SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB


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


                      For the Quarter Ended August 31, 1997


                         Commission File Number 0-22382


                           SECTOR COMMUNICATIONS, INC.
                 (Name of small business issuer in its charter)



                  Nevada                                  56-1051491
     (State or other jurisdiction of                     (IRS Employer
      Incorporation or organization)                  Identification No.)


                 7601 Lewinsville Road, Suite 250, McLean, VA 22102
                       Address of principal executive offices

                                   (703) 761-1500
                             Issuer's Telephone Number


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 |_|

As of August 31, 1997 there were 45,898,066 shares of the Registrant's Common
Stock outstanding.

<PAGE>

                           SECTOR COMMUNICATIONS, INC.

                              REPORT ON FORM 10-QSB

                                TABLE OF CONTENTS

                                                                        Page
                                                                        ----

PART I -- FINANCIAL INFORMATION

   Item 1.  Financial Statements

      Consolidated balance sheet -
         August 31, 1997 (unaudited) and February 28, 1997................3

      Consolidated statement of operations -
         three and six month periods (unaudited) ended
         August 31, 1997 and 1996.........................................4

      Consolidated statement of cash flows -
         six month periods (unaudited) ended
         August 31, 1997 and 1996.........................................5

      Notes to consolidated financial statements (unaudited)..............6

   Item 2. Management's Discussion and Analysis..........................10

PART II -- OTHER INFORMATION

   Item 6.  Exhibits and Reports on Form 8-K.............................14


                                     Page 2
<PAGE>

                           SECTOR COMMUNICATIONS, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                         August 31,    February 28,
                                                               1997            1997
                                                       ------------   ------------
                                                        (Unaudited)
<S>                                                    <C>            <C>         
ASSETS                                                  
CURRENT ASSETS
   Cash and Cash Equivalents                           $     82,395   $     80,096
   Accounts Receivable, net of provision for
    doubtful accounts of $75,526 and $50,678                351,782        618,845
   Marketable Securities                                         --         21,762
   Related Party Receivables                                     --         32,198
   Receivable on Sale of Securities                          39,000      1,000,000
   Notes Receivables                                         86,312        143,110
   Prepaid Expenses                                          94,138        117,426
                                                       ------------   ------------
     Total Current Assets                                   653,627      2,013,437
                                                       ------------   ------------

PROPERTY AND EQUIPMENT                                    2,205,735      2,170,846
   Accumulated Depreciation                              (1,270,849)    (1,060,696)
                                                       ------------   ------------
   Net Book Value                                           934,886      1,110,150
                                                       ------------   ------------

OTHER ASSETS
   Intangible Assets, net                                 5,149,853      5,350,447
   Capitalized Mining Claim Costs                         1,036,523      1,036,523
   Deposits                                                  41,953         41,953
                                                       ------------   ------------
     Total Other Assets                                   6,228,329      6,428,923
                                                       ------------   ------------

     TOTAL OTHER ASSETS                                $  7,816,842   $  9,552,510
                                                       ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
   Accounts Payable and Accrued Expenses               $  1,231,828   $  1,218,867
   Short-Term Borrowing                                          --         12,028
   Deferred Revenue                                         275,199        449,254
   Due to Related Parties                                   110,444        474,021
                                                       ------------   ------------
     Total Current Liabilities                            1,617,471      2,154,170

Rent Deposit                                                 12,248         12,248
                                                       ------------   ------------

   TOTAL LIABILITIES                                      1,629,719      2,166,418
                                                       ------------   ------------

Commitments and Contingencies                                    --             --

STOCKHOLDERS' EQUITY
   Preferred Stock, $.001 par value; 5,000,000 shares
    authorized, no shares issued and outstanding                 --
   Common Stock, $.001 par value; 50,000,000 shares
    authorized, 45,898,066 and 44,898,066 shares
    issued and outstanding                                   45,898         44,898
   Additional Paid-in Capital                            13,474,729     13,116,354
   Retained Deficit                                      (7,200,639)    (5,658,196)
   Cumulative Foreign Currency Translation Adjustment      (132,865)      (116,964)
                                                       ------------   ------------
     Total Stockholders' Equity                           6,187,123      7,386,092
                                                       ------------   ------------

   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $  7,816,842   $  9,552,510
                                                       ============   ============
</TABLE>

The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements.


