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: September ~~March 31~~30, 2015

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

For the transition period ~~from ___________________________ to ___________________________~~from____________________to______________________

Commission file number 000-29483

Pacific Sands, Inc.

(Exact Name of Registrant as specified in its charter)

Nevada	88-0322882
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

4611 Green Bay Road Kenosha, WI	53144
(Address of Principal Executive Offices)	(Zip Code)

Issuer’'s Telephone Number, Including Area Code: (262) 925-0123

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the issuer (1) 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 x ☒ No o ☐

Indicate by check mark whether the registrant is a larger accelerated filer, an accelerated filer, a non-accelerated or a smaller reporting company. See the definition 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☒

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

The number of shares outstanding of each of the issuer's classes of common equity, as of ~~May~~November 1516, 2015 are as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.001 par value	89108,~~811~~386,~~292~~729

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
		Page	~~Page~~
Item 1.	Financial Statements	~~Financial Statements~~3	3
		Balance Sheets as of March 31, 2015 (unaudited) and June 30, 2014	3
	Balance Sheets as of September 30, 2015, (unaudited) and June 30, 2015	3
		Statements of Operations for the Three and Nine Months Ended March 31, 2015 and 2014 (unaudited)	4
	Statements of Operations for the Three Months Ended September 30, 2015, and 2014, (unaudited)	4
		Statements of Cash Flows for the Nine Months Ended March 31, 2015 and 2014 (unaudited)	5
	Statements of Cash Flows for the Three Months Ended September 30, 2015, and 2014, (unaudited)	5
	Notes to Financial Statements (unaudited)	~~Notes to Financial Statements (unaudited)~~7	7
Item 2.	Management Discussion and Analysis of Financial Condition and Results of Operations	~~Management Discussion and Analysis of Financial Condition and Results of Operations~~13	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~Quantitative and Qualitative Disclosures About Market Risk~~15	20
Item 4.	Controls and Procedures	~~Controls and Procedures~~16	21
PART II OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	~~LEGAL PROCEEDINGS~~17	22
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~17	22
Item 3.	DEFAULTS UPON SENIOR SECURITIES	~~DEFAULTS UPON SENIOR SECURITIES~~17	22
Item 4.	MINE SAFETY DISCLOSURES	~~MINE SAFETY DISCLOSURES~~17	22
Item 5.	OTHER INFORMATION	~~OTHER INFORMATION~~17	22
Item 6.	EXHIBITS	~~EXHIBITS~~18	23
~~SIGNATURES~~	SIGNATURES	19	24

PACIFIC SANDS, INC.
BALANCE SHEETS
MARCH 31, 2015 AND JUNE 30, 2014
SEPTEMBER 30, 2015, AND JUNE 30, 2015
ASSETS
	March 31, 2015			June 30, 2014
	September 30, 2015			June 30, 2015
Current assets:	(Unaudited)
Cash and cash equivalents	$	414,~~985~~651		$	~~266~~30,~~190~~908
Trade receivables, net of allowances for doubtful accounts of $24,435 and $11,425, respectively		223,107			344,562
Trade receivables, net of allowances for doubtful accounts of $5,000		46,816			121,094
Inventories		~~203~~217,~~561~~249			~~259~~258,~~423~~917
Other current assets		~~130~~76,~~997~~273			1748,~~835~~705
Total Current Assets		~~562~~354,~~650~~989			~~888~~459,~~010~~624
Property and equipment, net		~~220~~185,~~547~~793			~~191~~201,~~255~~711
Other asset		2,290			2,820
Other Assets		1,939			2,115
Total Assets	$	~~785~~542,~~487~~721		$	1663,~~082,085~~451
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	~~504~~460,~~858~~303		$	~~411~~439,~~313~~597
Accrued expenses		98137,~~883~~183			54150,~~111~~486
Deferred rent expenses		-			8,800
Current portion of notes payable and capital leases		561,783			533,929
Current portion of notes payable and capital leases, less debt discount		414,582			346,815
Convertible notes, less discount of $181,417 and $155,042		90,333			17,708
Embedded conversion derivative liability		13,100			68,298
Derivative Liability		436,503			276,377
Total Current Liabilities		1,~~031~~686,~~423~~105			~~889~~1,~~337~~418,097
Notes payable - less current portion		116,165			230,123
Notes payable and capital leases, less current portion		68,099			88,375
Total Liabilities		1,~~147~~754,~~588~~204			1,~~119~~506,~~460~~472
Stockholders' deficit
Stockholders' Deficit
Preferred series A stock (1,000,000 shares authorized, 0 shares issued and outstanding)		-			-
Common stock, par value $0.001 per share; (200,000,000 shares authorized, 85,790,953 and 66,811,354 shares issued and outstanding, at March 31, 2015, and June 30, 2014, respectively)		85,790			66,811
Common stock (200,000,000 shares authorized, 91,986,292 and 89,811,292 shares issued and outstanding)		91,986			89,811
Additional paid in capital		6,~~178~~250,~~243~~002			56,~~710~~214,~~231~~378
Accumulated deficit		(67,~~626~~553,~~134)~~471	)		(57,~~814~~147,~~417)~~210	)
Total Stockholders' Deficit		(~~362~~1,~~101)~~211,483	)		(37843,~~375)~~021	)
Total Liabilities and Stockholders' Deficit	$	~~785~~542,~~487~~721		$	1663,~~082,085~~451

See accompanying notes.

PACIFIC SANDS, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2015, AND 2014
(UNAUDITED)
	Three months ended March 31,				Nine months ended March 31,
	2015		2014		2015		2014
Net sales	$	592,491	$	781,253	$	1,910,213	$	2,046,338
Cost of sales		281,486		474,931		1,083,022		1,223,961
Gross profit		311,005		306,322		827,191		822,377
Selling and administrative expenses		392,270		370,434		1,433,356		926,852
Loss from operations		(81,265)		(64,112)		(606,165)		(104,475)
Other income (expense)
Interest expense		(83,767)		(20,973)		(243,365)		(42,094)
Gain(loss) on derivative liability		22,959		-		31,060		-
Other income (expense)		5,483		1,454		6,753		2,163
Total other expense		(55,325)		(19,519)		(205,552)		(39,931)
Loss before income taxes		(136,590)		(83,631)		(811,717)		(144,406)
Income taxes		-		-		-		-
Net loss	$	(136,590)	$	(83,631)	$	(811,717)	$	(144,406)
Loss per share:
Basic	$	(0.002)	$	(0.001)	$	(0.011)	$	(0.002)
Diluted	$	(0.002)	$	(0.001)	$	(0.011)	$	(0.002)
Weighted average share outstanding:
Basic		76,559,510		64,326,051		72,987,036		64,430,687
Diluted		76,559,510		64,326,051		72,987,036		64,430,687

PACIFIC SANDS, INC.

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015, AND 2014

(UNAUDITED)

	Three months ended September 30,
	2015			2014

Net sales	$	227,509		$	486,045
Cost of sales		176,831			301,363

Gross profit		50,678			184,682

Selling and administrative expenses		280,878			593,463

Income (Loss) from operations		(230,200	)		(408,781	)

Other income/expense
Other income		1,022			542
Gain (loss) on derivative liability		(61,126	)		20,878
Interest expense		(115,957	)		(69,431	)
		(176,061	)		(48,011	)

Income (Loss) before income taxes		(406,261	)		(456,792	)

Income taxes		-			-

Net income (loss)	$	(406,261	)	$	(456,792	)

Basic and diluted loss per share	$	(0.004	)	$	(0.006	)

Basic and diluted weighted average shares outstanding		90,361,564			70,506,208

See accompanying notes.

