UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10 – Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~ March 31, ~~2010~~2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ________________

Commission file number: 333-130197


DELTRON, INC.
(Exact name of Registrant as specified in its charter)

Nevada		86-1147933
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

11377 Markon Drive Garden Grove, CA 92841
(Address of principal executive offices)

(714) 891-1795
(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x ~~[Not required]~~

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one).


Large accelerated filer o		Accelerated filer o

Non-accelerated filer o		Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No o

As of ~~February~~May 1613, 2011, there were 758,478,980 shares of the issuer’s common stock, par value $0.001, outstanding.

DELTRON, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2010

TABLE OF CONTENTS

		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements	34
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1424
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1530
Item 4.	Controls and Procedures	1630
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	1631
Item 1A.	Risk Factors	1631
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1631
Item 3.	Defaults Upon Senior Securities	1631
Item 4.	~~Submission~~[Removed ofand ~~Matters to a Vote of Security Holders~~Reserved]	1631
Item 5.	Other Information	1631
Item 6.	Exhibits	1731
	SIGNATURES	1832

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's September 30, 2010 Form 10-K filed with the SEC on January 1314, ~~2010~~2011. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
			December 31,	September 30,
			March 31	September 30
			2010	2010
			2011	2010
			Unaudited
Assets
	Current Assets:
		Cash	$ 3571,~~861~~559	$ 1,852
		Accounts receivable, net of allowance of doubtful accounts of $2,630
		Accounts receivable	453,514	660,395
		and $2,630 at December 31, 2010 and September 30, 2010, respectively	418,320	660,395
		Inventory	421,252	332,676
		Inventory, net of allowance for obsolescence of $9,795 and $9,795 at
		December 31, 2010 and September 30, 2010, respectively	375,900	332,676
		Loan receivable	41,000	41,000
		Prepaid expenses and other receivables	48,314	19,826
		Prepaid expenses	30,945	19,826
	Total Current Assets		~~919~~1,~~395~~018,270	1,055,749
	Property and equipment, net		2926,~~389~~539	32,239
Total Assets			$ 948,784	$1,087,988
	Intangible asset, net of amortization of $26,250		3,123,750	-
Liabilities and Stockholders' (Deficit) Equity
Total Assets			$ 4,168,559	$ 1,087,988
Liabilities and Stockholders' Deficit
	Current liabilities
		Line of credit	$ 100,000	$ 125,000
		Bank overdraft	-	10,506
		Accounts payable	~~289~~294,~~708~~189	452,318
		Accrued expenses	5253,~~969~~306	75,091
		Income taxes payable	~~800~~1,600	1,600
		Accrued expenses - related parties	~~180~~230,000	150,000
		Accrued interest - related parties	7986,~~826~~387	63,541
		Convertible notes - related parties, net of note discount of $20,304
		Accrued interest - others	30,902	-
		and $79,333 at December 31, 2010 and September 30, 2010, respectively	155,196	96,167
		Convertible notes - related parties, net of note discount of $0
		Convertible notes - net of note discount of $43,695
		and $79,333 at March 31, 2011 and September 30, 2010	175,500	96,167
		and $0 at December 31, 2010 and September 30, 2010, respectively	33,805	-
		Convertible notes	3,277,500	-
		Derivative liability – conversion options	65,874	-
		Current portion of long term debt - related party	415,109	334,587
		Current portion of long term debt - related party	374,848	334,587
	Total Current Liabilities		4,664,493	1,308,810
	Total Current Liabilities		1,333,026	1,308,810
	Notes payable - related party, net of current portion		680,001	760,523
	Notes payable - related party, net of current portion		720,262	760,523
Stockholders' Deficit
Total Liabilities			2,053,288	2,069,333
Stockholders' (Deficit) Equity
	Common stock, $0.001 par value; 10,000,000,000 shares
	authorized, 758,478,980 and 678,478,980 shares issued and outstanding
	at December 31, 2010 and September 30, 2010, respectively		758,479	678,479
	at March 31, 2011 and September 30, 2010, respectively		758,479	678,479
	Additional paid-in capital		1,398,767	1,418,767
	Accumulated deficit		(3,~~261~~333,~~750~~181)	(3,078,591)
		Total Stockholders' (Deficit) Equity	(1,104,504)	(981,345)
		Total Stockholders' Deficit	(1,175,935)	(981,345)
Total Liabilities and Stockholders' (Deficit) Equity			$ 948,784	$1,087,988
Total liabilities and stockholders' deficit			$ 4,168,559	$ 1,087,988
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these financial statements.

Deltron, Inc. and Subsidiary
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		For the three Months ended
		December 31,
		March 31,
		2010	2009
		2011	2010
Sales		$ 905,401	$ 511,556
		unaudited	unaudited
Cost of sales		778,016	435,062
Sales		$ 823,500	$ 603,503
Gross profit		127,385	76,494
Cost of sales		636,787	559,311
Selling, general and administrative expenses		210,480	161,231
Gross profit		186,713	44,192
Operating income (loss)		(83,095)	(84,737)
Selling, general and administrative expenses		214,072	150,257
Other income (expenses)
Operating loss		(27,359)	(106,065)
Change in fair value of derivative liability		(6,854)	-
Other expense
Interest expense, net		(92,375)	(14,562)
Interest expense		(44,072)	(53,579)
Total other income (expense)		(99,229)	(14,562)
Total other expense		(44,072)	(53,579)
Loss before provision for income taxes		(~~182~~71,~~324~~431)	(99159,~~299~~644)
Provision for income taxes		~~835~~-	-
Net loss		$ (~~183~~71,~~159~~431)	$ (99159,~~299~~644)
Per share information
Net loss per common share
	Basic	$ (0.000)	$ (0.~~001~~003)
	Fully diluted	$ (0.000)	$ (0.~~001~~003)
Weighted average number of common
	stock outstanding - basic	~~718~~758,478,~~980~~908	~~107~~49,~~206~~845,~~877~~698
Weighted average number of common
	stock outstanding - diluted	~~718~~758,478,~~980~~908	~~107~~49,~~206~~845,~~877~~698
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
The accompanying notes are an integral part of these financial statements.

Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S (DEFICIT) EQUITY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
					Additional
				For the six Months ended
		Common Stock			paid-in		Accumulated
				March 31,
		Number of shares	Amount		Capital		Deficit	Totals
				2011		2010
Balance - December 31, 2008		14,403,074	$ 14,403		$1,911,235		$(2,218,137)	$ (292,499)
				unaudited		unaudited
Recapitalization in reverse acquisition					(624,200)			(624,200)
Sales				$ 1,728,901		$ 1,115,059
Issuance of stock for cash		76,031,699	76,032		529,190			605,222
Cost of sales				1,414,803		994,373
Net loss							(400,564)	(400,564)
Gross profit				314,098		120,686
Balance - September 30, 2009 (Unaudited)		90,434,773	90,435		1,816,225		(2,618,701)	$ (712,041)
Selling, general and administrative expenses				431,406		311,488
Issuance of stock for cash		33,544,207	33,544		31,456			65,000
Operating loss				(117,308)		(190,802)
Net loss							(99,299)	(99,299)
Other expense
Balance - December 31, 2009		123,978,980	123,979		1,847,681		(2,718,001)	(746,341)
Interest expense				(136,447)		(68,141)
Beneficial conversion feature
Total other expense				(136,447)		(68,141)
- convertible notes payable - related parties		-	-		175,500		-	175,500
Loss before provision for income taxes				(253,755)		(258,943)
Recapitalization in reverse acquisition		554,500,000	554,500		(604,414)		-	(49,914)
Provision for income taxes				835		-
Net loss		-	-	$ (254,590)	-	$ (258,943)	~~(360,590)~~	~~(360,590)~~
Balance - September 30, 2010		678,478,980	$678,479		$1,418,767		$(3,078,591)	$ (981,345)
Per share information
Issuance of common stock for service		80,000,000	80,000		(20,000)			60,000
Net loss per common share
Net loss							(183,159)	(183,159)
	Basic			$ (0.000)		$ (0.002)
Balance - December 31, 2010 (Unaudited)		758,478,980	$758,479		$1,398,767		$(3,261,750)	$(1,104,504)
	Fully diluted			$ (0.000)		$ (0.002)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Weighted average number of common
	stock outstanding - basic			738,701,202		115,592,928
Weighted average number of common
	stock outstanding - diluted			738,701,202		115,592,928
The accompanying notes are an integral part of these financial statements.

Deltron, Inc. and Subsidiary
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S (DEFICIT)
				For the three Months ended
					Additional
				December 31,
		Common Stock			Paid-in		Accumulated
				2010		2009
		Number of Shares	Amount		Capital		Deficit	Totals
Cash Flows from Operating Activities:
Balance - December, 2008		14,403,074	$ 14,403		$ 1,911,235		$ (2,218,137)	$ (292,499)
	Net (loss)			$ (183,159)		$ (99,299)
Recapitalization in reverse acquisition					(624,200)			(624,200)
Adjustments to reconcile net loss to net cash used
Issuance of stock for cash		109,575,906	109,576		560,646			670,222
	in operating activities:
Net income							(499,863)	(499,863)
	Depreciation			2,850		2,500
Balance - December 31, 2009		123,978,980	123,979		1,847,681		(2,718,001)	(746,341)
	Change in fair value of derivative liability			6,854		-
Beneficial conversion feature
	amortization of discount on note payable			74,354		-
- convertible notes payable - related parties		-	-		175,500		-	175,500
	(Increase) Decrease in accounts receivable			242,075		102,779
Recapitalization in reverse acquisition		554,500,000	554,500		(604,414)		-	(49,914)
	(Increase) Decrease in inventory			(43,224)		(13,999)
Net loss		-	-		-		(360,590)	(360,590)
	(Increase) Decrease in prepaid expenses and other receivables			31,512		27,480
Balance - September 30, 2010		678,478,980	678,479		1,418,767		(3,078,591)	(981,345)
	Increase (decrease) in accounts payable			(162,610)		(51,990)
Issuance of common stock for services		80,000,000	80,000		(20,000)			60,000
	Increase (decrease) in accrued expenses			(22,922)		(41,366)
Net loss		-	-		-		(254,590)	(254,590)
	Increase (decrease) in accrued expenses - related parties			30,000		-
Balance - March 31, 2011, unaudited		758,478,980	758,479		1,398,767		(3,333,181)	(1,175,935)
	Increase (decrease) in accrued interest - related parties			16,285		12,713
The accompanying notes are an integral part of these financial statements.
Net Cash (Used) by Operating Activities				(7,985)		(61,182)
Net Cash Used in Investing Activities				-		-
Cash Flows from Financing Activities
	Proceeds from sale of common stock			-		65,000
	Decrease in bank overdraft			(10,506)		-
	Borrowing on related party notes			77,500		-
	Payments on line of credit			(25,000)		-
Net Cash Provided by Financing Activities				41,994		65,000
Net Increase (decrease) in Cash				34,009		3,818
Cash and Cash Equivalents - Beginning of Period				1,852		26,168
Cash and Cash Equivalents - End of Period				$ 35,861		$ 29,986
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Cash paid for interest expense			$ 2,054		$ -
	Cash paid for income taxes			$ 800		$ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
In November 2010, the Company issued 80,000,000 shares of its common stock valued at $60,000
to Elasco's president, $10,000 was recorded as a bonus and $50,000 is prepaid salary to be
expensed over six months beginning mid November 2010.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS



		For the three Months ended
		March 31,
		2011	2010
		unaudited	unaudited

Cash Flows from Operating Activities:
	Net loss	$ (71,431)	$ (159,644)

Adjustments to reconcile net loss to net cash used
	in operating activities:
	Depreciation	2,850	2,500
	Beneficial conversion feature	-	39,500
	Amortization of intangible assets	26,250	-
	Amortization of discount on notes payable	20,304	-
	(Increase) Decrease in accounts recievable	(35,194)	(78,251)
	(Increase) Decrease in inventory	(45,352)	29,073
	(Increase) Decrease in prepiad expenses	17,369	(4,494)
	Increase (decrease) in accounts payable	4,481	85,605
	Increase (decrease) in accrued expenses	(21,039)	35,219
	Increase (decrease) in accrued expenses - related parties	50,000	-
	Increase (decrease) in accrued interest - other	24,754	-
	Increase (decrease) in accrued interest - related parties	12,706	36,344

Net Cash Used by Operating Activities		(14,302)	(14,148)

Cash Flows from Financing Activities
	Borrowing of convertible debt	50,000	-
	Borrowing on related party notes	-	39,500

Net Cash Provided by Financing Activities		50,000	39,500

Net Increase in Cash		35,698	25,352

Cash - Beginning of Period		35,861	29,986

Cash - End of Period		$ 71,559	$ 55,338


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Cash paid for interest expense	$ 1,629	$ 2,032
	Cash paid for income taxes	$ -	$ -

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

Issuance of convertible note payable of $3,150,000 for unpatented
rebreather system technology.


