--------------------------------------------------------------------------------
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                         -------------------------------


                                    FORM 10-Q

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 For the Quarterly Period Ended January 31, 2002

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                        For the transition period From ---- To ----

                         Commission file number 1-111898
                                                --------

                               ACCELIO CORPORATION
             (Exact name of registrant as specified in its charter)

         CANADA                                               N/A
---------------------------                          --------------------------
(state or other jurisdiction of                             (IRS Employer
incorporation or organization)                             Identification No.)


                              560 Rochester Street
                         Ottawa, Ontario K1S 5K2, Canada
                   -----------------------------------------
                    (Address of principal executive offices)

                                 (613) 233-2256
                           ------------------------
               Registrant's telephone number (including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange  Act during the  preceding 12
months (or for such  shorter  period  that the issuer was  required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                                     Yes X   No
                                        ---     ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS
              The number of the issuer's Common Shares outstanding
                        on February 21, 2002: 24,969,794

--------------------------------------------------------------------------------
                                       1
<PAGE>
                               ACCELIO CORPORATION
                                TABLE OF CONTENTS



PART I     FINANCIAL INFORMATION                                        Page No.

Item 1.    Financial Statements

           Consolidated Balance Sheets as at January 31, 2002, and      3
             April  30, 2001

           Consolidated Statements of Operations for the three and nine 4
             month periods ended January 31, 2002 and January 31, 2001

           Consolidated Statements of Comprehensive Income for the      5
             three and nine month periods ended January 31, 2002 and
             January 31, 2001

           Consolidated Statements of Cash Flows for the three month    6
             and nine month periods ended January 31, 2002 and January
             31, 2001

           Notes to Consolidated Financial Statements                   7

Item 2.    Management's Discussion and Analysis of Financial           19
             Condition and Results of Operations

PART II    OTHER INFORMATION

Item 1.    Legal Proceedings                                           29

Item 6.    Exhibits and Reports on Form 8-K                            29

SIGNATURES                                                             30








This Quarterly Report on Form 10-Q ("Report"), contains forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933.
Discussions containing such forward-looking statements may be found in Item 2 of
Part I and Item 1 of Part II hereof, as well as within this Report generally. In
addition, when used in this Report, the words "believes", "intends",
"anticipates", "expects", and similar expressions are intended to identify
forward-looking statements. Such statements are subject to a number of risks and
uncertainties. Actual results in the future could differ materially from those
described in the forward-looking statements as a result of changes in
technology, changes in industry standards, new product introduction by
competitors, increased participation in the enterprise software market by major
corporations and other matters set forth in this Report. The Company does not
undertake any obligation to publicly release the results of any revisions to
these forward-looking statements that may be made to reflect any future events
or circumstances.

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                            ACCELIO CORPORATION
                                         CONSOLIDATED BALANCE SHEETS
                            (in thousands of Canadian dollars, except share amounts)

                                                                      January 31,          April 30,
                                                                         2002                2001
                                                                    ----------------      ------------
       <S>                                                           <C>                   <C>
                                                   ASSETS
       Current assets
         Cash and cash equivalents..............................           $ 28,163         $  41,426
         Accounts receivable (Note 2)...........................             18,909            28,488
         Term accounts receivable (Note 2)......................              1,187             3,962
         Unbilled receivables...................................              1,929             2,399
         Inventory..............................................                721               869
         Prepaid expenses ......................................              3,890             3,684
                                                                     ---------------      ------------
                                                                             54,799            80,828
         Fixed assets (Note 3)..................................             11,953            12,722
         Other assets (Note 4)..................................             19,397            21,126
                                                                     ---------------      ------------
                                                                           $ 86,149         $ 114,676
                                                                     ===============      ============

                                    LIABILITIES AND SHAREHOLDERS' EQUITY

       Current liabilities
         Accounts payable.......................................            $ 2,976           $ 4,039
         Accrued liabilities ...................................             12,148            11,911
         Unearned revenue.......................................             14,742            15,788
         Term loan (Note 5).....................................             10,000                --
         Obligations under capital lease (Note 10)..............                987               919
                                                                    ----------------      ------------
                                                                             40,853            32,657
       Accrued liabilities (Note 8).............................                249               446
       Term loan (Note 5).......................................                 --            10,000
       Obligations under capital lease (Note 10)................                880             1,011
                                                                    ----------------      ------------
                                                                             41,982            44,114
                                                                    ----------------      ------------


       Shareholders' equity
         Capital stock (Issued and outstanding -- 24,969,794
         Common Shares at January 31, 2002; 24,831,527
                                                                            273,126           272,587
         Common  Shares at April  30, 2001) ....................
         Cumulative translation adjustment......................            (3,341)           (4,206)
         Deficit................................................          (225,618)         (197,819)
                                                                    ----------------      ------------
                                                                             44,167            70,562
                                                                    ----------------      ------------
                                                                           $ 86,149          $144,676
                                                                    ================      ============

                       (the accompanying notes are an integral part of these consolidated financial statements)

</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>

                                                       ACCELIO CORPORATION
                                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (in thousands of Canadian dollars except share and per share amounts)


                                                          Three months ended                Nine months ended
                                                             Janaury 31,                        January 31,
                                                    ------------------------------    -------------------------------

                                                        2002            2001              2002             2001
                                                    -------------   --------------    --------------   --------------

       <S>                                           <C>              <C>               <C>              <C>
       Revenues
         Product................................        $ 13,167         $ 13,188          $ 32,310         $ 43,101
         Service................................          12,178           10,164            36,902           28,992
                                                    -------------   --------------    --------------   --------------
                                                          25,345           23,352            69,212           72,093
                                                    -------------   --------------    --------------   --------------

       Costs and expenses
         Cost of product........................           1,731            1,910             5,184            6,042
         Cost of service........................           3,729            2,766            13,325            8,052
         Sales and marketing....................          12,773           13,107            42,909           38,509
         General and administrative.............           2,715            2,569             8,762            7,301
         Research and development (Note 6)......           4,079            4,227            14,115           12,233
         Depreciation and amortization..........           2,707            2,709             8,232            7,770
         Takeover defence costs.................           4,545               --             4,545               --
         Gain on sale of assets.................              --               --             (200)               --
                                                    -------------   --------------    --------------   --------------
                                                          32,279           27,288            96,872           79,907
                                                    -------------   --------------    --------------   --------------
       Operating loss                                    (6,934)          (3,936)          (27,660)          (7,814)
         Net investment income .................            (80)              227              (22)              654
         Other income (expense).................            (15)               37               285               62
                                                    -------------   --------------    --------------   --------------
       Loss before taxes                                 (7,029)          (3,672)          (27,397)          (7,098)

       Income tax
         Current  (Note 7)......................           (140)            (201)             (402)            (860)
                                                    -------------   --------------    --------------   --------------
       Net loss                                        $ (7,169)        $ (3,873)        $ (27,799)        $ (7,958)
                                                    =============   ==============    ==============   ==============
       Basic income (loss) per share
         Net loss per share.....................       $  (0.29)        $  (0.16)        $   (1.12)        $  (0.36)
         Weighted average number of shares......      24,932,312       24,688,946        24,897,221       21,901,600
       Fully diluted income (loss) per share
       Net loss per share.......................       $  (0.29)        $  (0.16)        $   (1.12)        $  (0.36)
       Weighted average number of shares........      24,932,312       24,688,946        24,897,221       21,901,600


                       (the accompanying notes are an integral part of these consolidated financial statements)
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>
                                                               ACCELIO CORPORATION
                                                   CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
                                                         (in thousands of Canadian dollars)


                                                          Three months ended                Nine months ended
                                                              January 31,                       January 31,
                                                     -----------------------------    ------------------------------

                                                        2002            2001              2002            2001
                                                     ------------   --------------    -------------   --------------

       <S>                                             <C>             <C>              <C>               <C>
       Net loss.....................................   $ (7,169)        $ (3,873)       $ (27,799)         $(7,958)
       Other comprehensive income (loss):...........         --               --               --               --
       Cumulative translation adjustment (net of
       tax of nil):.................................     (2,444)            (274)             865           (1,161)
                                                     ------------   --------------    -------------   --------------
       Comprehensive loss...........................   $ (9,613)        $ (4,147)       $ (26,934)         $(9,119)
                                                     ============   ==============    =============   ==============


                       (the accompanying notes are an integral part of these consolidated financial statements)


</TABLE>

                                       5
<PAGE>
                               ACCELIO CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (in thousands of Canadian dollars)

<TABLE>
<CAPTION>

                                                 Three months ended             Nine months ended
                                                     January 31,                    January 31,
                                              ---------------------------   ----------------------------

                                                   2002            2001          2002            2001
                                              ------------    -----------   ------------    ------------
 <S>                                              <C>             <C>          <C>               <C>
 Cash provided from (used in):
 Operating activities
 Net loss................................        $ (7,169)       $(3,873)     $ (27,799)        $(7,958)
 Items not involving cash:
   Depreciation and amortization.........            2,983          3,630          8,829          10,498
   Deferred income taxes.................                -              -              -               -
   Other non-cash items..................          (2,213)         3,472          1,206          (1,055)
 Net change in operating components
   of working capital (Note 11)...........           6,741         (2,197)        11,158          (7,442)
                                              ------------    -----------   -------------    ------------
                                                       342          1,032         (6,606)         (5,957)
                                              ------------    -----------   -------------    ------------
 Investing activities
 Purchase of fixed assets................            (344)        (4,084)        (2,878)         (8,698)
 Purchase of other assets................            (894)        (1,572)        (3,038)         (3,267)
 Purchase of business....................                 -          (151)              -           (151)
                                              -------------   ------------  -------------   -------------
                                                   (1,238)        (5,807)        (5,916)        (12,116)
                                              -------------   ------------  -------------   -------------
 Financing activities
 Proceeds from issuance of shares.......               115          2,980            351          24,090
 Repayment of debt.......                               --           (397)            --            (397)
 Capital lease repayments................            (285)           (10)        (1,215)            (10)
                                              -------------   ------------  -------------   -------------
                                                     (170)         2,573           (864)         23,683
                                              -------------   ------------  -------------   -------------

 Effect of exchange rate changes on cash             (350)           249            123              32
                                              -------------   ------------  -------------   -------------

 Increase (decrease) in cash and cash
   equivalents...........................          (1,416)        (1,953)       (13,263)          5,642
 Cash and cash equivalents, beginning
   of period.............................           29,579         49,687         41,426          42,092
                                              -------------   ------------  -------------   -------------
 Cash and cash equivalents, end of
   period................................         $ 28,163       $ 47,734       $ 28,163         $47,734
                                              =============   ============  =============   =============



            (the accompanying notes are an integral part of these consolidated financial statements)

</TABLE>

                                       6
<PAGE>
                               ACCELIO CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   SIGNIFICANT ACCOUNTING POLICIES

(a)  Basis of presentation

     These consolidated financial statements have been prepared by management in
accordance with accounting principles generally accepted in the United States
("U.S. GAAP"), and include all assets, liabilities, revenues and expenses of
Accelio Corporation ("Accelio") and its wholly-owned subsidiaries: Accelio
Corporation (a Delaware corporation), JF A'Asia Pty. Limited ("Accelio
Pacific"), Accelio Aktiebolag ("Accelio Nordic"), Accelio France SA ("Accelio
France"), Accelio UK Limited ("Accelio UK"), Accelio Deutschland GmbH ("Accelio
Germany"), Accelio Technologies Limited ("Accelio Ireland"), Accelio Japan K.K.
("Accelio Japan"), Accelio Netherlands BV ("Accelio Netherlands"), Accelio Norge
AS ("Accelio Norway") and Accelio PTE Ltd ("Accelio Singapore"). Accelio and its
wholly-owned subsidiaries are collectively referred to herein as the "Company".
Investments in businesses that the Company does not control, but over which it
can exert significant influence, are accounted for using the equity method. Such
investments are periodically evaluated for impairment and appropriate
adjustments are recorded, if necessary. The unaudited interim consolidated
financial statements reflect all adjustments which are, in the opinion of the
Company's management, necessary for a fair statement of results for these
interim periods.

