[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE

ACT OF 1934

For the quarterly period ended September 30, 2004

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

For the transition period from n/a to n/a

333-90031

Commission file number

Northstar Electronics, Inc.

Exact name of small business issuer as specified in its charter

Delaware

State or other jurisdiction of organization

#33-0803434

IRS Employer Identification No.

Suite # 1455- 409 Granville Street,

Vancouver, British Columbia,

Canada V6C 1T2

Address of principal executive offices

(604) 685-0364

Issuer's telephone number

Not Applicable

Former name, former address and former fiscal year, if changed since last report

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[ ]

Applicable only to issuers involved in bankruptcy proceedings during the preceeding 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

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 October 31, 2004: 16,850,938

Transitional Small Business Disclosure Format (check one):

Yes [] No [X]

INDEX

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Northstar Electronics, Inc.

Consolidated Interim Financial Information, Unaudited

Nine Months Ended September 30, 2004, U.S. Dollars

Prepared by management

Consolidated Balance Sheets at September 30, 2004 and at December 31, 2003

Consolidated Statements of Operations for the Three and Nine Month Periods Ended

September 30, 2004 and 2003

Consolidated Statement of Changes in Stockholders' Equity for the Nine Months

Ended September 30, 2004 and 2003

Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2004

Notes to Consolidated Financial Information

Item 2. Management's Discussion and Analysis or Plan of Operation

Item 3. Controls and Procedures

PART II OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults Upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8K

SIGNATURES.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements - NORTHSTAR ELECTRONICS, INC.

Consolidated Balance Sheets

U.S. Dollars

	September 30	December 31
	2004	2003
	Unaudited
ASSETS
Current
Cash	$164,851	$613,040
Receivables	72,269	227,444
Due from Director	12,732	-
Inventory and work in progress	209,816	161,602
Prepaid expenses	12,531	11,148
Total Current Assets	472,199	1,013,234
Intangible assets	37,285	37,285
Property and Equipment	87,049	118,956
Total Assets	$596,533	$1,169,475
LIABILITIES
Current
Accounts payable And accrued liabilities	$225,335	$236,255
Loans payable	50,000	58,905
Deferred revenue	-	143,309
Current portion of Long term debt	91,198	83,527
Total Current Liabilities	366,533	521,996
Long Term Debt	539,825	514,192
Due to Cabot Management Limited	82,978	85,268
Due to Director	-	44,255
Total Liabilities	989,336	1,165,711
STOCKHOLDERS' EQUITY
Common Stock
Authorized
100,000,000 shares of common stock with a par value of $0.0001 each
20,000,000 shares of preferred stock with a par value of $0.0001 each
Issued and Outstanding
16,850,938 shares of common stock	1,685	1,584
(15,838,074 December 31, 2003)
Additional Paid in Capital	3,498,084	3,423,191
Other Comprehensive Income (loss)	(52,744)	(82,373)
Accumulated deficit	(3,839,828)	(3,338,638)
Total Stockholders' Equity (Deficit)	(392,803)	3,764
Total Liabilities and Stockholders' Equity	$596,533	$1,169,475

NORTHSTAR ELECTRONICS, INC.

Consolidated Statements of Operations

Three Months and Nine Months Ended September 30

Unaudited

U.S. Dollars

	Three Months		Nine Months
	2004	2003	2004	2003
Sales	$118,184	$267,858	$605,926	$856,755
Discounts	20,445	64,099	81,182	161,213
Sales net of Discounts	97,739	203,759	524,744	695,542
Cost of goods sold	36,462	125,849	238,718	294,145
Gross margin	61,277	77,910	286,026	401,397
Other income	(1,351)	4,545	11,284	9,196
Recovery of research and development	189,042	135,267	626,997	460,648
	248,968	217,722	924,307	871,241

Operating Expenses
Salaries	251,717	216,059	810,394	584,379
Consulting	24,763	13,753	37,336	116,442
Professional fees	15,765	3,026	29,305	26,117
Investor relations	8,028	37,935	70,409	94,171
Advertising and Marketing	9,628	10,545	56,442	65,968
Rent	27,363	26,584	85,643	76,344
Research and Development	20,656	31,127	59,433	76,939
Office	19,197	33,584	69,062	81,808
Travel and Business Development	52,359	31,565	122,921	57,324
Interest on Debt	5,236	4,904	12,382	21,610
Heat, light and Telephone	12,818	10,585	36,543	34,373
Amortization	8,896	4,314	25,836	12,412
Repairs and Maintenance	3,571	2,655	8,826	5,920
Transfer agent	317	218	965	2,026
Proposal costs	-	-	-	2,346
Total operating Expenses	460,314	426,854	1,425,497	1,258,179
Net income (loss) for the period	$(211,346)	$(209,132)	$(501,190)	$(386,938)
Net income (loss) per share	$(0.01)	$(0.02)	$(0.03)	$(0.03)
Weighted average number of shares
Outstanding	16,845,200	12,981,996	16,212,823	13,339,324

NORTHSTAR ELECTRONICS, INC.

