Nevada
|
88-0322882
|
|||
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
|
Non-accelerated
filer ¨
|
Smaller
reporting Company x
|
PART
I
|
||
Item
1.
|
Description
of Business.
|
3
|
Item
2.
|
Description
of Property.
|
10
|
Item
3.
|
Legal
Proceedings.
|
10
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
10
|
PART
II
|
||
Item
5.
|
Market
for Registrant'sCommon Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities.
|
11
|
Item 6. | Selected Financial Data. |
12
|
Item
7.
|
Management
s Discussion and Analysis of Financial Condition and Results of
Operations.
|
13
|
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. | 17 |
Item
8.
|
Financial
Statements and Supplementary Data.
|
18
|
Item
9.
|
Changes
In and Disagreements With Accountants on Accounting and Financial
Disclosure.
|
36
|
Item 9A(T). | Controls and Procedures. | 36 |
Item 9B. | Other Information. | 36 |
PART
III
|
||
Item
10.
|
Directors,
Executive Officers, Promoters and Corporate Governance.
|
37
|
Item
11.
|
Executive
Compensation.
|
38
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.
|
39
|
Item
13.
|
Certain
Relationships and Related Transactions and Director
Independence.
|
39
|
Item
14.
|
Principal
Accountant Fees and Services.
|
39
|
Item 15. | Exhibits. | 40 |
Signatures
|
41
|
|
EX-31.1
(EXHIBIT 31.1)
|
||
EX-31.2
(EXHIBIT 31.2)
|
||
EX-32.1
(EXHIBIT 32.1)
|
||
EX-32.2
(EXHIBIT 32.2)
|
High
|
Low
|
|
Fiscal
Year Ended June 30, 2008
|
||
First
Quarter
|
0.16
|
0.08
|
Second
Quarter
|
0.14
|
0.06
|
Third
Quarter
|
0.10
|
0.08
|
Fourth
Quarter
|
0.09
|
0.06
|
Fiscal
Year Ended June 30, 2009
|
||
First
Quarter
|
0.09
|
0.06
|
Second
Quarter
|
0.06
|
0.01
|
Third
Quarter
|
0.06
|
0.01
|
Fourth
Quarter
|
0.08
|
0.03
|
·
|
$10,000
due May 1, 2009.
|
·
|
$640,000
due on or before March 31, 2012
|
PACIFIC
SANDS, INC.
|
||||||||
BALANCE
SHEETS
|
||||||||
JUNE
30, 2009 AND 2008
|
||||||||
ASSETS
|
||||||||
June
30, 2009
|
June
30, 2008
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 7,144 | $ | 7,487 | ||||
Trade
receivables, net of allowances for doubtful accounts of $70,000 and
$13,602
|
137,412 | 256,427 | ||||||
Inventories
|
108,803 | 135,282 | ||||||
Other
current assets
|
1,257 | 3,216 | ||||||
Total
Current Assets
|
254,616 | 402,412 | ||||||
Property
and equipment, net
|
59,663 | 78,311 | ||||||
Other
assets:
|
||||||||
Security
deposit
|
- | 816 | ||||||
Goodwill
|
877,854 | 861,862 | ||||||
877,854 | 862,678 | |||||||
Total
Assets
|
$ | 1,192,133 | $ | 1,343,401 | ||||
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 152,022 | $ | 331,824 | ||||
Accrued
expenses
|
125,660 | 154,469 | ||||||
Deferred
compensation
|
- | 139,732 | ||||||
Current
portion of notes payable and capital leases
|
223,330 | 382,819 | ||||||
Total
Current Liabilities
|
501,012 | 1,008,844 | ||||||
Notes
payable and capital leases - net of discount of $33,946 and $78,601, less
current portion
|
989,285 | 555,773 | ||||||
Total
Liabilities
|
1,490,297 | 1,564,617 | ||||||
Stockholders'
deficit
|
||||||||
Common
stock (50,000,000 shares authorized, 49,196,090 and
45,308,958
|
||||||||
shares
issued, and 42,586,903 and 38,699,771 shares outstanding)
|
49,196 | 45,309 | ||||||
Additional
paid in capital
|
4,134,561 | 3,898,363 | ||||||
Treasury
stock, at cost
|
(132,030 | ) | (132,030 | ) | ||||
Accumulated
deficit
|
(4,349,891 | ) | (4,032,858 | ) | ||||
Total
Stockholders' Deficit
|
(298,164 | ) | (221,216 | ) | ||||
Total
Liabilities and Stockholders' Deficit
|
$ | 1,192,133 | $ | 1,343,401 |
PACIFIC
SANDS, INC.