                                     Page 3
<PAGE>

                           SECTOR COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                     (UNAUDITED)

<TABLE>
<CAPTION>
                                          Three Months Ended            Six Months Ended
                                      August 31,     August 31,     August 31,     August 31,
                                            1997           1996           1997           1996
                                    ------------   ------------   ------------   ------------
<S>                                 <C>            <C>            <C>            <C>       
REVENUE
   Telecommunication Revenue        $    195,542   $    104,642   $    446,226   $    582,321
   Software Sales & Maintenance          288,432             --        661,143             --
                                    ------------   ------------   ------------   ------------
                                         483,974        104,642      1,107,369        582,321
COST OF SALES                            250,966        143,525        622,354        529,805
                                    ------------   ------------   ------------   ------------

GROSS PROFIT (LOSS)                      233,008        (38,883)       485,015         52,516
                                    ------------   ------------   ------------   ------------

OPERATING EXPENSES
   Gold Exploration Costs                 27,219        239,336         57,083        239,336
   Software Development Costs            177,748             --        415,667             --
   Sales, General & Administrative       803,198        797,467      1,569,984        882,255
                                    ------------   ------------   ------------   ------------
     Total Operating Expenses          1,008,165      1,036,803      2,042,734      1,121,591
                                    ------------   ------------   ------------   ------------

(Loss) Income From Operations           (775,157)    (1,075,686)    (1,557,719)    (1,069,075)
                                    ------------   ------------   ------------   ------------

OTHER INCOME (EXPENSE)
   Interest Expense                         (612)       (84,017)        (1,224)      (167,357)
   Other Income (Expense)                 (5,113)        12,343         20,122         13,837
   Foreign Exchange Gain (Loss)          (13,896)        26,606         (3,622)        64,914
                                    ------------   ------------   ------------   ------------
     Total Other Income (Expense)        (19,621)       (45,068)        15,276        (88,606)
                                    ------------   ------------   ------------   ------------
Loss Before Provision
   for Income Taxes                     (794,778)    (1,120,754)    (1,542,443)    (1,157,681)

Provision for Income Taxes                    --             --             --             --
                                    ------------   ------------   ------------   ------------


Net Loss                            $   (794,778)  $ (1,120,754)  $ (1,542,443)  $ (1,157,681)
                                    ============   ============   ============   ============

Loss per share                      $      (0.02)  $      (0.05)  $      (0.03)  $      (0.07)
                                    ============   ============   ============   ============

Weighted Average of Number
   of Shares Outstanding              45,354,588     25,159,314     45,126,327     17,134,549
</TABLE>

The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements.


                                     Page 4
<PAGE>

                           SECTOR COMMUNICATIONS, INC.
                       CONSOLIDATED STATEMENT OF CASH FLOW
                                   (UNAUDITED)
                            FOR THE SIX MONTHS ENDED

                                                       August 31,     August 31,
                                                             1997          1996
                                                      -----------   -----------
CASH FLOWS FROM OPERATING ACTIVITIES
   Net Loss                                           $(1,542,443)  $(1,157,681)
   Adjustments to Reconcile Net Loss to
    Net Cash Provided by Operating Activities:
     Depreciation and Amortization                        408,437       191,837
     Compensation Portion of Restricted
        Stock Grants (Note 9)                                  --       407,916
     Change in Assets and Liabilities, Net
      of Effect of Acquisition:
        (Increase) Decrease in Assets
          Accounts Receivable                             267,063      (139,413)
          Repayment of Related Party Receivable            32,198
          Prepaid Expenses and Deposits                    23,288       (52,170)
          Receivable on Sale of Securities                971,000
        (Decrease) Increase in Liabilities
          Accounts Payable                                 12,961         4,730
          Related Party Payable                            (4,202)           --
          Deferred Revenue                               (174,055)           --
          Accrued Interest on Loan Payable                     --       166,680
          Rent Deposit                                         --        12,248
                                                      -----------   -----------

