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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2007

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: 0-27544



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OPEN TEXT CORPORATION

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|CANADA                                                         |  | 98-0154400                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

275 Frank Tompa Drive, Waterloo, Ontario, Canada N2L 0A1

(Address of principal executive offices)

Registrants telephone number, including area code: (519) 888-7111

(former name former address and former
fiscal year, if changed since last report)



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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act).

Large accelerated filer ̈Accelerated
filer  x                         Non-accelerated filer ̈

Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes ̈No  x

At April 30, 2007 there were 49,881,068
outstanding Common Shares of the registrant.



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OPEN TEXT CORPORATION

TABLE OF CONTENTS



|                              |  |                                                                                                               |  |        
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------- |  | -------
|                              |  |                                                                                                               |  | Page No
|PART I Financial Information: |  |                                                                                                              
|                              |  |                                                                                                              
|Item 1.                       |  | Financial Statements                                                                                          |  |        
|                              |  |                                                                                                              
|                              |  | Unaudited Condensed Consolidated Balance Sheets as of March 31, 2007 and June 30, 2006                        |  | 3      
|                              |  |                                                                                                              
|                              |  | Unaudited Condensed Consolidated Statements of IncomeThree and Nine Months Ended March 31, 2007 and 2006     |  | 4      
|                              |  |                                                                                                              
|                              |  | Unaudited Condensed Consolidated Statements of DeficitThree and Nine Months Ended March 31, 2007 and 2006    |  | 5      
|                              |  |                                                                                                              
|                              |  | Unaudited Condensed Consolidated Statements of Cash FlowsThree and Nine Months Ended March 31, 2007 and 2006 |  | 6      
|                              |  |                                                                                                              
|                              |  | Unaudited Notes to Unaudited Condensed Consolidated Financial Statements                                      |  | 7      
|                              |  |                                                                                                              
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                         |  | 33     
|                              |  |                                                                                                              
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                                                    |  | 48     
|                              |  |                                                                                                              
|Item 4.                       |  | Controls and Procedures                                                                                       |  | 49     
|                              | 
|PART II Other Information:    |  |                                                                                                              
|                              |  |                                                                                                              
|Item 1A.                      |  | Risk Factors                                                                                                  |  | 50     
|                              |  |                                                                                                              
|Item 6.                       |  | Exhibits                                                                                                      |  | 58     
|                              | 
|Signatures                    |  | 59                                                                                                           
|                              | 
|Index to Exhibits             |  | 60                                                                                                           



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OPEN TEXT CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)



|                                                                                                                                                      |  |                |           |   |               |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | - | ------------- | - | ------- | -
|                                                                                                                                                      |  | March 31, 2007 |           |   | June 30, 2006 |  
|                                                                                                                                                      |  | (Unaudited)    |           |   |               |  
|ASSETS                                                                                                                                                |  |                |           |   |               |   |         |  
|Current assets:                                                                                                                                       |  |                |           |   |               |   |         |  
|Cash and cash equivalents                                                                                                                             |  | $              | 159,683   |   |               | $ | 107,354 |  
|Accounts receivable trade, net of allowance for doubtful accounts of $1,959 as of March 31, 2007 and $2,736 as of June 30, 2006
(note 10)             |  |                | 113,737   |   |               |   | 75,016  |  
|Income taxes recoverable (note 13)                                                                                                                    |  |                |          |   |               |   | 11,924  |  
|Prepaid expenses and other current assets                                                                                                             |  |                | 12,262    |   |               |   | 8,428   |  
|Deferred tax assets (note 13)                                                                                                                         |  |                | 25,122    |   |               |   | 28,724  |  
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|Total current assets                                                                                                                                  |  |                | 310,804   |   |               |   | 231,446 |  
|Investments in marketable securities (note 3)                                                                                                         |  |                |          |   |               |   | 21,025  |  
|Capital assets (note 4)                                                                                                                               |  |                | 45,361    |   |               |   | 41,262  |  
|Goodwill (note 5)                                                                                                                                     |  |                | 526,636   |   |               |   | 235,523 |  
|Acquired intangible assets (note 6)                                                                                                                   |  |                | 362,115   |   |               |   | 102,326 |  
|Deferred tax assets (note 13)                                                                                                                         |  |                | 53,562    |   |               |   | 37,185  |  
|Other assets                                                                                                                                          |  |                | 9,318     |   |               |   | 2,326   |  
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|                                                                                                                                                      |  | $              | 1,307,796 |   |               | $ | 671,093 |  
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                  |  |                |           |   |               |   |         |  
|Current liabilities:                                                                                                                                  |  |                |           |   |               |   |         |  
|Accounts payable and accrued liabilities (note 7)                                                                                                     |  | $              | 99,187    |   |               | $ | 62,535  |  
|Current portion of long-term debt (note 8)                                                                                                            |  |                | 4,305     |   |               |   | 405     |  
|Deferred revenues                                                                                                                                     |  |                | 142,771   |   |               |   | 74,687  |  
|Income taxes payable (note 13)                                                                                                                        |  |                | 22,192    |   |               |   |        |  
|Deferred tax liabilities (note 13)                                                                                                                    |  |                | 5,790     |   |               |   | 12,183  |  
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|Total current liabilities                                                                                                                             |  |                | 274,245   |   |               |   | 149,810 |  
|Long-term liabilities:                                                                                                                                |  |                |           |   |               |   |         |  
|Accrued liabilities (note 7)                                                                                                                          |  |                | 18,880    |   |               |   | 21,121  |  
|Long-term debt (note 8)                                                                                                                               |  |                | 396,334   |   |               |   | 12,963  |  
|Deferred revenues                                                                                                                                     |  |                | 4,051     |   |               |   | 3,534   |  
|Deferred tax liabilities (note 13)                                                                                                                    |  |                | 107,928   |   |               |   | 19,490  |  
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|Total long-term liabilities                                                                                                                           |  |                | 527,193   |   |               |   | 57,108  |  
|Minority interest                                                                                                                                     |  |                | 6,299     |   |               |   | 5,804   |  
|Shareholders equity:                                                                                                                                 |  |                |           |   |               |   |         |  
|Share capital (note 11)                                                                                                                               |  |                |           |   |               |   |         |  
|49,810,068 and 48,935,042 Common Shares issued and outstanding at March 31, 2007 and June 30, 2006, respectively; Authorized Common
Shares: unlimited |  |                | 423,381   |   |               |   | 414,475 |  
|Additional paid-in capital                                                                                                                            |  |                | 33,626    |   |               |   | 28,367  |  
|Accumulated other comprehensive income                                                                                                                |  |                | 56,746    |   |               |   | 42,654  |  
|Accumulated deficit                                                                                                                                   |  |                | (13,694   | ) |               |   | (27,125 | )
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|Total shareholders equity                                                                                                                            |  |                | 500,059   |   |               |   | 458,371 |  
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|                                                                                                                                                      |  | $              | 1,307,796 |   |               | $ | 671,093 |  
|                                                                                                                                                      |  |                |           |   |               |   |         |  
|Commitments and Contingencies (note 16)                                                                                                               |  |                |           |   |               |   |         |  

See accompanying unaudited notes to unaudited condensed consolidated financial statements



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OPEN TEXT CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands of U.S. dollars, except per share data)



|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                      |  | Three months ended March 31, |         |   | Nine months ended March 31, |  
|                                                      |  | 2007                         |         |   | 2006                        |   |         | 2007 |  |   | 2006    |  
|Revenues:                                             |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|License                                               |  | $                            | 43,032  |   |                             | $ | 28,415  |      |  | $ | 123,282 |   |  | $ | 90,489  |  
|Customer support                                      |  |                              | 79,042  |   |                             |   | 45,966  |      |  |   | 205,352 |   |  |   | 136,656 |  
|Service                                               |  |                              | 33,978  |   |                             |   | 26,545  |      |  |   | 91,834  |   |  |   | 77,182  |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Total revenues                                        |  |                              | 156,052 |   |                             |   | 100,926 |      |  |   | 420,468 |   |  |   | 304,327 |  
|Cost of revenues:                                     |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|License                                               |  |                              | 3,515   |   |                             |   | 3,900   |      |  |   | 9,637   |   |  |   | 8,099   |  
|Customer support                                      |  |                              | 12,431  |   |                             |   | 7,103   |      |  |   | 31,821  |   |  |   | 21,595  |  
|Service                                               |  |                              | 28,042  |   |                             |   | 19,840  |      |  |   | 77,012  |   |  |   | 61,848  |  
|Amortization of acquired technology intangible assets |  |                              | 10,433  |   |                             |   | 4,730   |      |  |   | 25,675  |   |  |   | 14,013  |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Total cost of revenues                                |  |                              | 54,421  |   |                             |   | 35,573  |      |  |   | 144,145 |   |  |   | 105,555 |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|                                                      |  |                              | 101,631 |   |                             |   | 65,353  |      |  |   | 276,323 |   |  |   | 198,772 |  
|Operating expenses:                                   |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Research and development                              |  |                              | 21,176  |   |                             |   | 14,153  |      |  |   | 57,950  |   |  |   | 44,824  |  
|Sales and marketing                                   |  |                              | 39,069  |   |                             |   | 24,677  |      |  |   | 107,450 |   |  |   | 78,562  |  
|General and administrative                            |  |                              | 15,947  |   |                             |   | 11,210  |      |  |   | 43,688  |   |  |   | 33,298  |  
|Depreciation                                          |  |                              | 3,626   |   |                             |   | 2,694   |      |  |   | 10,525  |   |  |   | 8,034   |  
|Amortization of acquired intangible assets            |  |                              | 7,396   |   |                             |   | 2,298   |      |  |   | 17,147  |   |  |   | 6,825   |  
|Special charges (recoveries) (note 17)                |  |                              | 878     |   |                             |   | (557    | )    |  |   | 5,253   |   |  |   | 26,347  |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Total operating expenses                              |  |                              | 88,092  |   |                             |   | 54,475  |      |  |   | 242,013 |   |  |   | 197,890 |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Income from operations                                |  |                              | 13,539  |   |                             |   | 10,878  |      |  |   | 34,310  |   |  |   | 882     |  
|Other income (expense)                                |  |                              | (98     | ) |                             |   | (1,554  | )    |  |   | 604     |   |  |   | (3,318  | )
|Interest income (expense), net                        |  |                              | (7,550  | ) |                             |   | 685     |      |  |   | (14,670 | ) |  |   | 1,001   |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Income (loss) before income taxes                     |  |                              | 5,891   |   |                             |   | 10,009  |      |  |   | 20,244  |   |  |   | (1,435  | )
|Provision for income taxes                            |  |                              | 1,914   |   |                             |   | 2,558   |      |  |   | 6,421   |   |  |   | 928     |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss) before minority interest            |  |                              | 3,977   |   |                             |   | 7,451   |      |  |   | 13,823  |   |  |   | (2,363  | )
|Minority interest                                     |  |                              | 124     |   |                             |   | 129     |      |  |   | 392     |   |  |   | 462     |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss) for the period                      |  | $                            | 3,853   |   |                             | $ | 7,322   |      |  | $ | 13,431  |   |  | $ | (2,825  | )
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss) per sharebasic (note 12)           |  | $                            | 0.08    |   |                             | $ | 0.15    |      |  | $ | 0.27    |   |  | $ | (0.06   | )
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss) per sharediluted (note 12)         |  | $                            | 0.08    |   |                             | $ | 0.15    |      |  | $ | 0.26    |   |  | $ | (0.06   | )
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Weighted average number of Common Shares outstanding  |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Basic                                                 |  |                              | 49,490  |   |                             |   | 48,762  |      |  |   | 49,203  |   |  |   | 48,590  |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Diluted                                               |  |                              | 51,134  |   |                             |   | 50,260  |      |  |   | 50,703  |   |  |   | 48,590  |  
|                                                      |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  

See accompanying unaudited notes to unaudited condensed consolidated financial statements



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OPEN TEXT CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF DEFICIT

(in thousands of U.S. dollars)



|                             |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|---------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                             |  | Three months ended March 31, |         |   | Nine months ended March 31, |  
|                             |  | 2007                         |         |   | 2006                        |   |         | 2007 |  |   | 2006    |  
|Deficit, beginning of period |  | $                            | (17,547 | ) |                             | $ | (42,250 | )    |  | $ | (27,125 | ) |  | $ | (32,103 | )
|Net income (loss)            |  |                              | 3,853   |   |                             |   | 7,322   |      |  |   | 13,431  |   |  |   | (2,825  | )
|                             |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  
|Deficit, end of period       |  | $                            | (13,694 | ) |                             | $ | (34,928 | )    |  | $ | (13,694 | ) |  | $ | (34,928 | )
|                             |  |                              |         |   |                             |   |         |      |  |   |         |   |  |   |         |  

See accompanying unaudited notes to unaudited condensed consolidated financial statements



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)



|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|---------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | --------------------------- | - | ------- | ---- |  | - | -------- | - |  | - | ------- | -
|                                                                                         |  | Three months ended March 31, |         |   | Nine months ended March 31, |  
|                                                                                         |  | 2007                         |         |   | 2006                        |   |         | 2007 |  |   | 2006     |  
|Cash flows from operating activities:                                                    |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Net income (loss) for the period                                                         |  | $                            | 3,853   |   |                             | $ | 7,322   |      |  | $ | 13,431   |   |  | $ | (2,825  | )
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Depreciation and amortization                                                            |  |                              | 21,455  |   |                             |   | 9,722   |      |  |   | 53,347   |   |  |   | 28,872  |  
|Share-based compensation expense                                                         |  |                              | 1,261   |   |                             |   | 1,143   |      |  |   | 3,861    |   |  |   | 3,886   |  
|Undistributed earnings related to minority interest                                      |  |                              | 124     |   |                             |   | 129     |      |  |   | 392      |   |  |   | 462     |  
|Amortization of debt issuance costs                                                      |  |                              | 274     |   |                             |   |        |      |  |   | 531      |   |  |   |        |  
|Unrealized loss on financial instruments (note 9)                                        |  |                              | 364     |   |                             |   |        |      |  |   | 576      |   |  |   |        |  
|Deferred taxes                                                                           |  |                              | (14,270 | ) |                             |   | 2,272   |      |  |   | (23,194  | ) |  |   | (3,773  | )
|Impairment of capital assets                                                             |  |                              |        |   |                             |   | 150     |      |  |   |         |   |  |   | 3,817   |  
|Changes in operating assets and liabilities:                                             |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Accounts receivable                                                                      |  |                              | 3,550   |   |                             |   | 3,360   |      |  |   | 27,047   |   |  |   | 8,826   |  
|Prepaid expenses and other current assets                                                |  |                              | (212    | ) |                             |   | 379     |      |  |   | 682      |   |  |   | (549    | )
|Income taxes                                                                             |  |                              | 1,173   |   |                             |   | (110    | )    |  |   | (3,381   | ) |  |   | (1,823  | )
|Accounts payable and accrued liabilities                                                 |  |                              | (4,777  | ) |                             |   | (12,647 | )    |  |   | (9,690   | ) |  |   | (1,300  | )
|Deferred revenue                                                                         |  |                              | 28,326  |   |                             |   | 16,554  |      |  |   | 14,889   |   |  |   | 7,350   |  
|Other assets                                                                             |  |                              | 221     |   |                             |   | 425     |      |  |   | 3,916    |   |  |   | 2,428   |  
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Net cash provided by operating activities                                                |  |                              | 41,342  |   |                             |   | 28,699  |      |  |   | 82,407   |   |  |   | 45,371  |  
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Cash flows from investing activities:                                                    |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Acquisition of capital assets                                                            |  |                              | (729    | ) |                             |   | (2,729  | )    |  |   | (4,620   | ) |  |   | (16,826 | )
|Additional purchase consideration for prior period acquisitions                          |  |                              |        |   |                             |   |        |      |  |   | (856     | ) |  |   | (3,369  | )
|Purchase of IXOS, net of cash acquired                                                   |  |                              | (219    | ) |                             |   | (423    | )    |  |   | (1,086   | ) |  |   | (4,651  | )
|Purchase of Hummingbird, net of cash acquired                                            |  |                              |        |   |                             |   |        |      |  |   | (384,761 | ) |  |   |        |  
|Purchase of Momentum, net of cash acquired                                               |  |                              | (4,076  | ) |                             |   |        |      |  |   | (4,076   | ) |  |   |        |  
|Investments in marketable securities                                                     |  |                              |        |   |                             |   |        |      |  |   | (829     | ) |  |   |        |  
|Acquisition related costs                                                                |  |                              | (8,049  | ) |                             |   | (1,750  | )    |  |   | (28,249  | ) |  |   | (3,594  | )
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Net cash used in investing activities                                                    |  |                              | (13,073 | ) |                             |   | (4,902  | )    |  |   | (424,477 | ) |  |   | (28,440 | )
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Cash flows from financing activities:                                                    |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Excess tax benefits on share-based compensation expense                                  |  |                              | 381     |   |                             |   | 159     |      |  |   | 1,122    |   |  |   | 803     |  
|Proceeds from issuance of Common Shares                                                  |  |                              | 6,365   |   |                             |   | 1,567   |      |  |   | 8,829    |   |  |   | 3,452   |  
|Repayment of long-term debt                                                              |  |                              | (1,071  | ) |                             |   | (61     | )    |  |   | (2,244   | ) |  |   | (61     | )
|Proceeds from long-term debt                                                             |  |                              |        |   |                             |   |        |      |  |   | 390,000  |   |  |   | 12,928  |  
|Debt issuance costs                                                                      |  |                              |        |   |                             |   |        |      |  |   | (7,433   | ) |  |   |        |  
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Net cash provided by financing activities                                                |  |                              | 5,675   |   |                             |   | 1,665   |      |  |   | 390,274  |   |  |   | 17,122  |  
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Foreign exchange gain (loss) on cash held in foreign currencies                          |  |                              | 1,338   |   |                             |   | 1,025   |      |  |   | 4,125    |   |  |   | (463    | )
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Increase in cash and cash equivalents, during the period                                 |  |                              | 35,282  |   |                             |   | 26,487  |      |  |   | 52,329   |   |  |   | 33,590  |  
|Cash and cash equivalents at beginning of period                                         |  |                              | 124,401 |   |                             |   | 87,001  |      |  |   | 107,354  |   |  |   | 79,898  |  
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Cash and cash equivalents at end of period                                               |  | $                            | 159,683 |   |                             | $ | 113,488 |      |  | $ | 159,683  |   |  | $ | 113,488 |  
|                                                                                         |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  
|Supplementary cash flow disclosures (note 15)                                            |  |                              |         |   |                             |   |         |      |  |   |          |   |  |   |         |  