     The unaudited interim financial statements should be read in conjunction
with and follow the same accounting policies and methods of application as the
most recent annual financial statements of April 30, 2001.

(b)  Revenue recognition

     The Company recognizes revenue in accordance with Statement of Position
("SOP") 97-2, "Software Revenue Recognition," issued by the American Institute
of Certified Public Accountants ("AICPA"), SOP 98-9, "Modification of 97-2,
Software Recognition with Respect to Certain Transactions" and Staff Accounting
Bulletin (SAB) No. 101 "Revenue Recognition in Financial Statements", issued by
the Securities and Exchange Commission (SEC).

     The Company records product revenue from packaged software and irrevocable
commitments to purchase products when persuasive evidence of an arrangement
exists, the software product has been shipped, there are no significant
uncertainties surrounding product acceptance, the fees are fixed and
determinable and collection is considered probable. The Company's Irrevocable
Commitment Licenses ("ICLs") are arrangements to use multiple copies of a
software product under site licenses with users and to market multiple copies
of a software product under similar arrangements with resellers. These
arrangements always include post-contract customer support ("PCS") and are
typically less than a year in duration with a significant portion of the product
license fee payable within the Company's normal trade terms. Revenues from
irrevocable commitments to purchase products with payment terms exceeding the
Company's customary trade terms are recorded at the amount receivable less
deemed interest. The Company amortizes the difference between the face value of
the receivable and the discounted amount over the term of the receivable and
records the discount as interest income.

     Revenue from software product licenses which include significant
customization and revenue from services are recognized on a percentage of
completion basis, whereby revenue is recorded, based on labor input hours, at
the estimated realizable value of work completed to date. Estimated losses on
contracts are recognized when they become probable. Unbilled receivables
represent consulting work performed under contract and not yet billed.

     Revenue from maintenance agreements ("PCS") is recognized ratably over the
term of the agreement. Unearned revenue represents payments received from
customers for services not yet performed.

                                       7
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

2.   ACCOUNTS RECEIVABLE

     Accounts receivable and term accounts receivable are net of an allowance
for doubtful accounts of $3.7 million at January 31, 2002, and $2.9 million at
April 30, 2001.

     The Company records revenues from irrevocable commitments to purchase
products which do not conform to the Company's customary trade terms at the
minimum amount receivable less deemed interest ("Term Accounts Receivable"). The
Company's Irrevocable Commitment Licenses ("ICLs") are arrangements to use
multiple copies of a software product under site licenses with users and to
market multiple copies of a software under similar arrangements with resellers.
These arrangements always include post-contract customer support ("PCS") and are
typically less than a year in duration with a significant portion of the product
license fee payable within the Company's normal trade terms. License revenue
from arrangements having extended payment terms were $477,000 for the three
months ended January 31, 2002, and $1.1 million in the nine months ended January
31, 2002 compared to $1.5 million for the three months ended January 31, 2001
and $2.1 million for the nine months ended January 31, 2001. For the three
months ended January 31, 2002, the discount rate used was 6.5%.

     Payment of Term Accounts Receivable is generally due the earlier of: (i)
delivery of the Company's products by the customer to its customers or end
users; and (ii) specific dates in the license agreement ("Minimum Payment
Dates"). The amount of these receivables at January 31, 2002, and April 30, 2001
was $1.2 million and $4.0 million, respectively.

     The Company's customer base consists of large numbers of diverse customers
dispersed across many industries and geographies. As a result, concentration of
credit risk with respect to accounts receivable and term accounts receivable is
not significant.

3.   FIXED ASSETS

<TABLE>
<CAPTION>
                                                   January 31, 2002
                                 -----------------------------------------------------

                                                    Accumulated           Net book
                                     Cost           depreciation            value
                                 -------------    -----------------    ---------------
                                          (in thousands of Canadian dollars)
    <S>                             <C>                  <C>                 <C>
    Computer equipment........       $ 21,847             $ 16,610            $ 5,237
    Furniture and fixtures....          9,501                6,350              3,151
    Leasehold improvements....          6,096                2,531              3,565
                                 -------------    -----------------    ---------------
                                     $ 37,444             $ 25,491           $ 11,953
                                 =============    =================    ===============




                                                    April 30, 2001
                                 -----------------------------------------------------

                                                    Accumulated          Net book
                                     Cost           depreciation           value
                                 -------------    -----------------    ---------------
                                          (in thousands of Canadian dollars)
    Computer equipment........        $20,013              $13,999             $6,014
    Furniture and fixtures....          9,152                5,424              3,728
    Leasehold improvements....          4,974                1,994              2,980
                                 -------------    -----------------    ---------------
                                      $34,139              $21,417            $12,722
                                 =============    =================    ===============


</TABLE>

                                       8
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)


4.  OTHER ASSETS


<TABLE>
<CAPTION>

                                                            January 31, 2002
                                          -----------------------------------------------------

                                                              Accumulated          Net book
                                               Cost           amortization           value
                                          -------------      --------------     ---------------
                                                    (in thousands of Canadian dollars)
   <S>                                      <C>                 <C>                  <C>
   Delrina technology, trademarks,
     trade names and workforce....           $ 16,081            $ 11,946             $ 4,135
   Software.......................             18,617               9,371               9,246
   Goodwill.......................              2,234               1,543                 691
   Licenses, marketing and distribution
     rights.......................              7,001               4,053               2,948
   Capitalized software costs.....             17,294              16,928                 366
   Other assets...................              6,263               4,252               2,011
                                             -----------        ------------      ---------------
                                             $ 67,490            $ 48,093            $ 19,397
                                             ===========        ============      ===============


                                                                April 30, 2001
                                          -----------------------------------------------------

                                                              Accumulated          Net book
                                               Cost           amortization         value
                                          -------------      --------------     ---------------
                                                    (in thousands of Canadian dollars)
   Delrina technology, trademarks,
     trade names and workforce....          $ 16,081            $ 11,146              $ 4,935
   Software.......................            16,955               8,105                8,850
   Goodwill.......................             2,203               1,319                  884
   Licenses, marketing and distribution
     rights.......................             6,792               3,375                3,417
   Capitalized software costs.....            17,294              16,331                  963
   Other assets...................             6,234               4,157                2,077
                                            -----------        ------------       ---------------
                                            $ 65,559            $ 44,433             $ 21,126
                                            ===========        ============       ===============

</TABLE>

5.   FINANCIAL INSTRUMENTS AND CREDIT FACILITY

     The Company has entered into receivable purchase agreements with certain
third party purchasers. Under the agreements, the Company has the option to sell
certain accounts receivable on a recourse basis. The Purchasers have recourse in
the event of a trade dispute as defined in the receivables purchase agreements.
As at January 31, 2002 and April 30, 2001, the outstanding balance of accounts
receivable sold under these agreements was approximately US$2.6 million and
US$3.6 million, respectively. The recourse obligation is estimated to be nil as
the Company believes that none of the receivables sold are at risk of recourse.

     The Company has a committed $20 million credit facility with the Royal Bank
of Canada ("RBC"). This credit facility is made up of (i) a $10 million term
loan facility which bears interest at a rate of RBC prime plus 2.25% and is
payable on August 1, 2002 and (ii) a $10 million operating facility that bears
interest at a rate of RBC prime plus 1%. The credit facility is in effect until
August 1, 2002. As at January 31, 2002, the Company had drawn all of the $10
million term loan facility and fixed the interest rate until April 17, 2002, at
1.98%. The Company had no borrowings against its operating facility at January
31, 2002. The Company has granted, as collateral for the $20 million credit
facility, a general security agreement over Accelio's assets, including
assignment of receivables insurance and a pledge of the shares of certain
subsidiaries.

     When the Company deems appropriate, Accelio uses forward contracts and
purchased options to manage exposures to foreign exchange. The Company's
objective is to minimize risk using the most effective methods to eliminate or
reduce the impacts of this exposure. Accelio does not enter into financial
instruments for speculative or trading purposes. As at January 31, 2002, the
Company had no outstanding foreign exchange financial instruments.

                                       9
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

6.   RESEARCH AND DEVELOPMENT EXPENSE

     The following table provides a summary of capitalized software costs and
the related amortization and write down charged to cost of product in the three
and nine months ended January 31, 2002 and January 31, 2001.

<TABLE>
<CAPTION>
                                                         Three months ended                Nine months ended
                                                            January 31,                       January 31,
                                                    -----------------------------    ------------------------------
                                                          2002            2001              2002             2001
                                                    -----------------------------    ------------------------------
                                                             (in thousands of                 (in thousands of
                                                            Canadian dollars)                 Canadian dollars)
  <S>                                                  <C>               <C>            <C>              <C>
  Research and development costs........                $ 4,079          $ 5,198         $ 14,115         $ 14,901
  Capitalized software costs............                     --            (971)               --          (2,668)
                                                    ------------   --------------    -------------   --------------
  Net research and development expense..                $ 4,079          $ 4,227         $ 14,115         $ 12,233
                                                    ============   ==============    =============   ==============
  Amortization of development costs
  charged to cost of product............                $   161          $   814         $    482         $  2,432
                                                    ============   ==============    =============   ==============
  Write-down of development costs
  charged to cost of product............                $--              $--             $    115         $--
                                                    ============   ==============    =============   ==============

</TABLE>

7.   INCOME TAXES

     As at January 31, 2002, the Company had net deferred tax assets of $79.6
million (January 31, 2001, $58.5 million), the principal components of which
were temporary differences associated with the acquisition of in process
research and development and operating loss carry forwards. The Company believes
sufficient uncertainty exists regarding the realizability of these net deferred
tax assets such that a valuation allowance of $79.6 million (January 31, 2001,
$52.9 million) has been applied. During the quarter ended January 31, 2002, the
Company recorded a provision for domestic capital taxes and foreign jurisdiction
income tax of $140,000 (January 31, 2001, $201,000).