|
||||||||
STATEMENTS
OF OPERATIONS
|
||||||||
FOR
THE YEARS ENDED JUNE 30, 2009 AND 2008
|
||||||||
|
||||||||
|
||||||||
|
||||||||
2009
|
2008
|
|||||||
Net
sales
|
$ | 1,197,485 | $ | 976,357 | ||||
Cost
of sales
|
557,296 | 404,632 | ||||||
Gross
profit
|
640,189 | 571,725 | ||||||
Selling
and administrative expenses
|
931,108 | 852,277 | ||||||
Loss
from operations
|
(290,919 | ) | (280,552 | ) | ||||
Other
expense
|
||||||||
Interest
expense
|
(85,578 | ) | (44,055 | ) | ||||
Other
income
|
59,464 | 11,699 | ||||||
Loss
before income taxes
|
(317,033 | ) | (312,908 | ) | ||||
Income
taxes
|
- | - | ||||||
Net
loss
|
$ | (317,033 | ) | $ | (312,908 | ) | ||
Basic
and diluted loss per share:
|
$ | (0.008 | ) | $ | (0.009 | ) | ||
Basic
and diluted weighted average shares outstanding:
|
40,388,790 | 36,207,648 |
PACIFIC
SANDS, INC.
|
||||||||||||||||||||||||||||
STATEMENT
OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||||||
YEARS
ENDED JUNE 30, 2009 AND 2008
|
||||||||||||||||||||||||||||
Common Stock
|
Treasury Stock
|
|||||||||||||||||||||||||||
Number
of
|
Additional
Paid
|
Number
of
|
Accumulated
|
|||||||||||||||||||||||||
Shares
|
Amount
|
In
Capital
|
Shares
|
Amount
|
Deficit
|
Total
|
||||||||||||||||||||||
Balance
at June 30, 2007
|
40,970,311 | $ | 40,970 | $ | 3,517,196 | (6,609,187 | ) | $ | (132,030 | ) | $ | (3,719,950 | ) | $ | (293,814 | ) | ||||||||||||
Issuance
of common stock:
|
||||||||||||||||||||||||||||
For
cash
|
1,972,222 | 1,972 | 165,028 | - | - | - | 167,000 | |||||||||||||||||||||
For
settlement of debt and other liabilities
|
399,095 | 400 | 31,528 | - | - | - | 31,928 | |||||||||||||||||||||
Partial
payments of acquisition purchase price
|
1,000,000 | 1,000 | 99,000 | - | - | - | 100,000 | |||||||||||||||||||||
For
compensation
|
355,000 | 355 | 31,395 | - | - | - | 31,750 | |||||||||||||||||||||
For
professional services
|
564,000 | 564 | 50,156 | - | - | - | 50,720 | |||||||||||||||||||||
For
purchase of machinery
|
48,330 | 48 | 4,060 | - | - | - | 4,108 | |||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (312,908 | ) | (312,908 | ) | |||||||||||||||||||
Balance
at June 30, 2008
|
45,308,958 | 45,309 | 3,898,363 | (6,609,187 | ) | (132,030 | ) | (4,032,858 | ) | (221,216 | ) | |||||||||||||||||
Issuance
of common stock:
|
||||||||||||||||||||||||||||
For
cash
|
1,359,154 | 1,359 | 68,442 | - | - | - | 69,801 | |||||||||||||||||||||
For
settlement of debt and other liabilities
|
1,337,978 | 1,338 | 112,422 | - | - | - | 113,760 | |||||||||||||||||||||
For
compensation
|
890,000 | 890 | 26,210 | - | - | - | 27,100 | |||||||||||||||||||||
For
professional services
|
300,000 | 300 | 10,950 | - | - | - | 11,250 | |||||||||||||||||||||
Debt
discount for beneficial conversion feature
|
- | - | 18,174 | - | - | - | 18,174 | |||||||||||||||||||||
Net
loss
|
- | - | - | - | - | (317,033 | ) | (317,033 | ) | |||||||||||||||||||
Balance
at June 30, 2009
|
49,196,090 | $ | 49,196 | $ | 4,134,561 | (6,609,187 | ) | $ | (132,030 | ) | $ | (4,349,891 | ) | $ | (298,164 | ) |
PACIFIC
SANDS, INC.
