which Northstar relied
on is Regulation S of the United States Securities Act of 1933, as amended.
All persons were defined as non-US persons. The offering of shares was
limited solely to the shareholders of NTI as a reverse acquisition in which
the NTI business effectively became Northstar's business. The transaction
agreements are shown in Exhibits.
3)Date: June 25, 1999
Number of shares: 200,000
Total offering price: $1.00
Total proceeds: $200,000
Principal Underwriter: none
Total commissions: $20,000
Commissions paid to: unrelated party; Big 8 Management Ltd. as an
introduction fee
Net proceeds: $180,000
Name of Purchasers: See Exhibits
Exemption from registration: The exemption that Northstar relied on was
Regulation S of the United States Securities Act of 1933.
Item 5.
Index to Exhibits
Copies of the following documents are included as exhibits to this Registration
Statement pursuant to Item Part III of Form 1-A and Item 6 of Part II.
Exhibit No. Title of Document
3.10 Northstar Electronics, Inc. Certificate of Incorporation
3.11 Northstar Electronics, Inc. Bylaws
3.12 Northstar Electronics, Inc. Amendments to Articles of
Incorporation (company name change)
3.13 Letters of Consent (3 items)
3.2 Opinion Regarding Legality of Shares
10.2 Sales Contracts
04/06/95 ACOA Project 600-403-1828-1 Contribution Agreement
05/18/95 NRC Letter of Agreement #03978E
10/23/95 NRC Contribution Agreement #04132E
11/15/95 Teaming Agreement with LORAL Librascope
02/09/96 ACOA Project 600-4024021-1 Contribution Agreement
12/19/96 NRC Contribution Agreement #04702E
04/10/97 ACOA Business Development Program Contribution Agreement
11/28/97 NRC Contribution Agreement #05100E
10/28 /97 Sales Agreement with Lockheed-Martin
05/18/98 STI-Private Placement Memorandum (with attachments)
06/03/98 STI-Private Placement Offering Memorandum (with
attachments)
10/30/98 STI-Private Placement Offering Memorandum (with
attachments)
09/24/99 Sales Agreement with NOAA
10/18/99 Sales Agreement with Lockheed-Martin
10/01/99 Lease Agreement Northstar Electronics, Inc.and Morguard
10.31 Lease Agreements
05/28/99 Lease Agreement NTI and Par Holdings, Ltd.
10/01/99 Lease Agreement Northstar Electronics, Inc.and Morguard
23.1 Sullivan, Lewis and White- Auditor's Consent Letter
Jones Jensen Auditor's Consent Letter
99.1 Disclosure Statement
99.2 Subscription Agreement
99.3 Y2K Issues
Item 6.
Description of Exhibits
3.10 Northstar Electronics, Inc. Certificate of Incorporation
3.11 Northstar Electronics, Inc. Bylaws
Northstar Electronics, Inc. Amendments to Articles of
Incorporation
(company name change.)
3.13 Letters of Consent (3 items)
3.2 Opinion Regarding Legality of Shares
10.2 Sales Contracts
04/06/95 ACOA Project 600-403-1828-1 Contribution Agreement
05/18/95 NRC Letter of Agreement #03978E
10/23/95 NRC Contribution Agreement #04132E
11/15/95 Teaming Agreement with LORAL Librascope
02/09/96 ACOA Project 600-4024021-1 Contribution Agreement
12/19/96 NRC Contribution Agreement #04702E
04/10/97 ACOA Business Development Program Contribution Agreement
11/28/97 NRC Contribution Agreement #05100E
10/28/97 Sales Agreement with Lockheed-Martin
05/18/98 STI-Private Placement Memorandum (with attachments)
06/03/98 STI-Private Placement Offering Memorandum (with
attachments)
10/30/98 STI-Private Placement Offering Memorandum (with
attachments)
09/24/99 Sales Agreement with NOAA
10/18/99 Sales Agreement with Lockheed-Martin
10.31 Lease Agreements
05/28/99 Lease Agreement NTI and Par Holdings, Ltd.
10/01/99 Lease Agreement Northstar Electronics, Inc.and Morguard
23.2 Sullivan, Lewis and White- Auditor's Consent Letter
Jones Jensen Auditor's Consent Letter
99.1 Disclosure Statement
99.2 Subscription Agreement
99.3 Y2K Compliant Statement for Northstar Electronics, Inc.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements of filing on Form SB-1 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Vancouver, British Columbia, Canada, on April 4, 2000.
By: /s/ Dr.
Wilson Russell
/s/ Wilson Russell, PhD
-----------------------------------
Dr. Wilson Russell,
President,
Principal Financial Officer
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
By: /s/ Dr.
Wilson Russell
/s/Wilson Russell, PhD
-----------------------------------
Dr. Wilson Russell,
President,
Principal Financial Officer
Date: 04/04/00
/s/ Frank Power
-------------------------------
Frank Power, Director
Date filed: April 4 , 2000
SEC File No. 333-90031