                                       10
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

8.   PROVISION FOR RESTRUCTURING COSTS

     On March 17, 1999, the Corporation announced a restructuring plan and
recorded a provision for restructuring costs of $30.5 million directed at
reducing costs. The key restructuring actions included:

     o        Consolidation of management responsibilities and reduction in
              headcount;
     o        Closure of redundant facilities;
     o        Reduction in the carrying value of certain capital assets
              primarily related to past acquisitions; and
     o        Cancellation of certain commitments and other costs.

     The following table summarizes the activity in the restructuring costs
during the nine months ended January 31, 2002:

<TABLE>
<CAPTION>
                                            Employee                               Total      Non Cash       Total
                                            Termination   Facilities    Other      Costs        Costs      Provision
                                          ---------------------------------------------------------------------------

<S>                                          <C>          <C>          <C>       <C>         <C>         <C>
Restructuring provision............          $ 5,252      $2,914       $726      $8,892      $21,611     $ 30,503
Cash payments..........................      (1,175)        (36)      (207)     (1,418)           --      (1,418)
Non-cash items.........................           --          --         --          --      (21,611)    (21,611)
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, April 30, 1999...........           $ 4,077      $2,878       $519      $7,474         $ --      $ 7,474
Cash payments......................          (2,921)     (1,092)      (124)     (4,137)           --      (4,137)
Reductions...........................          (566)       (540)         --     (1,106)           --      (1,106)
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, April 30, 2000...........            $  590      $1,246       $395      $2,231         $ --      $ 2,231
Cash payments......................            (468)       (236)      (121)       (825)           --        (825)
Reductions...........................          (122)       (567)         --       (689)           --        (689)
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, April 30, 2001............             $ --       $ 443       $274       $ 717         $ --       $  717
Cash payments......................               --        (88)       (40)       (128)           --        (128)
Reductions...........................             --          --         --          --           --           --
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, July 31, 2001...........               $ --       $ 355       $234       $ 589         $ --       $  589
Cash payments......................               --         (8)       (41)        (49)           --         (49)
Reductions...........................             --          --         --          --           --           --
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, October 31, 2001...........            $ --       $ 347       $193       $ 540         $ --       $  540
Cash payments......................               --        (49)       (42)        (91)           --         (91)
Reductions...........................             --          --         --          --           --           --
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, January 31, 2002...........            $ --       $ 298      $ 151       $ 449         $ --        $ 449
                                          ============== =========== ========== =========== ============ ============
Long-term balance..................             $ --       $ 249       $ --       $ 249         $ --        $ 249
                                          ============== =========== ========== =========== ============ ============

</TABLE>

     Employee terminations totaled 105 and included 46 in sales and marketing,
40 in research and development, 12 in internal corporate services, and 7 in
systems and consulting services. Employee terminations included salary
continuance for which the Company was contractually obligated to pay. All
employees were terminated on or before April 30, 1999.

     Facilities costs consisted primarily of $2.1 million and $780,000 related
to the closure of the Company's United Kingdom and Toronto facilities,
respectively. The provision for redundant facilities included management's best
estimates of the total future operating costs of these vacant facilities for the
remainder of their respective lease terms. Actual costs could differ from these
estimates. During the nine months ended January 31, 2002, the Company's
liability for vacant facilities was reduced by $145,000. The Company's long-term
balance relates to a lease in the United Kingdom which expires April 30, 2010.

     Other cash costs related primarily to the cancellation of trade shows and
other commitments. The remaining obligation relates to a service contract which
expires August 31, 2002. During the nine months ended January 31, 2002, the
Company's liability related to this commitment was reduced by $123,000.

     Non-cash costs included impairment losses of $21.6 million related to
assets held for use. The losses were comprised of $16.6 million related to
marketing and distribution rights, $3.1 million related to goodwill and $1.9
million related to other capital assets.

                                       11
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)



9.   SEGMENTED INFORMATION

     Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
Company's chief decision maker in deciding how to allocate resources and
assessing performance. The Company's chief decision maker is the Chief Executive
Officer.

     The Company's Chief Executive Officer primarily evaluates the Company on a
geographic basis. The geographic evaluation is further segmented into Product,
Consulting, and Customer Support components. The Product segment engages in
business activities from which it earns license revenues from the Company's
software products. The Consulting segment earns revenues from assisting
customers in configuring, implementing and integrating the Company's products
and, when required, customizing products and designing automated processes to
meet the customer's specific business needs as well as providing all necessary
training. The Customer Support segment earns revenues through after-sale support
for software products as well as providing software upgrades under the Company's
maintenance and support programs.

     The Company evaluates performance based on the contribution of each
segment. The Product segment costs include all costs associated with selling
product licenses. The costs of the Consulting and Customer Support segments
include all costs associated with the delivery of the service to the customer.
Inter-segment revenues as well as charges such as depreciation and amortization,
interest expense and overhead allocation are not included in the calculation of
segment profit. The Company does not use a measure of segment assets to assess
performance or allocate resources. As a result, segment asset information is not
presented.


                                       12
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)



The following tables sets forth, on a comparative basis for the periods
indicated, the Company's segmented information:

<TABLE>
<CAPTION>
                                                Three months ended January 31, 2002
                                                 (in thousands of Canadian dollars)
                                        -----------------------------------------------------
                                                                     Customer
                                         Product       Consulting    Support      Total
                                        -----------------------------------------------------
 <S>                                       <C>           <C>          <C>         <C>
North America
Revenue.......................              $ 6,068       $ 1,866      $ 5,157     $ 13,091
Costs.........................                5,442         1,511          726        7,679
                                       ------------- ------------- ------------ ------------
Contribution..................              $   626       $   355      $ 4,431     $  5,412
                                       ------------- ------------- ------------ ------------

Europe
Revenue.......................              $ 6,466       $ 2,257      $ 2,443      $11,166
Costs.........................                4,112         1,026          466        5,604
                                       ------------- ------------- ------------ ------------
Contribution..................              $ 2,354       $ 1,231      $ 1,977      $ 5,562
                                       ------------- ------------- ------------ ------------

Asia Pacific
Revenue.......................              $   633          $ 63        $ 392      $ 1,088
Costs.........................                1,316             -            -        1,316
                                       ------------- ------------- ------------ ------------
Contribution..................              $ (683)          $ 63        $ 392      $ (228)
                                       -----------------------------------------------------

Total
Revenue.......................             $ 13,167       $ 4,186      $ 7,992     $ 25,345
Costs.........................               10,870         2,537        1,192       14,599
                                       ------------- ------------- ------------ ------------
Contribution..................              $ 2,297       $ 1,649      $ 6,800     $ 10,746
                                       ------------- ------------- ------------ ------------

Cost of product...............                                                        1,731
Corporate marketing...........                                                        1,903
Research and development......                                                        4,079
General and administration....                                                        2,715
Depreciation and amortization                                                         2,707
Takeover defence costs........                                                        4,545
                                                                                ------------
                                                                                   $ 17,680
                                                                                ------------
Operating loss ...............                                                      (6,934)
Net investment income.........                                                         (95)
                                                                                ------------
Loss before taxes.............                                                    $ (7,029)
Provision for income taxes....                                                        (140)
                                                                                ------------
Net loss......................                                                    $ (7,169)
                                                                                ============

</TABLE>

                                       13
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

<TABLE>
<CAPTION>


                                               Three months ended January 31, 2001
                                               (in thousands of Canadian dollars)
                                       ----------------------------------------------------
                                                                     Customer
                                        Product       Consulting     Support      Total
                                       ------------- ------------- ------------ -----------
<S>                                        <C>           <C>          <C>         <C>
North America
Revenue.......................              $ 7,024       $ 1,486      $ 4,948    $ 13,458
Costs.........................                6,262           744        1,051       8,057
                                       ------------- ------------- ------------ -----------
Contribution..................                $ 762         $ 742      $ 3,897     $ 5,401
                                       ------------- ------------- ------------ -----------

Europe
Revenue.......................              $ 4,992       $ 1,473      $ 1,887     $ 8,352
Costs.........................                3,307           524          447       4,278
                                       ------------- ------------- ------------ -----------
Contribution..................              $ 1,685         $ 949      $ 1,440     $ 4,074
                                       ------------- ------------- ------------ -----------

Asia Pacific
Revenue.......................              $ 1,172          $ 77        $ 293     $ 1,542
Costs.........................                1,130             -            -       1,130
                                       ------------- ------------- ------------ -----------
Contribution..................                $  42          $ 77        $ 293       $ 412
                                       ------------- ------------- ------------ -----------

Total
Revenue.......................             $ 13,188       $ 3,036      $ 7,128    $ 23,352
Costs.........................               10,699         1,268        1,498      13,465
                                       ------------- ------------- ------------ -----------
Contribution..................              $ 2,489       $ 1,768      $ 5,630     $ 9,887
                                       ------------- ------------- ------------ -----------

Cost of product...............                                                       1,910
Corporate marketing...........                                                       2,408
Research and development......                                                       4,227
General and administration....                                                       2,569
Depreciation and amortization                                                        2,709
                                                                                -----------
                                                                                  $ 13,823
                                                                                -----------
Operating loss ...............                                                     (3,936)
Net investment income.........                                                         264
                                                                                -----------
Income before taxes...........                                                   $ (3,672)
Provision for income taxes....                                                       (201)
                                                                                -----------
Net loss......................                                                   $ (3,873)
                                                                                ===========
</TABLE>
                                       14
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                 Nine months ended January 31, 2002
                                                 (in thousands of Canadian dollars)
                                        -----------------------------------------------------
                                                                      Customer
                                         Product       Consulting     Support      Total
                                        ------------- ------------- ------------ ------------
<S>                                       <C>            <C>          <C>          <C>
North America
Revenue.......................              $15,901       $ 7,746     $ 15,103     $ 38,750
Costs.........................               19,560         4,361        4,003       27,924
                                       ------------- ------------- ------------ ------------
Contribution..................            $ (3,659)       $ 3,385     $ 11,100     $ 10,826
                                       ------------- ------------- ------------ ------------

