BASWARE INTERIM REPORT JANUARY 1 – SEPTEMBER 30, 2007 (IFRS)

SUMMARY

January–September

Net sales EUR 50 082 thousand (EUR 43 446 thousand) growth 15 percent
Operating profit EUR 5 588 thousand (EUR 6 271 thousand) decrease 11 percent
Operating profit 11 percent of net sales (14%)
Share of international operations 46 percent of net sales (44%) growth 21 percent
Backlog of SaaS orders not recognized as income EUR 7 048 thousand at the end of the period
Earnings per share EUR 0.26 (EUR 0.40)

July–September (Q3)

Net sales EUR 15 268 thousand (EUR 13 363 thousand in Q3/2006) growth 14 percent
Operating profit EUR 1 406 thousand (EUR 2 495 thousand) decrease 44 percent
Operating profit 9 percent of net sales (19%)
Share of international operations 48 percent of net sales (48%) growth 15 percent
Earnings per share EUR 0.05 (EUR 0.15)

Outlook for 2007: BasWare expects the growth of net sales for the financial year to be from 15 to 20 percent compared with the Group's net sales in the previous year. Operating profit (EBIT) is expected to be from 10 to 15 percent of net sales.

The 2006 figures have been restated to comply with the adjusted accounting principles regarding license sales recognition. The Financial Statements have been prepared according to International Financial Reporting Standards (IFRS).

	7–9/	7–9/	Change,	1–9/		1–9/ Change,	1–12/
EUR thousand	2007	2006	%	2007	2006	%	2006

Net sales	15 268	13 363	14,3%	50 082	43 446	15.3%	59 954
Operating profit	1 406	2 495	-43.6%	5 588	6 271	-10.9%	8 078
% of net sales	9.2%	18.7%		11.2%	14.4%		13.5%
Profit before tax	1 516	2 563	-40.8%	5 816	6 457	-9.9%	8 287
Profit for the period	531	1 665	-68.1%	2 999	4 460	-32.7%	4 986
Return on equity, % Return on investment, % Cash and cash equivalents *)	4.6% 12.7% 9 644	15.6% 23.3% 9 909	-2.7%	8.8% 16.2% 9 644	18.2% 25.8% 9 909	-2.7%	15.1% 24.7% 8 975
Gearing, %	-10.9%	-20.6%		-10.9%	-20.6%		-18.4%
Equity ratio, %	68.7%	76.6%		68.7%	76.6%		77.5%
Earnings per share, EUR Earnings per share (diluted),	0.05	0.15	-67.5%	0.26	0.40	-34.4%	0.45
EUR	0.05	0.15	-67.5%	0.26	0.40	-34.4%	0.44
Equity per share, EUR	4.04	3.83	5.5%	4.04	3.83	5.5%	3.88

GROUP KEY FIGURES

*) Includes cash, cash equivalents and financial assets at fair value through profit or loss

BasWare

BasWare's CEO Ilkka Sihvo comments in conjunction with the Interim Report:

"We succeeded according to plan in the third quarter of the year. The Finnish Enterprise Purchase to Pay and Financial Management units as well as the European business area exceeded the objectives for the quarter. Also the Scandinavian unit met their objective. Development was positive also for BasWare Purchase Management solution and demand for the solution increased both in Finland as well as internationally. Additionally, services revenue increased during the quarter while in the first half of the year the development was mild. The third quarter of the year fell behind the same quarter in 2006 but was however as expected due to the growth investments realized during the quarter."

"During the quarter, BasWare signed several significant agreements for BasWare Invoice Processing as well as BasWare Purchase Management in Finland and in the rest of Europe. During the quarter, BasWare was chosen to implement BasWare Purchase Management as a Software as a Service delivery to both the Finnish State Treasury and the Oulu region. These deliveries strengthen our position in the public sector."

"As a result of the acquisition of Digital Vision, realized during the quarter, BasWare gained a market leading position in the UK purchase to pay market. We also gained valuable expertise in data capture solutions that can also be utilized within the global partner agreement we recently signed with DICOM Group."

REPORTING

BasWare Group adjusted the revenue recognition principles regarding license sales as well as the valuation principles regarding accounts receivables. The company published the restated figures for 2005 and 2006 on February 1, 2007. The audited Financial Statements prepared according to the adjusted accounting principles were published on February 8, 2007. BasWare assesses that the adjusted accounting principles have no effect on the Group's financial performance in the future.

BasWare acquired Digital Vision Technologies Ltd on September 10, 2007. Digital Vision's financial statements are consolidated in the Group financial statements as of September 1, 2007. This interim report also presents unaudited pro forma comparative figures for net sales and operating profit in 2007. The data has been prepared to demonstrate what would have been the Group net sales and operating profit had the financial statements been incorporated for the whole financial period.

In the first quarter, a formal bad debt reservation of EUR 1.3 million was realized in sales receivables. The formal debt reservation amounts to EUR 1.3 million at the end of the third quarter.

BasWare reports it Software as a Service (SaaS) revenue separately in the second segment. Software as a Service revenue includes license, maintenance and services revenue that are invoiced monthly based on an agreement. Software as a Service agreements typically span several years. The Group also reports the backlog of orders not recognized as income. The Company's SaaS sales are growing and this dilutes net sales growth in short term.

NET SALES

BasWare Group's net sales grew during the financial period by 15 percent and were EUR 50 082 thousand (EUR 43 446 thousand). During the third quarter, net sales grew by 14 percent and were EUR 15 268 thousand (EUR 13 363 thousand). The pro forma net sales for the financial period would have been EUR 54 627 thousand had the Digital Vision net sales been incorporated for the whole financial period.

