<Page>
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month Ended April 30, 2008 Commission File Number 0-14884
SAND TECHNOLOGY INC.
(Translation of registrant's name in English)
215 REDFERN, SUITE 410
WESTMOUNT, QUEBEC, CANADA H3Z 3L5
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F /X/ Form 40-F / /
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ______
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ______
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes / / No /X/
If "Yes" is marked, indicated below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- N/A .
<Page>
Sand Technology Inc. (the "Company") incorporates this Form 6-K Report by
reference into the Prospectus contained in the Company's Registration Statement
on Form F-3 (333-51014).
2
<Page>
[SAND (TM) TECHNOLOGY LOGO]
INVESTOR RELATIONS:
de Jong & Associates,
sndt@dejong.org
+(1) 760/943-9065
PRESS RELEASE
SAND TECHNOLOGY ANNOUNCES THIRD QUARTER RESULTS
MONTREAL, JUNE 30, 2008: SAND Technology Inc. (OTCBB:SNDTF), an international
provider of intelligent enterprise information management software, today
reported results for the nine-month period ended April 30, 2008. The Company
reported a net income for the third quarter of fiscal year 2008 of $8,441 on
revenues of $1,905,984 compared with a net loss of $753,440 on revenues of
$1,559,407 for the third quarter of fiscal year 2007.
"SAND is delighted to report that the company has had a profitable third
quarter. The improvement in our net results in comparison to the same period
last year reflects the changes we have made to the company to position it for
growth in the years ahead," said Arthur Ritchie, President and Chief Executive
Officer of SAND. "With the new array of functionality introduced in our product
line, we are anticipating increased market interest in our SAND/DNA products,
including the new SAND/DNA for SAP BI offering. We are particularly encouraged
by the signing of Procter and Gamble for our SAND/DNA for SAP BI product, and
the recent multi-million dollar contracts signed in the Financial Services
sector. Also, we have been notified that SAND/DNA is one of the software
components included in a very large award that has been granted to one of the
world's largest Systems Integrators for a solution to be installed in US
government organizations over the next decade," Mr. Ritchie added. "We are
optimistic that the continued growth of our global partner ecosystem, along with
more aggressive marketing efforts including participation in events such as SAP
Sapphire with Sun, TDWI, Storage Expo with Sun, and various webinars and
seminars with other partners such as SAP, HP, Cap Gemini, and Sapient, will help
us to realize our potential", he concluded.
ABOUT SAND TECHNOLOGY
SAND is an international provider of intelligent information management
software. The SAND/DNA product suite scales to help any size enterprise cope
with exploding data requirements, now and into the future. SAND/DNA Access
allows for retaining all potentially relevant data in a tiny footprint while
providing instant access to just what's required. SAND/DNA Analytics allows for
complex what-if analysis to meet any planned and unplanned business need.
SAND/DNA solutions include CRM analytics, and specialized applications for
government, healthcare, financial services, telecommunications, retail,
transportation, and other business sectors. SAND/DNA has achieved "Certified for
SAP NetWeaver" status and SAND Nearline Integration Controller has achieved
"Powered by SAP NetWeaver" status.
3
<Page>
SAND Technology has offices in the United States, Canada, the United Kingdom and
Central Europe.
- --------------------------------------------------------------------------------
AND Technology, Nucleus, N-Vector, and MPSO are registered trademarks, and
SAND/DNA, SAND/DNA Access, SAND/DNA Analytics, SAND/DNA aCRM, SAND Analytic
Server, SAND Searchable Archive, SAND Extensible Warehouse, and all related
SAND-, SAND/DNA, and Nucleus-based marks and designs, are trademarks of SAND
Technology Inc. Other trademarks remain the property of their respective
owners..
Certain statements contained in this press release are "forward looking
statements" within the meaning of the United States Securities Act of 1933 and
of the United States Securities Exchange Act of 1934. The forward-looking
statements are intended to be subject to the safe harbour protection provided by
these Acts. We have based these forward-looking statements on our current
expectations and projections about future results, levels of activity, events,
trends or plans. Such forward-looking statements are not guarantees and are
subject to known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of SAND to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. All forward looking statements
included in this press release are based on current expectations and on
information available to SAND on the date of this press release. For a more
detailed discussion of these risks and uncertainties and other business risks,
see SAND's current Annual Report and SAND's reports to the Securities and
Exchange Commission. You are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date made. We undertake
no obligation to publicly release the result of any revision of these
forward-looking statements to reflect events or circumstances after the date
they are made or to reflect the occurrence of unanticipated events.