|
||||||||
STATEMENTS
OF CASH FLOWS
|
||||||||
FOR
THE YEARS ENDED JUNE 30, 2009 AND 2008
|
||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
loss
|
$ | (317,033 | ) | $ | (312,908 | ) | ||
Adjustments
to reconcile net loss to net cash used in operating activities
-
|
||||||||
Depreciation
and amortization
|
23,295 | 14,962 | ||||||
Amortization
of debt discount
|
46,170 | 20,244 | ||||||
Common
shares and rights issued for services and compensation
|
38,350 | 82,470 | ||||||
Changes in assets and liabilities - | ||||||||
Trade
accounts receivable
|
107,024 | (140,133 | ) | |||||
Inventories
|
26,479 | (28,338 | ) | |||||
Prepaid
expenses
|
948 | 16,144 | ||||||
Other
assets
|
1,827 | 3,890 | ||||||
Accounts
payable and other current liabilities
|
(14,018 | ) | 188,246 | |||||
Net
Cash Used in Operating Activities
|
(86,958 | ) | (155,423 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchases
of equipment
|
(4,645 | ) | (5,497 | ) | ||||
Acquisition
of Natural Choices - initial payment
|
- | (60,000 | ) | |||||
Net
Cash Used in Investing Activities
|
(4,645 | ) | (65,497 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Issuance
of common stock
|
69,801 | 167,000 | ||||||
Issuance
of notes payable
|
179,316 | 173,745 | ||||||
Repayment
of note payable and long term obligation
|
(157,857 | ) | (110,508 | ) | ||||
Deferred
compensation payments
|
- | (15,799 | ) | |||||
Net
Cash Provided by Financing Activities
|
91,260 | 214,438 | ||||||
NET
DECREASE IN CASH AND CASH EQUIVALENTS
|
(343 | ) | (6,482 | ) | ||||
CASH
AND CASH EQUIVALENTS
|
||||||||
Beginning
of year
|
7,487 | 13,969 | ||||||
End
of year
|
$ | 7,144 | $ | 7,487 |
PACIFIC
SANDS, INC.
