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 ~~June 30,~~December 31, 2010

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 ox [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 o No xo

As of ~~August~~February 1316, ~~2010~~2011, there were ~~678~~758,~~978~~478,980 shares of the issuer’s common stock ~~outstanding~~, par value $0.001, outstanding.

DELTRON, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~MARCH~~DECEMBER 31, 2010

TABLE OF CONTENTS

		PAGE
	PART I - FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements ~~(Unaudited)~~	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1314
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4T.	Controls and Procedures	15
Item 4.	Controls and Procedures	16
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	1516
Item 1A.	Risk Factors	1516
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1516
Item 3.	Defaults Upon Senior Securities	1516
Item 4.	~~(Removed~~Submission ~~and~~of ~~Reserved)~~Matters to a Vote of Security Holders	16
Item 5.	Other Information	16
Item 6.	Exhibits	1617
	SIGNATURES	1718

PART I – FINANCIAL INFORMATION

ITEM 1.

~~UNAUDITED CONDENSED~~ FINANCIAL STATEMENTS

The accompanying unaudited condensed ~~financial~~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 810-K filed with the SEC on ~~May~~January 2813, 2010. 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 ~~ending September 30, 2010~~.


Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS


			December 31,	September 30,
			2010	2010
			Unaudited
Assets
	Current Assets:
		Cash	$ 35,861	$ 1,852
		Accounts receivable, net of allowance of doubtful accounts of $2,630
		and $2,630 at December 31, 2010 and September 30, 2010, respectively	418,320	660,395
		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
	Total Current Assets		919,395	1,055,749

	Property and equipment, net		29,389	32,239

Total Assets			$ 948,784	$1,087,988


Liabilities and Stockholders' (Deficit) Equity
	Current liabilities
		Line of credit	$ 100,000	$ 125,000
		Bank overdraft	-	10,506
		Accounts payable	289,708	452,318
		Accrued expenses	52,969	75,091
		Income taxes payable	800	1,600
		Accrued expenses - related parties	180,000	150,000
		Accrued interest - related parties	79,826	63,541
		Convertible notes - related parties, net of note discount of $20,304
		and $79,333 at December 31, 2010 and September 30, 2010, respectively	155,196	96,167
		Convertible notes - net of note discount of $43,695
		and $0 at December 31, 2010 and September 30, 2010, respectively	33,805	-
		Derivative liability – conversion options	65,874	-
		Current portion of long term debt - related party	374,848	334,587
	Total Current Liabilities		1,333,026	1,308,810

	Notes payable - related party, net of current portion		720,262	760,523

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
	Additional paid-in capital		1,398,767	1,418,767
	Accumulated deficit		(3,261,750)	(3,078,591)
		Total Stockholders' (Deficit) Equity	(1,104,504)	(981,345)

Total Liabilities and Stockholders' (Deficit) Equity			$ 948,784	$1,087,988


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

Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
					June 30,	December 31
			For the three Months ended
					2010			2009
			December 31,
					Unaudited
			2010		2009
Assets
Sales			$ 905,401		$ 511,556
	Current Assets:
Cost of sales			778,016		435,062
		Cash			$ 27,065			$ 29,986
Gross profit			127,385		76,494
		Accounts receivable, net of allowance of doubtful accounts of $7,821 and $7,821 at June 30, 2010 and December 31, 2009, respectively			398,361			250,993
Selling, general and administrative expenses			210,480		161,231
		Inventory		364,453				320,786
Operating income (loss)			(83,095)		(84,737)
		Loan receivable		41,000				41,000
Other income (expenses)
		Prepaid expenses		14,021				4,632
Change in fair value of derivative liability			(6,854)		-
	Total Current Assets			844,900				647,397
Interest expense, net			(92,375)		(14,562)
	Property and equipment, net			45,675				49,841
Total other income (expense)			(99,229)		(14,562)
Total Assets				$ 890,575				$ 697,238
Loss before provision for income taxes			(182,324)		(99,299)
Liabilities and Stockholders' (Deficit) Equity
Provision for income taxes			835		-
	Current liabilities
Net loss			$ (183,159)		$ (99,299)
		Line of credit		$ 125,000				$ 125,000
Per share information
		Accounts payable		387,125				228,122
Net loss per common share
		Accrued expenses		162,016				52,196
	Basic		$ (0.000)		$ (0.001)
		Accrued interest - related party		48,589				-
	Fully diluted		$ (0.000)		$ (0.001)
		Convertible notes - related parties		69,500				-
Weighted average number of common
		Current portion of long term debt - related party		306,124				151,077
	stock outstanding - basic		718,478,980		107,206,877
	Total Current Liabilities			1,098,354				556,395
Weighted average number of common
	Notes payable - related party, net of current portion			788,984				887,184
	stock outstanding - diluted		718,478,980		107,206,877
Stockholders' (Deficit) Equity
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
	Common stock, $0.0001 par value; 10,000,000,000 shares
	authorized, 678,478,980 and 123,978,980 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively			678,479				123,979
	Additional paid-in capital			1,302,767				1,847,681
	Accumulated deficit			(2,978,009)				(2,718,001)
		Total Stockholders' (Deficit) Equity		(996,763)				(746,341)
Total liabilities and stockholders' (deficit) equity				$ 890,575			$ 697,238

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


Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S (DEFICIT) EQUITY



			Additional
	Common Stock		paid-in	Accumulated
	Number of shares	Amount	Capital	Deficit	Totals


Balance - December 31, 2008	14,403,074	$ 14,403	$1,911,235	$(2,218,137)	$ (292,499)

Recapitalization in reverse acquisition			(624,200)		(624,200)

Issuance of stock for cash	76,031,699	76,032	529,190		605,222

Net loss				(400,564)	(400,564)

Balance - September 30, 2009 (Unaudited)	90,434,773	90,435	1,816,225	(2,618,701)	$ (712,041)

Issuance of stock for cash	33,544,207	33,544	31,456		65,000

Net loss				(99,299)	(99,299)

Balance - December 31, 2009	123,978,980	123,979	1,847,681	(2,718,001)	(746,341)

Beneficial conversion feature
- convertible notes payable - related parties	-	-	175,500	-	175,500

Recapitalization in reverse acquisition	554,500,000	554,500	(604,414)	-	(49,914)

Net loss	-	-	-	(360,590)	(360,590)

Balance - September 30, 2010	678,478,980	$678,479	$1,418,767	$(3,078,591)	$ (981,345)

Issuance of common stock for service	80,000,000	80,000	(20,000)		60,000

Net loss				(183,159)	(183,159)


Balance - December 31, 2010 (Unaudited)	758,478,980	$758,479	$1,398,767	$(3,261,750)	$(1,104,504)


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


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


		For the three Months ended
		December 31,
		2010	2009


Cash Flows from Operating Activities:
	Net (loss)	$ (183,159)	$ (99,299)

Adjustments to reconcile net loss to net cash used
	in operating activities:
	Depreciation	2,850	2,500
	Change in fair value of derivative liability	6,854	-
	amortization of discount on note payable	74,354	-
	(Increase) Decrease in accounts receivable	242,075	102,779
	(Increase) Decrease in inventory	(43,224)	(13,999)
	(Increase) Decrease in prepaid expenses and other receivables	31,512	27,480
	Increase (decrease) in accounts payable	(162,610)	(51,990)
	Increase (decrease) in accrued expenses	(22,922)	(41,366)
	Increase (decrease) in accrued expenses - related parties	30,000	-
	Increase (decrease) in accrued interest - related parties	16,285	12,713