PACIFIC SANDS, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 2015, AND 2014
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015, AND 2014
(UNAUDITED)
	2015			2014
Cash flows from operating activities:
Cash flows from operating activities
Net loss	$	(811,717)		$	(144,406)
Net income (loss)	$	(406,261	)	$	(456,792	)
Adjustments to reconcile net loss to net cash used in operating activities -
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities -
Depreciation and amortization		5418,~~347~~835			4816,~~361~~487
Stock options		63,478			79,348
Common shares issued for interest		-			22,000
Common shares issued for services and compensation		99,722			-
Common shares issued for services		37,800			93,722
Gain (loss) on derivative		(31,060)			-
Stock option expense		-			47,609
Accretion of debt discount		119,957			-
(Gain) loss on derivative		61,126			(20,877	)
Common shares issued for interest		49,153			12,000
Accretion of debt discount		72,625			26,375
Deferred rent		~~(8,800)~~-			(134,~~200)~~400	)
Changes in assets and liabilities:
Changes in assets and liabilities -
Trade accounts receivable		~~121~~74,~~455~~278			~~(135~~4,~~234)~~208
Inventories		5541,~~862~~668			(90159,~~266)~~522	)
Other assets		(727,~~314)~~391	)		7(223,~~068~~217	)
Accounts payable and other current liabilities		138,317			309,104
Deferred Revenue		-			247,560
Net Cash Provided by (Used in) Operating Activities		(156,600)			72,775
Accounts payable and other current liabilities		7,403			85,208
Cash flows from investing activities:
Net Used in Operating Activities		(119,917	)		(321,639	)
Purchases of equipment		(11,185)			(25,073)
Cash flows from investing activities
Prepaid brand development and other costs		(105,318)			-
Purchase of equipment		(2,917	)		(5,454	)
Net Cash Used in Investing Activities		(~~116~~2,~~503)~~917	)		(255,~~073)~~454	)
Cash flows from financing activities:
Cash flows from financing activities
Proceeds from common stock issued		-			5,000
Proceeds from convertible note		99,000			70,000
Convertible notes payable		70,000			-
Proceeds from notes payable		120,000			149,640
Proceeds from notes payable		311,240			220,958
Repayment of notes payable and long term obligations		(112,423	)		(148,425	)
Repayment of notes payable and long term obligations		(369,342)			(331,882)
Net Cash Provided by Financing Activities		106,577			71,215
Net Cash Provided by (Used in) Financing Activities		11,898			(105,924)
Net decrease in cash and cash equivalents		(16,257	)		(255,878	)
Net decrease in cash and cash equivalents		(261,205)			(58,222)
Cash and cash equivalents:
Beginning of period		~~266~~30,~~190~~908			90266,~~040~~190
End of period	$	414,~~985~~651		$	3110,~~818~~312

See accompanying notes.

PACIFIC SANDS, INC.
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 2015, AND 2014
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015, AND 2014
(UNAUDITED)
	2015	~~2015~~		2014	~~2014~~
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		$	8233,~~005~~040		$	2925,~~652~~092
Income taxes		$	-		$	-
Supplemental disclosure of non-cash financing and investing activities
Supplemental disclosure of non cash financing and investing activities:
Conversion of debt and derivative liability to equity		$	209,638		$	-
Conversion of debt to equity		$	-		$	65,000
Acquisition of stock for notes payable		$	-		$	31,000
Capital lease for equipment		$	-		$	72,453
Conversion of accrued interest to equity		$	49,153		$	12,000
Acquisition of stock for note payable		$	-		$	-

See accompanying notes.

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of Pacific Sands, Inc., 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 Pacific Sands, Inc’'s Annual Report filed with the SEC on Form 10-K for the year ended June 30, ~~2014~~2015. 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 interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal ~~2014~~2015, as reported elsewhere in this Form 10-Q have been omitted.

2. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business - Pacific Sands, Inc. with the right to do business as Natural Water Technologies (the "Company" ~~or “Pacific Sands”~~) was incorporated in Nevada on July 7, 1994. Pacific Sands develops, manufactures, markets and sells a range of nontoxic, environmentally friendly cleaning and water-treatment products based on proprietary blended botanical, nontoxic and natural chemical technologies. The Company’s products have applications ranging from water maintenance (spas, swimming pools, fountains, decorative ponds) to cleaning (nontoxic household and industrial) and pet care.

InPacific ~~February~~Sands ~~of 2008~~develops, ~~the Company acquired Natural Choices Home Safe Products~~manufactures, ~~LLC~~markets ~~(“Natural~~and ~~Choices”),~~sells a ~~developer~~range ~~and manufacturer~~ of nontoxic, environmentally friendly cleaning and ~~laundry~~water-treatment products. ~~The~~based ~~acquisition~~on ~~added~~proprietary ~~dozens~~blended ~~of new products to the Pacific Sands portfolio of earth~~botanical, ~~health,~~nontoxic ~~pet~~ and ~~kid-friendly~~natural ~~offerings,~~chemical ~~including Oxy-Boost™ an oxygen-bleach based, chlorine-free bleach alternative~~technologies. The Company's ~~now~~products ~~has~~have aapplications ~~large~~ranging ~~selection~~from ofwater ~~oxygen-~~maintenance ~~bleach~~(spas, ~~based~~swimming ~~formulations~~pools, ~~available both for retail distribution under its ecoone®~~fountains, ~~e-2~~decorative ~~elemental~~ponds) ~~earth®~~to ~~and~~cleaning ~~Natural~~(nontoxic ~~Choices™~~household ~~brands as well as for contract manufacturing~~ and ~~re-label~~industrial).

The Company markets and sells its product lines directly, over the Internet and through pool, spa, hardware, specialty and other retail outlets in the US, Canada and Europe. The products are also sold via Pacific Sands' distributors, manufacturers’' representatives and internationally established pool and spa industry distribution networks. The Company’'s products are also sold through numerous popular pool and spa websites. The Company’'s Natural Choices branded ~~products~~product are sold in numerous retail outlets around the country and in Europe as well as dozens of the top environmentally-oriented websites, including the Company's website.

Inventories - Inventories are stated at the lower of cost or market on the first-in, first-out (FIFO) basis.

Depreciation and Amortization - For financial reporting purposes, depreciation and amortization of property and equipment has been computed over estimated useful lives of two to seven years primarily using the straight-line method. Depreciation and amortization charges totaled $18,835 and $16,487 during the three months ended September 30, 2015, and 2014, respectively.

Revenue Recognition - Revenue is recognized when the related products are shipped unless the customer is under a bill and hold arrangement. Under a bill and hold arrangement revenue is recognized when the product is manufactured, invoiced and set aside in a specifically designated finished goods area. Upon invoicing under this arrangement ownership has passed to the buyer with no residual warranty obligation or right of return. All customers under a bill and hold arrangement have committed to purchases and have specifically requested they be on a bill and hold arrangement. In all cases goods are transferred to a designated finished goods fulfillment location under a fulfillment arrangement and are complete and ready for shipment. These bill and hold goods are either privately labeled or set aside exclusively for the customers use.

Customer deposits are 50% of total customer sale. There are two sets of criteria used to determine if a customer deposit is required. The first criterion is foreign customers. To ensure the validity and collectability of a foreign order the Company requires 50% of the total sale to be paid up front. The remaining 50% of the sales is to be paid upon completion of the order and prior to shipping the order to the customer. The second criterion is a new private label customer. These orders would require a 50% total deposit and the remaining 50% paid upon completion of order and prior to shipment. All customer deposits are held as a liability until the order is completed.

Advertising and Promotional Costs - Advertising and promotion costs are expensed as incurred.

