SAND Technology Inc. - Exhibit 99.1 - Filed by newsfilecorp.com

EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 SAND Technology Inc. - Exhibit 99.1 - Filed by newsfilecorp.com

Interim Condensed Consolidated Financial Statements
April 30, 2013

(Unaudited)

SAND Technology Inc.

Interim Condensed Consolidated Financial Statements
April 30, 2013

(Unaudited)

Notice of no auditor review of interim condensed consolidated financial statements

The accompanying unaudited interim condensed consolidated financial statements of SAND Technology Inc. as at and for the three months and nine months ended April 30, 2013 have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim condensed consolidated financial statements.

SAND Technology Inc.
Condensed Consolidated Balance Sheets
(Expressed in Canadian Dollars)
(Unaudited)

			April 30,			July 31,
	Note		2013			2012
ASSETS
Current Assets
Cash		$	1,213,006		$	811,655
Trade and other receivables	8		1,030,220			476,833
Research and development tax credits receivable			178,101			502,514
Prepaid expenses			52,624			70,039
			2,473,951			1,861,041

Other receivables	7,9		67,785			975,285
Capital assets			319,587			376,352
		$	2,861,323		$	3,212,678

LIABILITIES
Current Liabilities
Trade and other payables	10	$	805,381		$	677,099
Deferred revenue			1,376,116			1,086,802
			2,181,497			1,763,901

Deferred revenue			263,101			266,114
Deferred lease inducements			120,610			130,000
Convertible debentures	12		927,230			834,368
Other financial liabilities			156,818			154,264
			3,649,256			3,148,647

SHAREHOLDERS' EQUITY (DEFICIENCY)
Share capital			39,721,268			39,710,565
Contributed surplus			2,483,774			2,483,774
Deficit			(42,992,975	)		(42,130,308	)
			(787,933	)		64,031
		$	2,861,323		$	3,212,678

The accompanying notes are an integral part of the condensed consolidated financial statements.

On behalf of the Board of Directors,


George Wicker, Director		P. Wayne Musselman, Director

SAND Technology Inc.
Condensed Consolidated Statements of Comprehensive Income
Three-month and nine-month periods ended
(Expressed in Canadian Dollars, except for number of common shares)
(Unaudited)

			Three months ended						Nine months ended
			April 30,			April 30,			April 30,			April 30,
	Note		2013			2012			2013			2012

Revenue		$	528,603		$	889,143		$	1,657,898		$	2,187,729
Cost of sales and product support			87,752			303,687			250,455			820,398
Gross profit			440,851			585,456			1,407,443			1,367,331

Operating expenses
Research and development costs, net	4		228,935			374,572			701,575			1,068,660
Selling, general and administrative			316,983			1,422,973			1,487,749			4,090,900
			545,918			1,797,545			2,189,324			5,159,560
Operating loss			(105,067	)		(1,212,089	)		(781,881	)		(3,792,229	)
Net finance expense	5		43,571			107,378			119,335			705,337
Loss from continuing operations			(148,638	)		(1,319,467	)		(901,216	)		(4,497,566	)
Gain on sale of discontinued operations	7		-			-			-			8,571,967
Earnings from discontinued operations net of tax	7		-			-			-			62,922
Net income (loss) before income taxes			(148,638	)		(1,319,467	)		(901,216	)		4,137,323
Income tax recovery			-			-			38,549			-
Net income (loss) and comprehensive income (loss)		$	(148,638	)	$	(1,319,467	)	$	(862,667	)	$	4,137,323

Basic income (loss) per share	14	$	(0.01	)	$	(0.07	)	$	(0.04	)	$	0.21
From continuing operations		$	(0.01	)	$	(0.07	)	$	(0.04	)	$	(0.23	)

Diluted income (loss) per share	14	$	(0.01	)	$	(0.07	)	$	(0.04	)	$	0.21
From continuing operations		$	(0.01	)	$	(0.07	)	$	(0.04	)	$	(0.23	)

Basic weighted average number of common shares	14		20,744,017			19,559,303			20,154,606			19,370,102
Diluted weighted average number of of common shares	14		20,744,017			19,559,303			20,154,606			19,663,190

The accompanying notes are an integral part of the condensed consolidated financial statements.