Consolidated Statement of Changes in Stockholders' Equity

Nine Months Ended September 30, 2004

Unaudited

U.S. Dollars

				Other
			Additional	Compre-	Accumu-	Total
			Paid in	hensive	lated	Stockholder
	Shares	Amount	Capital	Income	Deficit	Equity
				(Loss)		(Deficit)
Balance December 31, 2003	15,838,074	$1,584	$3,423,191	$(82,373)	$(3,338,638)	$ 3,764
Net loss for nine months	-	-	-	-	(501,190)	(501,190)
Currency translation adjustments	-	-	-	29,629	-	29,629
Issuance of common stock For cash	1,000,000	100	-	-	-	100
Cancellation of common stock	(168,663)	(17)	17	-	-	-
Issuance of common stock for services	181,527	18	74,876	-	-	74,894

Balance September 30, 2004	16,850,938	$1,685	$3,498,084	$(52,744)	$(3,839,828)	$(392,803)

NORTHSTAR ELECTRONICS, INC.

Consolidated Statement of Cash Flows

Nine Months Ended September 30, 2004 and 2003

Unaudited

U.S. Dollars

	September 30
	2004	2003
Operating Activities
Net (loss)	$(501,190)	$(386,938)
Adjustments to reconcile Net (loss)
To net cash used by Operating activities
Amortization	25,836	12,412
Issuance of common stock for services	74,894	133,210
Changes in operating Assets and Liabilities	(127,134)	(167,981)
Net cash(used by) Operating activities	(527,594)	(409,297)
Investing Activity
Property and equipment proceeds (acquisition)	6,464	(22,691)
Financing Activities
Issuance of common stock for cash – net	100	1,085,947
Increase of long term debt	30,203	102,948
Due to Cabot Management Limited	(2,733)	11,513
Advances from (repayment to) director	12,249	(140,297)
Net cash provided by financing activities	39,819	1,060,111
Effect of foreign currency translation on cash	33,122	(1,200)
Inflow (outflow) of cash	(448,189)	626,923
Cash, beginning of period	613,040	117,690
Cash, end of period	$164,851	$744,613

Supplemental information

Interest paid	$12,382	$21,610
Shares issued for Services	181,527	305,480
Corporate income Taxes paid	$0	$0

NORTHSTAR ELECTRONICS, INC.

Notes to Consolidated Financial Information

Nine Months Ended September 30, 2004

Unaudited

U.S. Dollars

ORGANIZATION AND BASIS OF PRESENTATION

These financial statements include the accounts of Northstar Electronics, Inc. (“the Company”) and its wholly owned subsidiaries Northstar Technical Inc. (“NTI”) and Northstar Network Ltd. (“NN”). All inter company balances and transactions are eliminated. The Company was incorporated May 11, 1998 in the State of Delaware and had no operations other than organizational activities prior to the January 1999 merger with NTI described as follows: On January 26, 1999 the Company completed the acquisition of 100% of the shares of NTI. The Company, with the former shareholders of NTI receiving a majority of the total shares then issued and outstanding, effected the merger through the issuance of 4,901,481 shares of common stock from treasury. The transaction has been accounted for as a reverse take over resulting in the consolidated financial statements including the results of operations of the acquired subsidiary prior to the merger.

The Company’s business activities are conducted principally in Canada, however, these financial statements are prepared in accordance with accounting principles generally accepted in the United States of America with all amounts translated into United States dollars for reporting purposes.

These unaudited interim consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States 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, 2003 Form 10-KSB.

In the opinion of the Company’s management, this consolidated interim financial information reflects all adjustments necessary to present fairly the Company’s consolidated financial position at September 30, 2004 and the consolidated results of operations and cash flows for the three and nine months then ended. At September 30, 2004, 20% of the Company’s revenues were generated from one contract (September 30, 2003, 52% of the Company’s revenues were generated from one contract) – the Company is continually marketing its services for follow on contracts.

The results of operations for the three and nine months ended September 30, 2004 are not necessarily indicative of the results to be expected for the entire fiscal year.

