☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED September 30, 2015
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________
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Delaware
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000-24370
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33-0565710
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(State or other jurisdiction of incorporation)
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(Commission File No.)
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(IRS Employer Identification No.)
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Part I. Financial Information
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||
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Item 1.
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Unaudited Consolidated Financial Statements
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Unaudited Condensed Consolidated Balance Sheets as of September 30, 2015 and March 31, 2015
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3
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Unaudited Condensed Consolidated Statements of Operations for the three months and six months ended September 30, 2015 and 2014 and for the period from inception, September 16, 2002 to September 30, 2015
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4
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Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2015 and 2014 and for the period from inception, September 16, 2002, to September 30, 2015.
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5
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Notes to the Unaudited Consolidated Financial Statements
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6
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Item 2.
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Management's Discussion and Analysis or Plan of Operation
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9
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Item 3
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Quantitative and Qualitative Disclosures about Market Risk
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13
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Item 4.
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Controls and Procedures
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14
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Part II. Other Information
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Item 1.
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Legal Proceedings
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15
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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15
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Item 3.
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Defaults Upon Senior Securities
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15
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Item 4.
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Submission of Matters to a Vote of Security Holders
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15
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Item 5.
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Other Information
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15
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Item 6.
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Exhibits
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16
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Signatures
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17
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September 30,
2015
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March 31,
2015
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|||||||
ASSETS
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(Unaudited)
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(Unaudited)
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||||||
Current assets:
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||||||||
Cash
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$
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-
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$
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-
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||||
Inventory, net
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-
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-
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||||||
Total current assets
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-
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-
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||||||
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||||||||
Fixed assets –cost
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22,250
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22,250
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||||||
Less: accumulated depreciation
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(22,250
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)
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(22,250
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)
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||||
Net fixed assets
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-
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-
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||||||
Total assets
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$
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-
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$
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-
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||||
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||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
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||||||||
Current liabilities:
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||||||||
Accounts payable and accrued liabilities
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$
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5,993,095
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$
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5,431,211
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||||
Note payable - short term
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723,616
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723,616
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||||||
Total current liabilities
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6,716,711
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6,154,827
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||||||
Long term liabilities:
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||||||||
Note payable
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-
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-
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||||||
Total long term liabilities
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-
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-
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||||||
Total liabilities
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6,716,711
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6,154,827
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||||||
Shareholders' equity (deficit)
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||||||||
Preferred shares - $0.001 par value; 1,000,000 authorized, no shares issued or outstanding
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-
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-
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||||||
Common shares - $0.001 par value; 199,000,000 authorized; 305,778 and 305,778 shares issued and outstanding, respectively
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306
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306
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||||||
Additional paid-in-capital
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6,148,229
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6,148,229
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||||||
Deficit accumulated during development stage
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(12,865,246
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)
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(12,303,362
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)
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||||
Total shareholders' equity (deficit)
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(6,716,711
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)
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(6,154,827
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)
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||||
Total liabilities and shareholders' equity (deficit)
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$
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-
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-
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Three Months Ended
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Six Months Ended
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Inception to
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||||||||||||||||||
September 30,
2015
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September 30,
2014
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September 30,
2015
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September 30,
2014
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September 30,
2015
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||||||||||||||||
(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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|||||||||||||||||
Sales
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$
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-
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$
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-
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$
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-