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
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
		For the three Months ended
		June 30,
		2010	2009
Sales		$ 854,999	$ 546,503
Cost of sales		764,547	470,037
Gross profit		90,452	76,466
Selling, general and administrative expenses		151,451	311,913
Operating income (loss)		(60,999)	(235,447)
Other income (expense)
Interest expense		(82,318)	(20,260)
Gain on owners debt		-	-
Gain on sale of assets		-	-
Net loss		$ (143,317)	$ (255,707)
Per share information
Net loss per common share
	Basic	$ (0.000)	$ (0.005)
	Fully diluted	$ (0.000)	$ (0.005)
Weighted average number of common
	stock outstanding - basic	160,945,647	54,248,858
Weighted average number of common
	stock outstanding - diluted	160,945,647	54,248,858

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

Deltron, Inc. and Subsidiary
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		For the six Months ended
		June 30,
		2010	2009
Sales		$1,458,502	$ 907,152
Cost of sales		1,363,858	860,560
Gross profit		94,644	46,592
Selling, general and administrative expenses		242,505	596,696
Operating income (loss)		(147,861)	(550,104)
Other income (expense)
Interest expense		(92,253)	(36,325)
Other income		-	12,500
Write off of debt from subsidiary		(21,799)	-
Gain on owners debt		-	256,750
Gain on sale of assets		1,905	-
Net loss		$ (260,008)	$ (317,179)
Per share information
Net loss per common share
	Basic	$ (0.001)	$ (0.008)
	Fully diluted	$ (0.001)	$ (0.008)
Weighted average number of common
	stock outstanding - basic	142,462,313	39,306,689
Weighted average number of common
	stock outstanding - diluted	142,462,313	39,306,689

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

Deltron, Inc. and Subsidiary
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
			For the six Months ended
			June 30,
			2010	2009
Cash Flows from Operating Activities:
	Net Income (loss)		$ (260,008)	$ (317,179)
Adjustments to reconcile net loss to net cash used
	in operating activities:
	Depreciation		4,166	2,000
	Beneficial conversion feature		69,500	-
	Gain on extinguishment of debt		-	(256,750)
	(Increase) Decrease in accounts recievable		(147,368)	95,415
	(Increase) Decrease in inventory		(43,667)	(1,145)
	(Increase) Decrease in prepiad expenses		(9,389)	-
	Increase (decrease) in accounts payable		159,003	111,257
	Increase (decrease) in accrued expenses		106,753	(11,913)
	Increase (decrease) in accrued interest - related parties		48,589	-
Net Cash (Used) by Operating Activities			(72,421)	(378,315)
Cash Flows From Investing Activities
	Increase in loans receivable		-	-
	Purchase of equipment		-	-
Net Cash Used in Investing Activities			-
Cash Flows from Investing Activities
	Proceeds from sale of common stock			370,221
	Borrowing (payments) on line of credit		-	(10,000)
	Borrowing on related party notes		69,500
	Borrowing (payments) on shareholder loans		-	(28,735)
Net Cash Provided / (Used) by Financing Activities			69,500	331,486
Net Increase (decrease) in Cash			(2,921)	(46,829)
Cash and Cash Equivalents - Beginning of Period			29,986	78,738
Cash and Cash Equivalents - End of Period			$ 27,065	$ 31,909
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Cash paid for interest expense	$ 6,232		$ 14,193
	Cash paid for income taxes	$ -		$ -

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

Deltron, Inc. and Subsidiary
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER'S (DEFICIT) EQUITY
			Additional
	Common Stock		paid-in	Accumulated
	Number of shares	Amount	Capital	Deficit	Totals
Balance – December 31, 2008	14,403,074	$ 14,403	$ 1,911,235	$ (2,218,137)	$ (292,499)
Recapitalization in reverse acquisition			(624,200)		(64,200)
Issuance of stock for cash	109,575,906	109,576	560,646		670,222
Net income				(499,863)	(499,863)
Balance - December 31, 2009	123,978,980	123,979	1,847,681	(2,718,001)	(746,341)
Beneficial conversion feature
- convertible notes payable - related parties	-	-	69,500	-	69,500
Recapitalization in reverse acquisition	554,500,000	554,500	(614,414)	-	(59,914)
Net loss	-	-	-	(260,008)	(260,008)
Balance - June 30, 2010, unaudited	678,478,980	$ 678,479	$ 1,302,767	$ (2,978,009)	$ (996,763)

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

Deltron, Inc. & Subsidiary.

Notes to Unaudited Condensed Consolidated Financial Statements

~~June 30,~~December 31, 2010

NOTE 1~~. ORGANIZATION~~- 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 ~~the~~manufacturing ~~manufacturer~~ and ~~sales~~selling of open cast molded ~~polyurethane~~ polyurethane elastomer products such as skateboard, roller skate, and industrial wheels.

After the acquisition of Blu Vu’s ~~asset~~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, ~~the~~Deltron ~~Company~~ 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 ~~will~~has ~~transfer~~transferred all U.S. and international patent rights to the Company. ~~The~~ ~~Company~~ However, ~~expects~~if ~~that~~ the ~~transfer of those rights will be completed in the next 90 days. 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’s assets and Elasco, Inc. by the Company has been accounted for as a reverse ~~recapitalization~~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 generally accepted accounting principles. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, ~~after~~Elasco. All ~~elimination of all~~ significant intercompany transactions have ~~and~~been ~~balances.~~eliminated in consolidation.

Interim Periods

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 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 ~~six~~three months ended ~~June~~December 3031, 2010 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~~ year ended ~~December~~September 3130, ~~2009~~2010 thereto included in the Company’s Form 810-K filed ~~on May~~ ~~28, 2010 and 8-K/A filed~~ on ~~August~~January 13, 2010.

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. 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 of reporting cash flows, the Company considers all short term debt securities 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.

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 31, 2010, accounts receivable amounted to $418,320, net of allowance of doubtful accounts of $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.

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.

Income Taxes

The Company recognizes the tax effects of transactions in the year in which such transactions enter into the determination of net income, regardless of when reported for tax purposes. Deferred taxes are provided in the financial statements under ASC 740-20 to give effect to the resulting temporary differences which may arise from differences in the bases of fixed assets, depreciation methods, allowances, and start-up costs based on the income taxes expected to be payable in future years.

The Company follows the provisions of uncertain tax positions as addressed in ASC 740-10-65-1. The Company recognized approximately no increase in the liability for unrecognized tax benefits. The Company has no tax position as of ~~June~~December 3031, 2010 for which the ultimate deductibility is highly certain ~~but~~ 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 ~~June~~December 3031, 2010. ~~The~~ The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its continued losses.

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.

Use of Estimates

Advertising Costs

Advertising costs are expensed when incurred.

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 ~~Level~~of 2December ~~inputs~~31, 2010, to the ~~valuation~~Company ~~methodology~~used ~~include~~level ~~quoted~~3 ~~prices~~inputs for ~~similar~~its ~~assets~~valuation ~~and~~methodology ~~liabilities in active markets, and inputs that are observable~~ for the ~~assets~~fair value orof ~~liability,~~its ~~either~~notes ~~directly~~payable orand ~~indirectly,~~derivative ~~for~~liability ~~substantially~~as ~~the full term of the financial instruments.~~following:

· Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.


	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

~~During the six months ended June 30, 2010, the Company issued convertible notes totaling $69,500.~~ As of ~~June~~December 3031, 2010, the ~~carrying~~Company ~~value~~did ofnot ~~these~~identify ~~convertible notes~~any ~~was~~other ~~$69,500.~~assets ~~The~~or ~~Company~~liabilities ~~used~~that ~~level 3 inputs for its valuation methodology~~are ~~and~~required ~~the fair value was determined~~ to be ~~approximately~~presented ~~$68,500~~on ~~using~~the ~~cash~~balance ~~flows discounted~~sheet at ~~relevant~~fair ~~market~~value ~~interest rates~~ in ~~effect~~accordance ~~at the period close since~~with ~~there~~ASC ~~is no observable market price~~820-10.

