AI assistant
OPEN TEXT CORP — Regulatory Filings 2006
Aug 28, 2006
30627_rns_2006-08-28_40cc7cf6-e3c9-4def-a8f2-abac5cbf4253.zip
Regulatory Filings
Open in viewerOpens in your device viewer
CORRESP 1 filename1.htm LETTER TO THE SEC
CHOATE, HALL & STEWART LLP
Two International Place
Boston, MA 02110
T (617) 248-5000 F (617) 248-4000
Barbara M. Johnson
(617) 248-5090
August 28, 2006
By Electronic Submission
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street N.E. Mail Stop 4-06
Washington, D.C. 20549
| Attention: |
|---|
| Accounting Branch Chief |
Re: Open Text Corporation
Form 10-K for Fiscal Year Ended June 30, 2005
Form 10-Q for the Quarter Ended September 30, 2005
Form 10-Q for the Quarter Ended December 31, 2005
Form 10-Q for the Quarter Ended March 31, 2006
File No. 000-27544
Dear Ms. Collins:
On behalf of our client Open Text Corporation (the Company), this letter reflects the Companys responses to the comments of the Staff (the Staff) of the Securities and Exchange Commission (the Commission) as set forth in your letter dated June 27, 2006 to Mr. Alan Hoverd, the Companys former Chief Financial Officer. Please note that Mr. Paul McFeeters has replaced Mr. Hoverd as the Companys Chief Financial Officer.
The responses set forth below have been organized in the same manner in which the Staffs comments were organized.
General
Prior Comment No.1
- We note your response to our previous comment no. 1 where you indicate that the Company anticipates filing the Form 8-K/A to include the 2002 and 2003 restated financial statements for IXOS as well as the stub period financial statements from July 1, 2003 through March 1, 2004 on or before June 30, 2006. Please note that the Staff may have further comments once these financial statements are filed.
United States Securities and Exchange Commission
August 28, 2006
Page 2
The Company filed the Form 8-K/A which included the financial statements indicated above on June 30, 2006.
Note 9 - Accounts Payable - Trade and Accrued Liabilities
Excess Facility Obligations and Accrual Relating to Acquisitions, page 77
- We note your response to our previous comment no. 2 where you indicate that instead of recording the direct costs as deferred costs until such time as the additional shares are purchased, the Company recorded the costs directly to goodwill. Did the Company ever purchase the remaining IXOS shares? If so, tell us when you purchased these shares, tell us how much you paid for the shares and tell us how you recorded the purchase of such shares. If you have not purchased the remaining shares, then explain in further detail the reason for these costs and tell us why you believe it was appropriate to accrue these costs as part of the purchase price versus expensing such amounts when incurred.
Since the acquisition of 88% of the shares of IXOS in February 2004, the Company has continued to acquire the minority shares of IXOS through multiple step purchases. Please refer to Appendix A for details of the dates of the step purchases and the amounts paid to acquire the IXOS shares on those dates. Note that these purchases occur frequently as the Company has been active in its efforts to acquire the remaining minority shares. These step purchases have increased the Companys ownership of IXOS from 88% at the initial date of acquisition to approximately 96% as of July 21, 2006. The purchase program is continuing although the timing of its completion is ultimately dependent upon the availability of shares to purchase. The Company has been accounting for these additional step purchases in accordance with SFAS 141 paragraph 14.
The Companys response to Question 3 below further discusses the process being undertaken by the Company to acquire the remaining IXOS shares. The timing of future step purchases is also impacted by the matters and proceedings noted in the response to Question 3.
- We note your response to our previous comment no. 3 where you indicate that the remaining liability for the IXOS acquisition relates to certain IXOS shareholders having filed for a procedure asking the court to reassess the amount of annual compensation and the purchase price for the IXOS shares. With regard to the accrued liabilities for the IXOS acquisition costs, please explain the following:
Provide a schedule of the amounts originally accrued at the time of acquisition and the subsequent amounts actually paid for (a) registration of the IXOS Domination Agreement, (b) profession fees related to assistance from external parties to buy out the minority shareholders and (c) settlement of litigation with minority shareholders;
United States Securities and Exchange Commission
August 28, 2006
Page 3
Tell us how, at the time of acquisition, you determined that each of these costs was probable and explain the basis for each.
Based on your recent response, it appears that costs for recent shareholder actions have been recorded against this liability. We do not understand how legal costs incurred in subsequent dispute over the valuation of the stock in the Domination Agreement can be considered costs of the acquisition. It would not seem reasonable that such costs could be anticipated at the time of acquisition and therefore, they appear to be period costs that should be expensed as incurred. Please explain.
Appendix B provides a schedule of amounts originally accrued and subsequent amounts actually paid for the categories listed above.
The three categories of costs are directly associated with the process of acquiring 100% ownership of a company in Germany pursuant to a tender offer process. Each is discussed individually below:
a) Registration of IXOS Domination Agreement
As indicated in our previous response dated March 13, 2006 to Question 6 of the Staffs comments dated February 10, 2006, the Company determined, at the time of the acquisition of IXOS, that entering into a Domination Agreement (DA) with the acquired German corporation and registering it with the courts was a necessary legal step to complete an acquisition in Germany, both as a means to acquire further minority shares of IXOS and as a process to determine the fair value of such shares. In addition, it is a right of the minority shareholders after a control acquisition to request the installation of a DA between the acquirer and the target (Proctor & Gamble Wella case). The probable costs of installation and registering the IXOS DA, which included legal costs and accounting costs (primarily valuation) were provided to the Company as estimates by various third party advisors in Germany.
b) Professional fees related to assistance from external parties to buy out the minority shareholders
The Company did not accrue for professional fees associated with the subsequent buy out of individual minority shareholders at the date of the initial IXOS acquisition. These direct costs were recorded at the time of incurrence and allocated as additional purchase price consideration (substantially as goodwill) for the incremental step purchases, in accordance with paragraph 14 of SFAS 141.
c) Settlement of litigation with minority shareholders
The Company did not accrue for costs related to the settlement of litigation with minority shareholders at the date of the initial acquisition of IXOS in February 2004. Instead,
United States Securities and Exchange Commission
August 28, 2006
Page 4
the Company accrued for these direct costs as they became determinable. The accrual amounts were based on estimates provided to the Company by third party service providers in Germany.
The costs associated with shareholder disputes over the registration of the DA and the fair value established for the minority shares in the DA are direct and incremental costs associated with the ongoing step purchases of the remaining minority shares of IXOS. These disputes are a normal, probable and expected part of the process for acquiring minority shares in Germany as explained further in our response dated March 13, 2006.
In Germany, once the DA is registered, a company has two alternatives to acquire shares held by the minority shareholders:
(i) The company may choose to follow a court driven process of acquiring the minority shares; or
(ii) The company may choose to negotiate an out-of-court settlement with the holders of the minority shares.
In either case, all minority shareholders will be eligible to receive the determined value for their shares. All of the costs incurred under either of the alternatives are costs of doing a business acquisition in Germany. In order to acquire shares held by the minority shareholders, a company must choose one of the alternatives. As a result, the costs are probable and part of the acquisition of the shares held by the minority shareholders. With respect to the acquisition of the IXOS minority shareholders, Open Text chose to follow the court driven process. As explained in our letter of March 13, 2006, this gives a result that is similar to the common take-over bid process in North America where the initial bid price may be challenged and an ultimate higher bid is the purchase price of the acquired business under SFAS 141.
- We note your response to our previous comment no. 4 and your discussion of the remaining accrued liability for accounting services in the Centrinity acquisition. Please explain why the Company recorded an adjustment for goodwill of $341,403 during the quarter ended June 30, 2005. This amount equals the remaining balance in the account, which you indicated represents the amount due to an accounting firm that assisted the Company in the determination of the value of certain tax assets acquired in the business combination. When were these services performed? If these services were performed after the one year purchase price allocation period, then explain why such costs were not expensed as incurred. If the services were performed within the one year period, then tell us why the goodwill adjustment was recorded almost three years after the acquisition. We refer you to paragraph B183 of SFAS 141.
The Company recorded an adjustment for goodwill of $341,403 during the quarter ended June 30, 2005 because that was the quarter during which the income tax returns were assessed by Canada Revenue Agency and the amount of the liability became determinable. The accounting firm had been engaged by Centrinity prior to the Companys acquisition of
United States Securities and Exchange Commission
August 28, 2006
Page 5
them and had completed a sufficient amount of work to make an estimate of the value of the tax assets as part of the purchase price. Under the terms of the engagement, payment was not due to the accounting firm until the cash was received from the Canada Revenue Agency. The Company acknowledges that the liability should have been accrued at the same time as the asset was set up; however, the amount is not material to the Companys financial statements.