The accompanying notes are an integral part of these financial statements.


Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS



		For the six Months ended
		March 31,
		2011	2010
		unaudited	unaudited

Cash Flows from Operating Activities:
	Net loss	$ (254,590)	$ (258,943)

Adjustments to reconcile net loss to net cash used
	in operating activities:
	Depreciation	5,700	5,000
	Beneficial conversion feature	-	39,500
	Amortization of intangible assets	26,250	-
	Amortization of discount on notes payable	79,333	-
	(Increase) Decrease in accounts recievable	206,881	24,528
	(Increase) Decrease in inventory	(88,576)	15,074
	(Increase) Decrease in prepiad expenses	48,881	22,986
	Increase (decrease) in accounts payable	(158,129)	33,617
	Increase (decrease) in accrued expenses	(21,785)	(12,516)
	Increase (decrease) in accrued expenses - related parties	80,000	30,000
	Increase (decrease) in accrued interest - others	28,332	-
	Increase (decrease) in accrued interest - related parties	25,416	25,424

Net Cash Used by Operating Activities		(22,287)	(75,330)

Cash Flows from Financing Activities
	Proceeds from sale of common stock	-	65,000
	Decrease in bank overdraft	(10,506)	-
	Borrowing on related party notes	-	39,500
	Borrowing of convertible debt	127,500	-
	Payments on line of credit	(25,000)	-

Net Cash Provided by Financing Activities		91,994	104,500

Net Increase in Cash		69,707	29,170

Cash - Beginning of Period		1,852	26,168

Cash - End of Period		$ 71,559	$ 55,338


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Cash paid for interest expense	$ 3,683	$ 4,096
	Cash paid for income taxes	$ 800	$ -

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

In November the Company issued 80,000,000 shares of its common stock valued at $60,000
to Elasco's president, $10,000 was recorded as a bonus and $50,000 is prepaid salary to be
expensed over six months beginning mid November 2010.

The accompanying notes are an integral part of these financial statements.

Deltron, Inc. & Subsidiary.

Notes to Unaudited Condensed Consolidated Financial Statements

~~December~~ March 31, ~~2010~~2011

NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

Business Description

Deltron, Inc. (the “Company”) is a Nevada Corporation incorporated on September 14, 2005. It is based in Garden Grove, California. Through May 26, 2010 the Company was in the development stage. On May 26, 2010 the Company acquired all of the assets and liabilities of Blu Vu Deep Oil & Gas Exploration, Inc. including its ownership of 100% of the outstanding stock of Elasco, Inc. by issuance of 123,978,980 restricted common shares of its stock.

Elasco was incorporated on October 25, 1979 in the state of California. Its principal business is manufacturing and selling of open cast molded polyurethane elastomer products such as skateboard, roller skate, and industrial wheels.

After the acquisition of ~~Blu Vu~~BluVu’s assets, the Company is engaged in potential manufacture and mass-market of proprietary breathing equipment developed specifically for the oil and gas, mining and safety industries, and military and recreational divers. The technology is still under development. Production and manufacture of the equipment (primarily Closed-Circuit Rebreathers “CCRs” and components used for all types of rebreathers) will be produced by the wholly-owned subsidiary, Elasco, while the Company provides financial, operational and technical expertise.

On August 4, 2010, Deltron entered into an agreement with Radikal, AS (“Radikal”), the owner of intellectual property involving rebreather technology, to purchase its intellectual property involving said technology (the “Radikal Agreement”). The Radikal Agreement requires the Company to pay a per unit fee of $35 for at least 500 units per year for 2 years, after which the obligation to Radikal will be fulfilled. The Company is required to begin making payments in January 2012.

Pursuant to the terms of the Radikal Agreement, ~~Radikal~~Radikalhas ~~has~~ transferred all U.S. and international patent rights to the Company. However, if the per unit fee payments are not made when due, Radikal has the right to the return of the intellectual property transferred.

The acquisition of ~~Blu Vu~~BluVu’s assets and Elasco, Inc. by the Company has been accounted for as a reverse capitalization. The reverse recapitalization was the acquisition of a private operating company into a non-operating shell corporation with nominal net assets and is treated as a capital transaction, rather than a business combination. As a result no goodwill is recorded. In this situation Deltron is the legal acquirer because it acquired all of the assets and liabilities of Blu Vu and 100% of the stock of Elasco and Elasco is the legal acquiree because its equity interests were acquired. However, Elasco is the acquirer and Deltron is the acquiree for accounting purposes. The pre-acquisition financial statements of Elasco are treated as the historical

financial statements of the consolidated companies except that the equity section and earnings per share have been retroactively restated to reflect the reverse recapitalization.

Principles of consolidations

The accompanying unaudited condensed consolidated financial statements are presented in accordance with ~~U.S~~accounting ~~generally~~principlesgenerally accepted ~~accounting~~in ~~principles~~the United States of America (“GAAP”). The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Elasco. All significant intercompany transactions have been eliminated in consolidation.

Unaudited Interim ~~Periods~~Financial Data

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information required by ~~accounting~~GAAP ~~principles generally accepted in the United States of America~~ for annual financial statements. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended ~~December~~March 31, ~~2010~~2011 are not necessarily indicative of results for any future period. These statements should be read in conjunction with the consolidated financial statements and notes for the year ended September 30, 2010 thereto included in the Company’s Form 10-K filed on January 13, ~~2010~~2011.

Use of Estimates

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with ~~accounting principles generally accepted in the United States of America~~GAAP. The preparation of the Company’s consolidated financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ ~~significantly~~ from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

~~For purposes~~The ~~of reporting cash flows, the~~ Company considers all ~~short~~highly ~~term~~liquid ~~debt securities~~investments ~~purchases~~ with a maturity of three months or less to be cash equivalents. The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit of $250,000. At December 31, 2010 cash did not exceed the federally insured limit. The Company believes that the risk of loss is minimal. To date, the Company has not experienced any losses related to cash deposits with financial institutions. As of December 31, 2010, the Company had a cash balance of $35,861.

Concentration of Credit Risk

The Company deposits its cash with major financial institutions and may at times exceed the federally insured limit. At March 31, 2011 cash did not exceed the federally insured limit. The Company believes that the risk of loss is minimal. To date, the Company has not experienced any losses related to cash deposits with financial institutions.

Accounts Receivable

The Company estimates the collectability of customer receivables on an ongoing basis by reviewing past-due invoices and assessing the current creditworthiness of each customer. Allowances are provided for specific receivables deemed to be at risk for collection. As of ~~December~~March 31, ~~2010~~2011, ~~accounts receivable amounted to $418,320, net of~~ allowance of doubtful accounts of was $2,630.

Inventory

Inventory consists of raw material, work in progress, and finished goods. It is stated at the lower of cost or market on a first in, first out (FIFO) basis. The Company also evaluates and reserves allowance of obsolescence of its inventories. As of March 31, 2011, the allowance for obsolescence was $9,795.

Property and Equipment and Depreciation Policy

Property and equipment are recorded at cost, less accumulated depreciation. Cost of repairs and maintenance are expensed as they are incurred. Major repairs that extend the useful life of equipment are capitalized and depreciated over the remaining estimated useful life. When property and equipment are sold or otherwise disposed, the related cost and accumulated depreciation are removed from the respective accounts and the gains or losses realized on the disposition are reflected in operations. The Company uses the straight - line method in computing depreciation for financial reporting purposes.

Intangible assets

Costs paid by the Company related to the establishment, transfer and purchase of patented and unpatented technology and other intangibles are capitalized and amortized, depending on the estimated useful life of the technology. Useful lives range from three to ten years. Amortization is on the straight-line method.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of long-lived assets with finite lives. The Company assesses potential impairments to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is deemed not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. Based upon the most recent assessment as of March 31, 2011, management has determined there was no impairment in the carrying value of long-lived assets.

Income Taxes

The Company ~~recognizes~~accounts ~~the~~for ~~tax~~income ~~effects~~taxes ofin ~~transactions~~accordance inwith ~~the~~ASC ~~year~~740, in“Income Taxes”which ~~such transactions~~requires ~~enter~~an ~~into~~asset ~~the~~and ~~determination~~liability ofapproach ~~net~~for ~~income,~~financial ~~regardless~~accounting ofand ~~when reported~~reporting ~~for~~of ~~tax~~income ~~purposes~~taxes. Deferred income taxes ~~are~~reflect ~~provided~~the inimpact of temporary differences between the ~~financial statements~~amount ~~under~~of ~~ASC~~assets ~~740-20~~and toliabilities ~~give~~for ~~effect~~financial toreporting ~~the~~purposes ~~resulting~~and ~~temporary differences~~such ~~which~~amounts ~~may~~as ~~arise~~measured ~~from~~by ~~differences~~tax inlaws ~~the~~and ~~bases~~regulations. ofDeferred ~~fixed~~tax assets~~, depreciation~~ ~~methods,~~include ~~allowances,~~tax loss and ~~start-up~~credit ~~costs~~carry forwards and are reduced by a valuation allowance if, based on ~~the~~available ~~income~~evidence, ~~taxes expected~~it tois bemore ~~payable~~likely inthan ~~future~~not ~~years.~~that some portion or all of the deferred tax assets will not be realized.

The Company ~~follows~~adopted the ~~provisions~~FASB ofInterpretation ~~uncertain~~on ~~tax~~accounting ~~positions~~for asuncertainty ~~addressed~~ in ~~ASC 740-10-65-1~~income taxes. The ~~Company~~interpretation ~~recognized~~prescribes ~~approximately~~a nomeasurement ~~increase~~process ~~in the liability~~ for ~~unrecognized~~recording ~~tax~~in ~~benefits. The~~the ~~Company~~financial ~~has~~statements nouncertain tax ~~position as~~positions oftaken ~~December~~or ~~31,~~expected ~~2010~~to ~~for~~be ~~which~~taken ~~the~~in ~~ultimate~~a ~~deductibility~~tax isreturn. ~~highly~~Additionally, ~~certain but~~the ~~for~~interpretation ~~which~~provides ~~there~~guidance isregarding ~~uncertainty~~uncertain ~~about~~tax ~~such~~positions ~~timing~~relating ~~of such deductibility. The Company recognizes interest accrued related~~ to ~~unrecognized~~derecognition, ~~tax benefits~~classification, in interest ~~expense~~ and penalties, accounting in ~~operating~~interim ~~expenses. No such interest or penalties were recognized during the~~ periods, ~~presented. The Company~~disclosure ~~had no accruals for interest~~ and ~~penalties at December 31, 2010~~transition. The Company’s ~~utilization~~will ofclassify any ~~net~~interest ~~operating~~and ~~loss~~penalties ~~carry~~associated ~~forward~~with ~~may~~income ~~be unlikely~~taxes as ainterest ~~result of its continued losses~~expense.

Fair Value of Financial Instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial

instruments held by the Company. The Company considers the carrying amount of cash, prepaid expenses, accounts payable and accrued liabilities, to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.

The Company has also adopted ASC 820-10 (formerly SFAS 157, “Fair Value Measurements”) which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow:

· Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

As of December 31, 2010, the Company used level 3 inputs for its valuation methodology for the fair value of its notes payable and derivative liability as following:

	Carrying Value		Fair Value Measurements at
	As of		December 31, 2010
	December 31,		Using Fair Value Hierarchy
	2010		Level 1		Level 2		Level 3
Liabilities
Notes payable – related party		1,095,110		-		-		1,219,900
Convertible notes – related parties		155,196		-		-		177,600
Convertible notes		33,805						81,300
Derivative liability – conversion options		65,874		-		-		65,874
Total	$	1,349,985	$	-	$	–	$	1,544,674

As of December 31, 2010 the Company did not identify any other assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 820-10.

Revenue Recognition

The Company recognizes revenues through its consolidated fully owned subsidiary. Revenues are recognized from product sales upon delivery, at which time title passes to the customer provided that there are no uncertainties regarding customer acceptance, persuasive evidence of an arrangement exists, the sales price is fixed and determinable and collectability is deemed probable.

Advertising Costs

Advertising costs are charged to operations when incurred.

Share-Based Compensation

The Company has adopted ASC 718-20 (formerly SFAS No. 123R, Share-Based Payment -revised 2004) (“ASC718-20”) and related interpretations which establish the accounting for equity instruments exchanged for employee services. Under ASC 718-20, share-based compensation cost is measured at the grant date based on the calculated fair value of the award. The expense is recognized over the employees’ requisite service period, generally the vesting period of the award.