~~As of~~Revenue ~~June 30, 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.~~Recognition

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)


			December 31,		September 30,
			2010		2010
Total Assets
	Rebreather	$	77,374	$	42,852
	Polyurethane		871,410		1,045,136
		$	948,784	$	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 ~~and six~~ months ended ~~June~~December 3031, 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 ~~and six~~ months ended ~~June~~December 3031, 2009, the Company did not have common equivalent shares.

Significant Recent Accounting Pronouncements

In ~~May~~ October 2009, the ~~Financial Accounting Standards Board ("~~FASB") issued Accounting Standards Codification Topic No. ~~855~~605, Multiple-Deliverable ~~Subsequent~~Revenue ~~Events~~Arrangements. This guidance establishes ~~general~~a ~~standards~~selling price ofhierarchy ~~accounting~~ for ~~and,~~determining ~~disclosure of, events that occur after~~ the ~~balance~~selling ~~sheet~~price ~~date~~of ~~but~~a ~~before~~deliverable ~~financial~~and ~~statements~~expands the ~~are~~disclosures ~~issued~~required ~~or are~~for ~~available~~multiple-deliverable torevenue ~~be issued~~arrangements. ~~It sets forth (i) the period after the balance sheet~~This ~~date~~guidance ~~during~~is ~~which~~effective ~~management~~for ofrevenue aarrangements ~~reporting entity should evaluate events or transactions~~ that ~~may~~are ~~occur~~entered ~~for~~into ~~potential recognition~~ or ~~disclosure in the~~are ~~financial~~materially ~~statements,~~modified ~~(ii)~~in ~~the~~fiscal ~~circumstances~~years ~~under~~beginning ~~which~~on ~~an entity should recognize events~~ or ~~transactions occurring~~ after ~~the~~June ~~balance~~15, ~~sheet~~2010, ~~date in its~~with ~~financial~~early ~~statements~~adoption ~~and (iii) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date~~permitted. The ~~guidance is~~adoption ~~effective~~will ~~for~~have ~~interim or annual financial periods ending after June 15, 2009 and was adopted with~~ no material ~~effect~~impact on the Company'’s ~~statement of~~ financial ~~condition~~ ~~or results of operations~~statements.

In ~~June~~ ~~2009~~January 2010, the FASB issued ~~Accounting~~ASU ~~Standards Codification Topic~~ No. ~~105~~ 2010-~~10,~~06 ~~The FASB~~regarding ~~Accounting~~fair ~~Standards~~value measurements ~~Codification~~ and ~~the~~disclosures ~~Hierarchy~~and ofimprovement ~~Generally~~in ~~Accepted Accounting Principles ("ASC 105-10"). This guidance establishes~~ the ~~FASB Accounting~~disclosure ~~Standards~~about ~~Codification~~fair ~~(the "Codification") as the source of~~value ~~authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U~~measurements.~~S. GAAP.~~ ~~Rules~~This ~~and~~ASU ~~interpretive~~requires ~~releases~~additional ofdisclosures ~~the SEC~~regarding ~~under~~significant ~~authority~~transfers ~~of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained~~ in ~~the~~and ~~Codification carries~~out ~~an equal level~~ of ~~authority.~~Levels ~~The~~1 ~~Codification superseded all existing non-SEC accounting~~ and ~~reporting~~2 ~~standards.~~of ~~All~~fair ~~other~~value ~~non-grandfathered~~measurements, ~~non-SEC~~ ~~accounting~~including ~~literature~~a ~~not~~description ~~included~~of in the ~~Codification~~reasons isfor ~~non-authoritative. The FASB will not issue new standards in~~ the ~~form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts~~transfers. ~~Instead~~ Further, ~~it will issue~~this ~~Accounting~~ASU ~~Standards~~requires ~~Updates~~additional ~~("ASUs").~~disclosures ~~The~~for ~~FASB~~the ~~will~~activity ~~not consider ASUs as authoritative~~ in ~~their~~Level ~~own~~3 ~~right.~~fair ~~ASUs will serve only to update the~~value ~~Codification~~measurements, ~~provide~~requiring ~~background~~presentation of information about ~~the~~purchases, ~~guidance and provide the~~sales, basis for conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification. ASC 105-10 is effective for the financial statements issued for interim and annual periods ending after September 15issuances, ~~2009. The adoption will have no material impact on the Company’s consolidated financial statements but will require that interim~~ and ~~annual~~settlements ~~filings~~in ~~include references to~~ the ~~Codification.~~

~~In October~~reconciliation ~~2009,~~for ~~the~~fair ~~FASB~~value ~~issued Accounting Standards Codification Topic No~~measurements. ~~605, Multiple-Deliverable Revenue Arrangements.~~ This ~~guidance~~ASU ~~establishes a selling~~is ~~price~~effective ~~hierarchy~~ for ~~determining~~fiscal ~~the~~years ~~selling~~beginning ~~price~~after ofDecember a15, ~~deliverable~~2010, and ~~expands the disclosures required~~ for ~~multiple-deliverable revenue arrangements. This~~interim ~~guidance~~periods iswithin ~~effective~~those ~~for revenue arrangements that are entered into or are materially modified in~~ fiscal years. The ~~beginning~~Company ondoes ornot ~~after~~expect ~~June 15, 2010, with~~the ~~early~~ adoption ~~permitted.~~of ~~The~~this ~~adoption~~ASU ~~will~~to have noa material impact on ~~the Company’s~~our ~~consolidated~~ financial statements.

In February 2010, the FASB issued Accounting Standards Update No. 2010-09 (“ASU 2010-09”) as amendments to certain recognition and disclosure requirements. The amendments remove the requirement for an SEC filer to 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 literature. All of the amendments in ASU 2010-09 were effective upon issuance for interim and annual periods. The adoption of ASU 2010-09 did not have a material impact on the Company’s consolidated financial statements

13In 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.

correction of an error or retrospective application of U.S. GAAP. Those amendments remove potential conflicts with the SEC’s literature. All of the amendments in ASU 2010-09 were effective upon issuance for interim and annual periods. The adoption of ASU 2010-09 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 ~~June~~December 3031, 2010 the company had a net deficit in retained earnings of $(23,~~978~~261,~~009~~750) and a net loss of $(~~260~~183,~~008~~159) for the ~~six~~quarter ~~months~~ then ended. These matters create substantial doubt about the Company’s ability to continue as a going concern. For the ~~six~~quarter ~~months~~ ended ~~June~~December 3031, 2010, the Company is able to pay its obligations to vendors from ~~fund~~funds raised from ~~shareholders.~~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.

June 30, 2010


	December 31, 2010	September 30, 2010

Raw material	$ 231,879	$ 232,962
Work in process	40,226	41,513
Finished goods	113,590	67,996
	385,695	342,471
Less allowance for obsolete inventory	(9,795)	(9,795)

~~December 31~~$ 375,900 ~~2009~~$ 332,676

Raw material

$253,641

$219,372

Work in process

55,585

31,210

Finished goods

64,227

79,204

373,453

329,786

Less allowance for obsolete inventory

(9,000)

$364,453

$320,786

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at ~~June~~December 3031, 2010 and ~~December~~September 3130, ~~2009~~ 2010.