See accompanying unaudited notes to unaudited condensed consolidated financial statements



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share data)

NOTE 1BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements (Interim Financial Statements) include the accounts
of Open Text Corporation and its wholly and partially owned subsidiaries, collectively referred to as Open Text or the Company. All inter-company balances and transactions have been eliminated.

These Interim Financial Statements are expressed in U.S. dollars and are prepared in accordance with United States generally accepted accounting
principles (U.S. GAAP). These financial statements are based upon accounting policies and methods of their application are consistent with those used and described in the Companys annual consolidated financial statements. The
Interim Financial Statements do not include all of the financial statement disclosures included in the annual financial statements prepared in accordance with U.S. GAAP and therefore should be read in conjunction with the consolidated financial
statements and notes included in the Companys Annual Report on Form 10-K for the fiscal year ended June 30, 2006.

The
information furnished, as of March 31, 2007 and for the three and nine months ended March 31, 2007 and 2006, is unaudited; however it reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair
presentation of the results for the interim periods presented, and includes the financial results of Hummingbird Ltd. (Hummingbird), with effect from October 2, 2006, and Momentum Systems Inc. (Momentum), with effect
from March 2, 2007. The operating results for the three and nine months ended March 31, 2007 are not necessarily indicative of the results expected for any succeeding quarter or the entire fiscal year ending June 30, 2007.

Use of estimates

The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements. These estimates, judgments and assumptions are evaluated on an ongoing basis.
Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable at that time, the results of which form the basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from those estimates. In particular, significant estimates, judgments and assumptions include those related to: (i) revenue recognition, (ii) allowance for doubtful
accounts, (iii) testing goodwill for impairment, (iv) the valuation of acquired intangible assets, (v) the valuation of long-lived assets, (vi) the recognition of contingencies, (vii) facility and restructuring accruals,
(viii) acquisition accruals, (ix) asset retirement obligations, (x) realization of investment tax credits, (xi) the valuation allowance relating to the Companys deferred tax assets, (xii) the recognition of share-based
payment expense and (xiii) the recognition of unrealized gains/losses on financial instruments.

Reclassifications

For the three months ended March 31, 2006, General and administrative expenses have been increased by approximately $190,000 with corresponding
decreases of approximately $27,000, $61,000, and $102,000 in Sales and marketing expenses, Cost of services revenues and Cost of customer support revenues, respectively, from previously reported amounts. These reclassifications related to a change
in the method of allocating operating expenses within the Company.

For the nine months ended March 31, 2006, General and
administrative expenses, Cost of service revenues and Cost of customer support revenues have been increased by $75,000, $361,000, and $593,000, respectively, with corresponding decreases of approximately $314,000 and $715,000 in Sales and marketing
expenses, and



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



Research and development expenses, respectively, from previously reported amounts. These reclassifications related to a change in the method of allocating
operating expenses within the Company.

Service revenues increased by approximately $1.6 million and $4.1 million for the three and nine
months ended March 31, 2006, respectively, offset by a decrease in Customer support revenues of approximately $1.6 million and $4.1 million, respectively, from previously reported amounts. Cost of service revenues increased by approximately
$784,000 and $2.4 million for the three and nine months ended March 31, 2006, respectively, offset by a decrease in Cost of customer support revenue of approximately $784,000 and $2.4 million, respectively, from previously reported amounts.
These changes correspond to an internal reclassification pertaining to the Companys Enterprise Support Program (ESP program). The ESP program is a customized on-site support program that provides support services that
suit the specific requirements of the Companys customers.

There was no change to income from operations or net income (loss) per
share in any of the periods presented as a result of these reclassifications.

Comprehensive net income

Comprehensive net income is comprised of net income (loss) and other comprehensive net income, including the effect of foreign currency translation
resulting from the consolidation of subsidiaries where the functional currency is a currency other than the U.S. Dollar. The Companys total comprehensive net income was as follows:



|                                        |  |                              |       |                             |   |        |  |      |        |  |   |        |  
|--------------------------------------- |  | ---------------------------- | ----- | --------------------------- | - | ------ |  | ---- | ------ |  | - | ------ | -
|                                        |  | Three months ended March 31, |       | Nine months ended March 31, |  
|                                        |  | 2007                         |       | 2006                        |   | 2007   |  | 2006 |       
|Other comprehensive net income:         |  |                              |       |                             |   |        |  |      |        |  |   |        |  
|Foreign currency translation adjustment |  | $                            | 4,471 |                             | $ | 7,696  |  | $    | 14,092 |  | $ | 3,060  |  
|Net income (loss) for the period        |  |                              | 3,853 |                             |   | 7,322  |  |      | 13,431 |  |   | (2,825 | )
|                                        |  |                              |       |                             |   |        |  |      |        |  |   |        |  
|Comprehensive net income for the period |  | $                            | 8,324 |                             | $ | 15,018 |  | $    | 27,523 |  | $ | 235    |  
|                                        |  |                              |       |                             |   |        |  |      |        |  |   |        |  

NOTE 2NEW ACCOUNTING POLICIES

Recently issued accounting pronouncements

In February 2007, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115
(SFAS 159). SFAS 159 permits an entity to choose to measure many financial instruments and certain other items at fair value. Most of the provisions in SFAS 159 are elective; however, the amendment to FASB Statement No. 115,
Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. SFAS 159 is effective for the Company beginning July 1, 2008. The Company is currently
assessing the potential impact that the adoption of SFAS 159 will have on its financial statements.

In September 2006, the United States
Securities Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior year Misstatements when Quantifying Current year



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



Misstatements, (SAB 108). SAB 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet
(iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition adjustment. SAB 108 is effective for the Companys fiscal year 2007 annual financial statements. The Company is currently assessing the
potential impact that the adoption of SAB 108 will have on its financial statements.

In September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements, (SFAS 157), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 does
not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for the Company beginning July 1,
2008. The Company is currently assessing the potential impact that the adoption of SFAS 157 will have on its financial statements.

In July
2006, the FASB issued FASB Interpretation No. 48 on Accounting for Uncertain Tax Positionsan interpretation of FASB Statement No. 109, Accounting for Income Taxes (FIN 48). Under FIN 48, an entity should
presume that a taxing authority will examine a tax position when evaluating its position for recognition and measurement; therefore, assessment of the probability of the risk of examination is not appropriate. In applying the provisions of FIN 48,
there will be distinct recognition and measurement evaluations. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical
merits, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize will
be measured as the maximum amount which is more likely than not to be realized. The tax position should be derecognized when it is no longer more likely than not of being sustained. On subsequent recognition and measurement the maximum amount which
is more likely than not to be recognized at each reporting date will represent managements best estimate, given the information available at the reporting date, even though the outcome of the tax position is not absolute or final. Subsequent
recognition, derecognition, and measurement should be based on new information. A liability for interest or penalties or both will be recognized as deemed to be incurred based on the provisions of the tax law, that is, the period for which the
taxing authority will begin assessing the interest or penalties or both. The amount of interest expense recognized will be based on the difference between the amount recognized in the financial statements and the benefit recognized in the tax
return. On transition, the change in net assets due to applying the provisions of the final interpretation will be considered as a change in accounting principle with the cumulative effect of the change treated as an offsetting adjustment to the
opening balance of retained earnings in the period of transition. FIN 48 will be effective for the Company as of July 1, 2007. The Company is currently assessing the potential impact that the adoption of FIN 48 will have on its financial statements.

NOTE 3INVESTMENTS

On
October 2, 2006, the Company acquired all of the remaining issued and outstanding shares of Hummingbird. In view of this, the investment in the equity of Hummingbird was included as part of the cost of the acquisition of Hummingbird. For
details relating to this acquisition see Note 18 Acquisitions to the Interim Financial Statements.



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



NOTE 4CAPITAL ASSETS



|                       |  |                      |         |                          |   |        |  |   |       
|---------------------- |  | -------------------- | ------- | ------------------------ | - | ------ |  | - | ------
|                       |  | As of March 31, 2007
|                       |  | Cost                 |         | Accumulated Depreciation |   | Net   
|Furniture and fixtures |  | $                    | 9,866   |                          | $ | 7,576  |  | $ | 2,290 
|Office equipment       |  |                      | 8,490   |                          |   | 7,378  |  |   | 1,112 
|Computer hardware      |  |                      | 69,680  |                          |   | 60,446 |  |   | 9,234 
|Computer software      |  |                      | 18,659  |                          |   | 13,211 |  |   | 5,448 
|Leasehold improvements |  |                      | 13,715  |                          |   | 8,627  |  |   | 5,088 
|Land and Buildings*    |  |                      | 23,027  |                          |   | 838    |  |   | 22,189
|                       |  |                      |         |                          |   |        |  |   |       
|                       |  | $                    | 143,437 |                          | $ | 98,076 |  | $ | 45,361
|                       |  |                      |         |                          |   |        |  |   |       
|                       | 
|                       |  | As of June 30, 2006 
|                       |  | Cost                 |         | AccumulatedDepreciation  |   | Net   
|Furniture and fixtures |  | $                    | 8,605   |                          | $ | 6,360  |  | $ | 2,245 
|Office equipment       |  |                      | 8,281   |                          |   | 6,992  |  |   | 1,289 
|Computer hardware      |  |                      | 66,714  |                          |   | 54,995 |  |   | 11,719
|Computer software      |  |                      | 17,023  |                          |   | 11,737 |  |   | 5,286 
|Leasehold improvements |  |                      | 12,374  |                          |   | 8,064  |  |   | 4,310 
|Building               |  |                      | 16,726  |                          |   | 313    |  |   | 16,413
|                       |  |                      |         |                          |   |        |  |   |       
|                       |  | $                    | 129,723 |                          | $ | 88,461 |  | $ | 41,262
|                       |  |                      |         |                          |   |        |  |   |       

---

|* | Included in this balance is an asset held for sale with a carrying value of approximately $6.7 million and nil as of March 31, 2007 and June 30, 2006, respectively. This
asset is being held for sale as a consequence of a decision taken by the Companys management to sell a building acquired as part of the Hummingbird acquisition. The Company expects to sell the building by way of a commercial sale and, at this
point, is unable to predict the timing of its disposal. The building is being held for sale within the Companys North America reporting segment. See Note 14 Segment Information to the Interim Financial Statements.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 5GOODWILL

Goodwill is recorded when the consideration paid for an acquisition of a business exceeds the fair value of identifiable net tangible and intangible assets. The following table summarizes the changes in goodwill since June 30, 2005:



|                                           |  |   |         |  
|------------------------------------------ |  | - | ------- | -
|Balance, June 30, 2005                     |  | $ | 243,091 |  
|Adjustments relating to prior acquisitions |  |   | (17,470 | )
|Adjustments on account of foreign exchange |  |   | 9,902   |  
|                                           |  |   |         |  
|Balance, June 30, 2006                     |  |   | 235,523 |  
|Acquisition of Momentum                    |  |   | 3,251   |  
|Acquisition of Hummingbird                 |  |   | 271,239 |  
|Adjustments relating to prior acquisitions |  |   | 7,999   |  
|Adjustments on account of foreign exchange |  |   | 8,624   |  
|                                           |  |   |         |  
|Balance, March 31, 2007                    |  | $ | 526,636 |  
|                                           |  |   |         |  



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



Adjustments relating to prior acquisitions primarily relate to the adjustments to goodwill based upon
the review and evaluation of the tax attributes of acquisition-related operating loss carry forwards and deductions originally assessed at the various dates of acquisition and increases to goodwill relating to IXOS Software AG (IXOS) and
Gauss Interprise AG (Gauss) share purchases and step accounting adjustments.

NOTE 6ACQUIRED INTANGIBLE ASSETS



|                                |  |                   |         |   |                 |   |         |       |  |   |         |  
|------------------------------- |  | ----------------- | ------- | - | --------------- | - | ------- | ----- |  | - | ------- | -
|                                |  | Technology Assets |         |   | Customer Assets |   |         | Total | 
|Net book value, June 30, 2005   |  | $                 | 76,108  |   |                 | $ | 51,873  |       |  | $ | 127,981 |  
|Activity during fiscal 2006:    |  |                   |         |   |                 |   |         |       |  |   |         |  
|Amortization expense            |  |                   | (18,900 | ) |                 |   | (9,199  | )     |  |   | (28,099 | )
|Impairment of intangible assets |  |                   | (1,046  | ) |                 |   |        |       |  |   | (1,046  | )
|Foreign exchange impact         |  |                   | 3,000   |   |                 |   | 2,598   |       |  |   | 5,598   |  
|Other                           |  |                   | (3,988  | ) |                 |   | 1,880   |       |  |   | (2,108  | )
|                                |  |                   |         |   |                 |   |         |       |  |   |         |  
|Net book value, June 30, 2006   |  |                   | 55,174  |   |                 |   | 47,152  |       |  |   | 102,326 |  
|Activity during fiscal 2007:    |  |                   |         |   |                 |   |         |       |  |   |         |  
|Acquisition of Hummingbird      |  |                   | 159,200 |   |                 |   | 139,800 |       |  |   | 299,000 |  
|Amortization expense            |  |                   | (25,675 | ) |                 |   | (17,147 | )     |  |   | (42,822 | )
|Foreign exchange impact         |  |                   | 1,702   |   |                 |   | 1,536   |       |  |   | 3,238   |  
|Other                           |  |                   | 271     |   |                 |   | 102     |       |  |   | 373     |  
|                                |  |                   |         |   |                 |   |         |       |  |   |         |  
|Net book value, March 31, 2007  |  | $                 | 190,672 |   |                 | $ | 171,443 |       |  | $ | 362,115 |  
|                                |  |                   |         |   |                 |   |         |       |  |   |         |  

The range of amortization periods for intangible assets is from 4-10 years.

