10-Q

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ending August 31, 2015

o TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to __________________

Commission File No. 0-29373

Seychelle Environmental Technologies, Inc.

(Exact Name of registrant as specified in its charter)

Nevada	33-0836954
(State or other jurisdiction Of incorporation)	(IRS Employer File Number)
32963 Calle Perfecto
San Juan Capistrano, California	92675
(Address of principal executive offices)	(zip code)

(949) 234-1999

(Registrant's telephone number, including area code)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 þ  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(Section 232.405 of this chapter) during the preceding 12 months(or such shorter period that the registrant was required to submit and post such files. Yes þ  No o

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

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

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

The number of shares outstanding of the Registrant's common stock, as of October 9, 2015 was 26,372,646.

References in this document to "us," "we," or "Company" refer to Seychelle Environmental Technologies, Inc., its predecessor and its subsidiaries.

FORM 10-Q

Securities and Exchange Commission

Washington, D.C. 20549

Seychelle Environmental Technologies, Inc.

TABLE OF CONTENTS

		Page
PART I  FINANCIAL INFORMATION
Item 1.	Financial Statements		3
	Condensed Consolidated Balance Sheets		3
	Condensed Consolidated Statements of Operations		4
	Condensed Consolidated Statements of Cash Flows		6
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16
Item 4.	Controls and Procedures		16
Item 4T.	Controls and Procedures		16
PART II  OTHER INFORMATION
Item 1.	Legal Proceedings		17
Item 1A.	Risk Factors		17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3.	Defaults Upon Senior Securities		17
Item 4.	Submission of Matters to a Vote of Security Holders		17
Item 5.	Other Information		17
Item 6.	Exhibits		18
Signatures			19

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PART I

ITEM 1. FINANCIAL STATEMENTS

SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	August 31, 2015			February 28, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	1,687,564		$	1,514,534
Accounts receivable, net of allowance for doubtful accounts and sales returns
of $13,400		436,655			284,121
Related party receivables		22,407			12,601
Inventory, net		1,752,270			1,009,491
Deferred tax assets		116,829			629,838
Prepaid expenses, deposits and other current assets		164,144			174,052
Total current assets		4,179,869			3,624,637
Property and equipment, net		193,820			162,107
Intangible assets, net		151,776			152,643
Deferred tax assets		611,314			611,314
Other assets		15,651			25,491
Total assets	$	5,152,430		$	4,576,192
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	190,320		$	238,009
Accrued legal and settlement fees		-			532,103
Customer deposits		45,939			119,215
Capital lease obligations, current portion		11,413			5,639
Total current liabilities		247,672			894,966
Long-term liabilities:
Capital lease obligations, net of current		22,340			4,081
Total liabilities		270,012			899,047
Stockholders' equity:
Preferred stock, 6,000,000 shares authorized, none issued or outstanding					-
Common stock $0.001 par value, 50,000,000 shares authorized, 26,158,646 and     25,913,646 issued and outstanding at August 31, 2015 and February 28, 2015, respectively		26,159			25,914
Additional paid-in capital		8,675,056			8,457,603
Accumulated deficit		(3,818,797	)		(4,806,372	)
Total stockholders' equity		4,882,418			3,677,145
Total liabilities and stockholders' equity	$	5,152,430		$	4,576,192

See accompanying notes to condensed consolidated financial statements.

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SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended August 31,
	2015			2014
Sales	$	2,724,829		$	767,216
Cost of sales		1,319,711			435,646
Gross profit		1,405,118			331,570
Operating expenses
Selling, general, and administrative expenses		602,371			659,165
Archette legal expenses		-			199,823
Depreciation and amortization		20,395			15,815
Total  operating  expenses		622,766			874,803
Income (loss)  from operations		782,352			(543,233	)
Other income (expense)
Interest income		39			1,111
Interest expense		(133	)		(179	)
Other income (expense)		537			(5,953	)
Total other income (expense)		443			(5,021	)
Income (loss)  before income tax benefit (expense)		782,795			(548,254	)
Income tax benefit (expense)		(267,718	)		205,666
Net  income (loss)	$	515,077		$	(342,588	)
BASIC INCOME (LOSS) PER SHARE	$	0.02		$	(0.01	)
DILUTED  INCOME (LOSS) PER SHARE	$	0.02		$	(0.01	)
BASIC WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING		26,144,531			25,903,646
DILUTED WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING		28,464,562			25,903,646

 See accompanying notes to condensed consolidated financial statements.

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SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Six Months Ended August 31,
	2015			2014
Sales	$	5,072,012		$	1,874,514
Cost of sales		2,387,741			1,005,481
Gross profit		2,684,271			869,033
Operating expenses
Selling, general, and administrative expenses		1,154,287			1,225,034
Archette legal expenses		-			268,263
Depreciation and amortization		30,107			29,574
Total  operating  expenses		1,184,394			1,522,871
Income (loss)  from operations		1,499,877			(653,838	)
Other income (expense)
Interest income		228			2,771
Interest expense		(292	)		(448	)
Other income		771			2,539
Total other income		707			4,862
Income (loss)  before income tax benefit (expense)		1,500,584			(648,976	)
Income tax benefit (expense)		(513,009	)		243,660
Net  income (loss)	$	987,575		$	(405,316	)
BASIC INCOME (LOSS) PER SHARE	$	0.04		$	(0.02	)
DILUTED  INCOME (LOSS) PER SHARE	$	0.04		$	(0.02	)
BASIC WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING		26,023,362			25,891,146
DILUTED WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING		27,917,424			25,891,146

 See accompanying notes to condensed consolidated financial statements.

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  SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For The Six Months Ended August 31,
	2015			2014
OPERATING ACTIVITIES:
Net income (loss)	$	987,575		$	(405,316	)
Adjustments to reconcile net income (loss)  to net cash provided by (used in)  operating activities:
Depreciation and amortization		30,107			29,574
Stock-based compensation		217,698			210,350
Provision for doubtful accounts		-			9,958
Deferred income tax expense (benefit)		513,009			(243,460	)
Changes in operating assets and liabilities:
Increase in accounts receivable		(152,534	)		(17,240	)
Increase in related party receivables		(9,806	)		(7,008	)
(Increase) decrease in inventory		(742,779	)		15,890
(Increase) decrease in prepaid expenses, deposits  and other assets		19,748			(23,640	)
(Decrease) increase in accounts payable and accrued expenses		(47,689	)		51,375
Decrease in accrued legal and settlement fees		(532,103	)		-
Decrease in customer deposits		(73,276	)		(16,766	)
Net Cash Provided By (Used In) Operating Activities		209,950			(396,283	)
INVESTING ACTIVITIES:
Purchase of property and equipment		(34,953	)		(33,918	)
Purchase of intangible assets		-			(150,434	)
Net Cash Used In Investing Activities		(34,953	)		(184,352	)
FINANCING ACTIVITIES:
Repayment of  capital lease obligations		(1,967	)		(2,012	)
Net Cash Used in Financing Activities		(1,967	)		(2,012	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		173,030			(582,647	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,514,534			2,971,825
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,687,584		$	2,389,178
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Acquisition of equipment under capital leases	$	26,000		$	-
Cash paid for:
Interest	$	292		$	448
Income taxes	$	-		$	-

 See accompanying notes to condensed consolidated financial statements.

