Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2021 | Feb. 09, 2022 | |
Details | ||
Registrant CIK | 0000925661 | |
Fiscal Year End | --03-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2021 | |
Document Transition Report | false | |
Entity Registrant Name | SECTOR 10, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-24370 | |
Entity Tax Identification Number | 33-0565710 | |
Entity Address, Address Line One | 10900 NE 4th Street | |
Entity Address, Address Line Two | Suite 2300 | |
Entity Address, City or Town | Bellevue | |
Entity Address, State or Province | WA | |
Entity Address, Postal Zip Code | 98004 | |
City Area Code | 425 | |
Local Phone Number | 331-9620 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 305,778 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
Current Assets | ||
Cash | $ 0 | $ 0 |
Inventory, net | 0 | 0 |
Total current assets | 0 | 0 |
Fixed assets - cost | 0 | 0 |
Less: accumulated depreciation | 0 | 0 |
Net fixed assets | 0 | 0 |
Total assets | 0 | 0 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 9,676,491 | 10,055,578 |
Note payable - short term | 164,000 | 320,615 |
Total current liabilities | 9,840,491 | 10,376,193 |
Long term liabilities | ||
Note payable - long term | 0 | 0 |
Total long term liabilities | 0 | 0 |
Total liabilities | 9,840,491 | 10,376,193 |
Shareholders' equity (deficit) | ||
Preferred shares | 0 | 0 |
Common shares | 306 | 306 |
Additional paid-in capital | 6,148,229 | 6,148,229 |
Deficit accumulated during development stage | (15,989,026) | (16,524,728) |
Total shareholders' equity (deficit) | (9,840,491) | (10,376,193) |
Total liabilities and shareholders' equity (deficit) | $ 0 | $ 0 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets - Parenthetical - $ / shares | Dec. 31, 2021 | Mar. 31, 2021 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 199,000,000 | 199,000,000 |
Common Stock, Shares, Issued | 305,778 | 305,778 |
Common Stock, Shares, Outstanding | 305,778 | 305,778 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 232 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Details | |||||
Sales | $ 0 | $ 0 | $ 0 | $ 0 | $ 18,500 |
Cost of Sales | 0 | 0 | 0 | 0 | (18,032) |
Gross Profit | 0 | 0 | 0 | 0 | 468 |
Expenses | |||||
General and administrative | 7,204 | 11,575 | 26,886 | 49,252 | 14,485,736 |
Depreciation | 0 | 0 | 24,106 | ||
Research and development | 226,108 | ||||
Total expenses | 7,204 | 11,575 | 26,886 | 49,252 | 14,735,950 |
Income (loss) from operations | (7,204) | (11,575) | (26,886) | (49,252) | (14,735,482) |
Interest expense | (3,280) | (7,278) | (13,838) | (39,948) | (3,314,707) |
Other income (expense) | 0 | 1,857,497 | 576,426 | 1,857,497 | 2,061,163 |
Net income (loss) before income taxes | (10,484) | 1,838,644 | 535,702 | 1,768,297 | (15,989,026) |
Provision for income taxes | 0 | 0 | 0 | 0 | 0 |
Net income (loss) after income taxes | $ (10,484) | $ 1,838,644 | $ 535,702 | $ 1,768,297 | $ (15,989,026) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 305,778 | 305,778 | 305,778 | 305,778 | |
Basic and diluted income (loss) per share | |||||
Continuing Operations | $ (0.03) | $ 6.01 | $ 1.75 | $ 5.78 | |
Net Income (Loss) | $ (0.03) | $ 6.01 | $ 1.75 | $ 5.78 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 232 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | |
Cash Flows from Operating Activities | |||
Net Income (Loss) | $ 535,702 | $ 1,768,297 | $ (15,989,026) |
Adjustments to reconcile net loss to net cash used in operating activities | |||
Stock for services | 0 | 0 | 5,114,493 |
Depreciation | 0 | 0 | 24,106 |
Net discount on convertible debt | 0 | 0 | 206,324 |
Loss due to Impairment / Gain on restructuring | 0 | 0 | 630,795 |
Changes in | |||
Inventory and other current assets | 0 | 0 | (4,869) |