June 30, 2010


	December 31, 2010	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	497,262	494,412

	$ 29,389	$ 32,239

December 31, 2009

Machinery & equipment

$237,377

Tooling

139,138

Computer equipment

94,383

Leasehold improvements

38,720

Furniture, fixtures and office equipment

17,033

526,651

Less accumulated depreciation

480,976

476,810

$ 45,675

$ 49,841

NOTE 5 – LINE OF CREDIT

The Company has entered into a line of credit agreement with a bank. The maximum borrowing is $~~125~~100,000. Interest is calculated at prime plus 1.5% (with an interest rate floor of 6.5%) and is paid monthly. The agreement expires December 15, ~~2010~~2011 at which time the entire principal balance is due. The line of credit is personally guaranteed by the Trust of the former owner of Elasco, who is the president of the Company. The outstanding balance at ~~both~~December ~~June 30~~31, 2010 and ~~December~~September 3130, ~~2009~~2010 ~~was~~is $100,000 and $125,000, respectively, at 6.5%.

NOTE 6 – NOTES PAYABLE – RELATED ~~PARTY~~PARTIES

Concurrent with the sale of Elasco to Blu Vu, the previous owner, Henry Larrucea,who is the current officer and director of the Company, agreed to 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 of $256,750 was recorded as a gain in ~~Other~~other ~~Income~~income in the year ended September 30, 2009. Total interest paid or accrued for the shareholder for the ~~six~~ three months ending ~~June~~December 3031, 2010 was $147,~~692~~ 347 and the balance of the note as of December ~~June 30~~31, 2010 was $587,684. Payments have not been made on this note since July 2009. There iswas ~~approximately~~ $2943,~~000~~151 of accrued interest at ~~June~~December 3031, 2010.

~~The~~Mr. ~~same~~Larrucea ~~party~~also received a promissory note for the stock of Elasco for $540,000. The note is due in monthly payments of $10,000 and bears interest at 4.23%. The note is secured by the stock of Elasco. Total interest paid or accrued for the ~~shareholder~~three ~~for the six~~ months ending ~~June~~December 3031, 2010 was $105,~~732~~367 and the balance of the note as of ~~June~~December 3031, 2010 was $507,425. Payments have not been made on this note since August 2009. There ~~is approximately~~was $1930,~~000~~528 of accrued interest at ~~June~~December 3031, 2010.

~~The Company~~Both ~~has two notes payable to shareholders for $20,000 and $19,500, which it~~of ~~acquired~~these ~~under the May 26 Blu Vu asset purchase agreement. These~~ notes are ~~due~~ ~~July~~currently ~~12,~~in ~~2010~~default ~~and~~due ~~August~~to ~~17,~~non-payment ~~2010,~~of ~~respectively~~principal and ~~bear~~ interest ~~at 5~~.~~0%. Both~~ Upon ~~notes~~default ~~are~~the ~~convertible~~loans ~~into~~become ~~shares~~due ofon ~~the~~demand. Mr. ~~Company’s~~Larrucea has ~~common~~granted ~~stock at~~ a ~~conversion~~ ~~discount~~waiver ofwhich ~~70%~~waives of the ~~stocks bid price.~~

~~The~~default ~~Company~~under ~~has~~the ~~three~~terms ~~notes~~of ~~payable~~the ~~to shareholders for $10,000, $5,000 and $15,000. These~~ notes ~~are due September 17, 2010, October 22, 2010~~ and ~~November~~releases ~~22, 2010, respectively and bear interest at 5.0%. All three notes are convertible into shares of~~ the ~~Company’s~~company ~~common~~from ~~stock~~liquidated ~~at a conversion discount~~damages ~~of 70% of the stocks bid price~~provision.

The ~~effect~~Company ofhas two notes payable to shareholders for $20,000 and $19,500, which it acquired under the ~~beneficial~~May ~~conversion~~26 ~~feature~~Blu ~~has~~Vu ~~been~~asset ~~recoded~~purchase asagreement. These notes are due on May 28, 2011 and bear interest ~~expense~~at 5.0%. Both notes are convertible into shares of ~~$69,500~~the Company’s common stock at a conversion discount of 70% of the stocks bid price but in no event shall the ~~six~~conversion ~~months~~price ~~ended~~be ~~June~~less ~~30,~~than ~~2010~~par value of $0.001.

~~Current~~The ~~maturities~~Company ofhas ~~the~~nine notes payable to shareholders for ~~each~~a total of ~~the~~$136,000. These ~~five~~notes ~~years~~are ~~ending~~due ~~December~~ranging ~~31 are~~from asSeptember ~~follows:~~ 17, 2010 ~~$285~~to March 28,~~989;~~ 2011 $all bearing ~~158,375;~~interest ~~2012~~at ~~$165,620;~~5.0%. All ~~2013~~nine notes are convertible into shares of ~~$173,201;~~the ~~2014 $89,924,~~Company’s ~~thereafter~~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 $~~291,499~~0.001.

~~NOTE~~As of 7December –31, ~~CONCENTRATION~~2010, OFthe ~~CREDIT~~Company ~~RISK~~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.

~~A material~~Current ~~part~~maturities of the ~~Company’s~~notes ~~account~~payable ~~receivables~~for iseach ~~outstanding with five customers. The amount owed by these customers at June 30, 2010, was $336,913, approximately 84%~~ of the ~~Company’s receivables. Sales to the top~~ five ~~customers~~years ~~represented~~ending ~~84%~~September of30 ~~total~~are ~~sales~~as ~~for the six~~ follows:


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

~~months ended~~NOTE ~~June~~7 ~~30, 2010. The amount owed by these customers at December 31,~~– ~~2009,~~CONVERTIBLE ~~was~~NOTES ~~$172,433,~~PAYABLE ~~approximately 69% of the Company’s receivables. Sales to these five customers represented 74% of total sales for the year ended December 31, 2009.~~

~~NOTE~~In October, 8November and December 2010, the Company entered into securities –purchase ~~COMMITMENTS~~agreements –(the ~~RELATED~~“Purchase ~~PARTIES~~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 and presented at fair value. The derivative obligation arises because, based on historical trading patterns of the Company’s ~~leases~~stock, athe formula ~~manufacturing~~for ~~and~~determining ~~office~~the ~~facility~~Conversion ~~from~~Rate is expected to result in a ~~related~~lower Conversion ~~partnership~~Rate than the closing price of the stock on the actual date of conversion (hereinafter referred to as the “Variable Conversion Rate anDifferential”). ~~operating~~The ~~lease~~Company ~~which~~selected ~~expires~~the historical simulation approach to value this derivative liability believing that this method results in ~~2015~~a valuation that most closely relates to the economic reality of these transactions. Under this approach, the Company computed the Variable Conversion Rate Differential for each trading day during the twelve month period prior to the date of issuance of each convertible promissory note and then computed the average of these daily Variable Conversion Rate Differentials over the twelve month period. In accordance with GAAP, the derivative liability is required to be re-evaluated at each balance sheet date. The total unamortized discount represented by the value of the conversion feature and the derivative liability is being accreted over the eight month period until the conversion of the convertible promissory notes into common stock is permitted. This ~~lease~~results ~~currently~~in ~~requires~~an overall effective ~~monthly~~interest ~~payments~~rate of 83% on the $577,~~533~~500 ~~plus~~convertible ~~related~~notes. ~~insurance~~Accordingly, on issuance date, the Company recorded derivative liability and ~~maintenance~~discount on the Convertible Notes of $59,020. ~~Rental~~ For the three month period ended December 31, 2010, the amount of interest expense ~~under~~resulting from accretion of the unamortized discount on the convertible promissory notes amounted to $15,325. The remaining unamortized balance of this ~~lease~~discount, ~~for~~which amounted to $43,695, has been netted against the ~~six~~face ~~months~~amount ~~ended~~of ~~June~~the 30convertible promissory notes resulting in a net carrying amount of $33,805 which is included in the accompanying balance sheet at December 31, 2010. As of December 31, 2010, fair value of the derivative liability was $3365,~~198~~874 ~~all~~ and the change in fair value of ~~which~~$6,854 was recorded ~~paid~~against toincome afor ~~related~~the ~~party~~quarter ended December 31, 2010.