Segment Information

Based on the criteria established by ASC Topic 280 “Segment report” (formerly SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information”), the Company uses the management approach for determining which, if any, of its products and services, locations, customers or management structures constitute a reportable business segment. The management approach designates the internal organization that is used by management for making operating decisions and assessing performance as the source of any reportable segments. As of December 31, 2010, the Company mainly operated in two principal segments – development of the rebreather system and sales of polyurethane elastomer products. The rebreather system is still under development and has not generated any revenue. The following tables present summarized information by segments:

		Three Months Ended December 31,
		2010		2009
Revenues
	Rebreather	$	-	$	-
	Polyurethane		905,401		511,556
		$	905,401	$	511,556
Cost of sales
	Rebreather	$	-	$	-
	Polyurethane		778,016		435,062
		$	778,016	$	435,062
Gross Profit
	Rebreather	$	-	$	-
	Polyurethane		127,385		76,494
		$	127,385	$	76,494
Selling, general and administrative expenses
	Rebreather	$	104,973	$	71,046
	Polyurethane		105,507		90,185
		$	210,480	$	161,231
Income / (Loss) from operations
	Rebreather	$	(104,973)	$	(71,046)
	Polyurethane		21,878		(13,691)
		$	(83,095)	$	(84,737)

decisions and assessing performance as the source of any reportable segments. As of March 31, 2011, the Company mainly operated in two principal segments – development of the rebreather system and sales of polyurethane elastomer products. The rebreather system is still under development and has not generated any revenue. The following tables present summarized information by segments:

			December 31,		September 30,
		Six Months Ended March 31,
			2010		2010
		2011		2010
Revenues from external customers
	Rebreather		$ -		$ -
	Polyurethane		1,728,901		1,115,059
			$ 1,728,901		$ 1,115,059
Cost of sales
	Rebreather		$ -		$ -
	Polyurethane		1,414,803		994,373
			$ 1,414,803		$ 994,373
Gross Profit
	Rebreather		$ -		$ -
	Polyurethane		314,098		120,686
			$ 314,098		$ 120,686
Selling, general and administrative expenses
	Rebreather		$ 207,482		$ 57,140
	Polyurethane		223,924		254,348
			$ 431,406		$ 311,488
Income / (Loss) from operations
	Rebreather		$ (207,481)		$ (57,140)
	Polyurethane		90,173		(133,662)
			$ (117,308)		$ (190,802)
			March 31,		September 30,
			2011		2010
Total Assets
	Rebreather	$	77$ 3,~~374~~165,806	$	$ 42,852
	Polyurethane		~~871~~1,~~410~~002,753		1,045,136
		$	948,784	$	1,087,988
			$ 4,168,559		$ 1,087,988

Comprehensive Income (Loss)

ASC 220-10 (formerly, SFAS No. 130, Reporting Comprehensive Income) (“ASC 220-10”), requires disclosure of all components of comprehensive income (loss) on an annual and interim basis. Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive income (loss) is the same as its reported net income (loss) for the three months ended December 31, 2010 and 2009.

Basic and Diluted Per Common Share

The Company has adopted ASC 260-10, “Earnings per Share,” (EPS) which requires presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying unaudited condensed consolidated financial statements, basic net loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. For the three months ended December 31, 2010, the Company has excluded all common equivalent shares from the calculation of diluted net loss per share as such securities are anti-dilutive. For the three months ended December 31, 2009, the Company did not have common equivalent shares.

the net loss for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period. For the three and six months ended March 31, 2011 and 2010, the Company has excluded all common equivalent shares from the calculation of diluted net loss per share as such securities are anti-dilutive.

Significant Recent Accounting Pronouncements

In ~~October~~ ~~2009~~January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards ~~Codification~~Update ~~Topic~~(“ASU”) No. ~~605, Multiple~~2010-~~Deliverable~~06 ~~Revenue~~regarding ~~Arrangements~~fair value measurements and disclosures and improvement in the disclosure about fair value measurements. This ~~guidance~~ASU ~~establishes~~requires aadditional ~~selling price~~disclosures ~~hierarchy~~regarding ~~for~~significant ~~determining~~transfers ~~the~~in ~~selling~~and ~~price~~out of aLevels ~~deliverable~~1 and ~~expands the~~2 ~~disclosures~~of ~~required~~fair ~~for~~value ~~multiple-deliverable~~measurements, ~~revenue~~including ~~arrangements~~a description of the reasons for the transfers. Further, ~~This guidance~~this isASU ~~effective~~requires additional disclosures for ~~revenue~~the ~~arrangements~~activity ~~that~~in ~~are~~Level ~~entered~~3 ~~into~~fair orvalue ~~are materially~~measurements, ~~modified~~requiring presentation of information about purchases, sales, issuances, and settlements in the reconciliation for fair value measurements. This ASU is effective for fiscal years beginning ~~on or~~ after ~~June~~March 15, 2010, ~~with early~~and ~~adoption~~for ~~permitted~~interim periods within those fiscal years. The Company does not expect the adoption ~~will~~of this ASU to have noa material impact on ~~the Company’s~~our financial statements.

In ~~January~~ February 2010, the FASB issued ASU No. 2010-0609 ~~regarding~~(“ASU ~~fair~~2010-09”) ~~value measurements~~as ~~and~~amendments ~~disclosures~~to certain recognition and ~~improvement~~disclosure inrequirements. ~~the~~The ~~disclosure~~amendments ~~about~~remove ~~fair~~the ~~value measurements. This~~requirement ~~ASU~~for ~~requires~~an ~~additional~~SEC ~~disclosures~~filer ~~regarding significant~~to ~~transfers~~disclose a date in both issued and ~~out~~revised offinancial ~~Levels~~statements. 1Revised ~~and~~financial 2statements ofinclude ~~fair~~financial ~~value~~statements ~~measurements, including~~revised as a ~~description~~result of ~~the~~either ~~reasons~~correction ~~for~~of ~~the~~an ~~transfers~~error or retrospective application of U. ~~Further,~~S. ~~this ASU~~GAAP. ~~requires~~Those ~~additional~~amendments ~~disclosures~~remove ~~for~~potential conflicts with the ~~activity~~SEC’s literature. All of the amendments in ~~Level~~ASU 32010-09 ~~fair~~were ~~value measurements,~~effective ~~requiring~~upon ~~presentation~~issuance for interim and annual periods. The adoption of ASU ~~information~~2010-09 did ~~about~~not ~~purchases,~~have ~~sales, issuances,~~a ~~and~~material ~~settlements~~impact inon the Company’s consolidated financial statements

~~reconciliation~~In ~~for~~March ~~fair~~2010, ~~value~~the ~~measurements~~FASB issued ASUNo. ~~This~~ ~~ASU~~2010-11, which is ~~effective~~ ~~for~~included ~~fiscal~~in ~~years~~the ~~beginning~~Codification ~~after~~under ~~December~~ASC 15815, ~~2010,~~“Derivatives and ~~for~~Hedging” ~~interim periods~~(“ASC ~~within~~815”). This ~~those~~update ~~fiscal~~clarifies ~~years~~the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. ~~The~~Only ~~Company~~an ~~does~~embedded ~~not~~credit ~~expect~~derivative that is related to the subordination of one financial instrument to another qualifies for the exemption. This guidance is effective for interim and annual reporting periods beginning January 1, 2010. The adoption of this ~~ASU~~standard todid not have a material impact on ~~our~~the Company’s consolidated financial statements.

In ~~February~~ August 2010, the FASB issued ~~Accounting~~ASU ~~Standards Update~~ No. 2010-0922, ~~(“ASU 2010-09”)~~which asamended ~~amendments~~various toSEC ~~certain~~paragraphs ~~recognition~~in ~~and disclosure requirements. The amendments remove~~ the ~~requirement~~Codification ~~for~~based anon ~~SEC~~external ~~filer~~comments toreceived ~~disclose a date in both issued~~ and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. Those amendments remove potential conflicts with the ~~SEC’s~~issuance ~~literature. All~~ of ~~the~~Staff ~~amendments~~Accounting inBulletin ~~ASU~~(“SAB”) ~~2010-09~~112, ~~were effective~~which ~~upon~~amended ~~issuance~~or ~~for~~rescinded ~~interim~~portions ~~and annual periods. The adoption~~ of ~~ASU 2010-09 did~~ ~~not~~certain ~~have~~SAB ~~a material impact on the Company’s consolidated financial statements~~topics.

In March 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-11, which is included in the Codification under ASC 815, “Derivatives and Hedging” (“ASC 815”). This update clarifies the type of embedded credit derivative that is exempt from embedded derivative bifurcation requirements. Only an embedded credit derivative that is related to the subordination of one financial instrument to another qualifies for the exemption. This guidance is effective for interim and annual reporting periods beginning January 1, 2010. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

NOTE 2 – GOING CONCERN

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of ~~December~~March 31, ~~2010~~2011 the company had a ~~net~~accumulated deficit ~~in retained earnings~~ of $(3,~~261~~306,~~750~~931) and a net loss of $(~~183~~45,~~159~~181) for the quarter then ended. These matters create substantial doubt about the Company’s ability to continue as a going concern. For the quarter ended December 31, 2010, the Company is able to pay its obligations to vendors from funds raised from issuance of convertible notes. The Company intends on financing its future development activities from the same sources, until such time that funds provided by operations are sufficient to fund working capital requirements.

substantial doubt about the Company’s ability to continue as a going concern. For the quarter ended March 31, 2011, the Company is able to pay its obligations to vendors from funds raised from issuance of convertible notes. The Company intends on financing its future development activities from the same sources, until such time that funds provided by operations are sufficient to fund working capital requirements.

NOTE 3 – INVENTORY

Inventory consisted of the following ~~at December 31, 2010 and September 30, 2010.~~:

	December 31, 2010	September 30, 2010
	March 31, 2011	September 30, 2010
Raw material	$ ~~231~~273,~~879~~305	$ 232,962
Work in process	4039,~~226~~557	41,513
Finished goods	~~113~~118,~~590~~185	67,996
	385,695	342,471
	431,047	342,471
Less allowance for obsolete inventory	(9,795)	(9,795)
	$ 421,252	$ 332,676

$ 375,900 $ 332,676

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following ~~at December 31, 2010 and September 30, 2010.~~:

	December 31, 2010	September 30, 2010
	March 31, 2011	September 30, 2010
Machinery & equipment	$ 237,377	$ 237,377
Tooling	139,138	139,138
Computer equipment	94,383	94,383
Leasehold improvements	38,720	38,720
Furniture, fixtures and office equipment	17,033	17,033
	526,651	526,651
Less accumulated depreciation	~~497~~500,~~262~~112	494,412
	$ 29,389	$ 32,239
	$ 26,539	$ 32,239

NOTE 5 – ~~LINE~~INTANGIBLE ~~OF CREDIT~~ASSET

~~The Company~~In ~~has~~February ~~entered~~2011 ~~into~~the aCompany ~~line~~issued ~~of credit agreement with~~ a ~~bank. The maximum~~convertible ~~borrowing~~note ispayable ~~$100,000. Interest~~(see isNote ~~calculated~~8) atto ~~prime~~acquire ~~plus 1.5% (with~~ an ~~interest~~unpatented ~~rate~~rebreather ~~floor~~technology offrom ~~6.5%)~~an ~~and~~unrelated ~~is paid monthly~~party. The ~~agreement expires~~Company ~~December~~intends 5,to ~~2011~~manufacture atand ~~which~~sell ~~time~~these ~~the~~systems ~~entire~~for ~~principal~~use ~~balance~~in isnon-pressurized ~~due. The~~sport ~~line~~and ofmilitary ~~credit~~subs. isAmortization ~~personally~~expense ~~guaranteed~~approximated ~~by the Trust of the former owner of Elasco~~$26,250 ~~who~~for is the ~~president~~six ofmonths ~~the~~ended ~~Company. The~~March ~~outstanding balance at December~~ 31, ~~2010 and September 30, 2010 is $100,000 and $125,000, respectively, at 6~~2011.~~5%.~~

NOTE 6 – ~~NOTES PAYABLE~~LINE –OF ~~RELATED PARTIES~~CREDIT

~~Concurrent~~The ~~with~~Company ~~the~~has ~~sale~~a ofline ~~Elasco to Blu Vu, the previous owner, Henry Larrucea,who is the current officer and director~~ of ~~the~~credit ~~Company, agreed~~agreement ~~to exchange his outstanding demand note,~~ with ~~an outstanding balance of $856,750, for~~ a 10bank. The ~~year~~maximum ~~note~~borrowing atis ~~5% for~~ $~~600~~100,000. ~~The~~Interest ~~difference of~~is ~~$256,750~~calculated ~~was~~at ~~recorded~~prime asplus a1.5% ~~gain~~(with inan ~~other income in the year ended September 30, 2009. Total~~ interest ~~paid~~rate orfloor ~~accrued for the shareholder for the three months ending December 31, 2010 was $7,347 and the balance~~ of ~~the note as of December 31, 2010 was $587,684~~6.5%) ~~Payments~~and ~~have~~is ~~not~~paid ~~been made on this note since July 2009~~monthly. ~~There was $43,151 of accrued interest at December 31, 2010.~~

~~Mr. Larrucea~~The ~~also~~agreement ~~received~~expires aDecember ~~promissory~~5, ~~note~~2011 ~~for~~at ~~the~~which ~~stock~~time ofthe ~~Elasco~~entire ~~for~~principal ~~$540,000. The~~balance ~~note~~ is due ~~in monthly payments of $10,000 and bears interest at 4~~.~~23%.~~ The ~~note~~line ~~is secured by the stock~~ of ~~Elasco. Total~~credit ~~interest paid~~is orpersonally ~~accrued~~guaranteed ~~for~~by the ~~three~~Trust ~~months ending December 31, 2010 was $5,367 and the balance~~ of the ~~note~~former asowner of ~~December 31~~Elasco, ~~2010~~who ~~was~~is ~~$507,425. Payments~~the ~~have not~~CEO ~~been made on this note since August 2009. There was $30,528~~ of ~~accrued interest~~the ~~at December 31, 2010~~Company.