Net Cash (Used) by Operating Activities                    (5,753)     (565,853)
                                                      -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of Fixed Assets                               (34,889)       (8,736)
   Proceeds from Sale of Marketable Securities                 --     1,930,000
   Decrease in Marketable Securities                       21,762            --
   Payment for the Acquisition of Histech                      --      (400,000)
   Payment for the Acquisition of Sector AG                    --       (12,000)
   Cash Balances of Histech and Mountain                       --        36,587
   Cash Balance of Sector Received in the
     Reverse Acquisition                                       --        62,022
   Payment for the Investment in DBE Software                  --      (450,000)
   Loans Receivable                                        56,798      (252,192)
                                                      -----------   -----------
Net Cash Provided by Investing Activities                  43,671       905,681
                                                      -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from the Sale of Common Stock                      --       250,000
                                                      -----------   -----------
Net Cash Provided By Financing Activities                      --       250,000
                                                      -----------   -----------


Effect of Exchange Rate Changes on Cash                   (35,619)      138,138
                                                      -----------   -----------

Net Increase in Cash                                        2,299       727,966

Cash - March 1,                                            80,096        22,429
                                                      -----------   -----------

Cash - August 31,                                     $    82,395   $   750,395
                                                      ===========   ===========

SUPPLEMENTAL CASH FLOWS INFORMATION:
   Cash Paid For:
     Interest                                         $        --   $        --
                                                      ===========   ===========
     Taxes                                            $        --   $        --
                                                      ===========   ===========

The Accompanying Notes are an Integral Part of These Consolidated Financial
Statements.


                                     Page 5
<PAGE>

                            SECTOR COMMUNICATIONS, INC.
                           NOTES TO FINANCIAL STATEMENTS
                                    (Unaudited)
                                  August 31, 1997

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      a)    Basis of Presentation

            The accompanying financial statements have been prepared in
            accordance with generally accepted accounting principles for interim
            financial information and with the instructions to Form 10-Q.
            Accordingly, they do not include all of the information and
            footnotes required by generally accepted accounting principles for
            complete financial statements. In the opinion of management, all
            adjustments (consisting only of normal recurring adjustments)
            considered necessary for a fair presentation have been included.
            Certain reclassifications have been made to the prior period to
            conform to the current period's presentation.

            For further information refer to the financial statements and
            footnotes included in the Registrant's Annual Report on form 10-KSB
            for the period ended February 28, 1997.

            The results of operations for any interim period are not necessarily
            indicative of the results to be expected for the full fiscal year
            ending February 28, 1998.

            On June 18, 1996, Sector Communications, Inc. ("Sector"), formerly
            Aurtex, Inc., acquired all the outstanding capital stock of Global
            Communications Group, Inc. ("Global"). For accounting purposes, this
            acquisition has been treated as a recapitalization of Sector with
            Global as the acquirer in a reverse acquisition.

            The unaudited condensed consolidated balance sheet as of August 31,
            1997 and the condensed consolidated statements of operations and
            cash flows for the three and six month periods ended August 31, 1997
            and 1996 are those of Sector and its subsidiaries (collectively the
            "Company"). All significant intercompany accounts and transactions
            have been eliminated.

            The financial statements presented for periods prior to the
            acquisition of Global present the financial position and results of
            operations solely of Global, and do not include the financial
            position or results of operations of Sector or any of its
            subsidiaries. As such, the unaudited statements of operations and
            cash flows for the three months ended May 31, 1996 reflect the
            results of operations of only Global.

            The accompanying consolidated financial statements as of August 31,
            1997 and for the three and six months then ended include the
            accounts of Sector and its subsidiaries (see note 8). Such
            subsidiaries are as follows:

               Global Communications, Inc.,                     100% owned
               HIS Technologies AG                               60% owned
               Mountain Software AG                             100% owned


                                     Page 6
<PAGE>

                          SECTOR COMMUNICATIONS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)
                                 August 31, 1997

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

      b)    Loss Per Share

            Loss per share is based on the weighted average number of shares of
            common stock outstanding during the period.

      c)    Foreign Currency Translation

            In accordance with the provisions of Statement of Accounting
            Standard No. 52, "Foreign Currency Translations" ("SFAS No. 52") the
            assets and liabilities of the Company's subsidiaries located outside
            the United States are generally translated at the rates of exchange
            in effect at the balance sheet date. Gains and losses resulting from
            foreign currency transactions are recognized currently in income and
            those resulting from translation of financial statements, with the
            exception of entities operating in highly inflationary economies, as
            Global does in Bulgaria, are accumulated in a separate component of
            stockholders' equity. In highly inflationary economies, SFAS No. 52
            requires that the use of historical exchange rates to translate
            nonmonetary items and current exchange rates to translate monetary
            items. The effect of exchange rate changes is reflected in net loss.