COMMON STOCK

During the nine months ended September 30, 2004, the following shares of common stock were issued for:

Services: 60,455 shares fairly valued at $30,774 at the fair market value of those services

Services: 58,600 shares fairly valued at $22,370 at the fair market value of those services

Services: 62,472 shares fairly valued at $21,750 at the fair market value of those services

Exercise of option: 1,000,000 common shares to Wilson Russell, President and a director of the Company, for proceeds to the Company of $100

Cancelled: 168,663 common shares

LONG TERM DEBT

Balance due Atlantic Canada Opportunities Agency ("ACOA")
December 31, 2003	$597,719
Increase in ACOA funding	54,797
Foreign exchange translation adjustment	(3,101)
Repayment of ACOA funding	(18,392)
Balance due ACOA September 30, 2004	631,023
Less current portion	91,198
	$539,825

CONTINGENCIES

(i) The Company is a defendant in a lawsuit commenced against it in 1999 by its former master distributor. The former distributor has alleged that the Company has interfered with the ability of the former distributor to sell products. The Company has filed a counter claim for monies owing by the former distributor to the Company.

(ii) The Company is contingently liable to repay US$1,277,627 in assistance received under the Atlantic Innovation Fund. The assistance is repayable annually commencing August 1, 2005 at the rate of 5% of gross revenues from sales of products resulting from the Aquacomm research and development project. Gross revenues are to be calculated for the fiscal year immediately preceding the due date of the respective payment. Repayment is to continue until the assistance is repaid in full. The Company has recorded $nil sales of Aquacomm related products to September 30, 2004

Item 2. Management's Discussion and Analysis or Plan of Operation.

The following discussion should be read in conjunction with the accompanying unaudited consolidated financial information for the three and nine month periods ended September 30, 2004 and 2003 prepared by management and the audited consolidated financial statements for the twelve months ended December 31, 2003 as presented in the Company’s Form 10KSB.

Although the Company has experienced a net loss this quarter, it continues to expend considerable effort in developing new business in new markets for NETMIND and for new design and contract manufacturing work in an effort to materially benefit the future business of the Company. During the quarter ended September 30, 2004 the Company continued marketing its on board 3D graphical display of trawl status information (introduced during the second quarter of 2004) and has continued to improve both in house hardware and software development systems.

Special Note Regarding Forward Looking Statements

Certain statements in this report and elsewhere (such as in other filings by the Company with the Securities and Exchange Commission ("SEC"), press releases, presentations by the Company of its management and oral statements) may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," and "should," and variations of these words and similar expressions, are intended to identify these forward-looking statements. Actual results may materially differ from any forward-looking statements. Factors that might cause or contribute to such differences include, among others, competitive pressures and constantly changing technology and market acceptance of the Company's products and services. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

The Company’s Services

The Company, through its subsidiaries, is an underwater sonar technology developer, an electronic contract manufacturer, and a systems developer & integrator for the marine industry, defense, and homeland security sectors.

Underwater Sonar Products and Technologies

a - The NETMIND System

The Company’s first underwater sonar product based on our core technology was the NETMIND system. NETMIND’s market is the world’s commercial fishing industry and government oceanic research agencies. Historically, sales of our products have been divided equally between these two market sectors. The east and west coasts of North America provide a market base for NETMIND. One of our largest customers has been the United States National Oceanic and Atmospheric Administration (NOAA). The NETMIND system is sold in Ireland, Spain, Denmark, Germany, Sweden, Portugal, Italy, the United Kingdom, France, the United States, and Canada. Potential markets also exist in South America, Europe, Africa, Asia, New Zealand and Australia.

NETMIND is both a conservation tool as well as an efficiency tool. Electronic sensors attached to a fishing trawl measure the height and width of the net opening, the water temperature, the depth of the net and the amount of fish caught plus other parameters. The sensor information is transmitted via a wireless communications link back to the ship.

NETMIND helps prevent over fishing and allows fishermen to catch fewer fish and still make profits. This gives regulators flexibility in reducing quotas when attempting to conserve limited fish stocks.

Sales for NETMIND decreased this quarter over the comparative quarter last year and remain somewhat slower than expected. Sales have not expanded in Europe as anticipated. However, an upswing in activity over the next six months is expected with the introduction of the new NETMIND products during the previous (2^nd) quarter.

b - The AQUACOMM Project

The AQUACOMM project is a $2.5 Million in house research and development program for the development of new, leading edge multiple application sonar technologies and products for a variety of industries. These include defense, offshore oil and gas, commercial fishing, oceanography, marine environment and marine transportation. To date, the Company has expended $1,970,270 pursuant to this program. Among the new developments from the AQUACOMM project are a general purpose acoustic receiver, spread spectrum acoustic communications and improved sensors. The first new commercial product was introduced to the market during the second quarter of 2004.