Accounts payable and accrued liabilities | (535,702) | (1,768,297) | 9,550,579 |
Net cash used in operating activities | 0 | 0 | (467,598) |
Cash Flows from Investing Activities | |||
Fixed asset / Other asset purchases | 0 | 0 | (189,541) |
Net cash used in investing activities | 0 | 0 | (189,541) |
Cash Flows from Financing Activities | |||
Net Proceeds from general financing | 0 | 0 | 737,500 |
Net Proceeds (payments) from shareholder / officers | 0 | 0 | (113,947) |
Proceeds from issuance of common stock | 0 | 0 | 33,586 |
Net cash provided by financing activities | 0 | 0 | 657,139 |
Net increase (decrease) in cash | 0 | 0 | 0 |
Beginning of period - continuing operations | 0 | 0 | 0 |
End of period - continuing operations | 0 | 0 | 0 |
Cash paid for interest | 0 | 0 | 24,295 |
Cash paid for income taxes | $ 0 | $ 0 | $ 0 |
Note 1 - Basis of Presentation
Note 1 - Basis of Presentation | 9 Months Ended |
Dec. 31, 2021 | |
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. Impact of Recent Accounting Pronouncements Sector 10 does not expect the adoption of any recently issued accounting pronouncements to have a material impact on its financial condition or results of operations. |
Note 2 - Inventory
Note 2 - Inventory | 9 Months Ended |
Dec. 31, 2021 | |
Notes | |
Note 2 - Inventory | Note 2 – INVENTORY There were no sales in the nine months ended December 31, 2021. The inventory reflected on the books was $0 for the nine months ended December 31, 2021. |
Note 3 - Notes Payable
Note 3 - Notes Payable | 9 Months Ended |
Dec. 31, 2021 | |
Notes | |
Note 3 - Notes Payable | Note 3 – NOTES PAYABLE Johnson Financing Total interest accrued is $0 of which $2,598 was accrued in the first three months ended June 30, 2021. In the period ended September 30, 2021, an additional review of the Dutro settlement impact was conducted. In the review of the settlement impact, three loans were considered to be included within the terms of the settlement agreement including the Johnson loan. The full amount of the loan balances plus all accrued interest was treated as a gain on the extinguishment of debt as a result of the Court’s decision. No interest was accrued in the current period. No further interest shall be accrued in future periods. Dutro Financing: In October 2020, The Court dismissed the Dutro Litigation with no amounts due either party. As a result of the Court’s decision, the contingent interest along with the full outstanding loan balance was forgiven and no future interest is due. No interest was accrued in the current period. No further interest shall be accrued in future periods. Employee Agreement: The financial statements reflect an accrual of interest on unpaid wages and other compensation in the amount of $2,357,414. No amount was accrued during the current fiscal year. In September 2020, the Company decided to stop all accruals of salary and employee contract interest as of the end of the fiscal year ended March 31, 2020. No future accruals will be made for either interest on unpaid wages or on accrued wages. Other Notes Individuals – short term Total interest accrued as of December 31, 2021 was $114,630 of which $7,340 was accrued during the nine months ended December 31, 2021. Asher Enterprises, Inc. Total interest accrued (without discount amortization) as of December 31, 2021 was $61,602 of which $3,900 was accrued during the nine months ended December 31, 2021 The current period interest is included as part of other interest. Summary of Interest and Notes Payable Interest expense December 31, 2021 March 31, 2021 Interest – Johnson 2,598 10,394 Interest – Dutro Group - 18,112 Interest - Employee Group - - Interest – Other Notes 11,240 18,720 Total interest expense $ 13,838 $ 47,226 Note Payable Balance December 31, March 31, Edward Johnson – Johnson Financing $ $ 86,615 Various Individuals – Other Notes 99,000 169,000 Asher Enterprises, Inc. – Other Notes 65,000 65,000 Total Note Payable – short term $ 164,000 $ 320,615 Total Note Payable – long term $ - $ - Total Notes Payable $ 164,000 $ 320,615 Debt Maturity Schedule As of December 31, 2021, the annual maturities for notes payable are scheduled as follows: Fiscal Year Amount March 31, 2022 $ 164,000 March 31, 2023 $ - Total $ 164,000 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 4 - Equity