- We note your response to our previous comment no. 5 where you indicate that the $496,000 goodwill adjustment in the Gauss acquisition relates to costs associated with the Gauss squeeze out procedures and the registration thereof. Was the purpose of these squeeze out procedures to purchase the remaining minority shareholders stock? If so, tell us when you purchased these shares, tell us how much you paid for the shares and tell us how you recorded the purchase of such shares. If the Company did not purchase the remaining shares in Gauss, then explain in further detail the reason for these costs and tell us why you believe it was appropriate to record these additional costs as adjustment to goodwill versus expensing these amounts considering the acquisition occurred over two years ago.
In Germany, once ownership of 95% of the shares of a company is obtained, an acquirer can go through a Squeeze-Out process which is very similar to the DA process. The only difference is if the Squeeze-Out is registered with the court, minority shareholders have no choice but to sell their shares to the acquirer. On August 25, 2005, Open Text initiated the Squeeze-Out process for the purpose of purchasing the remaining minority shareholders stock by requesting shareholder meeting approval of the Squeeze-Out of the Gauss minority shareholders. The minority shareholders contested the validity of the resolution and it can be expected that minority shareholders will also contest the fairness or compensation offered in the Squeeze-Out.
The $496,000 represents direct costs accrued during the quarter ended September 30, 2005 in connection with the Squeeze-Out procedures and registration thereof, which have been subsequently paid. As the Company has not yet purchased the minority shares, these costs should have been recorded as deferred costs until such time as the purchase of the remaining shares occurred, resulting in a balance sheet classification error between deferred costs and goodwill.
The Company believes that these costs should continue to be deferred and should be an adjustment to goodwill upon acquisition of the minority shares as they directly relate to determining the fair value of the minority in accordance with SFAS 141, paragraph 24.
Since August 25, 2005, the Squeeze-Out has been challenged again and, as a result, as of the date of this letter; the Company has not yet acquired the minority shares of Gauss.
- Also, explain the purpose of the $434,315 goodwill adjustment in fiscal 2005 for Gauss accrued legal costs. If these costs also related to the squeeze out procedures then explain why you recorded these costs a year apart.
United States Securities and Exchange Commission
August 28, 2006
Page 6
As discussed in our response to question 5 above, the process of acquiring the shares held by the minority shareholders in Gauss commenced in May 2004 and is ongoing as the minority shareholders continue to contest the fair value of the minority shares in the German courts. The costs are being recorded as they are incurred. As the process to acquire the shares held by the minority shareholders has lasted several years, it has resulted in costs being recorded more than a year apart. The Company believes that the legal costs incurred in the Squeeze-Out of the minority shareholders should continue to be deferred and adjusted to goodwill upon acquisition of the minority shares as they directly relate to determining the fair value of the minority in accordance with SFAS 141, paragraph 24, which states that the cost of an acquired entity includes direct costs of the business combination.
March 31, 2006 Form 10-Q
Note 12 - Acquired Intangible Assets, page 17
- We note from your disclosures in Note 12 to the Companys March 31, 2006 Form 10-Q that you recorded additional adjustments of ($5,225) during the first three quarters of fiscal 2006 relating to prior acquisitions. Provide a detailed breakdown of these adjustments by acquisition and also include a detailed breakdown of the individual adjustments for each acquisition. For instance, if your goodwill adjustment for the Gauss acquisition include adjustments for items such as (a) the purchase of stock, (b) squeeze out costs, (c) tax adjustments or (d) accrual adjustments then include in your response the amounts applicable to each and provide an explanation as to your basis in generally accepted accounting principles for adjusting goodwill versus expensing such amounts.
The nature of the adjustments to goodwill and the basis for such adjustments are shown in the table below. A detailed breakdown of these adjustments by acquisition is provided in Appendix C to this letter.
| Nature of Adjustment | Description |
|---|---|
| Reversal of EITF 95-3 accruals | In accordance with EITF 95-3, when the ultimate amount of a cost expended is less than the amount recorded as a liability assumed in a purchase business combination, the excess should reduce the |
| cost of the acquired company. | |
| Finalization of purchase price within one year allocation period | In accordance with SFAS 141, changes to the purchase price can be made for a period of one year from the date of acquisition. Changes are a result of a reallocation between goodwill and |
| intangibles, more accurate assumptions, etc. | |
| Costs related to acquisition of minority interest | Amounts are direct and incremental costs associated with acquiring the minority interests in IXOS and GAUSS. Please see responses to Questions 2, 3, 5 and 6 of this letter. |
United States Securities and Exchange Commission
August 28, 2006
Page 7
| Settlement of outstanding stock options | In accordance with generally accepted accounting principles, if an acquiring enterprise settles the acquired enterprises stock options or stock awards directly, the cost of settlement
would be treated as part of the purchase price as the consideration paid was not in excess of the fair value of the options settled. |
| --- | --- |
| Recognition of acquired tax losses | In accordance with SFAS 109, the tax benefits of an acquired enterprises deductible temporary differences or operating loss or tax credit carryforwards existing at the date of acquisition
that are first recognized subsequent to the acquisition date (by realization or reduction of the valuation allowance) are recorded and goodwill related to the acquisition is reduced to zero. |
| Correction of accounting errors identified in prior periods | These amounts relate to certain errors identified in prior periods that were recorded in the current period. Amounts were individually immaterial to the financial statements when considered
either on their own or in conjunction with other unadjusted differences. |
| Other miscellaneous amounts under $100,000 | Amounts are individually insignificant. |
- Also continue the rollforward of the accrued acquisition costs as provided in your response letter dated March 13, 2006 through June 30, 2006. Explain, in detail, the reasons for the adjustments that were offset against goodwill.
As requested, a rollforward of the accrued acquisition costs to June 30, 2006 is provided in Appendix D to this letter.
Similar to the presentation in our March 13, 2006 letter, the types of accrued acquisition costs related to the Companys acquisitions are described in the table below. In each case these costs are included in the determination of the purchase price as they are direct out-of-pocket costs that are incremental to the consummation of the acquisition.
| Type of Costs | Description |
|---|---|
| Legal Costs | Legal costs include costs of drafting, review and negotiation of legal agreements relating to acquisitions and other ancillary related legal matters arising throughout the acquisition process, |
| arbitration proceedings directly related to enforcing or determining the terms of |
United States Securities and Exchange Commission
August 28, 2006
Page 8
| | share purchase agreements, the registration of agreements required in connection with the acquisition, and estimated costs at the date of acquisition associated with pre-acquisition litigation
matters and other litigation. |
| --- | --- |
| Accounting Fees | Accounting fees generally include costs relating to audits and valuations relating to the acquired company, independent external valuations of acquired intangible assets, and independent tax
advice related to structuring of acquisitions, filing pre-acquisition period tax returns and tax claims related to pre-acquisition fiscal periods. |
| Other External Acquisition Advisory Costs | Other external acquisition advisory costs include fees paid to external consultants for services relating to valuation of the acquired company, review of draft agreements and due diligence
reviews of financial statements of acquired companies. |
| Travel Costs | Travel costs include expenses incurred by third parties who provide legal, accounting and other external acquisition advisory services in connection with the acquisitions. |
| Insurance Costs | These costs relate specifically to the acquisition of Centrinity Inc. Pursuant to the terms of the Share Purchase Agreement, Open Text Corporation was required to secure directors and officers
insurance coverage for actions of the directors and officers of the acquired company taken prior to the acquisition. Since these directors and officers ceased to have any involvement with the combined company, the costs relate to pre-acquisition
period activities and have accordingly been included in the determination of the purchase price. |
| Acquisition Fees | These costs include transfer agent fees, tender solicitation costs, fees paid to the German stock exchange in connection with an acquisition, and brokerage fees for purchases of shares in the
acquired companies. |
| Other Costs | Other costs include all other direct costs not described above of which significant amounts are described in the footnotes to Appendix D. |
Note: The Company has classified foreign exchange revaluation adjustments related to the accounts payable balances separately in the attached schedule for ease of identification.
In light of the Companys responses to the Staffs comments set forth above, the Company does not believe it is appropriate to amend any of its historical filings, but will reflect the appropriate responses above in its future filings.
United States Securities and Exchange Commission
August 28, 2006
Page 9
If you have any questions with regard to the foregoing or would like to further discuss any of the matters covered in this letter, please contact me at (617) 248-5090.