4
<Page>
SAND TECHNOLOGY INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
IN CANADIAN DOLLARS
-------------------
<Table>
<Caption>
As at As at
Apr 30, 2008 July 31, 2007
------------- -------------
ASSETS
Current Assets
Cash and cash equivalents $1,434,056 $330,711
Accounts Receivable, Net $1,368,827 $1,582,957
Unbilled receivables $245,184 $-
Prepaid Expenses $120,519 $150,964
-----------------------------------
$3,168,586 $2,064,632
Capital Assets, Net $128,492 $181,669
Other Assets, Net $27,712 $110,847
-----------------------------------
$3,324,790 $2,357,148
===================================
LIABILITIES
Current Liabilities
Accounts Payable and Accrued Liabilities $1,202,295 $1,076,116
Deferred Revenue $1,500,687 $1,305,270
Due to Shareholder $1,196,195 $750,144
Deferred Credits $85,567 $107,569
-----------------------------------
$3,984,744 $3,239,099
-----------------------------------
Long term Liabilities
Convertible Debentures $461,781 $-
-----------------------------------
SHAREHOLDERS' DEFICIENCY
Common Stock $38,530,441 $38,530,441
Equity component of convertible
debentures $548,038 $-
Contributed Surplus $305,110 $305,110
Deficit $(40,505,324) $(39,717,50)
-----------------------------------
($1,121,735) $(881,951)
-----------------------------------
$3,324,790 $2,357,148
===================================
</Table>
5
<Page>
SAND TECHNOLOGY INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
IN CANADIAN DOLLARS
-------------------
<Table>
<Caption>
3 Months 9 Months 3 Months 9 Months
Ended Ended Ended Ended
Apr. 30, 2008 Apr. 30, 2008 Apr. 30, 2007 Apr. 30, 2007
------------- ------------- ------------- -------------
Revenues $1,905,984 $5,110,430 $1,559,407 $4,891,472
----------------------------------------------------------------------
Operating expenses
Cost of Sales and Product Support $(333,900) $(1,133,254) $(398,322) $(1,298,312)
Research and Development Costs $(355,133) $(1,445,810) $(598,337) $(1,758,289)
Amortization of capital assets and acquired technology $(46,147) $(141,907) $(49,296) $(151,165)
Selling, general and administrative expenses $(1,105,980) $(3,025,993) $(1,227,570) $(3,722,920)
----------------------------------------------------------------------
Total operating expense $(1,841,160) $(5,746,964) $(2,273,525) $(6,930,686)
----------------------------------------------------------------------
Operating Income (Loss) $64,824 $(636,534) $(714,118) $(2,039,214)
Interest Income, Net $(56,383) $(151,288) $(39,322) $(39,853)
----------------------------------------------------------------------
Net Earnings (Loss) $8,441 $(787,822) $(753,440) $(2,079,067)
======================================================================
Earnings (Loss) per share $0.00 ($0.06) ($0.06) ($0.16)
Weighted average number of shares outstanding 14,318,189 14,318,189 12,818,189 12,818,189
</Table>
6
<Page>
SAND TECHNOLOGY INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
QUARTERLY REPORT
THIRD QUARTER ENDED APRIL 30, 2008
7
<Page>
MANAGEMENT'S DISCUSSION AND ANALYSIS - APRIL 30, 2008
THIS MANAGEMENT DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
ATTACHED APRIL 30, 2008 UNAUDITED CONSOLIDATED BALANCE SHEET, CONSOLIDATED
STATEMENTS OF OPERATIONS, CONSOLIDATED STATEMENT OF CASH FLOWS AND RELATED NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. READERS SHOULD ALSO REFER TO
SAND TECHNOLOGY INC'S (SAND) 2007 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ON PAGES 7 TO 27 OF SAND'S 2007
ANNUAL REPORT.
CERTAIN STATEMENTS CONTAINED IN THIS DISCUSSION ARE "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF THE UNITED STATES SECURITIES ACT OF 1933 AND OF THE UNITED
STATES SECURITIES EXCHANGE ACT OF 1934. THE FORWARD-LOOKING STATEMENTS ARE
INTENDED TO BE SUBJECT TO THE SAFE HARBOUR PROTECTION PROVIDED BY THESE ACTS. WE
HAVE BASED THESE FORWARD-LOOKING STATEMENTS ON OUR CURRENT EXPECTATIONS AND
PROJECTIONS ABOUT FUTURE RESULTS, LEVELS OF ACTIVITY, EVENTS, TRENDS OR PLANS.
SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES AND ARE SUBJECT TO KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL
RESULTS, PERFORMANCE OR ACHIEVEMENTS OF SAND TO BE MATERIALLY DIFFERENT FROM ANY
FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. IN SOME CASES, YOU CAN IDENTIFY FORWARD-LOOKING
STATEMENTS BY TERMINOLOGY SUCH AS "GUIDANCE", "MAY", "WILL", "SHOULD", "COULD",
"WOULD", "EXPECT", "PLAN", "ANTICIPATE", "BELIEVE", "ESTIMATE", "CONTINUE", OR
THE NEGATIVE OF SUCH TERMS OR OTHER SIMILAR EXPRESSIONS. ALL FORWARD-LOOKING
STATEMENTS INCLUDED IN THIS DISCUSSION ARE BASED ON CURRENT EXPECTATIONS AND ON
INFORMATION AVAILABLE TO THE CORPORATION ON JUNE 25, 2008. FOR A MORE DETAILED
DISCUSSION OF THESE RISKS AND UNCERTAINTIES AND OTHER BUSINESS RISKS, SEE SAND'S
CURRENT ANNUAL REPORT AND ITS REPORTS TO THE SECURITIES AND EXCHANGE COMMISSION.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS,
WHICH SPEAK ONLY AS OF THE DATE MADE. WE UNDERTAKE NO OBLIGATION TO PUBLICLY
RELEASE THE RESULT OF ANY REVISION OF THESE FORWARD-LOOKING STATEMENTS TO
REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE THEY ARE MADE OR TO REFLECT THE
OCCURRENCE OF UNANTICIPATED EVENTS.
SAND REPORTS ITS UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS IN CANADIAN
DOLLARS AND IN ACCORDANCE WITH CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(GAAP).