Note 4 - Equity | 9 Months Ended |
Dec. 31, 2021 | |
Notes | |
Note 4 - Equity | Note 4 – EQUITY During the Quarter ended: June 30, 2021 No equity transactions occurred in the period ended June 30, 2021 During the Quarter ended: September 30, 2021 No equity transactions occurred in the period ended September 30, 2021 During the Quarter ended: December 31, 2021 No equity transactions occurred in the period ended December 31, 2021 |
Note 5 - Going Concern
Note 5 - Going Concern | 9 Months Ended |
Dec. 31, 2021 | |
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 nine month period ended December 31, 2021. This level of revenues is not sufficient for the Company to meet its future obligations. This factor raises substantial doubt about the Company’s ability to continue as a going concern. The Company recently settled the Dutro litigation and reviewing options for future business operations. The litigation and a lack of net cash flow has hindered the operation of the Company and has set back the ability to raise capital and develop ongoing business in order to continue forward as a going concern. It is expected that limitation will continue to hinder the ability to continue as a going concern through the end of the fiscal year ended March 31, 2022 and beyond. |
Note 6 - Income Tax
Note 6 - Income Tax | 9 Months Ended |
Dec. 31, 2021 | |
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 Company’s financial statements for the six month period ended September 30, 2021 and 2020 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 December 31, 2021 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 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 2017. |
Note 7 - OTHER INCOME
Note 7 - OTHER INCOME | 9 Months Ended |
Dec. 31, 2021 | |
Notes | |
Note 7 - OTHER INCOME | Note 7 – OTHER INCOME On October 21, 2020, In the period ended September 30, 2021, an additional review of the Dutro settlement impact was conducted and additional debts and liabilities were identified that should be released due to the terms of the settlement. . Extinguishment of Debt Extinguishment of Debt recognized in period ended 9/30/2021 $ 576,426 Extinguishment of Debt recognized in fiscal year ended 3/31/2021 2,115,532 Total Extinguishment of Debt Recognized $ 2,691,958 |
Note 8 - Subsequent Events
Note 8 - Subsequent Events | 9 Months Ended |
Dec. 31, 2021 | |
Notes | |
Note 8 - Subsequent Events | Note 8 – 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) Since the settlement of the litigation, the Company is reviewing various options to determine the future strategy of the Company operations. No restructuring plan has been finalized as of the filing date of this report. 2) The issues surrounding the prior litigation impacted the Company’s ability to obtain funding needed to operate the Company. |
Note 6 - Income Tax_ Income Tax
Note 6 - Income Tax: Income Tax, Policy (Policies) | 9 Months Ended |
Dec. 31, 2021 | |
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 Company’s financial statements for the six month period ended September 30, 2021 and 2020 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 December 31, 2021 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 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 2017. |