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SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS

NOTE 1:    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements have been prepared by Seychelle Environmental Technologies, Inc., and subsidiaries (the "Company") without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at August 31, 2015, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended February 28, 2015.  The results of operations for the periods ended August 31, 2015 and 2014 are not necessarily indicative of the operating results for the full fiscal years.

The summary of significant accounting policies of the Company is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of these condensed consolidated financial statements and the February 28, 2015 consolidated financials included in the 10-K filed on May 29, 2015.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

NOTE 2:    BASIC INCOME (LOSS) PER SHARE

Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during each period presented.  Diluted income (loss) per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents.  In periods when losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.  The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method.

The denominator for diluted income (loss) per share for the three- and six- month period ended August 31, 2014 did not include warrants as they would have been anti-dilutive. During the three and six months ended August 31, 2015, 3,446,467 and 4,535,479 warrants, respectively, were excluded from the denominator for diluted income (loss) per share.

	For the six months ended
	August 31,
	2015		2014
Numerator:
Net income (loss) available to common shareholders	$	987,575	$	(405,316	)
Weighted average shares – basic		26,023,362		25,891,146
Net income (loss) per share – basic	$	0.04	$	(0.02	)
Dilutive effect of common stock equivalents:
Warrants		1,894,062		-
Weighted average shares – diluted		27,917,424		25,891,146
Net income (loss) per share – diluted	$	0.04	$	(0.02	)

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SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

NOTES TO CONDENSED CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS

NOTE 2:    BASIC INCOME (LOSS) PER SHARE (continued)

	For the three months ended
	August 31,
	2015		2014
Numerator:
Net income (loss) available to common shareholders	$	515,077	$	(342,588	)
Weighted average shares – basic		26,144,531		25,903,646
Net income (loss) per share – basic	$	0.02	$	(0.01	)
Dilutive effect of common stock equivalents:
Warrants		2,320,031		-
Weighted average shares – diluted		28,464,562		25,903,646
Net income  (loss) per share – diluted	$	0.02	$	(0.01	)

NOTE 3:   COMMON STOCK PURCHASE WARRANTS

Common Stock

During the six month period ended August 31, 2015, 115,000 shares of restricted common stock were issued to employees and officers of the Company. Additionally, 100,000, 20,000, and 10,000 shares of restricted common stock were issued to TAM, vendors, and TAM's trustee, respectively. The shares were fully vested upon issuance. The value recorded in the accompanying condensed consolidated financial statements was based on the estimated fair value of the stock on the date of the grant and aggregated $83,000.

During the six month period ended August 31, 2014, 50,000 shares of restricted stock were issued by the Company to an employee. The shares vest over a two year period, with 17,000 shares vested upon issue. The remaining shares vest 17,000 and 16,000 after one and two years, respectively. The value recorded in the accompanying condensed consolidated financial statements was based on the estimated fair value of the stock on the date of the grant.   

Warrants

The Company has determined the estimated value of warrants granted using the Black-Scholes option pricing model. The amount of the expense charged to operations for warrants was $67,200 and $134,200 for the three and six month periods ended August 31, 2015, respectively, and $88,175 and $176,350 for the three and six month periods ended August 31, 2014, respectively.  All outstanding warrants are expected to be vested in December 2015.

A summary of warrant activity for the six months ended August 31, 2015 is as follows:

				Weighted-
				Average
	Warrants			Exercise
	Outstanding			Price
Outstanding at February 28, 2015		8,407,221			0.21
Granted		-			-
Exercised		-			-
Forfeited		(2,000,000	)		0.21
Outstanding at August 31, 2015		6,407,221			0.21
Vested at August 31, 2015		5,766,498			0.21
Exercisable at August 31, 2015		5,766,498			0.21

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SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS

NOTE 3:   COMMON STOCK PURCHASE WARRANTS (continued)

The following table summarizes significant ranges of outstanding warrants as of August 31, 2015:

		Warrants Outstanding				Warrants Exercisable
			Weighted	Weighted			Weighted
			Average	Average			Average
Exercise		Number	Remaining	Exercise		Number	Exercise
Price		Outstanding	Life (Years)	Price		Outstanding	Price
	$0.21	6,407,221	5.29		$0.21	5,766,498		$0.21

NOTE 4:    INVENTORY

The Company's inventory consisted of the following at August 31, 2015 and February 28, 2015:
	August 31, 2015			February 28, 2015
Raw materials	$	996,829		$	536,302
Finished goods		795,441			513,189
		1,792,270			1,049,491
Reserve for obsolete and slow moving inventory		(40,000	)		(40,000	)
	$	1,752,270		$	1,009,491

NOTE 5:    LINE OF CREDIT

As of February 28, 2015, the Company had a line of credit agreement totaling $500,000, with no outstanding borrowings as of February 28, 2015 or August 31, 2015.  The line expired on September 1, 2015 (see Note 9).

NOTE 6:    CONCENTRATIONS

Sales to two customers accounted for 61% and 66%, respectively, of sales for the three and six month period ended August 31, 2015. Accounts receivable from these two customers amounted to $166,861 or 37% of accounts receivable as of August 31, 2015. Two other customers amounted to $194,500 or 43% of accounts receivable as of August 31, 2015.

Sales to three customers accounted for 57% and 59% of sales for the three and six month periods ended August 31, 2014, respectively. Accounts receivable from these three customers amounted to $235,000 or 73% of accounts receivable as of August 31, 2014.  

NOTE 7:    RELATED PARTY TRANSACTIONS

During the three month periods ended August 31, 2015 and 2014, payments totaling $25,000 and $24,000, respectively, and during the six month periods ended August 31, 2015 and 2014, payments totaling $75,000 and $74,000, respectively, were made to TAM Irrevocable Trust ("TAM") for consulting services, in which Cari Beck, is a trustee as well as the daughter of the Company's President.  

During the three month periods ended August 31, 2015 and 2014, TAM purchased, on behalf of the Company, $208,000 and $0, respectively, of raw materials from a vendor with which it already had a business relationship. During the six month periods ended August 31, 2015 and 2014, TAM purchased, on behalf of the Company, $393,000 and $0, respectively, of raw materials, and paid $3,500 and $0, respectively, for related tooling to a vendor with which it already had a business relationship. The Company reimbursed TAM for these outlays in full during the six months ended August 31, 2015.

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SEYCHELLE ENVIRONMENTAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED (UNAUDITED) FINANCIAL STATEMENTS

NOTE 7:    RELATED PARTY TRANSACTIONS (continued)

During the six month period ending August 31, 2014, the Company paid $150,000 to TAM for purchase of intellectual property retained by TAM when the Company was organized in 1998. 