NOTE 8 – CONCENTRATION OF CREDIT RISK

A material part of the Company’s account receivables is outstanding with five customers. The amount owed by these customers at December 31, 2010 was $344,131, approximately 82% of the Company’s receivables. Sales to the top five customers represented 79% 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 these five customers represented 76% of total sales for the quarter ended December 31, 2009. Sales are concentrated in the western United States.

For the three months ended December 31, 2010 and 2009, the Company purchased approximately $324,808 and 115,166, respectively, of raw material from five suppliers, representing 80% and 71%, respectively, of the Company’s total purchases. As of December 31, 2010 and September 30, 2010, amounts owed to these five suppliers were approximately $233,284 and $186,000 representing 80% and 41%, respectively, of the total accounts payable.

NOTE 9 – 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 months ended December 31, 2010 was $16,599 all of which was paid to a related party.

Future rental payments required under this operating lease are as follows:

Year Ended

~~December~~September 3130,

2010

$ 66,396

2011

66 $ 49,~~396~~797

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.

~~NOTE~~Prior to 9the asset purchase agreement between Blu Vu and Deltron, Blu Vu was in –negotiations ~~STOCK~~with ~~HOLDER~~Radikal, ~~EQUITY~~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.

~~At December~~Pursuant ~~31,~~to ~~2009~~ the ~~Company~~terms ~~had 5,545,000 shares~~ of ~~common~~the ~~stock,~~Radikal ~~par value $.001~~Agreement, ~~outstanding. On~~Radikal ~~March 10, 2010, the Corporation’s Board of~~has ~~Directors~~transferred ~~approved~~all aU.S. ~~one~~and ~~hundred-for-one~~international ~~(100:1)~~patent ~~forward~~rights ~~split~~to of the ~~Corporation’s~~ ~~common stock, par value $0~~Company.~~001~~ ~~per~~If ~~share. The forward split was for shareholders of record as of~~ the ~~close of business on Friday, April 30,~~per ~~2010,~~unit ~~and~~fee ~~the~~payments ~~market~~are ~~effective~~not ~~date~~made ~~for~~when ~~the reverse stock split was May 3~~due, ~~2010. As~~Radikal ahas ~~result of~~ the ~~forward~~right ~~stock~~to ~~split, for every one share of~~ the ~~Corporation’s old~~return ~~common stock shareholders received ninety-nine additional shares~~ of ~~the~~ ~~Corporation’s~~the ~~new~~intellectual ~~common~~property ~~stock~~transferred. ~~Immediately~~ ~~following~~Payments ~~the~~for ~~forward~~these ~~split, the~~rights ~~number~~are ~~of shares of the Corporation’s outstanding issued common stock was~~not ~~increased~~required ~~from 5,545,000 shares~~ to ~~approximately~~begin ~~554,500,000~~until ~~shares,~~January ~~par value $~~2012.~~0001.~~

OnNOTE ~~May 26,~~10 ~~2010,~~– ~~the Company entered into an Asset Purchase Agreement (the “Agreement”)~~STOCK ~~with~~HOLDER 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’s subsidiary, Elasco, Inc., certain intellectual properties, computer programs and software, contracts, claims and accounts receivables associated with the operation of Blue Vu’s business of developing underwater deep breathing apparatus. In consideration of the sale of the assets of Blue Vu, the shareholders of Blue Vu, received EQUITY

16At December 31, 2009 the Company had 5,545,000 shares of common stock, par value $.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 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 $.001.

~~restricted~~On ~~common~~May 26, ~~shares~~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 ~~totaling~~purchased substantially all ~~123~~of the assets of Blue Vu,~~978~~ consisting of,~~980~~ but not limited to, all stock of Blu Vu’s subsidiary, Elasco, Inc. No, ~~other~~certain ~~consideration~~intellectual ~~will~~properties, becomputer programs ~~exchanged~~and insoftware, contracts, claims and accounts receivables associated with the ~~transaction.~~operation of Blu Vu’s business of developing underwater deep breathing apparatus. In

Asconsideration of ~~June~~ ~~30,~~the ~~2010,~~sale of the ~~number~~assets of Blu Vu, the shareholders of Blu Vu, received restricted common shares ~~issued~~of ~~and~~the ~~outstanding was~~Company ~~678~~totaling 123,~~478~~978,980. No other consideration was exchanged in the transaction.

~~NOTE~~In November 2010, the Company 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 ~~INCOME~~Stock ~~TAXES~~Incentive Program (ESIP).

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 ~~June~~December 3031, 2010 and December 31, 2009 except for $800 each year for state franchise taxes. For the ~~six~~three months ended ~~June~~December 3031, 2010 the Company had incurred a loss and had no a state income tax ~~liability~~payable of $800 at ~~June~~December 3031, 2010. No income tax benefit was recognized as of ~~June~~ 30December 31, 2010 and December 31, 2009 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.

~~NOTE~~The Company’s 11net loss of approximately $(183,159) will be carried forward to offset –future ~~SUBSEQUENT~~taxable ~~EVENTS~~income. As of December 31, 2010, the Company’s federal NOL is approximately $386,000 expiring in 2025, and its California NOL is approximately $296,000 expiring 2015. The Company has book/tax differences of approximately $270,000 comprised of accrued officer’s compensation of $70,000, accrued consulting of $120,000 and accrued interest of $80,000. These differences result in a deferred tax asset of approximately $91,000. The federal and California NOLs result in a deferred tax asset of approximately $124,000. Due to the uncertainty of recognizing any future benefit, the Company has recorded a valuation allowance of $215,000 to offset the deferred tax asset. The valuation allowance increased $69,600 from September 30, 2010, as a result of the uncertainty of utilizing the deferred tax assets.

~~Prior to~~The ~~the~~deferred ~~asset purchase agreement between Blu Vu and Deltron, Blu Vu was in~~tax 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~~comprised ~~agreement with Deltron. On August 4, 2010,~~ the ~~Company~~ ~~entered~~following ~~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 for~~ at ~~least~~December ~~500 units per year for 2 years~~31, ~~after which the obligation to Radikal will be fulfilled.~~2010:

Pursuant to the terms of the Radikal Agreement, Radikal will transfer all U.S. and international patent rights to the Company. The Company expects that the transfer of those rights will be completed in the next 90 days. If the per unit fee payments are not made when due, Radikal has the right to the return of the intellectual property transferred.


Deferred tax asset:

	Federal benefit of NOL carryover	$ 96,500
	California benefit of NOL carryover	27,500
	Accrued officer's compensation	24,000
	Accrued consulting	40,000
	Accrued interest	27,000

In July 2010, the Company borrowed $55,000 from three shareholders by issuing convertible notes in the amounts of $5,000, $15,000, $20,000 and $15,000 with the same conversion features as the notes issued in the six months ended June 30, 2010. The notes are all due in six months and bear interest at 5%.



	Total			215,000

	Valuation allowance			(215,000)

	Net deferred tax asset			$ -

17NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated subsequent event for purposes of recognition or disclosure in the financial statements through the date of issuance of its financial statements.

On January 21, 2011, the Company issued a convertible note for $50,000. 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 2.