Sincerely,
| /s/ Barbara M. Johnson |
|---|
| Barbara M. Johnson |
cc: Megan Akst, Staff Accountant
Securities and Exchange Commission
John Shackleton, Chief Executive Officer
Paul McFeeters, Chief Financial Officer
John Trent, Vice President, General Counsel and Secretary
James Clarke, Legal Counsel and Assistant Secretary
Open Text Corporation
APPENDIX A
Open Text Corporation Purchases of Shares of IXOS Software AG
| trade date | number of shares (A) | share price (EURO) | net price* (EURO) per share (B) | net volume* (EURO) (A x B) | total numbers (cum.) | shareholding of Ixos share capital | |
|---|---|---|---|---|---|---|---|
| # of shares | volume* (EURO) | ||||||
| 2-Jan-04 | 12,748 | 9.0000 | 9.0450 | 115,305.66 | 12,748 | 115,305.66 | |
| 8-Jan-04 | 9,225 | 9.0000 | 9.0450 | 83,440.13 | 21,973 | 198,745.79 | |
| 5-Feb-04 | 1,273,138 | 9.0000 | 9.0000 | 11,458,242.00 | 1,295,111 | 11,656,987.79 | |
| 10-Feb-04 | 14,955,006 | 16,250,117 | 11,656,987.79 | ||||
| 25-Feb-04 | 69,788 | 9.0000 | 9.0000 | 628,092.00 | 16,319,905 | 12,285,079.79 | |
| 4-Mar-04 | 2,837,523 | 19,157,428 | 12,285,079.79 | 87.89 % | |||
| 16-Apr-04 | 31,342 | 9.5124 | 9.5600 | 299,629.52 | 19,188,770 | 12,584,709.31 | |
| 23-Apr-04 | 1,540 | 9.5000 | 9.5480 | 14,703.92 | 19,190,310 | 12,599,413.23 | |
| 10-May-04 | 115,835 | 9.1201 | 9.1660 | 1,061,743.61 | 19,306,145 | 13,661,156.84 | |
| 21-May-04 | 23,645 | 9.3853 | 9.4320 | 223,019.64 | 19,329,790 | 13,884,176.48 | |
| 18-Jun-04 | 31,285 | 9.2740 | 9.3200 | 291,576.20 | 19,361,075 | 14,175,752.68 | |
| 9-Jul-04 | 48,252 | 9.4670 | 9.5140 | 459,069.53 | 19,409,327 | 14,634,822.20 | |
| 30-Jul-04 | 14,179 | 9.3781 | 9.4250 | 133,637.08 | 19,423,506 | 14,768,459.28 | |
| 20-Aug-04 | 30,575 | 9.4164 | 9.4635 | 289,346.51 | 19,454,081 | 15,057,805.79 | |
| 17-Sep-04 | 30,208 | 9.2727 | 9.3191 | 281,511.37 | 19,484,289 | 15,339,317.16 | |
| 08. Oct 04 | 27,670 | 9.3484 | 9.3954 | 259,970.72 | 19,511,959 | 15,599,287.88 | |
| 8-Nov-04 | 26,673 | 9.3650 | 9.4120 | 251,046.28 | 19,538,632 | 15,850,334.16 | |
| 25-Nov-04 | 14,066 | 9.4169 | 9.4640 | 133,120.62 | 19,552,698 | 15,983,454.78 | |
| 3-Dec-04 | 142,074 | 10.0680 | 10.1180 | 1,437,504.73 | 19,694,772 | 17,420,959.51 | |
| 21-Dec-04 | 33,886 | 9.8530 | 9.9020 | 335,539.17 | 19,728,658 | 17,756,498.69 | |
| 30-Dec-04 | 21,580 | 9.7970 | 9.8460 | 212,476.68 | 19,750,238 | 17,968,975.37 | |
| 21-Jan-05 | 225,614 | 9.9780 | 10.0280 | 2,262,457.19 | 19,975,852 | 20,231,432.56 | |
| 18-Feb-05 | 11,165 | 9.9970 | 10.0470 | 112,174.76 | 19,987,017 | 20,343,607.31 | |
| 18-Mar-05 | 18,604 | 10.0000 | 10.0500 | 186,970.20 | 20,005,621 | 20,530,577.51 | |
| 8-Apr-05 | 23,068 | 9.9680 | 10.0180 | 231,095.22 | 20,028,689 | 20,761,672.74 | |
| 15-Apr-05 | 100,000 | 10.4000 | 10.4000 | 1,040,000.00 | 20,128,689 | 21,801,672.74 | |
| 22-Apr-05 | 27,690 | 9.3800 | 9.3800 | 259,732.20 | 20,156,379 | 22,061,404.94 | |
| 29-Apr-05 | 21,082 | 9.3800 | 9.3800 | 197,749.16 | 20,177,461 | 22,259,154.10 | |
| 29-Apr-05 | 51,316 | 10.1340 | 10.1850 | 522,653.46 | 20,228,777 | 22,781,807.56 | |
| 6-May-05 | 13,227 | 9.3800 | 9.3800 | 124,069.26 | 20,242,004 | 22,905,876.82 | |
| 6-May-05 | 22,359 | 10.1500 | 10.2000 | 228,061.80 | 20,264,363 | 23,133,938.62 | |
| 13-May-05 | 6,356 | 9.3800 | 9.3800 | 59,619.28 | 20,270,719 | 23,193,557.90 | |
| 20-May-05 | 19,293 | 9.3800 | 9.3800 | 180,968.34 | 20,290,012 | 23,374,526.24 |
APPENDIX A
Open Text Corporation Purchases of Shares of IXOS Software AG
| trade date | number of shares (A) | share price (EURO) | net price* (EURO) per share (B) | net volume* (EURO) (A x B) | total numbers (cum.) | shareholding of Ixos share capital | |
|---|---|---|---|---|---|---|---|
| # of shares | volume* (EURO) | ||||||
| 20-May-05 | 23,628 | 10.1500 | 10.2000 | 241,005.60 | 20,313,640 | 23,615,531.84 | 93.29 % |
| 27-May-05 | 4,459 | 9.3800 | 9.3800 | 41,825.42 | 20,318,099 | 23,657,357.26 | |
| 3-Jun-05 | 9,811 | 9.3800 | 9.3800 | 92,027.18 | 20,327,910 | 23,749,384.44 | |
| 3-Jun-05 | 27,818 | 10.1410 | 10.1917 | 283,512.71 | 20,355,728 | 24,032,897.15 | |
| 10-Jun-05 | 5,294 | 9.3800 | 9.3800 | 49,657.72 | 20,361,022 | 24,082,554.87 | |
| 17-Jun-05 | 3,729 | 9.3800 | 9.3800 | 34,978.02 | 20,364,751 | 24,117,532.89 | |
| 17-Jun-05 | 28,629 | 10.0800 | 10.1304 | 290,023.22 | 20,393,380 | 24,407,556.11 | |
| 24-Jun-05 | 2,051 | 9.3800 | 9.3800 | 19,238.38 | 20,395,431 | 24,426,794.49 | |
| 24-Jun-05 | 31,681 | 10.1410 | 10.1917 | 322,883.25 | 20,427,112 | 24,749,677.74 | |
| 1-Jul-05 | 6,179 | 9.3800 | 9.3800 | 57,959.02 | 20,433,291 | 24,807,636.76 | |
| 1-Jul-05 | 32,519 | 10.1170 | 10.1676 | 330,640.18 | 20,465,810 | 25,138,276.94 | |
| 8-Jul-05 | 3,780 | 9.3800 | 9.3800 | 35,456.40 | 20,469,590 | 25,173,733.34 | |
| 8-Jul-05 | 21,370 | 10.1382 | 10.1890 | 217,738.93 | 20,490,960 | 25,391,472.27 | |
| 15-Jul-05 | 5,942 | 9.3800 | 9.3800 | 55,735.96 | 20,496,902 | 25,447,208.23 | |
| 15-Jul-05 | 23,529 | 10.1800 | 10.2309 | 240,722.85 | 20,520,431 | 25,687,931.08 | |
| 22-Jul-05 | 14,054 | 9.3800 | 9.3800 | 131,826.52 | 20,534,485 | 25,819,757.60 | |
| 22-Jul-05 | 9,962 | 10.2000 | 10.2510 | 102,120.46 | 20,544,447 | 25,921,878.06 | |
| 29-Jul-05 | 6,634 | 9.3800 | 9.3800 | 62,226.92 | 20,551,081 | 25,984,104.98 | |
| 29-Jul-05 | 10,128 | 10.4700 | 10.5224 | 106,570.87 | 20,561,209 | 26,090,675.85 | |
| 5-Aug-05 | 4,438 | 9.3800 | 9.3800 | 41,628.44 | 20,565,647 | 26,132,304.29 | |
| 5-Aug-05 | 9,609 | 10.5000 | 10.5525 | 101,398.97 | 20,575,256 | 26,233,703.26 | |
| 12-Aug-05 | 425 | 9.3800 | 9.3800 | 3,986.50 | 20,575,681 | 26,237,689.76 | |
| 19-Aug-05 | 1,892 | 9.3800 | 9.3800 | 17,746.96 | 20,577,573 | 26,255,436.72 | |