Note 3 - Notes Payable_ Interes
Note 3 - Notes Payable: Interest Expense Disclosure (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Interest Expense Disclosure | Summary of Interest and Notes Payable Interest expense December 31, 2021 March 31, 2021 Interest – Johnson 2,598 10,394 Interest – Dutro Group - 18,112 Interest - Employee Group - - Interest – Other Notes 11,240 18,720 Total interest expense $ 13,838 $ 47,226 |
Note 3 - Notes Payable_ Schedul
Note 3 - Notes Payable: Schedule Of Debt Table TextBlock (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule Of Debt Table TextBlock | Note Payable Balance December 31, March 31, Edward Johnson – Johnson Financing $ $ 86,615 Various Individuals – Other Notes 99,000 169,000 Asher Enterprises, Inc. – Other Notes 65,000 65,000 Total Note Payable – short term $ 164,000 $ 320,615 Total Note Payable – long term $ - $ - Total Notes Payable $ 164,000 $ 320,615 |
Note 3 - Notes Payable_ Sched_2
Note 3 - Notes Payable: Schedule of maturities of notes payable (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of maturities of notes payable | Fiscal Year Amount March 31, 2022 $ 164,000 March 31, 2023 $ - Total $ 164,000 |
Note 7 - OTHER INCOME_ Schedule
Note 7 - OTHER INCOME: Schedule of Other Nonoperating Income (Expense) (Tables) | 9 Months Ended |
Dec. 31, 2021 | |
Tables/Schedules | |
Schedule of Other Nonoperating Income (Expense) | Extinguishment of Debt Extinguishment of Debt recognized in period ended 9/30/2021 $ 576,426 Extinguishment of Debt recognized in fiscal year ended 3/31/2021 2,115,532 Total Extinguishment of Debt Recognized $ 2,691,958 |
Note 2 - Inventory (Details)
Note 2 - Inventory (Details) - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
Details | ||
Inventory, net | $ 0 | $ 0 |
Note 3 - Notes Payable (Details
Note 3 - Notes Payable (Details) | 9 Months Ended |
Dec. 31, 2021USD ($) | |
Accrual of interest on unpaid wages and other compensation | $ 0 |
Johnson Financing | |
Interest Accrued | 2,598 |
Individuals - Short Term | |
Interest Accrued | 7,340 |
Asher Enterprises, Inc. | |
Interest Accrued | $ 3,900 |
Note 3 - Notes Payable_ Inter_2
Note 3 - Notes Payable: Interest Expense Disclosure (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Dec. 31, 2021 | Mar. 31, 2021 | |
Interest Expense | $ 13,838 | $ 47,226 |
Johnson Financing | ||
Interest Expense | 2,598 | 10,394 |
Dutro Group | ||
Interest Expense | 0 | 18,112 |
Employee Group | ||
Interest Expense | 0 | 0 |
Other | ||
Interest Expense | $ 11,240 | $ 18,720 |
Note 3 - Notes Payable_ Sched_3
Note 3 - Notes Payable: Schedule Of Debt Table TextBlock (Details) - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
Note payable - short term | $ 164,000 | $ 320,615 |
Note payable - long term | 0 | 0 |
Notes Payable | 164,000 | 320,615 |
Johnson Financing | ||
Note payable - short term | 86,615 | |
Various Individuals | ||
Note payable - short term | 99,000 | 169,000 |
Asher Enterprises, Inc. | ||
Note payable - short term | $ 65,000 | $ 65,000 |
Note 3 - Notes Payable_ Sched_4
Note 3 - Notes Payable: Schedule of maturities of notes payable (Details) - USD ($) | Dec. 31, 2021 | Mar. 31, 2021 |
Details | ||
Long-Term Debt, Maturity, Year Two | $ 164,000 | |
Long Term Debt Maturities Repayments Of Principal In Year Three | 0 | |
Notes Payable | $ 164,000 | $ 320,615 |
Note 7 - OTHER INCOME_ Schedu_2
Note 7 - OTHER INCOME: Schedule of Other Nonoperating Income (Expense) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | 232 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2021 | |
Details | ||||||
Other income (expense) | $ 0 | $ 1,857,497 | $ 576,426 | $ 1,857,497 | $ 2,115,532 | $ 2,061,163 |
Extinguishment of Debt, Amount | $ 2,691,958 |