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

Forward-Looking Statements

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly 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 – Risk Factors” section in our Annual Report on Form 10-K for the year ended September 30, ~~2009~~2010. You 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. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

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

~~Results of Operations~~ Overview

~~We generated~~As ~~revenues~~previously ~~from~~described, ~~sales~~we ofcompleted ~~our~~an ~~products~~Asset inPurchase under which Deltron acquired the ~~amount~~assets of ~~$854~~Blu Vu Deep Oil & Gas Exploration,~~999~~ ~~and~~Inc. ~~$546,503~~ The ~~for~~transaction ~~the~~was ~~three~~treated ~~months~~as ~~ended~~a ~~June~~reverse 30recapitalization, ~~2010~~with ~~and~~Blu ~~2009~~Vu’s wholly owned subsidiary, ~~respectively~~Elasco, ~~and incurred~~Inc. ~~$151,451~~(“Elasco”) ~~and~~becoming ~~$311~~the accounting acquirer. Therefore,~~913~~ inDeltron ~~selling~~assumed the fiscal year end of Elasco of December 31. On August 13, ~~general~~2010, ~~and~~following ~~administrative~~the ~~expenses~~completion of the Asset ~~for~~Purchase Agreement, the ~~quarters~~Company ~~ended~~adopted ~~June~~the fiscal year end of the former shell Company of September 30, ~~2010~~for ~~and~~financial ~~2009,~~reporting ~~respectively~~purposes.

~~We generated~~The ~~revenues~~following ~~from~~discussion ~~sales~~highlights ofthe principal factors that have affected our ~~products~~financial incondition ~~the~~and ~~amount~~results of ~~$1,1458,502~~operations ~~and~~as well as our ~~$907,152~~liquidity and capital resources for the ~~six~~periods ~~months~~described. The ~~ended~~discussion reflects ~~June~~the ~~30,~~financial ~~2010~~condition and ~~2009,~~results ~~respectively,~~of operations as of and for the ~~incurred~~three-months ~~$242,505~~periods ~~and~~ended ~~$596~~December 31,~~696~~ in2010 ~~selling~~and ~~general~~2009. This ~~and~~discussion contains ~~administrative~~forward-looking ~~expenses~~statements. Please see “Forward-Looking Statements” for ~~the~~a ~~six~~discussion ~~months~~of ~~ended~~the ~~June 30~~uncertainties, ~~2010~~risks and ~~2009,~~assumptions associated ~~respectively~~with these forward-looking statements.

~~Revenues increased~~We ~~due~~are toa ~~new~~manufacturing ~~efforts~~company bywith ~~the~~two ~~Company~~distinct tobusiness ~~increase~~segments polyurethane ~~revenue~~and inrebreather. Our ~~2010~~primary ~~compared~~business is Elasco which is tofocused ~~2009~~on bymanufacturing ~~the~~technology ~~introduction~~for ofplastic ~~new~~and polyurethane products. Our ~~and~~secondary ~~improvement~~business insegment is focused on the ~~overall~~development of deep-sea ~~national~~exploration ~~economy~~breathing technology marketed as Blu Vu.

~~We incurred~~Polyurethane cost of goods sold of $764,547 and $470,037 for the quarters ended June 30, 2010 and 2009 respectively. We incurred cost of goods sold of $1,363,858 and $860,560 for the six months ended June 30, 2010 and 2009, respectively.Products

~~The increase~~Our ~~corresponded~~polyurethane toproducts ~~the~~are ~~increase~~manufactured inand ~~revenue,~~sold ~~but~~by atour ~~a smaller percentage~~wholly ~~increase~~owned ~~than~~subsidiary, ~~revenues~~Elasco, ~~due~~which tomakes ~~operating~~products ~~efficiencies~~for ~~realized~~the inrecreational ~~2010.Expenses~~roller skate ~~decreased~~and ~~due~~skateboarding tomarkets. They aare ~~decrease~~of inthe ~~salaries~~high ~~and consulting fees.~~

~~The following table provides selected financial data about our company as of June 30, 2010 and December 31, 2009.~~21

18performance 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.

~~Balance~~Elasco also produces a variety of industrial products that are ~~Sheet~~used ~~Data~~on assemblies and machinery where a long life cycle is needed. Some typical products are exercise equipment rollers, bowling pin setter pads and liners, and fire hydrant seals. Elasco’s polyurethane polymers excel in the gap between rubber and plastics, but can mimic many rubbers and plastics with specific formulations that optimize those characteristics. A recent formula developed exclusively by Elasco uses a natural soy-based resin as an ingredient to make an elastomer that performs like other hydrocarbon derived polyurethanes. This reduces related carbon emissions from the manufacturing process for that resin by 36%. This product is marketed as a green alternative to oil based products, and is finding favor in the youth market that many of Elasco’s products service.

~~June 30,~~Rebreather ~~2010~~System

~~December~~“Normal” scuba is an open circuit system. Combining a 31high-pressure cylinder and a demand regulator, ~~2009~~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.

~~Cash~~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 ~~cash~~over ~~equivalents~~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.

$Business operations

27As of December 31,~~065~~ 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.

As of December 31, 2010, our current liabilities of approximately $1.33 million exceeded our current assets of $919,395 by $413,631 and our net losses will continue for the foreseeable future. As part of the $1.33 million of current liabilities we have $155,196, net of note discount of $20,304, of convertible notes to related parties and $33,805, net 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. 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

~~29,986~~22

~~Total~~development and commercialization activities. This would ~~assets~~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.

$Financial Operations Overview

~~890,575~~Sales

$Our 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 month periods ended December 31, 2010 and 2009.

~~697,238~~Cost of Sales

~~Total~~Cost of sales for plastic and polyurethane products represents the ~~liabilities~~cost of direct labor, raw material, supplies and other miscellaneous support expenses. No cost of sales for rebreather system is recorded because we have not generated any revenues from the sale of rebreather system.

$Selling, General and Administrative

1Our selling expenses consist primarily of personnel,~~887~~ media,~~338~~ 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.

$Critical Accounting Policies and Significant Judgments and Estimates

1This discussion and analysis of our financial condition and results of operations is based on our financial statements,~~443~~ 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,~~579~~ 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.

~~Shareholders’ equity~~Revenue ~~(deficit)~~Recognition

$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.

~~(996~~Results of Operations for the Three Months Ended December 31,~~763)~~ 2010 and 2009

$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

~~(746,341)~~23

~~Net~~principal business is manufacturing and selling of open cast ~~cash~~molded ~~provided~~polyurethane byelastomer ~~financing~~products ~~activities~~such as skateboard, ~~for~~roller ~~the~~skate, ~~six~~and industrial ~~month~~wheels. Our ~~period~~Rebreather ~~ending~~system, ~~June~~which 30is marketed as Blu Vu, is ~~2010~~engaged in the potential manufacture and mass-market of proprietary breathing equipment developed specifically for the oil and gas, ~~was~~mining ~~$69~~and safety industries,~~500~~ and military and recreational divers.

WeThe ~~have~~following notable ~~off~~presents ~~balance~~unaudited ~~sheet~~consolidated ~~arrangements.~~statement of operations data for each of the periods indicated as:

Plan of Operation


		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%

Until May 26, 2010, we were a development stage company that had no operations, no revenue, no financial backing and limited assets. We had originally planned to develop our property in San Jose, Costa Rica, to rent two three-bedroom apartments to middle income families. Recently, the Company has decided to redirect its business focus towards identifying and pursuing options regarding the development of a new business plan and direction. Sales

OnWith ~~May~~respect ~~26,~~to ~~2010,~~our ~~the Company~~polyurethane ~~entered~~business, ~~into~~our ansales ~~Asset~~increased ~~Purchase~~by $393,845 ~~Agreement~~for (the ~~“Agreement”)~~three ~~with~~months ~~Blu~~ended ~~Vu Deep~~December ~~Oil & Gas Exploration~~31, ~~Inc.~~2010, acompared ~~Nevada~~to ~~corporation~~the ~~(Blue Vu”). The~~same ~~acquisition~~period ofin ~~Blu~~2009, Vudue isto ~~being~~recovery ~~treated~~in asthe aeconomy ~~reverse~~and ~~recapitalization,~~introduction ~~with~~of ~~Blu~~our new ~~Vu’s~~products ~~wholly~~to ~~owned~~our ~~subsidiary~~current ~~Elasco~~customer ~~becoming the accounting acquiror for financial reporting purposes~~base.

