PFSD: Pacific Sands, Inc. Message Board

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Non-Tech : PFSD: Pacific Sands, Inc.

PFSD 0.000200

0.0%

Jan 31 4:00 PM EST

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To: Geoff Altman who wrote (22)	3/6/2006 4:23:23 PM
From: Peter Dierks	of 55

I crunches some numbers. The publicly available numbers are difficult to read on the surface. Their Cost of Goods Sold fluctuates between 3% and 63%. I assume they are expensing some raw material purchases. This is not normally encountered under GAAP. After June '04 it has not fallen below 24%; 24% to 63% is still a wide range. They continue to issue stock for what would be normal business or "startup" related expenses. Published data does not allow me to determine the seasonality of their business, and thus apply an adjusted growth rate. In the fiscal year ended June 2004 Wynkoff issued himself roughly $300,000 in options. Michie and Rauscher got an additional $125,000 combined in options. When the whole company's market value was roughly $4.5M that is between a 9% and 10% haircut. If the company's stock does well, it magnifies the reduction in stockholder return. What are the terms of the restricted stock that makes it worth at least twice the market value of the common stock? This is why investing in penny stocks is always risky. The winners are the low basis owners. Investors might get lucky, but management almost always does.

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