As indicated in Note 18 Acquisitions to the Interim Financial Statements the amounts assigned to intangible assets on account of the
acquisition of Hummingbird are preliminary only and subject to change.

The following table shows the estimated future amortization expense
for the three months ended June 30, 2007 and each of the next four years thereafter, assuming no further adjustments to acquired intangible assets are made:



|      |  |                              |        
|----- |  | ---------------------------- | -------
|      |  | Fiscal years ending June 30,
|2007  |  | $                            | 17,822 
|2008  |  |                              | 71,014 
|2009  |  |                              | 64,377 
|2010  |  |                              | 51,836 
|2011  |  |                              | 49,276 
|      |  |                              |        
|Total |  | $                            | 254,325
|      |  |                              |        



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



NOTE 7ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Current liabilities

Accounts payable and accrued
liabilities are comprised of the following:



|                                                                            |  |                      |        |                     |   |       
|--------------------------------------------------------------------------- |  | -------------------- | ------ | ------------------- | - | ------
|                                                                            |  | As of March 31, 2007 |        | As of June 30, 2006
|Accounts payabletrade                                                      |  | $                    | 8,860  |                     | $ | 6,077 
|Accrued salaries and commissions                                            |  |                      | 26,538 |                     |   | 15,020
|Accrued liabilities                                                         |  |                      | 37,583 |                     |   | 26,827
|Amounts payable in respect of restructuring (note 17)                       |  |                      | 3,635  |                     |   | 6,148 
|Amounts payable in respect of acquisitions and acquisition related accruals |  |                      | 22,571 |                     |   | 8,463 
|                                                                            |  |                      |        |                     |   |       
|                                                                            |  | $                    | 99,187 |                     | $ | 62,535
|                                                                            |  |                      |        |                     |   |       

Long-term accrued liabilities



|                                                                            |  |                      |        |                     |   |       
|--------------------------------------------------------------------------- |  | -------------------- | ------ | ------------------- | - | ------
|                                                                            |  | As of March 31, 2007 |        | As of June 30, 2006
|Pension liabilities                                                         |  | $                    | 582    |                     | $ | 582   
|Amounts payable in respect of restructuring (note 17)                       |  |                      | 1,482  |                     |   | 1,851 
|Amounts payable in respect of acquisitions and acquisition related accruals |  |                      | 10,886 |                     |   | 14,224
|Other accrued liabilities                                                   |  |                      | 565    |                     |   | 568   
|Asset retirement obligations                                                |  |                      | 5,365  |                     |   | 3,896 
|                                                                            |  |                      |        |                     |   |       
|                                                                            |  | $                    | 18,880 |                     | $ | 21,121
|                                                                            |  |                      |        |                     |   |       

Pension liabilities

The Company acquired a controlling interest in IXOS in March 2004. IXOS has pension commitments to employees as well as to current and previous members of its executive board. The actuarial cost method used in
determining the net periodic pension cost, with respect to the IXOS employees, is the projected unit credit method. The liabilities and annual income or expense of the Companys pension plan are determined using methodologies that involve
various actuarial assumptions, the most significant of which are the discount rate and the long-term rate of return on assets. The Companys policy is to deposit amounts with an insurance company to cover the actuarial present value of the
expected retirement benefits. The fair value of plan assets as of March 31, 2007 was $2.8 million (June 30, 2006$2.6 million). The fair value of the pension obligation as of March 31, 2007 was $3.0 million (June 30, 2006$3.0
million).



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



Asset retirement obligations

The Company is required to return certain of its leased facilities to their original state at the conclusion of the lease. The Company has accounted for such obligations in accordance with FASB SFAS No. 143,
Accounting for Asset Retirement Obligations (SFAS 143). At March 31, 2007, the present value of this obligation was $5.4 million, (June 30, 2006$3.9 million), with an undiscounted value of $7.0 million, (June
30, 2006$4.8 million). These leases were primarily assumed in connection with the IXOS and Hummingbird acquisitions.

Excess facility obligations
and acquisition related accruals

The Company has accrued for the cost of excess facilities in connection with a number of its
acquisitions, including its fiscal 2007 Hummingbird acquisition. These accruals represent the Companys best estimate in respect of future sub-lease income and costs incurred to achieve sub-tenancy. These liabilities have been recorded using
present value discounting techniques and will be discharged over the term of the respective leases. The difference between the present value and actual cash paid for the excess facility will be charged to other income over the terms of the leases
ranging between one year to 17 years.

Acquisition related costs include amounts provided for certain pre-acquisition contingencies.



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



The following table summarizes the activity with respect to the Companys acquisition accruals
during the nine months ended March 31, 2007.



|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|-------------------------- |  | --------------------- | ------ | ---------------- | - | ------------------------------------------ |  | - | ---------------------------------- | - |  | ---------------------- | ----- | - |  | - | ------
|                           |  | Balance June 30, 2006 |        | Initial Accruals |   | Usage/ Foreign Exchange/ Other Adjustments |  |   | Subsequent Adjustments to
Goodwill |   |  | Balance March 31, 2007
|Hummingbird                |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Employee termination costs |  | $                     |       |                  | $ | 23,619                                     |  | $ | (13,470                            | ) |  | $                      | 3,416 |   |  | $ | 13,565
|Excess facilities          |  |                       |       |                  |   | 2,408                                      |  |   | (1,084                             | ) |  |                        | 1,537 |   |  |   | 2,861 
|Transaction-related costs  |  |                       |       |                  |   | 7,429                                      |  |   | (6,866                             | ) |  |                        |      |   |  |   | 563   
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       |       |                  |   | 33,456                                     |  |   | (21,420                            | ) |  |                        | 4,953 |   |  |   | 16,989
|IXOS                       |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Employee termination costs |  |                       | 22     |                  |   |                                           |  |   | (22                                | ) |  |                        |      |   |  |   |      
|Excess facilities          |  |                       | 17,401 |                  |   |                                           |  |   | (3,572                             | ) |  |                        | (251  | ) |  |   | 13,578
|Transaction-related costs  |  |                       | 616    |                  |   |                                           |  |   | (497                               | ) |  |                        |      |   |  |   | 119   
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       | 18,039 |                  |   |                                           |  |   | (4,091                             | ) |  |                        | (251  | ) |  |   | 13,697
|Gauss                      |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Transaction-related costs  |  |                       | 34     |                  |   |                                           |  |   | (6                                 | ) |  |                        | (28   | ) |  |   |      
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       | 34     |                  |   |                                           |  |   | (6                                 | ) |  |                        | (28   | ) |  |   |      
|Eloquent                   |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Transaction-related costs  |  |                       | 243    |                  |   |                                           |  |   |                                   |   |  |                        |      |   |  |   | 243   
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       | 243    |                  |   |                                           |  |   |                                   |   |  |                        |      |   |  |   | 243   
|Centrinity                 |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Excess facilities          |  |                       | 3,329  |                  |   |                                           |  |   | (286                               | ) |  |                        | (576  | ) |  |   | 2,467 
|Transaction-related costs  |  |                       | 221    |                  |   |                                           |  |   | (148                               | ) |  |                        | (73   | ) |  |   |      
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       | 3,550  |                  |   |                                           |  |   | (434                               | ) |  |                        | (649  | ) |  |   | 2,467 
|Artesia                    |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Excess facilities          |  |                       | 761    |                  |   |                                           |  |   | (394                               | ) |  |                        | (306  | ) |  |   | 61    
|Transaction-related costs  |  |                       | 12     |                  |   |                                           |  |   | (12                                | ) |  |                        |      |   |  |   |      
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       | 773    |                  |   |                                           |  |   | (406                               | ) |  |                        | (306  | ) |  |   | 61    
|Vista                      |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Transaction-related costs  |  |                       | 6      |                  |   |                                           |  |   |                                   |   |  |                        | (6    | ) |  |   |      
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       | 6      |                  |   |                                           |  |   |                                   |   |  |                        | (6    | ) |  |   |      
|Optura                     |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Excess facilities          |  |                       | 30     |                  |   |                                           |  |   | (30                                | ) |  |                        |      |   |  |   |      
|Transaction-related costs  |  |                       | 12     |                  |   |                                           |  |   |                                   |   |  |                        | (12   | ) |  |   |      
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  |                       | 42     |                  |   |                                           |  |   | (30                                | ) |  |                        | (12   | ) |  |   |      
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Totals                     |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|Employee termination costs |  |                       | 22     |                  |   | 23,619                                     |  |   | (13,492                            | ) |  |                        | 3,416 |   |  |   | 13,565
|Excess facilities          |  |                       | 21,521 |                  |   | 2,408                                      |  |   | (5,366                             | ) |  |                        | 404   |   |  |   | 18,967
|Transaction-related costs  |  |                       | 1,144  |                  |   | 7,429                                      |  |   | (7,529                             | ) |  |                        | (119  | ) |  |   | 925   
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       
|                           |  | $                     | 22,687 |                  | $ | 33,456                                     |  | $ | (26,387                            | ) |  | $                      | 3,701 |   |  | $ | 33,457
|                           |  |                       |        |                  |   |                                            |  |   |                                    |   |  |                        |       |   |  |   |       



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



The adjustments to goodwill relating to employee termination costs and excess facilities are
accounted for in accordance with Emerging Issues Task Force 95-3, Recognition of Liabilities in Connection With a Purchase Business Combination. The adjustments to goodwill relating to transaction costs are accounted for in accordance
with SFAS No. 141, Business Combinations (SFAS 141).

NOTE 8LONG-TERM DEBT AND CREDIT FACILITIES

Term loan and Revolver

On October 2, 2006, the
Company entered into a $465.0 million credit agreement (the credit agreement) with a Canadian chartered bank (the bank) consisting of a $390.0 million term loan facility (the term loan) and a $75.0 million
committed revolving long-term credit facility (the revolver). The term loan was used to partially finance the Hummingbird acquisition and the revolver will be used for general business purposes. The credit agreement is guaranteed by the
Company and certain of its subsidiaries.

Term loan

The term loan has a seven year term and expires on October 2, 2013 and bears interest at a floating rate of LIBOR plus 2.50%. The term loan principal
repayments are equal to 0.25% ($975,000) of the original principal amount, due each quarter with the remainder due at the end of the term.

As of March 31, 2007, the carrying value of the term loan was $388.1 million.

In October 2006, the Company entered into an
interest-rate collar agreement (the collar) that has the economic effect of circumscribing the floating portion of the interest rate obligations associated with $195.0 million of the term loan within an upper limit of 5.34% and a lower
limit of 4.79%. For more details relating to the collar see Note 9 Financial Instruments and Hedging Activities to the Interim Financial Statements.

Revolver

The revolver has a five year term and expires on October 2, 2011. Borrowings
under this facility bear interest at rates specified in the credit agreement. The revolver replaced a CAD $40.0 million line of credit (the old line of credit) that the Company previously had with the bank. The Company was required to
terminate the old line of credit prior to executing its current credit agreement. As of the date of termination, there were no borrowings outstanding on the CAD $40.0 million line of credit, nor were there any termination penalties. There were no
borrowings outstanding under the revolver as of March 31, 2007.

Mortgage

The mortgage consists of a five year mortgage agreement entered into during December 2005 with the bank. The principal amount of the mortgage is CAD $15.0
million. The mortgage: (i) has a fixed term of five years, (ii) matures on January 1, 2011, and (iii) is secured by a lien on the Companys headquarters in Waterloo, Ontario. Interest is to be paid monthly at a fixed rate of
5.25% per annum. Principal and interest are payable in monthly installments of CAD $101,000 with a final lump sum principal payment of CAD $12.6 million due on maturity.

As of March 31, 2007, the carrying values of the building and mortgage were $15.5 million and $12.6 million, respectively.



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



NOTE 9FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

In October 2006, Open Text entered into a three year interest-rate collar that had the economic effect of circumscribing the floating portion of the
interest rate obligations associated with $195.0 million of the term loan within an upper limit of 5.34% and a lower limit of 4.79%. This was pursuant to a requirement in the credit agreement that required the Company to maintain, from thirty days
following the date on which the term loan was entered into through the third anniversary or such earlier date on which the term loan is paid, interest rate hedging arrangements with counterparties in respect of 50% of the aggregate actual and
projected principal amount of the term loan.

SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities
(SFAS 133) requires that changes in a derivative instruments fair value be recognized in current earnings unless specific hedge accounting criteria are met and that an entity must formally document, designate and assess the
effectiveness of transactions that qualify for hedge accounting.

SFAS 133 requires that written options must meet certain criteria in
order for hedge accounting to apply. The Company determined that these criteria were not met and hedge accounting could not be applied for the quarters ended March 31, 2007 and December 31, 2006. The fair market value of the collar, which
represents the cash the Company would receive or pay to settle the collar, was a payable of approximately $576,000 as of March 31, 2007, and has been included within Accounts payable and accrued liabilities on the unaudited
condensed consolidated balance sheets. For the three and nine months ended March 31, 2007 an expense of approximately $364,000 and $576,000, representing the change in the fair value of the collar, has been included within interest expense
within the unaudited condensed consolidated statements of income. The Company records payments or receipts on the collar as adjustments to interest expense. The collar has a remaining term to maturity of 2.75 years.

The Company will continue to monitor changes in interest rates periodically and will assess whether hedge accounting could potentially be applied in
future periods.

NOTE 10ALLOWANCE FOR DOUBTFUL ACCOUNTS AND UNBILLED RECEIVABLES



|                                                                        |  |              |         |   |                                       |   |         |                   |  |   |        |  
|----------------------------------------------------------------------- |  | ------------ | ------- | - | ------------------------------------- | - | ------- | ----------------- |  | - | ------ | -
|                                                                        |  | Consolidated |         |   | Hummingbird(as of date ofacquisition) |   |         | Net ofHummingbird | 
|Balance of allowance for doubtful accounts (AfDA) as of June 30, 2006 |  | $            | 2,736   |   |                                       | $ |        |                   |  | $ | 2,736  |  
|Bad debt expense for the period                                         |  |              | 1,506   |   |                                       |   |        |                   |  |   | 1,506  |  
|AfDA relating to Hummingbird accounts receivable at date of acquisition |  |              | 17,592  |   |                                       |   | 17,592  |                   |  |   |       |  
|Write-offs                                                              |  |              | (12,483 | ) |                                       |   | (10,200 | )                 |  |   | (2,283 | )
|                                                                        |  |              |         |   |                                       |   |         |                   |  |   |        |  
|Balance of allowance for doubtful accounts as of March 31, 2007         |  | $            | 9,351   |   |                                       | $ | 7,392   |                   |  | $ | 1,959  |  
|                                                                        |  |              |         |   |                                       |   |         |                   |  |   |        |  

To date, the Company has not disclosed the AfDA assumed as part of the acquisition of Hummingbird
in its presentation of AfDA since business combination accounting rules require that acquired receivables be recorded at their estimated fair value.

However, in these unaudited notes to the Interim Financial Statements, the Company has disclosed the AfDA assumed as part of the acquisition of Hummingbird in its presentation of AfDA, as the Company believes



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



that such presentation provides additional information about the on-going changes in the consolidated AfDA balance. This presentation has no impact on the
net balance of accounts receivable included in the unaudited condensed consolidated balance sheets included in the Interim Financial Statements.

Included in accounts receivable are unbilled receivables in the amount of $3.6 million and $4.3 million as of March 31, 2007 and June 30, 2006, respectively.

NOTE 11SHARE CAPITAL AND SHARE BASED PAYMENTS

Share Capital

The authorized share capital of the Company includes an unlimited number of Common Shares and an unlimited number of first preference shares. No
preference shares have been issued.