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$
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-
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$
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18,500
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||||||||||
Cost of Sales
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-
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-
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-
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-
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(18,032
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)
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||||||||||||||
Gross Profit
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-
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-
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-
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-
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468
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|||||||||||||||
Expenses:
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||||||||||||||||||||
General and administrative
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208,395
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210,010
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414,161
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418,107
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10,676,479
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|||||||||||||||
Depreciation
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-
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-
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24,106
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|||||||||||||||||
Research and development
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-
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-
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226,108
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|||||||||||||||||
Total expenses
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208,395
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210,010
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414,161
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418,107
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10,926,693
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|||||||||||||||
Income (loss) from operations
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(208,395
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)
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(210,010
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)
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(414,161
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)
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(418,107
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)
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(10,926,225
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)
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||||||||||
Interest expense
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(75,372
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)
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(62,992
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)
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(147,723
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)
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(123,263
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)
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(1,308,226
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)
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||||||||||
Other income (expense)
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-
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-
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-
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-
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(630,795
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)
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||||||||||||||
Net income (loss) before income taxes
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(283,767
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)
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(273,002
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)
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(561,884
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)
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(541,370
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)
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(12,865,246
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)
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||||||||||
Provision for income taxes
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-
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-
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-
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-
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-
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|||||||||||||||
Net income (loss) after income taxes
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$
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(283,767
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)
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$
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(273,002
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)
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$
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(561,884
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)
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$
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(541,370
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)
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$
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(12,865,246
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)
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|||||
Weighted Average Shares Outstanding - basic and diluted*
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305,778
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305,778
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305,778
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305,778
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||||||||||||||||
Basic and diluted income (loss) per share
|
||||||||||||||||||||
Continuing Operations
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$
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(0.93
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)
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$
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(0.89
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)
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$
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(1.84
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)
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$
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(1.77
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)
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||||||||
Net Income (Loss)
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$
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(0.93
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)
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$
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(0.89
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)
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$
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(1.84
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)
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$
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(1.77
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)
|
Six Months Ended
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Inception to
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|||||||||||
September 30,
2015
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September 30,
2014
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September 30,
2015
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||||||||||
Cash Flows from Operating Activities:
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||||||||||||
Net Loss
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$
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(561,884
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)
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$
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(541,370
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)
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$
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(12,865,246
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)
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|||
Adjustments to reconcile net loss to net cash used in operating activities:
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||||||||||||
Stock for services
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-
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-
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5,114,493
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|||||||||
Depreciation
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-
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-
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24,106
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|||||||||
Net discount on convertible debt
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-
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-
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206,324
|
|||||||||
Loss due to Impairment / Gain on restructuring
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-
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-
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630,795
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|||||||||
Changes in:
|
||||||||||||
Inventory and other current assets
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-
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-