INTERIM REPORT	3(20)
OCTOBER 11, 2007	BasWare Corp.

The Company's product sales grew by 17 percent in the period and were 33 percent (33%) of net sales. Maintenance revenue and support services related to maintenance grew by 14 percent and represented 31 percent (31%) of net sales. Consulting and services revenue grew by 9 percent and represented 34 percent (36%) of net sales. In the financial period SaaS sales represented 2 percent of net sales. The backlog of SaaS orders not recognized as income was EUR 7 048 thousand at the end of the period.

In July–September, 26 percent (34%) of net sales came from own product sales and product sales decreased by 12 percent. The decrease of product sales in the quarter is affected by part of the Company's product sales becoming SaaS-based. SaaS sales represented 2 percent of net sales in the third quarter. Maintenance revenue represented 35 percent (32%) of net sales and grew by 23 percent. Consulting and services revenue represented 37 percent (34%) of net sales and grew by 25 percent.

Value added resellers provided a net share of 15 percent (16%) or EUR 2 533 thousand of product sales in January–September. In July–September value added resellers provided a net share of 16 percent (15%) or EUR 620 thousand of product sales which represents 9 percent (11%) of international operations' total net sales.

The international share of BasWare's net sales was 46 percent (44%) in the period. International operations grew by 21 percent.

Net sales
(EUR thousand)	7–9/2007	7–9/2006	Change, %	1–9/2007		1–9/2006 Change, %	1–12/2006
Finland	10 238	9 375	9.2	34 571	30 110	14.8	41 028
Scandinavia	3 126	2 672	17.0	11 015	10 344	6.5	14 698
Europe	3 477	2 332	49.1	9 429	6 272	50.3	8 985
Other	757	1 306	-42.0	2 429	2 393	1.5	3 512
Sales between segments	-2 329	-2 321	0.3	-7 362	-5 671	-29.8	-8 269
Group total	15 268	13 363	14.3	50 082	43 446	15.3	59 954

The geographical division of net sales by the location of assets (primary segment):

The geographical division of net sales by the location of customers:

Net sales
(EUR thousand)	7–9/2007	7–9/2006	Change, %	1–9/2007		1–9/2006 Change, %	1–12/2006
Finland	7 939	7 024	13.0	27 118	24 410	11.1	32 557
Scandinavia	2 819	2 602	8.3	10 362	9 713	6.7	14 129
Europe	3 371	2 051	64.4	9 364	6 717	39.4	9 421
Other	1 139	1 686	-32.5	3 239	2 607	24.2	3 848
Group total	15 268	13 363	14.3	50 082	43 446	15.3	59 954

FINANCIAL PERFORMANCE

BasWare's operating profit decreased by 11 percent in the financial period and totaled EUR 5 588 thousand (EUR 6 271 thousand). Operating profit represented 11 percent (14%) of net sales. In the third quarter, BasWare's operating profit decreased by 44 percent and was EUR 1 406 thousand (EUR 2 495 thousand). Operating profit represented 9 percent (19%) of net sales. The pro forma operating profit for the period would have been EUR 5 874 thousand had the Digital Vision operating profit been incorporated for the whole financial period.

Operating profit
(EUR thousand)	7–9/2007	7–9/2006	Change, %	1–9/2007		1–9/2006 Change, %	1–12/2006
Finland	3 219	3 514	-8.4	10 371	9 072	14.3	12 314
Scandinavia	-104	-211	50.7	-540	-65	-729.5	-45
Europe	-1 058	-580	-82.4	-2 584	-1 922	-34.5	-2 831
Other areas Operating profit between	-614	-213	-188.4	-1 591	-767	-107.6	-1 297
segments	-37	-15	-146.7	-67	-47	-42.6	-62
Group total	1 406	2 495	-43.6	5 588	6 271	-10.9	8 078

The division of operating profit geographically by the location of assets (primary segment):

The Company's fixed costs were EUR 40 996 thousand (EUR 33 906 thousand) in the period and have grown by 21 percent compared with the same period last year. Fixed costs include the bad debt reservation of EUR 1.3 thousand realized in sales receivables. Personnel costs made up 66 percent or EUR 27 031 thousand (EUR 23 910 thousand) of the fixed costs. In the third quarter, fixed costs totaled EUR 12 247 thousand (EUR 9 905 thousand).

Research and development costs totaled EUR 8 640 thousand (EUR 7 640 thousand) of which EUR 1 843 thousand (EUR 1 542 thousand) or 21 percent (20%) were capitalized during the period. Amortization of capitalized research and development costs totaled EUR 719 thousand (EUR 291 thousand). In the third quarter, research and development costs totaled EUR 2 296 thousand (EUR 2 195 thousand).

The Company's finance income and finance expenses were EUR 227 thousand (EUR 185 thousand). The Company's profit before tax was EUR 5 816 thousand (EUR 6 457 thousand) and profit for the period was EUR 2 999 thousand (EUR 4 460 thousand). Undiluted earnings per share were EUR 0.26 (EUR 0.40).

In the third quarter, profit before tax was EUR 1 516 thousand (EUR 2 563 thousand) and profit for the period was EUR 531 thousand (EUR 1 665 thousand). Earnings per share were EUR 0.05 (EUR 0.15).

FINANCE AND INVESTMENTS

BasWare Group's total assets on the balance sheet at the end of the financial period were EUR 67 555 thousand (EUR 57 293 thousand). The Company's cash and liquid assets were EUR 9 644 thousand (EUR 9 909 thousand), of which cash and cash equivalents were EUR 9 217 thousand (EUR 3 993 thousand) and financial assets at fair value through profit or loss were EUR 427 thousand (EUR 5 915 thousand).