The Company intends to use its Venture Technology Business Model to maximize the success of the new AQUACOMM technologies. In this model, our core technology is invested in partnerships with established companies in the different industry sectors.

c – Defense Sonar System

The Company completed a contract for a major defense contractor to design and construct prototype sonar hardware for a defense protection system for Navy ships and ports. This system, called an Intruder Detection System (IDS), can detect marine threats from terrorists in small surface boats, terrorist divers, and underwater vehicles carrying explosives. Sophisticated feature-based classification algorithms separate the threat from marine life that may exist at the installation locale. Data processing software is used to reject swimmer targets that are not on a threat trajectory. Northstar successfully designed and built the mechanical housing, hydrophones, and sonar for the IDS prototype systems. We expect that Homeland Security and Anti-Terrorism will become a major part of our business over the next five years with production of these and other systems.

Electronic Contract Manufacturing

As an electronic contract manufacturer, Northstar offers build-to-print manufacturing. This involves manufacturing a specific product for a client who supplies the production drawings and parts list. Northstar is attempting to leverage our in-house and Network affiliate capabilities, in addition to our large pool of vendor suppliers, to be competitive and capable in a wide range of manufacturing activity; from precision machining of parts for aerospace customers to delivery of complete retail electronic products. An example of this type of contract is a portable hand-held electronic asset management device. The expected production volume is a minimum of several thousand per year. To ensure cost-competitiveness, Northstar, if awarded the contract, plans to outsource the circuit board manufacturing but would carry out final assembly and testing in-house. In this type of contract, Northstar also provides follow-on engineering support services to ensure continuous product improvement, cost savings and profit improvements, thus forging strong, mutually beneficial relationships with our customers, and ensuring follow-on business.

Northstar successfully carried out a contract for Lockheed Martin, Manassas, Virginia to fabricate and test command and control consoles for Navy submarines. This contract was successfully completed in early 2001. A follow-on contract was received and completed in the fall of 2001. We have signed a manufacturing license agreement with Lockheed Martin under which Northstar can manufacture consoles for Lockheed Martin on projects they may have anywhere in the world.

We are attempting to expand our electronic contract manufacturing business with our current customers, as well as with customers in the offshore oil and gas, transportation and communication industries.

Systems Development & Integration

Billions of dollars in contracts are awarded each year to large defense contractors. Northstar decided several years ago that we had existing skill sets and could develop them to become a subcontractor to the large prime contractors.

The Company is developing its approach, through Northstar Network Ltd., to securing and executing large defense contracts by bringing together affiliate companies. The overall capability, which is substantial, is presented to the prime contractors.

System Integration activity involves Northstar’s management of the project, integration of components and subassemblies into a complete system, completion of the factory acceptance testing and shipment of the completed unit(s) to the customer. The delivered product could include top-level standalone systems, or subassemblies of a larger package. Design and assembly drawings are normally provided by the prime contractor. An example of one of this type of contract is the production of the previously mentioned submarine command and control consoles. In this contract we integrated over two hundred components, supplied from twenty six separate sub-contractors or suppliers, into single integrated systems. The Intruder Detection System (IDS) project for maritime anti-terrorism is another example of an application where Northstar was prime contractor and subcontracted out some of the work to gain efficiencies and improve profitability.

Potential Opportunities

Near Term

Intruder Detection System (IDS) – Northstar is pursuing military work to produce these systems for a major defense contractor.

Large Volume Contract Manufacturing – Northstar is pursuing a contract to manufacture an electronic device for a customer. Initial orders are expected in the next few months.

E-Learning/Courseware – Northstar is pursuing a contract to supply E-Learning/Courseware services to a UK company.

Maritime Helicopter Project (MHP) – The MHP is a $2.4 billion contract recently awarded to a team lead by Sikorsky. Northstar is pursuing several contract opportunities on the MHP with the Tier 1 and 2 contractors. These negotiations are close to being finalized and should be made public by year end.

Submarine Command and Control Consoles - Northstar has bid on contracts to provide various interactive consoles to be used in the training of submariners.

Longer Term

Northstar is pursing many other contract opportunities such as the supply of fiber optic assemblies and courseware for the Joint Strike Fighter (JSF) airplane, the supply of electronic components on the targeting-pod for the F-18 aircraft, Avionics Upgrades for the CC-130, and non specific components for the; Advanced Lightweight Anti-Armor Weapons Systems (ALAWS) Program, the Canadian Medium Support Vehicle Program and the Fixed Wing Search and Rescue (FESAR)Program.