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(4,869
|
)
|
||||||||
Accounts payable and accrued liabilities
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561,884
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541,370
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6,506,799
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|||||||||
Net cash used in operating activities
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-
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-
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(387,598
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)
|
||||||||
Cash Flows from Investing Activities:
|
||||||||||||
Fixed asset / Other asset purchases
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-
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-
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(189,541
|
)
|
||||||||
Net cash used in investing activities
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-
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-
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(189,541
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)
|
||||||||
Cash Flows from Financing Activities:
|
||||||||||||
Net Proceeds from general financing
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-
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-
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657,500
|
|||||||||
Net Proceeds (payments) from shareholder / officers
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-
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-
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(113,947
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)
|
||||||||
Proceeds from issuance of common stock
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-
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-
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33,586
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|||||||||
Net cash provided by financing activities
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-
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-
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577,139
|
|||||||||
Net increase (decrease) in cash
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-
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-
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-
|
|||||||||
Beginning of period - continuing operations
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-
|
-
|
-
|
|||||||||
End of period - continuing operations
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$
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-
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$
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-
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$
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-
|
||||||
Cash paid for interest
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$
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-
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$
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2,000
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$
|
24,295
|
||||||
Cash paid for income taxes
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$
|
-
|
$
|
-
|
$
|
-
|
Interest expense
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September 30,
2015
|
September 30,
2014
|
||||||
Interest – Johnson
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5,197
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5,197
|
||||||
Interest – Dutro Group
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18,112
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18,112
|
||||||
Interest - Employee Group
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118,254
|
93,794
|
||||||
Interest – Other Notes
|
6,160
|
6,160
|
||||||
Total interest expense
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$
|
147,723
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$
|
123,263
|
Note Payable Balance
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September 30,
2015
|
March 31,
2015
|
||||||
Edward Johnson – Johnson Financing
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$
|
86,615
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$
|
86,615
|
||||
Patrick Madison – Other Notes
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20,000
|
20,000
|
||||||
Lionel Brown – Other Notes
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20,000
|
20,000
|
||||||
Patricia Fielding – Other Notes
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22,000
|
22,000
|
||||||
Mark Madison – Other Notes
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10,000
|
10,000
|
||||||
Richard Long – Other Notes
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17,000
|
17,000
|
||||||
Asher Enterprises, Inc. – Other Notes
|
65,000
|
65,000
|
||||||
Vicki Davis - Dutro Group
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168,000
|
168,000
|
||||||
William Dutro – Dutro Group
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65,000
|
65,000
|
||||||
Dutro Company – Dutro Group
|
250,000
|
250,000
|
||||||
Total Note Payable – short term
|
$
|
723,615
|
$
|
723,615
|
||||
Total Note Payable – long term
|
$
|
-
|
$
|
-
|
||||
Total Notes Payable
|
$
|
723,615
|
$
|
723,615
|
Fiscal Year
|
Amount
|
|||
March 31, 2015
|
$
|
-
|
||
March 31, 2016
|
$
|
723,615
|
||
Total
|
$
|
723,615
|
1) | Litigation involving various parties continues and is expected to continue for the foreseeable future. The impact of the issues surrounding the litigation impact the Company's ability to obtain funding needed to operate the Company according to their strategic plans. |
Six Months Ended
|
Six Months Ended
|
|||||||
|
September 30,
|
September 30,
|
||||||
Sources and Uses of Cash
|
2015
|
2014
|
||||||
Net cash provided by / (used in)
|
||||||||
Operating activities
|
$
|
-
|
$
|
-
|
||||
Investing activities
|
-
|
-
|
||||||
Financing activities
|
-
|
-
|
||||||
|
||||||||
Increase/(decrease) in cash and cash equivalents
|
$
|
-
|
$
|
-
|
||||
|
||||||||
Period ended September 30, 2015 and 2014
|
||||||||
Cash and cash equivalents
|
$
|
-
|
$
|
-
|
·
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The Company has not generated revenues and has not executed any significant contracts for the sale of the Company's products.
|
·
|
The Company uses outside sources to fulfill contract obligations and has limited control over the provider's ability to meet the Company obligations.
|
·
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The directors, executive officers and principal shareholders of the Company have effective control of the Company, preventing non-affiliate shareholders from significantly influencing the Company's direction and future.
|
·
|
The Company relies on outsourced manufacturers for the production of all Sector 10 products. Litigation is pending regarding the breach of contract by the former outsourced manufacturer and other issues resulting in indefinite delays in production capability and capacity.
|
·
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The market for the Company's stock is thin and subject to manipulation.
|
·
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The market price for the Common Stock is volatile and may change dramatically at any time.
|
·
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Our business may be affected by increased compensation and benefits costs.
|
·
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The Company has not paid dividends and does not anticipate paying dividends in the future.
|
·
|
The Common Stock is a "low-priced stock" or "penny stock" and subject to regulation that limits or restricts the potential market for the stock.
|
·
|
Compliance with existing and new regulations of corporate governance and public disclosure may result in additional expenses.
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(a)
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Based on the evaluation of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) required by paragraph (b) of Rules 13a-15 or 15d-15, the Company's principal executive officer and principal financial officer concluded that as of September 30, 2015, the Company's disclosure controls and procedures were effective.
|
(b)
|
There have been no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the Company's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
|
Exhibit
|
||
31.1
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Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
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31.2
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
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32.2
|
Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101 INS
|
XBRL Instance Document*
|
|
101 SCH
|
XBRL Schema Document*
|
|
101 CAL
|
XBRL Calculation Linkbase Document*
|
|
101 DEF
|
XBRL Definition Linkbase Document*
|
|
101 LAB
|
XBRL Labels Linkbase Document*
|
|
101 PRE
|
XBRL Presentation Linkbase Document*
|
|
|
|
Sector 10, Inc.
|
|
|
|
|
|
|
|
|
|
November 16, 2015
|
|
By: /s/ Pericles DeAvila
|
|
Date
|
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Pericles DeAvila, President
|
|
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|
|
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November 16, 2015
|
|
By: /s/ Laurence A. Madison
|
|
Date
|
|
Laurence A. Madison
Chief Financial Officer
|
1. | I have reviewed this quarterly report on 10-Q of Sector 10, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
1. | I have reviewed this quarterly report on 10-Q of Sector 10, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent functions): |
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
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Note 4 - Equity |
6 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes | |
Note 4 - Equity | Note 4 EQUITY
During the Quarter ended: June 30, 2015:
No equity transactions occurred in the period ended June 30, 2015.
During the Quarter ended: September 30, 2015:
No equity transactions occurred in the period ended September 30, 2015. |
Note 3 - Notes Payable |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 3 - Notes Payable | Note 3 NOTES PAYABLE
Johnson Financing
The interest accrued for the six month period ended September 30, 2015 was $5,197.