NOTE 8:  COMMITMENTS AND CONTINGENCIES

The Company previously reported that it was involved in a case titled Letty Garcia v. Carl Palmer, Seychelle Environmental Technologies, Inc., et. al. brought in the Superior Court for the State of California, San Diego County District. This case has been transferred to the Orange County Superior Court for the State of California with additional hearings scheduled. We anticipate that it will be resolved this fiscal year and believe that Seychelle will prevail.

In January 2012, the Company entered into a contract with a distributor in which it granted exclusive distribution rights for certain new product lines. Subsequently, there was a contract dispute that has resulted in a lawsuit titled, Archette Wellness Group, dba Functional Water Technologies v. Seychelle Environmental Technologies, brought in the U.S. District Court, for the Central District of California, Southern Division. The case was settled on March 4, 2015, and such amount was fully provided for as of February 28, 2015.  The outstanding obligations were paid in full during the six month period ended August 31, 2015.

Otherwise, as of August 31, 2015, we know of no other legal proceedings pending or threatened, or judgments entered against the Company or any of its directors or officers in their capacity as such.

NOTE 9: SUBSEQUENT EVENTS

On September 1, 2015, 130,000 shares of restricted common stock were issued to employees and officers of the Company.  Additionally, 100,000 shares of restricted common stock were issued to TAM. The Company also re-purchased 16,000 shares from a stockholder.

The line of credit (see Note 5) expired on September 1, 2015 and was not renewed.

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

This discussion summarizes the significant factors affecting the operating results, financial condition and liquidity and cash flows of Seychelle Environmental Technologies, Inc., and subsidiaries (the "Company") as of and for the three and six month periods ended August 31, 2015 and 2014. The discussion and analysis that follows should be read together with the consolidated financial statements of Seychelle Environmental Technologies, Inc. and the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2015.  Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company's control.

Forward-Looking Statements

Certain statements contained herein are "forward-looking" statements.  Forward-looking statements include statements which are predictive in nature; which depend upon or refer to future events or conditions; or which include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", or variations or negatives thereof or by similar or comparable words or phrases. In addition, any statement concerning future financial performance, ongoing business strategies or prospects, and possible future Company actions that may be provided by management are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties, and assumptions about the Company; and economic and market factors in the countries in which the Company does business, among other things. These statements are not guarantees of future performance, and the Company has no specific intentions to update these statements. Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors including, among others:

(1)	the portable water filtration industry is in a state of rapid technological change, which can render the Company's products obsolete or unmarketable;
(2)	any failure by the Company to anticipate or respond to technological developments or changes in industry standards or customer requirements, or any significant delays in product development or introduction, could have a material adverse effect on the Company's business, operating results and financial condition;
(3)	the Company's sales are concentrated to a few large customers, and loss of business from one or more could impact the Company's revenues, gross profit and operating results;
(4)	the Company's cost of sales may be materially affected by increases in the market prices of the raw materials used in the Company's assembly processes;
(5)	the Company's water related product sales could be materially affected by weather conditions and government regulations;
(6)	the Company is subject to the risks of conducting business internationally; and
(7)	the industries in which the Company operates are highly competitive. Additional risks and uncertainties are outlined in the Company's filings with the Securities and Exchange Commission, including its most recent fiscal 2015 Annual Report on Form 10-K.

Description of the Business

We were incorporated under the laws of the State of Nevada on January 23, 1998 as a change of domicile to Royal Net, Inc., a Utah corporation that was originally incorporated on January 24, 1986. Royal Net, Inc. changed its state of domicile to Nevada and its name to Seychelle Environmental Technologies, Inc. effective in January 1998.

On January 30, 1998, we entered into an Exchange Agreement with Seychelle Water Technologies, Inc., a Nevada corporation (SWT), whereby we exchanged our issued and outstanding capital shares with the shareholders of SWT on a one share for one share basis. We became the parent company and SWT became a wholly owned subsidiary. SWT had been formed in 1997 to market water filtration systems of Aqua Vision International.

Our Company is presently comprised of Seychelle Environmental Technologies, Inc., a Nevada corporation, with two wholly-owned subsidiaries, Seychelle Water Technologies, Inc. and Fill 2 Pure International, Inc., also Nevada corporations (collectively, the Company or Seychelle). We use the trade name "Seychelle Water Filtration Products, Inc." in our commercial operations.

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Seychelle designs, assembles and distributes unique, state-of-the-art ionic absorption micron filters for portable filter devices that remove up to 99.99% of all pollutants and contaminants found in any fresh water source.  Patents or trade secrets cover all proprietary products.

Our principal business address is 32963 Calle Perfecto, San Juan Capistrano, California 92675. Our telephone number at this address is 949-234-1999.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Our summarized historical financial data is presented in the following table to aid in your analysis. You should read this data in conjunction with this section entitled Management's Discussion and Analysis of Financial Condition and Results of Operations, our condensed consolidated financial statements and the related notes to the condensed consolidated financial statements included elsewhere in this report. The selected condensed consolidated statements of operations data for the three and six month periods ended August 31, 2015 and 2014 are derived from our condensed consolidated financial statements included elsewhere in this report.

Three month period ended August 31, 2015 compared to the corresponding period in 2014
							Period over
	2015			2014			Period change			%
Sales	$	2,724,829		$	767,216			1,957,611			255	%
Cost of sales		1,319,711			435,646			884,065			203	%
Gross profit		1,405,118			331,570			1,073,548			324	%
Gross profit %		52	%		43	%		-			-
Selling general and administrative expenses		602,371			659,165			(56,794	)		(9	%)
Archette legal expenses		-			199,823			(199,823	)		(100	%)
Depreciation and amortization expense		20,395			15,815			4,580			29	%
Income (loss) before income tax benefit (expense)		782,795			(548,254	)		1,331,049			243	%
Income tax benefit (expense)		(267,718	)		205,666			(473,384	)		(230	%)
Net income (loss)		515,077			(342,588	)		857,665			250	%
Net income as a percentage of sales		19	%		(45	%)		-			64	%

Sales. The increase in sales to $2.7 million during the three months ended August 31, 2015 from $0.8 million during the three months ended August 31, 2014 (255%) is primarily due the launch of our pH2O product line, which increases the alkalinity of municipal water to between 8.0-9.5 pH. Sales during the three months ended August 31, 2015 of this product line were approximately $866,000, compared to nothing in the comparable period of 2014. Additionally, we had one customer (who has not purchased any product from the pH2O line) that has developed a private label pitcher and bottle, and significantly increased its distribution line, with sales increasing from $60,000 during the three months ended August 31, 2014 to $643,000 during the three months ended August 31, 2015. Additionally, during the third quarter ended November 30, 2014, we hired a National Sales Manager to assume some of the sales and larger customer relationship roles, and to develop sales programs with our smaller customers to increase their sales and broaden our customer base. We anticipate continued sales improvements during the balance of this fiscal year, and in the subsequent fiscal year as we expand our distribution of the pH2O product line and continue to strengthen relationships with existing customers.