Europe
Revenue.......................             $ 13,982       $ 5,867      $ 6,842     $ 26,691
Costs.........................               12,320         3,437        1,524       17,281
                                       ------------- ------------- ------------ ------------
Contribution..................              $ 1,662       $ 2,430      $ 5,318      $ 9,410
                                       ------------- ------------- ------------ ------------

Asia Pacific
Revenue.......................              $ 2,427         $ 313      $ 1,031      $ 3,771
Costs.........................                4,718             -            -        4,718
                                       ------------- ------------- ------------ ------------
Contribution..................            $ (2,291)         $ 313      $ 1,031     $ (947 )
                                       ------------- ------------- ------------ ------------

Total
Revenue.......................             $ 32,310      $ 13,926     $ 22,976     $ 69,212
Costs.........................               36,598         7,798        5,527       49,923
                                       ------------- ------------- ------------ ------------
Contribution..................            $ (4,288)       $ 6,128     $ 17,449     $ 19,289
                                       ------------- ------------- ------------ ------------

Cost of product...............                                                        5,184
Corporate marketing...........                                                        6,311
Research and development......                                                       14,115
General and administration....                                                        8,762
Depreciation and amortization                                                         8,232
Takeover defence costs........                                                        4,545
Gain on sale of asset.........                                                        (200)
                                                                                ------------
                                                                                   $ 46,949
                                                                                ------------
Operating loss ...............                                                     (27,660)
Net investment income.........                                                          263
                                                                                ------------
Loss before taxes.............                                                   $ (27,397)
Provision for income taxes....                                                        (402)
                                                                                ------------
Net loss......................                                                   $ (27,799)
                                                                                ============

</TABLE>

                                       15
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                               Nine months ended January 31, 2001
                                               (in thousands of Canadian dollars)
                                       ----------------------------------------------------
                                                                      Customer
                                         Product       Consulting     Support      Total
                                      ------------- ------------- ------------ -----------
<S>                                        <C>            <C>         <C>         <C>
North America
Revenue.......................             $ 22,664       $ 4,262     $ 14,422    $ 41,348
Costs.........................               18,064         2,133        3,120      23,317
                                       ------------- ------------- ------------ -----------
Contribution..................              $ 4,600       $ 2,129     $ 11,302    $ 18,031
                                       ------------- ------------- ------------ -----------

Europe
Revenue.......................             $ 14,370       $ 4,031      $ 5,350    $ 23,751
Costs.........................                9,420         1,509        1,290      12,219
                                       ------------- ------------- ------------ -----------
Contribution..................              $ 4,950       $ 2,522      $ 4,060    $ 11,532
                                       ------------- ------------- ------------ -----------

Asia Pacific
Revenue.......................              $ 6,067         $ 352        $ 575     $ 6,994
Costs.........................                3,533             -            -       3,533
                                       ------------- ------------- ------------ -----------
Contribution..................              $ 2,534         $ 352        $ 575     $ 3,461
                                       ------------- ------------- ------------ -----------

Total
Revenue.......................             $ 43,101       $ 8,645     $ 20,347    $ 72,093
Costs.........................               31,017         3,642        4,410      39,069
                                       ------------- ------------- ------------ -----------
Contribution..................             $ 12,084       $ 5,003     $ 15,937    $ 33,024
                                       ------------- ------------- ------------ -----------

Cost of product...............                                                       6,042
Corporate marketing...........                                                       7,492
Research and development......                                                      12,233
General and administration....                                                       7,301
Depreciation and amortization                                                        7,770
                                                                                -----------
                                                                                  $ 40,838
                                                                                -----------
Operating loss................                                                     (7,814)
Net investment income.........                                                         716
                                                                                -----------
Loss before taxes.............                                                   $ (7,098)
Provision for income taxes....                                                       (860)
                                                                                -----------
Net loss......................                                                   $ (7,958)
                                                                                ===========


</TABLE>

                                       16
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)


10.   CAPITAL LEASE OBLIGATION

     The Company leases certain computer hardware and software under capital
lease agreements. The capital leases have been recorded as fixed assets, other
assets, and capital lease obligations in the accompanying financial statements.
Depreciation related to the capital leases is included in depreciation and
amortization expense for the three and nine months ended January 31, 2002.


     The total future minimum lease payments under capital leases at January 31,
2002 are as follows:


                                                               in thousands
                                                               of Canadian
Years ending April 30,                                           dollars

  2002.................................................             $ 285
  2003.................................................             1,090
  2004.................................................               706
  2005.................................................                42
                                                           ---------------
  Total minimum lease payment..........................             2,123
  Less amounts representing interest...................             (256)
                                                           ---------------

  Present value of net minimum lease payments..........           $ 1,867

  Less current portion.................................             (987)
                                                           ---------------
  Long term portion....................................             $ 880
                                                           ---------------


11.   NET CHANGE IN OPERATING COMPONENTS OF WORKING CAPITAL

     The net change in operating components of working capital is comprised of:

<TABLE>
<CAPTION>
                                              Three months ended                Nine months ended
                                                  January 31,                      January 31,
                                          ----------------------------    -------------------------------
                                             2002            2001             2002             2001
                                          ------------   -------------    -------------    --------------
                                               (in thousands of                  (in thousands of
                                               Canadian dollars)                Canadian dollars)

  <S>                                         <C>             <C>             <C>               <C>
  Decrease (increase) in:
  Accounts receivable and term
    accounts receivable............           $ 6,566         $ 2,276         $ 14,010          $(3,070)
  Unbilled receivables.............               349             617              555             1,404
  Inventory........................               280            (40)              148               (4)
  Prepaid expenses.................           (1,527)           (539)          (1,410)             (467)

  Increase (decrease) in:
  Accounts payable.................           (1,902)              34          (1,063)           (3,202)
  Accrued liabilities..............             2,956           (147)              247             (863)
  Unearned revenue.................                19             (4)          (1,329)           (1,240)
                                          ------------   -------------    -------------    --------------
                                              $ 6,741       $ (2,197)         $ 11,158          $(7,442)
                                          ============   =============    =============    ==============

</TABLE>

                                       17
<PAGE>
                               ACCELIO CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                   (Unaudited)

12.  RECENT ACCOUNTING PRONOUNCEMENTS

     On October 3, 2001 the Financial Accounting Standards Board (FASB) issued
Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, that replaces FASB Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and APB Opinion
No. 30, Reporting Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, for the disposal of segments of business. Statement 144
requires that those long-lived assets be measured at the lower of carrying
amount or fair value less cost to sell, whether reported in continuing
operations or in discontinued operations. Therefore, discontinued operations
will no longer be measured at net realizable value or include amounts for
operating losses that have not yet occurred. The provisions of Statement 144 are
effective for financial statements issued or fiscal years beginning after
December 15, 2001 and, generally, are to be applied prospectively. This
pronouncement will be effective for the Company's fiscal year beginning May 1,
2002. Management believes the adoption of SFAS No. 144 will not have a
significant impact on the Company's financial condition or results of
operations.

     In July 2001, the Financial Accounting Standards Board ("FASB") has issued
the Statement of Financial Standards ("SFAS") No.141, Business Combinations,
that will require all business combinations to use the purchase method of
accounting. This pronouncement is effective for all business combinations
initiated after June 30, 2001. The FASB has also issued SFAS No. 142, Goodwill
and Other Intangible Assets, which will require intangible assets with an
indefinite life and goodwill to be tested for impairment on an annual basis.
Goodwill and indefinite life intangibles will no longer be amortized. Intangible
assets with a definite life will continue to be amortized over their useful
life. This pronouncement will be effective for the Company's fiscal year
beginning May 1, 2002. Management believes the adoption of SFAS No. 141 and SFAS
No. 142 will not have a significant impact on the Company's financial condition
or results of operations.

     In June 1998, the FASB issued the Statement of Financial Accounting
Standard ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). This statement establishes accounting and reporting
standards for derivative instruments and hedging activities and is effective for
all fiscal quarters of fiscal years beginning after June 15, 1999. In June,
1999, the FASB issued SFAS No.137, which delays the effective date of SFAS 133
until fiscal years beginning after June 15, 2000. Currently, as the Company has
no derivative instruments, the adoption of SFAS No. 133 has had no impact on the
Company's financial condition or results of operations.

13   SUBSEQUENT EVENT

     On February 1, 2002, Adobe Systems Incorporated ("Adobe") announced a
proposed agreement to acquire the Company. Under the terms of the agreement,
Adobe common stock, valued at $72.0 (US) million on closing will be exchanged
for all the Company's equity securities. The proposed acquisition is subject to
the execution of customary transaction documents and the satisfaction of
customary closing conditions, including the approval of the Company's
shareholders and clearance of the acquisition by U.S. and Canadian regulatory
authorities. The Company has agreed to pay a breakup fee of US$2.88 million and
expenses of US$1.25 million to Adobe if the Board of Directors of Accelio
supports another transaction. The transaction is expected to close in April
2002.

     On February 4, 2002 Open Text announced that it had extended its offer to
acquire all of the outstanding Common Shares of Accelio Corporation until 5:00
p.m. on April 30, 2002.

14.  COMPARATIVE RESULTS

     Certain of the prior years' figures have been reclassified in order to
conform to the presentation adopted in the current year.

                                       18
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


Introduction

     The following discussion of the Company's results of operations and of its
liquidity and capital resources should be read in conjunction with the
information contained in the Consolidated Financial Statements and related Notes
thereto. The following discussion provides a comparative analysis of material
changes for the quarters ended January 31, 2002, and 2000, in the financial
condition and results of operations of the parent company ("Accelio") and its
wholly-owned subsidiaries: Accelio Corporation (a Delaware corporation), JF
A'Asia Pty. Limited ("Accelio Pacific"), Accelio Scandinavia AB ("Accelio
Nordic"), Accelio France SA ("Accelio France"), Accelio UK Limited ("Accelio
UK"), Accelio Deutschland GmbH ("Accelio Germany"), Accelio Technologies Limited
("Accelio Ireland"), Accelio Japan K.K. ("Accelio Japan"), Accelio Netherlands
BV ("Accelio Netherlands") and Accelio PTE Ltd ("Accelio Singapore"). Accelio
and its wholly-owned subsidiaries are collectively referred to herein as the
"Company".

Results of Operations

     The Company's revenues and operating results have varied substantially from
quarter to quarter. With the exception of its consulting services operation, the
Company has historically operated with little backlog of orders because its
software products are generally shipped as orders are received. The Company
records product revenue from packaged software and irrevocable commitments to
purchase products when persuasive evidence of an arrangement exists, the
software product has been shipped, there are no significant uncertainties
surrounding product acceptance, the fees are fixed and determinable and
collection is considered probable. As a result, product revenue in any period is
substantially dependent on orders booked and shipped in that period. Product
revenue is difficult to forecast due to the fact that the Company's sales cycle,
from initial trial to multiple copy licenses, varies substantially from customer
to customer. As a result, variations in the timing of product sales can cause
significant variations in operating results from period to period. Product
revenue represented 52% of total revenue for the quarter ended January 31, 2002.