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

~~Depreciation~~Income ~~and~~Taxes ~~Amortization~~- The Company accounts for income taxes under Section 740-10-30 ~~For~~of ~~financial~~the ~~reporting~~FASB ~~purposes~~Accounting Standards Codification, ~~depreciation~~which ~~and~~requires ~~amortization~~recognition of ~~property~~deferred tax assets and ~~equipment~~liabilities ~~has~~for the expected future tax consequences of events that have been ~~computed~~included ~~over~~in ~~estimated~~the ~~useful~~financial ~~lives~~statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of ~~two~~assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to ~~seven~~reverse. Deferred ~~years~~tax ~~primarily~~assets ~~using~~are reduced by a valuation allowance to the ~~straight-line~~extent ~~method~~management concludes it is more likely than not that the assets will not be realized. ~~Depreciation~~Deferred tax assets and ~~amortization~~liabilities ~~charges~~are ~~totaled~~measured ~~$54,347~~using ~~and~~enacted ~~$48,361~~tax ~~during~~rates expected to apply to taxable income in the ~~nine~~ ~~months~~years ~~ended~~in ~~March~~which ~~31,~~those ~~2015,~~temporary differences are expected to be recovered or settled. The effect on deferred tax assets and ~~2014,~~liabilities ~~respectively~~of a change in tax rates is recognized in the Statement of Operations in the period that includes the enactment date.

~~Income Taxes -~~ The Company ~~uses~~adopted ~~the~~section ~~asset~~740-10-25 ~~and~~of ~~liability~~the ~~method~~FASB inAccounting ~~accounting~~Standards ~~for~~Codification ~~income~~("Section ~~taxes~~740-10-25"). ~~Deferred~~ ~~taxes~~Section ~~are~~740-10-25 ~~recognized~~addresses ~~for~~the ~~temporary~~determination ~~differences~~of ~~between~~whether ~~the~~tax ~~basis~~benefits ofclaimed ~~assets~~or ~~and~~expected ~~liabilities~~to ~~for~~be ~~financial~~claimed ~~statement~~on ~~and~~a ~~income~~ tax ~~purposes. The~~return ~~temporary~~should ~~differences~~be ~~relate~~recorded ~~primarily~~in tothe ~~net~~financial ~~operating~~statements. Under ~~loss~~Section ~~carry~~740-~~forwards~~10-25, ~~and~~the ~~deferred~~Company ~~compensation~~may ~~charges. A~~recognize ~~valuation~~the ~~allowance~~tax isbenefit ~~recorded~~from ~~for~~an ~~deferred~~uncertain tax ~~assets~~position ~~when~~only if it is more likely than not that ~~some~~the ortax ~~all~~position will be sustained on examination by the taxing authorities, based on the technical merits of the ~~deferred~~position. The tax ~~assets~~benefits ~~will~~recognized ~~not~~in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized ~~through~~upon ~~future~~ultimate ~~operations~~settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

The Company's income tax ~~accounting~~returns ~~process~~ for ~~uncertainty in income taxes prescribes a recognition threshold and measurement attribute for~~ the financial statement recognition and measurement of a tax position taken, or expected to be taken, in a tax return. A company must determine whether it is "more-likely-than-not" that a tax position will be sustained upon examination, including resolution of any related appeals or litigation procedures, based on the technical merits of the position. Once it is determined that a position meets the “more-likely-than-not” recognition threshold, the position is measured to determine the amount of benefit to recognize in the financial statements. Managementyear's ~~review~~ending ofJune ~~the~~30, ~~Company’s possible tax positions at March 31~~2012, ~~2015~~2013, and ~~June 30,~~ 2014, ~~did~~are ~~not~~subject ~~result~~to inexamination ~~any~~by ~~positions requiring disclosure. Should~~ the ~~Company~~IRS ~~need to record interest~~ and~~/or~~ ~~penalties~~ related ~~to uncertain tax positions~~states, orgenerally ~~other~~for ~~tax~~three ~~authority~~years ~~assessments,~~after ~~it would classify such expenses as part of the income tax provision~~filed.

Accounts Receivable - The Company’s ~~income~~makes ~~tax~~judgments ~~returns~~as ~~for~~to the ~~years~~collectability ~~ending~~of ~~June~~trade ~~30,~~and ~~2012,~~other ~~2013~~accounts receivable based on historic trends and ~~2014~~future ~~are~~expectations. ~~subject~~Management toestimates ~~examination~~an byallowance for doubtful receivables, which reflects its current assessment of the ~~IRS~~collectability of the receivables. Management believes that the current specific and ~~related~~general ~~states~~receivable reserve of $5,000 ~~generally~~is ~~for~~adequate ~~three~~as ~~years~~of ~~after~~September ~~filed~~30, 2015.

~~Revenue~~For ~~Recognition~~the -period ~~Revenue~~ended isSeptember ~~recognized~~30, ~~when~~2015, ~~the~~there ~~related~~was ~~products~~one ~~are shipped unless the~~ customer isthat ~~under~~accounted afor ~~“bill~~12% ~~and~~of ~~hold”~~sales ~~arrangement. Under a “bill~~ and ~~hold”~~0% ~~arrangement~~of ~~revenue~~receivables. isDuring ~~recognized~~the ~~when~~period ~~the~~ended ~~product~~September is30, ~~manufactured~~2014, ~~invoiced~~there ~~and~~was ~~set~~one ~~aside~~customer inthat aaccounted ~~specifically~~for ~~designated finished goods area~~49.8% ~~Upon invoicing under this arrangement ownership has passed to the buyer with no residual warranty obligation or right~~ of ~~return.~~sales ~~All customers under a “bill~~ and ~~hold”~~47% ~~arrangement~~of ~~have committed to purchases and have specifically requested they be on a “bill and hold” arrangement~~receivables. InThe ~~all~~Company ~~cases~~has ~~goods~~shifted ~~are transferred~~ to aselling ~~designated~~more ~~finished~~of ~~goods~~its ~~fulfillment~~branded ~~location~~products ~~under a fulfillment arrangement~~ and ~~are~~reducing ~~complete~~the ~~and~~amount ~~ready~~of ~~for~~private ~~shipment~~label production. ~~These~~The ~~“bill~~Company ~~and~~is ~~hold”~~no ~~goods~~longer ~~are~~producing ~~either~~the ~~privately~~private ~~labeled~~label orbrand ~~set~~of ~~aside~~its ~~exclusively~~prior ~~for~~largest ~~the customers use~~customer.

~~Customer~~Basic ~~Deposits~~and –Diluted ~~The~~Net ~~Company~~Loss ~~reserves~~Per Share - Basic loss per share is based upon the ~~right~~weighted toaverage ~~request~~number ~~deposits~~of oncommon ~~product~~shares ~~orders~~outstanding as. ~~Deposits~~There ~~are~~were ~~requested~~no ~~for~~common ~~new~~stock ~~customers~~equivalents oras ~~larger-than-normal~~of ~~orders~~September ~~for~~30, ~~regular customers~~2015. ~~When~~Dilutive ~~the~~shares ~~Company~~and ~~receives~~stock aoptions ~~deposit~~have onnot abeen ~~large~~included ~~order~~in ~~then~~the computation of net loss per common share, as the ~~Company~~effect ~~may~~would ~~choose~~be toanti-dilutive ~~progress~~as ~~bill~~of ~~for~~September ~~that~~30, ~~order~~2015.

Accounts Receivable - The Company makes judgments as to the collectability of trade and other accounts receivable based on historic trends and future expectations. Management estimates an allowance for doubtful receivables, which reflects its current assessment of the collectability of the receivables. Management believes that the current specific and general receivable reserves aggregating $24,435 are adequate as of March 31, 2015.

Advertising and Promotional Costs - Advertising and promotion costs are expensed as incurred. During the nine months ended March 31, 2015, and 2014, advertising and promotion costs totaled $440,829 and $58,393, respectively.

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

Basic and Diluted Net Loss Per Share - Basic net loss per share is based upon the weighted average number of common shares outstanding. Dilutive shares related to outstanding convertible promissory notes are not included in the computation of the weighted average number of shares outstanding for dilutive net loss per common share, as the effect would be anti-dilutive.