~~Both~~NOTE ~~of these~~7 ~~notes~~– ~~are~~NOTES ~~currently~~PAYABLE in– ~~default~~RELATED ~~due to non-payment of principal and interest. Upon default the loans become due on demand. Mr. Larrucea has granted a waiver which waives the~~ PARTIES

~~default under~~Concurrent with the ~~terms~~sale of Elasco to Blu Vu, the ~~notes~~previous owner, Henry Larrucea, who is the current officer and ~~releases~~director of the ~~company~~Company, ~~from~~agreed ~~liquidated~~to ~~damages provision~~exchange his outstanding demand note, with an outstanding balance of $856,750, for a 10 year note at 5% for $600,000. The difference of $256,750 was recorded as a gain in other income in the year ended September 30, 2009. Total interest paid or accrued for the shareholder for the three months ending March 31, 2011 was $7,341 and the balance of the note as of March 31, 2011 was $587,684. Payments have not been made on this note since July 2009. There was $50,492 of accrued interest at March 31, 2011.

~~The Company~~Mr. ~~has~~Larrucea ~~two~~also ~~notes~~received ~~payable~~a topromissory ~~shareholders~~note for ~~$20,000 and $19,500, which it acquired under~~ the ~~May~~stock 26of ~~Blu~~Elasco Vufor ~~asset purchase agreement~~$540,000. ~~These~~The ~~notes~~note ~~are~~ is due onin ~~May~~monthly ~~28,~~payments ~~2011~~of $10,000 and ~~bear~~bears interest at 54.023%. ~~Both~~The ~~notes~~note ~~are~~is ~~convertible into~~secured ~~shares~~by of the ~~Company’s~~stock ~~common~~of ~~stock~~Elasco. The atbalance aof ~~conversion~~the ~~discount~~note as of ~~70%~~March of31, ~~the stocks~~2011 ~~bid~~was ~~price~~$507,425. Payments ~~but~~have innot nobeen ~~event~~made ~~shall~~on ~~the~~this ~~conversion~~note ~~price~~since beAugust ~~less~~2009. There ~~than~~was ~~par value~~$35,895 of $0accrued interest at March 31, 2011.~~001.~~

~~The Company~~Both ~~has nine notes payable to shareholders for a total~~ of ~~$136,000. These~~these notes are ~~due~~currently ~~ranging~~in ~~from~~default ~~September~~due ~~17, 2010~~ to ~~March~~non-payment ~~28,~~of ~~2011~~principal ~~all bearing~~and interest ~~at 5~~.~~0%.~~ ~~All~~Upon ~~nine~~default ~~notes~~the ~~are~~loans ~~convertible~~become ~~into~~due ~~shares~~on ~~of the~~demand. Mr. ~~Company’s~~Larrucea ~~common~~has ~~stock~~granted at a ~~conversion~~waiver ~~discount~~which ofwaives ~~70% of~~ the ~~stocks~~default ~~bid price~~under ~~but~~the interms noof ~~event shall~~ the ~~conversion~~notes ~~price~~and bereleases ~~less~~the ~~than~~company ~~par~~from ~~value~~liquidated ~~of $0~~damages provision.~~001.~~

AsThe ~~of December~~Company 31has two notes payable to shareholders for $20,000 ~~2010~~and $19,500, which it assumed under the ~~Company~~May ~~had~~26 ~~authorized~~Blu ~~unissued~~Vu ~~common~~asset ~~stock~~purchase ~~of 9,241,521,020~~agreement. These ~~shares~~notes are due on May 28, ~~which~~2011 isand ~~sufficient~~bear tointerest ~~cover~~at 5.0%. Both notes are convertible into shares toof bethe ~~issued~~Company’s ~~upon~~ common stock at a conversion discount of ~~all~~70% ~~convertible~~of ~~notes~~the stocks bid price but in no event shall the conversion price be less than par value of $0.001.

~~Current~~The ~~maturities~~Company ~~of the~~has nine notes payable to shareholders for ~~each~~a total of ~~the~~$136,000. These ~~five~~notes ~~years~~are ~~ending~~due ranging from September 3017, 2010 to March 28, 2011 all bearing interest at 5.0%. All nine notes are asconvertible ~~follows:~~ into shares of the Company’s common stock at a conversion discount of 70% of the stocks bid price but in no event shall the conversion price be less than par value of $0.001. None of these notes are considered derivatives. As of March 31, 2011 these notes are in default and the Company has extended or is in the process of extending these for six months.

Year		Amount
2011	$	546,442
2012		163,779
2013		171,275
2014		118,656
2015		62,355
Thereafter		208,103
Total	$	1,270,610

As of March 31, 2011, the Company had authorized unissued common stock of 9,241,521,020 shares, which is sufficient to cover shares to be issued upon conversion of all convertible notes.

NOTE 78 – CONVERTIBLE NOTES PAYABLE

In October, November and December 2010, the Company entered into securities purchase agreements (the “Purchase Agreements”) with an investor and issued three 10% convertible promissory notes with face amounts of $35,000, $30,000 and $12,500 respectively (the “Convertible Notes”) and received cash proceeds of $77,500. The Notes mature in eight months from the date of issuance, and provide for nominal interest at the rate of ten (10%) percent per annum. The Notes may be converted into unregistered shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at the Conversion Price, as defined below, in whole, or in part, at any time beginning 180 days after the date of the Notes, at the option of the holder. The Conversion Price shall be equal to 50% multiplied by the Variable Conversion Rate which is equal to the average of the three (3) lowest closing bid prices of the Common Stock during the ten (10) trading day period prior to the date of conversion. The 50% discounted Conversion Price establishes a conversion feature which is required to be treated as a derivative

~~liability~~“Convertible Notes”) and ~~presented~~received atcash ~~fair~~proceeds ~~value. The derivative obligation arises because, based on historical trading patterns~~ of ~~the Company’s stock~~$77, the formula for determining the Conversion Rate is expected to result in a lower Conversion Rate than the closing price of the stock on the actual date of conversion (hereinafter referred to as the “Variable Conversion Rate Differential”)500. The ~~Company~~Notes ~~selected~~mature ~~the historical simulation approach to value this derivative liability believing that this method results~~ in aeight ~~valuation~~months ~~that most~~from ~~closely relates to~~ the ~~economic~~date ~~reality~~ of ~~these transactions. Under this approach~~issuance, ~~the~~and ~~Company~~provide ~~computed the Variable Conversion Rate Differential~~ for ~~each~~ ~~trading~~nominal ~~day~~interest ~~during~~at the ~~twelve~~rate ~~month period prior to the date~~ of ~~issuance~~ten ~~of each~~(10%) ~~convertible~~percent ~~promissory~~per ~~note and then computed the average of these daily Variable Conversion Rate Differentials over the twelve month period~~annum. ~~In accordance~~The ~~with~~Notes ~~GAAP,~~may ~~the derivative liability is required to~~ be ~~re-evaluated~~converted ~~at each~~into ~~balance~~unregistered ~~sheet~~shares ~~date. The total unamortized discount represented by the value~~ of the ~~conversion~~Company’s ~~feature~~common ~~and~~stock, ~~the~~par ~~derivative~~value ~~liability~~$0.001 isper ~~being~~share ~~accreted over~~ (the ~~eight~~“Common ~~month~~Stock”), ~~period~~at ~~until~~ the ~~conversion~~Conversion ofPrice, ~~the~~as ~~convertible~~defined ~~promissory notes~~below, ~~into common stock is permitted. This results~~ in ~~an overall effective interest rate of 83% on the $77~~whole,~~500~~ ~~convertible~~or ~~notes.~~in ~~Accordingly~~part, onat ~~issuance date,~~any ~~the~~time ~~Company~~beginning ~~recorded~~180 ~~derivative~~days ~~liability~~after ~~and discount on~~ the ~~Convertible Notes~~date of ~~$59,020. For~~ the ~~three month period ended December 31~~Notes, ~~2010,~~at the ~~amount of~~option ~~interest expense resulting from accretion~~ of the ~~unamortized discount on the convertible promissory notes amounted to $15,325~~holder. The ~~remaining unamortized~~Conversion ~~balance~~Price ofshall ~~this~~be ~~discount,~~equal ~~which amounted~~ to ~~$43,695,~~50% ~~has~~multiplied ~~been~~by ~~netted against~~ the ~~face~~Variable ~~amount~~Conversion ofRate ~~the convertible promissory notes resulting in a net carrying amount of $33,805~~ which is ~~included~~equal into the ~~accompanying~~average ~~balance~~of ~~sheet at~~the ~~December~~three ~~31,~~(3) ~~2010. As~~lowest ofclosing ~~December~~bid ~~31,~~prices ~~2010, fair value~~ of the ~~derivative~~Common ~~liability~~Stock ~~was~~during ~~$65,874 and~~ the ~~change~~ten in(10) ~~fair~~trading ~~value~~day ofperiod ~~$6,854~~prior ~~was recorded~~to ~~against income for~~ the ~~quarter~~date ~~ended~~of ~~December 31, 2010~~conversion.

~~NOTE~~ In January 2011, the Company entered into securities purchase agreements (the “Purchase Agreements”) with an investor and issued 8% –convertible ~~CONCENTRATION~~promissory OFnotes ~~CREDIT~~with ~~RISK~~a face amount of $50,000 (the “Convertible Note”) and received cash proceeds of $50,000. The Note matures in ten months from the date of issuance, and provide for nominal interest at the rate of eight (8.0%) percent per annum. The Note may be converted into unregistered shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at the Conversion Price, as defined below, in whole, or in part, at any time beginning 180 days after the date of the Notes, at the option of the holder. The Conversion Price shall be equal to 50% multiplied by the Variable Conversion Rate which is equal to the average of the three (3) lowest closing bid prices of the Common Stock during the ten (10) trading day period prior to the date of conversion.

~~A material~~As ~~part~~mentioned ofabove, the ~~Company’s~~convertible ~~account~~notes ~~receivables~~payable isonly ~~outstanding~~become ~~with~~convertible ~~five customers. The~~180 ~~amount~~days ~~owed~~from byissuance, ~~these~~accordingly, ~~customers~~as atof ~~December~~March 31, ~~2010 was $344~~2011,~~131, approximately~~ ~~82%~~and ofuntil the ~~Company’s~~notes ~~receivables. Sales~~payable ~~to the~~become ~~top five customers represented 79% of total sales. The amount owed by these customers at September 30~~convertible, ~~2010~~there ~~was~~were ~~$518,092,~~no ~~approximately~~derivative ~~78%~~liability ofrecorded ~~the Company’s~~as ~~receivables. Sales~~a toresult ~~these five customers represented 76%~~ of ~~total~~ ~~sales for~~ the ~~quarter~~conversion ~~ended December 31, 2009~~feature. ~~Sales are concentrated in the western United States.~~

~~For~~In February 2011, the ~~three~~ ~~months~~Company ~~ended~~purchased ~~December~~technology 31from an unrelated party for $3,150,000 ~~2010~~by ~~and~~issuing ~~2009~~a 5% convertible promissory note. The Note is due on demand, but not sooner than six months from the ~~Company~~date ~~purchased approximately~~of ~~$324~~issuance,~~808~~ and ~~115,166,~~provides ~~respectively,~~for ofnominal ~~raw~~interest ~~material~~at ~~from~~the ~~five suppliers,~~rate ~~representing~~of 80eight (5.0%) ~~and~~percent ~~71%,~~per ~~respectively,~~annum. The Note may be converted into unregistered shares of the Company’s ~~total purchases~~common stock, par value $0.001 Asper ofshare ~~December~~(the 31“Common Stock”), ~~2010~~at ~~and~~the ~~September~~Conversion 30Price, ~~2010~~as defined below, ~~amounts~~in ~~owed~~whole, toor ~~these five~~in ~~suppliers~~part, ~~were~~at ~~approximately~~any ~~$233,284~~time ~~and~~beginning ~~$186~~180 days after the date of the Notes,~~000~~ ~~representing~~at ~~80%~~the ~~and 41~~option of the holder. The Conversion Price shall be equal to 30%, ~~respectively,~~multiplied by the Variable Conversion Rate which is equal to the average of the ~~total~~three ~~accounts~~(3) ~~payable~~lowest closing bid prices of the Common Stock during the ten (10) trading day period prior to the date of conversion.