NOTE 2 - PROPERTY AND EQUIPMENT

            Property and equipment consists of the following:

                                          August 31,   February 28,
                                                1997           1997
                                         -----------   ------------
            Fiber Network                $   157,837    $   157,837
            Equipment                      1,910,607      1,875,718
            Furniture and Fixtures            47,223         47,223
            Vehicles and Other                90,068         90,068
                                         -----------    -----------
                                           2,205,735      2,170,846
            Less:  Accumulated
             Depreciation                 (1,270,849)    (1,060,696)
                                         -----------    -----------
                                         $   934,886    $ 1,110,150
                                         ===========    ===========

            Depreciation expense for the three month periods ended August 31,
            1997 and 1996 was $103,829 and $86,113, respectively, and for the
            six month periods ended August 31, 1997 and 1996 was $210,116 and
            $172,226, respectively.

NOTE 3 - RELATED PARTY TRANSACTIONS

            During the three month period ended November 30, 1996, the Company
            accrued $80,000 for consulting fees incurred for services provided
            by MCG Management Consulting Group, S.A. ("MCG"). This agreement was
            canceled on November 26, 1996. One of the principles of MCG is a
            former director of Sector AG and the former Chairman of the Board of
            Directors of Histech. This liability remains unpaid as of August 31,
            1997.

NOTE 4 - NOTES RECEIVABLE

            Notes receivable at August 31, 1997 are as follows: Both of these
            notes are currently due and in default.

            Promissory note receivable from
            Atcall, Inc., bearing interest at 8%
            per annum. This note is personally
            guaranteed by the president of Atcall.
            Repayment of this note was demanded 


                                     Page 7
<PAGE>

            on the note's due date, October 23,
            1996. On January 20, 1997, the Company
            agreed to restructure payment of this
            amount to be payable $25,000 per month
            with a final balloon payment of
            $25,000, plus all accrued interest.                      $  205,312

            Reserve for potential uncollectability                     (119,000)

            Unsecured promissory note receivable
            from Combined Metals Reduction
            Company, bearing interest at 10%. The
            Company has previously established a
            reserve for the full amount of this
            note.                                                       136,575

            Reserve for potential uncollectability                     (136,575)
                                                                     ----------

            Total                                                    $   86,312
                                                                     ==========

            Atcall, Inc. has made only three of its scheduled payments under the
            restructured payment plan. The Company has established a reserve for
            the potential uncollectibility of the note.

NOTE 5 - INTANGIBLE ASSETS

            Intangible assets at August 31, 1997 are as follows:

               Intangible assets related to the acquisition
               of Histech                                           $ 4,286,922

               Intangible assets related to the acquisition
               of Mountain                                              595,959

               Intellectual property and distribution rights
               acquired by Histech prior to its acquisition
               by the Company, net of foreign currency
               exchange fluctuations.                                   751,897
                                                                    ------------
                                                                      5,634,778
               Amortization of intangible assets and
               intellectual property and distribution
               rights                                                  (484,925)
                                                                    ------------

               Total                                                $ 5,149,853
                                                                    ============

            The intangible asset recorded for intellectual property and
            distribution rights was acquired by Histech based on an agreement,
            as amended, dated May 1, 1996, between Histech and HIS Software AG.

            The excess purchase price over the fair value of the net assets
            acquired of Histech and Mountain will be amortized on a
            straight-line basis over twenty years. Costs related to the
            acquisition of the intellectual property and distribution rights
            purchase by Histech are amortized over the estimated useful life of
            five years.