On May 19, 2006, the Company commenced a share repurchase program (hereinafter referred to as the
May 2006 Repurchase Program) that provided for the repurchase of up to a maximum of 2,444,104 Common Shares. Purchase and payment for the Companys Common Shares under the May 2006 Repurchase Program will be determined by the Board
of Directors of Open Text and will be made in accordance with the rules and policies of the Nasdaq Global Select Market (NASDAQ). The May 2006 Repurchase Program was superseded by a new repurchase program initiated on May 2, 2007.
For details relating to this, see Note 19 Subsequent Events to the Interim Financial Statements.

During the three and nine
months ended March 31, 2007 and 2006 the Company did not repurchase any of its Common Shares.

Employee Share Purchase Plan (ESPP)

During the three months ended March 31, 2007, 16,261 Common Shares were issued under the ESPP for cash collected from employees,
in prior periods, totaling $317,000. During the nine months ended March 31, 2007, 38,470 Common Shares were issued under the ESPP for cash collected from employees, in prior periods, totaling $622,000. In addition, cash in the amount of
approximately $174,000 was received from employees for the three months ended March 31, 2007, that will be used to purchase Common Shares in future periods.

During the three months ended March 31, 2006, 25,691 Common Shares were issued under the ESPP. During the nine months ended March 31, 2006, 281,093 Common Shares were issued under the ESPP for cash collected
from employees, in prior periods, totaling $3.4 million. In addition, cash in the amount $172,000 was received from employees for the three months ended March 31, 2006 that was used to purchase Common Shares in future periods.

Share-Based Payments

Summary of Outstanding Stock Options

As of March 31, 2007 options to purchase an aggregate of 5,127,280 Common Shares are outstanding under all of the Companys
stock option plans. In addition, 1,298,220 stock options are available for issuance under the 1998 Stock Option Plan and the 2004 Stock Option Plan. The Companys stock options generally vest over four to five years and expire ten years from
the date of the grant. The exercise price of options granted is equivalent to the fair market value of the stock at the date of grant.



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



A summary of option activity under the Companys stock option plans for the nine months ended
March 31, 2007 is as follows:



|                              |  |           |   |  |                                |       |                                           |      |                                   |   |       
|----------------------------- |  | --------- | - |  | ------------------------------ | ----- | ----------------------------------------- | ---- | --------------------------------- | - | ------
|                              |  | Options   |   |  | Weighted-Average ExercisePrice |       | Weighted-AverageRemainingContractual Term |      | Aggregate Intrinsic Value($000s)
|Outstanding at July 1, 2006   |  | 5,334,016 |   |  | $                              | 12.25 |                                           |      |                                   |   |       
|Granted                       |  | 1,118,800 |   |  |                                | 19.16 |                                           |      |                                   |   |       
|Exercised                     |  | (836,556  | ) |  |                                | 9.94  |                                           |      |                                   |   |       
|Forfeited or expired          |  | (488,980  | ) |  |                                | 18.47 |                                           |      |                                   |   |       
|                              |  |           |   |  |                                |       |                                           |      |                                   |   |       
|Outstanding at March 31, 2007 |  | 5,127,280 |   |  | $                              | 13.54 |                                           | 4.46 |                                   | $ | 48,013
|                              |  |           |   |  |                                |       |                                           |      |                                   |   |       
|Exercisable at March 31, 2007 |  | 3,398,967 |   |  | $                              | 11.62 |                                           | 3.61 |                                   | $ | 38,271
|                              |  |           |   |  |                                |       |                                           |      |                                   |   |       

The Company estimates the fair value of stock options using the Black-Scholes option pricing
model, consistent with the provisions of SFAS 123 (Revised 2004), Share-Based Payment (SFAS 123R) and United States Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 107. The
Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, while the options issued by the Company are subject to both vesting and
restrictions on transfer. In addition, option-pricing models require input of subjective assumptions including the estimated life of the option and the expected volatility of the underlying stock over the estimated life of the option. The Company
uses historical volatility as a basis for projecting the expected volatility of the underlying stock and estimates the expected life of its stock options based upon historical data.

The Company believes that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair
value of the Companys stock option grants. Estimates of fair value are not intended, however, to predict actual future events or the value ultimately realized by employees who receive equity awards.

For the three months ended March 31, 2007, the weighted-average fair value of options granted, as of the grant date, was $10.41, using the following
weighted average assumptions: expected volatility of 45%; risk-free interest rate of 4.7%; expected dividend yield of 0%; and expected life of 5.0 years. For the nine months ended March 31, 2007, the weighted-average fair value of options
granted, as of the grant date, was $7.03, using the following weighted average assumptions: expected volatility of 46%; risk-free interest rate of 4.6%; expected dividend yield of 0%; expected life of 4.8 years. A forfeiture rate of 5%, based on
historical rates, was used to determine the net amount of compensation expense recognized for each of these periods.

During the three
months ended December 31, 2006, the Company issued a net number of 98,578 stock options to the former employees of Hummingbird in replacement of their fully vested Hummingbird stock options (replacement options). These options were
valued using the following weighted average assumptions: expected volatility of 47%; risk-free interest rate of 4.3%; expected dividend yield of 0%; and expected life of 4.5 years, resulting in an approximate fair value of $7.30 per replacement
option. Approximately $286,000 has been allocated to the cost of the Hummingbird acquisition, and the remainder will be amortized to share-based compensation cost over a vesting period of 4 years. No further replacement options have been issued
by the Company during the nine months ended March 31, 2007.



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



For the three months ended March 31, 2006, the weighted-average fair value of options granted,
as of the grant date, was $9.30, using the following weighted average assumptions: expected volatility of 54%; risk-free interest rate of 4.4%; expected dividend yield of 0%; and expected life of 5.5 years. For the nine months ended March 31,
2006, the weighted-average fair value of options granted, as of the grant date, was $8.47, using the following weighted average assumptions: expected volatility of 55%; risk-free interest rate of 4.4%; expected dividend yield of 0%; and expected
life of 5.5 years. A forfeiture rate of 5%, based on historical rates, was used to determine the net amount of compensation expense recognized for each of these periods.

In each of the above periods, no cash was used by the Company to settle equity instruments granted under share-based compensation arrangements.

As of March 31, 2007, the total compensation cost related to unvested stock awards not yet recognized in the unaudited condensed consolidated
statements of income was $12.5 million, which will be recognized over a weighted average period of approximately 2 years.

Share-based
compensation cost included in the unaudited condensed consolidated statements of income for the three and nine months ended March 31, 2007 was approximately $1.2 million and $3.9 million, respectively. Deferred tax assets of $243,000 and
$627,000, respectively, were recorded for the three and nine months ended March 31, 2007, in relation to the tax effect of certain stock options that are eligible for a tax deduction when exercised. Share-based compensation cost included in the
unaudited condensed consolidated statements of income for the three and nine months ended March 31, 2006 was approximately $1.1 million and $3.9 million, respectively. Deferred tax assets of $144,000 and $467,000, respectively, were recorded
for the three and nine months ended March 31, 2006, in relation to the tax effect of certain stock options that are eligible for a tax deduction when exercised.

For the three and nine months ended March 31, 2007, cash in the amount of $6.2 million and $8.3 million, respectively, was received as the result of the exercise of options granted under share-based payment
arrangements. The tax benefit realized by the Company from the exercise of options eligible for a tax deduction, during the three and nine months ended March 31, 2007, was approximately $381,000 and $1.1 million, respectively, which was
recorded as additional paid-in capital.

For the three and nine months ended March 31, 2006, cash in the amount of $1.4 million and
$3.0 million, respectively, was received as the result of the exercise of options granted under share-based payment arrangements. The tax benefit realized by the Company from the exercise of options eligible for a tax deduction, during the three and
nine months ended March 31, 2006 was $159,000 and $803,000, respectively, which was recorded as additional paid-in capital.

NOTE 12NET
INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of
common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the shares used in the calculation of basic net income (loss) per share plus the



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



dilutive effect of common share equivalents, such as stock options, using the treasury stock method. Common share equivalents are excluded from the
computation of diluted net income (loss) per share if their effect is anti-dilutive.



|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|--------------------------------------------- |  | ---------------------------- | ------ | --------------------------- | - | ------ |  | ---- | ------ |  | - | ------ | -
|                                              |  | Three months ended March 31, |        | Nine months ended March 31, |  
|                                              |  | 2007                         |        | 2006                        |   | 2007   |  | 2006 |       
|Basic net income (loss) per share             |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Net income (loss)                             |  | $                            | 3,853  |                             | $ | 7,322  |  | $    | 13,431 |  | $ | (2,825 | )
|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Basic net income (loss) per share             |  | $                            | 0.08   |                             | $ | 0.15   |  | $    | 0.27   |  | $ | (0.06  | )
|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Diluted net income (loss) per share           |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Net income (loss)                             |  | $                            | 3,853  |                             | $ | 7,322  |  | $    | 13,431 |  | $ | (2,825 | )
|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Diluted net income (loss) per share           |  | $                            | 0.08   |                             | $ | 0.15   |  | $    | 0.26   |  | $ | (0.06  | )
|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Weighted average number of shares outstanding |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Basic                                         |  |                              | 49,490 |                             |   | 48,762 |  |      | 49,203 |  |   | 48,590 |  
|Effect of dilutive securities*                |  |                              | 1,644  |                             |   | 1,498  |  |      | 1,500  |  |   |       |  
|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Diluted                                       |  |                              | 51,134 |                             |   | 50,260 |  |      | 50,703 |  |   | 48,590 |  
|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  
|Excluded as anti-dilutive**                   |  |                              | 813    |                             |   | 1,663  |  |      | 1,917  |  |   | 2,245  |  
|                                              |  |                              |        |                             |   |        |  |      |        |  |   |        |  

---

|* | Due to the net loss for the nine months ended March 31, 2006, diluted net loss per share has been calculated for this period using the basic weighted average number of Common
Shares outstanding, as the inclusion of any potentially dilutive securities would be anti-dilutive.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Certain options to purchase Common Shares are excluded from the calculation of diluted net income (loss) per share because the exercise price of the stock options was greater than
or equal to the average price of the Common Shares, and therefore their inclusion would have been anti-dilutive.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 13INCOME
TAXES

The Company operates in various tax jurisdictions, and accordingly, the Companys income is subject to varying rates of tax.
Losses incurred in one jurisdiction cannot be used to offset income taxes payable in another. The Companys ability to use income tax losses and future income tax deductions is dependent upon the profitable operations of the Company in the tax
jurisdictions in which such losses or deductions arise. As of March 31, 2007 and June 30, 2006, the Company had total net deferred tax assets of $78.7 million and $65.9 million, respectively, and total deferred tax liabilities of $113.7
million and $31.7 million, respectively.

Deferred tax assets arise primarily from available income tax losses and future income tax
deductions. The Company provides a valuation allowance if sufficient uncertainty exists regarding the realization of certain deferred tax assets. Taking into account the following factors: (i) the reversal of deferred income tax liabilities,
(ii) projected future taxable income, (iii) the character of the income tax assets and (iv) tax planning strategies, a valuation allowance of $168.8 million and $127.5 million was recorded as of March 31, 2007 and June 30,
2006, respectively. The majority of the valuation allowance relates to uncertainties regarding the utilization of foreign pre-acquisition losses of Hummingbird, Gauss and IXOS. The Company continues to evaluate its taxable position quarterly and
considers factors by taxing jurisdiction such as estimated taxable income, the history of losses for tax purposes and the growth of the Company, among others. The principal component of the total deferred tax liabilities arises from acquired
intangible assets purchased in the Hummingbird, Gauss and IXOS transactions.



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



NOTE 14SEGMENT INFORMATION

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information establishes standards for the reporting, by public business enterprises, of information about operating segments,
products and services, geographic areas, and major customers. The method of determining what information to report is based on the way that management organizes the operating segments within the Company for making operational decisions and
assessments of financial performance.

The Companys operations fall into one dominant industry segment, being enterprise content
management software. The Company manages its operations, and accordingly determines its operating segments, on a geographic basis. The Company has two reportable segments: North America and Europe. The Company evaluates operating segment performance
based on revenues and direct operating expenses of the segment, based on the location of the respective customers. The accounting policies of the operating segments are the same as those described in the summary of accounting policies. No segments
have been aggregated.

Included in the following operating results are allocations of certain operating costs that are incurred in one
reporting segment but which relate to all reporting segments. The allocations of these common operating costs are consistent with the manner in which they are allocated for the chief operating decision maker (CODM) of the Companys
analysis. For the three and nine months ended March 31, 2007 and March 31, 2006, the Other category consists of geographic regions other than North America and Europe. Revenues from transactions that both emanate and conclude
within operating segments are not considered for the purpose of this disclosure since such transactions are not reviewed by the CODM. The reclassification of certain prior period comparative figures, to conform to current period presentation,
referred to in Note 1 Basis of Presentation to the Interim Financial Statements, did not impact information about the reportable segments, reported hereunder.

Goodwill and other acquired intangible assets have been assigned to segment assets based on the relative benefit that the reporting units are expected to receive from the assets, or the location of the acquired
business operations to which they relate. These allocations have been made on a consistent basis.

Contribution margin does not include
amortization of intangible assets, depreciation, provision for (recovery of) special charges, other income (expense), interest income (expense), minority interest, and the provision for (recovery of) income taxes.

Information about reportable segments is as follows:



|                                  |  |               |        |        |   |        |  |       |       |  |   |        
|--------------------------------- |  | ------------- | ------ | ------ | - | ------ |  | ----- | ----- |  | - | -------
|                                  |  | North America |        | Europe |   | Other  |  | Total
|Three months ended March 31, 2007 |  |               |        |        |   |        |  |       |       |  |   |        
|Revenue from external customers   |  | $             | 75,230 |        | $ | 73,410 |  | $     | 7,412 |  | $ | 156,052
|Operating costs                   |  |               | 60,077 |        |   | 54,117 |  |       | 5,986 |  |   | 120,180
|                                  |  |               |        |        |   |        |  |       |       |  |   |        
|Contribution margin               |  | $             | 15,153 |        | $ | 19,293 |  | $     | 1,426 |  | $ | 35,872 
|                                  |  |               |        |        |   |        |  |       |       |  |   |        
|Three months ended March 31, 2006 |  |               |        |        |   |        |  |       |       |  |   |        
|Revenue from external customers   |  | $             | 45,902 |        | $ | 49,656 |  | $     | 5,368 |  | $ | 100,926
|Operating costs                   |  |               | 36,591 |        |   | 40,209 |  |       | 4,083 |  |   | 80,883 
|                                  |  |               |        |        |   |        |  |       |       |  |   |        
|Contribution margin               |  | $             | 9,311  |        | $ | 9,447  |  | $     | 1,285 |  | $ | 20,043 
|                                  |  |               |        |        |   |        |  |       |       |  |   |        



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



|                                 |  |               |         |        |   |         |  |       |        |  |   |        
|-------------------------------- |  | ------------- | ------- | ------ | - | ------- |  | ----- | ------ |  | - | -------
|                                 |  | North America |         | Europe |   | Other   |  | Total
|Nine months ended March 31, 2007 |  |               |         |        |   |         |  |       |        |  |   |        
|Revenue from external customers  |  | $             | 196,814 |        | $ | 203,794 |  | $     | 19,860 |  | $ | 420,468
|Operating costs                  |  |               | 158,708 |        |   | 150,789 |  |       | 18,061 |  |   | 327,558
|                                 |  |               |         |        |   |         |  |       |        |  |   |        
|Contribution margin              |  | $             | 38,106  |        | $ | 53,005  |  | $     | 1,799  |  | $ | 92,910 
|                                 |  |               |         |        |   |         |  |       |        |  |   |        
|Nine months ended March 31, 2006 |  |               |         |        |   |         |  |       |        |  |   |        
|Revenue from external customers  |  | $             | 145,918 |        | $ | 142,257 |  | $     | 16,152 |  | $ | 304,327
|Operating costs                  |  |               | 115,698 |        |   | 119,494 |  |       | 13,034 |  |   | 248,226
|                                 |  |               |         |        |   |         |  |       |        |  |   |        
|Contribution margin              |  | $             | 30,220  |        | $ | 22,763  |  | $     | 3,118  |  | $ | 56,101 
|                                 |  |               |         |        |   |         |  |       |        |  |   |        