Equity ratio was 68.7 percent (76.6%) and gearing was -10.9% (-20.6%). The Company had a total of EUR 4 597 thousand (EUR 870 thousand) interest-bearing liabilities, of which current liabilities accounted for EUR 4 418 thousand (EUR 433 thousand). Return on investment was 16.2 percent and return on equity 8.8 percent.

Cash flows from operating activities were EUR 5 918 thousand (EUR 5 532 thousand). Cash flows from investments were EUR -7 373 thousand (EUR -5 023 thousand).

The acquisition cost of Digital Vision, acquired in September 2007, totals EUR 9 271 thousand according to the estimate conducted at the end of the quarter. Of the amount, a total of EUR 916 thousand, including deferred tax liabilities, has been allocated to intangible assets in respect of customer relationships and products. EUR 7 147 thousand has been recorded as goodwill.

The Company's capital expenditure, resulting from regular, additional and replacement, investments resulting from growth, was EUR 581 thousand (EUR 510 thousand) in the period. Gross investments which include, in addition to the previously mentioned, the capitalized research and development costs and the acquisition of Digital Vision, totaled EUR 11 109 thousand (EUR 24 492 thousand, includes the acquisition of Analyste).

Amortizations of intangible assets were EUR 1 448 thousand (EUR 1 051 thousand). There are no indications of impairments of assets.

RESEARCH, DEVELOPMENT AND NEW PRODUCTS

BasWare's research and development costs were EUR 8 640 thousand (EUR 7 640 thousand) in the period and made up 17 percent (18 %) of net sales. Research and development costs grew by 13 percent (75%) compared with the same period last year.

Research and development is centralized in the Software Production business unit. Altogether 144 people (138) worked in the unit at the end of September 2007.

During the second quarter, the BasWare portfolio was further developed according to plan. A new version of BasWare Purchase Management was launched during the quarter. The new version includes support for the Unicode standard, enabling the use of different Latin or Asian character sets in one database installation. A new version was also launched of the BasWare Travel & Expense Management solution. The new version enables e.g. fully automated document processing by matching pre-approved travel plans with incoming travel claims. A new version or BasWare Mobile was launched during the quarter with enhancements to the user interface and also support for mobile phones running the Windows Mobile operating system.

A new version of BasWare Group Consolidation was launched during the quarter, including full support for Cyrillic characters. During the quarter, a Russian version of the related BasWare IFRS Consolidation solution was also launched. A new version of the public sector reporting package, related to the BasWare Group Consolidation solution, was launched during the quarter. The new version enables e.g. automated calculation of key figures.

PERSONNEL

BasWare employed 588 (510) people in average in the third quarter and 630 (519) people at the end of the period. The number of personnel grew by 21 percent compared with the same period last year and grew by 13 percent compared with the first quarter of the year. The acquisition of Digital Vision increased the number of personnel by 52 people.

The share of personnel working in foreign units has increased compared with the same period last year. At the end of the period, 41 percent (34%) of the BasWare personnel worked outside of Finland and 59 percent (66%) in Finland.

The average age of the employees is 35.8 (35.4) years. 32 percent of them hold a Master's degree and 44 percent a Bachelor's degree. 28 percent of the personnel are women and 72 percent men.

For incentive purposes, the Company has a bonus program that covers the whole personnel. During the financial period, the Company also had two on-going warrant programs for the Group's key personnel as well as a share-based incentive program directed to the top management.

Geographical distribution of personnel:

Personnel	7–9/	7–9/	Change,	1–9/	1–9/	Change,	1–12/
(employed, in average)	2007	2006	%	2007	2006	%	2006
Finland	369	343	7.6	361	348	3.7	346
Scandinavia	98	88	11.4	96	87	10.3	89
Europe	94	63	49.2	76	60	26.7	62
Other areas	28	17	64.7	24	15	60.0	17
Group total	588	510	15.3	557	510	9.2	513

BUSINESS OPERATIONS

General economic situation in the main market areas of BasWare remains relatively good. Research institutions predict that the annual growth of the IT market will be approximately 5–7 percent in the Nordic countries, Western Europe and United States. The competitiveness of the BasWare software is estimated to have slightly improved. BasWare is named strong newcomer in the international eProcurement solutions market in a report by the independent research firm Forrester Research, Inc. and ranked among five leading vendors globally. According to Forrester, BasWare is a leading electronic invoice presentment and payment (EIPP) vendor with the most revenues and largest installed base.

BasWare Enterprise Purchase to Pay operations grew by 16 percent in the financial period and represent 88 percent (87%) of total net sales. In the third quarter the growth was 18 percent. The Company estimates that the demand for procurement solutions continues to increase. The demand for automated invoice processing solutions and travel and expense management solutions has remained steady.

In Enterprise Purchase to Pay units, new customers include Toyota Material Handling Finland and Maxit Oy Ab in Finland, Scottish & Newcastle in the UK, Ernst & Young in France, ING Direct Spain in Spain, Nykredit A/S in Denmark and Fairwinds Credit Union in the United States. Additionally, several Software as a Service deliveries were agreed during the quarter, the most significant of which being the Finnish State Treasury and the Oulu region. BasWare was chosen to deliver its BasWare Purchase Management solution as a service to the State Treasury where it will be taken in to use in the entire state administration. In addition to BasWare Purchase Management, the Oulu region will implement also the new sourcing solution, BasWare RFx Management.