ALL FINANCIAL FIGURES ARE IN CANADIAN DOLLARS UNLESS OTHERWISE NOTED. SAND
REPORTS ITS UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS IN CANADIAN DOLLARS AND
IN ACCORDANCE WITH CANADIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP).
OVERVIEW
During the 2007 fiscal year, SAND continued its process, started in
previous years, of engaging integrator and systems partners in active sales
situations for its high-performance analytical application products. In
particular, the SAND Searchable Archive product (now named SAND/DNA Access)
began to gain traction and mindshare as a method for managing growth in data
warehouse environments in a fashion that is very complementary to existing
industry standards. In conjunction with partners like SAP, the company has
readied specific application offerings, using this exciting product, to make it
easy to adopt. During 2007, the company launched the SAND/DNA brand for its
products in conjunction with the SAP offering with high interest from industry
analysts, partners, and prospective customers.
8
<Page>
Despite the growing conditioning of the market to its new solutions to
intelligent information management, the company recognizes the potentially
lengthy sales cycles required to gain strong market acceptance of these new
approaches, and therefore significantly lowered its expense rate. At the same
time it engaged refined skills in the area of Marketing and Business Development
geared towards the SAND/DNA applications.
The result in the first three quarters of this Fiscal Year (2008) was the
continuation of progressive sales and a significant reduction in operating
losses. We expect that our new solutions will continue contributing to revenues
and profits going forward and we are encouraged by the trends in our financial
performance which should only improve further as they come on stream.
RESULTS OF OPERATIONS
THIRD QUARTER OF FISCAL 2008 COMPARED WITH THIRD QUARTER OF FISCAL 2007 AND
FIRST NINE MONTHS OF FISCAL 2008 COMPARED WITH FIRST NINE MONTHS OF FISCAL 2007
REVENUE
Sales revenue for the third quarter ended April 30, 2008 was $1,905,984, an
increase of 22.2% from sales of $1,559,407 for the third quarter ended April 30,
2007. In North America, sales were $579,067, an increase of 6.7% from sales of
$542,737 in the third quarter of fiscal 2007. In Europe, sales in the third
quarter of fiscal 2008 were $1,326,917, an increase of 30.5% from sales of
$1,016,670 in the third quarter of fiscal 2007.
Sales revenue for the first nine months of fiscal 2008 was $5,110,430, an
increase of 4.5% from sales of $4,891,472 for the first nine months of fiscal
2007. In North America sales were $1,819,382, an increase of 23.7% from sales of
$1,471,261 in the first nine months of fiscal 2007. In Europe, sales in the
first nine months of fiscal 2008 were $3,291,048, a decrease of 3.8% from sales
of $3,420,211 in the first nine months of fiscal 2007.
In North America the larger increase in our revenues can be explained
primarily by the increased sales from our alliances during the first nine months
of fiscal 2008. In Europe the small decrease is associated primarily to delays
in the procurement process from some key opportunities.
We recognize revenues from software licenses in accordance with the
provisions of the American Institute of Certified Public Accountants Statement
of Position 97-2, which requires that companies defer revenue and profit
recognition if four specified criteria of a sale are not met. In addition, we
are required to allocate revenue to multiple element arrangements. We typically
contract professional services on a time-and-materials basis and such revenues
are recognized as services when they are performed. Revenues from support and
maintenance are recognized rateably over the term of the applicable support and
maintenance agreement.
9
<Page>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses include salaries, commissions
and other personnel-related costs, the impact of foreign exchange gains and
losses, travel expenses, advertising programs and other promotional activities
associated with the selling and marketing of our products and services. Selling,
general and administrative expenses decreased by 9.9% to $1,105,980 for the
third quarter ended April 30, 2008 from $1,227,570 for the third quarter ended
April 30, 2007. For the first nine months of fiscal 2008, selling, general and
administrative expenses were $3,025,993 compared to $3,722,920 during the first
nine months of fiscal 2007, a decrease of 18.7%.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development expenses consist primarily of salaries and other
personnel-related costs of technical and engineering personnel associated with
our research and product development activities, including the enhancement and
localization of existing products, quality assurance and testing as well as the
cost of materials and equipment used in research and development activities.
Research and development expenses (net of the tax credit) decreased by 40.6% to
$355,133 for the third quarter ended April 30, 2008 from $598,337 for the third
quarter ended April 30, 2007. The large reduction in costs is due to the timing
of the receipt of the R&D tax credits. For the first nine months of fiscal 2008,
research and development expenses were $1,445,812 compared to $1,758,289 during
the first nine months of fiscal 2007, a decrease of 17.8%. For the remainder of
fiscal 2008, we expect that Research and Development expenditures will not vary
significantly from the prior year's fourth quarter.
COST OF SALES
Cost of sales consists primarily of the costs related to the sale of
third-party software, including certain license fees and royalties, as well as
the costs related to systems architects who assist clients to implement systems
and provide support services. Cost of sales decreased by 16.2% to $333,900 for
the third quarter ended April 30, 2008 from $398,322 for the third quarter ended
April 30, 2007. For the first nine months of fiscal 2008, cost of sales was
$1,133,254 compared to $1,298,312 during the first nine months of fiscal 2007, a
decrease of 12.7%. Cost of revenues from services may vary due to the mix of
services provided by SAND's personnel relative to services provided by outside
consultants and to varying levels of expenditures necessary to build the service
sector.