A reconciliation of the totals reported for the operating segments to the applicable line items in
the Interim Financial Statements for the three and nine months ended March 31, 2007 and 2006 is as follows:



|                                                        |  |                              |           |   |                    |   |         |  
|------------------------------------------------------- |  | ---------------------------- | --------- | - | ------------------ | - | ------- | -
|                                                        |  | Three months ended March 31, |          
|                                                        |  | 2007                         |           |   | 2006               |  
|Total contribution margin from operating segments above |  | $                            | 35,872    |   |                    | $ | 20,043  |  
|Amortization and depreciation                           |  |                              | 21,455    |   |                    |   | 9,722   |  
|Special charges (recoveries)                            |  |                              | 878       |   |                    |   | (557    | )
|                                                        |  |                              |           |   |                    |   |         |  
|Total operating income                                  |  |                              | 13,539    |   |                    |   | 10,878  |  
|Interest, other income, taxes and minority interest     |  |                              | (9,686    | ) |                    |   | (3,556  | )
|                                                        |  |                              |           |   |                    |   |         |  
|Net income                                              |  | $                            | 3,853     |   |                    | $ | 7,322   |  
|                                                        |  |                              |           |   |                    |   |         |  
|                                                        | 
|                                                        |  | Nine months ended March 31,  |          
|                                                        |  | 2007                         |           |   | 2006               |  
|Total contribution margin from operating segments above |  | $                            | 92,910    |   |                    | $ | 56,101  |  
|Amortization and depreciation                           |  |                              | 53,347    |   |                    |   | 28,872  |  
|Special charges                                         |  |                              | 5,253     |   |                    |   | 26,347  |  
|                                                        |  |                              |           |   |                    |   |         |  
|Total operating income                                  |  |                              | 34,310    |   |                    |   | 882     |  
|Interest, other income, taxes and minority interest     |  |                              | (20,879   | ) |                    |   | (3,707  | )
|                                                        |  |                              |           |   |                    |   |         |  
|Net income (loss)                                       |  | $                            | 13,431    |   |                    | $ | (2,825  | )
|                                                        |  |                              |           |   |                    |   |         |  
|                                                        |  |                             
|                                                        |  | As of March 31,2007          |           |   | As of June 30,2006 |  
|Segment assets                                          |  |                              |           |   |                    |   |         |  
|North America                                           |  | $                            | 696,624   |   |                    | $ | 268,231 |  
|Europe                                                  |  |                              | 532,623   |   |                    |   | 331,139 |  
|Other                                                   |  |                              | 60,146    |   |                    |   | 38,550  |  
|                                                        |  |                              |           |   |                    |   |         |  
|Total segment assets                                    |  | $                            | 1,289,393 |   |                    | $ | 637,920 |  
|                                                        |  |                              |           |   |                    |   |         |  



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



A reconciliation of the totals reported for the operating segments to the applicable line items in
the Interim Financial Statements as of March 31, 2007 and June 30, 2006 is as follows:



|                                      |  |                      |           |                     |   |        
|------------------------------------- |  | -------------------- | --------- | ------------------- | - | -------
|                                      |  | As of March 31, 2007 |           | As of June 30, 2006
|Segment assets                        |  | $                    | 1,289,393 |                     | $ | 637,920
|Investments in marketable securities  |  |                      |          |                     |   | 21,025 
|Cash and cash equivalents (corporate) |  |                      | 18,403    |                     |   | 12,148 
|                                      |  |                      |           |                     |   |        
|Total assets                          |  | $                    | 1,307,796 |                     | $ | 671,093
|                                      |  |                      |           |                     |   |        

The following table sets forth the distribution of revenues determined by location of customer and
identifiable assets, by significant geographic area, for the three and nine months ended March 31, 2007 and 2006:



|                |  |                             |         |                            |   |         |  |      |         |  |   |        
|--------------- |  | --------------------------- | ------- | -------------------------- | - | ------- |  | ---- | ------- |  | - | -------
|                |  | Three months endedMarch 31, |         | Nine months endedMarch 31,
|                |  | 2007                        |         | 2006                       |   | 2007    |  | 2006
|Total revenues: |  |                             |         |                            |   |         |  |      |         |  |   |        
|Canada          |  | $                           | 12,515  |                            | $ | 8,244   |  | $    | 30,445  |  | $ | 23,896 
|United States   |  |                             | 62,715  |                            |   | 37,658  |  |      | 166,369 |  |   | 122,022
|United Kingdom  |  |                             | 19,756  |                            |   | 10,945  |  |      | 49,023  |  |   | 28,837 
|Germany         |  |                             | 22,023  |                            |   | 18,424  |  |      | 69,025  |  |   | 53,704 
|Rest of Europe  |  |                             | 31,631  |                            |   | 20,287  |  |      | 85,746  |  |   | 59,716 
|Other           |  |                             | 7,412   |                            |   | 5,368   |  |      | 19,860  |  |   | 16,152 
|                |  |                             |         |                            |   |         |  |      |         |  |   |        
|Total revenues  |  | $                           | 156,052 |                            | $ | 100,926 |  | $    | 420,468 |  | $ | 304,327
|                |  |                             |         |                            |   |         |  |      |         |  |   |        



|                     |  |                      |           |                     |   |        
|-------------------- |  | -------------------- | --------- | ------------------- | - | -------
|                     |  | As of March 31, 2007 |           | As of June 30, 2006
|Segment assets:      |  |                      |           |                     |   |        
|Canada               |  | $                    | 148,391   |                     | $ | 97,421 
|United States        |  |                      | 548,233   |                     |   | 170,810
|United Kingdom       |  |                      | 99,383    |                     |   | 53,501 
|Germany              |  |                      | 209,888   |                     |   | 177,651
|Rest of Europe       |  |                      | 223,352   |                     |   | 99,987 
|Other                |  |                      | 60,146    |                     |   | 38,550 
|                     |  |                      |           |                     |   |        
|Total segment assets |  | $                    | 1,289,393 |                     | $ | 637,920
|                     |  |                      |           |                     |   |        

The Companys goodwill has been allocated as follows to the Companys operating
segments:



|              |  |                      |         |                     |   |        
|------------- |  | -------------------- | ------- | ------------------- | - | -------
|              |  | As of March 31, 2007 |         | As of June 30, 2006
|North America |  | $                    | 249,911 |                     | $ | 89,499 
|Europe        |  |                      | 242,680 |                     |   | 124,827
|Other         |  |                      | 34,045  |                     |   | 21,197 
|              |  |                      |         |                     |   |        
|              |  | $                    | 526,636 |                     | $ | 235,523
|              |  |                      |         |                     |   |        



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



NOTE 15SUPPLEMENTAL CASH FLOW DISCLOSURES



|                                                        |  |                              |        |      |                             |     |      |  |      |        |  |   |      
|------------------------------------------------------- |  | ---------------------------- | ------ | ---- | --------------------------- | --- | ---- |  | ---- | ------ |  | - | -----
|                                                        |  | Three months ended March 31, |        |      | Nine months ended March 31,
|                                                        |  | 2007                         |        | 2006 |                             |     | 2007 |  | 2006
|Supplemental disclosure of cash flow information:       |  |                              |        |      |                             |     |      |  |      |        |  |   |      
|Cash paid during the period for interest                |  | $                            | 7,910  |      | $                           | 160 |      |  | $    | 15,894 |  | $ | 221  
|Cash received during the period for interest            |  |                              | 725    |      |                             | 845 |      |  |      | 2,313  |  |   | 1,222
|Cash paid (received) during the period for income taxes |  |                              | 12,067 |      |                             | (49 | )    |  |      | 18,343 |  |   | 1,020

NOTE 16COMMITMENTS AND CONTINGENCIES

The Company has entered into the following contractual obligations with minimum annual payments for the indicated fiscal periods as follows:



|                              |  |                        |         |      |   |              |  |              |         |                 |   |         |  |   |        
|----------------------------- |  | ---------------------- | ------- | ---- | - | ------------ |  | ------------ | ------- | --------------- | - | ------- |  | - | -------
|                              |  | Payments due by period
|                              |  | Total                  |         | 2007 |   | 2008 to 2009 |  | 2010 to 2011 |         | 2012 and beyond
|Long-term debt obligations    |  | $                      | 595,672 |      | $ | 8,853        |  | $            | 70,433  |                 | $ | 79,688  |  | $ | 436,698
|Operating lease obligations * |  |                        | 99,059  |      |   | 6,588        |  |              | 46,200  |                 |   | 32,644  |  |   | 13,627 
|Purchase obligations          |  |                        | 5,924   |      |   | 1,047        |  |              | 3,962   |                 |   | 915     |  |   |       
|                              |  |                        |         |      |   |              |  |              |         |                 |   |         |  |   |        
|                              |  | $                      | 700,655 |      | $ | 16,488       |  | $            | 120,595 |                 | $ | 113,247 |  | $ | 450,325
|                              |  |                        |         |      |   |              |  |              |         |                 |   |         |  |   |        

---

|* | Net of $6.6 million of non-cancelable sublease income to be received by the Company from properties which the Company has subleased to other parties.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------

Rental expense of $3.9 million and $10.0 million was recorded during the three and nine months ended March 31, 2007, respectively.

Rental expense of $1.8 million and $9.1 million was recorded during the three and nine months ended March 31, 2006, respectively.

The long-term debt obligations are comprised of interest and principal payments on the Companys $390.0 million term loan agreement and a five year
mortgage on the Companys headquarters in Waterloo, Ontario. For the purpose of calculating the interest on the $390.0 million term loan, LIBOR has been assumed at 5.35%, which is the three-month LIBOR rate as of March 30, 2007. For
details relating to the term loan and the mortgage see Note 8 Long-term Debt and Credit Facilities to the Interim Financial Statements.

The Company does not enter into off-balance sheet financing arrangements as a matter of practice except for the use of operating leases for office space, computer equipment and vehicles. In accordance with U.S. GAAP, neither the lease
liability nor the underlying asset is carried on the balance sheet, as the terms of the leases do not meet the criteria for capitalization.

Domination agreements

IXOS domination agreements

On December 1, 2004, the Company announced that it had entered into a domination and profit transfer agreement (the IXOS DA) with IXOS.
The IXOS DA came into force in August 2005 when it was registered in



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



the commercial register at the local court in Munich. Under the terms of the IXOS DA, Open Text acquired authority to issue directives to the management of
IXOS. Also within the terms of the IXOS DA, Open Text offered to purchase the remaining Common Shares of IXOS for a cash purchase price of Euro 9.38 per share (Purchase Price) which was the weighted average fair value of the IXOS
Common Shares as of December 1, 2004. Additionally, Open Text has guaranteed a payment by IXOS to the minority shareholders of IXOS of an annual compensation of Euro 0.42 per share (Annual Compensation).

The IXOS DA was registered on August 23, 2005. In the quarter ended September 30, 2005, the Company commenced accruing the amount payable to
minority shareholders of IXOS on account of Annual Compensation. This amount has been accounted for as a guaranteed dividend, payable to the minority shareholders, and is recorded as a charge to minority interest in the unaudited
condensed consolidated statements of income.

Based on the number of minority IXOS shareholders as of March 31, 2007, the estimated
amount of Annual Compensation is approximately $124,000 for the three months ended March 31, 2007 and $377,000 for the nine months ended March 31, 2007. Additionally, an amount of approximately $397,000 was paid, against previously accrued
amounts, to the IXOS minority shareholders on account of Annual Compensation for the year ended June 30, 2006. Because the Company is unable to predict, with reasonable accuracy, the number of IXOS minority shareholders in future periods, the
Company is unable to predict the amount of Annual Compensation that will be payable in future years.

Certain IXOS shareholders have filed
for a procedure granted under German law at the district court of Munich, Germany, asking the court to review the proposed amount of the Annual Compensation and the Purchase Price (the IXOS Appraisal Procedures) for the amounts offered
under the IXOS DA. It cannot be predicted at this stage, whether the court will increase the Annual Compensation and/or the Purchase Price in the IXOS Appraisal Procedures. The purchase offer made under the IXOS DA will expire at the end of the IXOS
Appraisal Procedures.

These disputes are a normal and probable part of the process of acquiring minority shares in Germany. The costs
associated with the above mentioned shareholder objections to the proposed fair value of the Annual Compensation and the Purchase Price are direct incremental costs associated with the ongoing step acquisitions of shares held by the minority
shareholders and have been deferred within Goodwill pending the outcome of the objections. The Company is unable to predict the future costs associated with these activities that will be payable in future periods.

Gauss domination agreements

On October 27, 2006, the Squeeze Out agreement with the Gauss minority shareholders was registered in the Commercial Register in the Local Court of Hamburg. Certain shareholders have filed a special procedure in the German
courts to reassess the value of the purchase price and annual compensation. The procedure is still pending and the Company is not able to determine the likely date by which such procedure will be completed.

As of December 31, 2006, the Company has acquired 100% of all issued and outstanding common shares of Gauss.

Guarantees and indemnifications

The Company
has entered into license agreements with customers that include limited intellectual property indemnification clauses. Generally, the Company agrees to indemnify its customers against legal claims that the



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



Companys software products infringe certain third party intellectual property rights. In the event of such a claim, the Company is generally obligated
to defend its customers against the claim and either settle the claim at the Companys expense or pay damages that its customers are legally required to pay to the third-party claimant. These intellectual property infringement indemnification
clauses generally are subject to limits based upon the amount of the license sale. Additionally, the Companys current end-user license agreement contains a limited software warranty. The Company has not made any indemnification payments in
relation to these indemnification clauses.

In connection with certain facility leases, the Company has guaranteed payments on behalf of
its subsidiaries either by providing a security deposit with the landlord or through unsecured bank guarantees obtained from local banks.

The Company has not recorded a liability for guarantees, indemnities or warranties described above in the accompanying unaudited condensed consolidated balance sheets since the maximum amount of potential future payments under such
guarantees, indemnities and warranties is not determinable.

Litigation

The Company is subject from time to time to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business.
While the outcome of these proceedings and claims cannot be predicted with certainty, the Companys management does not believe that the outcome of any of these legal matters will have a material adverse effect on its consolidated financial
position, results of operations and cash flows.

NOTE 17SPECIAL CHARGES (RECOVERIES)

Fiscal 2007 Restructuring

In December
2006, the Board approved, and the Company commenced implementing, restructuring activities to streamline its operations and consolidate its excess facilities (Fiscal 2007 restructuring plan). Total costs to be incurred in conjunction
with the plan are expected to be approximately $7.0 million, of which $993,000 and $6.1 million has been recorded within Special charges in the three and nine months ended March 31, 2007, respectively. The charge consisted primarily of costs
associated with workforce reduction and abandonment of excess facilities, and are expected to be paid by December 31, 2008, and August 31, 2010, respectively. However on a quarterly basis, the Company will conduct an evaluation of these
balances and revise its assumptions and estimates, as appropriate.