A total of 1.6 million invoices were transmitted through the eInvoicing service of BasWare EInvoices Oy, operating in the Nordic countries. The invoice volume grew by 34.1 percent during the quarter compared with the same period last year. A total of 20 new customer agreements were signed during the quarter, of which international operations represented 25 percent. BasWare EInvoices Oy signed two new e-Invoice operator agreements with Nordic operators. In addition to these agreements, BasWare EInvoices Oy became a member of the HUB Alliance e-Invoicing community, operating in the United Kingdom. This strengthens the company's role in international e-Invoicing markets, especially in Central Europe and in the United States. Net sales of BasWare EInvoices Oy are included in the Enterprise Purchase to Pay net sales.

The Financial Management operations (BasWare FIMA Oy) grew by 12 percent in the period and represented 12 percent (13%) of net sales. In the third quarter the operations decreased by 7 percent. The demand for Financial Management software has been moderate especially for the planning and analyzing solutions. The unit's new customers include Espoon kaupunki, Lännen Tehtaat Oyj and Fastems Oy Ab in Finland. Additionally, the Financial Management unit signed an agreement with Russian IES Holding for the delivery of BasWare IFRS Consolidation.

Reseller Channel and Partners

Reseller operations through business partners are an important part of international operations. The focus of partner activities in the third quarter was on the execution of actions defined in the partner plans. The aim is to identify the most potential companies among the partners and increase their expertise and commitment to the BasWare solutions.

Three new reseller agreements were signed during the third quarter of which Pba Consult in Russia, IT Sistemi in Croatia and Pebbletree Consulting in South Africa. BasWare had a total of 66 international resellers at the end of the period, operating in 33 countries. Outside the Nordic countries, BasWare has 42 partners in Europe. BasWare also has an extensive reseller network in Finland.

Nordic

BasWare's Nordic organization includes the Enterprise Purchase to Pay and Financial Management units in Finland, as part of the parent company, as well as the Scandinavian (Sweden, Denmark and Norway) unit. All the BasWare Enterprise Purchase to Pay and Financial Management products are sold in the Nordic countries, apart from the payment solutions which are currently sold only in Finland.

Sales and other business operations are mainly handled by the own organization. There are altogether 28 resellers and 17 application service providers selling payment solutions in Finland. There are two Enterprise Purchase to Pay business partners in Sweden and one in Iceland. In Russia, there are two Enterprise Purchase to Pay partners of which the other started operations during the quarter. In addition there are two Financial Management business partners in the area.

As a whole, BasWare's Nordic operations exceeded its objectives for the third quarter. The Finnish unit exceeded its objective while the Scandinavian unit met its objective. Also the Financial Management unit exceeded its objective. The growth of net sales in the Finland segment was 9 percent. In the Scandinavia segment, the quarter's net sales grew by 17 percent. Net sales of the financial period grew by 14 percent.

Europe

Outside of Scandinavia, BasWare has European subsidiaries in the Netherlands, Germany, the United Kingdom and France. In addition, there are partner operations in 10 other countries. Two new reseller agreements were signed during the quarter. There are altogether 42 resellers in the area.

As a whole, the European business area exceeded the objective for the quarter. The net sales of the area grew by 49 percent in July–September compared with the same quarter last year. The sales consisted mainly of the BasWare Invoice Processing solution. The units in United Kingdom and France exceeded their objectives for the quarter. The Dutch and German units met their objectives.

Other Areas

Other areas segment decreased in July–September by 42 percent compared with the same quarter last year.

Outside of Europe, BasWare has a U.S. subsidiary which focuses on the sales of the Enterprise Purchase to Pay solutions in the United States and Canada. In addition, there are six resellers in the area. The operations of BasWare, Inc. fell behind the objective for the quarter.

The sales in other areas outside Europe, mainly in Australia, are handled through value added resellers. Their net sales, that are entered as a part of the Finnish parent company's sales in segment reporting, fell slightly behind the objective for the period.

OTHER EVENTS OF THE FINANCIAL PERIOD

Acquisition of Digital Vision

BasWare acquired the entire share capital of UK-based Digital Vision on September 10, 2007. The acquisition price was approximately EUR 9.2 million and was paid in cash. First part, a total of EUR 9 million, was paid in conjunction with the completition of the acquisition. The remainder, totaling approximately EUR 0.2 million, will be determined by Digital Vision's net assets on the Interim Financial Statements on August 31, 2007 and will be paid in October 2007.

Digital Vision's organization was combined with BasWare's UK subsidiary. The acquisition strengthens BasWare's market position in the United Kingdom and also extends BasWare's expertise in scan & capture and mailroom automation solutions. Digital Vision's mailroom automation application automates document processing in companies that receive large volumes of documents. Digital Vision uses state of the art document recognition and data capture technologies to eliminate the paper documents and automate processes. The company has been the leading mailroom automation solution provider in the UK.

Changes in Group structure

BasWare incorporated its Financial Management unit on August 1, 2007. The new company is called BasWare FIMA Oy. The company develops and provides off the shelf software solutions as well as consulting services for business planning, reporting and group consolidation. The aim is to strengthen the market leadership in Finland and gain significant market share in the countries where the transition to IFRS reporting is about to take place.

Strategy

In its meeting on October 4, 2007, the Board of Directors of BasWare Corp. discussed the Company's growth strategy and approved five strategic projects that facilitate reaching the set targets. The projects, to be realized in the strategy period from 2007 to 2010, are: Dominating the US, Conquer the base, Must-have brand and thought leadership, Five global giants per year and Joint forces.

There has been no change to the Company's vision, mission and financial targets, published on September 12, 2006.