Dutro Financing:
The contingent reserve interest includes all interest accrued on the Dutro Company note and all interest accrued after July 1, 2010 for the Vicki Davis and William Dutro note. Interest accrued during the six month period ended September 30, 2015 was $18,112 comprised of Dutro Company - $9,375, Vick Davis - $6,300 and William Dutro - $2,437. Total contingent reserve - interest for the period ended September 30, 2015 is $207,067 comprised of Dutro Company - $115,323, Vick Davis - $66,150 and William Dutro - $ 25,594.
Employee Agreement:
The financial statements reflect an accrual of interest on unpaid wages and other compensation in the amount of 699,358 of which $118,254 is accrued during the six month period ended September 30, 2015. As of September 30, 2015, no election has been made to convert any portion of the balance due under the agreement to common shares.
Other Notes
Other Individuals + Asher Enterprises
Total interest accrued as of September 30, 2015 was $68,697 of which $6,160 was accrued during the six month period ended September 30, 2015.
Summary of Interest and Notes Payable
Debt Maturity Schedule
As of September 30, 2014, the annual maturities for notes payable are scheduled as follows:
All interest is due under the terms of the various agreements. However future interest payments will not be made until all pending litigation is resolved and a satisfactory revised payment arrangement is completed by all parties.
|
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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) |
Sep. 30, 2015 |
Mar. 31, 2015 |
---|---|---|
Current assets: | ||
Cash | ||
Fixed assets -cost | $ 22,250 | $ 22,250 |
Less: accumulated depreciation | $ (22,250) | $ (22,250) |
Net fixed assets | ||
Current liabilities: | ||
Accounts payable and accrued liabilities | $ 5,993,095 | $ 5,431,211 |
Note payable - short term | 723,616 | 723,616 |
Total current liabilities | 6,716,711 | 6,154,827 |
Long term liabilities: | ||
Total liabilities | $ 6,716,711 | $ 6,154,827 |
Shareholders' equity (deficit) | ||
Preferred shares - $0.001 par value; 1,000,000 authorized, no shares issued or outstanding | ||
Common shares - $0.001 par value; 199,000,000 authorized; 305,778 and 305,778 shares issued and outstanding, respectively | $ 306 | $ 306 |
Additional paid-in-capital | 6,148,229 | 6,148,229 |
Deficit accumulated during development stage | (12,865,246) | (12,303,362) |
Total shareholders' equity (deficit) | $ (6,716,711) | $ (6,154,827) |
Note 1 - Basis of Presentation |
6 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes | |
Note 1 - Basis of Presentation | Note 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements of Sector 10, Inc. (Sector 10 or the Company), have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and required by Rule 10-01 of Regulation S-X. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited consolidated financial statements. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. |
Note 2 - Inventory |
6 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes | |
Note 2 - Inventory | Note 2 INVENTORY
There were no sales in the six month period ended September 30, 2015. There was no inventory for the six month period ended September 30. 2015. The carrying value of inventory is periodically reviewed and impairments, if any, are recognized when the expected future benefit from the inventory is less than its carrying value. If applicable, the Company will establish inventory reserves for estimated obsolescence or unmarketable inventory which is equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. No reserves exist at the end of the current period. |
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICAL - $ / shares |
Sep. 30, 2015 |
Mar. 31, 2015 |
---|---|---|
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICAL | ||
Preferred shares par value | $ 0.001 | $ 0.001 |
Preferred shares authorized | 1,000,000 | 1,000,000 |
Preferred shares issued | ||
Preferred shares outstanding | ||
Common shares par value | $ 0.001 | $ 0.001 |
Common shares authorized | 199,000,000 | 199,000,000 |
Common shares issued | 305,778 | 305,778 |
Common shares outstanding | 305,778 | 305,778 |
Note 3 - Notes Payable: Employee Agreement (Details) |
3 Months Ended |
---|---|
Jun. 30, 2015
USD ($)
| |
Details | |
Accrual of interest on unpaid wages and other compensation | $ 118,254 |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Sep. 30, 2015 |
Nov. 13, 2015 |
|
Document and Entity Information: | ||
