SOURCE: Pacific Sands, Inc.

Pacific Sands, Inc.

March 14, 2016 12:27 ET

Reorganization Update at Pacific Sands, Inc.

KENOSHA, WI--(Marketwired - Mar 14, 2016) - Pacific Sands, Inc. (OTCQB: PFSD) ( is announcing additional results under its enterprise wide reorganization program begun at the first of the year.

Emphasis on the repair of the liability side of the Balance Sheet continues. The largest of the three remaining convertible notes has been restructured as a term loan with sustainable monthly payments and an acceptably low interest rate. As long as timely monthly payments are made, the noteholder has agreed to suspend any conversion of the debt to equity.

A large note from a shareholder has also been modified. A substantial interest rate reduction from 30% to 6% has been granted with an abatement of principle and interest payments for a period of three years.

Vendor liabilities and collection efforts have received equally high priority. In excess of $100,000 of concessions and write-downs of payables balances have been granted to date. In some cases, modest and sustainable monthly payment programs have been established. As a result of this continuing effort, accounts payable balances have been reduced from $511,000 at year end to about $370,000 currently, or a nearly 28% reduction.

While all of this helps, it will be sales growth and consistent operating profits that ultimately create long term shareholder value. With the dramatic reduction of selling and general overhead costs, preliminary results, which have not been reviewed by our outside audit firm, indicate that the company may have achieved break-even profit and loss status for the 2 months ending February 29, 2016. Noncash interest costs and derivative expenses related to the complex accounting for the issuance and conversion of debt to equity will create a loss for that two month period.

The company currently has in excess of $130,000 of shippable open sales orders. Only a portion of that will be converted to sales revenue before the end of this quarter because of the lack of adequate working capital. 

To address this issue the company has placed a very high priority on developing its ecommerce capabilities. With a redesigned website, sales on multiple platforms, and promotional activities on social media, we have gone from a near standstill at year-end to an annual run rate for sales of in excess of $150,000. These sales are critical for working capital management purposes because they are paid in advance at the point of sale. Additional design upgrades and promotional programs are scheduled.

To support the real-time nature of our ecommerce segment, finished goods inventory levels have been increased by 16% since year-end. Despite the addition of these high value items, total investment in inventory has declined 3.5% over the same period.

The company continues to pursue additional non-equity funding sources as we head into the important outdoor cleaning and Pool and Spa seasonal sales period.

Additional updates on our operations will be released periodically.

Thank you for your support.

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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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