     Service revenue primarily consists of consulting services, training and
technical support. Consulting services include assisting customers to configure,
implement and integrate the Company's products and, when required, customize
products and design automated processes to meet customers' specific business
needs. Service revenue represented 48% of total revenue for the quarter ended
January 31, 2002.

     Costs and expenses are comprised of cost of product, cost of service, sales
and marketing, general and administrative, research and development,
depreciation and amortization and other expenses. Cost of product consists of
the cost of disks, manuals, packaging, freight, royalty payments to vendors
whose software is bundled with certain products, amortization of deferred
product development costs and provision for bad debts. Cost of service includes
all costs of providing technical support, training, consulting, custom forms
development application development services and provision for bad debts. Sales
and marketing expenses are principally related to salaries and commissions paid
to sales and marketing personnel and the cost of marketing programs. Research
and development expenses include personnel and occupancy costs as well as the
costs of software development, testing, product management, quality assurance
and documentation. General and administrative expenses include personnel and
occupancy costs related to administrative personnel. Depreciation and
amortization includes depreciation of fixed assets and amortization of other
assets, goodwill and distribution rights relating to various acquisitions. The
Company amortizes goodwill and distribution rights over their expected useful
lives. The Company periodically reviews the carrying value of its fixed assets
and other assets. Any impairment in the carrying value is recognized at that
time.

                                       19
<PAGE>
     The following table sets forth, on a comparative basis for the periods
indicated, the components of the Company's product margin, service margin and
product and service margin:

<TABLE>
<CAPTION>
                               Three months ended January 31,                   Nine months ended January 31,
                       -----------------------------------------------    -------------------------------------------
                               2002                     2001                     2002                   2001
                       ---------------------   -----------------------    -------------------    --------------------
                             (in thousands of Canadian dollars)               (in thousands of Canadian dollars)

<S>                      <C>           <C>         <C>           <C>      <C>           <C>       <C>           <C>
Product revenue....      $ 13,167      100%        $13,188       100%     $ 32,310      100%      $43,101       100%
Cost of product....         1,731       13%          1,910        14%        5,184       16%        6,042        14%
                       -----------   -------   ------------    -------    ---------    ------    ---------    -------
Product margin.....        11,436       87%         11,278        86%       27,126       84%       37,059        86%
                       ===========   =======   ============    =======    =========    ======    =========    =======

Service revenue....        12,178      100%         10,164       100%       36,902      100%       28,992       100%
Cost of service....         3,729       31%          2,766        27%       13,325       36%        8,052        28%
                       -----------   -------   ------------    -------    ---------    ------    ---------    -------
Service margin.....         8,449       69%          7,398        73%       23,577       64%       20,940        72%
                       ===========   =======   ============    =======    =========    ======    =========    =======


Total revenue......        25,345      100%         23,352       100%       69,212      100%       72,093       100%
Costs of product and
service                     5,460       22%          4,676        20%       18,509       27%       14,094        20%
                       -----------   -------   ------------    -------    ---------    ------    ---------    -------
Product and service
margin                   $ 19,885       78%        $18,676        80%     $ 50,703       73%      $57,999        80%
                       ===========   =======   ============    =======    =========    ======    =========    =======

</TABLE>

The following table presents, for the periods indicated, consolidated statement
of operations data expressed as a percentage of total revenues:

<TABLE>
<CAPTION>

                                                    Three months ended            Nine months ended
                                                        January 31,                  January 31,
                                                 --------------------------   -------------------------
                                                    2002           2001           2002          2001
                                                 ------------   -----------   ------------   ----------
         <S>                                        <C>            <C>             <C>          <C>
         REVENUES
           Product................................      52%           56%             47%          60%
           Service................................      48%           44%             53%          40%
                                                ------------   -----------    ------------   ----------
                                                       100%          100%            100%         100%
                                                ------------   -----------    ------------   ----------
         COSTS AND EXPENSES
           Cost of product........................       7%            8%              7%           8%
           Cost of service........................      15%           12%             19%          11%
           Sales and marketing....................      50%           56%             62%          53%
           General and administrative.............      11%           11%             13%          10%
           Research and development...............      16%           18%             20%          17%
           Depreciation and amortization..........      11%           12%             12%          11%
           Takeover bid expenses..................      18%             -              7%            -
           Gain on sale of assets.................        -             -              0%            -
                                                ------------   -----------    ------------   ----------
                                                       127%          117%            140%         111%
                                                ------------   -----------    ------------   ----------
         OPERATING LOSS...........................     -27%          -17%            -40%         -11%
         Interest and other income (expense)......       0%            1%              0%           1%
                                                ------------   -----------    ------------   ----------
         LOSS BEFORE TAXES........................     -28%          -16%            -40%         -10%
         Provision for income taxes...............      -1%           -1%             -1%          -1%
                                                ------------   -----------    ------------   ----------
         NET LOSS.................................     -28%          -17%            -40%         -11%
                                                ============   ===========    ============   ==========

</TABLE>
                                       20
<PAGE>
     The following table provides details of product revenue by geographic
segment and, within Canada and the United States of America, by distribution
channel:

<TABLE>
<CAPTION>

                                  Three months ended January 31,                 Nine months ended January 31,
                             -----------------------------------------    --------------------------------------------
                               2002          2001          Increase          2002             2001         Increase
                                                          (Decrease)                                      (Decrease)
                             ----------    ----------     ------------    ------------     -----------    ------------

<S>                            <C>           <C>             <C>             <C>             <C>             <C>
Product revenue by region
United States and Canada....   $ 6,068       $ 7,024         -14%            $ 15,901        $ 22,664        -30%
Europe......................     6,466         4,992          30%              13,982          14,370         -3%
Rest of World...............       633         1,172         -46%               2,427           6,067        -60%
                             ----------    ----------     ------------    ------------     -----------    ------------
                              $ 13,167      $ 13,188          0%             $ 32,310        $ 43,101        -25%
                             ==========    ==========     ============    ============     ===========    ============


Product revenue by channel in North America
End Users...................   $ 4,764       $ 5,165          -8%            $ 10,673        $ 13,718        -22%
Reseller and OEM............     1,304         1,859         -30%               5,228           8,946        -42%
                             ----------    ----------     ------------    ------------     -----------    ------------
                               $ 6,068       $ 7,024         -14%            $ 15,901        $ 22,664        -30%
                             ==========    ==========     ============    ============     ===========    ============

</TABLE>

Three Months Ended January 31, 2002, Compared to Three Months Ended January 31,
2001

Revenues

     Total Revenues: Total revenues increased 9% to $25.3 million for the three
months ended January 31, 2002, from $23.4 million for the three months ended
January 31, 2001. Total revenues consisted of 52% product revenue and 48%
service revenue for the three months ended January 31, 2002.

     Product Revenue: Product revenue was unchanged at $13.2 million for the
three months ended January 31, 2002, and the three months ended January 31,
2001. Product revenue derived from North America, Europe and Rest of World
represented 46%, 49% and 5%, respectively, of product revenue for the three
months ended January 31, 2002, as compared to 53%, 38% and 9%, respectively, of
product revenue for the three months ended January 31, 2001.

     Product revenue derived from North America decreased 14% to $6.1 million
for the three months ended January 31, 2002, from $7.0 million for the three
months ended January 31, 2001. Reseller and OEM sales, which represented 21% of
North American product revenue, decreased 30% to $1.3 million for the three
months ended January 31, 2002, from $1.9 million for the three months ended
January 31, 2001 due primarily to lower than expected revenues from the United
States Government sector and a large contract in the Financial Sector in Q3 of
2001 for which there was no comparative transaction in Q3 of 2002. Product
revenue from direct sales, which represented 79% of North American product
revenue, decreased 8% to $4.8 million for the three months ended January 31,
2002, from $5.2 million for the three months ended January 31, 2001.

     Product revenue derived from Europe increased 30% to $6.5 million for the
three months ended January 31, 2002, from $5.0 million for the three months
ended January 31, 2001, due to increased license revenue from the United
Kingdom. The increase in our United Kingdom operation's revenue was primarily
due to a large financial contract that contributed $2.9 million of product
revenue. There was no comparative deal in the three months ended January 31,
2001.

     Product revenue derived from Rest of World decreased 46% to $633,000 for
the three months ended January 31, 2002, from $1.2 million for the three months
ended January 31, 2001, primarily due to decreased reseller revenue from Japan
and China.

                                       21
<PAGE>
     Service Revenue: Service revenue increased 20% to $12.2 million for the
three months ended January 31, 2002, from $10.2 million for the three months
ended January 31, 2001. For the three months ended January 31, 2002, maintenance
and support revenue increased 12% to $8.0 million from $7.1 million for the
three months ended January 31, 2001. This increase resulted from continued
growth in the company's overall maintenance and support base which results from
continued sales of new maintenance and support contracts as well as the renewal
of existing contracts. The Company's consulting revenue increased 38% to $4.2
million for the three months ended January 31, 2002, from $3.0 million for the
three months ended January 31, 2001. For the past year, the Company has been
strengthening its capacity to win and provide consulting business by increasing
the size of its sales force and the number of consultants dedicated to earning
consulting revenue for the Company. This has resulted in an increase in
consulting revenue.

Costs and Expenses

     Total Costs and Expenses: Total costs and expenses were $32.3 million for
the three months ended January 31, 2002, an increase of 18% from $27.3 million
for the three months ended January 31, 2001. This increase was primarily due to
the costs associated with retaining CIBC World Markets, and legal and accounting
fees to address the unsolicited bid by OpenText Corporation.

     In a move to reduce its cost base while also preserving the intellectual
talent of the Company, Accelio implemented a Global salary reduction program of
10% for all employees earning $60,000 or higher. Employees earning less than
$60,000 received a 5% reduction. This initiative is currently for six months but
may be extended to twelve months and commenced during the quarter ended January
31, 2002. The reduction applied to every employee, where legally applicable
geographically, including the Board of Directors, the executive officers and the
Chief Executive Officer. The Company cancelled all executive bonus plans for the
third and fourth quarters, unless it meets its profit target. The Company did
not meet the target for the third quarter ended January 31, 2002. The Company
also eliminated a total of 50 positions. All employees received statutory notice
of this change in salary in accordance with employment law. Employees were
granted stock options on a prorated basis with the salary reduction. The grant
was based on the amount of the salary reduction divided by 4. For example, an
employee with a salary of $60,000 would multiply the salary times 10% ($6,000)
divided by two ($3,000) divided by 4 equals number of options granted of 750.
The vesting period for these options is 2/3 at one year from the date of grant
and the remaining 1/3 after eighteen months of grant date. The Company granted
approximately 500,000 options to employees pursuant to this arrangement. These
measures have contributed to reducing overall employee costs in the three months
ended January 31, 2002 by approximately $3.2 million dollars from the three
months ended October 31, 2001.