SAND Technology Inc.
Condensed Consolidated Statements of Changes in Shareholders’ Equity
Nine-month periods ended April 30, 2013, and 2012
(Expressed in Canadian Dollars, except for number of common shares)
(Unaudited)

		Share Capital
		Number of
		class "A"				Contributed					Shareholders'
	Note	common shares		Amount		surplus		Deficit			equity

Balance as at July 31, 2011		19,283,636	$	39,706,665	$	1,863,006	$	(44,934,005	)	$	(3,364,334	)
Net income and and total comprehensive income				-		-		4,137,323			4,137,323
Exercise of stock options	14	255,000		3,400							3,400
Share-based compensation				-		334,000		-			334,000
Balance as at April 30, 2012		19,538,636	$	39,710,065	$	2,197,006	$	(40,796,682	)	$	1,110,389

Balance as at July 31, 2012		19,673,636	$	39,710,565	$	2,483,774	$	(42,130,308	)	$	64,031
Net loss and and total comprehensive loss				-		-		(862,667	)		(862,667	)
Exercise of warrants	14	535,713		5,357							5,357
Exercise of stock options	14	534,668		5,346		-		-			5,346
Balance as at April 30, 2013		20,744,017	$	39,721,268	$	2,483,774	$	(42,992,975	)	$	(787,933	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

SAND Technology Inc.
Consolidated Statements of Cash Flows
Nine-month periods ended
(Expressed in Canadian Dollars)
Unaudited

			April 30,			April 30,
	Note		2013			2012
OPERATING ACTIVITIES
Net income (loss)		$	(862,667	)	$	4,137,323
Adjustment for non-cash and other items
Gain on sale of discontinued operations	7		-			(8,571,967	)
Depreciation of capital assets			41,872			47,086
Stock-based compensation			-			334,000
Write-down of fixed assets			14,892			-
Foreign exchange (gain) loss on items denominated in foreign currencies			57,647			(26,626	)
Accretion of debt component of convertible debentures			92,862			82,500
Change in fair value of other financial liabilities			2,554			-
Interest expense on financial liabilities measured at amortized cost			16,481			99,312
Amortization of deferred lease inducement			(9,390	)		(9,750	)
Net change in working capital items	17		1,084,837			328,933
Cash flows from (used for) operating activities			439,088			(3,579,189	)

INVESTING ACTIVITIES
Purchase of capital assets			-			(361,233	)
Proceeds from sale of discontinued operations	7		-			7,443,530
Cash flows from investing activities			-			7,082,297

FINANCING ACTIVITIES
Financing interest paid			(16,481	)		(61,812	)
Exercise of stock options			5,346			3,400
Warrants exercised			5,357			-
Deferred lease inducements			-			143,000
Repayments of due to shareholders			-			(1,392,278	)
Proceeds from bridge loan	11		-			962,500
Repayment of bridge loan	11		-			(1,000,000	)
Cash flows used for financing activities			(5,778	)		(1,345,190	)
Effect of exchange rate changes on cash			(31,959	)		(3,893	)
Net increase in cash			401,351			2,154,025
Cash, beginning of the period			811,655			810,745
Cash, end of period		$	1,213,006		$	2,964,770

The accompanying notes are an integral part of the condensed consolidated financial statements.

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

1 - NATURE AND GENERAL BUSINESS DESCRIPTION

SAND Technology Inc. is the ultimate parent company. It is domiciled in Canada and is a federally incorporated company under the Canada Business Corporations Act. SAND Technology Inc. maintains its registered office at 4115 Sherbrooke St. West, Suite 500, Westmount, Quebec, Canada, and is a publicly-traded company listed on the Over-the-Counter (“OTC”) Bulletin Board in the United States under the symbol ‘SNDTF’. Its fiscal year end is July 31.

SAND Technology Inc. and its wholly-owned subsidiaries (collectively the “Company”) are involved in the design, development, marketing and support of software products and services that reduce large amounts of data into a small footprint and enable users to retrieve usable business information from large amounts of data.