- 12 -

Cost of sales and gross profit percentage. As a percentage of sales, the gross profit margin during the three months ended August 31, 2015 increased from 43% to 52% as compared to the comparable period of the previous year. The largest increase to our sales was directly related to the launch of our aforementioned pH2O product line. We are selling this product with strict minimum order quantities that allow us to achieve greater profit margins, averaging 68% during the three months ended August 31, 2015.  Additionally, our National Sales Manager (a position created and filled subsequent to the three months ended August 31, 2014), introduced a Minimum Advertised Pricing policy during the three months ended May 31, 2015 that has allowed us to increase our margins with customers who market our products online, as well as increased sales prices on our own website store.  The product mix and timing of significant sales is always a significant factor in the resulting profit margins reported.  The Company expects the gross margin percentages to remain at approximately 50% in the foreseeable future.

Selling, general and administrative expenses. These expenses decreased by $56,794, or 9%, during the period ended August 31, 2015 compared to the same period in the prior year. This decrease was largely a result of a decreased need for third-party consultants during the current quarter, as well as certain moving and product packaging development expenses that were incurred during the period ended August 31, 2014, but not in the current period. We anticipate slight increases in sales, general and administrative expenses in future quarters to accommodate our expanding markets and product lines, which are driving increases in sales.

The Archette case was settled on March 4, 2015 and there were no further legal expenses related to the case incurred during the period ended August 31, 2015.

Depreciation and amortization expense.  Depreciation and amortization expense was relatively flat from period to period, but the slight increase is due to additional tooling, and a Company vehicle being purchased during the period ended August 31, 2015.

Income tax expense (benefit).  The Company recorded income tax provision of approximately $268,000 due to the pretax income of approximately $783,000 during the three month period ended August 31, 2015, compared to a benefit of approximately $206,000 due to the pretax loss of approximately $548,000 during the three month period ended August 31, 2014.

Net income (loss). Net income for the three month period ended August 31, 2015 was $515,077, up 250% compared to net loss of $342,588 for the three month period ended August 31, 2014.  This was primarily due to an increase of approximately $1.9 million in sales during the three month period ended August 31, 2015.  Additionally, the improved margins and decrease in selling, general and administrative expenses and legal expense discussed above contributed to the net income during the three months ended August 31, 2015. We remain focused on the primary factors affecting our bottom line and expect the Company's profitability to continue during fiscal 2016 and future fiscal years.

Six month period ended August 31, 2015 compared to the corresponding period in 2014
							Period over
	2015			2014			Period change			%
Sales	$	5,072,012		$	1,874,514			3,197,498			171	%
Cost of sales		2,387,741			1,005,481			1,382,260			137	%
Gross profit		2,684,271			869,033			1,815,238			209	%
Gross profit %		53	%		46	%
Selling general and administrative expenses		1,154,287			1,225,034			(70,747	)		(6	%)
Archette legal expenses		-			268,263			(268,263	)		(100	%)
Depreciation and amortization expense		30,107			29,574			533			2	%
Income (loss) before income tax benefit (expense)		1,500,584			(648,976	)		2,149,560			331	%
Income tax benefit (expense)		(513,009	)		243,660			(756,669	)		(311	%)
Net income (loss)		987,585			(405,316	)		1,392,901			344	%
Net income as a percentage of sales		19	%		(22	%)					41	%

- 13 -

Sales. The increase in sales to $5.1 million during the six months ended August 31, 2015 from $1.9 million during the three months ended August 31, 2014 (171%) is primarily due the launch of our pH2O product line, which increases the alkalinity of municipal water to between 8.0-9.5 pH. Sales during the six months ended August 31, 2015 of this product line were approximately $1.9 million, compared to nothing in the comparable period 2014. Additionally, we had one customer (who has not purchased any product from the pH2O line) that has developed a private label pitcher and bottle, and significantly increased its distribution line, with sales increasing from $106,000 during the six months ended August 31, 2014 to $1,249,000 during the six months ended August 31, 2015. Additionally, during the third quarter ended November 30, 2014, we hired a National Sales Manager to assume some of the sales and larger customer relationship roles, and to develop sales programs with our smaller customers to increase their sales and broaden our customer base. We anticipate continued sales improvements during the balance of this fiscal year, and in the subsequent fiscal year as we expand our distribution of the pH2O product line and continue to strengthen relationships with existing customers.

Cost of sales and gross profit percentage. As a percentage of sales, the gross profit margin during the six months ended August 31, 2015 increased from 46% to 53% as compared to the comparable period of the previous year. The largest increase to our sales was directly related to the launch of our aforementioned pH2O product line. We are selling this product with strict minimum order quantities that allow us to achieve greater profit margins, averaging 68% during the six months ended August 31, 2015.  Additionally, our National Sales Manager (a position created and filled subsequent to the three months ended August 31, 2014), introduced a Minimum Advertised Pricing policy during the three months ended May 31, 2015 that has allowed us to increase our margins with customers who market our products online, as well as increased sales prices on our own website store.  The product mix and timing of significant sales is always a significant factor in the resulting profit margins reported.  The Company expects the gross margin percentages to remain at approximately 50% in the foreseeable future.

Selling, general and administrative expenses. These expenses decreased by $70,747, or 6%, during the six months ended August 31, 2015 compared to the same period in the prior year. This decrease was largely a result of a decreased need for third-party consultants during the current period, as well as moving and product packaging development expenses that were incurred during the period ended August 31, 2014, but not in the current period. We anticipate slight increases in sales, general and administrative expenses in future quarters to accommodate our expanding markets and product lines, which are driving increases in sales.

The Archette case was settled on March 4, 2015 and there were no further legal expenses related to the case incurred during the six months ended August 31, 2015.

Depreciation and amortization expense.  Depreciation and amortization expense was relatively flat from period to period, but the slight increase is due to additional tooling and a Company vehicle being purchased during the period ended August 31, 2015.

Income tax expense (benefit).  The Company recorded an income tax provision of approximately $513,000 due to the pretax income of approximately $1,501,000 during the six month period ended August 31, 2015, compared to a benefit of approximately $244,000 due to the pretax loss of approximately $649,000 during the six month period ended August 31, 2014.

Net income (loss). Net income for the six month period ended August 31, 2015 was $987,585, up 344% compared to net loss of $405,316 for the six month period ended August 31, 2014.  This was primarily due to the increase in sales of approximately $3.2 million during the six month period ended August 31, 2015.  Additionally, the improved gross margins and decrease in selling, general and administrative expenses and legal expenses discussed above contributed to the net income during the six months ended August 31, 2015.  We remain focused on the primary factors affecting our bottom line and expect the Company's profitability to continue during fiscal 2016 and future fiscal years.