SHARE AND SHAREHOLDERS

BasWare Corporation's share capital totaled EUR 3 440 437.20 at the end of the period and the number of shares was 11 468 124. The book counter value of the shares is EUR 0.30 per share.

Board's Authorizations given by the Annual General Meeting of Shareholders on February 26, 2007

Authorization to resolve on share issue

The Annual General Meeting authorized the Board to resolve on the issuance of a maximum of 2 293 624 shares and on the conveying of a maximum of 1 146 812 shares in possession of the Company in one or more installments, either against pay or free of charge.

The new shares can be issued and the Company's own shares conveyed either against payment or for free to the Company's shareholders in proportion to their holding or by means of a directed issue, deviating from the pre-emptive rights of the shareholders provided that from the Company's perspective there are important financial grounds for it, such as enabling business arrangements and company acquisitions, company's capital management, personnel incentive program or other reasons for developing the Company's business activities.

The authorization also includes the right to grant warrants and other special rights to receive new shares in the company or BasWare shares held by the company against payment such that either the share subscription price will be paid in cash or the subscriber's receivables will be offset against the subscription price.

The authorization also includes the right to resolve on a free issue to the Company itself. The amount of the shares issued to the Company can be a maximum of 1 146 812 shares, including shares acquired based on the authorization or the previously acquired own shares of the Company.

The subscription prices of new shares and the sum paid for the own shares will be recorded in the fund for invested non-restricted equity.

The authorization is valid until March 31, 2008.

Authorization to resolve on acquiring the Company's own shares

The Board is authorized to resolve on the acquisition of a maximum of 1 146 812 own shares. The new shares are acquired at the Helsinki Stock Exchange and can either be held by the Company, nullified or conveyed further. The authorization for acquisition is valid until March 31, 2008.

Authorization to resolve on an extraordinary dividend distribution

The Board is authorized to resolve on an extraordinary dividend distribution totaling a maximum of EUR 1 000 000, distributed from the Company's distributable funds.

The authorization is in effect until the start of the following Annual General Meeting.

Warrant Programs

Warrant Program 2006

Based on the Warrant Program 2006, a maximum of 300 000 warrants can be granted to the key personnel of BasWare Group, each warrant entitling to subscribe one BasWare share. The warrants of the Warrant Program 2006 are divided into three series, each having an own subscription period as follows: April 1, 2008–March 31, 2009, April 1, 2009–March 31, 2010 and April 1, 2010–March 31, 2011. The subscription prices of the shares correspond to the volume-weighted average share price of the Company in January–March of 2006, 2007 and 2008.

Warrant Program 2007

The warrants shall, by deviation from the shareholders' pre-emptive right to subscription, be issued to key personnel identified by the Board of Directors, employed by the group for the present and not parttime, to increase their commitment and work motivation. Part of the warrants shall be issued to the wholly owned subsidiary of BasWare Corporation to be issued later to persons employed by the Group or to persons who are recruited to the Group.

The shareholders' pre-emptive right to subscription is being deviated from, since the warrants are intended to form a part of the Group's incentive program and, thus, from the Company's perspective, there are considerable financial grounds for it.

The warrants are granted free of charge. The Board of Directors shall decide upon the procedure and schedule of the approval of warrants. The warrants will be granted to the Group's personnel and management according to the resolution of the Board.

BasWare Corporation shall issue a maximum of 200 000 warrants, whereof 100 000 shall be marked with the letter D and 100 000 with the letter E. The warrants will be issued in the book-entry system. Each warrant entitles its holder to subscribe one (1) share in BasWare Corporation.

The subscription price of the share will be recorded to EUR 0.30 in the share capital of Company and for the remainder in the fund for invested non-restricted equity. BasWare's share capital can increase by a maximum of 200.000 new shares or EUR 60 000 based on the subscriptions.

The subscription period is

warrant D April 1, 2009 March 31, 2010,
warrant E April 1, 2010 March 31, 2011

The subscription prices correspond to

for warrant D, the volume-weighted average share price of the Company in January-March of 2007
for warrant E, the volume-weighted average share price of the Company in January-March of 2008

The portion of shares subscribed based on the now issued warrants totals a maximum of 1.71% of the Company's shares and votes after the possible increase in share capital.

Share price and trade

In the third quarter, the highest price of the share was EUR 14.00 (EUR 15.25), lowest price was EUR 10.11 (EUR 11.21) and closing price was EUR 12.95 (EUR 11.90). The average price of the share was EUR 12.13 (EUR 13.22).

A total of 2 216 534 (4 708 382) shares were traded during the financial period which is the equivalent of 19 percent (43%) of the average number of shares. Market capitalization with the period's closing price on September 28, 2007 was EUR 148 512 thousand (EUR 136 471 thousand).

Shareholders

BasWare had 17 990 (20 453) shareholders at the end of the financial period, including nomineeregistered holdings (10). Nominee-registered holdings accounted for 14.2 percent of the total number of shares.

The Company received one notice of change in ownership during the financial period when the holdings of Baillie Gifford Overseas Limited and Baillie Giffords & Co. exceeded the five percent threshold defined in the Securities Markets Act.

THE COMPANY'S NEAR FUTURE RISKS AND BUSINESS UNCERTAINTIES

A more in-depth account of the Company's operating risks has been published in conjunction with the 2006 Financial Statements. BasWare has divided the risks into six categories: risks related to business operations, products, personnel as well as legal, financial and data security risks. BasWare takes risks that are a natural part of the strategy and objectives. These risks are managed and reduced in various ways.

As part of BasWare's risks and business uncertainties in the near future, Software as a Service (SaaS) based services instead of license agreements may affect the Company's short term net sales growth. The availability of consulting resources has improved but resourcing may still somewhat slow down the growth of services operations.