2 - GOING CONCERN

These interim condensed consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

With the exception of the year ended July 31, 2012, the Company has incurred operating losses in the past years and has accumulated a deficit of $ 42,992,975 as at April 30, 2013. The Company has also generated negative cash flows from operations. Historically, the Company financed its operating and capital requirements mainly through issuances of debt and equity. The Company’s continuation as a going concern is dependent upon, amongst other things, attaining a satisfactory revenue level, the support of its customers, a return to profitable operations and the generation of cash from operations, the ability to secure new financing arrangements and new capital. These matters are dependent on a number of items outside of the Company’s control. These material uncertainties cast substantial doubt regarding the Company’s ability to continue as a going concern.

The Company can give no assurance that it will achieve profitability or be capable of sustaining profitable operations. These interim condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of the carrying amounts of assets or the amount and classification of liabilities that might result if the Company is unable to continue as a going concern.

3 - SIGNIFICANT ACCOUNTING POLICIES

a)	Basis of Presentation and Statement of Compliance

	These interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and using the accounting policies disclosed in note 3 of the Company’s annual consolidated financial statements as at and for the year ended July 31, 2012.

	These interim condensed consolidated financial statements have been prepared on a going concern basis in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. Accordingly, the interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries; however, they do not include all of the information required for full annual financial statements, and should be read in conjunction with the Company’s most recent annual consolidated financial statements as at and for the year ended July 31, 2012.

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

	The unaudited interim condensed consolidated financial statements as at and for the three-month and nine- month periods ended April 30, 2013 were approved and authorized for issue by the Board of Directors on June 24, 2013.

b)	Basis of Measurement

	These condensed consolidated financial statements have been prepared on the historical cost basis except for financial liabilities defined under IFRS as liabilities measured at fair value through profit and loss (“FVTPL”) which are measured at fair value.

c)	Functional and presentation currency

	The condensed consolidated financial statements are presented in Canadian dollars, which is the functional currency of the Company and its subsidiaries.

d)	Critical Accounting Estimates, Judgements and Assumptions

	The preparation of financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue, costs and expenses for the period. Estimates and underlying assumptions are based on historical experience and other assumptions that are considered reasonable in the circumstances and are reviewed on an on-going basis. Actual results may differ from such estimates and it is possible that the differences could be material. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In preparing these interim condensed consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty are the same as those applied in the annual IFRS consolidated financial statements for the year ended July 31, 2012.

4 - RESEARCH AND DEVELOPMENT COSTS

Research and development costs presented in the consolidated statements of operations and comprehensive income have been determined as follows:

		Three months ended					Nine months ended
		April 30,		April 30,			April 30,		April 30,
		2013		2012			2013		2012

Research and development costs	$	228,935	$	432,072		$	701,575	$	1,241,160
Government assistance
Investment tax credits		-		(57,500	)		-		(172,500	)
	$	228,935	$	374,572		$	701,575	$	1,068,660

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

5 – NET FINANCE EXPENSE

		Three months ended				Nine months ended
		April 30,		April 30,		April 30,		April 30,
		2013		2012		2013		2012

Accretion interest on convertitble debentures	$	36,695	$	27,500	$	92,862	$	82,500
Change in fair value of of other financial liabilities		1,796				2,554		-
Interest expense - due to shareholders		-		-		-		84,315
Other Interest		4,490		5,734		16,481		14,997
Net foreign exchange loss (gain)		590		74,144		7,438		523,525
Net finance expense	$	43,571	$	107,378	$	119,335	$	705,337

6 – INFORMATION INCLUDED IN CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Depreciation expense of capital assets for the three-month periods ended April 30, 2013 and 2012 amounted to $14,592 and $15,199 respectively. Depreciation expense of capital assets for the nine-month periods ended April 30, 2013 and 2012 amounted to $41,872 and $47,086 respectively.

7 – DISCONTINUED OPERATIONS

On October 4, 2011, the Company completed the sale of its SAP Information Lifecycle Management (ILM) Product Line to a third party for a consideration of $8,439,200 (US$8,000,000). After deductions for earn-out milestones, customers’ consent holdback, an escrow amount relating to representations and warranties and other amounts, the Company received proceeds of $7,443,530 (US$7,200,000) during the nine month period ended April 30, 2012. The Company anticipates it will be able to meet all its obligations under the asset purchase agreement governing this transaction to collect the remaining amount due from the sale and an amount of $806,000 (US$800,000) was recorded in other receivables.