10
<Page>
OPERATIONS
SAND generated a net income of $8,441 in the third quarter ended April 30,
2008 as compared to a net loss of $753,440 in the third quarter ended April 30,
2007. Net loss was $787,822 in the first nine months of fiscal 2008 as compared
to a net loss of $2,079,067. These results reflect the transitional nature of
the business and distribution model of SAND, as it moves progressively towards
being profitable. We believe that this transition is likely to continue during
the next few quarters.
LIQUIDITY AND CAPITAL RESOURCES
Cash and investments as at April 30, 2008 were $1,434,056 compared with
$1,052,582 as at April 30, 2007. On April 18th 2008, the Corporation issued
secured convertible debentures ("Convertible Debentures") on a private placement
basis and received proceeds of $1,009,819 (US$1,002,600). Each unit consists of
one 8% Secured Convertible Debenture due December 31st, 2017, redeemable at the
option of the Corporation if the bid price of the stock has been above $1.50 for
sixty consecutive trading days, and convertible into Class A common shares at
$0.45 per share and one thousand share purchase warrants of the Corporation.
Each warrant entitles its holder to purchase one additional common share
(warrant share) of the Corporation at a price of $0.70 per warrant share at any
time until the earlier of the close of business on the day which is thirty-six
months from April 18th 2008 or the sixtieth consecutive trading day in which the
bid price of the common shares has been above $1.50. Interest is calculated at
the rate of 8% per annum, payable in kind, i.e. in common shares at a rate of
$0.45 per share. The interest is due on each Conversion Date (date when that
principal amount is being converted) subsequent to January 1st, 2009, and on the
Maturity Date. The financing is secured by a first rank hypothec on all of the
Corporation's property and assets, movable and immovable, corporeal and
incorporeal, present and future, of ever kind and nature for the principal
amount and accrued interest. The proceeds from the private placement will be
used to increase marketing and advertising capital needs and expansion.
SAND does not have a line of credit with a commercial bank. In light of
operating losses suffered in the current and past years, the Corporation's
ability to realize its assets and discharge its liabilities depends on the
continued financial support of its shareholders and creditors and its ability to
obtain additional financing. The Corporation's management will continue to
search for additional sources of debt and equity financing. There can be no
assurance that the Corporation's activities will be successful and as a result
there is doubt regarding the going concern assumption.
11
<Page>
NOTICE TO READERS OF THE UNAUDITED INTERIM FINANCIAL STATEMENTS:
The unaudited interim financial statements of Sand Technology Inc. for the
three-month period ended April 30, 2008 have not been reviewed by the
Corporation's external auditors.
SAND TECHNOLOGY INC.
QUARTERLY REPORT
THIRD QUARTER ENDED APRIL 30, 2008
12
<Page>
SAND TECHNOLOGY INC.
CONSOLIDATED BALANCE SHEETS
(IN CANADIAN DOLLARS)
================================================================================
<Table>
<Caption>
AS AT As at
APRIL 30, July 31,
2008 2007
- --------------------------------------------------------------------------------------------------------------------
$ $
(UNAUDITED) (audited)
- --------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets
Cash & cash equivalents 1,434,056 330,711
Accounts receivable 1,368,827 1,582,957
Unbilled receivables 245,184 -
Prepaid expenses 120,519 150,964
- --------------------------------------------------------------------------------------------------------------------
3,168,586 2,064,632
Capital assets, net (Note 2) 128,492 181,669
Other assets (Note 3) 27,712 110,847
- --------------------------------------------------------------------------------------------------------------------
3,324,790 2,357,148
====================================================================================================================
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 1,202,295 1,076,116
Deferred revenue 1,500,687 1,305,270
Due to a Shareholder (Note 4) 1,196,195 750,144
Deferred credits 85,567 107,569
- --------------------------------------------------------------------------------------------------------------------
3,984,744 3,239,099
Long Term Liabilities
Convertible Debentures (Note 5) 461,781 -
- --------------------------------------------------------------------------------------------------------------------
4,446,525
SHAREHOLDERS' DEFICIENCY
Common stock (Note 6)
Authorized
An unlimited number of Class "A" common shares,
without par value
Issued and outstanding
14,318,189 common shares (14,318,189 in July 31, 2007) 38,530,441 38,530,441
Equity component of convertible debentures (Note 5) 548,038 -
Contributed surplus 305,110 305,110
Deficit (40,505,324) (39,717,502)
- --------------------------------------------------------------------------------------------------------------------
(1,121,735) (881,951)
- --------------------------------------------------------------------------------------------------------------------
3,324,790 2,357,148
====================================================================================================================
</Table>
SAND TECHNOLOGY INC.