~~NOTE~~As 9mentioned ~~– COMMITMENTS~~above, –the ~~RELATED~~convertible ~~PARTIES~~notes payable only become convertible 180 days from issuance, accordingly, as of March 31, 2011, and until the notes payable become convertible, there were no derivative liability recorded as a result of the conversion feature.

~~The Company~~NOTE ~~leases~~9 a– ~~manufacturing~~CONCENTRATION ~~and~~OF ~~office~~CREDIT facility from a related partnership as an operating lease which expires in 2015. This lease currently requires monthly payments of $5,533 plus related insurance and maintenance. Rental expense under this lease for the three months ended December 31, 2010 was $16,599 all of which was paid to a related party.RISK

~~Future~~A ~~rental payments~~material ~~required~~part ~~under~~of ~~this~~the ~~operating~~Company’s ~~lease~~account receivables is outstanding with five customers. The amount owed by these customers at March 31, 2011 was $396,366, approximately87% of the Company’s receivables. Sales to the top five customers represented 84% of total sales. The amount owed by these customers at September 30, 2010 was $518,092, approximately 78% of the Company’s receivables. Sales to the top five customers represented 83% of total sales for the quarter ended March 31, 2010.Sales are asconcentrated ~~follows:~~in the western United States.

~~Year Ended~~For the three months ended March 31, 2011 and 2010, the Company purchased approximately $138,000 and $136,000, respectively, of raw material from five suppliers, representing 43% and 46%, respectively, of the Company’s total purchases. As of March 31, 2011 and September 30, 2010, amounts owed to these five suppliers were approximately $146,048 and $186,000 representing 64% and 41%, respectively, of the total accounts payable.

~~September 30,~~NOTE 10 – COMMITMENTS – RELATED PARTIES

The Company leases a manufacturing and office facility from a related partnership as an operating lease which expires in 2015. This lease currently requires monthly payments of $5,533 plus related insurance and maintenance. Rental expense under this lease for the three and six months ended March 31, 2011 was $16,599 and $33,198, respectively, all of which was paid to a related party. Total future lease payments through September 30, 2015 are $298,782.

The Company has an employment agreement with Jeff Bozanic to develop its re-breather technology. The agreement is for three years starting January 1, 2010 at a cost of $ 4910,~~797~~000 per month. As of March 31, 2011, the Company owed Mr. Bozanic $150,000. This amount is classified as accrued expenses – related parties on the balance sheet.

2012

66,396

2013 66,396

2014

66,396

2015

66,396

The Company has an employment agreement with Jeff Bozanic to develop its re-breather technology. The agreement is for three years starting January 1, 2010 at a cost of $10,000 per month. As of December 31, 2010, the Company owed Mr. Bozanic $120,000.

Prior to the asset purchase agreement between Blu Vu and Deltron, Blu Vu was in negotiations with Radikal, AS (“Radikal”), the owner of intellectual property involving rebreather technology, to purchase its intellectual property involving said technology. At that time, Blu Vu did not own any rebreather technology. No agreement was reached between Blu Vu and Radikal prior to the asset purchase agreement with Deltron. On August 4, 2010, the Company entered into an agreement with Radikal to purchase its intellectual property involving said technology (the “Radikal Agreement”). The Radikal Agreement requires the Company to pay a per unit fee of $35 for at least 500 units per year for 2 years, after which the obligation to Radikal will be fulfilled.

Pursuant to the terms of the Radikal Agreement, Radikal has transferred all U.S. and international patent rights to the Company. If the per unit fee payments are not made when due, Radikal has the right to the return of the intellectual property transferred. Payments for these rights are not required to begin until January 2012.

NOTE 1011 – STOCK HOLDER EQUITY

At ~~December~~ March 31, 2009 the Company had 5,545,000 shares of common stock, par value $0.001, outstanding. On March 10, 2010, the Corporation’s Board of Directors approved a one hundred-for-one (100:1) forward split of the Corporation’s common stock, par value $0.001 per share. The forward split was for shareholders of record as of the close of business on Friday, April 30, 2010, and the market effective date for the ~~reverse~~forward stock split was May 3, 2010. As a result of the forward stock split, for every one share of the Corporation’s old common stock shareholders received ninety-nine additional shares of the Corporation’s new common stock. Immediately following the forward split, the number of shares of the Corporation’s outstanding issued common stock was increased from 5,545,000 shares to approximately 554,500,000 shares, par value $0.001.

On May 26, 2010, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Blu Vu Deep Oil & Gas Exploration, Inc., a Nevada corporation. Under the terms of the Agreement, the Company purchased substantially all of the assets of Blue Vu, consisting of, but not limited to, all stock of ~~Blu Vu~~BluVu’s subsidiary, Elasco, Inc., certain intellectual properties, computer programs and software, contracts, claims and accounts receivables associated with the operation of ~~Blu Vu~~BluVu’s business of developing underwater deep breathing apparatus. In consideration of the sale of the assets of Blu Vu, the shareholders of BluVu, received restricted common shares of the Company totaling 123,978,980. No other consideration was exchanged in the transaction.

~~consideration~~In ofNovember 2010, the ~~sale~~Company ofissued ~~the~~80,000,000 ~~assets~~shares ofto ~~Blu~~Elasco’s ~~Vu,~~president ~~the shareholders~~as ofa ~~Blu~~bonus Vuof $10,000 ~~received~~and ~~restricted~~prepaid ~~common~~salary ~~shares~~ of $50,000 over the ~~Company totaling~~next ~~123,978,980~~six months under an Employee Stock Incentive Program (ESIP). No ~~other~~This ~~consideration~~amount ~~was~~is ~~exchanged~~recorded inunder prepaid expenses on the ~~transaction~~ March 31, 2011 balance sheet.

~~In November~~NOTE ~~2010,~~12 ~~the~~– ~~Company~~INCOME ~~issued 80,000,000 shares to Elasco’s president as a bonus of $10,000 and prepaid salary of $50,000 over the next six months under an Employee Stock Incentive Program (ESIP).~~TAXES

As of December 31, 2010, the number of common shares issued and outstanding was 758,478,980.

NOTE 11 – INCOME TAXES

The Company recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

The Company incurred no income taxes for the periods ended ~~December~~March 31, ~~2010~~2011 and ~~December~~ March 31, ~~2009~~2010 except for $800 each year for state franchise taxes. For the three and six months ended ~~December~~March 31, ~~2010~~2011 the Company had incurred a loss and had a state income tax payable of $800 at ~~December~~March 31, ~~2010~~2011. No income tax benefit was recognized as of ~~December~~March 31, ~~2010~~2011 and ~~December~~March 31, ~~2009~~2010 as a result of the valuation allowance applied to deferred tax assets, due to the uncertainty of recognizing any future tax benefits from the NOL.

The Company’s net loss of ~~approximately~~ $~~(183~~228,~~159)~~340 for the six months ended March 31, 2011 will be carried forward to offset future taxable income. As of ~~December~~March 31, ~~2010~~2011, the Company’s federal NOL is approximately $~~386~~365,000 expiring in 2025, and its California NOL is approximately $~~296~~275,000 expiring 2015. The Company has book/tax differences of approximately $~~270~~335,000 comprised of accrued officer’s compensation of $7090,000, accrued consulting of $~~120~~150,000 and accrued interest of $8095,000. These differences result in a deferred tax asset of approximately $91114,000. The federal and California NOLs result in a deferred tax asset of approximately $~~124~~110,000. Due to the uncertainty of recognizing any future benefit, the Company has recorded a valuation allowance of $~~215~~110,000 to offset the deferred tax asset. The valuation allowance increased $6978,600 from September 30, 2010, as a result of the uncertainty of utilizing the deferred tax assets.

The deferred tax asset comprised the following at ~~December~~March 31, ~~2010~~2011:

Deferred tax asset:
	Federal benefit of NOL carryover	$ 9686,~~500~~000
	California benefit of NOL carryover	2724,~~500~~000
	Accrued officer's compensation	2431,000
	Accrued consulting	4051,000
	Accrued interest	2732,000
	Total	224,000
	Valuation allowance	(224,000)
	Net deferred tax asset	$ -

	Total			215,000
	Valuation allowance			(215,000)
	Net deferred tax asset			$ -

The Company recognized approximately no increase in the liability for unrecognized tax benefits. The Company has no tax position as of March 31, 2011 for which the ultimate deductibility is highly certain but for which there is uncertainty about such timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at March 31, 2011. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its continued losses.

NOTE 1213 – SUBSEQUENT EVENTS

~~The~~Subsequent to year end, the Company ~~has evaluated~~issued ~~subsequent~~40,000,000 ~~event~~shares ~~for~~to ~~purposes~~an employee of ~~recognition~~Elasco orand ~~disclosure~~28,000,000 into ~~the financial~~Elasco’s ~~statements~~president ~~through~~as prepaid salary over the ~~date~~next offour ~~issuance~~months ofunder ~~its~~an ~~financial statements~~Employee Stock Incentive Program (ESIP).

~~On January~~ITEM ~~21, 2011, the Company issued a convertible note for $50,000~~2. The note is due on October 24, 2011 and accrues interest at 8.0%. The Note may be converted into unregistered shares of the Company’s common stock, par value $0.001 per share at the Conversion Price, as defined below, in whole, or in part, at any time beginning 180 days after the date of the Notes, at the option of the holder. The Conversion Price shall be equal to 50% multiplied by the Variable Conversion Rate which is equal to the average of the three (3) lowest closing bid prices of the Common Stock during the ten (10) trading day period prior to the date of conversion.

~~ITEM~~MANAGEMENT’S 2.DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~ Overview

~~Forward-Looking~~As ~~Statements~~previously described, we completed an Asset Purchase under which Deltron acquired the assets of Blu Vu Deep Oil & Gas Exploration, Inc. The transaction was treated as a reverse recapitalization, with BluVu’s wholly owned subsidiary, Elasco, Inc. (“Elasco”) becoming the accounting acquirer. Therefore, Deltron assumed the fiscal year end of Elasco of December 31. On August 13, 2010, following the completion of the Asset Purchase Agreement, the Company adopted the fiscal year end of the former shell Company of September 30 for financial reporting purposes.

~~Except~~The ~~for~~following ~~historical~~discussion ~~information,~~highlights ~~this report contains forward-looking statements within~~ the ~~meaning~~principal offactors ~~Section~~that ~~27A~~have ofaffected ~~the~~our ~~Securities Act~~financial ofcondition ~~1933~~ and ~~Section~~results ~~21E~~ of ~~the~~operations ~~Securities~~as ~~Exchange~~well ~~Act~~as ofour ~~1934. Such forward-looking~~liquidity ~~statements involve risks~~ and ~~uncertainties,~~capital ~~including,~~resources ~~among other~~for ~~things,~~the ~~statements~~periods ~~regarding our business strategy, future revenues and anticipated costs and expenses~~described. ~~Such~~The ~~forward-looking~~discussion ~~statements~~reflects ~~include, among others, those statements including~~ the ~~words~~financial ~~“expects,”~~condition ~~“anticipates,” “intends,” “believes”~~ and ~~similar language. Our actual~~ results ~~may~~of ~~differ significantly~~operations ~~from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein~~ as ~~well as in the “Description~~ of ~~Business~~ –and ~~Risk Factors” section in our Annual Report on Form 10-K~~ for the ~~year~~ period ended ~~September~~March 3031, ~~2010. You~~2011 ~~should carefully review the risks described in our Annual Report~~ and ~~in other documents we file from time to time with the Securities and Exchange Commission~~2010. ~~You~~This ~~are~~discussion ~~cautioned~~contains ~~not to place undue reliance on the~~ forward-looking statements,. Please ~~which~~see ~~speak~~“Forward-Looking ~~only~~Statements” asfor ofa ~~the~~discussion ~~date~~ of ~~this~~ ~~report.~~the Weuncertainties, ~~undertake~~risks noand ~~obligation~~assumptions toassociated ~~publicly~~with ~~release~~these ~~any revisions to the~~ forward-looking statements ~~or reflect events or circumstances after the date of this document~~.