Results of Operations

Comparison of the three and nine months ended September 30, 2004 with the three and nine months ended September 30, 2003:

Gross revenues from sales, miscellaneous and research and development recovery for the three month period ended September 30, 2004 were $305,875 compared to $407,670 in the comparative prior period. Gross revenues from sales, miscellaneous and research and development recovery for the nine month period ended September 30, 2004 were $1,244,207 compared to $1,326,599 in the comparative prior period.

Sales revenue for the three month period ended September 30, 2004 was $118,184 compared to $267,858 of sales revenue recorded during the same period of the prior year. This comparative decrease is the result of decreased seasonal activity in the fishing industry, which impacted on the sales of the NETMIND systems. Sales revenue for the nine month period ended September 30, 2004 was $605,926, comparable to $856,755 in the prior period. Gross margins decreased from $401,397 (47%) in the prior period to $286,206 (47%) in the current period although as a percentage of sales, cost of sales remained stable.

The net loss for the three month period ended September 30, 2004 was $(211,346) comparable to a net loss of $(209,132) for the three months ended September 30, 2003. Over this past quarter, the Company continued to invest considerable resources in seeking out additional and future contract manufacturing opportunities and is confident that the efforts will return positive results to the Company over the ensuing months and years.

Travel and business development costs rose to $122,921 for the nine months from $57,324 for the comparative prior period ended September 30, 2003 due to the expanded pursuit of defense contracts.

The Company is actively pursuing contracts for its sonar capabilities in military and anti terrorist applications as well as the offshore petroleum industry.

During the quarter the Company increased expenditures on the marketing and advertising of its NETMIND system and expanded awareness of the NETMIND system through trade shows and a growing distribution network including Ireland, Spain and the Scandinavian countries. The system upgrades are being well received by our fishing industry customers and by government researchers.

The Company continued on its research and development program towards extending its underwater wireless communication technology into new products. This accounts for an increase in salaries to $810,394 for the nine months ended September 30, 2004 compared to salaries of $584,379 for the comparative prior nine months ended September 30, 2003. The increased activity resulted in an increase of cost recovery to $626,997 compared with $460,648 recovered in the comparative prior period pursuant to the AQUACOMM program.

Comparison of Financial Position at September 30, 2004 with December 31, 2003

The Company’s working capital position at September 30, 2004 decreased to $105,666 with current assets of $472,199 which are in excess of current liabilities of $366,533. At December 31, 2003 the Company had working capital of $491,238.

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 financial statements at December 31, 2003. 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 which have a material impact on our financial condition and results of operations. 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

The Company has increased its shareholder’s deficit as a result of its efforts to increase its business activity and customer base. Cash outflows used in the first quarter ended March 31, 2004 was $(261,657) compared to an outflow of cash of $(67,552) for the three months ended June 30, 2004 and an outflow of cash of $(118,980) for the three months ended September 30, 2004 (cash outflow of $(448,189) for the nine months ended September 30, 2004 compared with cash inflow of $626,923 in the prior comparative nine months) . Over the prior comparative nine months the Company received $1,085,947 ($100 over the current nine months) from equity funding and received $102,948 in the prior comparative nine months from the proceeds of long term debt and received long term debt of $30,203, net of repayments, over the current nine months. As a result, operations have used cash during the quarter, leaving cash on hand at September 30, 2004 of $164,851 compared to cash on hand of $613,040 at December 31, 2003 and $744,613 at September 30, 2003. Until the Company receives its next contract and/or increases its product sales revenue, it will be dependent upon equity and loan financings to compensate for the outflow of cash anticipated from operations.

The Company is preparing a private placement offering pursuant to Regulations D and S. Any funds so raised are targeted primarily for product development, inventory for contract manufacturing, marketing and general working capital. Government support of approximately $530,000 is in place pursuant to the Aquacomm project and an additional $825,000 in provisionally repayable loans and non repayable contributions from the federal government is available to be used for programs to develop defense and homeland security technologies. The government funding programs require the Company to provide up to $0.35 for each $1.00 spent and the balance is funded by the program. At this time, no further commitment for funding has been made to the Company.

Item 3. Controls and Procedures

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 a date within 90 days of the filing date of this Quarterly Report on Form 10-QSB, our chief executive officer and chief financial officer have 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.

(b) Changes in internal controls

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their most recent evaluation.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.