Liquidity and Capital Resources

Net cash provided operating activities. During the six month period ended August 31, 2015, cash provided by operating activities was approximately $210,000, primarily as the result of the net income reported for the period of approximately $988,000, compared to cash used in operating activities of approximately $396,000 during the six month period ended August 31, 2014. Additionally, we recorded a non-cash tax provision of approximately $513,000, issued stock-based compensation of approximately $218,000 and utilized prior period prepayments of approximately $20,000 during the current period. This was offset reducing our customer deposit liabilities by approximately $73,000, an increase in accounts receivable of approximately $153,000, a decrease in accounts payable and accrued expenses of approximately $48,000, a decrease of accrued legal and settlement fees of approximately $532,000, and an inventory increase of approximately $743,000.

Net cash used in investing activities. During the six month period ended August 31, 2015, the Company spent approximately $35,000 on capital expenditures. In the comparable period of the prior year, the Company spent approximately $34,000 on capital expenditures and $150,000 for intangible assets.

Net cash provided by financing activities. Cash used in financing activities during the six month period ended August 31, 2015 was relatively consistent with the comparable period in the prior year.

- 14 -

As of August 31, 2015, the Company had approximately $1.7 million in cash and cash equivalents. The Company believes it has substantial liquidity to meet its operating needs through the balance of fiscal 2016.

Critical Accounting Policies and Estimates

The Company's discussion and analysis of its financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

The Company believes that the estimates, assumptions and judgments involved in the accounting policies described in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of its most recent fiscal 2015 Annual Report on Form 10-K have the greatest potential impact on its consolidated financial statements, so it considers these to be its critical accounting policies. Because of the uncertainty inherent in these matters, actual results could differ from the estimates the Company uses in applying the critical accounting policies. Certain of these critical accounting policies affect working capital account balances, including the policies for inventory reserves and stock-based compensation. These policies require that the Company make estimates in the preparation of its consolidated financial statements as of a given date.

Within the context of these critical accounting policies, the Company is not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported. There were no material changes to the Company's critical accounting policies or estimates during the six and three month periods ended August 31, 2015.

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which requires entities to recognize revenue in the way it expects to be entitled for the transfer of promised goods or services to customers.  The ASU will replace most of the existing revenue recognition requirements in U.S. GAAP when it becomes effective.  This pronouncement is effective for annual reporting periods beginning after December 15, 2017, as amended, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted.  The Company is currently evaluating the effect that this pronouncement will have on our consolidated financial statements and related disclosures.  

In August 2014, FASB issued ASU No. 2014-15, "Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern". Under U.S. GAAP, continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity's liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity's liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity's liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity's ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this ASU should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU, however, at the current period, management does not believe that it has met conditions which would subject these condensed consolidated financial statements for additional disclosure.

In July 2015, FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory," which requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out ("LIFO") or the retail inventory method. This ASU is effective for annual reporting periods beginning after December 15, 2016. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of this standard is not expected to have a material impact on the Company's consolidated financial position and results of operations.

Management does not believe any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the Company's present or future consolidated financial statements.

- 15 -

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.

ITEM 4. CONTROLS AND PROCEDURES

Not applicable.

ITEM 4T. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, based on an evaluation of our disclosure controls and procedures (as defined in Rules 13a -15(e) and 15(d)-15(e) under the Exchange Act), our Chief Executive Officer and the Chief Financial Officer each have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the applicable time periods specified by the SEC's rules and forms.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 240.13a-15 or Rule 240.15d-15 of this chapter that occurred during our most recent fiscal three months that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This report does not include an attestation report by the Company's independent registered public accounting firm regarding internal control over financial reporting as we are not subject to this requirement.

- 16 -

PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

The Company previously reported that it was involved in a case titled Letty Garcia v. Carl Palmer, Seychelle Environmental Technologies, Inc., et. al. brought in the Superior Court for the State of California, San Diego County District. This case has been transferred to the Orange County Superior Court for the State of California with additional hearings scheduled. We anticipate that it will be resolved this fiscal year and believe that Seychelle will prevail. 

In January 2012, the Company entered into a contract with a distributor in which it granted exclusive distribution rights for certain new product lines. Subsequently there was a contract dispute that has resulted in a lawsuit titled, Archette Wellness Group, dba Functional Water Technologies v. Seychelle Environmental Technologies, brought in the U.S. District Court, for the Central District of California, Southern Division. This case was settled on March 4, 2015, and such amount was fully provided for as of February 28, 2015.  The outstanding obligations were paid in full during the six month period ended August 31, 2015.

Otherwise, as of August 31, 2015, we know of no other legal proceedings pending or threatened, or judgments entered against the Company or any of our directors or officers in their capacity as such.

ITEM 1A. RISK FACTORS

There have been no changes to our Risk Factors included in our fiscal 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission on May 29, 2015.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the six month period ended August 31, 2015, 115,000 shares of restricted common stock were issued to employees and officers of the Company at a price of $0.32 per share. Additionally, 100,000, 20,000, and 10,000 shares of restricted common stock were issued to TAM, vendors, and TAM's trustee, respectively at a price of $0.32 per share. The shares were fully vested upon issuance. The value recorded in the accompanying condensed consolidated financial statements was based on the estimated fair value of the stock on the date of the grant and aggregated $83,000.

During the six month period ended August 31, 2014, 50,000 shares of restricted stock were issued by the Company to an employee at a price of $0.68 per share. The shares vest over a two year period, with 17,000 shares vested upon issue. The remaining shares vest 17,000 and 16,000 after one and two years, respectively. The value recorded in the accompanying condensed consolidated financial statements was based on the estimated fair value of the stock on the date of the grant.   

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.  OTHER INFORMATION

On June 1, 2015, 105,000 shares or restricted common stock were issued to employees and officers of the Company. Additionally, on the same date, 100,000, 20,000, and 10,000 shares of restricted common stock were issued to TAM, vendors, and TAM's trustee, respectively.

- 17 -

ITEM 6.  EXHIBITS

Exhibits

Exhibit No.	Description
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002)
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002)
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C.ss.1350 Section 906 of the Sarbanes-Oxley Act of 2002)
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C.ss.1350 Section 906 of the Sarbanes-Oxley Act of 2002)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

- 18 -

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the Registrant has duly caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized. 

	Seychelle Environmental Technologies, Inc.
Date: October 9, 2015	By:	/s/ Carl Palmer
		Carl Palmer Director, Chief Executive Officer

Date: October 9, 2015	By:	/s/ Jim Place
		Jim Place Director and Chief Financial Officer

- 19 -

EX-31

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Carl Palmer, as to Seychelle Environmental Technologies, Inc. (the "Registrant"), certify that:

1. I have reviewed this Quarterly Report on Form 10-Q;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.  The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.  The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: October 9, 2015	By:	/s/ Carl Palmer
		Carl Palmer
		Chief Executive Officer

EX-31.2

 Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jim Place, as to Seychelle Environmental Technologies, Inc. (the "Registrant") certify that:

1. I have reviewed this Quarterly Report on Form 10-Q;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.  The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and 

d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5.  The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions);

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: October 9, 2015	By:	/s/ Jim Place
		Jim Place
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTIONS 1350

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly report of Seychelle Environmental Technologies, Inc. (the "Registrant") on Form 10-Q  for the three-month period ended August 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carl Palmer, Chief Executive Officer of the Registrant certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of the undersigned's knowledge and belief:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.