| 19-Aug-05 | 23,659 | 10.5200 | 10.5726 | 250,137.14 | 20,601,232 | 26,505,573.86 | |
| 26-Aug-05 | 823 | 9.3800 | 9.3800 | 7,719.74 | 20,602,055 | 26,513,293.60 | |
| 2-Sep-05 | 827 | 9.3800 | 9.3800 | 7,757.26 | 20,602,882 | 26,521,050.86 | |
| 9-Sep-05 | 1,681 | 9.3800 | 9.3800 | 15,767.78 | 20,604,563 | 26,536,818.64 | |
| 9-Sep-05 | 13,567 | 10.5200 | 10.5726 | 143,438.46 | 20,618,130 | 26,680,257.11 | |
| 16-Sep-05 | 25,837 | 9.3800 | 9.3800 | 242,351.06 | 20,643,967 | 26,922,608.17 | |
| 16-Sep-05 | 9,520 | 9.3800 | 9.3800 | 89,297.60 | 20,653,487 | 27,011,905.77 | |
| 23-Sep-05 | 511 | 9.3800 | 9.3800 | 4,793.18 | 20,653,998 | 27,016,698.95 | |
| 23-Sep-05 | 18,487 | 9.3800 | 9.3800 | 173,408.06 | 20,672,485 | 27,190,107.01 | 94.93 % |
| 30-Sep-05 | 3,304 | 9.3800 | 9.3800 | 30,991.52 | 20,675,789 | 27,221,098.53 |
APPENDIX A
Open Text Corporation Purchases of Shares of IXOS Software AG
| trade date | number of shares (A) | share price (EURO) | net price* (EURO) per share (B) | net volume* (EURO) (A x B) | total numbers (cum.) | shareholding of Ixos share capital | |
|---|---|---|---|---|---|---|---|
| # of shares | volume* (EURO) | ||||||
| 30-Sep-05 | 5,000 | 9.3800 | 9.3800 | 46,900.00 | 20,680,789 | 27,267,998.53 | |
| 30-Sep-05 | 11,307 | 10.5200 | 10.5726 | 119,544.39 | 20,692,096 | 27,387,542.91 | |
| 7-Oct-05 | 980 | 9.3800 | 9.3800 | 9,192.40 | 20,693,076 | 27,396,735.31 | |
| 7-Oct-05 | 1,000 | 9.3800 | 9.3800 | 9,380.00 | 20,694,076 | 27,406,115.31 | |
| 7-Oct-05 | 10,960 | 10.5200 | 10.5726 | 115,875.70 | 20,705,036 | 27,521,991.01 | |
| 14-Oct-05 | 2,334 | 9.3800 | 9.3800 | 21,892.92 | 20,707,370 | 27,543,883.93 | |
| 14-Oct-05 | 3,610 | 9.3800 | 9.3800 | 33,861.80 | 20,710,980 | 27,577,745.73 | |
| 21-Oct-05 | 1,331 | 9.3800 | 9.3800 | 12,484.78 | 20,712,311 | 27,590,230.51 | |
| 21-Oct-05 | 225 | 9.3800 | 9.3800 | 2,110.50 | 20,712,536 | 27,592,341.01 | |
| 21-Oct-05 | 9,040 | 10.5200 | 10.5726 | 95,576.30 | 20,721,576 | 27,687,917.31 | |
| 28-Oct-05 | 952 | 9.3800 | 9.3800 | 8,929.76 | 20,722,528 | 27,696,847.07 | |
| 28-Oct-05 | 685 | 9.3800 | 9.3800 | 6,425.30 | 20,723,213 | 27,703,272.37 | |
| 4-Nov-05 | 1,155 | 9.3800 | 9.3800 | 10,833.90 | 20,724,368 | 27,714,106.27 | |
| 4-Nov-05 | 2,200 | 9.3800 | 9.3800 | 20,636.00 | 20,726,568 | 27,734,742.27 | |
| 4-Nov-05 | 1,133 | 10.5200 | 10.5726 | 11,978.76 | 20,727,701 | 27,746,721.03 | |
| 11-Nov-05 | 1,233 | 9.3800 | 9.3800 | 11,565.54 | 20,728,934 | 27,758,286.57 | |
| 11-Nov-05 | 20 | 9.3800 | 9.3800 | 187.60 | 20,728,954 | 27,758,474.17 | |
| 18-Nov-05 | 150 | 9.3800 | 9.3800 | 1,407.00 | 20,729,104 | 27,759,881.17 | |
| 18-Nov-05 | 815 | 9.3800 | 9.3800 | 7,644.70 | 20,729,919 | 27,767,525.87 | |
| 25-Nov-05 | 40 | 9.3800 | 9.3800 | 375.20 | 20,729,959 | 27,767,901.07 | |
| 25-Nov-05 | 0 | 9.3800 | 9.3800 | 0.00 | 20,729,959 | 27,767,901.07 | |
| 2-Dec-05 | 30 | 9.3800 | 9.3800 | 281.40 | 20,729,989 | 27,768,182.47 | |
| 2-Dec-05 | 0 | 9.3800 | 9.3800 | 0.00 | 20,729,989 | 27,768,182.47 | |
| 9-Dec-05 | 350 | 9.3800 | 9.3800 | 3,283.00 | 20,730,339 | 27,771,465.47 | |
| 9-Dec-05 | 300 | 9.3800 | 9.3800 | 2,814.00 | 20,730,639 | 27,774,279.47 | |
| 16-Dec-05 | 1,981 | 9.3800 | 9.3800 | 18,581.78 | 20,732,620 | 27,792,861.25 | |
| 16-Dec-05 | 1,160 | 9.3800 | 9.3800 | 10,880.80 | 20,733,780 | 27,803,742.05 | |
| 23-Dec-05 | 0 | 9.3800 | 9.3800 | 0.00 | 20,733,780 | 27,803,742.05 | |
| 23-Dec-05 | 1,742 | 9.3800 | 9.3800 | 16,339.96 | 20,735,522 | 27,820,082.01 | |
| 30-Dec-05 | 0 | 9.3800 | 9.3800 | 0.00 | 20,735,522 | 27,820,082.01 | |
| 30-Dec-05 | 2,780 | 9.3800 | 9.3800 | 26,076.40 | 20,738,302 | 27,846,158.41 | 95.23 % |
| 6-Jan-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,738,302 | 27,846,158.41 | |
| 6-Jan-06 | 515 | 9.3800 | 9.3800 | 4,830.70 | 20,738,817 | 27,850,989.11 |
APPENDIX A
Open Text Corporation Purchases of Shares of IXOS Software AG
| trade date | number of shares (A) | share price (EURO) | net price* (EURO) per share (B) | net volume* (EURO) (A x B) | total numbers (cum.) | shareholding of Ixos share capital | |
|---|---|---|---|---|---|---|---|
| # of shares | volume* (EURO) | ||||||
| 13-Jan-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,738,817 | 27,850,989.11 | |
| 13-Jan-06 | 6,000 | 9.3800 | 9.3800 | 56,280.00 | 20,744,817 | 27,907,269.11 | |
| 20-Jan-06 | 800 | 9.3800 | 9.3800 | 7,504.00 | 20,745,617 | 27,914,773.11 | |
| 20-Jan-06 | 1,600 | 9.3800 | 9.3800 | 15,008.00 | 20,747,217 | 27,929,781.11 | |
| 3-Feb-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,747,217 | 27,929,781.11 | |
| 3-Feb-06 | 13,690 | 9.3800 | 9.3800 | 128,412.20 | 20,760,907 | 28,058,193.31 | |
| 10-Feb-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,760,907 | 28,058,193.31 | |
| 10-Feb-06 | 1,415 | 9.3800 | 9.3800 | 13,272.70 | 20,762,322 | 28,071,466.01 | |
| 17-Feb-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,762,322 | 28,071,466.01 | |
| 17-Feb-06 | 4,750 | 9.3800 | 9.3800 | 44,555.00 | 20,767,072 | 28,116,021.01 | |
| 24-Feb-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,767,072 | 28,116,021.01 | |
| 24-Feb-06 | 500 | 9.3800 | 9.3800 | 4,690.00 | 20,767,572 | 28,120,711.01 | |
| 3-Mar-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,767,572 | 28,120,711.01 | |
| 3-Mar-06 | 400 | 9.3800 | 9.3800 | 3,752.00 | 20,767,972 | 28,124,463.01 | |
| 17-Mar-06 | 525 | 9.3800 | 9.3800 | 4,924.50 | 20,768,497 | 28,129,387.51 | |
| 17-Mar-06 | 4,880 | 9.3800 | 9.3800 | 45,774.40 | 20,773,377 | 28,175,161.91 | |
| 31-Mar-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,773,377 | 28,175,161.91 | |
| 31-Mar-06 | 300 | 9.3800 | 9.3800 | 2,814.00 | 20,773,677 | 28,177,975.91 | |