As a result of this transaction, the Company recorded a gain of $8,571,967 taking into account the full proceeds from the sale that are expected to be recovered (including the transfer of deferred revenues and other working capital elements of $350,650), reduced by a small amount of capital assets transferred and legal and personnel expenses incurred of $217,883. The Company did not have any income taxes to pay on this transaction as it had sufficient income tax loss carryforwards from prior years to offset the gain.

As a result of the sale of its SAP Information Lifecycle Management (ILM) Product Line, the Company has presented, for the three-month and nine-month periods ended April 30, 2013 and 2012, the net earnings from this business segment separately in the consolidated statement of operations. The net earnings are comprised of the revenues derived from and the direct costs associated with the business segment, as follows:

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

		Three months ended				Nine months ended
		April 30,		April 30,		April 30,		April 30,
		2013		2012		2013		2012

Revenue	$	-	$	-	$	-	$	237,383
Direct costs		-		-		-		174,461
Earnings before income taxes		-		-		-		62,922
Gain on sale of discontinued operations		-		-		-		8,571,967
Income taxes		-		-		-		-
Net earnings and cashflows generated	$	-	$	-	$	-	$	8,634,889

Basic earnings per share from discontinued operations	$	-	$	-	$	-	$	0.45
Diluted earnings per share from discontinued operations	$	-	$	-	$	-	$	0.44

Weighted average number of common shares
Basic		20,744,017		19,559,303		20,154,606		19,370,102
Diluted		20,744,017		19,559,303		20,154,606		19,663,190

8 – TRADE AND OTHER RECEIVABLES

			April 30,		July 31,
	Note		2013		2012

Trade receivables		$	224,220	$	307,937
Sales tax receivable			-		168,896
Other receivables	7		806,000		-
		$	1,030,220	$	476,833

Since most of the Company’s customers are relatively large companies in various industries and with a strong history of payment, the allowance for doubtful accounts was nil as at April 30, 2013 and 2012.

9 – OTHER RECEIVABLES

			April 30,		July 31,
	Note		2013		2012

Long-term trade receivables		$	67,785	$	184,965
Receivable from the sale of the SAP ILM product line	7		-		790,320
		$	67,785	$	975,285

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

10– TRADE AND OTHER PAYABLES

		April 30,		July 31,
		2013		2012

Trade payables and accrued liabilities	$	490,775	$	584,517
Salaries and commission payable		4,101		12,582
Sales tax payable		157,188		-
Payable to related parties		153,317		80,000
	$	805,381	$	677,099

11 – BRIDGE LOAN

On September 7, 2011, the Company completed a bridge loan with a group of investors. The bridge loan consisted of a loan of $1,000,000 to the Company in exchange for a promissory note of $1,000,000 and 500,000 warrants. The promissory note had a maturity date of November 30, 2011 with an interest rate of 15%. The interest on the promissory note was prepaid from the proceeds of the loan. Each of the 500,000 warrants issued allowed the investors to purchase 1 common share at a price of $0.50 per warrant. The warrants expire on September 7, 2014. The bridge loan was repaid in its entirety at the maturity date of November 30, 2011.

12 - CONVERTIBLE DEBENTURES

At April 30, 2013, the fair value of the secured convertible debentures was $927,230 (July 31, 2012 — $834,368). For the nine months ended April 30, 2013, the net finance costs related to these secured convertible debentures were $95,416 (2012 — $82,500), which included changes in the fair value of the debt component of the convertible debentures of $92,862 (2012 — 82,500) and changes in the fair value of other financial liabilities of $2,554 (2012 — nil).

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

13 – STOCK OPTIONS, WARRANTS AND SHARE AWARDS

a)	Stock Option Plans

	The following table summarizes information about the Company’s stock options as of April 30, 2013:

	April 30, 2013				July 31, 2012
			Weighted				Weighted
			average				average
	Number of		exercise		Number of		exercise
	options		price		options		price
			(US $)				(US $)
Options outstanding beginning of the period	2,134,083		0.01		3,473,583		0.11
Granted	-		-		567,500		0.01
Exercised	(534,668	)	(0.01	)	(390,000	)	(0.01	)
Expired	-		(0.01	)	(1,090,000	)	(0.01	)
Forfeited	(1,254,415	)	(0.01	)	(427,000	)	(0.84	)
Options outstanding at the end of the period	345,000		0.01		2,134,083		0.01
Options exercisable at the end of the period	345,000		0.01		1,689,385		0.01