Date: October 9, 2015	By:	/s/ Carl Palmer
		Carl Palmer
		Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTIONS 1350

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly report of Seychelle Environmental Technologies, Inc. (the "Registrant") on Form 10-Q  for the three-month period ended August 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jim Place, Chief Financial Officer of the Registrant certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that, to the best of the undersigned's knowledge and belief:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Registrant.

Date: October 9, 2015	By:	/s/ Jim Place
		Jim Place
		Chief Financial Officer

XML

4. INVENTORY

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

INVENTORY

NOTE 4:    INVENTORY

The Company's inventory consisted of the following at August 31, 2015 and February 28, 2015:
	August 31, 2015			February 28, 2015
Raw materials	$	996,829		$	536,302
Finished goods		795,441			513,189
		1,792,270			1,049,491
Reserve for obsolete and slow moving inventory		(40,000	)		(40,000	)
	$	1,752,270		$	1,009,491

XML

3. COMMON STOCK PURCHASE WARRANTS

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

COMMON STOCK PURCHASE WARRANTS

NOTE 3:   COMMON STOCK PURCHASE WARRANTS

Common Stock

During the six month period ended August 31, 2015, 115,000 shares of restricted common stock were issued to employees and officers of the Company. Additionally, 100,000, 20,000, and 10,000 shares of restricted common stock were issued to TAM, vendors, and TAM's trustee, respectively. The shares were fully vested upon issuance. The value recorded in the accompanying condensed consolidated financial statements was based on the estimated fair value of the stock on the date of the grant and aggregated $83,000.

During the six month period ended August 31, 2014, 50,000 shares of restricted stock were issued by the Company to an employee. The shares vest over a two year period, with 17,000 shares vested upon issue. The remaining shares vest 17,000 and 16,000 after one and two years, respectively. The value recorded in the accompanying condensed consolidated financial statements was based on the estimated fair value of the stock on the date of the grant.   

Warrants

The Company has determined the estimated value of warrants granted using the Black-Scholes option pricing model. The amount of the expense charged to operations for warrants was $67,200 and $134,200 for the three and six month periods ended August 31, 2015, respectively, and $88,175 and $176,350 for the three and six month periods ended August 31, 2014, respectively.  All outstanding warrants are expected to be vested in December 2015.

A summary of warrant activity for the six months ended August 31, 2015 is as follows:

				Weighted-
				Average
	Warrants			Exercise
	Outstanding			Price
Outstanding at February 28, 2015		8,407,221			0.21
Granted		-			-
Exercised		-			-
Forfeited		(2,000,000	)		0.21
Outstanding at August 31, 2015		6,407,221			0.21
Vested at August 31, 2015		5,766,498			0.21
Exercisable at August 31, 2015		5,766,498			0.21

The following table summarizes significant ranges of outstanding warrants as of August 31, 2015:

		Warrants Outstanding				Warrants Exercisable
			Weighted	Weighted			Weighted
			Average	Average			Average
Exercise		Number	Remaining	Exercise		Number	Exercise
Price		Outstanding	Life (Years)	Price		Outstanding	Price
	$0.21	6,407,221	5.29		$0.21	5,766,498		$0.21

XML

Condensed Consolidated Balance Sheets - USD ($)	Aug. 31, 2015	Feb. 28, 2015
ASSETS
Cash and cash equivalents	$ 1,687,564	$ 1,514,534
Accounts receivable, net of allowance for doubtful accounts and sales returns of $13,400	436,655	284,121
Related party receivables	22,407	12,601
Inventory, net	1,752,270	1,009,491
Deferred tax assets	116,829	629,838
Prepaid expenses, deposits, and other current assets	164,144	174,052
Total current assets	4,179,869	3,624,637
Property and equipment, net	193,820	162,107
Intangible assets, net	151,776	152,643
Deferred tax assets	611,314	611,314
Other assets	15,651	25,491
Total assets	5,152,430	4,576,192
Current Liabilities:
Accounts payable and accrued expenses	$ 190,320	238,009
Accrued legal and settlement fees		532,103
Customer deposits	$ 45,939	119,215
Capital lease obligation, current portion	11,413	5,639
Total current liabilities	247,672	894,966
Long term Liabilities:
Capital lease obligation, net of current	22,340	4,081
Total liabilities	$ 270,012	$ 899,047
STOCKHOLDERS' EQUITY
Preferred stock, 6,000,000 shares authorized, none issued or outstanding
Common stock $0.001 par value, 50,000,000 shares authorized,26,158,646 and 25,913,646 issued and outstanding at August 31, 2014 and February 28, 2014, respectively	$ 26,159	$ 25,914
Additional paid-in capital	8,675,056	8,457,603
Accumulated deficit	(3,818,797)	(4,806,372)
Total Stockholders' Equity	4,882,418	3,677,145
Total liabilities and stockholders' equity	$ 5,152,430	$ 4,576,192

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1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying condensed consolidated financial statements have been prepared by Seychelle Environmental Technologies, Inc., and subsidiaries (the "Company") without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at August 31, 2015, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended February 28, 2015.  The results of operations for the periods ended August 31, 2015 and 2014 are not necessarily indicative of the operating results for the full fiscal years.

The summary of significant accounting policies of the Company is presented to assist in understanding the Company's consolidated financial statements. The consolidated financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of these condensed consolidated financial statements and the February 28, 2015 consolidated financials included in the 10-K filed on May 29, 2015.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

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3. COMMON STOCK PURCHASE WARRANTS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Common Stock Purchase Warrants Details Narrative
Expense charged to operations for warrants	$ 67,200	$ 85,711	$ 134,200	$ 174,200

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6. CONCENTRATIONS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Concentrations Details Narrative
Percentage of sales attributable to two customers	61.00%		66.00%
Amount of accounts receivable from two customers	$ 166,861		$ 166,861
Percentage of accounts recievable from two other customers	$ 194,500
Percentage of sales attributable to two other customers	43.00%
Percentage of sales attributable to three customers		57.00%		59.00%
Amount of accounts receivable from three customers		$ 235,000
Percentage of accounts receivable from three customers		73.00%

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2. BASIC INCOME (LOSS) PER SHARE

6 Months Ended

Aug. 31, 2015

Accounting Policies [Abstract]

BASIC INCOME (LOSS) PER SHARE

NOTE 2:    BASIC INCOME (LOSS) PER SHARE

Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during each period presented.  Diluted income (loss) per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents.  In periods when losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.  The dilutive effect of outstanding stock options and warrants is reflected in diluted earnings per share by application of the treasury stock method.

The denominator for diluted income (loss) per share for the three- and six- month period ended August 31, 2014 did not include warrants as they would have been anti-dilutive. During the three and six months ended August 31, 2015, 7,334,992 and 6,550,710 warrants, respectively, were excluded from the denominator for diluted income (loss) per share.