     Cost of Product: Cost of product decreased 9% to $1.7 million for the three
months ended January 31, 2002, from $1.9 million for the three months ended
January 31, 2001. These costs represent 13% and 14% of product revenue for the
three months ended January 31, 2002 and January 31, 2001, respectively. The
decrease is related to a decrease in amortization of capitalized software costs.
During fiscal year 2001, the company wrote down the value of certain capitalized
software costs. The write-down was attributable to management's analysis that
the life cycles of some of its products had come to an end. Total capitalized
software costs charged to cost of product revenue decreased 80% to $161,000 for
the three months ended January 31, 2002, from $814,000 for the three months
ended January 31, 2001. Total bad debt expense decreased 37% to $615,000 for the
three months ended January 31, 2002, from $980,000 for the three months ended
January 31, 2001.


     Cost of Service: Cost of service increased 35% to $3.7 million for the
three months ended January 31, 2002, from $2.8 million for the three months
ended January 31, 2001 due to the company's increasing consulting revenue in
addition to the number of resources dedicated to consulting and customer support
activities. The service margin decreased to 69% for the three months ended
January 31, 2002, from 73% for the three months ended January 31, 2001.

     Sales and Marketing: Sales and marketing expenses decreased 3% to $12.8
million for the three months ended January 31, 2002 from $13.1 million for the
three months ended January 31, 2001, primarily due to lower travel and
recruiting fees as a result of the Company's increased cost management efforts.
As a percentage of total revenues, sales and marketing decreased to 50% for the
three months ended January 31, 2002, from 56% for the three months ended January
31, 2001.

                                       22
<PAGE>
     General and Administrative: General and administrative expenses increased
6% to $2.7 million for the three months ended January 31, 2002, from $2.6
million for the three months ended January 31, 2001. As a percentage of total
revenues, general and administrative expenses remained constant at 11% for the
three months ended January 31, 2002, and the three months ended January 31,
2001.

     Research and Development: Research and development expenses decreased 4% to
$4.1 million for the three months ended January 31, 2002, from $4.2 million for
the three months ended January 31, 2001, primarily due to lower overall costs
incurred as a result of the Company's increased cost management, and the
implementation of the Global salary reduction program of 10% for all employees
earning $60,000 or higher. During the three months ended January 31, 2002, the
Company did not capitalize any costs related to software development as compared
to $971,000 for the three months ended January 31, 2001. Software development
costs are expensed as incurred unless they meet generally accepted accounting
criteria for deferral and amortization. Costs were not deferred in the quarter
ended January 31, 2002 to the extent they were for the quarter ended January 31,
2001 because fewer projects met the criteria for deferral and where projects did
meet the criteria the period between achieving technological feasibility and the
general availability of the product was short and the associated costs were
minimal. Research and development expense as a percentage of product revenue
decreased to 31% for the three months ended January 31, 2002, from 32% for the
three months ended January 31, 2001.

     Depreciation and Amortization: Depreciation and amortization remained at
$2.7 million for the three months ended January 31, 2002, and the three months
ended January 31, 2001.

     Takeover defence costs: The expense of $4.5 million was due to the costs
associated with retaining CIBC World Markets, and legal and accounting fees to
address the unsolicited bid by OpenText Corporation.

     Operating Loss: Operating loss was $6.9 million for the three months ended
January 31, 2002, compared to an operating loss of $3.9 million for the three
months ended January 31, 2001. The increase in operating loss is due to the
factors discussed above.

     Net Investment and Other Income (Expense): Net investment and other expense
was approximately $95,000 for the three months ended January 31, 2002, compared
to other income of $264,000 for the three months ended January 31, 2001. The
decrease is due to the decrease in cash and cash equivalents and the lower
interest return on investments.

     Provision for Income Taxes: During the quarter ended January 31, 2002, the
Company recorded a provision for domestic capital taxes and foreign jurisdiction
income tax of $140,000, compared to $201,000 for the three months ended January
31, 2001.

Nine Months Ended January 31, 2002, Compared to Nine Months Ended January 31,
2001

Revenues

     Total Revenues: Total revenues decreased 4% to $69.2 million for the nine
months ended January 31, 2002, from $72.1 million for the nine months ended
January 31, 2001. Total revenues consisted of 47% product revenue and 53%
service revenue for the nine months ended January 31, 2002.

     Product Revenue: Product revenue decreased 25% to $32.3 million for the
nine months ended January 31, 2002, from $43.1 million for the nine months ended
January 31, 2001. Product revenue derived from North America, Europe and Rest of
World represented 49%, 43% and 8%, respectively, of product revenue for the nine
months ended January 31, 2002, as compared to 53%, 33% and 14%, respectively, of
product revenue for the nine months ended January 31, 2001.

     Product revenue derived from North America decreased 30% to $15.9 million
for the nine months ended January 31, 2002, from $22.7 million for the nine
months ended January 31, 2001. Reseller and OEM sales, which represented 33% of
North American product revenue, decreased 42% to $5.2 million for the nine
months ended

                                       23
<PAGE>
January 31, 2002, from $8.9 million for the nine months ended January 31, 2001
due primarily to the economic slowdown in North America and lower than expected
revenues from the United States Government. Product revenue from direct sales,
which represented 67% of North American product revenue, decreased 22% to $10.7
million for the nine months ended January 31, 2002, from $13.7 million for the
nine months ended January 31, 2001.

     Product revenue derived from Europe decreased 3% to $14.0 million for the
nine months ended January 31, 2002, from $14.4 million for the nine months ended
January 31, 2001, due to a decline in license revenue from France.

     Product revenue derived from Rest of World decreased 59% to $2.5 million
for the nine months ended January 31, 2002, from $6.1 million for the nine
months ended January 31, 2001, primarily due to decreased reseller revenue from
Japan and Australia.

     Service Revenue: Service revenue increased 27% to $36.9 million for the
nine months ended January 31, 2002, from $29.0 million for the nine months ended
January 31, 2001. For the nine months ended January 31, 2002, maintenance and
support revenue increased 13% to $23.0 million from $20.3 million for the nine
months ended January 31, 2001. The Company's consulting revenue increased 61% to
$13.9 million for the nine months ended January 31, 2002, from $8.6 million for
the nine months ended January 31, 2001. For the past year, the Company has been
strengthening its capacity to win and provide consulting business by increasing
the size of its sales force and the number of consultants dedicated to earning
consulting revenue for the Company. This has resulted in an increase in
consulting revenue.

Costs and Expenses

     Total Costs and Expenses: Total costs and expenses were $96.9 million for
the nine months ended January 31, 2002, an increase of 21% from $79.9 million
for the nine months ended January 31, 2001.

     Cost of Product: Cost of product decreased 14% to $5.2 million for the nine
months ended January 31, 2002, from $6.0 million for the nine months ended
January 31, 2001. These costs represent 16% and 14% of product revenue for the
nine months ended January 31, 2002 and January 31, 2001, respectively. The
decrease is related to a decrease in amortization of capitalized software costs.
During fiscal year 2001, the company wrote down the value of certain capitalized
software costs. The write-down was attributable to management's analysis that
the life cycles of some of its products had come to an end. Total capitalized
software costs charged to cost of product revenue decreased 75% to $597,000 for
the nine months ended January 31, 2002, from $2.4 million for the nine months
ended January 31, 2001. Total bad debt expense decreased 38% to $1.5 million for
the nine months ended January 31, 2002, from $2.4 million for the nine months
ended January 31, 2001.

     Cost of Service: Cost of service increased 65% to $13.3 million for the
nine months ended January 31, 2002, from $8.1 million for the nine months ended
January 31, 2001 due to the company's increasing consulting revenue in addition
to the number of resources dedicated to consulting and customer support
activities. The service margin decreased to 64% for the nine months ended
January 31, 2002, from 72% for the nine months ended January 31, 2001.

     Sales and Marketing: Sales and marketing expenses increased 11% to $42.9
million for the nine months ended January 31, 2002 from $38.5 million for the
nine months ended January 31, 2001, as a result of the company's expansion of
its worldwide sales force. As a percentage of total revenues, sales and
marketing increased to 62% for the nine months ended January 31, 2002, from 53%
for the nine months ended January 31, 2001.

     General and Administrative: General and administrative expenses increased
20% to $8.8 million for the nine months ended January 31, 2002, from $7.3
million for the nine months ended January 31, 2001. As a percentage of total
revenues, general and administrative expenses increased to 13% for the nine
months ended January 31, 2002, from 10% for the nine months ended January 31,
2001.

     Research and Development: Research and development expenses increased 15%
to $14.1 million for the nine

                                       24
<PAGE>
months ended January 31, 2002, from $12.2 million for the nine months ended
January 31, 2001, primarily due to a reduction in the amount of capitalized
software costs. During the nine months ended January 31, 2002, the Company did
not capitalize any costs related to software development as compared to $2.7
million for the nine months ended January 31, 2001. Software development costs
are expensed as incurred unless they meet generally accepted accounting criteria
for deferral and amortization. Costs were not deferred in the nine months ended
January 31, 2002 to the extent they were for the nine months ended January 31,
2001 because fewer projects met the criteria for deferral and where projects did
meet the criteria the period between achieving technological feasibility and the
general availability of the product was short and the associated costs were
minimal. Research and development expense as a percentage of product revenue
increased to 44% for the nine months ended January 31, 2002, from 28% for the
nine months ended January 31, 2001.

     Depreciation and Amortization: Depreciation and amortization increased 6%
to $8.2 million for the nine months ended January 31, 2002 compared to $7.8
million for the nine months ended January 31, 2001.

     Takeover defence costs: The expense of $4.5 million was due to the costs
associated with retaining CIBC World Markets, and legal and accounting fees to
address the unsolicited bid by OpenText Corporation.

     Operating Loss: Operating loss was $27.7 million for the nine months ended
January 31, 2002, compared to an operating loss of $7.8 million for the nine
months ended January 31, 2001. The increase in operating loss is due to the
factors discussed above.

     Net Investment and Other Income (Expense): Net investment and other income
was approximately $263,000 for the nine months ended January 31, 2002, compared
to $716,000 for the nine months ended January 31, 2001. The decrease is due to
the decrease in cash and cash equivalents and the lower interest return on
investments.