Entity Registrant Name | SECTOR 10 INC | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Trading Symbol | seci | |
Amendment Flag | false | |
Entity Central Index Key | 0000925661 | |
Current Fiscal Year End Date | --03-31 | |
Entity Common Stock, Shares Outstanding | 305,778 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 |
Note 3 - Notes Payable: Schedule Of Debt Table TextBlock (Details) - USD ($) |
Sep. 30, 2015 |
Mar. 31, 2015 |
---|---|---|
Note payable - short term | $ 723,616 | $ 723,616 |
Notes Payable | 723,615 | 723,615 |
EdwardJohnsonJohnsonFinancingMember | ||
Note payable - short term | 86,615 | 86,615 |
PatrickMadisonOtherNotesMember | ||
Note payable - short term | 20,000 | 20,000 |
LionelBrownOtherNotesMember | ||
Note payable - short term | 20,000 | 20,000 |
PatriciaFieldingOtherNotesMember | ||
Note payable - short term | 22,000 | 22,000 |
MarkMadisonOtherNotesMember | ||
Note payable - short term | 10,000 | 10,000 |
RichardLongOtherNotesMember | ||
Note payable - short term | 17,000 | 17,000 |
AsherEnterprisesIncOtherNotesMember | ||
Note payable - short term | 65,000 | 65,000 |
VickiDavisDutroGroupMember | ||
Note payable | 168,000 | 168,000 |
WilliamDutroDutroGroupMember | ||
Note payable | 65,000 | 65,000 |
DutroCompanyDutroGroupMember | ||
Note payable | $ 250,000 | $ 250,000 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) |
3 Months Ended | 6 Months Ended | 157 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
Sales | $ 18,500 | ||||
Cost of Sales | (18,032) | ||||
Gross Profit | 468 | ||||
Expenses: | |||||
General and administrative | $ 208,395 | $ 210,010 | $ 414,161 | $ 418,107 | 10,676,479 |
Depreciation | 24,106 | ||||
Research and development | 226,108 | ||||
Total expenses | 208,395 | 210,010 | 414,161 | 418,107 | 10,926,693 |
Income (loss) from operations | (208,395) | (210,010) | (414,161) | (418,107) | (10,926,225) |
Interest expense | (75,372) | (62,992) | (147,723) | (123,263) | (1,308,226) |
Other income (expense) | (630,795) | ||||
Net income (loss) before income taxes | $ (283,767) | $ (273,002) | $ (561,884) | $ (541,370) | $ (12,865,246) |
Provision for income taxes | |||||
Net income (loss) after income taxes | $ (283,767) | $ (273,002) | $ (561,884) | $ (541,370) | $ (12,865,246) |
Weighted Average Shares Outstanding - basic and diluted* | 305,778 | 305,778 | 305,778 | 305,778 | |
Basic and diluted income (loss) per share | |||||
Continuing Operations | $ (0.93) | $ (0.89) | $ (1.84) | $ (1.77) | |
Net Income (Loss) | $ (0.93) | $ (0.89) | $ (561,884) | $ (541,370) | $ (12,865,246) |
Note 7 - Subsequent Events |
6 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes | |
Note 7 - Subsequent Events | Note 7 SUBSEQUENT EVENTS
The Company has evaluated subsequent events per the requirements of ASC Topic 855 and has determined that the following events should be disclosed.
1) Litigation involving various parties continues and is expected to continue for the foreseeable future. The impact of the issues surrounding the litigation impact the Companys ability to obtain funding needed to operate the Company according to their strategic plans. |
Note 6 - Income Tax |
6 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes | |
Note 6 - Income Tax | Note 6 - INCOME TAX
Income taxes are accounted for using the asset and liability method. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The Companys financial statements for the six month period ended September 30, 2015 and 2014 do not include any provision for income taxes. No income tax accrual has been recorded based on the expectation that the Company will be in a net loss position for the overall applicable fiscal year. Accordingly, deferred tax assets have been entirely offset by valuation allowances. The difference between the amounts of income tax benefit that would result from applying domestic federal statutory income tax rates to the net loss and the net deferred tax assets is related to certain nondeductible expenses, state income taxes, and the change in the valuation allowance.
The Financial Accounting Standards Board ("FASB") has issued ASC 740 for Accounting for Income Taxes that clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of ASC 740, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740.
The Company had no unrecognized tax benefit which would affect the effective tax rate if recognized.
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of September 30, 2015 the Company had no accrued interest or penalties related to uncertain tax positions.