There have been no other significant changes in BasWare's risks and uncertainties during the financial period.

FUTURE OUTLOOK

According to research institutions, the global enterprise software market will grow by approximately 5–7 percent annually. However, regional growth may outstrip this; for example in Asia Pacific annual growth is estimated at over 12 percent. BasWare operates in the electronic procurement and purchase invoice area, which is expected to grow more rapidly than the average for enterprise software.

Western Europe and the United States represent approximately three quarters of overall demand for enterprise software. Since invoice processing and purchase management software remain at the beginning of their lifecycles in these regions, demand is estimated to be high.

The purchase management and invoice processing software markets are relatively heterogeneous with regards to the competitive situation. However, strong growth may attract more competitors to the market. The industry is consolidating rapidly and this development is expected to continue in the future. BasWare is a medium sized software company on a global scale, in terms of sales and number of personnel.

BasWare's direct competitors are mainly smaller companies that operate locally. Document management, scanning and workflow solution developers compete with BasWare especially in invoice processing. Competing solutions also include tailored software solutions that complement Enterprise Resource Planning (ERP) systems and require extensive client-specific project work.

The competitiveness of the software is still good due to new value added products and the integrated concept that the products form. A leading research company, Forrester Research, Inc. names BasWare the leading provider of invoice automation solutions and in procurement one of the top five vendors in the world.

The Company's international growth is based on the Company's own sales and marketing efforts as well as on reseller operations. The development of the indirect channel continues especially in Europe and North America and in Russia and Asia. In Scandinavia, the focus is on profitability, supported by the extending product portfolio. In Finland, the focus is on profitability and the moderate growth comes mainly from the purchase management area.

BasWare has complemented its organic growth with acquisitions. The Company continues to review possible acquisition targets during 2007. With the acquisitions, the Company can extend the sales channel and the product portfolio. They may also strengthen the Company's position in the electronic invoicing market.

In 2007, BasWare expects the growth of net sales for the financial year to be from 15 to 20 percent compared with the Group's net sales in the previous year. Operating profit (EBIT) is expected to be from 10 to 15 percent of net sales.

In Espoo, Finland, October 11, 2007

BASWARE CORPORATION Board of Directors

For more information, please contact

CEO Ilkka Sihvo, BasWare Corp., Tel. +358 9 8791 7251 or +358 40 501 8251

Analyst and Press Briefing

BasWare arranges today, October 11, 2007 a briefing on the Interim Report for the press and analysts at 10:30 in Hotel Kämp, Paavo Nurmi conference room in Helsinki, Finland. During this briefing CEO Ilkka Sihvo will comment the operations and financial performance of the quarter. Welcome.

Distribution Helsinki Stock Exchange Key media www.basware.com

				OCTOBER 11, 2007			BasWare Corp.
GROUP INCOME STATEMENT
	1.7.–	1.7.–		1.1.–	1.1.–		1.1.–
	30.9.	30.9.	Change,	30.9.		30.9. Change,	31.12.
EUR thousand	2007	2006	%	2007	2006	%	2006
NET SALES	15 268	13 363	14.3	50 082	43 446	15.3	59 954
Other operating income	23	25	-8.1	790	127	521.0	177
Materials and services	-981	-468	109.5	-2 463	-1 935	27.3	-2 593
Employee benefits expenses Depreciation and	-7 827	-6 942	12.8	-27 031	-23 910	13.0	-32 953
amortization Other operating	-657	-520	26.4	-1 825	-1 462	24.9	-2 033
expenses	-4 419	-2 963	49.2	-13 966	-9 995	39.7	-14 474
Operating profit	1 406	2 495	-43.6	5 588	6 271	-10.9	8 078
Finance Income	130	56	133.2	270	242	11.7	308
Finance Expenses	-20	12	-266.6	-43	-57	-24.5	-99
Profit before tax	1 516	2 563	-40.8	5 816	6 457	-9.9	8 287
Income tax expense	-985	-898	9.7	-2 816	-1 997	41.0	-3 301
PROFIT FOR
THE PERIOD	531	1 665	-68.1	2 999	4 460	-32.7	4 986
EPS (undiluted), EUR	0.05	0.15	-67.5	0.26	0.40	-34.4	0.45
EPS (diluted), EUR	0.05	0.15	-67.5	0.26	0.40	-34.0	0.44
Average share number:
- undiluted	11 468 124	11 443 639		11 468 124	11 074 109		11 172 612
- diluted	11 468 124	11 443 639		11 468 124	11 138 694		11 221 052

INTERIM REPORT 13(20)

GROUP BALANCE SHEET

			Change,
EUR thousand	30.9.2007	30.9.2006	%	31.12.2006
ASSETS
NON-CURRENT ASSETS
Intangible assets	11 873	9 384	26.5	9 980
Goodwill	25 816	18 228	41.6	18 477
Tangible assets	1 003	841	19.3	784
Investments in associates		3	-100.0
Available-for-sale investments	38	2 612	-98.6	2 612
Trade and other receivables	12	12	-0.5
Deferred tax assets	2 752	3 446	-20.1	3 501
Non-current assets	41 495	34 527	20.2	35 354

CURRENT ASSETS
Inventories	28	8	265.7	20
Trade and other receivables	16 158	12 724	27.0	13 018
Income tax receivables	230	125	84.1	192
Financial assets at
fair value through profit or loss	427	5 915	-92.8	5 963
Cash and cash equivalents	9 217	3 993	130.8	3 012
Current assets	26 060	22 766	14.5	22 204