~~On August~~In 4,respect ~~2010,~~to ~~Deltron~~our ~~entered into an agreement with Radikal, AS (“Radikal”), the owner of intellectual property involving~~ rebreather ~~technology~~product, towe ~~purchase its~~have ~~intellectual~~not ~~property~~produced ~~involving said technology (the “Radikal Agreement”).~~sales ~~The~~as ~~Radikal~~of ~~Agreement~~December ~~requires the Company to pay a per unit fee for at least 500 units per year for 2 years~~31, ~~after~~2010 ~~which~~and ~~the obligation to Radikal will be fulfilled~~2009.

~~Pursuant to the terms~~Cost of the Radikal Agreement, Radikal will transfer all U.S. and international patent rights to Deltron. Deltron expects that the transfer of those rights will be completed in the next 90 days. If the per unit fee payments are not made when due, Radikal has the right to the return of the intellectual property transferred.Sales

~~OVERVIEW~~Cost of sales consists of payroll, raw material, supplies and other miscellaneous costs for the Polyurethane products. For the three-month period ended December 31, 2010, costs of sales of $778,016 consist primarily of labor cost of $310,840, raw material cost of $400,705 and other costs of $66,471. For the three-month period ended December 31, 2009, cost of sales of $435,062 consisted primarily of labor costs of $232,697, raw material cost of $163,044, and other costs of $39,321. 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.

~~Blu Vu~~Selling, ~~originally~~ ~~formed in June of 2008, was a technology company focused on the~~General ~~development of deep-sea exploration breathing technology for the oil~~ and ~~gas industries;~~Administration as well as for use in fire and rescue, mining, hazardous materials industries, and recreational diving. Under the technical guidance of internationally renowned deep-sea diver, Dr. Jeffrey Bozanic, the Company expects to manufacture and mass market proprietary breathing equipment developed specifically for the oil & gas, mining, military, and safety industries, as well as the emerging market of recreational divers. Under the terms of the Agreement, Deltron acquired all of the assets associated with the operation of Blu Vu’s business.

~~Additionally,~~For ~~Deltron~~the ~~intends~~three ~~to seek complementary businesses to~~months ~~enhance~~ended ~~its~~December ~~growth~~31, by2010 ~~acquiring~~and ~~companies with historically profitable results~~2009, ~~strong~~ ~~balance~~our ~~sheets~~selling, ~~high~~general ~~profit margins,~~ and ~~solid management teams in place.~~administrative ~~Under~~expenses ~~the~~for ~~assumption of finding appropriate target companies, Deltron expects to fulfill its strategic growth plan with additional acquisitions during~~ each ofsegment ~~the~~are ~~next~~as ~~several~~follows ~~years.~~(unaudited):

~~On March~~ 24~~, 2009, Blu Vu acquired Elasco Inc., an engineered plastics and polyurethane molding company with a production facility in Southern California. Elasco is a leader in polyurethane and plastics~~


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

~~technologies. Elasco~~Selling, ~~has~~general ~~been in business since 1979 producing a variety of recreational~~ and ~~industrial~~administrative ~~products~~expenses ~~used~~associated inwith ~~dynamic~~our ~~applications~~polyurethane ~~made~~business ~~mainly~~consist ~~from~~primarily ~~polyurethane. The~~of ~~company~~payroll ~~also~~costs, ~~has~~rental ~~injection~~fee, ~~molding~~professional ~~capability~~fee, ofinsurance, ~~reinforced~~ and ~~non~~other ~~reinforced~~expense. For ~~plastics~~the ~~and~~three ~~produces~~months ~~many~~ended ~~parts~~December ~~for~~31, ~~its~~2010, ~~internal~~selling, ~~use~~general asand ~~component~~administrative ~~parts~~expenses inincluded ~~various assemblies. In~~the ~~what~~following: ispayroll ~~currently~~and abenefits ~~fragmented market~~$63,651, ~~Elasco~~professional ~~and~~fees ~~Deltron~~$8,163, ~~expect~~rent ~~to fill the~~expense ~~need~~$16,599, ~~for~~insurance ~~improved~~expenses $2,289, ~~safer~~ and ~~more~~other ~~efficient~~expenses ~~breathing technology~~$14,805. ~~The acquisition~~ ofFor ~~Elasco~~the comparable isperiod ~~intended~~in to2009 ~~allow~~expenses ~~Deltron~~were ~~to manufacture its proprietary Rebreather technologies,~~ as ~~well~~follows: aspayroll ~~provide~~and ~~new synergies among~~benefits ~~future~~$37,826, ~~acquired~~rent ~~companies~~expense ~~that~~$16,599, ~~may~~consulting ~~develop~~$13,712, ~~allowing~~professional ~~for~~fee ~~greater cost effectiveness~~$1,331, insurance ~~thus~~expenses ~~further~~$2,503 ~~enhancing~~and ~~each~~other ~~individual~~expenses ~~company’s strengths~~$18,214.

~~The molded~~Comparing ~~polyurethane~~the ~~products~~three ~~segment~~months ~~that~~ended ~~Elasco~~December ~~operates~~31, in2010, iswith anthe ~~industry that~~same isperiod ~~extremely~~in ~~fragmented. Most~~2009, ~~companies~~the ~~operate~~increase in ~~niche~~selling, ~~markets~~general ~~providing~~and administrative expenses ~~very~~were ~~specific~~primarily ~~products~~due to ~~their~~an ~~customer~~increase ~~base. The~~in ~~majority~~payroll ofexpenses ~~these companies~~resulting ~~use~~from aincrease ~~lesser amount of automation than Elasco does. They also~~in ~~have~~wages ~~significantly~~and ~~higher~~bonus ~~raw~~while ~~material~~other ~~costs~~expenses decreased because ~~they~~of ~~typically~~more ~~purchase~~outsourced ~~premixed~~services ~~packages~~were ~~through~~done ~~sources~~in-house ~~that~~in ~~significantly mark up the price of the base materials~~2010. ~~Elasco~~Other ~~has~~expenses aremained ~~“vertically integrated” production facility~~consistent ~~that~~for ~~enables~~the itthree tomonths ~~purchase~~ended ~~raw~~December ~~materials~~31, at2010 aand ~~significant discount from the typical price of premixed products~~2009. WeGeneral ~~expect to target companies for~~and ~~acquisition~~administrative ~~that~~expenses ~~have~~associated ~~synergies~~with ~~that~~our ~~will~~Blu ~~benefit~~Vu ~~from~~rebreather ~~advantages~~system inconsist ~~productivity~~primary ~~and~~of ~~raw~~consulting ~~material~~and ~~costs~~professional ~~that Elasco can provide in order to maximize the profit potential of those companies~~fees.