NOTE 6 - WARRANTS

            At August 31, 1997, the Company has reserved 3,895,680 shares of
            common stock for issuance upon the exercise of the currently
            outstanding warrants. The exercise prices and expiration dates of
            the warrants are as follows:


                                     Page 8
<PAGE>

                       Number     Exercise      Date       Date of
                      of Shares    Price     Exercisable   Expiration
                      ---------   --------   -----------   ----------
                      2,083,746    $0.79       2/28/97     12/31/97
                         11,934     0.79       2/28/97      8/31/97
                        100,000     2.25       2/28/97      6/30/00
                        100,000     3.00       7/20/97      6/30/00
                        100,000     4.00       7/20/98      6/30/00
                        250,000     0.79       2/28/97      7/18/99
                      1,250,000     0.79       2/28/97      7/18/99
                      ---------
                      3,895,680
                      =========

NOTE 7 - STOCK OPTION PLANS

            At August 31, 1997, the Company has options outstanding for the
            purchase of 1,210,000 shares under the 1994 Stock Plan, at exercise
            prices ranging from $.375 to $1.0625 per share. 510,000 options are
            exercisable as of August 31, 1997. There were no option transactions
            during the period March 1 through August 31, 1997.

NOTE 8 - SECTOR COMMUNICATIONS AG

            Sector Communications AG was dissolved in July of 1997. At the time
            of its dissolution it had no operating budget, revenues nor
            employees. The Company acquired 100% of the outstanding capital
            stock of Sector Communications AG ("Sector AG") on July 31, 1996,
            from Murray Services, Ltd. ("Murray") for the purpose of holding the
            equity interests acquired by the Company in Switzerland, namely HIS
            Technologies AG and Mountain Software AG. At the time that Sector AG
            was acquired it had neither assets nor liabilities. Equity interests
            in HIS Technologies AG and Mountain Software AG are now held
            directly by Sector Communications, Inc.

NOTE 9 - REVERSE SPLIT OF COMMON STOCK AUTHORIZED

            At the Annual Meeting, held on October 21, 1997, shareholders voted
            to amend the Sector Communications, Inc. Certificate of
            Incorporation to authorize a reverse split of the Company's common
            stock. The Board of Directors had adopted a resolution authorizing
            an amendment to the Company's Amended and Restated Articles of
            Incorporation to effect a reverse split of the Company's Common
            Stock, $0.001 par value, whereby every 40 shares of Company Common
            Stock will be converted into one share. No fractional shares of
            stock would be issued in connection with a reverse split, but in
            lieu thereof, each holder of Common Stock who would otherwise be
            entitled to receive a fraction of a share of Common Stock shall have
            the number of shares rounded up or down to the closest number of
            whole shares of Common Stock. The Board of Directors has no
            immediate plans to effect the authorized reverse split.


                                     Page 9
<PAGE>

Item 6. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

RESULTS OF OPERATIONS

The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the three and six month periods ended August 31, 1997 compared to
the three and six month periods ended August 31, 1996.

Telecommunication Revenue

The Company earns all of its telecommunications revenue from (i) providing
direct-dial services for international long distance calls to hotels in the
cities of Sofia and Plovdiv in Bulgaria; (ii) from the integration, installation
and maintenance of customer-owned digital phone systems; and (iii) from
usage-based percentages of Company-owned digital phone systems through shared
revenue agreements with some of its customers.

The Company's telecommunications revenue increased by $90,900 from $104,642 for
the three months ended August 31, 1996 to $195,542 for the three months ended
August 31, 1997, and decreased by $136,095 from $582,321 for the six months
ended August 31, 1996 to $446,226 for the six months ended August 31, 1997. The
decrease in revenue for the six months is due primarily to the Bulgarian
Telephone Company ("BTC"), without prior notice or cause, unilaterally
terminating the Company's Joint Activity Agreement on July 8, 1996. On that date
the BTC disconnected Global's digital link to international carrier services,
thus suspending the majority of the services provided by the Company to its
customers. The digital link was reestablished through a new Joint Activity
Agreement with the BTC dated February 14, 1997. The increase in revenues from
carrier services for the three months is due to the reconnection of the
Company's services.

Software Sales and Maintenance

Effective August 31, 1996, the Company began recording the software sales and
maintenance revenue of its 60% owned subsidiary, Histech. No revenue related to
Histech's operations was recorded prior to that time, since the acquisition of
Histech was accounted for as a purchase, effective August 31, 1996.