See notes to the consolidated financial statements
13
<Page>
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
<Table>
<Caption>
THREE MONTHS Three months NINE MONTHS Nine months
ENDED ended ENDED ended
APRIL 30, April 30, APRIL 30, April 30,
2008 2007 2008 2007
- --------------------------------------------------------------------------------------------------------------
$ $ $ $
REVENUES 1,905,984 1,559,407 5,110,430 4,891,472
- --------------------------------------------------------------------------------------------------------------
Cost of sales and product support (333,900) (398,322) (1,133,254) (1,298,312)
Research and development, net (355,133) (598,337) (1,445,812) (1,758,289)
Amortization of capital and other (46,147) (49,296) (141,905) (151,165)
assets
Selling, general and
administrative expenses (1,105,980) (1,227,570) (3,025,993) (3,722,920)
- --------------------------------------------------------------------------------------------------------------
Total operating expenses (1,841,160) (2,273,525) (5,746,964) (6,930,686)
==============================================================================================================
Operating income (loss) 64,824 (714,118) (636,534) (2,039,214)
Interest income (expense) (56,383) (39,322) (151,288) (39,853)
- --------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) 8,441 (753,440) (787,822) (2,079,067)
Deficit at beginning of period (40,513,765) (38,516,605) (39,717,502) (37,190,978)
- --------------------------------------------------------------------------------------------------------------
DEFICIT AT END OF PERIOD (40,505,324) (39,270,045) (40,505,324) (39,270,045)
==============================================================================================================
Basic and diluted
earnings (loss) per share 0.00 (0.06) (0.07) (0.16)
==============================================================================================================
Weighted average number of
shares outstanding 14,318,189 12,818,189 14,318,189 12,818,189
Net effect of dilutive stock
options and warrants - - - -
- --------------------------------------------------------------------------------------------------------------
Weighted average number of
diluted shares outstanding 14,318,189 12,818,189 14,318,189 12,818,189
==============================================================================================================
</Table>
See notes to the consolidated financial statements
14
<Page>
SAND TECHNOLOGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
<Table>
<Caption>
THREE MONTHS Three months NINE MONTHS Nine months
ENDED ended ENDED ended
APRIL 30, April 30, APRIL 30, April 30,
2008 2007 2008 2007
- ----------------------------------------------------------------------------------------------
$ $ $ $
OPERATING ACTIVITIES
Net income (loss) 8,441 (753,440) (787,822) (2,079,067)
Items not affecting cash
Amortization of capital and 46,147 49,296 141,905 151,165
other assets
Changes in non-cash operating
working capital items (Note 11) 278,501 1,249,430 320,987 847,589
- ----------------------------------------------------------------------------------------------
333,089 545,286 (324,930) (1,080,313)
- ----------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital assets (2,073) (11,667) (5,593) (36,101)
- ----------------------------------------------------------------------------------------------
331,016 (11,667) (330,523) (36,101)
- ----------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Due to Shareholder 37,912 177,300 446,051 778,450
Deferred credits (7,334) (7,334) (22,002) (22,002)
Convertible Debentures 1,009,819 - 1,009,819 -
- ----------------------------------------------------------------------------------------------
1,040,397 169,966 1,433,868 756,448
- ----------------------------------------------------------------------------------------------
Increase (Decrease) in cash and 1,371,413 703,585 1,103,345 (359,966)
Cash equivalents
Cash & cash equivalents,
beginning of period 62,643 348,997 330,711 1,412,548
- ----------------------------------------------------------------------------------------------
CASH & CASH EQUIVALENTS,
END OF PERIOD 1,434,056 1,052,582 1,434,056 1,052,582
==============================================================================================
</Table>
See notes to the consolidated financial statements
15
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
The Corporation is involved in the design, development, marketing and support of
software products and services that enable users to retrieve usable business
information from large amounts of data. The software products, collectively
known as the SAND/DNA and the SAND/DNA Analytics, are designed to provide an
efficient and cost-effective way for business users to make fast easy inquiries
of large databases without the intervention of specialist Information Technology
professionals. The Corporation is considered to have only one reportable
business segment.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements have been prepared in accordance with Canadian
generally accepted accounting principles and on the basis of the going
concern assumption, meaning that it is assumed that the Corporation will be
able to realize its assets and discharge its liabilities in the normal
course of operations.
In light of operating losses suffered in the current and past years, the
Corporation's ability to realize its assets and discharge its liabilities
depends on the continued financial support of its shareholders and
creditors and its ability to obtain additional financing. The Corporation's
management will continue to search for additional sources of debt and
equity financing.
There can be no assurance that the Corporation's activities will be
successful and as a result there is doubt regarding the "going concern"
assumption. These consolidated financial statements do not reflect
adjustments that would be necessary if the "going concern" assumption was
not appropriate. The adjustments to the carrying values of the assets and
liabilities, the reported expenses and the balance sheet classifications,
which could be material, may be necessary for these consolidated financial
statements.
USE OF ESTIMATES
These financial statements have been prepared in accordance with Canadian
generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities at the date of the
financial statements, and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those
estimates.
These unaudited interim consolidated financial statements do not include
all disclosures required for annual financial statements and should be read
in conjunction with the most recent annual financial statements as at and
for the year ended July 31, 2007.
BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Corporation and its wholly-owned subsidiaries. All inter-company
transactions and balances have been eliminated.
16
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION
The Corporation generates revenues principally through two sources:
software licences and services. Software licence revenues are normally
generated from licensing the perpetual use of the Corporation's software
products. Service revenues are generated from sales of maintenance,
implementation, consulting and training services performed for customers
that licence the Corporation's products.
Revenue from the sale of software licence agreements are recognized upon
delivery of software if persuasive evidence of an arrangement exists,
collection is probable, the fee is fixed or determinable and
vendor-specific evidence of an arrangement exists to allocate the total fee
to the different elements of an arrangement. Vendor-specific objective
evidence is typically based on the price charged when an element is sold
separately, or, in the case of an element not yet sold separately, the
price established by management, if it is probable that the price, once
established, will not change before market introduction.
