Northstar Electronics announced a letter of intent to purchase Echotec Sonar Corporation, a cutting-edge innovator of High Definition Omni Sonar (HDOS) technology, specifically targeted for the defense, scientific, commercial shipping and commercial fisheries markets. Northstar has offered 10,000,000 shares of restricted common stock, to be released equally over a three-year period, and 6,000,000 three-year common shares warrants at an exercise price of $0.10. The deal is agreed to in principal by both parties and is expected to close by mid-April, 2012.

Born out of more than 75 years combined experience in the defense and security sonar industry; Echotec Sonar Corporation, a privately held company, was created to satisfy the need for innovative, high-performance, low-cost sonar products that fit multiple applications and markets.

Coming together to develop Echotec's cutting edge technology, are two highly respected sonar engineers, Phillip Johnson and Dan Ward. Phillip Johnson was with Lockheed Martin for nearly 20 years and helped manage, design, and develop many of the systems used within defense systems, high frequency sonar systems, underwater acoustics, analog electronics, and he built many system level mechanical designs. Phillip has worked within the military complex for over 40 years and retains a NATO and Canadian security clearance. Dan Ward was a senior underwater systems engineer at Lockheed Martin Canada where he developed the world's most advanced underwater intruder detection, mine hunting, and obstacle avoidance sonars. He is recognized in the defense and research communities for state of-the art advancements in multiple high frequency sonar systems.

Echotec Sonar designs, develops, and will manufacture and sell value--priced High-Definition Omni Sonar systems capable of rendering objects in both 2-D and 3-D with extreme resolution. Based on sonar concepts derived from object identification and threat detection, harbor security and obstacle avoidance research, Echotec Sonar plans to develop a family of products around the HDOS which will add a level of technological innovation that surpasses contemporary sonar systems. With one of the best price--performance measures, the HDOS is designed to meet the specific demands of the defense and scientific communities, utilizes state of the art technology, is affordable, and light weight with a small footprint. These compelling features meet the needs of many required applications.

"After fielding more than 25 sonar designs for the defense and scientific markets, it was clear all of these solutions could now be implemented using off the shelf processors and video cards in conjunction with a fully digital transducer," said Phillip Johnson CEO of Echotec Sonar Corporation. "With the pace of development of high-definition rendering cards/ processors found in most desktops and mobile technologies, Dan Ward [CTO of Echotec Sonar Corporation] and I knew we could build a series of high-performance, high-value sonars to meet the needs of a variety of markets".

The transducer (underwater component) is an extremely sensitive unit, which provides accurate calibrated data to the processor and video system (inboard component). Combining innovation in both the underwater and inboard components, high-resolution images are rendered with instantaneous 3D capabilities, wireless mobile device integration, and control. The image definition is so high that it is possible to provide a fish count and perform species identification for the fisheries market. For the security and scientific community, it can provide threat identification and analysis for objects of interest, such as an intruder diver swimming nearby. The software and control systems are easily modified to suit the specific needs of each of the; defense, scientific, commercial shipping, and fisheries markets.

The products will be designed for retrofit to existing equipment on all types of vessels from commercial fishing vessels to luxury cruise ships (e.g. Costa Concordia), lowering the cost of ownership and reducing time to install.

"We had the pleasure of working with Phil Johnson and Dan Ward while producing defense and security sonar systems when they were with Lockheed Martin," said Dr. Wilson Russell, president of Northstar Electronics. "When they started their own company to produce an innovative sonar product with multiple applications, it was an easy decision to bring them in as a strategic acquisition. The expectation is that this acquisition will bring another dimension and a strong source of revenue for Northstar Electronics Inc., moving it forward and expanding its market reach. We're also hard at work to find other suitable acquisition candidates that will improve our bottom line and increase shareholder value."