The Company files income tax returns in the U.S. federal jurisdiction and in the states of Delaware, Utah and any other jurisdiction where required. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2012. |
Note 3 - Notes Payable: Schedule of maturities of notes payable (Details) - USD ($) |
Sep. 30, 2015 |
Mar. 31, 2015 |
---|---|---|
Details | ||
Long Term Debt Maturities Repayments Of Principal In Year Three | $ 723,615 | |
Notes Payable | $ 723,615 | $ 723,615 |
Note 3 - Notes Payable: Schedule of maturities of notes payable (Tables) |
6 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2015 | ||||||||||||||||
Tables/Schedules | ||||||||||||||||
Schedule of maturities of notes payable |
All interest is due under the terms of the various agreements. However future interest payments will not be made until all pending litigation is resolved and a satisfactory revised payment arrangement is completed by all parties.
|
Note 6 - Income Tax: Income Tax, Policy (Policies) |
6 Months Ended |
---|---|
Sep. 30, 2015 | |
Policies | |
Income Tax, Policy | Income taxes are accounted for using the asset and liability method. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The Companys financial statements for the six month period ended September 30, 2015 and 2014 do not include any provision for income taxes. No income tax accrual has been recorded based on the expectation that the Company will be in a net loss position for the overall applicable fiscal year. Accordingly, deferred tax assets have been entirely offset by valuation allowances. The difference between the amounts of income tax benefit that would result from applying domestic federal statutory income tax rates to the net loss and the net deferred tax assets is related to certain nondeductible expenses, state income taxes, and the change in the valuation allowance.
The Financial Accounting Standards Board ("FASB") has issued ASC 740 for Accounting for Income Taxes that clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of ASC 740, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740.
The Company had no unrecognized tax benefit which would affect the effective tax rate if recognized.
The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of September 30, 2015 the Company had no accrued interest or penalties related to uncertain tax positions.
The Company files income tax returns in the U.S. federal jurisdiction and in the states of Delaware, Utah and any other jurisdiction where required. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2012. |
Note 3 - Notes Payable: Schedule Of Debt Table TextBlock (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Debt Table TextBlock |
|
Note 3 - Notes Payable (Details) - USD ($) |
3 Months Ended | 6 Months Ended | 157 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
Sep. 30, 2014 |
Sep. 30, 2015 |
|
Johnson Financing - Interest Accrued | $ 5,197 | $ 5,197 | $ 5,197 | ||
Contingent Reserve Interest Accrued | 18,112 | 18,112 | 18,112 | ||
Total Contingent Reserve -Interest | 207,067 | 207,067 | 207,067 | ||
Inividuals - short-term Interest accrued | 6,160 | ||||
Interest expense | 75,372 | $ 62,992 | 147,723 | $ 123,263 | 1,308,226 |
Johnson | |||||
Interest expense | 5,197 | 5,197 | |||
Dutro Group | |||||
Interest expense | 18,112 | 18,112 | |||
Employee Group | |||||
Interest expense | 118,254 | 93,794 | |||
Other Notes | |||||
Interest expense | 6,160 | $ 6,160 | |||
VickiDavisDutroGroupMember | |||||
Contingent Reserve Interest Accrued | 6,300 | 6,300 | 6,300 | ||
Total Contingent Reserve -Interest | 66,150 | 66,150 | 66,150 | ||
DutroCompanyDutroGroupMember | |||||
Total Contingent Reserve -Interest | 115,323 | 115,323 | 115,323 | ||
WilliamDutroDutroGroupMember | |||||
Total Contingent Reserve -Interest | $ 25,594 | $ 25,594 | $ 25,594 |
Note 5 - Going Concern |
6 Months Ended |
---|---|
Sep. 30, 2015 | |
Notes | |
Note 5 - Going Concern | Note 5 GOING CONCERN
The Company generated minimal revenues prior to the current fiscal year. No revenues were generated for the three month period ended September 30, 2015. This level of revenues is not sufficient for the Company to meet its future obligations. This factor raises substantial doubt about the Companys ability to continue as a going concern.
The Company is in the midst of the Dutro litigation and other litigation. The litigation has hindered the operation of the Company and have set back the ability to raise capital and develop ongoing business. The Company is in the process of restructuring the business in order to continue forward as a going concern. It is expected that the restructuring will be completed after the current litigation is completed. After the restructuring is completed, revenues are not expected to be generated at the earliest by the end of the year ended March 31, 2016. |