A reconciliation of the beginning and ending liability is shown below:



|                                       |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  
|-------------------------------------- |  | ------------------- | ------ | - | ------------- | - | --- | ----- |  | - | ----- | - |  | - | ------ | -
|                                       |  | Work forcereduction |        |   | Facilitycosts |   |     | Other |  |   | Total |  
|Fiscal 2007 Restructuring Plan         |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  
|Balance as of June 30, 2006            |  | $                   |       |   |               | $ |    |       |  | $ |      |   |  | $ |       |  
|Accruals                               |  |                     | 5,679  |   |               |   | 213 |       |  |   | 203   |   |  |   | 6,095  |  
|Cash payments                          |  |                     | (3,700 | ) |               |   | (35 | )     |  |   | (203  | ) |  |   | (3,938 | )
|Foreign exchange and other adjustments |  |                     | (21    | ) |               |   | (15 | )     |  |   |      |   |  |   | (36    | )
|                                       |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  
|Balance as of March 31, 2007           |  | $                   | 1,958  |   |               | $ | 163 |       |  | $ |      |   |  | $ | 2,121  |  
|                                       |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



The following table outlines restructuring charges incurred under the Fiscal 2007 restructuring plan,
by segment, for the three and nine months ended March 31, 2007.



|                                                                  |  |                     |       |               |   |       |  |   |       |   |  |   |      
|----------------------------------------------------------------- |  | ------------------- | ----- | ------------- | - | ----- |  | - | ----- | - |  | - | -----
|                                                                  |  | Work forcereduction |       | Facilitycosts |   | Other |  |   | Total
|Fiscal 2007 Restructuring Planby Segment                         |  |                     |       |               |   |       |  |   |       |   |  |   |      
|North America                                                     |  | $                   | 175   |               | $ |      |  | $ | 39    |   |  | $ | 214  
|Europe                                                            |  |                     | 593   |               |   | 213   |  |   | (29   | ) |  |   | 777  
|Other                                                             |  |                     |      |               |   |      |  |   | 2     |   |  |   | 2    
|                                                                  |  |                     |       |               |   |       |  |   |       |   |  |   |      
|Total charge by segment for the three months ended March 31, 2007 |  | $                   | 768   |               | $ | 213   |  | $ | 12    |   |  | $ | 993  
|                                                                  |  |                     |       |               |   |       |  |   |       |   |  |   |      
|                                                                  |  |                     |       |              
|                                                                  |  | Work forcereduction |       | Facilitycosts |   | Other |  |   | Total
|Fiscal 2007 Restructuring Planby Segment                         |  |                     |       |               |   |       |  |   |       |   |  |   |      
|North America                                                     |  | $                   | 2,072 |               | $ |      |  | $ | 140   |   |  | $ | 2,212
|Europe                                                            |  |                     | 3,607 |               |   | 213   |  |   | 51    |   |  |   | 3,871
|Other                                                             |  |                     |      |               |   |      |  |   | 12    |   |  |   | 12   
|                                                                  |  |                     |       |               |   |       |  |   |       |   |  |   |      
|Total charge by segment for the nine months ended March 31, 2007  |  | $                   | 5,679 |               | $ | 213   |  | $ | 203   |   |  | $ | 6,095
|                                                                  |  |                     |       |               |   |       |  |   |       |   |  |   |      

Fiscal 2006 Restructuring

In the three months ended September 30, 2005, the Board approved, and the Company began to implement restructuring activities to streamline its
operations and consolidate its excess facilities (Fiscal 2006 restructuring plan). These charges relate to work force reductions, abandonment of excess facilities and other miscellaneous direct costs. On a quarterly basis, the Company
conducts an evaluation of these balances and revises its assumptions and estimates, as appropriate. In the three and nine months ended March 31, 2007, the Company recorded recoveries from special charges of $115,000 and $842,000, respectively.
The provision related to workforce reduction is expected to be paid by September 30, 2007, and the provisions relating to the abandonment of excess facilities, such as contract settlements and lease costs, are expected to be paid by January
2014.

A reconciliation of the beginning and ending liability is shown below:

Fiscal 2006 Restructuring



|                                       |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  
|-------------------------------------- |  | -------------------- | ------ | - | -------------- | - | ------ | ----- |  | - | ----- | - |  | - | ------ | -
|                                       |  | Work force reduction |        |   | Facility costs |   |        | Other |  |   | Total |  
|Fiscal 2006 Restructuring Plan         |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  
|Balance as of June 30, 2006            |  | $                    | 2,685  |   |                | $ | 4,135  |       |  | $ | 9     |   |  | $ | 6,829  |  
|Accruals (recoveries)                  |  |                      | (620   | ) |                |   | (324   | )     |  |   | 102   |   |  |   | (842   | )
|Cash payments                          |  |                      | (1,817 | ) |                |   | (2,301 | )     |  |   | (112  | ) |  |   | (4,230 | )
|Foreign exchange and other adjustments |  |                      | (59    | ) |                |   | 143    |       |  |   |      |   |  |   | 84     |  
|                                       |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  
|Balance as of March 31, 2007           |  | $                    | 189    |   |                | $ | 1,653  |       |  | $ | (1    | ) |  | $ | 1,841  |  
|                                       |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



The following tables outline restructuring charges incurred and recovered under the Fiscal 2006
restructuring plan, by segment, for the three and nine months ended March 31, 2007:



|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|----------------------------------------------------------------------------- |  | ------------------- | ---- | - | -------------- | - | ---- | ----- |  | - | ----- | - |  | - | ---- | -
|                                                                              |  | Work forcereduction |      |   | Facility costs |   |      | Other |  |   | Total |  
|Fiscal 2006 Restructuring Planby Segment                                     |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|North America                                                                 |  | $                   |     |   |                | $ | 17   |       |  | $ |      |   |  | $ | 17   |  
|Europe                                                                        |  |                     | (2   | ) |                |   | (157 | )     |  |   | 27    |   |  |   | (132 | )
|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|Total charge (recoveries) by segment for three months ended March 31, 2007    |  | $                   | (2   | ) |                | $ | (140 | )     |  | $ | 27    |   |  | $ | (115 | )
|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|                                                                              |  |                     |      |  
|                                                                              |  | Work forcereduction |      |   | Facility costs |   |      | Other |  |   | Total |  
|Fiscal 2006 Restructuring Planby Segment                                     |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|North America                                                                 |  | $                   | (189 | ) |                | $ | (320 | )     |  | $ | 19    |   |  | $ | (490 | )
|Europe                                                                        |  |                     | (423 | ) |                |   | (4   | )     |  |   | 88    |   |  |   | (339 | )
|Other                                                                         |  |                     | (8   | ) |                |   |     |       |  |   | (5    | ) |  |   | (13  | )
|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|Total charge (recoveries) by segment for the nine months ended March 31, 2007 |  | $                   | (620 | ) |                | $ | (324 | )     |  | $ | 102   |   |  | $ | (842 | )
|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  

Fiscal 2004 Restructuring

In the three months ended March 31, 2004, the Company recorded a restructuring charge of approximately $10 million relating primarily to its North
America segment. The charge consisted primarily of costs associated with a workforce reduction, excess facilities associated with the integration of the IXOS acquisition, write downs of capital assets and legal costs related to the termination of
facilities. All actions relating to employer workforce reductions were completed, and the related costs expended as of March 31, 2006. On a quarterly basis the Company conducts an evaluation of these balances and revises its assumptions and
estimates, as appropriate. The provision for facility costs is expected to be substantially paid by 2011.

The activity of the
Companys provision for the 2004 restructuring charge is as follows for the nine months ended March 31, 2007:



|                                       |  |                |       |  
|-------------------------------------- |  | -------------- | ----- | -
|                                       |  | Facility costs |      
|Fiscal 2004 Restructuring Plan         |  |                |       |  
|Balance as of June 30, 2006            |  | $              | 1,170 |  
|Cash payments                          |  |                | (402  | )
|Foreign exchange and other adjustments |  |                | 387   |  
|                                       |  |                |       |  
|Balance as of March 31, 2007           |  | $              | 1,155 |  
|                                       |  |                |       |  



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



NOTE 18ACQUISITIONS

Fiscal 2007

Momentum

In March 2007, Open Text acquired all issued and outstanding shares of Momentum, a privately held company that specializes in providing Enterprise Content Management (ECM) solutions to U.S. government agencies. Open Text expects
that the acquisition of Momentum will enhance its ability to provide services to the U.S. government market. In accordance with SFAS 141, this acquisition is accounted for as a business combination.

Established in 1993 and based in Arlington, Virginia, Momentum has been serving the government sector for more than 12 years by providing technical
expertise to automate business processes. Momentum has used Open Texts Livelink ECM software to develop integrated systems for its clients.

The results of operations of Momentum have been consolidated with those of Open Text beginning March 2, 2007.

Consideration
for this acquisition consisted of $4.7 million in cash, of which $4.4 million was paid at closing, and $300,000 was paid into escrow for a period of one year, as provided for in the share purchase agreement. The Company additionally incurred
approximately $280,000 in costs directly related to this acquisition. In addition, the Company paid an amount of $600,000 into escrow on account of a payment due to the former owner of Momentum in connection with his employment with the Company for
a period of one year ending on March 1, 2008. This amount has been included as part of Prepaid expenses and other current assets in these Interim Financial Statements and is being charged to operations over the 12 months commencing
March 2, 2007.

Preliminary Purchase Price Allocation

Under business combination accounting the total purchase price was allocated to Momentums net assets, based on their estimated fair values as of March 2, 2007, as set forth below. The excess of the purchase
price over the net assets was recorded as goodwill. The allocation of the purchase price was based on a preliminary valuation, conducted by the Companys management, and its estimates and assumptions are subject to change upon finalization,
which is expected to occur prior to March 1, 2008.

The preliminary purchase price allocation set forth below represents
managements best estimate of the allocation of the purchase price and the fair value of net assets acquired.



|                                                  |  |   |       |  
|------------------------------------------------- |  | - | ----- | -
|Current assets (net of cash acquired of $620,000) |  | $ | 1,454 |  
|Long-term assets                                  |  |   | 157   |  
|Goodwill *                                        |  |   | 3,251 |  
|                                                  |  |   |       |  
|Total assets acquired                             |  |   | 4,862 |  
|Liabilities assumed                               |  |   | (506  | )
|                                                  |  |   |       |  
|Net assets acquired                               |  | $ | 4,356 |  
|                                                  |  |   |       |  



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



---

|* | Includes the fair value of intangible assets acquired as part of this acquisition. The Company is currently in the process of determining the fair value of such intangible
assets and upon the final determination of such fair value the Company will allocate a portion of the purchase price to acquired intangible assets, resulting in a corresponding reduction to recorded goodwill.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The portion of the purchase price allocated to goodwill has been assigned to the Companys North America segment.

No amount of the goodwill is expected to be deductible for tax purposes.

A director of the Company received approximately $90,000 in consulting fees for assistance with the acquisition of Momentum. These fees are included in the purchase price allocation. The director abstained from voting
on the transaction.

Hummingbird

In October 2006, Open Text acquired all of the issued and outstanding shares of Hummingbird. Open Text expects that the combination of the two companies will strengthen its ability to offer an expanded portfolio of solutions aimed at a wide
range of vertical markets. In accordance with SFAS 141, this acquisition is accounted for as a business combination.

Hummingbirds
software offerings fall into two principal product families: (i) Hummingbird Enterprise, and (ii) Hummingbird Connectivity. The Companys flagship offering, Hummingbird Enterprise, is an integrated ECM suite enabling users to capture,
create, access, manage, share, find, extract, analyze, protect, publish and archive business content across the extended enterprise from anywhere in the world. Hummingbird Connectivity is a host access product suite that includes software
applications for accessing mission-critical back office applications and related data from the majority of todays systems, including mainframe, AS/400, Linux and UNIX platform environments.

The results of operations of Hummingbird have been consolidated with those of Open Text beginning October 2, 2006.

Consideration for this acquisition, net of cash acquired, consisted of $412.5 million in cash including approximately $21.0 million associated with
the open market purchases of Hummingbird shares acquired in June 2006 and an additional $6.4 million of direct acquisition related costs.

Purchase
Price Allocation

Under business combination accounting the total purchase price was allocated to Hummingbirds net tangible and
identifiable intangible assets, based on their estimated fair values as of October 2, 2006, as set forth below. The excess of the purchase price over the net tangible and identifiable intangible assets was recorded as goodwill. The allocation
of the purchase price was based on a preliminary valuation, conducted by the Companys management, and its estimates and assumptions are subject to change upon finalization, which is expected to occur prior to October 1, 2007.



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##### Table of Contents

OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



The purchase price allocation set forth below represents managements best estimate of the
allocation of the purchase price and the fair value of net assets acquired.



|                                                 |  |   |          |  
|------------------------------------------------ |  | - | -------- | -
|Current assets (net of cash acquired of $88,287) |  | $ | 69,680   |  
|Long-term assets                                 |  |   | 14,631   |  
|Customer assets                                  |  |   | 139,800  |  
|Technology assets                                |  |   | 159,200  |  
|Goodwill                                         |  |   | 271,239  |  
|                                                 |  |   |          |  
|Total assets acquired                            |  |   | 654,550  |  
|Liabilities assumed                              |  |   | (242,059 | )
|                                                 |  |   |          |  
|Net assets acquired                              |  | $ | 412,491  |  
|                                                 |  |   |          |  

The useful lives of both the customer and technology assets have been estimated to be seven years
each.

The portion of the purchase price allocated to goodwill was assigned in the ratio of 56%, 40% and 4% to the Companys North
America, Europe and Other segments, respectively. No amount of the goodwill is expected to be deductible for tax purposes.

As part of the
purchase price allocation, the Company recognized liabilities in connection with this acquisition of approximately $38.4 million relating primarily to employee termination charges, costs relating to abandonment of excess Hummingbird facilities and
accruals for direct acquisition related costs. This was the result of management approved and initiated plans to restructure the operations of Hummingbird, commencing at the time of acquisition, to eliminate duplicative activities and to reduce
costs. The Company will continue to evaluate and identify any material duplicative Hummingbird activities and areas where costs may be reduced during the remainder of the purchase price allocation period and include these in the determination of the
fair value of this acquisition. The liability relating to abandonment of excess facilities is expected to be paid over the terms of the various leases, the last of which expires in March 2011. The liabilities related to employee termination costs
are expected to be substantially paid on or before the quarter ended September 30, 2007. For further details relating to the type and amounts of these liabilities see Note 7 Accounts payable and accrued liabilities to the Interim
Financial Statements.

A director of the Company received approximately $351,000 in consulting fees for assistance with the acquisition of
Hummingbird. These fees are included in the purchase price allocation. The director abstained from voting on the transaction.

IXOS

As of March 31, 2007, the Company owned 95.90% of the outstanding shares of IXOS. The Company increased its ownership of the
shares of IXOS by way of open market purchases by 0.38% during the nine months ended March 31, 2007. Total consideration paid for the purchase of shares of IXOS during the three and nine months ended March 31, 2007 was approximately
$219,000 and $1.1 million, respectively. The minority interest in IXOS has been adjusted to reflect the reduced minority interest ownership in IXOS.



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OPEN TEXT CORPORATION

UNAUDITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

For the Three and Nine Months Ended March 31, 2007

(Tabular dollar amounts in thousands of U.S. dollars, except per share
data)



NOTE 19SUBSEQUENT EVENTS

Repayment of term loan

On May 2, 2007, the Company announced that it would make an
additional payment of $30.0 million against its term loan during May 2007.

May 2007 Repurchase Program

On May 2, 2007 Open Text filed a notice of intention with the Ontario Securities Commission to make a normal course issuer bid to repurchase a
maximum of 2,494,053 Open Text Common Shares on the NASDAQ (hereinafter referred to as the May 2007 Repurchase Program). Purchases under the May 2007 Repurchase Program will commence on or after May 7, 2007, will be determined by
the Board of Directors of Open Text and will be made in accordance with rules and policies of the NASDAQ. The May 2007 Repurchase Program supersedes the May 2006 Repurchase Program and will terminate on May 6, 2008.



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##### Table of Contents

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation

In
addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended, and is subject to the safe harbors created by those sections. Words such as anticipates, expects, intends, plans,
believes, seeks, estimates, may, could, would, might, will and variations of these words or similar expressions are intended to identify forward-looking
statements. In addition, any statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking
statements. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed herein and in the notes to our financial statements for the three and nine months ended March 31, 2007, certain
sections of which are incorporated herein by reference as set forth in Part II Item 1A Risk Factors of this report. The actual results that we achieve may differ materially from any forward-looking statements, which reflect
managements opinions only as of the date hereof. We undertake no obligation to revise or publicly release the results of any revisions to these forward-looking statements. You should carefully review Part II Item 1A Risk
Factors and other documents we file from time to time with the Securities and Exchange Commission. A number of factors may materially affect our business, financial condition, operating results and prospects. These factors include but are not
limited to those set forth in Part II Item 1A Risk Factors and elsewhere in this report. Any one of these factors may cause our actual results to differ materially from recent results or from our anticipated future results. You
should not rely too heavily on the forward-looking statements contained in this Quarterly Report on Form 10-Q, because these forward-looking statements are relevant only as of the date they were made.