TOTAL ASSETS	67 555	57 293	17.9	57 558
EQUITY AND LIABILITIES SHAREHOLDERS' EQUITY
Share capital	3 440	3 440		3 440
Share premium account	33 127	33 127		33 127
Fair value reserve and other
reserves	540	514	5.0	540
Translation differences	550	211	160.5	235
Retained earnings	8 629	6 584	31.1	7 176
Minority interest	98			88
Shareholders' equity	46 383	43 877	5.7	44 606

NON-CURRENT LIABILITIES
Deferred tax liability	1 649	1 415	16.5	1 462
Interest-bearing liabilities	179	437	-58.9	329
Non-current liabilities	1 828	1 851	-1.2	1 791

CURRENT LIABILITIES
Interest-bearing liabilities Trade payables and other liabilities	4 418 13 774	433 10 085	919.5 36.6	428 9 957

Tax liability from income tax	1 152 19 343	1 046	10.1 67.3	775
Current liabilities		11 565		11 160
TOTAL EQUITY AND
LIABILITIES	67 555	57 293	17.9	57 558

GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

	Share-	Share					Share
	holders'	premium	Other	Translation	Retained Minority		holders'
EUR thousand	equity	account	reserves	differences	earnings interest		equity
SHAREHOLDERS'
EQUITY 1.1.2006	2 963	15 010		-203	3 527		21 296


Change in translation difference				414	-252		162
Granted warrants					-81		-81
Net profit/loss recognized
directly in shareholders' equity			514	414	-333		596
Profit for the period					4 460		4 460
Total profits and losses			514	414	4 127		5 055

Dividend distribution					-1 070		-1 070
Rights issue	477						477
Warrants used		190					190
Share premium		17 933					17 933
Transaction costs for equity							-6
SHAREHOLDERS'
EQUITY 30.9.2006	3 440	33 127	514	211	6 584		43 877

	Share-	Share					Share
	holders'	premium	Other	Translation	Retained Minority		holders'
EUR thousand	equity	account	reserves	differences	earnings	interest	equity
SHAREHOLDERS'
EQUITY 1.1.2007	3 440	33 127	540	235	7 176	88	44 606


Change in translation difference				315	-2		312
Granted warrants					142		142
Net profit/loss recognized
directly in shareholders' equity				315	143		458

Profit for the period					3 030	-31	2 999
Total profits and losses				315	3 173	-31	3 457
Rights issue							40

						40
Dividend distribution SHAREHOLDERS'					-1 720		-1 720

GROUP CASH FLOW STATEMENT

EUR thousand	1.1.–30.9.2007	1.1.–30.9.2006	1.1.–31.12.2006
Cash flows from operating activities
Profit for the period	2 999	4 460	4 986
Adjustments for profit	4 110	3 176	5 235
Working capital changes	739	-305	-902
Interest paid	-47	-34	-41
Dividends received			-8
Interest received	55	52	70
Other financial items in operating activities	35	69	65
Income taxes paid	-1 975	-1 885	-3 750
Net cash from operating activities	5 918	5 532	5 657
Cash flows from investing activities
Purchase of tangible and intangible assets	-2 402	-1 974	-3 021
Proceeds from sale of tangible and intangible assets	25	133	64
Acquired subsidiaries	-8 018	-3 660	-3 660
Disposal of associated companies			23
Proceeds from other investments Granted loans	3 013	457	457 -1
Repayments of loan receivables	8	21	24
Net cash used in investing activities	-7 373	-5 023	-6 114

Cash flows from financing activities
Proceeds from issuance of share capital		760	760
Minority's capital investment	40		95
Proceeds from short-term loans	4 000
Repayments of long-term borrowings	-307	-300	-400
Repayments of financial lease liabilities	-12	-63	-75
Dividends paid	-1 720	-1 070	-1 070
Net cash used in financing activities	2 000	-673	-689

Net change in cash and cash equivalents according to cash flow statement	545	-163	-1 146
Cash and cash equivalents at beginning of period Effects of exchange rate changes on cash	8 975	9 987	9 987
and cash equivalents	-39	-20	-19
Effects of fair value implementation	164	105	152
Cash and cash equivalents at end of period	9 644	9 909	8 975

GROUP QUARTERLY INCOME STATEMENT

EUR thousand	1–3/	1–3/	4–6/	4–6/	7–9/	7–9/	10–12/
	2007	2006	2007	2006	2007	2006	2006
NET SALES	17 038	15 432	17 776	14 651	15 268	13 363	16 508
Other operating income	15	41	752	61	23	25	50
Materials and services	-819	-778	-662	-689	-981	-468	-658
Employee benefits expenses	-9 243	-8 259	-9 961	-8 710	-7 827	-6 942	-9 042
Depreciation and amortization	-571	-453	-597	-488	-657	-520	-572
Other operating expenses	-5 010	-3 454	-4 536	-3 578	-4 419	-2 963	-4 479
Operating profit	1 409	2 529	2 773	1 247	1 406	2 495	1 807
%	8.3%	16.4%	15.6%	8.5%	9.2%	18.7%	10.9%
Finance income	61	138	79	48	130	56	66
Finance expenses	-11	-60	-12	-8	-20	12	-43
Profit before tax	1 459	2 606	2 840	1 287	1 516	2 563	1 831
%	8.6%	16.9%	16.0%	8.8%	9.9%	19.2%	11.1%
Tax on income from operations PROFIT FOR THE PERIOD	-575 884	-613 1 994	-1 256 1 584	-486 801	-985 531	-898 1 665	-1 304 526
%	5.2%	12.9%	8.9%	5.5%	3.5%	12.5%	3.2%