The following table summarizes significant ranges of exercise prices of outstanding and exercisable options held by employees, officers and directors as of April 30, 2013:

April 30, 2013

Options Outstanding

Options Exercisable

Weighted

average

Number of

remaining

exercise

Number of

remaining

exercise

options

life (years)

price

options

life (years)

price

(US $)

U.S.$0.01

345,000

4.48

0.01

345,000

4.48

0.01

Share-based compensation expense included in selling, general and administrative expenses for the three-month periods ended April 30, 2013 and 2012 was nil and $112,000 respectively. Share-based compensation expense for the nine-month periods ended April 30, 2013 and 2012 was nil and $334,000 respectively.

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

b)	Warrants

	The following table summarizes information about the Company’s share warrants, which are all fully vested and outstanding:

			April 30, 2013				July 31, 2012
			Weighted	Weighted		Weighted	Weighted
			average	average		average	average
	Number of		remaining	exercise	Number of	remaining	exercise
	warrants		life (years)	price	warrants	life (years)	price
				(US$)			(US$)

Balance, beginning of the period	2,357,147		1.73	0.34	1,857,147	1.63	0.29
Granted	-		-	-	500,000	2.10	0.50
Exercised	(535,713	)	-	0.01	-	-	-
Expired	(250,002	)	-	0.01	-	-	-
Balance, end of the period	1,571,432		1.71	0.50	2,357,147	1.73	0.34

During the nine-month period ended April 30, 2013, 535,713 warrants (2012 – nil) were exercised for a total consideration of $5,357 and 250,002 warrants expired.

14 –EARNINGS PER SHARE

The following table shows the number of stock options, share awards, share warrants, shares issuable upon conversion of the convertible debentures and interest payable in kind for the periods presented:

	April 30,	July 31,
	2013	2012

Stock options	345,000	2,134,083
Warrants	1,571,432	2,357,147
Convertible debentures, principal	2,228,000	2,228,000
Convertible debentures, interest	891,200	757,520
	5,035,632	7,476,750

Basic

For the three-month and nine-month periods ended April 30, 2013 and 2012, the calculation of basic earnings per share at April 30, 2013 was based on the net income (loss) attributable to common shareholders of the Company and a weighted average number of common shares outstanding.

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

The basic earnings per share for three-month and nine-month periods ended April 30, 2013 and 2012 are as follows:

		Three months ended						Nine months ended
		April 30,			April 30,			April 30,			April 30,
		2013			2012			2013			2012

Net income, (loss) for the year	$	(148,638	)	$	(1,319,467	)	$	(862,667	)	$	4,137,323
Weighted average shares outstanding, basic		20,744,017			19,559,303			20,154,606			19,370,102
Basic earnings per share	$	(0.01	)	$	(0.07	)	$	(0.04	)	$	0.21

Diluted

For the three-month and nine-month periods ended April 30, 2013 and 2012, the calculation of diluted earnings per share was based on net income (loss) attributable to common shareholders and a weighted average number of common shares outstanding adjusted to reflect the effects of all options. For the three-month and nine month periods ended April 30, 2013, 345,000 options, 1,571,432 warrants, 2,228,000 shares from the potential conversion of the principal of the convertible debentures and 891,200 shares from the potential conversion of the interests of convertible debentures that may potentially dilute earnings per share in the future were not considered in the computation since these instruments were anti-dilutive. The diluted weighted average number of common share is calculated as follows:

	Three months ended		Nine months ended
	April 30,	April 30,	April 30,	April 30,
	2013	2012	2013	2012

Weighted average shares outstanding, basic	20,744,017	19,559,303	20,154,606	19,370,102
Options	-	-	-	275,231
Warrants	-	-	-	17,857
Convertible debentures, principal	-	-	-	-
Convertible debentures, interests	-	-	-	-
	20,744,017	19,559,303	20,154,606	19,663,190

For the three-month period ended April 30, 2012, 357,000 options, 1,571,432 warrants, 2,228,000 shares from the potential conversion of the principal of the convertible debentures and 57,520 shares from the potential conversion of the interests of convertible debentures that may potentially dilute earnings per share in the future were not considered in the computation since these instruments were anti-dilutive.