|
||||||||
STATEMENTS OF CASH
FLOWS
|
||||||||
YEARS
ENDED JUNE 30, 2009 AND 2008
|
||||||||
Supplemental
disclosures of cash flow information:
|
||||||||
2009 | 2008 | |||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$ | 20,576 | $ | 16,677 | ||||
Income
taxes
|
$ | - | $ | - | ||||
Supplemental
disclosure of non cash financing and investing activities
|
||||||||
Conversion
of debt to equity
|
$ | 64,084 | $ | 31,928 | ||||
Conversion
of accrued salaries to equity
|
$ | 49,676 | $ | - | ||||
Conversion
of deferred compensation to notes payable
|
$ | 274,443 | $ | - | ||||
Convertible
notes discount with corresponding increase to paid in capital for value of
the beneficial conversion feature
|
$ | 18,174 | $ | - | ||||
Capital
lease obligations
|
$ | - | $ | 49,400 | ||||
Common
stock issued as down payment for machinery purchased under capital
lease
|
$ | - | $ | 4,108 | ||||
Reclassification
of settlement obligation (previously recorded as deferred
compensation)
|
$ | - | $ | 100,000 | ||||
Debt
obligation incurred upon acquisition of the assets of Natural Choices Home
Safe Products, net of discount
|
$ | - | $ | 647,814 |
FORM
10-K
|
JUNE
30, 2009
|
FORM
10-K
|
JUNE
30, 2009
|
FORM
10-K
|
JUNE
30, 2009
|
FORM
10-K
|
JUNE
30, 2009
|
June
30, 2009
|
June
30, 2008
|
|||||||
Raw
materials
|
$ | 94,484 | $ | 106,862 | ||||
Finished
goods
|
14,319 | 28,420 | ||||||
|
||||||||
Total
|
$ | 108,803 | $ | 135,282 |
FORM
10-K
|
JUNE
30, 2009
|
June
30, 2009
|
June
30, 2008
|
|||||||
Accrued
compensation
|
$ | 55,894 | $ | 71,484 | ||||
Accrued
taxes
|
39,525 | 33,497 | ||||||
Accrued
professional fees
|
18,766 | 38,964 | ||||||
Accrued
interest
|
9.897 | 789 | ||||||
Accrued
other
|
1,578 | 9,735 | ||||||
Total
|
$ | 125,660 | $ | 154,469 |
June
30, 2009
|
June
30, 2008
|
|||||||
Dell
Financial Services – line of credit
|
$ | 13,652 | $ | 10,632 | ||||
J.P.
Morgan Chase – business line of credit
|
94,992 | 99,589 | ||||||
Notes
payable stockholders and directors
|
59,652 | 25,000 | ||||||
Notes
payable – settlement obligation
|
44,500 | 80,500 | ||||||
Notes
payable – acquisition, net of discount
|
629,684 | 668,058 | ||||||
Convertible
notes payable – net of discount
|
68,370 | -- | ||||||
Notes
payable – executive officers
|
274,443 | -- | ||||||
Capital
leases
|
27,322 | 54,813 | ||||||
1,212,615 | 938,592 | |||||||
Less
current maturities
|
223,330 | 382,819 | ||||||
$ | 989,285 | $ | 555,773 |
FORM
10-K
|
JUNE
30, 2009
|
|
o
|
$10,000
due May 1, 2009.
|
|
o
|
$640,000
due on or before March 31, 2012
|
FORM
10-K
|
JUNE
30, 2009
|
2010
|
$ | 223,330 | ||
2011
|
100,317 | |||
2012
|
922,914 |
Common
stock issued as earnest money prior to closing, at fair
value
|
$ | 50,000 | ||
Cash
paid at closing
|
60,000 | |||
Common
stock issued at closing, at fair value
|
50,000 | |||
Debt
obligation incurred
|
730,000 | |||
Less:
imputed interest on debt obligation incurred
|
(82,186 | ) | ||
$ | 807,814 |
Accounts
receivable
|
$ | 17,645 | ||
Inventories
|
13,687 | |||
Accounts
payable
|
(57,302 | ) | ||
Direct
cost of acquisition
