Item 2. Management's Discussion And Analysis Or Plan Of Operation

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.

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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.

Management of the Company as installed by Solar Tracer Corporation and First Diversified Equities, Inc. submitted resignations effective April 15, 2011. On or before these resignations, the Solar Tracer Corporation, its shareholders, representatives and management returned to Treasury the 60,000,000 common shares it received under the Solar Tracer Stock Exchange Agreement o January 7, 2011. As a result of this return of shares, Sector 10 Holdings, Inc. becomes the largest shareholder of record based on a shareholder report dated May 11, 2011.

A special shareholder meeting was held on May 12, 2011 to reappoint Pericles DeAvila and Laurence A. Madison as directors of the Company and acting Management. The shareholders requested that a review of the circumstances surrounding the Solar Tracer/First Diversified termination be conducted. The review triggered an investigation that is ongoing. The results thus far indicate outside interference that led to the reversal of the acquisitions and the resignation of management.

Going Concern Qualification

The notes to the Company's consolidated financial statements disclose that the limited cash flow of the Company has been absorbed in operating activities, the Company has incurred net losses since inception, and the Company has a working capital deficiency. In the event that funding from internal sources or from public or private financing is insufficient to fund the Company's business, the Company will have to substantially cut back its level of spending, which could substantially curtail the Company's operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's going concern uncertainty may affect its ability to raise additional capital, and may also affect its ability to raise additional capital, and may also affect its relationships with suppliers and customers. Investors should carefully examine the Company's financial statements.

Results of Operations

Nine Months Ended December 31, 2011 as Compared to the Nine Months Ended December 31, 2010

Revenues -

The Company had no revenues for the nine months ended December 31, 2011.

The Company had no revenues for the nine months ended December 31, 2010.

Other Income-

The Company had no other income for the nine months ended December 31, 2011.

The Company had no other income for the nine months ended December 31, 2010.

Operating Expenses -

The Company had no operating expenses for the nine months ended December 31, 2011.

The Company had no operating expenses for the nine months ended December 31, 2010.

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General and Administrative Expenses -

General and administrative expenses were $496,829 for the nine months ended December 31, 2011 which was made up primarily of Wages - $412,476, Financing Fee
- $68,041, Professional fees - Legal & Accounting - $14,731and other expenses of $1,581.

General and administrative expenses were $1,691,013 for the nine months ended December 31, 2010 which was made up primarily of Financing Fee - $678,845, Wages
- $463,781, Professional fees - Legal & Accounting - $453,381, Payroll/Benefits tax, insurance and expenses - $41,601, Professional fees - investor relations $34,270, Filing fees - $5,995, Director and Business Advisory Board fees - $5,226 and other expenses of $7,914.

Depreciation Expense -

Depreciation expense for the nine months ended December 31, 2011 was $3,338.

Depreciation expense for the nine months ended December 31, 2010 was $5,194.

Interest Expense -

Interest expense for the nine months ended December 31, 2011 was $107,799.

Interest expense for the nine months ended December 31, 2010 was $239,526.

Three Months Ended December 31, 2011 as Compared to the Three Months Ended December 31, 2010

Revenues -

The Company had no revenues for the three months ended December 31, 2011.

The Company had no revenues for the three months ended December 31, 2010.

Other Income-

The Company had no other income for the three months ended December 31, 2011.

The Company had no other income for the three months ended December 31, 2010.

Operating Expenses -

The Company had no operating expenses for the three months ended December 31, 2011.

The Company had no operating expenses for the three months ended December 31, 2010.

General and Administrative Expenses -

General and administrative expenses were $136,270 for the three months ended December 31, 2011 which was made up primarily of Wages - $135,766 and other expenses of $504.

General and administrative expenses were $892,567 for the three months ended December 31, 2010 which was made up primarily of Financing Fees - $476,855, Wages - $227,007, Professional fees - Legal & Accounting - $160,550, Professional fees - investor relations $15,250, Payroll/Benefits tax, insurance and expenses - $10,018 and other expenses of $2,887.

Depreciation Expense -

Depreciation expense for the three months ended December 31, 2011 was $1,113.

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Depreciation expense for the three months ended December 31, 2010 was $1,113.

Interest Expense -

Interest expense for the three month period ended December 31, 2011 was $33,202.

Interest expense for the three month period ended December 31, 2010 was $55,910.

Liquidity and Capital Resources
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As of December 31, 2011, 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, 2012 or for any future period.

Total Assets -

The Company had $522,711 in total assets as of December 31, 2011, comprised of cash - $0, Inventory - $18,409, Net Fixed Assets - $4,302 and Network Acquisition/Development Costs - $500,000.

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 expected to be completed by the end of the fiscal year ended March 31, 2012. Potential funding is not expected until sometime in the fiscal year ended March 31, 2013.

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.

Total Liabilities -

Current liabilities as of December 31, 2011 were $2,370,887. The balance was composed of accounts payable and accrued liabilities of $2,125,772 and note payable to outside investors of $245,115.

Long term liabilities as of December 31, 2011 were $483,000. The balance consists of Notes Payable to Dutro Company - $250,000, Vicki Davis Living Trust
- $168,000 and William Dutro - $65,000.

Total liabilities as of December 31, 2011 were $2,853,887.