	For the six months ended
	August 31,
	2015		2014
Numerator:
Net income (loss) available to common shareholders	$	987,575	$	(405,316	)
Weighted average shares – basic		26,158,646		25,891,146
Net income (loss) per share – basic	$	0.04	$	(0.02	)
Dilutive effect of common stock equivalents:
Warrants		1,894,062		-
Weighted average shares – diluted		27,807,708		25,891,146
Net income (loss) per share – diluted	$	0.04	$	(0.02	)

	For the three months ended
	August 31,
	2015		2014
Numerator:
Net income (loss) available to common shareholders	$	515,077	$	(342,588	)
Weighted average shares – basic		26,158,646		25,903,646
Net income (loss) per share – basic	$	0.02	$	(0.01	)
Dilutive effect of common stock equivalents:
Warrants		2,320,031		-
Weighted average shares – diluted		28,233,677		25,903,646
Net income  (loss) per share – diluted	$	0.02	$	(0.01	)

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
CURRENT ASSETS
Net of allowance for doubtful accounts	$ 13,400	$ 3,400
STOCKHOLDERS' EQUITY
Preferred stock, authorized shares	6,000,000	6,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	50,000,000	50,000,000
Common stock, issued shares	26,158,646	25,913,646

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4. INVENTORY (Tables)

6 Months Ended

Aug. 31, 2015

Inventory Tables

Inventory

The Company's inventory consisted of the following at August 31, 2015 and February 28, 2015:
	August 31, 2015			February 28, 2015
Raw materials	$	996,829		$	536,302
Finished goods		795,441			513,189
		1,792,270			1,049,491
Reserve for obsolete and slow moving inventory		(40,000	)		(40,000	)
	$	1,752,270		$	1,009,491

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Document and Entity Information - shares	6 Months Ended
	Aug. 31, 2015	Oct. 09, 2015
Document And Entity Information
Entity Registrant Name	SEYCHELLE ENVIRONMENTAL TECHNOLOGIES INC /CA
Entity Central Index Key	0001056757
Document Type	10-Q
Document Period End Date	Aug. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--02-29
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,372,646
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2015

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2. BASIC INCOME (LOSS) PER SHARE - (Details) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Numerator:
Net Income (Loss) available to common shareholders	$ 515,077	$ (342,588)	$ 987,575	$ (405,316)
Weighted average shares, basic	26,158,646	25,903,646	26,158,646	25,891,146
Net income (loss) per share, basic	$ 0.02	$ (0.01)	$ 0.04	$ (0.02)
Dilutive effect of common stock equivalents:
Warrants	$ 2,320,031		$ 1,894,062
Weighted average shares, diluted	28,233,677	25,903,646	27,807,708	25,891,146
Net income (loss) per share, diluted	$ 0.02	$ (0.01)	$ 0.04	$ (0.02)

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014	Aug. 31, 2015	Aug. 31, 2014
Condensed Consolidated Statements Of Income
Sales	$ 2,724,829	$ 767,216	$ 5,072,012	$ 1,874,514
Cost of sales	1,319,711	435,646	2,387,741	1,005,481
Gross profit	1,405,118	331,570	2,684,271	869,033
OPERATING EXPENSES
Selling, General, and Administrative Expenses	$ 602,371	659,165	$ 1,154,287	1,225,034
Archette legal expenses		199,823		268,263
Depreciation and Amortization	$ 20,395	15,815	$ 30,107	29,574
Total operating expenses	622,766	874,803	1,184,394	1,522,871
Income (Loss) from Operations	782,352	(543,233)	1,499,877	(653,838)
OTHER INCOME (EXPENSE)
Interest income	$ 39	1,111	228	2,771
Interest expense		(179)	$ 479	(448)
Other income (expense)	$ 404	(5,953)		2,539
Total other income (expense)	443	(5,021)	$ 707	4,862
Income (loss) before income tax benefit (expense)	782,795	(548,254)	1,500,584	(648,976)
Income tax benefit (expense)	(267,718)	205,666	(513,009)	243,660
Net Income (Loss)	$ 515,077	$ (342,588)	$ 987,575	$ (405,316)
BASIC INCOME (LOSS) PER SHARE	$ 0.02	$ (0.01)	$ 0.04	$ (0.02)
DILUTED INCOME (LOSS) PER SHARE	$ 0.02	$ (0.01)	$ 0.04	$ (0.02)
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	26,158,646	25,903,646	26,158,646	25,891,146
DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	28,478,677	25,903,646	28,052,708	25,891,146

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7. RELATED PARTY TRANSACTIONS

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

RELATED PARTY TRANSACTIONS

NOTE 7:    RELATED PARTY TRANSACTIONS

During the three month periods ended August 31, 2015 and 2014, payments totaling $25,000 and $24,000, respectively, and during the six month periods ended August 31, 2015 and 2014, payments totaling $75,000 and $74,000, respectively, were made to TAM Irrevocable Trust ("TAM") for consulting services, in which Cari Beck, is a trustee as well as the daughter of the Company's President.  

During the three month periods ended August 31, 2015 and 2014, TAM purchased, on behalf of the Company, $208,000 and $0, respectively, of raw materials from a vendor with which it already had a business relationship. During the six month periods ended August 31, 2015 and 2014, TAM purchased, on behalf of the Company, $393,000 and $0, respectively, of raw materials, and paid $3,500 and $0, respectively, for related tooling to a vendor with which it already had a business relationship. The Company reimbursed TAM for these outlays in full during the six months ended August 31, 2015.

During the six month period ending August 31, 2014, the Company paid $150,000 to TAM for purchase of intellectual property retained by TAM when the Company was organized in 1998. 

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6. CONCENTRATIONS

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

CONCENTRATIONS

NOTE 6:    CONCENTRATIONS

Sales to two customers accounted for 61% and 66%, respectively, of sales for the three and six month period ended August 31, 2015. Accounts receivable from these two customers amounted to $166,861 or 37% of accounts receivable as of August 31, 2015. Two other customers amounted to $194,500 or 43% of accounts receivable as of August 31, 2015.

Sales to three customers accounted for 57% and 59% of sales for the three and six month periods ended August 31, 2014, respectively. Accounts receivable from these three customers amounted to $235,000 or 73% of accounts receivable as of August 31, 2014.  