|
(44,070 | ) | ||
Intangible
asset
|
877,854 | |||
$ | 807,814 |
FORM
10-K
|
JUNE
30, 2009
|
June
30, 2008
|
||||
Net
sales
|
$ | 1,337,905 | ||
Gross
profit
|
715,791 | |||
Operating
loss
|
(279,785 | ) | ||
Net
loss
|
(314,283 | ) | ||
Loss
per share
|
(0.008 | ) |
FORM
10-K
|
JUNE
30, 2009
|
Price
per share
|
||||||||||
Shares
|
Range
|
Weighted
Average
|
||||||||
Balance,
June 30, 2008
|
3,000,000 | $.16 - $1.00 | $0.440 | |||||||
Balance,
June 30, 2009
|
3,000,000 | $.16 - $1.00 | $0.440 |
FORM
10-K
|
JUNE
30, 2009
|
Years
Ended
|
||||||||
June
30, 2009
|
June
30, 2008
|
|||||||
Numerator
|
||||||||
Basic
and diluted loss
|
$ | (317,033 | ) | $ | (312,908 | ) | ||
Denominator
|
||||||||
Basic
and diluted earnings per share-weighted average shares
outstanding
|
40,388,970 | 36,207,648 | ||||||
Basic
and diluted loss per common share
|
$ | (0.008 | ) | $ | (0.009 | ) |
FORM
10-K
|
JUNE
30, 2009
|
|
June
30, 2009
|
June
30, 2008
|
||||||
Stock
options
|
3,000,000 | 3,000,000 |
June
30 ,2009
|
June
30 ,2008
|
|||||||
Net
Operating Loss Carryforwards
|
$ | 1,342,000 | $ | 1,242,000 | ||||
Deferred
Compensation
|
134,000 | 92,000 | ||||||
Accounts
receivable allowance
|
30,000 | 6,000 | ||||||
Valuation
Allowance
|
(1,506,000 | ) | (1,340,000 | ) | ||||
Net
Deferred Tax Asset
|
$ | -- | $ | -- |
FORM
10-K
|
JUNE
30, 2009
|
Quarter
ended
|
||||||||||||||||
September 30,
2008
|
December
31, 2008
|
March 31,
2009
|
June
30, 2009
|
|||||||||||||
Net
sales
|
$ | 352,806 | $ | 176,999 | $ | 328,070 | $ | 339,610 | ||||||||
|
||||||||||||||||
Gross
profit
|
190,856 | 56,588 | 201,434 | 191,311 | ||||||||||||
|
||||||||||||||||
Net
earnings (loss)
|
(64,912 | ) | (181,039 | ) | 24,264 | (95,346 | ) | |||||||||
Net
earnings (loss) per share – basic and diluted
|
(.002 | ) | (.005 | ) | .001 | (.002 | ) | |||||||||
|
||||||||||||||||
Weighted
average basic and diluted shares
|
39,229,515 | 40,117,486 | 40,551,236 | 41,674,207 |
Quarter
ended
|
||||||||||||||||
September 30,
2007
|
December
31, 2007
|
March 31,
2008
|
June
30, 2008
|
|||||||||||||
Net
sales
|
$ | 179,807 | $ | 153,234 | $ | 231,145 | $ | 412,171 | ||||||||
|
||||||||||||||||
Gross
profit
|
116,944 | 84,654 | 170,067 | 199,964 | ||||||||||||
|
||||||||||||||||
Net
earnings (loss)
|
(53,829 | ) | (158,211 | ) | (85,148 | ) | (15,720 | ) | ||||||||
Net
earnings (loss) per share – basic and diluted
|
(.002 | ) | (.005 | ) | (.002 | ) | (.000 | )* | ||||||||
|
||||||||||||||||
Weighted
average basic and diluted shares
|
34,004,047 | 34,830,931 | 37,503,493 | 38,699,771 |
Name
|
Age
|
Position with the
Company
|
Michael
L. Wynhoff
|
44
|
President/Chief
Executive Officer and Director
|
Michael
D. Michie
|
48
|
Chief
Financial Officer/Treasurer and Director
|
Thomas
Paulsen
|
46
|
Director
|
John
D. Hagarty
|
70
|
Director
|
Name
and Principal Position
|
Year
|
Salary(b)
|
Bonus
|
Restricted
Stock
Awards
|
Option
Awards(a)
|
Nonequity
incentive
plan
compensation
|
Non-qualified
deferred
compensation
|
Total
|
|||||||||||||||||||||
Michael
L. Wynhoff
|
2009
|