| 13-Apr-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,773,677 | 28,177,975.91 | |
| 13-Apr-06 | 2,930 | 9.3800 | 9.3800 | 27,483.40 | 20,776,607 | 28,205,459.31 | |
| 28-Apr-06 | 263 | 9.3800 | 9.3800 | 2,466.94 | 20,776,870 | 28,207,926.25 | |
| 28-Apr-06 | 2,301 | 9.3800 | 9.3800 | 21,583.38 | 20,779,171 | 28,229,509.63 | |
| 12-May-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,779,171 | 28,229,509.63 | |
| 12-May-06 | 250 | 9.3800 | 9.3800 | 2,345.00 | 20,779,421 | 28,231,854.63 | |
| 26-May-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,779,421 | 28,231,854.63 | |
| 26-May-06 | 2,250 | 9.3800 | 9.3800 | 21,105.00 | 20,781,671 | 28,252,959.63 | |
| 9-Jun-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,781,671 | 28,252,959.63 | |
| 9-Jun-06 | 3,000 | 9.3800 | 9.3800 | 28,140.00 | 20,784,671 | 28,281,099.63 | |
| 23-Jun-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,784,671 | 28,281,099.63 | |
| 23-Jun-06 | 16,478 | 9.3800 | 9.3800 | 154,563.64 | 20,801,149 | 28,435,663.27 | 95.52 % |
| 7-Jul-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,801,149 | 28,435,663.27 | |
| 7-Jul-06 | 2,000 | 9.3800 | 9.3800 | 18,760.00 | 20,803,149 | 28,454,423.27 | 95.53 % |
| 21-Jul-06 | 0 | 9.3800 | 9.3800 | 0.00 | 20,803,149 | 28,454,423.27 |
APPENDIX A
Open Text Corporation Purchases of Shares of IXOS Software AG
| trade date | number of shares (A) | share price (EURO) | net price* (EURO) per share (B) | net volume* (EURO) (A x B) | total numbers (cum.) | shareholding of Ixos share capital | |
|---|---|---|---|---|---|---|---|
| # of shares | volume* (EURO) | ||||||
| 21-Jul-06 | 8,000 | 9.3800 | 9.3800 | 75,040.00 | 20,811,149 | 28,529,463.27 | 95.57 % |
- incl. 0.5% brokerage fee, if any (see column on the right)
** updated share capital of IXOS: 21,776,650 shares
APPENDIX B
| Amounts originally accrued | Registration of IXOS Domination Agreement — $ 1,130,164 | Professional fees related to assistance from external parties to buy out
minority shareholders — Nil | Settlement of litigation with minority shareholders — Nil |
| --- | --- | --- | --- |
| Amounts subsequently paid | $ 1,130,164 | Nil | Nil |
Note 1: These amounts are included in the opening balance of accrued acquisition costs for IXOS in Appendix D.
APPENDIX C
-Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Nature of Adjustment | IDI | Brokercom | Artesia | Eloquent | Gauss | Vista | First Class | IXOS | Optura | Open Image | Core- change | Total | Quarterly subtotal | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter ended September 30, 2005: | ||||||||||||||||||||||||
| Reversal of EITF 95-3 accruals | (890,571 | ) | (63,491 | ) | (30,239 | ) | (984,301 | ) | ||||||||||||||||
| Finalization of purchase price within one year allocation period | (478,808 | ) | 922,222 | 443,414 | ||||||||||||||||||||
| Costs related to acquisition of minority interest | 607,446 | 1,480,182 | 2,087,628 | |||||||||||||||||||||
| Settlement of outstanding stock options | | |||||||||||||||||||||||
| Recognition of acquired tax losses | (273,023 | ) | (99,521 | ) | (208,980 | ) | (581,524 | ) | ||||||||||||||||
| Correction of errors identified in prior periods | (250,000 | ) | 689,000 | 439,000 | ||||||||||||||||||||
| Other miscellaneous amounts under $100,000 | 60,000 | (59,784 | ) | (91,773 | ) | 43,933 | (47,624 | ) | ||||||||||||||||
| | ||||||||||||||||||||||||
| Total Q1 adjustments relating to prior acq | (273,023 | ) | 60,000 | (638,113 | ) | (250,000 | ) | 607,446 | 922,222 | (982,344 | ) | 1,940,644 | (30,239 | ) | | | 1,356,593 | 1,356,593 | ||||||
| Quarter ended December 31, 2005: | ||||||||||||||||||||||||
| Reversal of EITF 95-3 accruals | (62,805 | ) | (179,542 | ) | (101,950 | ) | (178,672 | ) | (180,712 | ) | (141,182 | ) | (387,953 | ) | (1,232,816 | ) | ||||||||
| Finalization of purchase price within one year allocation period | | |||||||||||||||||||||||
| Costs related to acquisition of minority interest | 476,063 | 476,063 | ||||||||||||||||||||||
| Settlement of outstanding stock options | 316,786 | 316,786 | ||||||||||||||||||||||
| Recognition of acquired tax losses | (288,092 | ) | (288,092 | ) | ||||||||||||||||||||
| Correction of errors identified in prior periods | (1,049,344 | ) | (1,049,344 | ) | ||||||||||||||||||||
| Other miscellaneous amounts under $100,000 | (58,694 | ) | 49,113 | 50,000 | 40,419 | |||||||||||||||||||
| | ||||||||||||||||||||||||
| Total Q2 adjustments relating to prior acq | | | (62,805 | ) | | (238,236 | ) | (101,950 | ) | (178,672 | ) | (676,186 | ) | (141,182 | ) | (387,953 | ) | 50,000 | (1,736,984 | ) | (1,736,984 | ) | ||
| Quarter ended December 31, 2005: | ||||||||||||||||||||||||
| Reversal of EITF 95-3 accruals | 11,265 | (1,175 | ) | (9,966 | ) | 124 | ||||||||||||||||||
| Finalization of purchase price within one year allocation period | | |||||||||||||||||||||||
| Costs related to acquisition of minority interest | 138,863 | 138,863 | ||||||||||||||||||||||
| Settlement of outstanding stock options | 85,223 | 85,223 | ||||||||||||||||||||||
| Recognition of acquired tax losses | (2,499,581 | ) | (2,636,855 | ) | (5,136,436 | ) | ||||||||||||||||||
| Correction of errors identified in prior periods | | |||||||||||||||||||||||
| Other miscellaneous amounts under $100,000 | 2,878 | 607 | 63,251 | 66,736 | ||||||||||||||||||||
| Total Q3 adjustments relating to prior acq | | | | | (2,485,438 | ) | | 607 | (2,350,693 | ) | (9,966 | ) | | | (4,845,490 | ) | (4,845,490 | ) | ||||||
| Q306 YTD Total | (5,225,881 | ) |
APPENDIX D
Note that Foreign Exchange (Fx) has been classified separately for ease of identification purposes only.
Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Legal | Accounting | Other External Acquisition Advisory Costs | Travel | Acquisition Fees | Insurance | Other | FX | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Centrinity | |||||||||||||||||
| Opening Balance | (1,480,131 | ) | (337,104 | ) | (114,274 | ) | (1,912 | ) | | (148,627 | ) | (277,220 | ) | 203,748 | (2,155,519 | ) | |
| Goodwill Adjustments | 76,285 | (347,179 | ) E | (270,894 | ) | ||||||||||||
| Payments | 592,228 | 1,912 | 126,255 | 720,394 | |||||||||||||
| Fx | 10,000 | 10,000 | |||||||||||||||
| Balance @ 12/31/02 | (811,618 | ) | (337,104 | ) | (114,274 | ) | | | (148,627 | ) | (498,144 | ) | 213,748 | (1,696,019 | ) | ||
| Payments | 204,089 | 114,274 | 148,627 | (6,172 | ) | 460,818 | |||||||||||
| Fx | 2,405 | 2,405 | |||||||||||||||
| Balance @ 03/31/03 | (811,618 | ) | (133,015 | ) | | | | | (504,316 | ) | 216,153 | (1,232,796 | ) | ||||
| Payments | 95,202 | 66,936 | (23,098 | ) | 139,040 | ||||||||||||
| Fx | 125,981 | 125,981 | |||||||||||||||
| Balance @ 06/30/03 | (716,416 | ) | (66,079 | ) | | | | | (527,414 | ) | 342,134 | (967,775 | ) | ||||
| Goodwill Adjustments | 506,000 | D | 506,000 | ||||||||||||||
| Payments | (28,590 | ) | (28,590 | ) | |||||||||||||
| Fx | (306,523 | ) | (306,523 | ) | |||||||||||||
| Balance @ 09/30/03 | (716,416 | ) | (66,079 | ) | | | | | (50,003 | ) | 35,612 | (796,887 | ) | ||||
| Goodwill Adjustments | 279,062 | C | 279,062 | ||||||||||||||
| Payments | (12,590 | ) | (12,590 | ) | |||||||||||||
| Fx | (13,142 | ) | (13,142 | ) | |||||||||||||
| Other | | ||||||||||||||||
| Balance @ 12/31/03 | (437,354 | ) | (66,079 | ) | | | | | (62,593 | ) | 22,470 | (543,557 | ) | ||||
| Payments | (43,991 | ) | 12,445 | (31,546 | ) | ||||||||||||
| Fx | 11,833 | 11,833 | |||||||||||||||
| Balance @ 03/31/04 | (481,345 | ) | (66,079 | ) | | | | | (50,148 | ) | 34,303 | (563,269 | ) | ||||
| Payments | 2,290 | 32,318 | 34,609 | ||||||||||||||
| Fx | 27,764 | 27,764 | |||||||||||||||
| Balance @ 06/30/04 | (479,055 | ) | (66,079 | ) | | | | | (17,829 | ) | 62,067 | (500,896 | ) | ||||
| Fx | (31,561 | ) | (31,561 | ) | |||||||||||||
| Balance @ 09/30/04 | (479,055 | ) | (66,079 | ) | | | | | (17,829 | ) | 30,506 | (532,457 | ) | ||||
| Payments | (2,070 | ) | (2,070 | ) | |||||||||||||
| Fx | (69,369 | ) | (69,369 | ) | |||||||||||||
| Balance @ 12/31/04 | (479,055 | ) | (66,079 | ) | | | | | (19,899 | ) | (38,863 | ) | (603,896 | ) | |||
| Goodwill Adjustments | 208,200 | A | 19,899 | 61,082 | 289,181 | ||||||||||||
| Fx | 8,027 | 8,027 | |||||||||||||||
| Balance @ 03/31/05 | (270,855 | ) | (66,079 | ) | | | | | | 30,246 | (306,688 | ) | |||||
| Goodwill Adjustments | (341,403 | ) B | (341,403 | ) | |||||||||||||
| Fx | (2,800 | ) | (2,800 | ) | |||||||||||||
| Balance @ 06/30/05 | (270,855 | ) | (407,482 | ) | | | | | | 27,446 | (650,890 | ) | |||||
| Fx | (34,870 | ) | (34,870 | ) | |||||||||||||
| Balance @ 09/30/05 | (270,855 | ) | (407,482 | ) | | | | | | (7,424 | ) | (685,760 | ) | ||||
| Goodwill Adjustments | 130,000 | A | 66,079 | 196,079 | |||||||||||||
| Payments | | ||||||||||||||||
| Fx | 7,424 | 7,424 | |||||||||||||||
| Other | (34,145 | ) | (34,145 | ) | |||||||||||||
| Balance @ 12/31/05 | (175,000 | ) | (341,403 | ) | | | | | | | (516,403 | ) | |||||
| Payments | 120,943 | 120,943 | |||||||||||||||
| Fx | (405 | ) | (405 | ) | |||||||||||||
| Balance @ 03/31/06 | (54,057 | ) | (341,403 | ) | | | | | | (405 | ) | (395,865 | ) | ||||
| Payments | 16,521 | 157,907 | 174,428 | ||||||||||||||
| Fx | 3 | 3 | |||||||||||||||
| Balance @ 06/30/06 | (37,536 | ) | (183,496 | ) | | | | | | (402 | ) | (221,434 | ) |
Footnotes:
A Adjustment of pre-acquisition contingency accrual
B Direct costs related to valuation of acquired tax assets
C Goodwill adjustment relates to the finalization of acquisition related costs accrual within the 1 year allocation period
D Reversal of accrual for employee severance payments
E Accrual for employee severance payments
APPENDIX D
Note that Foreign Exchange (Fx) has been classified separately for ease of identification purposes only.
Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Legal | Accounting | Other External Acquisition Advisory Costs | Travel | Acquisition Fees | Insurance | Other | FX | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Eloquent | ||||||||||||||||
| Opening Balance | (928,281 | ) | (43,908 | ) | (47,772 | ) | | (57,804 | ) | | (12,244 | ) | (6,642 | ) | (1,096,651 | ) |
| Payments | 167,107 | 3,200 | 170,307 | |||||||||||||
| Balance @ 03/31/03 | (761,174 | ) | (43,908 | ) | (44,572 | ) | | (57,804 | ) | (12,244 | ) | (6,642 | ) | (926,344 | ) | |
| Payments | 115,538 | 20,320 | 39,903 | 54,487 | 50,176 | 280,424 | ||||||||||
| Balance @ 06/30/03 | (645,636 | ) | (23,588 | ) | (4,668 | ) | | (3,316 | ) | | 37,931 | (6,642 | ) | (645,920 | ) | |
| Payments | 60,067 | (158 | ) | 21,746 | (48,671 | ) | 32,984 | |||||||||
| Fx | (4,000 | ) | (4,000 | ) | ||||||||||||
| Balance @ 09/30/03 | (585,569 | ) | (23,746 | ) | (4,668 | ) | | 18,429 | | (10,740 | ) | (10,642 | ) | (616,936 | ) | |
| Payments | 25,733 | 42,709 | 8,048 | 76,489 | ||||||||||||
| Balance @ 12/31/03 | (559,836 | ) | 18,962 | (4,668 | ) | | 18,429 | | (2,692 | ) | (10,642 | ) | (540,447 | ) | ||
| Payments | 3,037 | (16,126 | ) | 4,668 | (18,429 | ) | (26,850 | ) | ||||||||
| Balance @ 03/31/04 | (556,799 | ) | 2,836 | | | | | (2,692 | ) | (10,642 | ) | (567,297 | ) | |||
| Goodwill Adjustments | 56,053 | 7,421 | 63,475 | |||||||||||||
| Payments | 742 | 742 | ||||||||||||||
| Other | 2,692 | 2,692 | ||||||||||||||
| Balance @ 06/30/04 | (500,004 | ) | 10,258 | | | | | | (10,642 | ) | (500,388 | ) | ||||
| Balance @ 09/30/04 | (500,004 | ) | 10,258 | | | | | | (10,642 | ) | (500,388 | ) | ||||
| Payments | 3,706 | 3,706 | ||||||||||||||
| Fx | 10,642 | 10,642 | ||||||||||||||
| Balance @ 12/31/04 | (496,297 | ) | 10,258 | | | | | | | (486,040 | ) | |||||
| Balance @ 03/31/05 | (496,297 | ) | 10,258 | | | | | | | (486,040 | ) | |||||
| Balance @ 06/30/05 | (496,297 | ) | 10,258 | | | | | | (486,040 | ) | ||||||
| Goodwill Adjustments | 250,000 | A | 250,000 | |||||||||||||
| Balance @ 09/30/05 | (246,297 | ) | 10,258 | | | | | | | (236,040 | ) | |||||
| Balance @ 12/31/05 | (246,297 | ) | | | | | | | | (246,297 | ) | |||||
| Balance @ 03/31/06 | (246,297 | ) | | | | | | | | (246,297 | ) | |||||
| Payments | 3,360 | 3,360 | ||||||||||||||
| Balance @ 06/30/06 | (242,937 | ) | | | | | | | | (242,937 | ) |
Footnotes:
A Reversal of accrual for pre-acquistion contingency adjustment
APPENDIX D
Note that Foreign Exchange (Fx) has been classified separately for ease of identification purposes only.
Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Legal | Accounting | Other External Acquisition Advisory Costs | Travel | Acquisition Fees | Insurance | Other | FX | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gauss | |||||||||||||||||
| Opening Balance | (509,391 | ) | (771,004 | ) | (234,490 | ) | (128,237 | ) | (255,127 | ) | | (123,064 | ) | 25,313 | (1,995,998 | ) | |
| Payments | 525,723 | 115,812 | 33,198 | 78,214 | 14,817 | 767,764 | |||||||||||
| Fx | 13,647 | 13,647 | |||||||||||||||
| Other | 20,596 | 20,596 | |||||||||||||||
| Balance @ 09/30/03 | 16,333 | (771,004 | ) | (118,678 | ) | (95,039 | ) | (176,912 | ) | | (87,651 | ) | 38,961 | (1,193,991 | ) | ||
| Goodwill Adjustments | (347,781 | ) C | (347,781 | ) | |||||||||||||
| Payments | 88,307 | (16,115 | ) | 90,319 | 196,007 | 358,519 | |||||||||||
| Fx | (1,049 | ) | (1,049 | ) | |||||||||||||
| Goodwill Adjustments | 57,531 | 57,531 | |||||||||||||||
| Other | 60,787 | 60,787 | |||||||||||||||
| Balance @ 12/31/03 | (243,141 | ) | (771,004 | ) | (134,793 | ) | (4,720 | ) | (176,912 | ) | | 226,673 | 37,911 | (1,065,985 | ) | ||
| Payments | 279,956 | 521,626 | 218,173 | 4,720 | 55,341 | 13,721 | 1,093,538 | ||||||||||
| Other | 2,677 | 2,677 | |||||||||||||||
| Balance @ 03/31/04 | 36,815 | (249,378 | ) | 83,381 | | (121,571 | ) | | 243,072 | 37,911 | 30,230 | ||||||
| Goodwill Adjustments | (306,242 | ) C | (306,242 | ) | |||||||||||||
| Payments | 266,587 | 161,597 | 3,212 | 60,137 | 491,533 | ||||||||||||
| Other | (215,520 | ) | (215,520 | ) | |||||||||||||
| Balance @ 06/30/04 | 303,402 | (87,781 | ) | 86,593 | | (61,434 | ) | | (278,690 | ) | 37,911 | 2 | |||||
| Goodwill Adjustments | (434,315 | ) B | (62,045 | ) | (3,640 | ) | (500,000 | ) | |||||||||
| Balance @ 09/30/04 | (130,913 | ) | (149,826 | ) | 86,593 | | (61,434 | ) | | (278,690 | ) | 34,271 | (499,998 | ) | |||
| Payments | 11,037 | 46,864 | 57,901 | ||||||||||||||
| Fx | (84,201 | ) | (84,201 | ) | |||||||||||||
| Balance @ 12/31/04 | (119,876 | ) | (102,962 | ) | 86,593 | | (61,434 | ) | | (278,690 | ) | (49,930 | ) | (526,299 | ) | ||
| Goodwill Adjustments | 105,884 | A | 105,884 | ||||||||||||||
| Payments | (10,426 | ) | (10,426 | ) | |||||||||||||
| Fx | 66,880 | 66,880 | |||||||||||||||
| Balance @ 03/31/05 | (119,876 | ) | (102,962 | ) | 86,593 | | (61,434 | ) | | (183,232 | ) | 16,950 | (363,961 | ) | |||
| Fx | 66,373 | 66,373 | |||||||||||||||
| Balance @ 06/30/05 | (119,876 | ) | (102,962 | ) | 86,593 | | (61,434 | ) | | (183,232 | ) | 83,323 | (297,588 | ) | |||
| Goodwill Adjustments | (496,000 | ) B | (108,000 | ) B | (3,446 | ) | (607,446 | ) | |||||||||
| Payments | 86,098 | 86,098 | |||||||||||||||
| Fx | 32,132 | 32,132 | |||||||||||||||
| Balance @ 09/30/05 | (529,778 | ) | (102,962 | ) | (21,407 | ) | | (61,434 | ) | | (186,678 | ) | 115,456 | (786,804 | ) | ||
| Goodwill Adjustments | 108,406 | A | 108,406 | ||||||||||||||
| Payments | 257,052 | 31,000 | 21,407 | 61,434 | 370,893 | ||||||||||||
| Fx | (118,144 | ) | (118,144 | ) | |||||||||||||
| Other | 24,818 | 24,818 | |||||||||||||||
| Balance @ 12/31/05 | (272,726 | ) | (71,962 | ) | | | (0 | ) | | (53,454 | ) | (2,688 | ) | (400,830 | ) | ||
| Goodwill Adjustments | (11,265 | ) | (11,265 | ) | |||||||||||||
| Payments | 230,318 | 19,618 | (8,494 | ) | 241,443 | ||||||||||||
| Fx | (8,661 | ) | (8,661 | ) | |||||||||||||
| Other | | ||||||||||||||||
| Balance @ 03/31/06 | (53,673 | ) | (52,344 | ) | | | (8,494 | ) | | (53,454 | ) | (11,349 | ) | (179,314 | ) | ||
| Goodwill Adjustments | (171,927 | ) B | 52,343 | 53,454 | (66,130 | ) | |||||||||||
| Payments | 223,866 | 223,866 | |||||||||||||||
| Fx | (12,118 | ) | (12,118 | ) | |||||||||||||
| Other | | ||||||||||||||||
| Balance @ 06/30/06 | (1,734 | ) | (1 | ) | | | (8,494 | ) | | | (23,467 | ) | (33,696 | ) |
Footnotes:
A Adjust several non-material miscellaneous items
B Accrual relating to finalization of purchase price (see response to Questions 5 and 6 for more detailed description of nature of adjustments)
C Adjust accrual for additional costs within 1 year of acquisition
APPENDIX D
Note that Foreign Exchange (Fx) has been classified separately for ease of identification purposes only.
Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Legal | Accounting | Other External Acquisition Advisory Costs | Travel | Acquisition Fees | Insurance | Other | FX | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| IXOS | |||||||||||||||||
| Opening Balance | (2,634,803 | ) | (1,045,747 | ) | (1,106,933 | ) | (348,566 | ) | (3,159,926 | ) | | (3,668,495 | ) | 54,493 | (11,909,975 | ) | |
| Goodwill Adjustments | (75,601 | ) | (75,601 | ) | |||||||||||||
| Payments | 337,045 | A | 72,830 | 583,426 | 331,720 | 2,965,081 | 558,528 | 4,848,630 | |||||||||
| Balance @ 03/31/04 | (2,373,359 | ) | (972,917 | ) | (523,506 | ) | (16,846 | ) | (194,845 | ) | | (3,109,967 | ) | 54,493 | (7,136,946 | ) | |
| Goodwill Adjustments | 76,061 | 76,061 | |||||||||||||||
| Payments | 456,963 | 86,750 | 332,926 | 16,846 | 194,845 | 2,533,609 | 3,621,939 | ||||||||||
| Balance @ 06/30/04 | (1,916,396 | ) | (886,167 | ) | (190,580 | ) | | | | (500,297 | ) | 54,493 | (3,438,946 | ) | |||
| Goodwill Adjustments | (350,000 | ) B | (350,000 | ) | |||||||||||||
| Payments | 319,762 | 149,964 | 11,161 | 6,175 | 487,061 | ||||||||||||
| Fx | (220,061 | ) | (220,061 | ) | |||||||||||||
| Balance @ 09/30/04 | (1,596,634 | ) | (1,086,203 | ) | (179,420 | ) | | | | (494,123 | ) | (165,567 | ) | (3,521,946 | ) | ||
| Payments | 464,505 | 321,070 | 25,463 | 811,038 | |||||||||||||
| Fx | 158,024 | 158,024 | |||||||||||||||
| Balance @ 12/31/04 | (1,132,129 | ) | (765,133 | ) | (153,956 | ) | | | | (494,123 | ) | (7,543 | ) | (2,552,884 | ) | ||
| Payments | 213,630 | 45,455 | 259,085 | ||||||||||||||
| Fx | (65,158 | ) | (65,158 | ) | |||||||||||||
| Other | (18,028 | ) | (18,028 | ) | |||||||||||||
| Balance @ 03/31/05 | (918,498 | ) | (765,133 | ) | (108,501 | ) | | | | (512,151 | ) | (72,701 | ) | (2,376,985 | ) | ||
| Payments | 21,001 | 21,001 | |||||||||||||||
| Fx | (105,385 | ) | (105,385 | ) | |||||||||||||
| Other | 294,384 | 294,384 | |||||||||||||||
| Balance @ 06/30/05 | (897,498 | ) | (765,133 | ) | (108,501 | ) | | | | (217,767 | ) | (178,086 | ) | (2,166,985 | ) | ||
| Payments | 386,813 | 386,813 | |||||||||||||||
| Fx | 177,187 | 177,187 | |||||||||||||||
| Balance @ 09/30/05 | (510,685 | ) | (765,133 | ) | (108,501 | ) | | | | (217,767 | ) | (899 | ) | (1,602,985 | ) | ||
| Goodwill Adjustments | 30,000 | 30,000 | |||||||||||||||
| Payments | 9,538 | 117,690 | 42,815 | 170,043 | |||||||||||||
| Fx | 31,156 | 31,156 | |||||||||||||||
| Other | 48,787 | 23,000 | 71,787 | ||||||||||||||
| Balance @ 12/31/05 | (471,147 | ) | (647,443 | ) | (16,900 | ) | | | | (194,767 | ) | 30,257 | (1,299,999 | ) | |||
| Goodwill Adjustments | (25,699 | ) | (31,656 | ) | (57,355 | ) | |||||||||||
| Payments | 380,094 | 410,233 | 2,260 | 792,586 | |||||||||||||
| Fx | (45,231 | ) | (45,231 | ) | |||||||||||||
| Balance @ 03/31/06 | (116,752 | ) | (268,866 | ) | (14,640 | ) | | | | (194,767 | ) | (14,974 | ) | (609,999 | ) | ||
| Goodwill Adjustments | (291,990 | ) D | (669,469 | ) B | (31,159 | ) | (992,618 | ) | |||||||||
| Payments | 372,180 | 487,055 | 31,159 | 890,394 | |||||||||||||
| Fx | 96,516 | 96,516 | |||||||||||||||
| Other | | ||||||||||||||||
| Balance @ 06/30/06 | (36,563 | ) | (451,280 | ) | (14,640 | ) | | | | (194,767 | ) | 81,542 | 615,707 |
Footnotes:
A $238,505 of the balance relates to contract termination costs
B Audit fees - pre acquistion periods
C Relates to severance payment to former IXOS president
D Accrual relating to finalization of purchase price
APPENDIX D
Note that Foreign Exchange (Fx) has been classified separately for ease of identification purposes only.
Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Legal | Accounting | Other External Acquisition Advisory Costs | Travel | Acquisition Fees | Insurance | Other | FX | Total | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Artesia | ||||||||||||||||
| Opening Balance | (167,180 | ) | (90,080 | ) | (122,667 | ) | (966 | ) | | | 1,021 | (341 | ) | (380,213 | ) | |
| Payments | 73,179 | 139,928 | 966 | 214,073 | ||||||||||||
| Fx | 3,039 | 3,039 | ||||||||||||||
| Balance @ 09/30/04 | (94,001 | ) | (90,080 | ) | 17,261 | | | | 1,021 | 698 | (165,101 | ) | ||||
| Payments | 26,677 | 26,677 | ||||||||||||||
| Fx | 3,766 | 3,766 | ||||||||||||||
| Balance @ 12/31/04 | (67,324 | ) | (90,080 | ) | 17,261 | | | | 1,021 | 4,463 | (134,658 | ) | ||||
| Payments | 16,901 | 32,453 | 721 | 50,075 | ||||||||||||
| Fx | (1,452 | ) | (1,452 | ) | ||||||||||||
| Balance @ 03/31/05 | (50,423 | ) | (57,627 | ) | 17,982 | | | | 1,021 | 3,011 | (86,036 | ) | ||||
| Payments | 7,640 | 7,640 | ||||||||||||||
| Fx | (706 | ) | (706 | ) | ||||||||||||
| Balance @ 06/30/05 | (42,783 | ) | (57,627 | ) | 17,982 | | | | 1,021 | 2,305 | (79,103 | ) | ||||
| Goodwill Adjustments | (40,216 | ) | (40,216 | ) | ||||||||||||
| Fx | 2,704 | 2,704 | ||||||||||||||
| Balance @ 09/30/05 | (42,783 | ) | (57,627 | ) | 17,982 | | | | (39,195 | ) | 6,009 | (115,615 | ) | |||
| Goodwill Adjustments | 46,403 | 9,390 | (17,982 | ) | 29,195 | (6,204 | ) | 60,802 | ||||||||
| Fx | 196 | 196 | ||||||||||||||
| Balance @ 12/31/05 | 3,620 | (48,237 | ) | | | | | (10,000 | ) | 0 | (54,617 | ) | ||||
| Payments | 46,086 | 46,086 | ||||||||||||||
| Fx | (3,700 | ) | (3,700 | ) | ||||||||||||
| Balance @ 03/31/06 | 3,620 | (2,151 | ) | | | | | (10,000 | ) | (3,700 | ) | (12,231 | ) | |||
| Balance @ 06/30/06 | 3,620 | (2,151 | ) | | | | | (10,000 | ) | (3,700 | ) | (12,231 | ) |
APPENDIX D
Note that Foreign Exchange (Fx) has been classified separately for ease of identification purposes only.
Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Legal | Accounting | Other External Acquisition Advisory Costs | Travel | Acquisition Fees | Other | FX | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Vista | ||||||||||||||
| Opening Balance | (235,835 | ) | (69,334 | ) | (125,298 | ) | | | (40,000 | ) | (9,345 | ) | (479,811 | ) |
| Payments | 9,808 | 31,064 | 40,872 | |||||||||||
| Fx | 1,250 | 1,250 | ||||||||||||
| Balance @ 09/30/04 | (226,026 | ) | (69,334 | ) | (94,234 | ) | | | (40,000 | ) | (8,095 | ) | (437,689 | ) |
| Payments | 13,920 | 133,024 | 146,944 | |||||||||||
| Fx | 1,867 | 1,867 | ||||||||||||
| Balance @ 12/31/04 | (212,106 | ) | (69,334 | ) | 38,790 | | | (40,000 | ) | (6,227 | ) | (288,877 | ) | |
| Payments | 131,710 | 32,251 | 2,759 | 166,720 | ||||||||||
| Fx | 985 | 985 | ||||||||||||
| Balance @ 03/31/05 | (80,396 | ) | (37,083 | ) | 41,549 | | | (40,000 | ) | (5,243 | ) | (121,172 | ) | |
| Payments | 617 | 617 | ||||||||||||
| Fx | | | ||||||||||||
| Balance @ 06/30/05 | (79,779 | ) | (37,083 | ) | 41,549 | | | (40,000 | ) | (5,243 | ) | (120,556 | ) | |
| Fx | 6,000 | 6,000 | ||||||||||||
| Balance @ 09/30/05 | (79,779 | ) | (37,083 | ) | 41,549 | | | (40,000 | ) | 758 | (114,555 | ) | ||
| Goodwill Adjustments | 79,779 | 24,528 | (41,549 | ) | 40,000 | (808 | ) | 101,950 | ||||||
| Fx | 580 | 580 | ||||||||||||
| Balance @ 12/31/05 | | (12,555 | ) | | | | | 530 | (12,025 | ) | ||||
| Payments | 12,866 | 12,866 | ||||||||||||
| Fx | (6,870 | ) | (6,870 | ) | ||||||||||
| Balance @ 03/31/06 | | 311 | | | | | (6,340 | ) | (6,029 | ) | ||||
| Balance @ 06/30/06 | | 311 | | | | | (6,340 | ) | (6,029 | ) |
APPENDIX D
Note that Foreign Exchange (Fx) has been classified separately for ease of identification purposes only.
Amounts less than $100,000 have not been explained as the Company believes such amounts are not material to this analysis and the Companys financial statements.
| Legal | Accounting | Other External Acquisition Advisory Costs | Travel | Acquisition Fees | Insurance | Other | FX | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Optura | |||||||||||||||
| Opening Balance | (101,924 | ) | (84,999 | ) | (69,000 | ) | | | (99,075 | ) | (366 | ) | (355,364 | ) | |
| Payments | 43,353 | 47,280 | 9,991 | 100,624 | |||||||||||
| Balance @ 03/31/05 | (58,571 | ) | (84,999 | ) | (21,720 | ) | | | (89,084 | ) | 634 | (253,740 | ) | ||
| Payments | 12,689 | 942 | 13,631 | ||||||||||||
| Balance @ 06/30/05 | (45,882 | ) | (84,999 | ) | (21,720 | ) | | | (88,142 | ) | 634 | (240,109 | ) | ||
| Payments | 16,050 | 16,050 | |||||||||||||
| Fx | 470 | 470 | |||||||||||||
| Balance @ 09/30/05 | (29,833 | ) | (84,999 | ) | (21,720 | ) | | | (88,142 | ) | 104 | (224,590 | ) | ||
| Goodwill Adjustments | 27,908 | 23,022 | 21,720 | 78,539 | 151,189 | ||||||||||
| Payments | 1,925 | 21,226 | 23,151 | ||||||||||||
| Other | 8,603 | ||||||||||||||
| Balance @ 12/31/05 | 0 | (40,752 | ) | | | | (1,000 | ) | 104 | (41,647 | ) | ||||
| Payments | 28,146 | 28,146 | |||||||||||||
| Fx | (50 | ) | (50 | ) | |||||||||||
| Balance @ 03/31/06 | 0 | (12,606 | ) | | | | | (1,000 | ) | 54 | (13,551 | ) | |||
| Goodwill Adjustments | (1,242 | ) | (1,242 | ) | |||||||||||
| Payments | 2,750 | 2,750 | |||||||||||||
| Fx | (70 | ) | (70 | ) | |||||||||||
| Balance @ 06/30/06 | (1,242 | ) | (9,856 | ) | | | | | (1,000 | ) | (16 | ) | (12,114 | ) |
- The balance at acquistion and at the end of the following quarter do not tie to disclosures in the Companys Form 10-Q filing for the three months ended March 31, 2005 by $149,000. This disclosure discrepancy was corrected in the Companys Form 10-K filed for the period ended June 30, 2005.