OVERVIEW

Acquisitions:

Momentum Systems Inc. (Momentum)

In March 2007, we acquired 100% of all issued and outstanding Common Shares of Momentum, a privately held company based in Arlington, Virginia, which has been serving the government sector for over 12 years. With an experienced staff,
located primarily in the Washington D.C area, Momentum has had a successful track record of implementing and supporting our Livelink ECM solutions across all levels of government. We believe this acquisition will add to our government domain
expertise and further enhance our ability to deliver valuable government solutions.

Consideration for this acquisition consisted of
$4.7 million in cash (net of cash acquired), of which $4.4 million was paid at closing, and $300,000 was paid into escrow for a period of one year, as provided for in the share purchase agreement. We additionally incurred approximately $280,000
in costs directly related to this acquisition. In addition, we paid an amount of $600,000 into escrow on account of a payment due to the former owner of Momentum in connection with his employment with us for a period of one year ending on
March 1, 2008.

Hummingbird Ltd. (Hummingbird)

In October 2006, we completed the acquisition of Hummingbird, a Toronto, Ontario, based, global provider of ECM solutions. This transaction was the culmination of an offer made by us, in July 2006 to purchase all
of the issued and outstanding common shares of this company.

The approximate value of this all cash transaction was $412.5 million, net of
cash acquired from Hummingbird.

We believe that this acquisition will enhance our size and global reach and will further solidify our
position as a leading provider of ECM solutions. We believe the union of Open Text and Hummingbird will strengthen our ability to reach a wider, more diversified audience, create a strong strategic fit that adds to our solutions focus,
and increase the reach of our global partner program.



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##### Table of Contents

Restructuring Activities

In October 2006, we announced a restructuring plan that involves, primarily, workforce reductions, real estate optimization and legal entity reorganization. This plan involved and impacted legacy Hummingbird
operations and the operations of the combined companies.

New Products

In February, we hosted Summit 2007, which is the worldwide user conference for Hummingbird customers and partners. At this conference we
unveiled details of our next generation ECM offering, codenamed DMX. This product represents the convergence of Open Text and Hummingbird technologies. With DMX, customers will have the opportunity to take advantage of broader sets of Open Text
applications, while still being able to maximize the values that they have invested in their Hummingbird enterprise deployments.

In April
we hosted two LiveLinkUp Europe events; one in Munich and one in London, where we outlined our strategic vision for ECM and how the broader new capabilities in Livelink ECM 10 will help customers achieve enterprise transparency,
leveraging it for business advantages.

Our records management offerings continue to drive our strategic relations and tight integration
with partners, such as Microsoft Corporation (Microsoft), Oracle Inc. (Oracle) and SAP AG (SAP). The introduction of Livelink ECMRecords Management for use with SAP® applications was one of our significant announcements made in the third quarter. It will be marketed and supported by
SAP and Open Text. U.S. federal government customers of SAP and Open Text will now have a fully integrated solution to help them implement comprehensive records management programs.

Partners

We rely on close cooperation with partners for sales and product development, as
well as for the optimization of opportunities which arise in our competitive environment.

We continue to make significant progress with
our global partner program, with emphasis on developing strategic relations and tight integration with partners, such as Microsoft, Oracle and SAP. Our revenue from partners has more than doubled in the three months ended March 31, 2007,
compared to the same period in the prior fiscal year. Partner revenue was approximately 37% of total revenue for the current quarter.

Outlook

We anticipate that our customers will continue to look for comprehensive ECM solutions that are fast, easy to deploy, and highly
scalable. Overall we are seeing our pipeline continuing to build, driven across the product portfolio by the need for compliance and regulatory specific solutions.



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##### Table of Contents

Results of Operations

The following table presents an overview of our selected financial data for the periods indicated.



|                                           |  |                              |         |   |             |   |         |             |  |   |          |   |  |         |   
|------------------------------------------ |  | ---------------------------- | ------- | - | ----------- | - | ------- | ----------- |  | - | -------- | - |  | ------- | --
|                                           |  | Three months ended March 31, |         |   | Change in $ |   |         | % Change    | 
|(in thousands)                             |  | 2007                         |         |   | 2006        |   |         |            
|Total revenue                              |  | $                            | 156,052 |   |             | $ | 100,926 |             |  | $ | 55,126   |   |  | 54.6    | % 
|Cost of revenue                            |  |                              | 54,421  |   |             |   | 35,573  |             |  |   | 18,848   |   |  | 53.0    | % 
|Gross profit                               |  |                              | 101,631 |   |             |   | 65,353  |             |  |   | 36,278   |   |  | 55.5    | % 
|Amortization of acquired intangible assets |  |                              | 7,396   |   |             |   | 2,298   |             |  |   | 5,098    |   |  | 221.8   | % 
|Special charges (recoveries)               |  |                              | 878     |   |             |   | (557    | )           |  |   | 1,435    |   |  | (257.6  | )%
|Other operating expenses                   |  |                              | 79,818  |   |             |   | 52,734  |             |  |   | 27,084   |   |  | 51.4    | % 
|Income from operations                     |  |                              | 13,539  |   |             |   | 10,878  |             |  |   | 2,661    |   |  | 24.5    | % 
|Net income                                 |  |                              | 3,853   |   |             |   | 7,322   |             |  |   | (3,469   | ) |  | (47.4   | )%
|Gross margin                               |  |                              | 65.1    | % |             |   | 64.8    | %           |  |   |          |   |  |         |   
|                                           |  |                              |        
|                                           |  | Nine months ended March 31,  |         |   |             |   |         |             | 
|(in thousands)                             |  | 2007                         |         |   | 2006        |   |         | Change in $ |  |   | % Change |  
|Total revenue                              |  | $                            | 420,468 |   |             | $ | 304,327 |             |  | $ | 116,141  |   |  | 38.2    | % 
|Cost of revenue                            |  |                              | 144,145 |   |             |   | 105,555 |             |  |   | 38,590   |   |  | 36.6    | % 
|Gross profit                               |  |                              | 276,323 |   |             |   | 198,772 |             |  |   | 77,551   |   |  | 39.0    | % 
|Amortization of acquired intangible assets |  |                              | 17,147  |   |             |   | 6,825   |             |  |   | 10,322   |   |  | 151.2   | % 
|Special charges                            |  |                              | 5,253   |   |             |   | 26,347  |             |  |   | (21,094  | ) |  | (80.1   | )%
|Other operating expenses                   |  |                              | 219,613 |   |             |   | 164,718 |             |  |   | 54,895   |   |  | 33.3    | % 
|Income from operations                     |  |                              | 34,310  |   |             |   | 882     |             |  |   | 33,428   |   |  | 3,790.0 | % 
|Net income (loss)                          |  |                              | 13,431  |   |             |   | (2,825  | )           |  |   | 16,256   |   |  | N/A     |   
|Gross margin                               |  |                              | 65.7    | % |             |   | 65.3    | %           |  |   |          |   |  |         |   

As a result of our acquisition of Hummingbird, we have included the financial results of
Hummingbird in our unaudited condensed consolidated financial statements (Interim Financial Statements) beginning October 2, 2006, the date we acquired 100% of the issued and outstanding shares. The fluctuations in the operating
results in the current periods, compared with the same period in the prior fiscal year, are generally due to the synergies generated by this acquisition. An analysis of each of the components of our Results of Operations follows.

Immediately upon the acquisition of Hummingbird, Open Text restructured both Hummingbird and pre-acquisition Open Text operations into one
combined organization. Sales forces were aligned by either a combined vertical or geography. All back office functions such as accounting and information technology were combined to manage both operations. Our research and development teams quickly
prepared integration code to combine products and features between previous Hummingbird and Open Text products. Most former Hummingbird executive management and many next levels of management personnel were terminated and primarily Open Text
management assumed all responsibilities for sales, service, research and development, and general and administrative activities. In view of the shared resources, single line management and combined operations, presentation of the results of
operations of Open Text and Hummingbird separately is not meaningful to this analysis.



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##### Table of Contents

Revenues

Revenues by Product Type

The following tables set forth our revenues by product and as a percentage of the related
product revenue for the periods indicated:



|                 |  |                              |         |      |                             |             |  |          |        |  |      |   |      |   |             |  |          |         |  |   |         |  |      |  
|---------------- |  | ---------------------------- | ------- | ---- | --------------------------- | ----------- |  | -------- | ------ |  | ---- | - | ---- | - | ----------- |  | -------- | ------- |  | - | ------- |  | ---- | -
|                 |  | Three months ended March 31, |         |      | Nine months ended March 31, |            
|(in thousands)   |  | 2007                         |         | 2006 |                             | Change in $ |  | % Change |        |  | 2007 |   | 2006 |   | Change in $ |  | % Change |        
|License          |  | $                            | 43,032  |      | $                           | 28,415      |  | $        | 14,617 |  | 51.4 | % |      | $ | 123,282     |  | $        | 90,489  |  | $ | 32,793  |  | 36.2 | %
|Customer support |  |                              | 79,042  |      |                             | 45,966      |  |          | 33,076 |  | 72.0 | % |      |   | 205,352     |  |          | 136,656 |  |   | 68,696  |  | 50.3 | %
|Service          |  |                              | 33,978  |      |                             | 26,545      |  |          | 7,433  |  | 28.0 | % |      |   | 91,834      |  |          | 77,182  |  |   | 14,652  |  | 19.0 | %
|                 |  |                              |         |      |                             |             |  |          |        |  |      |   |      |   |             |  |          |         |  |   |         |  |      |  
|Total            |  | $                            | 156,052 |      | $                           | 100,926     |  | $        | 55,126 |  | 54.6 | % |      | $ | 420,468     |  | $        | 304,327 |  | $ | 116,141 |  | 38.2 | %
|                 |  |                              |         |      |                             |             |  |          |        |  |      |   |      |   |             |  |          |         |  |   |         |  |      |  



|                     |  |                             |   |  |                            |   |  |       |   |  |       |  
|-------------------- |  | --------------------------- | - |  | -------------------------- | - |  | ----- | - |  | ----- | -
|                     |  | Three months endedMarch 31, |   |  | Nine months endedMarch 31, |  
|(% of total revenue) |  | 2007                        |   |  | 2006                       |   |  | 2007  |   |  | 2006  |  
|License              |  | 27.6                        | % |  | 28.2                       | % |  | 29.3  | % |  | 29.7  | %
|Customer support     |  | 50.7                        | % |  | 45.5                       | % |  | 48.8  | % |  | 44.9  | %
|Service              |  | 21.7                        | % |  | 26.3                       | % |  | 21.9  | % |  | 25.4  | %
|                     |  |                             |   |  |                            |   |  |       |   |  |       |  
|Total                |  | 100.0                       | % |  | 100.0                      | % |  | 100.0 | % |  | 100.0 | %
|                     |  |                             |   |  |                            |   |  |       |   |  |       |  

License Revenues

License revenues consist of fees earned from the licensing of software products to customers.

For the
three months ended March 31, 2007, license revenues increased by approximately $14.6 million, compared to the same period in the prior fiscal year, primarily as a result of growth in our North American operations. Of the total growth achieved
this quarter, North America accounted for 62.3% of the increase, followed by Europe, which contributed 37.0% and the remaining growth was contributed by the Other segment.

For the nine months ended March 31, 2007, license revenues increased by $32.8 million, compared to the same period in the prior fiscal year,
primarily as a result of growth in our European license sales. Of the total growth, Europe contributed 54.9%, followed by North America, which added 39.6% and the remaining Other segment contributed approximately 5.5% to the year-to-date growth.

Customer Support Revenues

Customer support revenues consist of revenue from our customer support and maintenance agreements. These agreements allow our customers to receive technical support, enhancements and upgrades to new versions of our software products when
and if available. Customer support revenues are generated from such support and maintenance agreements relating to current year sales of software products and from the renewal of existing maintenance agreements for software licenses sold in prior
periods. As our installed base grows, the renewal rate has a larger influence on customer support revenue than the current software revenue growth. Therefore, changes in customer support revenues do not necessarily correlate directly to the changes
in license revenue in a given period. Typically the term of these support and maintenance agreements is twelve months, with customer renewal options. We have historically experienced a renewal rate over 90% but continue to encounter pricing pressure
from our customers during contract negotiation and renewal. New license sales create additional customer support agreements which contribute substantially to the increase in our customer support revenue.

For the three months ended March 31, 2007, customer support revenues increased by $33.1 million, compared to the same period in the prior fiscal
year, primarily as a result of growth in our North American



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operations. Of the total growth achieved this quarter, North America accounted for 53.0% of the increase, followed by Europe, which contributed 42.4% and the
remaining Other segment contributed 4.6% to this growth.

For the nine months ended March 31, 2007, customer support revenues
increased by $68.7 million, compared to the same period in the prior fiscal year, primarily as a result of growth from Europe. Of the total growth, Europe contributed 50.1%, followed closely by North America, which contributed 46.5% and the
remaining contribution came from our Other segment, which added 3.4% to the overall growth.

Service Revenues

Service revenues consist of revenues from consulting contracts and contracts to provide training and integration services.

For the three months ended March 31, 2007, service revenues increased by $7.4 million, compared to the same period in the prior fiscal year,
primarily as a result of growth in our European operations. Of the total growth achieved this quarter, Europe accounted for 60.0% of the increase, followed by North America, which contributed 33.3% and the remaining Other segment contributed 6.7% to
this growth.

For the nine months ended March 31, 2007, service revenues increased by $14.7 million, compared to the same period in
the prior fiscal year, primarily as a result of growth from Europe. Of the total growth, Europe contributed 56.8%, followed closely by North America, which contributed 42.5% and the remaining contribution came from our Other segment.

Revenues by Geography

The following table sets forth
information regarding our revenues by geography.



|                   |  |                             |         |   |                            |   |         |      |  |   |         |   |  |   |         |  
|------------------ |  | --------------------------- | ------- | - | -------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                   |  | Three months endedMarch 31, |         |   | Nine months endedMarch 31  |  
|(In thousands)     |  | 2007                        |         |   | 2006                       |   |         | 2007 |  |   | 2006    |  
|North America      |  | $                           | 75,230  |   |                            | $ | 45,902  |      |  | $ | 196,814 |   |  | $ | 145,918 |  
|Europe             |  |                             | 73,410  |   |                            |   | 49,656  |      |  |   | 203,794 |   |  |   | 142,257 |  
|Other              |  |                             | 7,412   |   |                            |   | 5,368   |      |  |   | 19,860  |   |  |   | 16,152  |  
|                   |  |                             |         |   |                            |   |         |      |  |   |         |   |  |   |         |  
|Total              |  | $                           | 156,052 |   |                            | $ | 100,926 |      |  | $ | 420,468 |   |  | $ | 304,327 |  
|                   |  |                             |         |   |                            |   |         |      |  |   |         |   |  |   |         |  
|                   |  |                            
|                   |  | Three months endedMarch 31, |         |   | Nine months endedMarch 31, |  
|% of Total Revenue |  | 2007                        |         |   | 2006                       |   |         | 2007 |  |   | 2006    |  
|North America      |  |                             | 48.2    | % |                            |   | 45.5    | %    |  |   | 46.8    | % |  |   | 47.9    | %
|Europe             |  |                             | 47.0    | % |                            |   | 49.2    | %    |  |   | 48.5    | % |  |   | 46.7    | %
|Other              |  |                             | 4.8     | % |                            |   | 5.3     | %    |  |   | 4.7     | % |  |   | 5.4     | %
|                   |  |                             |         |   |                            |   |         |      |  |   |         |   |  |   |         |  
|Total              |  |                             | 100.0   | % |                            |   | 100.0   | %    |  |   | 100.0   | % |  |   | 100.0   | %
|                   |  |                             |         |   |                            |   |         |      |  |   |         |   |  |   |         |  

In the three and nine months ended, March 31, 2007, our total revenues have increased by
approximately $55.1 million and $116.1 million, respectively, compared to the same periods in the prior fiscal year.