Use of Accounting Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Statement of Cash Flows - For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments purchased with an initial maturity of three months or less to be cash equivalents.

Recent Accounting Pronouncements – In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP.8

~~The~~PACIFIC ~~standard is effective for annual periods beginning after December 15~~SANDS, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2018.INC

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

3. GOING CONCERN

The accompanying financial statements have been presented assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of its liabilities in the normal course of business. Through ~~March~~September 3130, 2015, the Company has incurred cumulative losses of $67,~~626~~553,~~134 and a stockholders’ deficit of $362,101~~471. The Company's successful transition to attaining profitable operations is dependent upon obtaining financing adequate to fulfill its development, marketing and sales activities and achieving a level of revenues adequate to support the Company's cost structure. Management's plan of operations anticipates that the cash requirements of the Company for the next twelve months will be met by obtaining capital through the sale of common stock, debt financings and from current operations. However, there is no assurance that the Company will be able to fully implement its plan in order to generate the funds needed on a going concern basis.

4. INVENTORIES

Inventories at ~~March~~September 3130, 2015, and June 30, ~~2014~~2015, consisted of the following:

	March 31, 2015		June 30, 2014
	September 30, 2015		June 30, 2015
Raw materials	$	~~154~~183,~~209~~487	$	~~219~~204,~~222~~032
Finished goods		4933,~~352~~762		4054,~~201~~885
Total	$	~~203~~217,~~561~~249	$	~~259~~258,~~423~~917

5. PROPERTY AND EQUIPMENT

Property and equipment at ~~March~~September 3130, 2015, and June 30, ~~2014~~2015, consisted of the following:

	March 31, 2015			June 30, 2014
	September 30, 2015			June 30, 2015
Furniture	$	35,997		$	35,997
Furniture and office equipment	$	35,997		$	35,997
Manufacturing equipment		288,217			~~210~~288,~~483~~217
Office Equipment		55,543			54,435
Leasehold improvements		90,116			90,116
Leasehold improvements		90,116			85,320
Computer software		52,150			52,150
Less accumulated depreciation and amortization		(301,476)			(247,130)
Office equipment		58,460			55,543
Property and equipment, net	$	220,547		$	191,255
Total Property and equipment		524,940			522,024
Less accumulated depreciation and amortization		(339,147	)		(320,312	)
Property and equipment, net	$	185,793		$	201,711

109

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

6. ACCRUED EXPENSES

Accrued expenses at ~~March~~September 3130, 2015, and June 30, ~~2014~~2015, consisted of the following:

	March 31, 2015		June 30, 2014
	September 30, 2015		June 30, 2015
Accrued compensation	$	92128,~~024~~561	$	37144,~~295~~823
Accrued payroll liabilities		1,514		3,354
Accrued payroll taxes		1,006		1,200
Accrued expense		19		386
Accrued expenses – other		-		340
Accrued interest		57,~~326~~616		134,~~076~~123
Total	$	98137,~~883~~183	$	54150,~~111~~486

7. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS

Notes payable at ~~March~~September 3130, 2015, and June 30, ~~2014~~2015, consisted of the following:

	March 31, 2015			June 30, 2014
	September 30, 2015			June 30, 2015
Promissory note – unrelated party		25,000			53,800
Promissory note – unrelated parties (1)	$	264,959		$	247,084
Convertible notes (3)		17,500			63,000
Notes payable - stockholders		220,000			220,000
Notes payable – stockholder		230,000			304,000
Promissory Note – Kenosha Area Business Alliance		70,389			74,648
Promissory note – related party					65,000
Capital Lease		39,554			45,592
Notes payable – former executive officer		9,060			55,863
Note payable – Vendor		34,980			34,980
Capital lease (2)		51,630			-
Total notes payable		629,882			622,304
Note payable – Capital Access (1)		124,545			-
Less current maturities		(561,783	)		(533,929	)
Promissory Note – Kenosha Area Business Alliance		78,845			91,065
	$	68,099		$	88,375
Debt discount		(5,833)			(55,790)
Total obligations		530,747			576,938
Less current maturities		(414,582)			(346,815)
Total long term liabilities	$	116,165		$	230,123

11The scheduled annual maturities for notes payable are as follows for the years ending September 30,

PACIFIC SANDS, INC.

2015	$	561,783
2016		34,185
2017		19,941
2018		13,973
2019		-

(1) During the quarter the Company issued a short term note payable on July 23, 2015, for $60,000 to support current operations. This note bears 25.92% annual interest and matures on March 22, 2016. Under the terms of this agreement daily payments of $482.14 are required. The balance as of September 30, 2015 was $41,669. The Company issued a short term note payable on September 24, 2015, for $50,000 to support current operations. This note bears 43% annual interest and matures on January 30, 2016. Under the terms of this agreement daily payments of $812.50 are required. The balance as of September 30, 2015 was $47,159.

PACIFIC SANDS, INC

NOTES TO FINANCIAL STATEMENTS

~~The~~8. ~~scheduled~~CONVERTIBLE ~~annual maturities for notes payable and capital lease obligations are as follows for the years ending March 31,~~DEBT

2015	$	414,582
2016		67,381
2017		24,692
2018		20,547
2019 and thereafter		3,545

(1) The Company issued a short term note payable for $150,000 to support current operations and payoff an existing higher rate note. This note bears 19% annual interest and matures on April 12, 2016. Under the terms of this agreement daily payments of $540.90 are required.

(2) The Company entered into a capital lease agreement for new manufacturing equipment. The lease has a $1 purchase option upon maturity. The lease agreement was for $72,453. This note requires monthly payments of $2,466. This lease bears 18.4% annual interest and matures on July 7, 2017.

(3) The Company issued two additional convertible notes for $32,500 and $37,500, during the three months ended September 30, 2014, for a total of $130,000 in convertible debt. During the current fiscal year $115,500 of the convertible debt was converted into equity.

The fair value of the conversion features are calculated at the time of issuance and the Company discounts the debt and records a derivative liability for the calculated value using a Black-Scholes option-pricing model. Changes in the fair value of the derivative liability thereafter are recorded in other income (expense) in the statement of operations. Upon conversion of the convertible debt to stock, the Company reclassifies the related embedded conversion derivative liability to paid-in capital. The Company recognizes expense for accretion of the convertible debentures discount over the term of the note. The Company has considered the provision of ASC 480, Distinguishing Liabilities from Equity, as the conversion feature embedded in each debenture could result in the note principal converted to a variable number of the Company’s common shares.

Debt Discount – Costs incurred with parties who are providing short-term financing, which include the fair value of an embedded derivative conversion, are reflected as a debt discount and are amortized over the life of the related debt. When the debt is repaid, the related debt discount is recorded as additional interest expense and the related derivative liability is relieved into additional paid in capital.

12A convertible note of $45,000 was issued on July 30, 2015. This note is set to mature on August 1, 2016. The derivative calculation was $104,852, of which $45,000 was recorded to debt discount and $59,852 to derivative gain/loss.

~~PACIFIC~~A ~~SANDS~~convertible note of $54,000 ~~INC~~was issued on August 12, 2015. This note is set to mature on May 11, 2016. The derivative calculation was $67,162, of which $54,000 was recorded to debt discount and $13,162 to derivative gain/loss.

At September 30, 2015, convertible notes totaled $271,750 of which $181,417 was attributable to the discount on debt. For the period ended September 30, 2015, $72,625 of the debt discount was amortized and recorded as interest expense.