$ | 97,751 | -- | $ | 3,150 | -- | -- | -- | $ | 100,901 | ||||||||||||||||||
Chief
Executive Officer
|
2008
|
$ | 78,468 | -- | $ | 5,300 | -- | -- | -- | $ | 83,768 | ||||||||||||||||||
2007
|
$ | 82,215 | -- | $ | 27,440 | $ | 88,676 | -- | -- | $ | 198,331 | ||||||||||||||||||
Michael
D. Michie
|
2009
|
$ | 90,143 | -- | $ | 9,150 | -- | -- | -- | $ | 99,293 | ||||||||||||||||||
Chief
Financial Officer
|
2008
|
$ | 72,145 | -- | $ | 12,050 | -- | -- | -- | $ | 84,195 | ||||||||||||||||||
2007
|
$ | 98,754 | -- | $ | 15,720 | $ | 22,768 | -- | -- | $ | 137,242 | ||||||||||||||||||
Thomas
Paulson
|
2009
|
-- | -- | $ | 3,150 | -- | -- | -- | $ | 3,150 | |||||||||||||||||||
Secretary
|
2008
|
-- | -- | $ | 1,700 | -- | -- | -- | $ | 1,700 | |||||||||||||||||||
Mark
R. Rauscher
|
2008
|
-- | -- | -- | -- | -- | -- | -- | |||||||||||||||||||||
Retired
|
2007
|
-- | -- | $ | 9,860 | $ | 22,768 | -- | -- | $ | 32,628 | ||||||||||||||||||
John
Hagarty
|
2009
|
-- | -- | $ | 9,450 | -- | -- | -- | $ | 9,450 | |||||||||||||||||||
Director
|
2008
|
-- | -- | $ | 15,900 | -- | -- | -- | $ | 15,900 | |||||||||||||||||||
2007
|
-- | -- | $ | 19,744 | -- | -- | -- | $ | 19,744 | ||||||||||||||||||||
(a)
|
In
fiscal 2005, the Company granted to its executives, 2,000,000 stock
options to purchase common shares at an exercise price of $0.03 per share,
and 1,000,000 stock options at an exercise price of $0.10 per
share. During fiscal 2007, those options were surrendered and
reissued for four years no vesting period and exercise prices as follows;
2,000,000 stock options at $0.16 and 1,000,000 stock options at
$1.00.
|
(b)
|
During fiscal 2009, cash payments received as compensation by Mr. Wynhoff and Mr. Michie was $70,015 and $72,179, respectively. The balance of their salaries was accrued and subsequently converted to promissory notes. |
Title
of Class
|
Name
of Beneficial Owner
|
Beneficial
Ownership
|
Percent
of Class
|
Common
|
Michael
L. Wynhoff
1509
Rapids Drive
Racine,
WI 53404
|
6,776,018
|
14.5%
|
Common
|
Michael
D. Michie
1509
Rapids Drive
Racine,
WI 53404
|
2,000,080
|
4.3%
|
Common
|
Mark
Rauscher
1509
Rapids Drive
Racine,
WI 53404
|
2,125,348
|
4.6%
|
Common
|
John
D. Hagarty
1509
Rapids Drive
Racine,
WI 53404
|
1.7%
|
|
Common
|
Thomas
Paulsen
1509
Rapids Drive
Racine,
WI 53404
|
676,923
|
1.5%
|
Fiscal
2009
|
Fiscal
2008
|
|||||||
Audit
fees (1)
|
$
|
32,557 |
$
|
31,492
|
||||
Audit
related fees (2)
|
$
|
- |
$
|
18,864
|
||||
Tax
fees
|
$
|
3,135 |
$
|
2,700
|
(1)
|
Audit
fees represent fees for professional services provided in connection with
the audit of our financial statements and review of our quarterly
financial statements and audit services provided in connection with other
statutory or regulatory filings.
|
(2)
|
Audit
related fees consist of fees for professional services for the audit of
Natural Choices Home Products in connection with the acquisition made by
the Company.
|
31.1
|
Chairman of the Board 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
|
|
32.2
|
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
|