This report contains forward-looking statements within the meaning of Section 29a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from historical or anticipated results. You should not place undue reliance on such forward-looking statements, and, when considering such forward-looking statements, you should keep in mind the risk factors noted in this report, including the section of this report entitled "Risks Related to Our Business and Operations." You should also keep in mind that all forward-looking statements are based on management's existing beliefs about present and future events outside of management's control and on assumptions that may prove to be incorrect. The following discussion and analysis should be read in conjunction with the Company's financial statements and notes thereto, which are included elsewhere in this report.

Overview

Sector 10 has developed and seeks to market pre-deployed emergency and disaster response equipment with the world's first patented Stationary Response Units (SRU) and Mobile Response Units (MRU). Sector 10 has patents issued in the United States and patent applications pending with U.S. and international agencies. Sector 10's initial SRU and MRU design has been developed, produced, nationally test marketed and sold.

The Company's cash balance is insufficient to satisfy the Company's cash requirements for the next 12 months. Due to issues surrounding Dutro Group and other pending litigation, the ability to deliver products to customers has been delayed. 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.

Going Concern Qualification

Our notes to the financial statements disclose that the cash flow of the Company has been absorbed in operating activities, has incurred net losses for the fiscal year and has a working capital deficiency. Due to the pending litigation and the current restructuring, the Company operations are not likely to produce positive cash flow until at least the end of the fiscal year ended March 31, 2020. These factors raise substantial doubt about our ability to continue as a going concern. Our going concern uncertainty may affect our ability to raise additional capital, and may also affect our relationships with suppliers and customers. Investors should carefully examine our financial statements and read the notes to the financial statements.


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Results of Operations

Nine Months Ended December 31, 2019 as Compared to the Nine Months Ended December 31, 2018

Revenues -

The Company had no revenues for the nine months ended December 31, 2019.

The Company had no revenues for the nine months ended December 31, 2018.

Other Income-

The Company had no other income for the nine months ended December 31, 2019.

The Company had no other income for the nine months ended December 31, 2018.

Operating Expenses -

The Company had no operating expenses for the nine months ended December 31, 2019.

The Company had no operating expenses for the nine months ended December 31, 2018.

General and Administrative Expenses -

General and administrative expenses were $601,214 for the nine months ended December 31, 2019 which was made up primarily of Wages - $495,000, Payroll tax expense - $49,500, Professional fees - Legal & Accounting - $37,474, Insurance expense - $ 16,743 and other expenses of $2,497.

General and administrative expenses were $623,409 for the nine months ended December 31, 2018 which was made up primarily of Wages - $495,000, Payroll tax expense - $49,500, Professional fees - Legal & Accounting - $60,000, Insurance expense - $ 12,389, Filing fees - $4,410 and other expenses of $2,110.

Depreciation Expense -

Depreciation expense for the nine months ended December 31, 2019 was $0.

Depreciation expense for the nine months ended December 31, 2018 was $0.

Interest Expense -

Interest expense for the nine months ended December 31, 2019 was $389,605.

Interest expense for the nine months ended December 31, 2018 was $350,006.

Three Months Ended December 31, 2019 as Compared to the Three Months Ended December 31, 2018

Revenues -

The Company had no revenues for the three months ended December 31, 2019.

The Company had no revenues for the three months ended December 31, 2018.


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Other Income-

The Company had no other income for the three months ended December 31, 2019.

The Company had no other income for the three months ended December 31, 2018.

Operating Expenses -

The Company had no operating expenses for the three months ended December 31, 2019.

The Company had no operating expenses for the three months ended December 31, 2018.

General and Administrative Expenses -

General and administrative expenses were $198,420 for the three months ended December 31, 2019 which was made up primarily of Wages - $165,000, Payroll tax expense - $16,500, Professional fees - Legal & Accounting - $11,189, Insurance expense - $5,581 and other expenses of $150.

General and administrative expenses were $208,007 for the three months ended December 31, 2018 which was made up primarily of Wages - $165,000, Payroll tax expense - $16,500, Professional fees - Legal & Accounting - $20,000, Insurance expense - $4,937, Filing Fees - $1,470 and other expenses of $100.

Depreciation Expense -

Depreciation expense for the three months ended December 31, 2019 was $0.

Depreciation expense for the three months ended December 31, 2018 was $0.

Interest Expense -

Interest expense for the three month period ended December 31, 2019 was $133,252.

Interest expense for the three month period ended December 31, 2018 was $120,052.

Liquidity and Capital Resources

As of December 31, 2019, Sector 10 had cash of $0. This amount is not sufficient to meet the Company's working capital requirements for the balance of the fiscal year ending March 31, 2020 or for any future period.

Total Assets -

The Company had $0 in total assets as of December 31, 2019.

Working capital -

As of this filing date, the Company is in the process of restructuring its operations in order to raise capital and continue in its efforts to manufacture and distribute its products. The restructuring is not expected to be completed by the end of the fiscal year ended March 31, 2020. Potential funding is not expected until litigation efforts are completed. It is uncertain as to when such litigation will be completed.

Our auditors are of the opinion that our continuation as a going concern is in doubt. Our continuation as a going concern is dependent upon continued financial support from our shareholders and other related parties.


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