The derivatives were valued using the Black-Scholes option pricing model with the following assumptions:

	Remeasurement			Initial Measurement
	September 30, 2015			August 7, 2015			July 30, 2015
Market value of stock on measurement date	$	0.016		$	0.02		$	0.03
Risk-free interest rate		0.09-.34	%		0.09	%		0.34	%
Dividend yield		0	%		0	%		0	%
Volatility factor		147-220	%		206	%		223	%
Term	Various			9 months			12 months

The following table presents the embedded conversion derivative liabilities, the Company's only financial liabilities measured and recorded at fair value on the Company's balance sheet on a recurring basis, and their level within the fair value hierarchy as of September 30, 2015:

	Level 1		Level 2		Level 3
Embedded conversion derivative liability:
September 30, 2015	$	-	$	-	$	436,503

The following table reconciles for the period ended September 30, 2015, the beginning and ending balances for financial instruments that are recognized at fair value in the financial statements:

Balance at June 30, 2015	$	276,377
Issued during period ending September 30, 2015		99,000
(Gain) Loss on fair value adjustments		61,126
Reductions in fair value due to conversion of Convertible Debentures into common stock		-
Balance of embedded conversion of derivative liability as of September 30, 2015	$	436,503

9. STOCKHOLDERS' DEFICIT

Transactions for the three months ended September 31, 2015, are as follows:

On July 16, 2015, the Company issued 125,000 shares of common stock for $5,000 for payment of services rendered.

On September 11, 2015, the Company issued 2,050,000 shares of common stock to an employee for $32,800 for payment of compensation.

PACIFIC SANDS, INC

NOTES TO FINANCIAL STATEMENTS

~~At March 31, 2015, convertible notes totaled $17,500 of which $5,833 was attributable to the discount on debt~~10. INCOME ~~For~~(LOSS) ~~the~~PER ~~period ended March 31, 2015, $119,957 of the debt discount was amortized and recorded as interest expense.~~SHARE

AtBasic ~~March~~income ~~31,~~(loss) ~~2015,~~per ~~$115,500, $94,138 and $3,820, of the convertible debt, derivative liability and accrued interest, respectively were converted into 13,708,207 shares of~~ common ~~stock.~~share ~~$94,138~~ is ~~the~~based ~~portion~~on of the ~~derivative~~weighted ~~that~~average ~~was~~number ~~written off to equity and $9,723~~ of ~~the~~common ~~remaining~~shares ~~debt~~outstanding ~~discount~~in ~~was~~each ~~amortized~~period and ~~recorded~~net ~~as interest expense~~loss.

The following table ~~presents~~sets ~~the~~forth ~~embedded conversion derivative liabilities,~~ the ~~Company’s~~computation ~~only~~of ~~financial~~basic ~~liabilities measured~~ and ~~recorded~~diluted atincome ~~fair~~(loss) ~~value~~per ~~on the Company’s balance sheet on a recurring basis, and their level within the fair value hierarchy as of March 31, 2015:~~share.

	Level 1			Level 2			Level 3
	Three months ended September 30,
Embedded conversion derivative liability:
	2015			2014
March 31, 2015	$	-		$	-		$	13,100
Numerator:
Basic and diluted income (loss)	$	(406,261	)	$	(456,792	)
Denominator:
Basic and diluted per share data - weighted average shares		90,361,564			70,506,208
Basic and diluted loss per share	$	(.004	)	$	(.006	)

~~The~~Anti-dilutive ~~following~~securities ~~table~~not ~~reconciles~~included ~~for~~in ~~the~~net ~~period~~loss ~~ended~~per ~~March~~share ~~31, 2015, the beginning and ending balances for financial instruments that are recognized at fair value in the financial statements~~calculation:

Balance at June 30, 2014	$	68,298
	Three months ended September 30,
Issued during period ending March 31, 2015		70,000
	2015			2014
Reductions in fair value due to conversion of Convertible Debentures into common stock		(94,138	)
Stock options		3,174,000			3,174,000
Gain on fair value adjustments to embedded conversion derivative liabilities		(31,060	)
Convertible debt		38,704,308			4,156,250
Balance of embedded derivative liability as of March 31, 2015	$	13,100

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

8. STOCKHOLDERS’ DEFICIT

Transactions for the nine months ended March 31, 2015, are as follows:

On July 1, 2014, the Company issued 175,000 shares of common stock for $7,000 for payment of interest on a note payable.

On July 4, 2014, the Company issued 500,000 shares of common stock for $15,000 for payment of interest on a note payable.

On July 9, 2014, the Company issued 1,934,400 shares of common stock to an outside consulting company for prepayment of services to be rendered of $77,376.

On July 18, 2014, the Company issued 288,467 shares of common stock to officers of the company for $11,539 for payment of compensation.

On July 31, 2014, the Company issued 120,192 shares of common stock to an officer of the company for $4,808 for payment of compensation.

On August 8, 2014, the Company issued 1,625,000 shares of common stock to a related party for $65,000 to convert a note payable.

On October 1, 2014, the Company issued 120,000 shares of common stock to an employee for $6,000 as payment for compensation.

On October 4, 2014, the Company issued 300,000 shares of common stock for $15,000 as payment of interest on a note payable.

On November 17, 2014, the Company issued 208,333 shares of common stock for $8,333 as payment of interest on a note payable.

On December 31, 2014, the Company issued 600,000 shares of common stock for $12,000 to convert a portion of a convertible note payable.

On January 23, 2015, the Company issued 674,157 shares of common stock for $12,000 to convert a portion of a convertible note payable.

On January 29, 2015, the Company issued 1,034,483 shares of common stock for $15,000 to convert a portion of a convertible note payable.

On February 3, 2015, the Company issued 1,562,500 shares of common stock for $15,000 to convert a portion of a convertible note payable.

On March 4, 2015, the Company issued 1,309,091 shares of common stock for $9,000 to convert a portion of a convertible note payable and $2,520 in lieu of interest.

On March 10, 2015, the Company issued 2,112,676 shares of common stock for $15,000 to convert a portion of a convertible note payable.

On March 19, 2015, the Company issued 3,081,967 shares of common stock for $17,500 to convert a portion of a convertible note payable and $1,300 in lieu of interest.

On March 24, 2015, the Company issued 3,333,333 shares of common stock for $20,000 to convert a portion of a convertible note payable.

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

9. OPTIONS

For all of the Company’s stock-based compensation plans, the fair value of each grant was estimated at the date of grant using the Black-Scholes option-pricing model. Black-Scholes utilizes assumptions related to volatility, the risk-free interest rate, the dividend yield (which is assumed to be zero, as the Company has not paid cash dividends to date and does not currently expect to pay cash dividends) and the expected term of the option. Expected volatilities utilized in the model are based mainly on the historical volatility of the Company’s stock price over a period commensurate with the expected life of the share option as well as other factors. The risk-free interest rate is derived from the zero-coupon U.S. government issues with a remaining term equal to the expected life at the time of grant.

On November 1st, 2013, the Company granted certain consultants options to purchase 3,174,000 shares of common stock under an agreement at an exercise price of $0.06 per share. Approximately eight (8) percent of the options vested monthly through October 31, 2014. The Company recorded a total expense of $63,478 related to these options during the nine months ended March 31, 2015.

Expected Life (years)	10
Risk free rate of return	2.710	%
Dividend yield	0
Volatility factor	262	%

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

10. LOSS PER SHARE

Basic loss per common share is based on the weighted average number of common shares outstanding in each period and net loss.

The following table sets forth the computation of basic and diluted loss per share.