In circumstances where the implementation services are essential to the
functionality of the software or where the software requires significant
customization, the Corporation recognizes software licence revenue using
the percentage-of-completion method over the implementation period. The
percentage-of-completion is measured by the percentage of implementation
hours incurred to date to estimated implementation hours. Past experience
has shown expended hours to be the best measure of progress.
Revenues from maintenance services for licences previously sold and
implemented are recognized rateably over the terms of the contract.
Revenue from consulting and training services, not considered as part of
the implementation of software licences, are recognized as the services are
provided.
Amounts received in advance of the delivery of products or the performance
of services are classified as deferred revenue.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include unrestricted cash and highly liquid
investments.
CAPITAL ASSETS
Capital assets are recorded at cost and are amortized over their estimated
useful lives using the straight-line method over the following periods:
Furniture and equipment 5 years
Computer equipment 3 years
Leasehold Improvements over the lease term
17
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
OTHER ASSETS
Other assets comprise contract costs. Contract costs are comprised of an
amount paid to the vendor upon the transfer of a long-term service contract
and will be amortized rateably over the term of the contract.
RESEARCH AND DEVELOPMENT COSTS
Research costs are charged to operations in the period in which they are
incurred. Development costs are expensed as incurred unless a project meets
the criteria under Canadian generally accepted accounting principles for
deferral and amortization. The Corporation has not deferred any such
development costs to date. Related tax credits are recorded as a reduction
of research and development expenses.
INCOME TAXES
Income taxes are accounted for using the liability method of tax
allocation. Future income tax assets and liabilities are determined based
on deductible or taxable temporary differences between the financial
statement values and tax values of assets and liabilities, using enacted
income tax rates expected to be in effect for the year in which the
differences are expected to reverse.
DEFERRED CREDITS
Deferred credits include deferred lease inducements, which are amortized on
a straight-line basis over the term of the lease.
FOREIGN EXCHANGE TRANSLATION
Revenue, expenses and acquisition of non-monetary assets denominated in
foreign currencies are translated into Canadian dollars at rates prevailing
on the transaction dates. Monetary assets and liabilities are translated at
rates in effect at the balance sheet date.
The accounts of the subsidiaries included in the consolidated financial
statements are translated into Canadian dollars using the temporal method.
Under this method, monetary items are translated at exchange rates in
effect at the balance sheet dates; non-monetary assets are translated at
historical exchange rates. Revenue and expenses are translated at average
exchange rates for the period, with the exception of amortization of
assets, which is translated at the same historical exchange rates as the
related assets. Translation losses and gains are included in operations.
18
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOSS PER SHARE
Per share computations are based on the weighted average number of shares
outstanding during the period. The dilutive effect of options is determined
using the treasury stock method.
STOCK-BASED COMPENSATION AND OTHER STOCK-BASED PAYMENTS
The Corporation accounts for stock-based compensation under the
recommendations of Section 3870 of the Canadian Institute of Chartered
Accountants (CICA) Handbook, STOCK-BASED COMPENSATION AND OTHER STOCK-BASED
PAYMENTS, which sets standards for recognizing, measuring and disclosing
stock-based compensation and other stock-based payments made in exchange
for goods and services. The standards require the Corporation to use a
fair-value based method for all stock-based awards and the recognition of
an expense in the financial statements. See Note 6, stock option plan, for
additional information.
GUARANTEES
In the normal course of its operations, the Corporation has entered into
agreements that contain certain features which meet the definition of a
guarantee under the guidance provided by Accounting Guideline 14.
Certain agreements with its customers include intellectual-property
indemnification obligations that are customary in the industry. These
obligations would generally require the Corporation to compensate a third
party for certain damages and claims incurred as a result of third-party
intellectual-property claims arising from these agreements.
The nature of these obligations prevents the Corporation from making a
reasonable estimate of the maximum potential amount it could be required to
pay. Historically, the Corporation has not made any payments under such
obligations. The adoption of these recommendations did not have an impact
on the Corporation's consolidated financial statements.
NEW ACCOUNTING POLICIES ADOPTED
STOCK-BASED COMPENSATION FOR EMPLOYEES ELIGIBLE TO RETIRE BEFORE THE
VESTING DATE
In July 2006, the Emerging Issues Committee (EIC) of the CICA issued
EIC-162, "Stock-based Compensation for Employees Eligible to Retire before
the Vesting Date". EIC-162 clarifies the accounting for compensation costs
relating to stock-based awards granted to employees. EIC-162 requires that
i) compensation costs attributable to stock-based awards granted to
employees who are eligible to retire on the grant date be recognized on the
grant date, and ii) compensation cost attributable to stock-based awards
granted to employees who will become eligible to retire during the vesting
period be recognized over the period from the grant date to the date of
retirement eligibility. This abstract is to be applied retroactively, with
restatement of prior periods, and is effective for interim periods
beginning on or after December 1, 2006. The adoption of EIC-162 did not
have a material impact on the Corporation's financial statements.