~~Although~~We weare ~~believe~~a ~~that~~manufacturing ~~the~~company ~~expectations~~with ~~reflected~~two indistinct ~~these forward-looking~~business ~~statements~~segments ~~are~~polyurethane ~~based~~and onrebreather. ~~reasonable~~Our ~~assumptions,~~primary ~~there~~business ~~are~~is ~~a number~~Elasco ofwhich ~~risks~~is focused on manufacturing technology for plastic and ~~uncertainties~~polyurethane ~~that~~products.Our ~~could~~secondary ~~cause~~business ~~actual~~segment ~~results~~is tofocused ~~differ materially~~on ~~from~~the ~~such~~development ~~forward~~of deep-~~looking~~sea ~~statements~~exploration breathing technology marketed as Blu Vu.

~~All~~Polyurethane ~~references in this Form 10-Q to the “Company,” “Deltron,” “we,” “us,” or “our” are to Deltron, Inc.~~Products

~~Overview~~Our polyurethane products are manufactured and sold by our wholly owned subsidiary, Elasco, which makes products for the recreational roller skate and skateboarding markets. They are of the high performance type used by dedicated enthusiasts in those sports. These products are sold to O.E.M. customers, who market and distribute them through channels specific to their individual retail outlets, as well as by direct marketing through their internet sales sites. Most are sold through distribution channels of specialty stores and roller rinks. They are differentiated from the typical product found in larger retail stores in that they are not considered a toy category, but rather a sporting good.

AsElasco ~~previously~~also ~~described,~~produces wea ~~completed~~variety anof ~~Asset~~industrial ~~Purchase~~products ~~under which~~that ~~Deltron~~are ~~acquired~~used ~~the~~on ~~assets~~assemblies ofand ~~Blu~~machinery Vuwhere ~~Deep~~a ~~Oil~~long &life ~~Gas~~cycle ~~Exploration,~~is ~~Inc~~needed. ~~The~~ Some ~~transaction~~typical ~~was~~products ~~treated~~are asexercise aequipment ~~reverse~~rollers, ~~recapitalization~~bowling pin setter pads and liners, ~~with~~and ~~Blu~~fire Vuhydrant seals. Elasco’s ~~wholly~~ ~~owned~~polyurethane ~~subsidiary,~~polymers ~~Elasco~~excel in the gap between rubber and plastics, ~~Inc.~~but ~~(“Elasco”)~~can ~~becoming~~mimic ~~the~~many ~~accounting acquirer~~rubbers and plastics with specific formulations that optimize those characteristics. ~~Therefore,~~A ~~Deltron~~recent ~~assumed~~formula ~~the~~developed ~~fiscal~~exclusively ~~year~~by ~~end~~Elasco ofuses ~~Elasco~~a ~~of December~~natural 31soy-based resin as an ingredient to make an elastomer that performs like other hydrocarbon derived polyurethanes. OnThis ~~August~~reduces ~~13,~~related ~~2010,~~carbon ~~following~~emissions from the ~~completion~~manufacturing ofprocess ~~the~~for ~~Asset Purchase~~that ~~Agreement,~~resin ~~the~~by ~~Company~~36%. This ~~adopted~~product ~~the~~is ~~fiscal~~marketed ~~year~~as ~~end~~a ofgreen ~~the~~alternative ~~former~~to ~~shell Company~~oil ofbased ~~September~~products, 30and ~~for~~is ~~financial~~finding ~~reporting~~favor ~~purposes~~in the youth market that many of Elasco’s products service.

~~The~~Rebreather following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. The discussion reflects the financial condition and results of operations as of and for the three-months periods ended December 31, 2010 and 2009. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. System

We“Normal” ~~are~~scuba ais ~~manufacturing~~an ~~company~~open ~~with~~circuit ~~two~~system. Combining ~~distinct~~a ~~business~~high-pressure ~~segments polyurethane~~cylinder and ~~rebreather. Our~~a ~~primary~~demand ~~business~~regulator, isa ~~Elasco~~diver ~~which~~inhales ~~is focused~~gas onat ~~manufacturing~~ambient ~~technology~~pressure, ~~for~~uses ~~plastic~~a little of the oxygen in the gas, and ~~polyurethane~~then ~~products~~exhales. ~~Our~~ When ~~secondary~~the ~~business~~diver ~~segment~~exhales isthe ~~focused~~gas, onit bubbles to the ~~development~~surface, carrying as much as 98% of ~~deep-sea exploration~~the ~~breathing~~original ~~technology~~oxygen ~~marketed~~it ascontained. The ~~Blu~~“open Vucircuit” comes from the fact that the exhaled gas is released on every breath.

~~Polyurethane Products~~22

~~Our~~The ~~polyurethane~~advantage ~~products~~that ~~are~~a ~~manufactured~~rebreather ~~and~~has ~~sold~~over by“normal” ~~our~~scuba ~~wholly owned~~system ~~subsidiary~~is that it recirculates the gas a diver is breathing, ~~Elasco~~allowing the diver to breath from the same gas over and over again, ~~which~~after ~~makes~~removing ~~products~~the carbon dioxide generated by human metabolism. Rebreathers provide gas to the diver in an optimal mix for the ~~recreational~~depth ~~roller~~at ~~skate~~ which they are diving. The system adds oxygen and ~~skateboarding~~other ~~markets~~gases to make up what is consumed. ~~They~~Because ~~are~~the gas is reused, instead of being “thrown away” with every breath, a diver can remain underwater far longer on much less gas. In fact, for some dives, rebreathers can be as much as fifty times more efficient on gas consumption than standard scuba tanks. This minimizes decompression obligations, or in some cases eliminates it for shallower working dives. Less decompression time means more working time, and greater cost efficiency for the ~~high~~project.

21In February 2011, the Company purchased technology relating to an invention for submersible boat rebreather systems. The Company intends to manufacture and sell these systems for use in non-pressureized sport and military subs. Typical uses would be in areas where extended times underwater would be beneficial like sport divers, ports and oil and gas equipment inspections, government and military security and university biologist research.

~~performance~~Business type used by dedicated enthusiasts in those sports. These products are sold to O.E.M. customers, who market and distribute them through channels specific to their individual retail outlets, as well as by direct marketing through their internet sales sites. Most are sold through distribution channels of specialty stores and roller rinks. They are differentiated from the typical product found in larger retail stores in that they are not considered a toy category, but rather a sporting good. operations

~~Elasco~~As ~~also~~of ~~produces~~March a31, ~~variety~~2011, ofwe ~~industrial~~had ~~products~~an ~~that~~accumulated ~~are used~~deficit onof ~~assemblies~~approximately $3.3 million, and ~~machinery~~as ~~where~~of aSeptember ~~long~~30, ~~life~~2010, ~~cycle~~our isaccumulated ~~needed. Some typical~~deficit ~~products~~was ~~are~~approximately ~~exercise~~$3.1million.We ~~equipment~~incurred ~~rollers,~~operating ~~bowling~~losses ~~pin~~of ~~setter~~$1,109, ~~pads~~$106,065, ~~and liners~~$91,058and ~~and~~$190,802 ~~fire~~for ~~hydrant~~the ~~seals. Elasco’s~~three ~~polyurethane~~and ~~polymers~~six ~~excel~~months ~~in the~~ended ~~gap~~March ~~between~~31, ~~rubber~~2011 and ~~plastics~~2010, ~~but~~respectively, ~~can mimic many rubbers~~ and ~~plastics with~~incurred ~~specific~~net ~~formulations~~losses ~~that~~of ~~optimize~~$45,181 ~~those~~and ~~characteristics. A~~$159,644and ~~recent formula~~$228,340 ~~developed~~and ~~exclusively~~$258,943for bythose ~~Elasco~~respective ~~uses~~periods. aWe ~~natural~~expect ~~soy-based~~our ~~resin~~net aslosses ~~an ingredient~~ to ~~make~~continue anfor ~~elastomer~~at ~~that~~least ~~performs~~the ~~like~~next ~~other~~couple ~~hydrocarbon~~of ~~derived polyurethanes~~years. ~~This~~We ~~reduces~~anticipate ~~related~~that ~~carbon~~a ~~emissions~~substantial ~~from~~portion ~~the manufacturing~~of ~~process~~our ~~for~~capital ~~that~~resources ~~resin~~and byefforts ~~36%. This~~will ~~product~~be isfocused ~~marketed~~on asthe ~~a green~~scale ~~alternative~~up due to ~~oil~~expansion ~~based~~via ~~products~~acquisition, product development and isother ~~finding~~general ~~favor~~corporate inpurposes, including the ~~youth market~~payment ~~that~~of ~~many~~legal offees ~~Elasco’s~~due ~~products~~to ~~service~~our acquisitions.

~~Rebreather~~As ~~System~~of March 31, 2011, our current liabilities of approximately $4.7 million exceeded our current assets of approximately $1,018,000 by $3,682,000 and our net losses will continue for the foreseeable future. As part of the $4.7 million of current liabilities we have $175,000, of convertible notes to related parties and $3,277,500 of convertible notes to unrelated parties. We are currently planning to issue additional stocks and convertible notes to support our expansion. As a result, the additional equity funding may result in significant dilution to existing stockholders. If adequate funds are not available, we may be required to delay or curtail significantly our development and commercialization activities. This would have a material adverse effect on our business, financial condition and/or results of operations and could ultimately cause us to have to cease operations.

~~“Normal”~~Financial ~~scuba~~Operations is an open circuit system. Combining a high-pressure cylinder and a demand regulator, a diver inhales gas at ambient pressure, uses a little of the oxygen in the gas, and then exhales. When the diver exhales the gas, it bubbles to the surface, carrying as much as 98% of the original oxygen it contained. The “open circuit” comes from the fact that the exhaled gas is released on every breath.Overview

The advantage that a rebreather has over “normal” scuba system is that it recirculates the gas a diver is breathing, allowing the diver to breath from the same gas over and over again, after removing the carbon dioxide generated by human metabolism. Rebreathers provide gas to the diver in an optimal mix for the depth at which they are diving. The system adds oxygen and other gases to make up what is consumed. Because the gas is reused, instead of being “thrown away” with every breath, a diver can remain underwater far longer on much less gas. In fact, for some dives, rebreathers can be as much as fifty times more efficient on gas consumption than standard scuba tanks. This minimizes decompression obligations, or in some cases eliminates it for shallower working dives. Less decompression time means more working time, and greater cost efficiency for the project. Sales

~~Business~~Our ~~operations~~sales are derived from the sale of plastic and polyurethane products. Customers are generally billed at shipping of products. We currently have not generated any revenues from the sale of rebreather system for the three and six month periods ended March 31, 2011 and 2010.

AsCost of December 31, 2010, we had an accumulated deficit of approximately $3.26 million, and as of September 30, 2010, our accumulated deficit was approximately $3.08 million. We incurred operating losses of $83,095 and $84,737 for the three months ended December 31, 2010 and 2009, respectively, and incurred net losses of $183,159 and $99,299 for those respective periods. We expect our net losses to continue for at least the next couple of years. We anticipate that a substantial portion of our capital resources and efforts will be focused on the scale up due to expansion via acquisition, product development and other general corporate purposes, including the payment of legal fees due to our acquisitions.Sales

AsCost of ~~December~~sales ~~31,~~for ~~2010,~~plastic ~~our current liabilities of approximately $1.33 million exceeded our current assets of $919,395 by $413,631~~ and ~~our~~polyurethane ~~net losses~~products ~~will~~represents ~~continue for~~ the ~~foreseeable~~cost ~~future. As part~~ of ~~the~~direct ~~$1.33 million of current liabilities we have $155~~labor,~~196,~~ ~~net~~raw ~~of note discount of $20~~material,~~304,~~ ofsupplies ~~convertible notes to related parties~~ and ~~$33,805,~~other ~~net~~miscellaneous ~~of note discount of $43,695 of convertible notes to unrelated parties. We are currently planning to issue additional stocks and convertible notes to~~ support ~~our~~ ~~expansion~~expenses. AsNo acost ~~result,~~of ~~the~~sales ~~additional~~for ~~equity~~rebreather ~~funding~~system ~~may~~is ~~result~~recorded ~~in significant~~because ~~dilution~~we tohave ~~existing stockholders. If adequate funds are~~ not ~~available,~~ wegenerated ~~may~~any berevenues ~~required~~from tothe ~~delay~~sale orof ~~curtail~~rebreather ~~significantly our~~ system.

2223

~~development and commercialization activities. This would have a material adverse effect on our business~~Selling, ~~financial~~General ~~condition~~ and~~/or results~~ ~~of operations and could ultimately cause us to have to cease operations.~~Administrative

~~Financial~~Our ~~Operations~~selling ~~Overview~~expenses consist primarily of personnel, media, support and travel costs to inform user organizations and consumers of our products. Our general and administrative expenses consist primarily of personnel, occupancy, legal, consulting and administrative and support costs for our operations.

