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". 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 following discussion, comparison and analysis should be read in conjunction
with the Company's accompanying unaudited consolidated financial statements for
the years ended December 31, 2020 and 2019 and the notes related thereto. The
discussion of results, causes and trends should not be construed to infer
conclusions that such results, causes or trends necessarily will continue in the
future.
DISCUSSION
The following table sets forth for the years indicated items included in the
Company's consolidated statement of operations:
2020 2019
Total revenue $ - $ -
Cost of goods sold - -
Gross margin - -
Expenses 48,667 580,344
Net income (loss) $ (48,667) $ (580,344)
Net income (loss) per share $ (0.00) $ (0.00)
During the years ended December 31, 2020 and 2019, the Company continued its
recovery from the loss of its contracts, continued to improve its internal
systems and continued working toward attaining suitable new contracts.
A shortage of working capital in support of operations has been an issue as the
Company took measures to provide that support. Sufficient capital was not raised
and consequent business operations were kept at a minimum.
The Company experienced operating losses of $48,667 for 2020, and $580,344 for
2019 while maintaining an office and continuing to pursue its single engine
aircraft opportunity.
Discontinued NETMIND operations: the Company was unable to finance its
operations and could not attract personnel to manufacture and market the NETMIND
product.
Defense Sonar Development Contract Opportunity
Discontinued
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4
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Contract Manufacturing and System Integration
Although the Company remains open to carrying out work in contract manufacturing
and system integration, we are not actively pursuing contracts at this time in
those areas.
Results of Operations
Nil revenue was generated in the years 2020 and 2019 resulting in negligible
cash flow. The Company generated $0 in contract revenue and $0 sales revenues
during these years.
During 2020 the Company incurred costs of $nil ($39,983 during 2019) on market
assessments, type certificate matters, supply chain management planning, quality
control, first assembly plans, follow-on production plans, and maintenance,
repair and overall planning related to the acquisition of the worldwide rights
to the single engine industrial Turbo Prop airplane. In order to fund the
project the Company reduced its interest in the project to 31.5% subject to our
new partner company being successful in financing the project.
Liquidity and Capital Resources
The Company used cash in operations of $(18,665) in 2020 compared to cash used
by operations of $(130,570) in 2019 and $(127,672) in 2018.
In 2020 the Company raised equity financing of $nil. In 2019 the Company raised
equity financing of $nil.
The Company's working capital and capital requirements will depend on many
factors, including the ability of the Company to generate sufficient funds to
cover the current level of operating expenses. During the most recent fiscal
year 2020 the Company increased its current debt by $39,002 (2019 increased by
$449,774). The Company is attempting to negotiate a secure equity financing in
the short term.
The Company is liable to repay CAD$3,100,221 in assistance received from the
Atlantic Canada Opportunity Agency (ACOA) by the Company's two former
subsidiaries, Northstar Technical Inc. (NTI) and Northstar Network Ltd. (NNL).
The Company, for reasons of expediency, became a cosigner of the agreements the
subsidiaries had with ACOA. Subsequently, ACOA claimed that NTI and NNL were
delinquent in their payments and, eventually, in early 2013 ACOA launched legal
action in Newfoundland where the two subsidiaries had operated. The Company was
not in a financial position at the time to launch a defense and ACOA received a
judgment unopposed. The Company intends to approach ACOA with a reasonable offer
of settlement.
The availability of sufficient future funds will depend to an extent on the
timing of the expected financing of the rights to the single engine Turbo Prop
airplane. Accordingly, the Company will be required to issue securities to
finance start-up and working capital requirements for the expected new aviation
business and ongoing general business expansion. There can be no assurance
whether or not such future financings will be available or on satisfactory
terms.
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