	Three months ended March 31,						Nine months ended March 31,
	2015			2014			2015			2014
Net loss – basic	$	(136,590	)	$	(83,631	)	$	(811,718	)	$	(144,406	)
Interest expense for conversion of promissory note		-			-			-			-
Net loss diluted		(132,770	)		(86,631	)		(807,898	)		(144,406	)
Weighted average shares – basic		76,559,510			64,326,051			72,987,036			64,430,687
Incremental shares outstanding
Assuming the conversion of dilutive
Convertible promissory notes
Weighted average shares – diluted		76,559,510			64,326,051			72,987,036			64,430,687
Loss per share
Basic	$	(0.002	)	$	(0.001	)	$	(0.01	)	$	(0.002	)
Diluted	$	(0.002	)	$	(0.001	)	$	(0.01	)	$	(0.002	)

Convertible promissory notes (and related expenses) were not included in the computation of diluted loss per common share for the three- and nine-month periods ended March 31, 2015 and 2014, since their inclusion would have resulted in an anti-dilutive effect.

PACIFIC SANDS, INC.

NOTES TO FINANCIAL STATEMENTS

11. INCOME TAXES

The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting and tax bases of its assets and liabilities. Deferred assets are reduced by a valuation allowance when deemed appropriate.

The tax effects of existing temporary differences that give rise to significant portions of deferred tax assets at ~~March~~September 3130, 2015, and June 30, ~~2014~~2015, are as follows:

	March 31, 2015			June 30, 2014
	September 30, 2015			June 30, 2015
Net operating loss carryforwards	$	12,~~814~~136,000		$	12,~~476~~033,000
Deferred compensation		4,000			23,000
Accounts receivable allowance		2,000			2,000
Deferred rent expense		-			4,000
Valuation allowance		(2,138,000	)		(2,035,000	)
Accounts receivable allowance		10,000			5,000
Valuation allowance		(1,828,000)			(1,505,000)
Net deferred tax asset	$	--		$	--

At ~~March~~September 3130, 2015, the Company has net operating loss carry-forwards for Federal tax purposes of approximately $45,~~319~~085,000 which, if unused to offset future taxable income, will expire in years beginning in ~~2018~~2019.

1712. SUBSEQUENT EVENTS

On November 3, 2015, the Company issued 950,000 shares of common stock as payment for accrued salaries.

On November 6, 2015, the Company issued 15,450,437 shares of common stock to the CEO as payment for accrued salaries.

Item 2. Management Discussion and Analysis of Financial Condition and Results of Operation

THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ALL FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN AS THEY ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS CONCERNING FUTURE EVENTS OR FUTURE PERFORMANCE OF THE COMPANY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH ARE ONLY PREDICTIONS AND SPEAK ONLY AS OF THE DATE HEREOF. FORWARD-LOOKING STATEMENTS USUALLY CONTAIN THE WORDS "ESTIMATE," "ANTICIPATE," "BELIEVE," "EXPECT," OR SIMILAR EXPRESSIONS, AND ARE SUBJECT TO NUMEROUS KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES. IN EVALUATING SUCH STATEMENTS, PROSPECTIVE INVESTORS SHOULD CAREFULLY REVIEW VARIOUS RISKS AND UNCERTAINTIES IDENTIFIED BELOW, AS WELL AS THE MATTERS SET FORTH IN THE COMPANY'S ANNUAL REPORT ON 10-K FOR THE YEAR ENDED JUNE 30, ~~2013~~2011 AND ITS OTHER SEC FILINGS. THESE RISKS AND UNCERTAINTIES COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED IN THE FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR PUBLICLY ANNOUNCE REVISIONS TO ANY FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR DEVELOPMENTS.

General

Pacific Sands, Inc. (the "Company" or "Pacific Sands") was incorporated in the State of Nevada on July 7, 1994. The Company's fiscal year ends June 30. The Company is a C-Corporation for federal income tax purposes. The Company does not have subsidiaries or affiliated entities. The Company also does business as Natural Water Technologies, ~~ecoONE~~ecoone® ~~Marketing Group~~ and Natural Choices Home Safe Products (see discussion below).

The Company develops, manufactures, markets and sells a range of non-toxic, environmentally friendly cleaning and water-treatment products based on proprietary blended botanical and nontoxic chemical technologies. The Company's products have applications ranging from water installation maintenance (spas, swimming pools, fountains, decorative ponds) to cleaning (non-toxic household and industrial).

The Company has a ~~two~~ mature, actively marketed product ~~lines~~line known as the ~~ecoONE~~ecoone® Spa Treatment system. asThe ~~well~~ecoone® asbrand ~~ecoONE®~~is ~~Pool~~an ~~conditioner~~inclusive line that provides all the necessary components to maintain spa's and ~~Natural~~keep ~~Choices~~them ~~household~~running ~~cleaning~~simply, ~~products~~safely, and naturally.

The Company's ~~markets~~other ~~and~~brand ~~sells~~is ~~its~~Natural ~~product~~Choices, ~~lines~~which ~~directly,~~is ~~through~~a ~~pool~~line of earth-, ~~spa~~health-, ~~hardware~~pet-, ~~specialty~~ and ~~other~~kid-friendly ~~retail~~cleaning ~~outlets in the US, Canada~~ and ~~Europe~~laundry products. The ~~products~~top ~~are~~selling ~~also~~product ~~sold~~is ~~via~~Oxy-Boost™ ~~Pacific~~an ~~Sands~~oxygen-bleach ~~distributors~~based, ~~manufacturers’~~chlorine-free ~~representatives~~bleach ~~and internationally established pool and spa industry distribution networks~~alternative. ~~The~~Throughout ~~Company’s~~the ~~products~~last ~~are~~six ~~also~~months ~~sold~~the ~~through~~company ~~numerous~~has ~~popular~~re-launched ~~pool~~the ~~and spa websites. The Company’s~~ Natural Choices ~~branded~~brand ~~products~~and ~~are~~began ~~sold~~marketing ininitiatives ~~numerous~~to ~~retail~~sell ~~outlets~~to ~~around~~consumers ~~the~~direct ~~country~~from ~~as well as dozens of~~ the ~~top environmentally-oriented websites. The~~ Company ~~has~~in ~~revamped~~addition ~~its~~to ~~own~~our ~~website~~numerous ~~and has been selling products through the Company’s website~~distributors.

The Company's ~~goal~~has isa tolarge ~~achieve~~selection ~~sustained~~of ~~profitability~~oxygen-bleach ~~through~~based ~~revenues~~formulations ~~achieved~~available byboth ~~marketing~~for ~~and~~retail ~~sales~~distribution ofunder its ~~nontoxic,~~ecoone® ~~earth-,~~and ~~health-~~Natural ~~and~~Choices ~~kid-friendly,~~brands ~~ecoONE®~~as ~~Pool,~~well ~~Spa,~~as ~~Household~~for ~~Cleaning~~contract manufacturing and ~~other~~private ~~product lines~~label.

Management believes the Company must continue to provide new and innovative products and branding to the consumer in order to grow its business. Research and product development activities, designed to enable sustained organic growth, continued to carry a high priority during the past fiscal year. While many of the benefits from these efforts will not be realized until future years, management believes these activities demonstrate the Company’s commitment to future growth. The Company has entered into a service agreement with an outside marketing development group in which the outside marketing development group provides the Company with consulting services to assist in enhancing the value of the Company’s current products and facilitate change and innovation for existing products branded by the Company.13

~~Management~~The ~~intends~~Company's togoal ~~continue~~is ~~the~~to ~~aggressive~~achieve ~~marketing~~sustained ~~and~~profitability ~~sale~~through ofrevenues ~~its~~achieved ~~products~~by ~~through a~~marketing ~~widening~~and ~~base~~sales of ~~retail~~its ~~outlets~~nontoxic, ~~distribution centers~~earth-, ~~OEM~~health- ~~arrangements~~ and ~~private~~kid-friendly, ~~label~~ecoone® ~~manufacturing~~and inNatural ~~order~~Choices toproduct ~~achieve its goals~~lines.

Management intends to continue the aggressive marketing and sale of its products through a widening base of retail outlets, distribution centers and OEM arrangements in order to achieve its goals.

