SOURCE: Pacific Sands, Inc

May 13, 2005 15:57 ET

PFSD Releases FY 2005 Third Quarter Report; Sales Up 387%, Gross Profits Up 220% - Company Shows Substantial Improvements Across Balance Sheet

RACINE, WI -- (MARKET WIRE) -- May 13, 2005 -- Pacific Sands, Inc. (OTC BB: PFSD) today announced its financial results for the third quarter of fiscal year 2005 ended March 31, 2005. Revenues were up 387% over the third quarter of fiscal year 2004 and gross profits were up 220%. For the combined nine months ending March 31, 2005, net sales were up 235% and gross profits up 146% from the same period the previous fiscal year.

"We're on the right path with revenue growth and an improving balance sheet," Pacific Sands President and CEO commented. "Our first two quarters since taking over management in mid-June of 2004 were spent largely laying the groundwork for new marketing and sales initiatives and establishing a corporate and operations structure to support those sales. The third quarter results reflect the very first stages of the type of growth we have planned for, worked for and expected."

CFO Michael Michie added, "Our third quarter 2005 sales were within a few thousand dollars of total sales for the entire fiscal year 2004."

Pacific Sands Inc. will host a third quarter 2005 earnings call on Monday, May 16 at 11:00 a.m. EDT. Pacific Sands invites all those interested in hearing management's discussion to join the call by dialing 800-821-1449. Pacific Sands President and CEO Michael Wynhoff and CFO Michael Michie will discuss the results of the previous quarter and provide insights into the current state of operations. Questions for Pacific Sands management should be submitted in advance and in writing to JT Ploch at pacificsandsir@charter.net.

Results of Operations:

(for the full quarterly report, please contact Pacific Sands Investor Relations at pacificsandsir@charter.net to receive a copy via email.)


PACIFIC SANDS, INC.
DBA NATURAL WATER TECHNOLOGIES
STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED MARCH 31, 2005 AND 2004
(A Review)

                             Three Months Ended     Nine Months Ended
                                  March 31,             March 31,
                                           2004                    2004
                               2005     (Restated)     2005     (Restated)
NET SALES                   $   56,528  $   14,595  $   93,345  $   39,624

COST OF SALES                   30,796       2,919      46,067       7,457

GROSS PROFIT                    25,732      11,676      47,278      32,167

SELLING AND
 ADMINISTRATIVE EXPENSES       109,660     127,768     312,787     198,794

LOSS FROM OPERATIONS           (83,928)   (116,092)   (265,509)   (166,627)

OTHER INCOME (EXPENSES)
  Interest expense                (400)          -      (3,400)          -
  Miscellaneous income             476           -       3,366           -
Gain from restructuring of
 related party debt             15,791           -      15,791           -

  Total Other Income - net      15,867           -      15,757           -

LOSS BEFORE INCOME
 TAXES                         (68,061)   (116,092)   (249,752)   (166,627)

INCOME TAXES                         -           -           -           -

NET LOSS                    $  (68,061) $ (116,092) $ (249,752) $ (166,627)

BASIC AND DILUTED NET LOSS
 PER SHARE                  $   (0.002) $   (0.004) $   (0.008) $   (0.006)

BASIC AND DILUTED WEIGHTED
 AVERAGE SHARES
 OUTSTANDING                30,163,975  27,798,873  31,227,328  27,924,909


PACIFIC SANDS, INC.
DBA NATURAL WATER TECHNOLOGIES
BALANCE SHEETS
MARCH 31, 2005 AND JUNE 30, 2004

ASSETS
                                        March 31,
                                           2005          June 30,
                                        (A Review)         2004
CURRENT ASSETS
Cash and cash equivalents               $  18,477       $  44,098
Trade receivables (net of allowance
 for doubtful accounts of $176,223
 for both periods)                         81,701          63,301
Inventories                                26,214           5,598
Other current assets                        5,284             925

  Total Current Assets                    131,676         113,922

PROPERTY AND EQUIPMENT
Furniture and fixtures                      6,766               -
Manufacturing equipment                     8,653               -
Office equipment                            1,852               -
                                           17,271               -
Less accumulated depreciation               2,949               -

  Property and Equipment, net              14,322               -

                                        $ 145,998       $ 113,922

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                      $  16,844       $  17,198
  Accrued expenses                         72,695          40,237
  Deferred compensation                    14,435               -
  Notes payable                            22,500          50,792

    Total Current Liabilities             126,474         108,227

LONG TERM LIABILITIES
  Deferred compensation to former
   officer                                100,000         100,000
  Notes payable                             5,000               -

  Total Long Term Liabilities             105,000         100,000

STOCKHOLDERS' EQUITY
  Common stock                             36,159          30,299
  Additional paid in capital            2,837,359       2,560,602
  Treasury stock, at cost                (151,030)         (5,514)
  Accumulated deficit                  (2,807,964)     (2,558,212)

  Less: due from shareholder                    -        (121,480)

    Total Stockholders' Equity            (85,476)        (94,305)

                                        $ 145,998       $ 113,922


PACIFIC SANDS, INC.
DBA NATURAL WATER TECHNOLOGIES
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 2005 AND 2004
(A Review)
                                                           2004
                                           2005         (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                $(249,752)      $(166,627)

Adjustments to reconcile net loss
 to net cash used in operating
 activities -
Depreciation                                2,949           1,380
Compensation of below market stock
 options granted                           66,700               -
Common shares and rights issued for
 services and compensation                 15,500               -
Gain from restructuring of related
 party debt                               (15,791)              -
Changes in assets and liabilities -
  Trade accounts receivable               (18,400)         62,514
  Inventories                             (20,616)           (104)
Other current assets                       (4,359)           (118)
  Accounts payable                          2,799         (70,630)
Accrued expenses                           32,458         171,057
Deferred compensation                      14,435               -

Net Cash Used in Operating
 Activities                              (174,077)         (2,528)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment                    (17,271)              -

Net Cash Used in Investing Activities     (17,271)              -

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable                15,000           2,000
Payment of notes payable                   (2,501)              -
Issuance of common stock                  172,478               -
Issuance of common stock -
 exercise of options                       10,300               -
Purchase of common stock                  (29,550)              -

Net Cash Provided by Financing
 Activities                               165,727           2,000

NET DECREASE IN CASH AND CASH
 EQUIVALENTS                              (25,621)           (528)

CASH AND CASH EQUIVALENTS
  Beginning of period                      44,098           4,691

  End of period                         $  18,477       $   4,163

(for the full quarterly report, please contact Pacific Sands Investor Relations at pacificsandsir@charter.net to receive a copy via email.)

About Pacific Sands

Pacific Sands, Inc. develops, manufactures and markets environmentally safe, nontoxic cleaning and water treatment solutions. Its Eco One™ and Rainforest Blue™ pool and spa treatment solutions are swiftly becoming standards in the alternative chemical market.

Web site: http://www.pacificsandsinc.com

Safe Harbor Act Disclaimer

The statements contained in this release and statements that the company may make orally in connection with this release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward-looking statements, since these forward-looking statements involve risks and uncertainties that could significantly and adversely impact the company's business. Therefore, actual outcomes and results may differ materially from those made in forward-looking statements.

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