     Provision for Income Taxes: The Company recorded a provision for domestic
capital taxes and foreign jurisdiction income tax of $402,000 during the nine
months ended January 31, 2002, compared to $860,000 for the nine months ended
January 31, 2001.

Liquidity and Capital Resources

     As at January 31, 2002, and April 30, 2001, the Company had $28.2 million
and $41.4 million of cash and cash equivalents respectively. During the nine
months ended January 31, 2002, the Company's cash and cash equivalents decreased
by approximately $13.3 million. The decrease is primarily due to the Company's
use of cash to fund current operations, the purchase of fixed and other assets,
the repayment of certain capital lease obligations, offset by a decrease in
accounts receivable.

     The Company believes that its existing cash and cash equivalents will
provide sufficient liquidity to meet the Company's business requirements in the
near term. However, should the Company continue to incur operating losses, its
ability to meet its liquidity requirements and to raise additional capital
through debt or equity financing may be compromised.

                                       25
<PAGE>
Future Payments

     Future payments due under debt and lease obligations as of January 31,
2002:

<TABLE>
<CAPTION>

                            RBC term    Capital     Operating       Property
  Fiscal year                 loan       leases      leases        leases       Total
  ------------------------ ------------ -------- ----------- ------------- -----------
                                       (in thousands of Canadian dollars)
  <S>                         <C>        <C>          <C>         <C>         <C>

  2002                        $ 10,000    $ 285        $186       $ 1,765     $12,236
  2003                               -    1,090          52         5,940       7,082
  2004                               -      706           -         5,527       6,233
  2005                               -       42           -         5,397       5,439
  2006 and beyond                    -        -           -        14,381      14,381
                           ------------ -------- ----------- ------------- -----------
  Total                       $ 10,000  $ 2,123        $238      $ 33,010     $45,371
                           ============ ======== =========== ============= ===========

</TABLE>

Operations

     The Company decreased its investment in the non-cash operating components
of working capital during the nine months ended January 31, 2002, by
approximately $11.2 million primarily due to a decrease in accounts receivable.
The decrease in accounts receivable is related to the improvement in DSO (days
sales outstanding) and the Company's decline in revenue.

     The Company purchased approximately $2.9 million of fixed assets in the
nine months ended January 31, 2002 including computer hardware, office
equipment, furniture, and leasehold improvements. During the nine months ended
January 31, 2002, the Company invested $3.0 million in other assets related
primarily to the purchase of software.

     During the nine months ended January 31, 2002, the Company generated cash
of approximately $351,000 relating to the Company's stock purchase plan.

Accounts Receivable and Term Accounts Receivable:

     Total accounts receivable and term accounts receivable decreased $12.3
million to $20.1 million at January 31, 2002 from $32.5 million at April 30,
2001, primarily due to the Company's continued focus on collections. Accounts
receivable excluding term accounts receivable decreased to $18.3 million at
January 31, 2002, from $28.5 million at April 30, 2001. Term accounts
receivable, which are accounts receivable with contracted payment dates
exceeding the Company's customary trade terms, decreased by $2.8 million to $1.2
million for the nine months ended January 31, 2002, from $4.0 million on April
30, 2001 due to a reduction in the Company's practice of granting extended
payment terms.

     The Company records revenues from irrevocable commitments to purchase
products which do not conform to the Company's customary trade terms at the
minimum amount receivable less deemed interest ("Term Accounts Receivable"). The
Company's Irrevocable Commitment Licenses ("ICLs") are arrangements to use
multiple copies of a software product under site licenses with users and to
market multiple copies of a software product under similar arrangements with
resellers. These arrangements always include post-contract customer support
("PCS") and are typically less than a year in duration with a significant
portion of the product license fee payable within the Company's normal trade
terms. License revenue from arrangements having extended payment term were
$477,000 for the three months ended January 31, 2002, and $1.1 million for the
nine months ended January 31, 2002. For the three months ended January 31, 2002,
the discount rate used was 6.5%.

     Payment of Term Accounts Receivable is generally due the earlier of: (i)
delivery of the Company's products by the customer to its customers or end
users; and (ii) specific dates in the license agreement ("Minimum Payment
Dates").

Restructuring

                                       26
<PAGE>
     On March 17, 1999, the Corporation announced a restructuring plan and
recorded a provision for restructuring costs of $30.5 million directed at
reducing costs. The key restructuring actions included:

     o    Consolidation of management responsibilities and reduction in
          headcount;
     o    Closure of redundant facilities;
     o    Reduction in the carrying value of certain capital assets primarily
          related to past acquisitions; and
     o    Cancellation of certain commitments and other costs.

     The following table summarizes the activity in the restructuring costs
during the three months ended January 31, 2002:

<TABLE>
<CAPTION>

                                          Employee                                Total      Non Cash       Total
                                          Termination    Facilities    Other      Costs       Costs      Provision
                                          -------------- ----------- ---------- ----------- ------------ ------------

<S>                                        <C>          <C>          <C>       <C>         <C>         <C>
Restructuring provision...........         $ 5,252      $2,914       $726      $8,892      $21,611     $ 30,503
Cash payments.....................          (1,175)        (36)      (207)     (1,418)          --       (1,418)
Non-cash items....................              --          --         --          --      (21,611)     (21,611)
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, April 30, 1999...........          $ 4,077      $2,878       $519      $7,474        $ --      $ 7,474
Cash payments.....................           (2,921)     (1,092)      (124)     (4,137)         --       (4,137)
Reductions........................             (566)       (540)         --     (1,106)         --       (1,106)
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, April 30, 2000...........           $  590      $1,246       $395      $2,231         $ --      $ 2,231
Cash payments.....................             (468)       (236)      (121)       (825)          --         (825)
Reductions........................             (122)       (567)         --       (689)          --         (689)
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, April 30, 2001...........             $ --       $ 443       $274       $ 717         $ --       $  717
Cash payments.....................               --         (88)       (40)       (128)          --         (128)
Reductions........................               --          --         --          --           --           --
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, July 31, 2001............             $ --       $ 355       $234       $ 589         $ --       $  589
Cash payments.....................               --          (8)       (41)        (49)          --          (49)
Reductions........................               --          --         --          --           --           --
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, October 31, 2001.........              $ --       $ 347       $193       $ 540         $ --       $  540
Cash payments.....................                --         (49)       (42)        (91)          --         (91)
Reductions........................                --          --         --          --           --           --
                                          -------------- ----------- ---------- ----------- ------------ ------------
Balance, January 31, 2002.........              $ --       $ 298      $ 151       $ 449         $ --        $ 449
                                          ============== =========== ========== =========== ============ ============


Long-term balance.................              $ --       $ 249       $ --       $ 249         $ --        $ 249
                                          ============== =========== ========== =========== ============ ============

</TABLE>

     Employee terminations totaled 105 and included 46 in sales and marketing,
40 in research in development, 12 in internal corporate services, and 7 in
systems and consulting services. Employee terminations included salary
continuance for which the Company was contractually obligated to pay. All
employees were terminated on or before April 30, 1999.

     Facilities costs consisted primarily of $2.1 million and $780,000 related
to the closure of the Company's United Kingdom and Toronto facilities,
respectively. The provision for redundant facilities included management's best
estimates of the total future operating costs of these vacant facilities for the
remainder of their respective lease terms. Actual costs could differ from these
estimates. During the nine months ended January 31, 2002, the Company's
liability for vacant facilities was reduced by $145,000. The Company's long-term
balance relates to a lease in the United Kingdom which expires April 30, 2010.

     Other cash costs related primarily to the cancellation of trade shows and
other commitments. The remaining obligation relates to a service contract which
expires August 31, 2002. During the nine months ended January 31, 2002, the
Company's liability related to this commitment was reduced by $123,000.

     Non-cash costs included impairment losses of $21.6 million related to
assets held for use. The losses were comprised of $16.6 million related to
marketing and distribution rights, $3.1 million related to goodwill and $1.9
million related to other capital assets.

                                       27
<PAGE>
Financial Instruments and Credit Facility

     The Company has entered into receivable purchase agreements with certain
third party purchasers. Under the agreements, the Company has the option to sell
certain accounts receivable on a recourse basis. The Purchasers have recourse in
the event of a trade dispute as defined in the receivables purchase agreements.
As at January 31, 2002 and April 30, 2001, the outstanding balance of accounts
receivable sold under these agreements was approximately US$2.6 million and
US$3.6 million, respectively. The recourse obligation is estimated to be nil as
the Company believes that none of the receivables sold are at risk of recourse.

     The Company has a committed $20 million credit facility with the Royal Bank
of Canada ("RBC"). This credit facility is made up of (i) a $10 million term
loan facility which bears interest at a rate of RBC prime plus 2.25% and is
payable on August 1, 2002 and (ii) a $10 million operating facility that bears
interest at a rate of RBC prime plus 1%. The credit facility is in effect until
August 1, 2002. As at January 31, 2002, the Company had drawn all of the $10
million term loan facility and fixed the interest rate until April 17, 2002, at
1.98%. The Company had no borrowings against its operating facility at January
31, 2002. The Company has granted, as collateral for the $20 million credit
facility, a general security interest in Accelio's assets, including
assignment of receivables insurance and a pledge of the shares of certain
subsidiaries.

     When the Company deems appropriate, Accelio uses forward contracts and
purchased options to manage exposures to foreign exchange. The Company's
objective is to minimize risk using the most effective methods to eliminate or
reduce the impacts of this exposure. Accelio does not enter into financial
instruments for speculative or trading purposes. As at January 31, 2002, the
Company had no outstanding foreign exchange financial instruments.

Critical Accounting Policies and Estimates

     The Company's discussion and analysis of its financial condition and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial
statements requires Accelio to make estimates and judgements that affect the
reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. On an on-going basis, Accelio
evaluates its estimates including those related to product returns, bad debts,
inventories, investments, intangible assets, income taxes, financing operations,
warranty obligations, restructuring, contingencies, and litigation. Accelio
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgements about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

     Accelio believes the following critical accounting policies affect its more
significant judgements and estimates used in the preparation of its consolidated
financial statements:

(1)  Revenue recognition

     The Company recognizes revenue in accordance with Statement of Position
("SOP") 97-2, "Software Revenue Recognition," issued by the American Institute
of Certified Public Accountants ("AICPA"), SOP 98-9, "Modification of 97-2,
Software Recognition with Respect to Certain Transactions" and Staff Accounting
Bulletin (SAB) No. 101 "Revenue Recognition in Financial Statements", issued by
the Securities and Exchange Commission (SEC).

                                       28
<PAGE>
(a)  Product Revenue

     The Company records product revenue from packaged software and irrevocable
commitments to purchase products when persuasive evidence of an arrangement
exists, the software product has been shipped, there are no significant
uncertainties surrounding product acceptance, the fees are fixed and
determinable and collection is considered probable.