During the three months ended August 31, 1997 and six months ended August 31,
1997, the Company recorded $288,432 and $661,143 in software sales and
maintenance, net of payments to third party distributors, generated exclusively
by its 60% owned subsidiary, Histech as follows:

                                                     Three Months    Six Months
                                                         Ended          Ended
                                                            August 31, 1997
                                                     ---------------------------
Software Sales                                         $ 30,318        285,338
Software Maintenance and Consulting                      40,582        102,805
                                                       --------       --------
Subtotal                                                 70,900        388,143
Deferred Software Maintenance Recognized in                        
 Current Period                                         217,532        273,000
                                                       --------       --------
Total Recognized Revenue                               $288,432       $661,143
                                                       ========       ========
                                                                 
Histech utilizes the service of software distributors for the sales of its
products in geographic regions in which it has no sales force. During the three
months and six months ended August 31, 1997, approximately 40% of sales were
generated through distributors.

Histech plans to release several new software products in the third and fourth
quarters of 1997 for use on Digital Open VMS, Microsoft Windows NT and various
versions of Unix-based corporate networks. These products will facilitate the
administration of user accounts and security across all three networks
concurrently from a single Windows NT workstation.


                                    Page 10
<PAGE>

Cost of Sales

The majority of the Company's costs of sales for the three months and six months
ended August 31 relate to costs associated with telecommunication revenues as
shown below.

                                Three Months Ended          Six Months Ended
                             August 31,   August 31,     August 31,  August 31,
                                1997         1996            1997        1996
                             ----------    ----------     ----------   --------
Global Communications        $  192,938   $  143,525        418,307     529,805
Histech                          58,028           --        204,047          --
                             ----------   ----------     ----------   ---------
  Total                      $  250,966   $  143,525     $  622,354   $ 529,805
                             ==========   ==========     ==========   =========

Global's costs of sales increased by $49,413 from $143,525 for the three months
ended August 31, 1996 to $192,938 for the three months ended August 31, 1997 and
decreased by $111,498 from $529,805 for the six months ended August 31, 1996 to
$418,307 for the six months ended August 31, 1997. These changes are due
primarily to the Company reestablishing its carrier services in the current six
months which had been terminated in July of 1996 and reconnected in February of
1997.

                                          Three Months Ended    Six Months Ended
                                                August 31,         August 31,
                                              1997   1996         1997   1996
                                              ----   ----         ----   ----
Cost of Sales, as a Percent of Revenue         99%   137%          94%    91%

The variances are due in part to increased costs incurred in reestablishing
Global's digital link at the BTC and fixed costs forming a larger percentage of
revenue earned.

Costs of sales related to software products and maintenance are comprised
primarily of commissions and distribution payments. These costs were 20% of
software sales and maintenance revenue for the three month period August 31,
1997 and 31% for the six month period ended August 31, 1997.

Software Development Costs

Software development costs consist primarily of salaries, employee-related
benefits, consulting fees and other costs directly attributable to the
development of Histech's new distributed systems management products. The
Company believes that a significant level of development is required to remain
competitive and expects that such costs will continue to increase in the future,
although such costs may decline as a percentage of total revenue to the extent
that revenue increases.

Sales, General and Administrative Expense

Consists primarily of personnel costs, including salaries, benefits and bonuses
and related costs for management, finance and accounting, legal and other
professional services. General and administrative expenses are detailed in the
following table by individual company below.

                                   Three Months Ended         Six Months Ended
                                        August 31,               August 31,
                                    1997        1996          1997       1996
                                 ----------   ---------    ----------  ---------
General and Administrative
  Global Communications           $   95,173   $ 78,116    $   216,680 $ 162,904
  Histech                            361,685         --        657,276        --
  Sector Communications              346,340    719,351        696,028   719,351
                                  ----------  ---------    ----------- ---------
      Total                       $  803,198  $ 797,467    $ 1,569,984 $ 882,255
                                  ==========  =========    =========== =========

Higher expenses for salaries, related costs and professional services were
primarily responsible for the increase in the sales, general and administrative
costs for Global for the three and six month periods ended August 31, 1997
compared to the same periods in 1996.

The decrease in Sector's general and administrative costs in the three month
period ended August 31, 1997, as compared to the same period in 1996, is due to
a stock compensation expense of $407,916 in 1996 and none in 1997.


                                    Page 11
<PAGE>

Sales, general and administrative costs of Histech consist primarily of salaries
and related costs, fees, marketing expenses, depreciation and the amortization
of intangible assets. Management of Histech believes that as new products are
introduced into the market in the future, significant marketing costs will be
incurred to successfully promote these products.