COMMITMENTS AND CONTINGENT LIABILITIES

EUR thousand	30.9.2007	30.9.2006	31.12.2006
GUARANTEES ON BEHALF OF SUBSIDIARIES
Guarantees total	1 097	980	986
OWN CONTINGENT LIABILITIES
Lease liabilities
Current lease liabilities	553	611	544
Lease liabilities maturing in 1–5 years	598	613	567
Total	1 151	1 224	1 111
Rental liabilities
Current rental liabilities	1 675	1 064	1 334
Rental liabilities maturing in 1–5 years	4 152	1 156	3 193
Rental liabilities maturing later	246
Total	6 074	2 220	4 527
Own contingent liabilities, total	7 225	3 444	5 638

SEGMENT REPORTING

Geographical segments (primary segment)

Net sales
(EUR thousand)	7-9/2007	7-9/2006	Change, %	1-9/2007		1-9/2006 Change, %	1-12/2006
Finland	10 238	9 375	9.2	34 571	30 110	14.8	41 028
Scandinavia	3 126	2 672	17.0	11 015	10 344	6.5	14 698
Europe	3 477	2 332	49.1	9 429	6 272	50.3	8 985
Other areas	757	1 306	-42.0	2 429	2 393	1.5	3 512
Sales between
segments	-2 329	-2 321	0.3	-7 362	-5 671	-29.8	-8 269
Group total	15 268	13 363	14.3	50 082	43 446	15.3	59 954

Operating profit
(EUR thousand)	7-9/2007	7-9/2006	Change, %	1-9/2007		1-9/2006 Change, %	1-12/2006
Finland	3 219	3 514	-8.4	10 371	9 072	14.3	12 314
Scandinavia	-104	-211	50.7	-540	-65	-729.5	-45
Europe	-1 058	-580	-82.4	-2 584	-1 922	-34.5	-2 831
Other areas	-614	-213	-188.4	-1 591	-767	-107.6	-1 297
Operating profit
between segments	-37	-15	-146.7	-67	-47	-42.6	-62
Group total	1 406	2 495	-43.6	5 588	6 271	-10.9	8 078

Personnel

(employed, in
average)	7-9/2007	7-9/2006	Change, %	1-9/2007		1-9/2006 Change, %	1-12/2006
Finland	369	343	7.6	361	348	3.7	346
Scandinavia	98	88	11.4	96	87	10.3	89
Europe	94	63	49.2	76	60	26.7	62
Other areas	28	17	64.7	24	15	60.0	17
Group total	588	510	15.3	557	510	9.2	513

Business segments (secondary segment)

Net sales
(EUR thousand)	7-9/2007	7-9/2006	Change, %	1-9/2007		1-9/2006 Change, %	1-12/2006
Product sales	4 019	5 632	-28.6	16 637	15 265	9.0	19 374
Maintenance and
support	5 369	3 561	50.8	15 468	12 771	21.1	18 776
Consulting and services	4 987	4 072	22.5	15 523	14 352	8.2	20 106
SaaS	340			881
Other operations	553	98	462.8	1 573	1 059	48.5	1 698
Group total	15 268	13 363	14.3	50 082	43 446	15.3	59 954

Geographical division of net sales by the location of customer

Net sales (EUR
thousand)	7-9/2007	7-9/2006	Change, %	1-9/2007		1-9/2006 Change, %	1-12/2006
Finland	7 939	7 024	13.0	27 118	24 410	11.1	32 557
Scandinavia	2 819	2 602	8.3	10 362	9 713	6.7	14 129
Europe	3 371	2 051	64.4	9 364	6 717	39.4	9 421
Other areas	1 139	1 686	-32.5	3 239	2 607	24.2	3 848
Group total	15 268	13 363	14.3	50 082	43 446	15.3	59 954

	INTERIM REPORT	19(20)
	OCTOBER 11, 2007	BasWare Corp.

GROUP KEY INDICATORS

EUR thousand	1–9/2007	1–9/2006	1–12/2006

Net sales	50 082	43 446	59 954
Growth of net sales, %	15.3%	40.9%	43.9%
Operating profit	5 588	6 271	8 078
Growth of operating profit, %	-10.9%	78.5%	123.7%
% of net sales	11.2%	14.4%	13.5%
Profit before tax	5 816	6 457	8 287
% of net sales	11.6%	14.9%	13.8%
Profit for the period	2 999	4 460	4 986
% of net sales	6.0%	10.3%	8.3%
Return on equity, %	8.8%	18.2%	15.1%
Return on investment, %	16.2%	25.8%	24.7%
Interest bearing liabilities	4 597	870	758
Cash and liquid assets *)	9 644	9 909	8 975
Gearing, %	-10.9%	-20.6%	-18.4%
Equity ratio, %	68.7%	76.6%	77.5%
Total assets	67 555	57 293	57 558
Gross investments **)	11 109	24 492	25 315
% of net sales	22.2%	56.4%	42.2%
Capital expenditure	581	510	597
% of net sales	1.2%	1.2%	1.0%
Research and development costs	8 640	7 640	10 925
% of net sales	17.3%	17.6%	18.2%
R&D personnel at end of period	144	138	138
Personnel average for period	557	510	513
Personnel at end of period	630	519	528
Growth of personnel, %	21.4%	34.8 %	33.7%
Earnings per share, EUR	0.26	0.40	0.45
Earnings per share, EUR (diluted)	0.26	0.40	0.44
Equity per share, EUR	4.04	3.83	3.88
Average share number:
- undiluted	11 468 124	11 074 109	11 172 612
- diluted	11 468 124	11 138 694	11 221 052