     At the time of contract signing, we assess whether the fee associated with
our revenue transactions is fixed and determinable. We assess whether the fee is
fixed and determinable based on the payment terms associated with the
transaction. We consider the fee to be fixed and determinable if it is due
within our normal payment terms, which are 30 to 90 days from invoice date. In
certain specific cases, we accept payment terms that stretch beyond our normal
payment terms but are under a year in length. This only occurs under Irrevocable
Commitment Licenses ("ICLs"). The Company uses ICLs to recognize revenue from
arrangements with users or original equipment manufacturers ("OEM") when the
risk of obsolescence is low as: (1) the software is mission critical software to
the user; or (2) the software is embedded in the software of the OEM. In
addition, the Company always sells post-contract customer support ("PCS") with
ICL's. These PCS arrangements include the right to unspecified future upgrades.
Accordingly, the Company believes the risk that the product's value will decline
over the term of the agreement is low. The Company has a history of collecting
all amounts due under the original terms of its ICLs. The Company does not have
a history of granting concessions, including but not limited to those that would
reduce an arrangement fee or extend the terms of payment or increase the
deliverables under such arrangements.

     If it cannot be concluded that a fee is fixed or determinable at the outset
of an arrangement, revenue is recognized as payments from customers become due,
assuming all other conditions for revenue recognition have been satisfied.

     We assess collection based on a number of factors, including past
transaction history with the customer and the credit-worthiness of the customer.
We do not request collateral from our customers. If we determine that collection
of a fee is not reasonably assured, we defer the fee and recognize revenue at
the time collection becomes reasonably assured, which is generally upon receipt
of cash.

     The Company uses binding purchase orders and signed license agreement as
evidence of an arrangement. Our arrangements do not generally include acceptance
clauses. However, if an arrangement includes an acceptance provision, acceptance
occurs upon the earlier of receipt of a written customer acceptance or
expiration of the acceptance period.

     Revenues from ICLs to purchase products with payment terms exceeding the
Company's customary trade terms are recorded at the amount receivable less
deemed interest. The Company amortizes the difference between the face value of
the receivable and the discounted amount over the term of the receivable and
records the discount as interest income. The Company estimates its implied
discounted interest rate in order to make this determination based on credit
ratings of the individual customers.

     For all arrangements with multiple obligations (i.e. PCS) we allocate
revenue to each component of the arrangement using the residual value method
based on the fair value of the undelivered elements, which is specific to the
Company. This means that we defer revenue from the arrangement fee equivalent to
the fair value of the undelivered elements. Fair values for the ongoing PCS
obligations are based upon our analysis of maintenance and support renewal
pricing. Fair value of consulting is based upon separate sales by us of these
services to other customers.

b)   Post-contract Customer Support Revenue

     The Company enters into arrangements that always include PCS. Revenue from
PCS is recognized ratably over the term of the agreement. Unearned revenue
represents payments received from customers for services not yet performed.

c)   Consulting Revenue

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     Revenue from software product licenses which include significant
customization and revenue from services are recognized on a percentage of
completion basis, whereby revenue is recorded, based on labor input hours, at
the estimated realizable value of work completed to date. Recognition of revenue
for these fixed price contracts rely on estimates of labor input hours incurred
to date as well as the total estimated labor input hours for the project at
hand. Estimated losses on contracts are recognized when they become probable.
Unbilled receivables represent consulting work performed under contract and not
yet billed. The Company follows this method since reasonably dependable
estimates of the revenue, labor input hours and costs applicable to various
stages of a contract can be made.



(2)  Allowance for Doubtful Accounts


     The Company reviews its accounts receivable and evaluates the adequacy of
its allowance for doubtful accounts. Specific items that are analyzed include
historical bad debts, changes in customer payments and current economic trends.


(3)  Intangible Assets and Goodwill


     The Company assesses the impairment of identifiable intangibles, long-lived
assets and related goodwill whenever events or changes in circumstances indicate
that the carrying value may not be recoverable. Future adverse changes in market
conditions or poor operating results of the underlying investments could result
in losses or an inability to recover the carrying value of the investments that
may not be reflected in an investment's carrying value, thereby, possibly
requiring an impairment charge in the future.



(4)  Determining Functional Currencies for Purposes of Consolidating
     International Operations


     In preparing the Company's consolidated financial statements, we are
required to translate the financial statements of the foreign subsidiaries from
the currency in which they keep their accounting records, their local currency,
into Canadian dollars. This process results in exchange gains and losses which,
under the relevant accounting guidance are either included within the statement
of operations or as a separate part of our net equity under the caption
"cumulative translation adjustment".

     Under the relevant accounting guidance the treatment of these translation
gains or losses is dependent upon management's determination of the functional
currency of each subsidiary. The functional currency is based upon management's
judgment and involves consideration of all relevant economic facts and
circumstances affecting the subsidiary. Generally, the currency in which the
subsidiary transacts a majority of its transactions would be considered the
functional currency but any dependency upon the parent and the nature of the
subsidiary's operations must also be considered.

     The Company has determined that the functional currency of its subsidiaries
is the local currency, and as such, any gain or loss associated with the
translation is included in cumulative translation adjustments. However, if the
functional currency was not the local currency, any gain or loss associated with
the translation of the financial statements would be included within the
Company's statement of operations after the date of the change. If the Company's
assessment of the functional currency were to change for one or more of its
subsidiaries, this would impact the Company's consolidated statement of
operations in future periods.

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(5)  Income Tax Reserves

     The Company has net deferred tax assets, the principal components of which
are temporary differences associated with the acquisition of in process research
and development and operating loss carry forwards. The Company believes
sufficient uncertainty exists regarding the realizability of these net deferred
tax assets such that a valuation allowance has been taken on the entire amount.
Assumptions regarding the realizability of these net deferred tax assets are
revisited at each balance sheet date. Any changes in the Company's overall
operating environment and financial performance could result in adjustments to
the valuation allowance.

(6)  Costs of Computer Software to be Sold

     Costs related to the development of proprietary software are expensed as
incurred unless the costs relate to technically feasible and complete products
and can reasonably be regarded as assured of recovery through future revenues in
which case the costs are deferred and amortized. Annual amortization is computed
using the greater of (i) the ratio of the product's current gross revenues to
the total of current and expected gross revenues or (ii) the straight-line
method computed by dividing the remaining unamortized capitalized cost by the
estimated remaining economic life of the product, not to exceed three years. At
each balance sheet date, the unamortized capitalized costs are compared to the
net realizable value of the product. If there is an excess in capitalized costs,
this excess is written off in the period.



Recent Accounting Pronouncements

     On October 3, 2001 the Financial Accounting Standards Board (FASB) issued
Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, that replaces FASB Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and APB Opinion
No. 30, Reporting Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, for the disposal of segments of business. Statement 144
requires that those long-lived assets be measured at the lower of carrying
amount or fair value less cost to sell, whether reported in continuing
operations or in discontinued operations. Therefore, discontinued operations
will no longer be measured at net realizable value or include amounts for
operating losses that have not yet occurred. The provisions of Statement 144 are
effective for financial statements issued or fiscal years beginning after
December 15, 2001 and, generally, are to be applied prospectively. This
pronouncement will be effective for the Company's fiscal year beginning May 1,
2002. Management believes the adoption of SFAS No. 144 will not have a
significant impact on the Company's financial condition or results of
operations.

     In July 2001, the Financial Accounting Standards Board ("FASB") has issued
the Statement of Financial Standards ("SFAS") No.141, Business Combinations,
that will require all business combinations to use the purchase method of
accounting. This pronouncement is effective for all business combinations
initiated after June 30, 2001. The FASB has also issued SFAS No. 142, Goodwill
and Other Intangible Assets, which will require intangible assets with an
indefinite life and goodwill to be tested for impairment on an annual basis.
Goodwill and indefinite life intangibles will no longer be amortized. Intangible
assets with a definite life will continue to be amortized over their useful
life. This pronouncement will be effective for the Company's fiscal year
beginning May 1, 2002. Management believes the adoption of SFAS No. 141 and SFAS
No. 142 will not have a significant impact on the Company's financial condition
or results of operations.

     In June 1998, the FASB issued the Statement of Financial Accounting
Standard ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). This statement establishes accounting and reporting
standards for derivative instruments and hedging activities and is effective for
all fiscal quarters of fiscal years beginning after June 15, 1999. In June 1999,
the FASB issued SFAS No.137, which delays the effective date of SFAS 133 until
fiscal years beginning after June 15, 2000. Currently, as the Company has no
derivative instruments, the adoption of SFAS No. 133 has had no impact on the
Company's financial condition or results of operations.


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PART II -- OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any material legal proceeding.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

During the three months ended January 31, 2002, the Company filed the following
reports on Form 8-K;


o     Report on Form 8-K dated November 26, 2001, regarding the appointment of
      Trey Graham to Senior Vice President and Chief Financial Officer

o     Report on Form 8-K dated December 17, 2001, regarding the unsolicited bid
      from Open Text to acquire all the outstanding common shares of the Company

o     Report on Form 8-K dated December 18, 2001, pursuant to the Company's
      hiring of CIBC World Markets to act as its financial advisor in response
      to the unsolicited bid from Open Text to acquire all the outstanding
      common shares of the Company

o     Report on Form 8-K dated January 7, 2002, pursuant to the announcement
      that the Company's Board of Directors unanimously rejected the unsolicited
      tender offer by Open Text Corporation to acquire all of the Company's
      outstanding shares

o     Report on Form 8-K dated January 11, 2002, pursuant to the announcement by
      the Company as to the primary reasons for rejecting the Open Text bid

o     Report on Form 8-K dated January 30, 2002, pursuant to the announcement by
      the Company announced that it has received several proposals to acquire
      all of its issued and outstanding shares, each proposal being for a price
      per share that is higher than that of the unsolicited tender offer made by
      Open Text Corporation

o     Report on Form 8-K dated February 1, 2002, pursuant to the announcement by
      the Company that Adobe has agreed to acquire all outstanding shares of the
      Company for approximately CDN $4.50 per share, payable in Adobe shares
      valued at US$72.0 million

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                                   SIGNATURES


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                     Accelio Corporation


March 11, 2002         By:  /s/ A. Kevin Francis
--------------            ---------------------------------------------
    Date                  A. Kevin Francis
                          President and Chief Executive Officer and Director
                          (Principal Executive Officer)


March 11, 2002         By:  /s/ Leonard (Trey) Graham III
--------------            ---------------------------------------------
    Date                  Leonard (Trey) Graham III
                          Senior Vice President, Finance and Chief Financial
                          Officer (Principal Financial and Accounting Officer)

                                       33