19
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
2. CAPITAL ASSETS
<Table>
<Caption>
APRIL 30, 2008 July 31, 2007
---------------------------------------- --------------
Accumulated Net Book Net Book
Cost Depreciation Value Value
------------ -------------- ------------ --------------
$ $ $ $
Furniture and equipment 320,113 320,113 0 111
Computer equipment 633,894 583,127 50,767 81,762
Leasehold improvements 287,610 209,885 77,725 99,796
-----------------------------------------------------------------------------------
1,241,617 1,113,125 128,492 181,669
===================================================================================
</Table>
3. OTHER ASSETS
<Table>
<Caption>
APRIL 30, 2008 July 31, 2007
---------------------------------------- -------------
Accumulated Net Book Net Book
Cost Depreciation Value Value
------------ -------------- ------------ -------------
$ $ $ $
Contract Costs 471,100 443,388 27,712 110,847
-----------------------------------------------------------------------------------
</Table>
4. DUE TO A SHAREHOLDER
During the year 2007, the Corporation formalized the conditions pertaining
to a loan obtained from a significant shareholder who is also the President
and Chief Executive Officer. The loan is repayable within 90 days of the
receipt of a written demand from the shareholder. The loan bears interest
at 15%. In conjunction with the ratification of the loan agreement, the
Corporation also issued 103,061 warrants, each warrant entitling to
purchase one class "A" common share of the Corporation at a price of
US$0.44 per share and is valid for the term of the agreement. The residual
valuation method was used to allocate the proceeds between the liability
component and the equity component. The value of the liability component
was determined to be the face value of the debt because there is no
maturity date and by difference, the value of the equity instrument was
determined to be nil.
20
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
5. CONVERTIBLE DEBENTURES
On April 18th 2008, the Corporation issued secured convertible debentures
("Convertible Debentures") on a private placement basis and received
proceeds of $1,009,819 (US$1,002,600). Each unit consists of one 8% Secured
Convertible Debenture due December 31st, 2017, redeemable at the option of
the Corporation if the bid price of the stock has been above $1.50 for
sixty consecutive trading days, and convertible into Class A common shares
at $0.45 per share and one thousand share purchase warrants of the
Corporation. Each warrant entitles its holder to purchase one additional
common share (warrant share) of the Corporation at a price of $0.70 per
warrant share at any time until the earlier of the close of business on the
day which is thirty-six months from April 18th 2008 or the sixtieth
consecutive trading day in which the bid price of the common shares has
been above $1.50. Interest is calculated at the rate of 8% per annum,
payable in kind, i.e. in common shares at a rate of $0.45 per share. The
interest is due on each Conversion Date (date when that principal amount is
being converted) subsequent to January 1st, 2009, and on the Maturity Date.
The financing is secured by a first rank hypothec on all of the
Corporation's property and assets, movable and immovable, corporeal and
incorporeal, present and future, of ever kind and nature for the principal
amount and accrued interest. The proceeds from the private placement will
be used to increase marketing and advertising capital needs and expansion.
For accounting purposes, the debenture contains both a liability component
and an equity component being the conversion option, which has been
separately presented in the consolidated balance sheet. The liability
component of the convertible secured debentures is calculated using the
present value of the cash flows at an interest rate applicable to
non-convertible secured debt. The preliminary amount calculated for the
carrying amount of the debt component is $461,781. The amount will be
finalized once the valuation has been completed. The carrying value of the
debentures will be accreted to their face value over their life to maturity
(December 31, 2017). The accretion expense will be included in interest
expense in the consolidated statement of operations. The debt issuance
costs have been recorded directly against net income. The carrying amount
of the equity component was valued at $548,038, determined by deducting the
carrying amount of the liability component from the gross proceeds received
on the compounded instrument.
6. COMMON STOCK
(A) AUTHORIZED
Unlimited number of Class "A" common shares without par value.
(B) STOCK OPTION PLANS
The company has two stock option plans. Under the 1996 Stock Incentive
Plan, the Company may grant options to its regular full-time employees and
those of its subsidiaries for up to a maximum of 1,100,000 common shares.
Under the 1996 Stock Option Plan, the Company may grant options to its
regular full-time employees directors and those of its subsidiaries for up
to a maximum of 900,000 common shares. Under both plans, the exercise price
of each option is not less than the market price of the Company's shares on
the Nasdaq National Market System or since August 9, 2005 on the OTC
Bulletin Board
21
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
6. COMMON STOCK (CONTINUED)
(OTCBB) on the day prior to the date of grant. Options vest rateably over a
five year period and the option's maximum term is 10 years.
Activity in the stock option plans for the nine months period ended
April 30, 2008 and fiscal 2007 was as follows:
<Table>
<Caption>
NINE MONTHS ENDED
APRIL 30, 2008 July 31, 2007
--------------------- ---------------------
WEIGHTED Weighted
AVERAGE average
OPTIONS EXERCISE Options exercise
(000) PRICE (000) price
-------------------------------------------
# $US # $US
Outstanding,
beginning of period 1,169 1.52 1,041 1.59
Granted - - 288 1.00
Exercised - - - -
Forfeited 427 2.04 160 1.00
-------- -------- -------- --------
Outstanding,
End of period 742 1.22 1,169 1.52
======== ======== ======== ========
Options exercisable
at end of period 471 1.34 728 1.79
======== ======== ======== ========
</Table>
The following table summarizes significant ranges of outstanding options
held by directors, officers, and employees as of April 30, 2008:
<Table>
<Caption>
Options outstanding Options exercisable
--------------------------------- ---------------------
Weighted
average Weighted Weighted
remaining average average
Ranges of exercise Options life exercise Options exercise
prices ($US) (000) (years) price (000) Price
-------------------------------------------------------
# $US # $US
LESS THAN1.00 160 8.47 0.69 160 0.69
1.00 to 1.99 521 17.25 1.00 250 1.00
3.00 to 3.99 20 8.47 3.37 20 3.37
4.00 to 4.99 30 9.99 4.63 30 4.63
5.00 to 5.99 5 12.68 5.00 5 5.00
6.00 to 6.99 6 11.28 6.46 6 6.46
--------------------------------- ---------------------
742 14.75 1.22 471 1.34
</Table>
22
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
6. COMMON STOCK (CONTINUED)
(C) SHARE AWARD PLAN
On November 2, 2006, the Board of Directors of SAND established a Share
Award Plan pursuant to which up to 1,000,000 Common Shares of the
Corporation shall be issuable under the Share Award Program through direct
and immediate issuances without any intervening option grants.