~~PRODUCTS~~Other income (expense)

~~Rebreather~~For ~~Systems~~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

~~A rebreather~~For ~~re-circulates~~ the ~~gas~~comparable aperiod ~~diver~~in ~~is breathing~~2009, ~~allowing~~we ~~the~~incurred ~~diver~~interest ~~to breath~~expense ~~from the same gas over and over again after removing the carbon dioxide~~of ~~generated~~$14,562 bypaid ~~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~~accrued ~~gases~~on ~~to make up what is consumed. Because~~ the ~~gas is reused~~$125,000 ~~instead~~line of ~~being~~credit ~~“thrown~~and ~~away” with every breath~~$1, ~~a diver can remain underwater far longer on much less gas. In fact~~095,110 ~~for~~long ~~some~~term ~~dives,~~promissory ~~rebreathers~~notes ~~can~~due ~~be as~~to ~~much~~a ~~as fifty times more efficient on gas consumption than standard scuba~~shareholder ~~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~~officer.

~~Benefits of Blu Vu Rebreather technology~~ Net Loss

~~•Maximizes~~The ~~No-Decompression~~increase ~~Time~~in net loss of $83,860 for the three months ended December 31, 2010, compared to the same period in 2009, was a net result of: an increase in our polyurethane product sales, an increase in selling, general and administration expenses due to the increase in salaries and professional fees in 2010 and the increase in interest expense resulted from amortization of beneficial conversion option embedded in the convertible notes in 2010.

•Extended diving depth capability

•Stealth - No bubbles

•Negligible limits to Air Travel after Diving

•Ship bottom inspections

•Size & weight of equipment package reduced

•Helium cost and consumption minimized

Products - Polyurethane

Elasco 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.

Elasco also produces a variety of industrial products that are used on assemblies and machinery where a long life cycle is needed. Some typical products are exercise equipment rollers, bowling pin setter pads and liners, and fire hydrant seals. Elasco’s polyurethane polymers excel in the gap between rubber and plastics, but can mimic many rubbers and plastics with specific formulations that optimize those characteristics. A recent formula developed exclusively by Elasco uses a natural soy-based resin as an ingredient to make an elastomer that performs like other hydrocarbon derived polyurethanes. This reduces related carbon emissions from the manufacturing process for that resin by 36%. This product is marketed as a green alternative to oil based products, and is finding favor in the youth market that many of Elasco’s products service. The versatility of its compounding provides Elasco with a wide range of performance characteristics outperforming other materials with:

•Excellent abrasion resistance

•High tensile and tear strengths

•Flexibility over a wide range of temperatures

•Increased elasticity over the entire hardness range

•High impact resistance and vibration dampening

•Excellent resistance to oils, greases, and many solvents

•Good weatherability

•Resistance to fungal and microbial attack

•Ability to bond to metals, other rubbers, plastics, and polymer compounds

•High load bearing capabilities

Liquidity and Capital Resources

~~Our cash~~Since ~~and~~our ~~cash~~inception, ~~equivalents~~we ~~balance~~have asincurred significant losses. As of ~~June~~December 3031, 2010, ~~was~~we had an accumulated deficit of approximately $273.26 million,~~065~~ and ~~December 31~~as of September 30, ~~2009~~2010, our accumulated deficit was approximately $~~55,338~~3.08 million. We have anot ~~working~~yet ~~(deficit)/capital~~achieved ofprofitability ~~($253,454)~~ and anticipate that ~~$91,002~~we aswill ofcontinue ~~June~~to ~~30,~~incur ~~2010~~net ~~and~~losses ~~December~~for ~~31,~~the ~~2009,~~foreseeable ~~respectively~~future. We ~~The~~expect that ~~Company~~our ~~is currently~~sales ~~financing~~and ~~operations~~general ~~using~~and ~~convertible~~administrative ~~debt~~expenses ~~instruments~~will continue to grow and, ~~see~~as ~~Note~~a 6result, ~~of the~~we ~~condensed~~will ~~consolidated~~need ~~financial~~to ~~statements~~generate ~~for~~significant ~~further~~product ~~discussion~~revenues to achieve profitability. We may never achieve profitability.

Due 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.

Operating Capital and Capital Expenditure Requirements

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.

We need additional funds 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 capital; however, we do not know whether additional funding will be available on acceptable terms, or at all, especially given the economic conditions that currently prevail. In addition, any additional equity funding may result in significant dilution to existing stockholders, and, if we incur additional debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for our business activities.

We expect to continue to incur operating losses in the future and to 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.

Sources of Liquidity

Since 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 months ended December 31, 2010, we had received $77,500 from issuance of convertible notes.

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.

Cash Flows

Net 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.

There was no net cash used in investing activities for the three months ended December 31, 2010 and 2009.

Net cash proceeds from financing activities for the three months ended December 31, 2010, were $41,994 which was primarily derived from the issuance of convertible notes and the paydown of the line of credit.

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 ~~never entered into any~~ no off-balance sheet ~~financing~~ arrangements ~~and~~or ~~have~~financing ~~not~~activities ~~formed~~with ~~any~~ special purpose ~~entities. We have not~~ ~~guaranteed any debt or commitments of other~~ entities ~~or entered into any options on non-financial assets~~.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4T4.

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, ~~Henry~~Randall ~~Larrucea~~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 ~~such~~and ~~that~~identified the ~~information~~ ~~relating~~following tomaterial ~~us,~~weaknesses: ~~required to be disclosed in~~

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

~~our~~2. Due ~~Securities~~to ~~and~~our ~~Exchange~~small ~~Commission (“SEC”) reports (i) is recorded~~size, ~~processed,~~the ~~summarized~~Company ~~and~~did ~~reported~~not ~~within~~maintain ~~the~~effective ~~time~~internal ~~periods specified~~controls into ~~SEC~~assure ~~rules~~segregation ~~and~~as ~~forms,~~the ~~and~~same ~~(ii)~~employee iswas ~~accumulated~~responsible ~~and~~for ~~communicated~~initiating ~~to our~~and ~~management,~~recording ~~including~~of ~~our chief executive officer and chief financial officer~~transactions, as ~~appropriate~~thereby tocreating ~~allow~~the ~~timely~~segregation ~~decisions~~of ~~regarding~~duties ~~required disclosure.~~weakness; and

~~Changes in Internal Control Over Financial Reporting~~27

~~There have been no changes in our internal control over financial~~3. ~~reporting~~The ~~that~~Company ~~occurred~~did ~~during~~not ~~the quarter ended June 30, 2010, that~~ have ~~materially~~ ~~affected~~an orindependent ~~are~~board ~~reasonably~~of ~~likely~~directors tofor ~~materially~~oversight ~~affect~~of ~~our internal~~the ~~control~~Company’s ~~over~~operations and financial reporting process.

~~PART~~Changes IIin –Internal ~~OTHER~~Control ~~INFORMATION~~Over Financial Reporting

~~ITEM~~There 1have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2010 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

~~LEGAL~~PART ~~PROCEEDINGS~~II – OTHER INFORMATION

InITEM ~~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~~1. ~~We are not a party to nor are we aware of any existing, pending or threatened lawsuits or other legal actions involving us.~~

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

~~The~~We ~~Company~~did ~~entered~~not ~~into an agreement with Blu Vu to~~ issue ~~123,98,980~~ ~~shares~~any ofequity ~~its~~securities ~~common~~during ~~stock in conjunction with~~ the ~~Asset~~quarter ~~Purchase~~ended ~~Agreement~~December ~~between~~31, ~~the Company and Blu Vu~~2010. ~~The shartea re authorized by have not yet been issued. These shares were issued without registration in reliance on Section 4(2) of the Securities Act.~~

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

([REMOVED AND RESERVED) ]

None.

ITEM 5.

OTHER INFORMATION

~~None.~~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

2228

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~~: August~~ 20February 16, 2011 By: /s/ ~~2010~~Henry Larrucea

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

~~Henry Larrucea President, Principal Executive and Financial Officer~~29

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