The following discussion should be read in conjunction with the accompanying unaudited consolidated financial information for the six month periods ended June 30, 2020 and June 30, 2019 prepared by management and the consolidated financial statements for the year ended December 31, 2019 as presented in the Form 10K as filed.

Special Note Regarding Forward Looking Statements

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





The Company's Services

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

The Company is currently working on plans to obtain ownership rights to a single engine turbo prop airplane with industrial applications. If successful, we intend to manufacture the airplane and market it internationally. We also intend to provide Maintenance, Repair and Overhaul (MRO) services in close proximity to customers. The Company's wholly owned subsidiary, National Five Holding Ltd, is a 95% shareholder of Northstar Sealand Enterprises Ltd. (NSEL). The constituent parts of NSEL have experience in working on certified commercial aircraft and government military contracts and have access to an established aircraft parts manufacturing facility.





Results of Operations

Comparison of the three and six months ended June 30, 2020 with the three and six months ended June 30, 2019:

The net loss for the three month period ended June 30, 2020 was $(152,816) compared to a net loss of $(171,459) for the three months ended June 30, 2019. The Company reduced its management and administration fees to $nil (June 30, 2019 $45,000) while it searched for new management to conduct its affairs. A recovery of foreign exchange during the three months significantly reduced the loss for the period.

The net income for the six month period ended June 30, 2020 was $65,138, compared to a net loss of $(329,102) for the six months ended June 30, 2019. The Company reduced its management and administration fees to $15,000 (June 30, 2019 $90,750) while it searched for new management to conduct its affairs. A recovery of foreign exchange during the period significantly reduced the loss for the period.

Comparison of Financial Position at June 30, 2020 with December 31, 2019

The Company's working capital deficiency decreased at June 30, 2020 to $5,274,689 with current liabilities of $5,305,256 which are in excess of current assets of $30,567. At December 31, 2019 the


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Company had a working capital deficiency of $5,339,827. See also contingent liabilities, note 3 to the financial statements for the six months ended June 30, 2020.

Critical Accounting Policies and Estimates

We have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States of America in the preparation of our financial statements. Our significant accounting policies are described in the footnotes to our annual financial statements at December 31, 2019. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Although these estimates are based on our knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. Certain accounting policies involve significant judgments and assumptions by us and have a material impact on our financial condition and results. Management believes its critical accounting policies reflect its most significant estimates and assumptions used in the presentation of our financial statements. Our critical accounting policies include revenue recognition, accounting for stock based compensation and the evaluation of the recoverability of long-lived and intangible assets. We do not have off-balance sheet arrangements, financings or other relationships with unconsolidated entities or other persons, also known as "special purpose entities".

Liquidity and Capital Resources

Cash outflow from operations for the six months ended June 30, 2020 was $(6,177) compared to an outflow of cash of $(128,634) in the comparative prior six months ended June 30, 2019. During the current period, the Company received $0 ($0 in the comparative prior period) from equity funding and received $0 (received $0 in the comparative period) long term debt leaving cash on hand at June 30, 2020 of $30,567 compared to cash on hand of $40,261 at December 31, 2019. Until the Company receives revenues from its new potential business it will be dependent upon equity funding and loan financings to compensate for the outflow of cash anticipated from operations.

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

The Company's continued operations are dependent upon obtaining revenues from outside sources or raising additional funds through debt or equity financing.

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