On August 28, 2007, the Board of Directors of the Corporation authorized
the award of up to 665,000 Common Shares. Since then, the Corporation has
awarded 652,500 Common Shares including grants which are dependant on the
Award Recipients achieving certain defined objectives. Vested Common Shares
shall be acquired by the Award Recipient upon payment of $0.001 per Common
Share by the Award Recipient to the Corporation in the event the Award
Recipient is in the employ of the Corporation on the vesting date of
September 30, 2010 or upon a change in control of the Corporation. As at
April 30, 2008, 652,500 awarded Common Shares are still outstanding (Nil as
of July 31, 2007).
7. INCOME TAXES
There was no income tax accrued during the nine-month period ended April
30, 2008.
8. COMMITMENTS
The Corporation is committed under operating leases for a total amount of
approximately $1,090,005. The minimum payments due in each of the
forthcoming years are as follows:
<Table>
<Caption>
$
2008 407,498
2009 275,317
2010 244,314
2011 162,876
</Table>
9. SEGMENTED INFORMATION
The Corporation is considered to have only one business segment.
The Corporation has two geographic reportable segments. Both the North
American and European segments market the SAND Analytical Server and the
SAND Searchable Archive. The accounting policies of the segments are the
same as described in the summary of significant accounting policies. The
Company evaluates segment performance based on earnings before taxes. Sales
for each segment are based on the location of the third party customer. All
intercompany transactions between segments have been eliminated.
23
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
9. SEGMENTED INFORMATION (CONTINUED)
As at and for the three months ended April 30,
<Table>
<Caption>
--------------------------------------------------------------
North America Europe
--------------------------------------------------------------
2008
Net sales 579,067 1,326,917
(Loss) before income taxes (244,366) 252,807
Identifiable assets 1,605,600 1,719,190
--------------------------------------------------------------
2007
Net sales 542,737 1,016,670
(Loss) earnings before income
taxes (1,093,470) 340,030
Identifiable assets 847,154 1,580,377
--------------------------------------------------------------
</Table>
As at and for the nine months ended April 30,
<Table>
<Caption>
--------------------------------------------------------------
North America Europe
--------------------------------------------------------------
2008
Net sales 1,819,382 3,291,048
Loss before income taxes (1,547,390) 759,568
Identifiable assets 1,605,600 1,719,190
--------------------------------------------------------------
2007
Net sales 1,471,261 3,420,211
(Loss) before income taxes (2,615,657) 536,590
Identifiable assets 847,154 1,580,377
--------------------------------------------------------------
</Table>
24
<Page>
SAND TECHNOLOGY INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(IN CANADIAN DOLLARS)
(UNAUDITED)
================================================================================
10. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS
As at April 30, 2008, the estimated fair market value of cash and cash
equivalents, accounts receivable, loan and accounts payable and accrued
liabilities is equal to the book value, given the short-term nature of
these items.
CREDIT RISK
The Corporation's exposure to credit risk as of April 30, 2008, is equal to
the carrying amount of its financial assets.
CONCENTRATION OF CREDIT RISK
Credit risk concentration with respect to trade receivables is limited due
to the relatively large size of the Corporation's customers.
CURRENCY RISK
The Corporation operates internationally and is exposed to market risk
principally from changes in foreign currency rates. The Corporation does
not hold any financial instruments that mitigate this risk.
11. CHANGES IN NON-CASH OPERATING WORKING CAPITAL ITEMS
<Table>
<Caption>
THREE MONTHS Three months NINE MONTHS Nine months
ENDED ended ENDED ended
APRIL 30, January 31, APRIL 30, April 30,
2008 2007 2008 2007
-------------------------------------------------------------------------------------
$ $ $ $
Accounts receivable 299,233 1,359,440 214,130 623,308
Unbilled receivables (245,184) - (245,184) -
Prepaid expenses 59,669 46,768 30,445 (80,748)
Deferred revenue 114,440 (43,969) 195,417 75,188
Accounts payable and
accrued liabilities 50,343 (112,809) 126,179 229,841
-------------------------------------------------------------------------------------
Changes in non-cash
operating working
capital items 278,501 1,249,430 320,987 847,589
=====================================================================================
</Table>
12. COMPARATIVE FIGURES
Certain figures for prior periods have been reclassified in order to
conform to the presentation adopted in the current period.
25
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 6-K to be signed on its behalf by
the undersigned, thereunto duly authorized.
SAND TECHNOLOGY INC.
June 30, 2008 /s/ Arthur G. Ritchie
--------------------------------
Arthur G. Ritchie
Chairman of the Board, President
and Chief Executive Officer
26