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5. LINE OF CREDIT (Details Narrative) - USD ($)	3 Months Ended
	Aug. 31, 2014	Aug. 31, 2015	Feb. 28, 2015
Line Of Credit Details Narrative
Available Line of Credit		$ 500,000	$ 500,000
Company borrowings against line of credit		$ 0	$ 0
Expiration of line of credit	Sep. 01, 2015

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3. COMMON STOCK PURCHASE WARRANTS (Details) - 6 months ended Aug. 31, 2015 - $ / shares	Total	Total
Common Stock Purchase Warrants Details
Warrants, Granted
Warrants, Exercised
Warrants, Forfeited	(2,000,000)
Warrants, Outstanding at August 31, 2015	6,407,221
Vested at August 31, 2015		5,766,498
Exercisable at August 31, 2015		5,766,498
Warrants Outstanding		8,407,221
Remaining Life in years of Warrants Outstanding	6 years 2 months 6 days
Warrants Weighted Average Exercise Price per Share	$ 0.21	$ 0.21
Warrants Weighted Average Exercise Price per Share, Outstanding at August 31, 2015	$ 0.21
Weighted Average Exercise Price Warrants Exercisable at August 31, 2015		$ 0.21

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2. BASIC INCOME (LOSS) PER SHARE (Tables)

6 Months Ended

Aug. 31, 2015

Accounting Policies [Abstract]

Basic and Diluted income (loss) per share

	For the six months ended
	August 31,
	2015		2014
Numerator:
Net income (loss) available to common shareholders	$	987,575	$	(405,316	)
Weighted average shares – basic		26,158,646		25,891,146
Net income (loss) per share – basic	$	0.04	$	(0.02	)
Dilutive effect of common stock equivalents:
Warrants		1,894,062		-
Weighted average shares – diluted		27,807,708		25,891,146
Net income (loss) per share – diluted	$	0.04	$	(0.02	)

	For the three months ended
	August 31,
	2015		2014
Numerator:
Net income (loss) available to common shareholders	$	515,077	$	(342,588	)
Weighted average shares – basic		26,158,646		25,903,646
Net income (loss) per share – basic	$	0.02	$	(0.01	)
Dilutive effect of common stock equivalents:
Warrants		2,320,031		-
Weighted average shares – diluted		28,233,677		25,903,646
Net income  (loss) per share – diluted	$	0.02	$	(0.01	)

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8. COMMITMENTS AND CONTINGENCIES

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

COMMITMENTS AND CONTINGENCIES

NOTE 8:  COMMITMENTS AND CONTINGENCIES

The Company previously reported that it was involved in a case titled Letty Garcia v. Carl Palmer, Seychelle Environmental Technologies, Inc., et. al. brought in the Superior Court for the State of California, San Diego County District. This case has been transferred to the Orange County Superior Court for the State of California with additional hearings scheduled during the third quarter. We anticipate that it will be resolved this fiscal year and believe that Seychelle will prevail.

In January 2012, the Company entered into a contract with a distributor in which it granted exclusive distribution rights for certain new product lines. Subsequently, there was a contract dispute that has resulted in a lawsuit titled Archette Wellness Group, dba Functional Water Technologies v. Seychelle Environmental Technologies, brought in the U.S. District Court, for the Central District of California, Southern Division. The Company believes it will prevail in this matter.

Otherwise, as of August 31, 2014, we know of no other legal proceedings pending or threatened, or judgments entered against the Company or any of its directors or officers in their capacity as such.

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9. SUBSEQUENT EVENTS

6 Months Ended

Aug. 31, 2015

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 9: SUBSEQUENT EVENTS

On September 4, 2014, 10,000 shares of restricted stock were issued by the Company to an employee. All shares of restricted stock were fully vested upon issuance.

On September 4, 2014, a prepayment totaling $50,000 was made to TAM for consulting services to be provided during the three months ending November 30, 2014.  

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3. COMMON STOCK PURCHASE WARRANTS (Tables)

6 Months Ended

Aug. 31, 2015

Common Stock Purchase Warrants Tables

Summary of warrant activity

				Weighted-
				Average
	Warrants			Exercise
	Outstanding			Price
Outstanding at February 28, 2015		8,407,221			0.21
Granted		-			-
Exercised		-			-
Forfeited		(2,000,000	)		0.21
Outstanding at August 31, 2015		6,407,221			0.21
Vested at August 31, 2015		5,766,498			0.21
Exercisable at August 31, 2015		5,766,498			0.21

Significant ranges of outstanding warrants

		Warrants Outstanding				Warrants Exercisable
			Weighted	Weighted			Weighted
			Average	Average			Average
Exercise		Number	Remaining	Exercise		Number	Exercise
Price		Outstanding	Life (Years)	Price		Outstanding	Price
	$0.21	6,407,221	5.29		$0.21	5,766,498		$0.21

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2. BASIC INCOME (LOSS) PER SHARE (Details Narrative) - shares	3 Months Ended	6 Months Ended
	Aug. 31, 2015	Aug. 31, 2015
Accounting Policies [Abstract]
Warrants excluded from the diluted income (loss) per share	7,334,992	6,550,710

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9. SUBSEQUENT EVENTS (Details Narrative)	3 Months Ended
	Nov. 30, 2014 USD ($) shares
Subsequent Events [Abstract]
Restricted Stock Issued During Period	10,000
Prepayment to TAM for consulting services | $	$ 50,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Aug. 31, 2015	Aug. 31, 2014
OPERATING ACTIVITIES:
Net income (loss)	$ 987,575	$ (405,316)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	30,107	29,574
Stock-based compensation	$ 217,698	210,350
Provision for doubtful accounts		9,958
Deferred income tax expense (benefit)	$ 513,009	(243,460)
Changes in operating assets and liabilities:
Increase in accounts receivable	(152,534)	(17,240)
Increase in related party receivables	(9,806)	(7,008)
(Increase) decrease in inventory	(742,779)	15,890
(Increase) decrease in prepaid expenses, deposits and other assets	19,748	(23,640)
(Decrease) increase in accounts payable and accrued expenses	(47,689)	$ 51,375
Decrease in accrued legal and settlement fees	(532,103)
Decrease in customer deposits	(73,276)	$ (16,766)
Net Cash Provided By (Used In) Operating Activities	209,950	(396,283)
INVESTING ACTIVITIES:
Purchase of property and equipment	$ (34,953)	(33,918)
Purchase of intangible assets		(150,434)
Net Cash Used In Investing Activities	$ (34,953)	(184,352)
FINANCING ACTIVITIES:
Repayment of capital lease obligations	(1,967)	(2,012)
Net Cash Used in Financing Activities	(1,967)	(2,012)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	173,030	(582,647)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	1,514,534	2,971,825
CASH AND CASH EQUIVALENTS AT END OF PERIOD	1,687,584	$ 2,389,178
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Acquisition of equipment under capital leases	26,000
Cash paid for:
Interest	$ 479	$ 448
Income taxes

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5. LINE OF CREDIT

6 Months Ended

Aug. 31, 2015

Notes to Financial Statements

LINE OF CREDIT

NOTE 5:    LINE OF CREDIT

As of February 28, 2015, the Company had a line of credit agreement totaling $500,000, with no outstanding borrowings as of February 28, 2015 or August 31, 2015.  The line expired on September 1, 2015 (see Note 9).

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4. INVENTORY (Details) - USD ($)	Aug. 31, 2015	Feb. 28, 2015
Inventory Details
Raw materials	$ 996,829	$ 536,302
Finished goods	795,441	513,189
Inventory	1,792,270	1,049,491
Reserve for obsolete and slow moving inventory	(40,000)	(40,000)
Inventory, Net	$ 1,752,270	$ 1,009,491