~~Sales~~Critical Accounting Policies and Significant Judgments and Estimates

~~Our~~This ~~sales~~discussion ~~are~~and ~~derived~~analysis ~~from~~of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the ~~sale~~reported amounts of ~~plastic~~assets, liabilities and ~~polyurethane products. Customers~~expenses ~~are~~and ~~generally~~the ~~billed~~disclosure of contingent assets and liabilities at ~~shipping~~the date of ~~products~~the financial statements, as well as revenues and expenses during the reporting periods. We ~~currently~~ ~~have~~evaluate ~~not~~our ~~generated~~estimates ~~any~~and ~~revenues~~judgments ~~from~~on an ongoing basis. We base our estimates on historical experience and on various other factors we believe are reasonable under the ~~sale~~circumstances, the results of ~~rebreather~~which ~~system~~form ~~for~~ the ~~three~~basis ~~month~~for ~~periods~~making ~~ended~~judgments ~~December~~about ~~31,~~the ~~2010~~carrying value of assets and ~~2009~~liabilities that are not readily apparent from other sources. Actual results could therefore differ from those estimates under different assumptions or conditions. Our significant accounting policies are described in Note 1 to our unaudited condensed consolidated financial statements included in Item 1 of this report. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our condensed consolidated financial statements.

~~Cost of~~Revenue ~~Sales~~Recognition

~~Cost~~Sales ~~of sales~~ for ~~plastic~~our ~~and~~ polyurethane products ~~represents~~are ~~the cost~~recognized ofwhen ~~direct~~our ~~labor,~~plastic ~~raw~~or ~~material,~~polyurethane ~~supplies~~products ~~and~~are ~~other~~shipped ~~miscellaneous~~to ~~support expenses~~our customers. NoCurrently ~~cost of sales~~ for rebreather system, isthere ~~recorded because we~~ have not ~~generated~~been any revenues recognized from the sale of ~~rebreather~~its ~~system~~products.

~~Selling~~Results of Operations for the Three and Six Months Ended March 31, ~~General~~2011 and ~~Administrative~~2010

As earlier described, we operate in two business segments: Polyurethane products and Rebreather system. Our ~~selling~~Elasco ~~expenses~~business ~~consist~~focuses ~~primarily~~on ofthe ~~personnel,~~delivery ~~media, support~~of plastic and ~~travel~~polyurethane ~~costs~~product to ~~inform~~our ~~user~~customer. ~~organizations~~Its principal business is manufacturing and ~~consumers~~selling of ~~our~~ open cast molded polyurethane elastomer products such as skateboard, roller skate, and industrial wheels. Our ~~general~~Rebreather ~~and~~system, ~~administrative~~which ~~expenses~~is ~~consist~~marketed ~~primarily~~as ~~of personnel,~~Blu ~~occupancy~~Vu, ~~legal~~is engaged in the potential manufacture and mass-market of proprietary breathing equipment developed specifically for the oil and gas, ~~consulting~~mining and ~~administrative~~safety industries, and ~~support~~military ~~costs~~and ~~for our~~recreational ~~operations~~divers.

~~Critical~~The ~~Accounting~~following ~~Policies~~table ~~and~~presents ~~Significant~~consolidated ~~Judgments~~statement ~~and Estimates~~of operations data for each of the periods indicated as:

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as revenues and expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could therefore differ materially from those estimates under different assumptions or conditions. Our significant accounting policies are described in Note 1 to our unaudited condensed consolidated financial statements included in Item 1 of this report. We believe the following critical accounting policies reflect our more significant estimates and assumptions used in the preparation of our consolidated financial statements.


	Three months ended
		March 31,		Percent
		2011	2010	Change
		(Unaudited)	(Unaudited)
Sales		$ 823,500	$ 603,503	36%
Cost of sales		636,787	559,311	14%
Gross profit		186,713	44,192	323%

Selling, general and administrative		214,072	150,257	42%

~~Revenue Recognition~~24

Sales for our polyurethane products are recognized when our plastic or polyurethane products are shipped to our customers. Currently for rebreather system, there have not been any revenues recognized from the sale of its products.


Operating loss	(27,359)	(106,065)	(74)%

Other expense, net	(44,072)	(53,579)	(18)%

Net loss	$ (71,431)	$ (159,644)	(55)%

Results of Operations for the Three Months Ended December 31, 2010 and 2009


	Six months ended
	March 31,		Percent
	2011	2010	Change
	(Unaudited)	(Unaudited)
Sales	$ 1,728,901	$ 1,115,059	55%
Cost of sales	1,414,803	994,373	42%
Gross profit	314,098	120,686	160%

Selling, general and administrative	431,406	311,488	38%

Operating loss	(117,308)	(190,802)	(39)%

Other expense, net	(136,447)	(68,141)	100%

Net loss	$ (253,755)	$ (258,943)	(2)%

As earlier described, we operate in two business segments: Polyurethane products and Rebreather system. Our Elasco business focuses on the delivery of plastic and polyurethane product to our customer. Its Sales

23With respect to our polyurethane business, our sales increased by $219,997 for the three months and $613,842 for the six months ended March 31, 2011, compared to the same period in 2010, due to recovery in the economy and introduction of our new products to our current customer base.

~~principal~~In ~~business~~respect isto ~~manufacturing~~our ~~and~~rebreather ~~selling of open cast molded polyurethane elastomer products such as skateboard~~product, ~~roller~~we ~~skate,~~have ~~and industrial~~not ~~wheels. Our~~produced ~~Rebreather~~sales ~~system, which is marketed~~ as ~~Blu Vu, is engaged in the potential manufacture and mass-market~~ of ~~proprietary~~March ~~breathing equipment developed specifically for the oil and gas~~31, ~~mining and safety industries, and military and recreational divers~~2011.

~~The following~~Cost ~~table presents unaudited consolidated statement~~ of ~~operations data for each of the periods indicated as:~~Sales

		Three months ended
		December 31,		Percent
		2010	2009	Change
		(Unaudited)	(Unaudited)
Sales		905,401	511,556	77%
Cost of sales		778,016	435,062	79%
Gross profit		127,385	76,494	67%
	Selling, general and administrative	210,480	161,231	31%
Operating loss		(83,095)	(84,737)	(2)%
	Other income (expense), net	(99,229)	(14,562)	(581)%
Net (loss)		(183,159)	(99,299)	84%

Cost of sales consists of payroll, raw material, supplies and other miscellaneous costs for the Polyurethane products. For the three-month period ended March 31, 2011, costs of sales of $636,787 consist primarily of labor cost of $295,213, raw material cost of $322,840 and other costs of $18,734.For the three month period ended March 31, 2010, cost of sales of $559,311 consisted primarily of labor costs of $227,609, raw material cost of $301,257, and other costs of $30,445.For the six-month period ended March 31, 2011, costs of sales of $1,414,803 consist primarily of labor cost of $606,053, raw material cost of $729,545 and other costs of $79,205.For the six-month period ended March 31, 2010, cost of sales of $994,373 consisted primarily of labor costs of $460,306, raw material cost of $464,301, and other costs of $69,766.We expect costs of sales will increase as an absolute number as more plastic and polyurethane products are produced. However, we expect the cost of sales to decrease as a percentage of revenues as we improve our operating efficiency and increase the automation of certain processes.

~~Sales~~25

~~With respect to our polyurethane business~~Selling, ~~our~~General ~~sales increased by $393,845 for the three months ended December 31, 2010, compared to the same period in 2009, due to recovery in the economy~~ and ~~introduction~~Administration ~~of our new products to our current customer base.~~

InSelling, ~~respect~~general toand administrative expenses associated with our ~~rebreather~~polyurethane ~~product~~business consist primarily of payroll costs, werental ~~have~~fee, ~~not~~professional ~~produced~~fee, ~~sales as~~insurance, ofand ~~December~~other expense. For the three months ended March 31, ~~2010~~2011, selling, general and ~~2009~~administrative expensesincluded the following: payroll and benefits $34,870, professional fees $75,411, rent expense $16,599, insurance expenses $12,395, amortization expense $26,250 and other expenses $48,547. For the comparable period in 2010 expenses were as follows: payroll and benefits $18,633, rent expense $16,599, consulting $14,538, professional fee $32,436, insurance expenses $6,493 and other expenses $61,558.

~~Cost of~~For ~~Sales~~the six months ended March 31, 2011, selling, general and administrative expenses included the following: payroll and benefits $124,099, consulting fee $36,000, professional fees $183,906, rent expense $33,198, insurance expenses $14,685, amortization expense $26,250 and other expenses $13,000. For the comparable period in 2010 expenses were as follows: payroll and benefits $56,446, rent expense $33,198, consulting $28,249, professional fee $61,295, insurance expenses $8,996 and other expenses $123,304.

~~Cost~~Comparing ~~of sales consists of payroll, raw material, supplies and other miscellaneous costs for~~ the ~~Polyurethane products. For the~~ three~~-month~~ ~~period~~months ended ~~December~~March 31, ~~2010~~2011, ~~costs~~with ofthe ~~sales~~same ofperiod ~~$778,016~~in ~~consist primarily of labor cost of $310~~2010,~~840,~~ ~~raw material cost of $400,705 and other costs of $66,471. For~~ the ~~three-month~~increase ~~period~~in ~~ended December 31~~selling, ~~2009,~~general ~~cost of~~and ~~sales~~administrative ofexpenses ~~$435,062~~were ~~consisted~~ primarily ofdue ~~labor~~to ~~costs~~an ofincrease ~~$232,697,~~in ~~raw material~~professional ~~cost of $163,044, and other costs of $39,321~~fees. WeOther ~~expect~~expenses ~~costs~~remained ~~of sales~~consistent ~~will~~for ~~increase~~the asthree anmonths ~~absolute~~ended ~~number~~March as31, ~~more~~2011 ~~plastic~~ and ~~polyurethane products~~2010.General ~~are~~and ~~produced. However,~~administrative weexpenses ~~expect~~associated ~~the~~with ~~cost~~our ofBlu ~~sales~~Vu torebreather ~~decrease~~system ~~as a~~consist ~~percentage~~primary of ~~revenues~~consulting ~~as we improve our operating efficiency~~ and ~~increase~~professional ~~the automation of certain processes~~fees.

~~Selling,~~Other ~~General and Administration~~ expense

For the three months ended ~~December~~March 31, ~~2010~~2011 and ~~2009~~2010, ~~our~~we ~~selling,~~incurred ~~general~~other ~~and administrative~~ expenses ~~for~~of ~~each~~$44,072 ~~segment~~and ~~are~~$53,579, aswhich ~~follows~~consisted ~~(unaudited):~~primarily of interest expense

24Net Loss

		2010		2009
Rebreather	$	104,973	$	71,046
Polyurethane		105,507		90,185
	$	210,480	$	161,231

The decrease in net loss of $88,213 for the three months ended March 31, 2011, compared to the same period in 2010, was a net result of: an increase in our polyurethane product sales, an increase in gross profit due to efficiencies relating to increased sales and a decrease in interest expense due to the decrease of the beneficial conversion feature of $39,500 recorded in 2010.

~~Selling,~~Liquidity ~~general~~ and ~~administrative~~Capital expenses associated with our polyurethane business consist primarily of payroll costs, rental fee, professional fee, insurance, and other expense. For the three months ended December 31, 2010, selling, general and administrative expenses included the following: payroll and benefits $63,651, professional fees $8,163, rent expense $16,599, insurance expenses $2,289, and other expenses $14,805. For the comparable period in 2009 expenses were as follows: payroll and benefits $37,826, rent expense $16,599, consulting $13,712, professional fee $1,331, insurance expenses $2,503 and other expenses $18,214.Resources

~~Comparing~~Since ~~the~~our ~~three~~inception, ~~months~~we ~~ended~~have ~~December~~incurred significant losses. As of March 31, ~~2010~~2011, ~~with~~we ~~the~~had ~~same period~~an inaccumulated ~~2009,~~deficit ~~the~~of ~~increase~~approximately in$3.3 ~~selling~~million, ~~general~~ and ~~administrative~~as ~~expenses were~~of ~~primarily~~September ~~due~~30, to2010, anour ~~increase~~accumulated indeficit ~~payroll~~was ~~expenses~~approximately ~~resulting~~$3.1 ~~from~~million. We ~~increase~~have ~~in wages~~not ~~and~~yet ~~bonus~~achieved ~~while~~profitability ~~other~~and ~~expenses~~anticipate ~~decreased~~that ~~because~~we ofwill ~~more~~continue ~~outsourced services~~to ~~were~~incur ~~done~~net ~~in-house~~losses ~~in 2010. Other expenses remained consistent~~ for the ~~three~~foreseeable ~~months~~future. ~~ended~~We ~~December~~expect ~~31,~~that ~~2010~~our sales and ~~2009. General~~general and administrative expenses ~~associated~~will ~~with~~continue ~~our~~to ~~Blu~~grow Vuand, ~~rebreather~~as ~~system~~a ~~consist primary~~result, ofwe ~~consulting~~will ~~and~~need ~~professional~~to ~~fees~~generate significant product revenues to achieve profitability. We may never achieve profitability.