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

The diluted earnings per share for three-month and nine-month periods ended April 30, 2013 and 2012 are as follows:

		Three months ended						Nine months ended
		April 30,			April 30,			April 30,			April 30,
		2013			2012			2013			2012

Net income, (loss) for the year	$	(148,638	)	$	(1,319,467	)	$	(862,667	)	$	4,137,323
Weighted average shares outstanding, diluted		20,744,017			19,559,303			20,154,606			19,663,190
Diluted earnings per share	$	(0.01	)	$	(0.07	)	$	(0.04	)	$	0.21

15 – SEGMENTED INFORMATION

For purposes of segmented information, the Company has identified one reportable business segment and four main geographic areas. The geographic areas of Canada, United States, Europe and Australia market the Company’s products and services. The accounting policies of the Company are consistently applied in the geographic areas of Canada, United States, Europe and Australia. Sales for each geographic area are based on the location of the third party customers. Sales from customers in areas other than Canada, United States, Europe and Australia are included in the geographic area where the sales invoice is initiated. All intercompany transactions between areas have been eliminated.

				United
		Canada		States		Europe		Australia		Total

Three months ended April 30, 2013
Revenue	$	132,453	$	78,990	$	317,160	$	-	$	528,603
Current assets		1,819,613		40,779		639,716		41,628		2,541,736
Net capital assets		319,587		-		-		-		319,587

Three months ended April 30, 2012
Revenue ⁽¹⁾		80,131		69,398		738,828		786		889,143
Current assets		2,218,243		46,259		1,888,234		68,787		4,221,523
Net capital assets		361,793		4,075		28,633		1,007		395,508

Nine months ended April 30, 2013
Revenue	$	467,647	$	217,486	$	972,765	$	-	$	1,657,898
Current assets		1,819,613		40,779		639,716		41,628		2,541,736
Net capital assets		319,587		-		-		-		319,587

Nine months ended April 30, 2012
Revenue ⁽¹⁾		410,543		256,047		1,461,010		60,129		2,187,729
Current assets		2,218,243		46,259		1,888,234		68,787		4,221,523
Net capital assets		361,793		4,075		28,633		1,007		395,508

⁽¹⁾

Excluding revenues related to the discontinued operations.

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

16 - RELATED PARTY TRANSACTIONS

Key Management Personnel

Related party transactions that the Company incurs include those with key management personnel along with other members of the board of directors. They control 14.2% of the voting shares of the Company.

Key management personnel compensation is comprised of the following for the three-month and nine-month periods ended April 30, 2013 and 2012:

		Three months ended				Nine months ended
		April 30,		April 30,		April 30,		April 30,
		2013		2012		2013		2012
Wages, salaries, bonus and other short-term benefits, including amounts paid through their holding companies	$	31,692	$	327,473	$	73,317	$	766,271
Share-based compensation		-		44,768		-		134,304
	$	31,692	$	372,241	$	73,317	$	900,575

During the nine-month period ended April 30, 2012, payments in the amount of $1,392,278 were made to related parties in relation to amounts due to shareholders.

During the fourth quarter of fiscal year ended July 31, 2012, senior management including the Chief Executive Officer, the President, the Chief Financial Officer and the Chief Technology Officer left the Company. The board of directors retained the services of a strategic advisor and a financial consultant to assist them in fulfilling the responsibilities normally associated with these positions.

The transactions with related parties occurred in the normal course of business. All outstanding balances with these related parties are to be settled in cash within twelve months of the reporting date.

SAND Technology Inc.
Notes to Condensed Consolidated Financial Statements
April 30, 2013 and 2012
(Unaudited)
(Expressed in Canadian Dollars, unless otherwise stated)

17 –CONSOLIDATED STATEMENT OF CASH FLOWS

The changes in working capital items for the three-month periods ended April 30, 2013 and 2012 are as follows:

		April 30,		April 30,
		2013		2012

Trade and other receivable		323,047		(56,430	)
Research and development tax credits receivable		324,413		163,844
Prepaid expenses		14,893		(26,676	)
Trade and other payables		137,485		(96,430	)
Deferred revenue		284,999		344,625
	$	1,084,837	$	328,933

18 –COMPARATIVE FIGURES

Certain comparative figures for 2012 have been reclassified to conform to the presentation adopted in 2013.