To date, the Company has funded operations through a combination of revenues from the sale of its products, established credit with vendors, ~~issuing convertible~~ debt issuance and the sale of rule 144 ~~stock~~stocks through private placement. The Company's failure to continue to raise adequate financing to fund operations may jeopardize its existence. (See “"Liquidity and Capital Resources”")

Management knows of no additional trends or uncertainties beyond those discussed that are reasonably likely to have a material impact on the Company's short or long-term liquidity.

RESULTS OF OPERATIONS

Results for the three months ending ~~March~~September 3130, 2015, compared to the three months ending ~~March~~September 3130, 2014.

For the three months ended ~~March~~September 3130, 2015, net sales were $~~592~~227,~~491~~509, a decrease of 3253% ~~from~~over net sales of $~~781~~486,~~253~~045 for the three months ended ~~March~~September 3130, 2014. The ~~Company~~decrease ~~has~~in ~~rebalanced~~quarter ~~its~~one ~~customer~~sales ~~base,~~is ~~reducing~~attributable ~~the~~to ~~amount~~a ofreduction ~~concentration~~in ~~away~~private ~~from~~label asales ~~few~~and ~~higher~~a ~~volume~~generally ~~low~~slower ~~margin~~quarter ~~customers~~for ~~with~~sales ~~less~~as ~~than~~trends ~~favorable~~have ~~payment~~shown ~~terms~~in tothe apast. ~~broader~~The ~~mix~~Company ofhas ~~smaller~~moved ~~and~~towards ~~medium~~sales ~~sized~~of ~~companies~~it ~~accepting~~branded ~~more~~product ~~favorable~~lines ~~payment terms~~ and ~~who~~has ~~have~~shifted ~~potential~~away tofrom ~~grow~~manufacturing ~~with~~a ~~the~~large ~~Company~~private inlabel ~~the~~customers ~~future~~goods.

For the three months ended ~~March~~September 3130, 2015, cost of sales was $~~281~~176,~~486~~831 compared to $~~474~~301,~~931~~363 for the same period in the previous fiscal year. The Company’'s gross margin ~~was~~decreased 52from 37.9% for the three months ended ~~March~~September 3130, ~~2015~~2014, ~~and~~to 3922.3% ~~for the three months ended March 31, 2014~~. The ~~Company~~increase ~~has~~in ~~conducted~~COGS acompared complete and detailed review of all the products offered including re-costing and evaluating the profitability and long term viability of each item. As a result the Company reduced the total number of items being offered by approximately 35%, with only slight impact to ~~our total~~ revenue. Asand ~~a result~~ the decreased gross margin ~~improved by 13%. These changes have also freed up considerable capacity so the Company~~ is indue ~~a position~~ to ~~grow~~lower ~~the~~ sales ofand ~~higher~~an ~~margin~~inability ~~items~~to ~~that~~support ~~have~~current ~~more~~manufacturing ~~potential~~labor ~~for~~and ~~growth~~overhead ~~in general~~costs.

For the three months ended ~~March~~September 3130, 2015, and 2014, selling and general administrative expenses were $~~392~~280,~~270~~878 and $~~370~~593,~~434~~463, respectively. WeThe ~~have~~decrease ~~made some significant progress~~ in ~~developing~~administrative ~~some~~expense ~~new~~is ~~marketing~~due ~~and~~to ~~branding~~a ~~initiatives~~reduction ~~that will help us better capitalize on some~~ of ~~our~~sales ~~existing~~staff, ~~product~~marketing, ~~lines~~and ~~as well as to establish our own brands in the market in~~ other ~~categories~~expenses.

Interest expense for the three months ended ~~March~~September 3130, 2015, was $83115,~~767~~957 compared to $2069,~~973~~431 for the three months ended ~~March~~September 3130, 2014. ~~During~~ ~~the~~The ~~three~~increase ~~months~~in ~~ended~~interest ~~March~~expense ~~31,~~is ~~2015,~~due ~~the~~to ~~Company expensed $48,134 of~~ debt ~~discount~~financed toat ~~interest~~higher ~~expense.~~rates ~~The~~and ~~additional~~the ~~increase~~current inperiod interest ~~expense~~includes isthe ~~due~~amortization toof ~~higher~~debt ~~rate~~discount offor ~~financing~~$72,625.

The Company recorded a net loss of $~~136~~406,~~590~~261 or $0.~~002~~004 loss per share for the three months ended ~~March~~September 3130, 2015, as compared to a net loss of $83456,~~631~~792 or $0.~~001~~ 006 loss per share for the three months ended ~~March~~September 3130, 2014.

~~Results for the nine months ending March 31, 2015 compared to the nine months ending March 31, 2014.~~14

For the nine months ended March 31, 2015, net sales were $1,910,213, a decrease of 7% over net sales of $2,046,338 for the nine months ended March 31, 2014. The decrease in sales is related to the Company rebalancing its customer base from low margin customers to higher margin customers.

For the nine months ended March 31, 2014, cost of sales was $1,083,021 compared to $1,223,961 for the same period in the previous fiscal year. The Company’s gross margin increased from 40% for the nine months ended March 31, 2014, to 43% for the current fiscal year to date. The decreased cost and increased margin is a reflection of the Company working with more customers that allow for a greater gross margin.

For the nine months ended March 31, 2015, and 2014, selling and general administrative expenses were $1,433,357 and $926,852, respectively. This increase is due to the continued investment in marketing and new product development.

Interest expense for the nine months ended March 31, 2015, was $243,366 compared to $42,094 for the nine months ended March 31, 2014. During the nine months ended March 31, 2015, the Company expensed $119,957 of debt discount to interest expense. The remaining increase in interest expense is due to higher cost financing.

The company recorded a net loss of $811,717, or $0.011 loss per share for the nine months ended March 31, 2015. This compares to a net loss of $144,406, or $0.002 per share for the nine months ended March 31, 2014.

LIQUIDITY AND CAPITAL RESOURCES

Management believes that the Company is positioned for sales growth but will require additional funding to continue operations. The Company's ability to achieve its objectives is dependent upon its ability to sustain and enhance its current revenue stream and to continue to raise funds through loans, vendor credit and the private placement of restricted securities until such time as the Company sustains fiscal profitability. To date, the Company has funded operations and expansion through a combination of revenues from the sale of its products, established credit with vendors, deferred salaries (subsequently converted to ~~notes~~common ~~payable~~stock issued to officers), debt financings and the sale of rule 144 stock through private placement. The Company's failure to continue to raise adequate financing to fund planned expansion may jeopardize its plans for growth.

19At September 30, 2015, the Company had current assets of $354,989 and total assets of $542,721, compared to June 30, 2015, when current assets were $459,624 and total assets were $663,451. Cash and cash equivalents at September 30, 2015, was $14,651 compared to $30,908 at June 30, 2015.

AtCurrent ~~March~~liabilities ~~31,~~at ~~2015,~~September ~~the Company had negative net working capital of $468~~30,~~773~~ ~~composed of current assets of $562~~2015,~~650~~ ~~and~~were ~~current liabilities of~~ $1,~~031~~686,~~423.~~105 ~~That~~as is compared to ~~the~~ $1,~~327~~418,097 at June 30, ~~2014,~~2015. ~~when~~Current ~~current~~liabilities ~~assets~~include ~~were~~accounts ~~$888~~payable,~~010 and~~ current ~~liabilities~~portion ~~were~~of ~~$889~~notes payable,~~337. The~~ ~~Company~~accrued isexpenses, ~~currently~~and ~~looking~~other ~~for~~current ~~reasonable financing opportunities~~debt.

