Sector 10 Inc (SECI)

[ErnieBilco]

Continuation of 8K

Requests for Information


Multiple requests have been made to the Directors and Officers who resigned on April 15, 2011 to provide information and to discuss issues concerning the factors surrounding their resignation and to provide details surrounding the activity that occurred during their tenure as Directors and Officers of the Company. Prior Directors and Officers have not responded to any of the requests as of the date of this filing. The Form 10-K for the fiscal year ended was initially due on June 29, 2011. An Form 12b-25 extension was filed to provide additional time to receive critical information from the prior management in order to complete the information required to be disclosed in Form 10-K. Due to the failure of the former Directors and Officers to provide critical information, the Company anticipates that reporting for the Form 10-K for the fiscal year ended March 31, 2011 and the Form 10-Q for the period ended June 30, 2011 will be filed late (see Section 8 - Late Filing).


Status of Litigation /Claims


In an agreement dated June 8, 2011, Sector 10, Inc. retained the Houston Texas based law firm of Berg & Androphy under a contingent fee arrangement to coordinate ongoing litigation and to review and implement options for potential litigation among other parties. The agreement was signed by all parties on June 10, 2011. In addition, Dalton and Kelley located in Salt Lake City was retained by the Company to assist in the cases involving Edward Johnson and other parties.


The new Directors of the Company, appointed by a special shareholders meeting, have received information which indicates that the parties representing Edward Johnson in his claim against the Company may have contacted the prior Directors and Officers and such communication may have impacted their decision to resign on April 15, 2011. The new Directors, as mandated by the shareholders, are conducting a review and examination of all the factors surrounding the resignation of the Directors and Officers on April 15, 2011. If any such contact was made, the documentation shall be provided to the Company Counsel for their review.


Examination:


The Board of Directors was requested by the shareholders to conduct a comprehensive examination of the facts and circumstances surrounding the actions taken by Solar Tracer Corporation, First Diversified Equities, Inc, their collective representatives and management in the post acquisition period according to the Stock Exchange Agreements. The examination will review all actions within Sector 10, Inc. and outside Sector 10, Inc that may impact the Company or its shareholders. At the completion of the examination, the Board will determine whether there has been any breach of the respective Stock Exchange Agreements and/or any potentially fraudulent actions. Based on the outcomes of this examination, the Board of Directors shall be authorized to proceed in any manner that is in the best interest of the Company and its shareholders.


Any actions taken by any of the Sector 10, Inc. shareholders, Sector 10, Inc., Sector 10, Inc. Directors and Sector 10, Inc. management are without prejudice with respect to any claims surrounding the issues pertaining to the examination and review conducted and all facts and circumstances pertaining to the Solar Tracer Stock Exchange Agreement and First Diversified Equities, Inc. Stock Exchange Agreement.


The initial findings of the examination and review were expected to be available to the Board of Directors on or before June 30, 2011. Due to the lack of cooperation from prior management in providing information relating to their actions, the examination is not completed at this time. Further time is needed in order to gather all information needed to make a complete report. The examination will be deferred indefinitely until all critical information is received from the prior management.


Officers:


The Board was requested to appoint officers within 30 days after their acceptance of their election to the Board of Directors. Initially the Board expected to appoint officers on or before June 30, 2011. Due to the ongoing examination and the difficulty in receiving information from the prior Directors and Officers, the appointment of officers will be delayed indefinitely until critical information is received and the examination is complete.