~~Other~~Due ~~income (expense)~~to the continued losses incurred from our operations, as of March 31, 2011, we had approximately $71,559 in cash and cash equivalents and a working capital deficit of $220,366 compared to $1,852 in cash and cash equivalents and a working capital deficit of $253,061 at September 30, 2010.

For the three months ended December 31, 2010, we incurred other expenses of $99,229, which consisted primarily $74,354 amortization of note discount on the $253,000 convertible notes; total interest of $18,534 paid and accrued on the $100,000 line of credit, $1,095,110 long term promissory notes, and $253,000 convertible notes due to certain shareholders and officer, net of an accrued interest income of $513 on the $41,000 loan receivable; and change in fair value of derivative liability 26

~~For~~Operating ~~the~~Capital ~~comparable period in 2009, we incurred interest expense of $14,562 paid~~ and ~~accrued~~Capital onExpenditure ~~the $125,000 line of credit and $1,095,110 long term promissory notes due to a shareholder and officer.~~ Requirements

~~Net Loss~~Our continued operating losses and limited capital raise substantial doubt about our ability to continue as a going concern, and we need to raise substantial additional funds in the next 12 months in order to continue to conduct our business. Until we can generate a sufficient amount of revenues to finance our cash requirements, which we may never do, we expect to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations.

~~The~~We ~~increase~~need inadditional ~~net~~funds ~~loss~~to continue our operations and will need substantial additional funds before we can generate revenue from our Blu Vu rebreather system. We are currently exploring additional sources of ~~$83~~capital; however,~~860~~ ~~for~~we ~~the~~do ~~three~~not ~~months~~know ~~ended December~~whether 31additional funding will be available on acceptable terms, ~~2010~~or at all, ~~compared~~especially togiven the ~~same~~economic ~~period~~conditions inthat ~~2009~~currently prevail. In addition, ~~was~~any aadditional ~~net~~equity ~~result~~funding ~~of:~~may ~~an increase~~result in ~~our~~significant ~~polyurethane~~dilution ~~product~~to ~~sales~~existing stockholders, anand, ~~increase~~if inwe ~~selling,~~incur ~~general~~additional ~~and administration~~debt ~~expenses~~financing, ~~due~~a tosubstantial ~~the~~portion ~~increase~~of inour ~~salaries~~operating ~~and~~cash ~~professional~~flow ~~fees~~may ~~in 2010~~be ~~and~~dedicated to the ~~increase~~payment inof ~~interest~~principal ~~expense~~and ~~resulted~~interest ~~from~~on ~~amortization~~such ~~of beneficial~~indebtedness, ~~conversion~~thus ~~option~~limiting ~~embedded~~funds inavailable ~~the~~for ~~convertible~~our ~~notes~~business ~~in 2010~~activities.

~~Liquidity~~We expect to continue to incur operating losses in the future and ~~Capital~~to ~~Resources~~ make capital expenditures to expand our polyurethane operations and to market our Blu Vu rebreather system (including upgrading our plant equipment) and to scale up our sales efforts. We expect that our existing cash will be used to fund working capital and for capital expenditures and other general corporate purposes, including the repayment of debt incurred as a result of our acquisitions. Although since September 30, 2010, we have raised gross proceeds of $127,500 through the sale of convertible promissory notes, we anticipate that our cash on hand (including the proceeds from these promissory notes) and cash generated through our operations will not be sufficient to fund our operations for the next 12 months. In addition we will have to repay the outstanding notes plus interest. We therefore anticipate raising additional funds in the near future.

~~Since~~Sources ~~our inception, we have incurred significant losses. As~~ of December 31, 2010, we had an accumulated deficit of approximately $3.26 million, and as of September 30, 2010, our accumulated deficit was approximately $3.08 million. We have not yet achieved profitability and anticipate that we will continue to incur net losses for the foreseeable future. We expect that our sales and general and administrative expenses will continue to grow and, as a result, we will need to generate significant product revenues to achieve profitability. We may never achieve profitability.Liquidity

25Since our inception substantially all of our operations have been financed primarily from sales of our polyurethane products and equity and debt financings. For the three and six months ended March 31, 2011, we had received $50,000 and $127,500 from issuance of convertible notes.

~~Due~~Cash to the continued losses incurred from our operations, as of December 31, 2010, we had $35,861 in cash and cash equivalents and a working capital deficit of $413,631 compared to $1,852 in cash and cash equivalents and a working capital of $253,061 at September 30, 2010. Flows

~~Operating~~Net ~~Capital~~cash ~~and~~used ~~Capital~~in ~~Expenditure~~operating ~~Requirements~~activities was $14,302 for the three months ended March 31, 2011, compared to $14,148 for the same period ended March 31, 2010.The decrease in cash of $14,302 was primarily attributable to the loss for the quarter of 45,181.

~~Our~~There ~~continued~~was ~~operating~~no ~~losses~~net ~~and~~cash ~~limited~~used ~~capital~~in ~~raise substantial~~investing ~~doubt~~activities ~~about~~for ~~our ability to continue as a going concern, and we need to raise substantial additional funds in~~ the ~~next~~three 12 months inended ~~order~~March ~~to continue to conduct our business. Until we can generate a sufficient amount of revenues to finance our cash requirements~~31, ~~which~~2011and ~~we may never do, we expect to finance future cash needs primarily through public or private equity offerings, debt financings, borrowings or strategic collaborations~~2010.

WeNet ~~need~~cash ~~additional~~proceeds ~~funds to continue our operations and will need substantial additional funds before we can generate revenue~~ from ~~our~~financing ~~Blu~~activities ~~Vu rebreather~~for ~~system. We are currently exploring additional sources of capital; however, we do not know whether additional funding will be available on acceptable terms, or at all, especially given~~ the ~~economic~~three ~~conditions~~months ~~that currently~~ended ~~prevail. In~~March ~~addition~~31, ~~any additional equity funding may result in significant dilution to existing stockholders~~2011, ~~and,~~was ~~if we incur additional debt financing~~$50,000 awhich ~~substantial~~was ~~portion~~derived offrom ~~our operating cash flow may be dedicated to~~ the ~~payment~~issuance of ~~principal~~convertible ~~and interest on such indebtedness, thus limiting funds available for our business activities~~notes.

WeFor ~~expect to continue to incur operating losses in~~ the ~~future~~six ~~and to~~months ~~make~~ended ~~capital~~March ~~expenditures~~31, to2010, ~~expand~~proceeds ~~our~~from ~~polyurethane operations and to market our Blu Vu rebreather system (including upgrading our plant equipment) and to scale up our~~ sales ~~efforts. We expect that our existing cash will be used to fund working capital and for capital expenditures and other general corporate purposes, including the repayment~~ of ~~debt~~common ~~incurred~~stocks aswere ~~a result of our acquisitions. Although since September 30~~$65, ~~2010~~000, wenet ~~have raised gross proceeds~~ of ~~$127,500~~offering ~~through the sale of convertible promissory notes~~costs, ~~we anticipate that our cash on hand (including the proceeds from these promissory notes) and cash generated~~ through ~~our~~a ~~operations~~Regulation ~~will~~S ~~not be sufficient to fund our operations for the next 12 months~~offering. ~~In addition we will have to repay the outstanding notes plus interest. We therefore anticipate raising additional funds in the near future.~~

~~Sources~~Contractual ofObligations ~~Liquidity~~and Commercial Commitments

~~Since~~As ~~our~~of ~~inception~~March ~~substantially~~31, ~~all~~2011, ofwe ~~our~~have ~~operations~~a ~~have~~contractual ~~been financed~~obligation ~~primarily~~to ~~from~~pay ~~sales~~the line of ~~our~~credit ~~polyurethane~~of ~~products~~$100,000 ~~and~~with ~~equity~~an ~~and~~interest ~~debt financings. For~~rate ~~the~~of ~~three~~prime ~~months~~plus ~~ended~~1.5%. ~~December~~There ~~31,~~was ~~2010,~~also wea ~~had~~total ~~received $77,500~~remaining ~~from~~balance ~~issuance~~on oftwo ~~convertible~~promissory notes. of

In addition, in order to decrease the cash outflows, in November 2010, the Company issued 80 million shares of its common stock valued at $60,000 to the President of its subsidiary, Elasco, as a payment of a bonus of $10,000 and prepayment of salary of $50,000 for the following six months. 27

~~Cash Flows~~$1,095,110 due to a shareholder and officer in connection with our acquisitions. The notes bear interests at a rate of 5% and 4.23% per annum, respectively.Our total lease obligations are $315,381 for our Southern California facility, which expires on December 31, 2015.

~~Net~~Income cash used in operating activities was $7,985 for the three months ended December 31, 2010, compared to $61,182 for the same period ended December 31, 2009. The decrease in cash used of $53,197 was primarily attributable to increases in our polyurethane product sales.Taxes

~~There~~Since ~~was~~inception, nowe ~~net~~have ~~cash~~incurred ~~used~~operating inlosses ~~investing~~and, ~~activities~~accordingly, have not recorded a provision for ~~the~~federal ~~three months~~income ~~ended~~taxes ~~December~~for any periods presented. As of March 31, ~~2010~~2011, we had net operating loss carryforwards for federal income tax purposes of $365,000. If not utilized, the federal net operating loss carryforwards will expire in 2025. Utilization of net operating loss and ~~2009~~credit carryforwards may be subject to a substantial annual limitation due to restrictions contained in the Internal Revenue Code that are applicable if we experience an “ownership change”. The annual limitation may result in the expiration of our net operating loss and tax credit carryforwards before they can be used.

26Off-Balance Sheet Arrangements

~~Net~~We ~~cash~~have ~~proceeds~~no ~~from~~off-balance ~~financing~~sheet ~~activities~~arrangements ~~for~~or ~~the~~financing ~~three~~activities ~~months ended~~with ~~December~~special ~~31,~~purpose ~~2010, were $41,994 which was primarily derived from the issuance of convertible notes and the paydown of the line of credit~~entities.

For the three months ended December 31, 2009, proceeds from sales of common stocks were $65,000, net of offering costs, through a Regulation S offering.

Contractual Obligations and Commercial Commitments

As of December 31, 2010, we have a contractual obligation to pay the line of credit of $100,000 with an interest rate of prime plus 1.5%. There was also a total remaining balance on two promissory notes of $1,095,110 due to a shareholder and officer in connection with our acquisitions. The notes bear interests at a rate of 5.0% and 4.23% per annum, respectively. Our total lease obligations are $ 315,381 for our Southern California facility, which expires on December 31, 2015.

Income Taxes

Since inception, we have incurred operating losses and, accordingly, have not recorded a provision for federal income taxes for any periods presented. As of December 31, 2010, we had net operating loss carryforwards for federal income tax purposes of $386,000. If not utilized, the federal net operating loss carryforwards will expire in 2025. Utilization of net operating loss and credit carryforwards may be subject to a substantial annual limitation due to restrictions contained in the Internal Revenue Code that are applicable if we experience an “ownership change”. The annual limitation may result in the expiration of our net operating loss and tax credit carryforwards before they can be used.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements or financing activities with special purpose entities.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Our Disclosure Controls

Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, Randall Fernandez, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective and identified the following material weaknesses:

1. The Company has insufficient internal personnel resources and technical accounting and reporting expertise within the Company’s financial closing and reporting functions;

2. Due to our small size, the Company did not maintain effective internal controls to assure segregation as the same employee was responsible for initiating and recording of transactions, thereby creating the segregation of duties weakness; and

3. The Company did not have an independent board of directors for oversight of the Company’s operations and financial reporting process.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended ~~December~~March 31, ~~2010~~2011, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

In the ordinary course of our business, we may from time to time become subject to routine litigation or administrative proceedings which are incidental to our business. We are not a party to nor are we aware of any existing, pending or threatened lawsuits or other legal actions involving us.

ITEM 1A.

RISK FACTORS

Not applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We did not issue any equity securities during the quarter ended ~~December~~ March 31, ~~2010~~2011.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

[REMOVED AND RESERVED]

ITEM 5.

OTHER INFORMATION

Not applicable.

ITEM 6.

EXHIBITS

Exhibit No.

Description

31.1 / 31.2

Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive and Financial Officer

32.1 / 32.2

Rule 1350 Certification of Principal Executive and Financial Officer

2829

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DELTRON, INC.

Dated: May ~~February~~ 16, ~~2011 By: /s/~~ ~~Henry Larrucea~~ 2011

By:/s/ Henry ~~LarruceaPresident,~~ ~~Principal Executive and Financial Officer~~Larrucea

29Henry Larrucea President, Principal Executive and Financial Officer

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