Interest Expense

Interest expense declined dramatically for the three month and six month periods
ended August 31, 1997 as compared to the three and six month periods ended
August 31, 1996. This decrease results from the extinguishing of the Company's
long-term debt on February 28, 1997.

Gold Exploration Costs and Activities

In order to accurately determine the best course to take for the ultimate
divestiture of its gold assets, the Company incurred exploration costs, as more
fully described below of $27,219 during the three month period ended August 31,
1997 and $57,083 during the six month period ended August 31, 1997 as compared
to $239,336 incurred during the three month period ended August 31, 1996. Prior
to June 1, 1996, the Company did conduct gold exploration activities, but due to
the nature of the acquisition of Global as a reverse acquisition, the historic
financial statements are those only of Global and not of Sector, formerly
Aurtex. The reader is referred to the Company's February 29, 1996 and February
28, 1997 10-KSB for details concerning exploration costs incurred during its
years ended February 29, 1996 and February 28, 1997. The Company incurred
approximately $18,000 in exploration costs in the three months ended August 31,
1996 which were incurred prior to the reverse acquisition of Global, and as such
are not shown in the statement of operations as expense.

In connection with the change in the Company's strategic direction the Company
has decided to curtail any significant future gold exploration activities. The
Company is currently evaluating options to determine the possibilities of
divestiture and or discontinuance of its mineral properties described below.
Management believes it has sufficient information from the exploration efforts
conducted recently to properly evaluate various possibilities of divestiture of
the mineral properties, the Company does not expect to incur significant costs
in the future related to its gold exploration properties or other gold
exploration related activities.

Vienna Project

On April 15, 1997, the Vienna Property Exploration License and Option to
Purchase Agreement expired. The Company has written off previously capitalized
costs of $100,000 related to this property.

Ketchum Project

A minor drilling program, consisting of one exploration drill hole of 403 feet
was conducted under the direction of Agricola Metals Company, a principal of
which is a shareholder of the Company, to explore that part of the Wood River
formation immediately under the challis volcanics in the Rooks Creek East area
of the Company's unpatented claim block. According to Agricola Metals Company,
the drill core showed mineralization of the Wood River in this sector. However,
faulting prevented the drilling from reaching the critical zone. Further surface
investigation, and a modest drilling program, will be needed to determine
whether a deposit exists in this location.

LIQUIDITY AND CAPITAL RESOURCES

During the six month period ended August 31, 1997, the Company financed its
operations primarily through funds it received pursuant to a debt retirement
agreement entered into on February 28, 1997.

The Company is currently experiencing negative cash flow from operations but
management believes that with the reinstatement of Global's services and
increased sales of Histech, that operating cash flow will improve significantly.
Even with these projected 


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<PAGE>

improvements in operations and cash flows from Global and Histech, and the
curtailment of gold exploration activities, the funding of future operations
will require further infusion of capital. Negotiations are currently under way
with potential investors wishing to provide additional operating capital. Based
on its current and projected operating levels, the Company believes that it
could attain a breakeven or positive level of cash flow with the next twelve
months.

If additional funds are raised by the Company through the issuance of equity
securities, securities convertible into or exercisable for equity securities, or
an equity securities exchange, the percentage ownership of the then current
stockholders of the Company will be reduced. The Company may issue preferred
stock with rights, preferences or privileges senior to those of the Company's
common stock.

FORWARD LOOKING STATEMENTS

Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements which involve risk and
uncertainties. Such forward-looking statements reflect the Company's current
views with respect to future events and reflect the Company's current views with
respect to future events and financial performance, including statements in the
following section concerning the timing and amount of revenues, the level of
expenses incurred and the sufficiency of cash and other resources to fund
operations. Actual results could differ materially from those projected in the
forward-looking statements as a result of the Company's ability to obtain
adequate additional financing as needed, the uncertainties of new product
development and introduction, sales, growth, competitive pressures,
uncertainties connected to the Bulgarian economy, and other risks listed from
time to time in the Company's SEC reports including, but not limited to, Report
on Form 10-KSB for the year ended 2/28/97 (Forward Looking Statements section).


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                           PART II--OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)   Exhibits: NONE

(b)   Reports on Form 8-K: NONE

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.


October 21, 1997                                      /s/ Theodore Georgelas
                                                      --------------------------
                                                      Theodore Georgelas
                                                      President and Chief
                                                      Executive Officer


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