~~Net~~Non-current ~~cash~~liabilities ~~used~~at inSeptember ~~operating~~30, ~~activities~~2015, ~~during~~and ~~the~~June ~~nine months ended March 31~~30, 2015, ~~was~~were $~~156~~68,~~600~~099 and $88,375, ~~substantially~~respectively. ~~lower~~Non-current ~~than~~liabilities ~~the~~as ~~$72~~of September 30,~~775~~ ~~cash~~2015, ~~provided~~include bya ~~operating~~note ~~activities~~payable ~~during~~to ~~the~~Kenosha ~~nine~~Area ~~months~~Business ~~ended~~Alliance ~~March~~for 31$52,697 ~~2014~~and a note payable to a capital lease for $15,402.

ToFor ~~finance~~ the ~~operating~~period ~~activities for the nine months~~ ending ~~March~~September 3130, 2015, the Company ~~issued~~received ~~$70,000~~two ~~in convertible notes and obtained other short term financing. For the nine months ending March 31~~loans, ~~2014,~~totaling ~~the Company issued~~ $5120,000, ofto ~~common~~meet ~~stock and used cash provided by~~ operating ~~activities~~needs.

AtNet ~~June~~cash ~~30,~~used ~~2014,~~in operating activities during the ~~Company~~three ~~had~~months aended ~~stockholders’~~September ~~deficit~~30, of2015, was $37119,~~375.~~917 Atcompared ~~March~~to 31$321,639 ~~2015,~~used ~~the~~in ~~Company~~operating ~~had~~activities ~~stockholders’~~during ~~deficit~~the ofthree ~~$362~~months ended September 30,~~101~~ 2014.

~~The~~During ~~Company~~the ~~has~~three nomonths ~~“off~~ended ~~balance~~September ~~sheet”~~30, ~~source~~2015, net cash provided by financing activities was $106,577, which included proceeds of ~~liquidity~~$120,000 ~~arrangements~~from debt issued, $99,000 of convertible debt issued and $112,423 of debt repayments as compared to the previous fiscal quarter net cash provided by financing activities was $71,215, which included proceeds of $149,640 from debt issued, $70,000 of convertible debt issued and $148,425 of debt repayments.

On September 30, 2015, the Company had an accumulated deficit of $7,553,471 and total stockholders' deficit of $1,221,483.

The Company's ability to achieve its objectives is dependent on its ability to sustain and enhance its revenue stream and to continue to raise funds through loans, credit and the private placement of restricted securities until such time as the Company achieves profitability. To date, management has been successful in raising cash on an as-needed basis for the continued operations of the Company. There is no guarantee that management will be able to continue to raise needed cash in this fashion.

The Company has no material commitments for capital expenditures at this time. The Company has no "off balance sheet" source of liquidity arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

AnNot investment in the common stock of the Company involves a high degree of risk. In addition to the other information in this report, the following risk factors should be considered carefully in evaluating the Company and its business. This Report contains forward-looking statements. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements usually contain the words "estimate," "anticipate," "believe," "plan," "expect," or similar expressions, and are subject to numerous known and unknown risks and uncertainties. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this report, including the matters set below and in the Company's other SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements. The Company undertakes no obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.Required

~~THE COMPANY HAS EXPERIENCED LOSSES FROM OPERATIONS SINCE COMMENCING OPERATIONS:~~15

While the Company has not been profitable since commencing operations in 1994, for the quarter ending March 31, 2015, the Company continues to make significant improvements in manufacturing infrastructure. Continued investments in advertising and promotions resulted in Selling and Administrative expenses increasing by 35%.

POSSIBLE DIFFICULTY FINANCING PLANNED GROWTH:

The Company's present plans require an amount of expenditure and working capital. In the future, the Company will require financing in addition to the cash generated from operations to fund planned growth. If additional resources are unavailable, the Company may be unable to grow according to its present plan.

MANAGEMENT'S ASSUMPTIONS REGARDING THE FUTURE MARKET MAY BE FAULTY:

Management assumes there will be a continuing and increased desirability in the retail market for nontoxic, environment and health friendly products for cleaning and water treatment use. Should management's assumptions as to this increased desirability be faulty, the Company may have difficulty achieving its planned growth.

THE LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT THE COMPANY:

The Company is run by a small number of key personnel. Should the Company experience a loss of these key people due to their inability or unwillingness to continue in their present positions, the Company's business and financial results could be adversely affected.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based upon an evaluation of the effectiveness of disclosure controls and procedures, ~~our~~the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) were effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Disclosure controls and procedures are defined as those controls and other procedures of an issuer that are designed to ensure that the information required to be disclosed by the issuer in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’'s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

~~During~~As ~~the~~reported ~~quarter~~in ~~ended~~our ~~March~~Annual ~~31,~~Report ~~2015,~~on ~~Judson~~Form ~~Just,~~10-K for the ~~CFO,~~year ~~had~~ended ~~resigned~~June ~~his~~30, ~~position~~2015, tomanagement ~~pursue~~believes ~~another~~there ~~career~~are ~~opportunity.~~no ~~The~~significant ~~accountant~~deficiencies ~~for~~in the Company's ~~provides~~internal ~~oversight~~control ofover financial ~~transactions~~reporting ~~and~~In ~~Michael~~making ~~Michie,~~this ~~the CEO~~assessment, ~~reviews~~our ~~all~~management ~~financial~~used ~~transactions.~~the ~~The~~criteria ~~Company~~set ~~believes~~forth ~~that~~by ~~while~~the ~~there~~Committee ~~are~~of ~~acceptable~~Sponsoring ~~segregation~~Organizations ~~issues~~of asthe aTreadway ~~small~~Commission ~~company~~("COSO") ~~this~~in ~~move~~Internal ~~will~~Control-Integrated ~~provide~~Framework. ~~some~~Management ~~financial~~concluded ~~benefit~~that tointernal ~~the~~controls ~~Company~~over ~~and~~financial ~~with~~reporting ~~the~~were ~~overlapping~~effective as of ~~oversight~~June ~~the~~30, ~~risk will be minimized~~2015.

21There have not been any changes in the Company's internal control over financial reporting during the quarter ended September 30, 2015, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II OTHER INFORMATION

Item 1 – LEGAL PROCEEDINGS

None

Item 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None~~On July 16, 2015, the Company issued 125,000 shares of common stock for $5,000 for payment of services rendered. Common stock shares were issued in lieu of a payment.

On September 11, 2015, the Company issued 2,050,000 shares of common stock to an employee for $32,800 for payment of compensation. Common stock shares were issued in lieu of payment.

Item 3 – DEFAULTS UPON SENIOR SECURITIES

None

Item 4 – MINE SAFETY DISCLOSURES

~~None~~Not Applicable

Item 5 – OTHER INFORMATION

None

2217

Item 6 – EXHIBITS

(a)	Exhibit Index
Exhibit	Description of the Exhibit
31.1	Chief Executive Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Chief Financial Officer Certification of Periodic Financial Report Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Chairman of the Board Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1	Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Chairman of the Board Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance*
101 INS	XBRL Instance Document*
101.SCH	XBRL Schema*
101 SCH	XBRL Schema Document*
101.CAL	XBRL Calculation*
101 CAL	XBRL Calculation Linkbase Document*
101.DEF	XBRL Definition*
101 LAB	XBRL Labels Linkbase Document*
101.LAB	XBRL Label*
101 PRE	XBRL Presentation Linkbase Document*
101.PRE	XBRL Presentation*
101 DEF	XBRL Definition Linkbase Document*

* The XBRL related information in Exhibit 101 shall not be deemed “"filed”" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

2318

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PACIFIC SANDS, INC.
Dated: November 16, 2015	/s/ Michael D. Michie
Dated: May 15, 2015	By:	/s/ Michael Michie
	Michael D. Michie
		Michael Michie Chief Executive Officer
	Chief Executive Officer Chief Financial Officer

~~SIGNATURES~~19

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PACIFIC SANDS, INC.
Dated: May 15, 2015	By:	/s/ Michael Michie
		Michael Michie Chief Financial Officer

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