North America
revenues increased when compared with the proportionate contributions of Europe and Other primarily due to higher North America license and customer support revenues for the three months ended March 31, 2007 compared to the same period
in the prior fiscal year.

On a current year to date basis, compared to the same period in the prior fiscal year, Europe revenues increased
in proportion to North America and Other on account of increased product revenues in all three product types.

The
Other geographic segment, reflected above, includes Australia, Japan, Malaysia, and the Middle East region.



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Cost of Revenues and Gross Margin by Product Type

The following tables set forth the changes in cost of revenues and gross margin by product type for the periods indicated:

Cost of Revenues:



|                                                      |  |                              |        |      |                             |             |  |   |          |   |  |       |    |      |   |             |  |          |         |  |   |        |  |      |  
|----------------------------------------------------- |  | ---------------------------- | ------ | ---- | --------------------------- | ----------- |  | - | -------- | - |  | ----- | -- | ---- | - | ----------- |  | -------- | ------- |  | - | ------ |  | ---- | -
|                                                      |  | Three months ended March 31, |        |      | Nine months ended March 31, |            
|(in thousands)                                        |  | 2007                         |        | 2006 |                             | Change in $ |  |   | % Change |   |  | 2007  |    | 2006 |   | Change in $ |  | % Change |        
|License                                               |  | $                            | 3,515  |      | $                           | 3,900       |  | $ | (385     | ) |  | (9.9  | %) |      | $ | 9,637       |  | $        | 8,099   |  | $ | 1,538  |  | 19.0 | %
|Customer support                                      |  |                              | 12,431 |      |                             | 7,103       |  |   | 5,328    |   |  | 75.0  | %  |      |   | 31,821      |  |          | 21,595  |  |   | 10,226 |  | 47.4 | %
|Service                                               |  |                              | 28,042 |      |                             | 19,840      |  |   | 8,202    |   |  | 41.3  | %  |      |   | 77,012      |  |          | 61,848  |  |   | 15,164 |  | 24.5 | %
|Amortization of acquired technology intangible assets |  |                              | 10,433 |      |                             | 4,730       |  |   | 5,703    |   |  | 120.6 | %  |      |   | 25,675      |  |          | 14,013  |  |   | 11,662 |  | 83.2 | %
|                                                      |  |                              |        |      |                             |             |  |   |          |   |  |       |    |      |   |             |  |          |         |  |   |        |  |      |  
|Total                                                 |  | $                            | 54,421 |      | $                           | 35,573      |  | $ | 18,848   |   |  | 53.0  | %  |      | $ | 144,145     |  | $        | 105,555 |  | $ | 38,590 |  | 36.6 | %
|                                                      |  |                              |        |      |                             |             |  |   |          |   |  |       |    |      |   |             |  |          |         |  |   |        |  |      |  



|                            |  |                             |   |  |                            |   |  |      |   |  |      |  
|--------------------------- |  | --------------------------- | - |  | -------------------------- | - |  | ---- | - |  | ---- | -
|                            |  | Three months endedMarch 31, |   |  | Nine months endedMarch 31, |  
|Gross margin (% of revenue) |  | 2007                        |   |  | 2006                       |   |  | 2007 |   |  | 2006 |  
|License                     |  | 91.8                        | % |  | 86.3                       | % |  | 92.2 | % |  | 91.0 | %
|Customer support            |  | 84.3                        | % |  | 84.5                       | % |  | 84.5 | % |  | 84.2 | %
|Service                     |  | 17.5                        | % |  | 25.3                       | % |  | 16.1 | % |  | 19.9 | %

Cost of license revenues

Cost of license revenues consists primarily of royalties payable to third parties, product media duplication, instruction manuals and packaging expenses.

Cost of license revenues increased in the three and nine months ended March 31, 2007, as a direct result of the incremental impact of
Hummingbird. The increase in the gross margin for the three months ended March 31, 2007, compared to the same period in the prior fiscal year, was due to an overall reduction of reseller fees and reliance on third party products. The gross
margins for the nine months ended March 31, 2007, compared to the same period in the prior fiscal year, were relatively stable, both within the 91% to 93% range.

Cost of customer support revenues

Cost of customer support revenues is comprised primarily of
technical support personnel and related costs.

Cost of customer support revenues increased in the three and nine months ended
March 31, 2007, as a direct result of the incremental impact of Hummingbird. The gross margins for the three and nine months ended March 31, 2007 compared to the same periods in the prior fiscal year were relatively stable, all within the
85% range.

Cost of service revenues

Cost of service revenues consists primarily of the costs of providing integration, customization and training with respect to our various software products. The most significant component of these costs is personnel and related expenses.
The other components include travel costs and third party subcontracting.



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Cost of service revenues increased in the three and nine months ended March 31, 2007, as a direct
result of the incremental impact of Hummingbird. Gross margins for the three and nine months ended March 31, 2007 declined compared to the same periods in the prior fiscal year, as a result of the increased costs due to the integration and
reorganization of our combined entity.

Operating Expenses

The following table sets forth total operating expenses by function and as a percentage of total revenue for the periods indicated:



|                                           |  |                              |        |      |                             |        |          |  |          |        |  |       |   |      |   |          |  |   |          |  |   |         |   |  |       |  
|------------------------------------------ |  | ---------------------------- | ------ | ---- | --------------------------- | ------ | -------- |  | -------- | ------ |  | ----- | - | ---- | - | -------- |  | - | -------- |  | - | ------- | - |  | ----- | -
|                                           |  | Three months ended March 31, |        |      | Nine months ended March 31, |       
|(in thousands)                             |  | 2007                         |        | 2006 |                             |        | $ Change |  | % Change |        |  | 2007  |   | 2006 |   | $ Change |  |   | % Change | 
|Research and development                   |  | $                            | 21,176 |      | $                           | 14,153 |          |  | $        | 7,023  |  | 49.6  | % |      | $ | 57,950   |  | $ | 44,824   |  | $ | 13,126  |   |  | 29.3  | %
|Sales and marketing                        |  |                              | 39,069 |      |                             | 24,677 |          |  |          | 14,392 |  | 58.3  | % |      |   | 107,450  |  |   | 78,562   |  |   | 28,888  |   |  | 36.8  | %
|General and administrative                 |  |                              | 15,947 |      |                             | 11,210 |          |  |          | 4,737  |  | 42.3  | % |      |   | 43,688   |  |   | 33,298   |  |   | 10,390  |   |  | 31.2  | %
|Depreciation                               |  |                              | 3,626  |      |                             | 2,694  |          |  |          | 932    |  | 34.6  | % |      |   | 10,525   |  |   | 8,034    |  |   | 2,491   |   |  | 31.0  | %
|Amortization of acquired intangible assets |  |                              | 7,396  |      |                             | 2,298  |          |  |          | 5,098  |  | 221.8 | % |      |   | 17,147   |  |   | 6,825    |  |   | 10,322  |   |  | 151.2 | %
|Special charges (recoveries)               |  |                              | 878    |      |                             | (557   | )        |  |          | 1,435  |  | N/A   |   |      |   | 5,253    |  |   | 26,347   |  |   | (21,094 | ) |  | N/A   |  
|                                           |  |                              |        |      |                             |        |          |  |          |        |  |       |   |      |   |          |  |   |          |  |   |         |   |  |       |  
|Total                                      |  | $                            | 88,092 |      | $                           | 54,475 |          |  | $        | 33,617 |  | 61.7  | % |      | $ | 242,013  |  | $ | 197,890  |  | $ | 44,123  |   |  | 22.3  | %
|                                           |  |                              |        |      |                             |        |          |  |          |        |  |       |   |      |   |          |  |   |          |  |   |         |   |  |       |  



|                                           |  |                              |   |  |                             |    |  |      |   |  |      |  
|------------------------------------------ |  | ---------------------------- | - |  | --------------------------- | -- |  | ---- | - |  | ---- | -
|                                           |  | Three months ended March 31, |   |  | Nine months ended March 31, |   
|(in % of total revenue)                    |  | 2007                         |   |  | 2006                        |    |  | 2007 |   |  | 2006 |  
|Research and development                   |  | 13.6                         | % |  | 14.0                        | %  |  | 13.8 | % |  | 14.7 | %
|Sales and marketing                        |  | 25.0                         | % |  | 24.5                        | %  |  | 25.6 | % |  | 25.8 | %
|General and administrative                 |  | 10.2                         | % |  | 11.1                        | %  |  | 10.4 | % |  | 10.9 | %
|Depreciation                               |  | 2.3                          | % |  | 2.7                         | %  |  | 2.5  | % |  | 2.6  | %
|Amortization of acquired intangible assets |  | 4.7                          | % |  | 2.3                         | %  |  | 4.1  | % |  | 2.2  | %
|Special charges                            |  | 0.6                          | % |  | (0.6                        | %) |  | 1.2  | % |  | 8.7  | %

Research and development expenses

Research and development (R&D) expenses consist primarily of engineering personnel expenses, contracted research and development expenses,
and facilities and equipment costs.

For the three months ended March 31, 2007, R&D expenses increased by $7.0 million compared to
the same period in the prior fiscal year. This increase is primarily attributable to an increase in R&D headcount of 268 employees. This increase in staff translates into an increase of approximately $5.4 million in direct labour and
approximately $1.1 million in associated labour benefits and expenses. The remaining increase is attributed to normal operating expenses.

For the nine months ended March 31, 2007, R&D expenses increased by $13.1 million compared to the same period in the prior fiscal year. This increase is predominantly attributable to an increase in direct labour of approximately
$11.4 million and labour related expenses of approximately $2.3 million.

Sales and marketing expenses

Sales and marketing expenses mainly consist of personnel expenses and costs associated with advertising and trade shows.



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For the three months ended March 31, 2007, sales and marketing expenses increased by $14.4 million
compared to the same period in the prior fiscal year. This increase is largely attributable to an increase in sales and marketing headcount of 201 employees. This increase in staff translates into an increase of approximately $6.2 million in direct
labour and approximately $2.1 million in associated labour benefits and expenses. Travel, marketing and commission expenses contributed to an increase of approximately $6.0 million on account of an increase to the breadth of our product portfolio
and an expansion of our normal business activities as a result of our fiscal 2007 acquisitions.

For the nine months ended March 31,
2007, sales and marketing expenses increased by $28.9 million compared to the same period in the prior fiscal year. This increase is primarily attributable to an increase in direct labour of approximately $11.9 million and labour related expenses of
approximately $5.1 million. Travel, marketing and commission expenses contributed to an increase of approximately $11.4 million on account of an increase to the breadth of our product portfolio and an expansion of our normal business activities as a
result of our fiscal 2007 acquisitions.

General and administrative expenses

General and administrative expenses mainly consist of salaries of administrative personnel, related overhead, facility expenses, audit fees, consulting
expenses and public company costs.

For the three months ended March 31, 2007, general and administrative expenses increased by $4.7
million compared to the same period in the prior fiscal year. This increase is partially due to an increase in general and administrative headcount of 88 employees. This increase in staff translates into an increase in direct labour expenses of
approximately $2.5 million and labour related benefits and expenses of approximately $500,000. The remaining increase in general and administrate expenses related to miscellaneous operating activities associated with the expanded scale of the
business.

For the nine months ended March 31, 2007, general and administrative expenses increased by $10.4 million compared to the
same period in the prior fiscal year. This increase is partially due to an increase in direct labour of approximately $6.8 million, and labour related expenses of approximately $2.4 million. The remaining increase in general and administrative
expenses related to miscellaneous operating activities associated with the expanded scale of the business.

Accounts Receivable (AR) and
Allowance for Doubtful Accounts (AfDA):

As a result of our October 2006 purchase of Hummingbird, our AfDA, on a
combined company basis, increased by approximately $17.6 million of which we wrote off $7.2 million and $3.0 million, for the quarters ended December 31, 2006 and March 31, 2007 respectively, in connection with AR that emanated
from pre-acquisition date transactions that we determined were uncollectible. See Note 10 Allowance for Doubtful Accounts and Unbilled Receivables to the Interim Financial Statements for additional information relating to legacy
Hummingbird AfDA.

Share-based compensation expense

On July 1, 2005, we adopted the fair value-based method for measurement and cost recognition of employee share-based compensation under the provisions of Financial Accounting Standards Board (FASB)
Statement of Financial Accounting Standards (SFAS) No 123 (Revised 2004) Share-Based Payments (SFAS 123R), using the modified prospective application transitional approach. Previously, we had been accounting for
employee share-based compensation using the intrinsic value method, which generally did not result in any compensation cost being recorded for stock options since the exercise price was equal to the market price of the underlying shares on the date
of grant.



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Our stock options are now accounted for under SFAS 123R. The fair value of each option granted is
estimated on the date of the grant using the Black-Scholes option-pricing model.

For the three months ended March 31, 2007, the fair
value of each option was estimated using the following weightedaverage assumptions: expected volatility of 45.0%; risk-free interest rate of 4.7%; expected dividend yield of 0.0%; and expected life of 5.0 years. For the nine months ended
March 31, 2007, the fair value of each option was estimated using the following weightedaverage assumptions: expected volatility of 46.0%; risk-free interest rate of 4.6%; expected dividend yield of 0.0%; and expected life of 4.8 years.
Expected option lives and volatilities are based on our historical data.

For the three months ended March 31, 2006, the fair value of
each option was estimated using the following weightedaverage assumptions: expected volatility of 54.0%; risk-free interest rate of 4.4%; expected dividend yield of 0.0%; and expected life of 5.5 years. For the nine months ended March 31,
2006, the fair value of each option was estimated using the following weighted-average assumptions: expected volatility of 55.0%; risk-free interest rate of 4.4%; expected dividend yield of 0.0%; and expected life of 5.5 years.

Share-based compensation cost included in the unaudited condensed consolidated statements of income for the three and nine months ended March 31,
2007 was approximately $1.2 million and $3.9 million, respectively, net of related tax effects. This includes deferred tax assets of $243,000 and $627,000 for the three and nine months ended March 31, 2007 respectively, in relation to the tax
effect of certain stock options that are eligible for a tax deduction when exercised. As of March 31, 2007, the total compensation cost related to unvested awards not yet recognized was $12.5 million, which will be recognized over a weighted
average period of approximately 2 years.

We made no modifications to the terms of our outstanding share options in anticipation of the
adoption of SFAS 123R. Also, we made no changes in either the quantity or type of instruments used in our share option plans or the terms of our share option plans.

Amortization of acquired intangible assets

Amortization of acquired intangible assets
includes the amortization of customer assets. Amortization of acquired technology is included as an element of cost of sales.

For the
three months ended March 31, 2007, amortization of acquired intangible assets increased $5.1 million, compared to the same period in the prior fiscal year. For the nine months ended March 31, 2007, amortization of acquired intangible
assets increased $10.3 million, compared to the same period in the prior fiscal year. These increases are due to the impact of the Hummingbird acquisition.

Special charges (recoveries)

Fiscal 2007 Restructuring

In December 2006, our Board approved, and we commenced implementing, restructuring activities to streamline our operations and consolidate our excess
facilities (Fiscal 2007 restructuring plan). Total costs to be incurred in conjunction with the plan are expected to be approximately $7.0 million, of which $993,000 and $6.1 million has been recorded within Special charges in the three
and nine months ended March 31, 2007,



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respectively. The charge consisted primarily of costs associated with workforce reduction and abandonment of excess facilities, and are expected to be paid
by December 31, 2008, and August 31, 2010, respectively. However on a quarterly basis, we will conduct an evaluation of these balances and revise our assumptions and estimates, as appropriate.

A reconciliation of the beginning and ending liability is shown below:



|                                       |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  
|-------------------------------------- |  | ------------------- | ------ | - | ------------- | - | --- | ----- |  | - | ----- | - |  | - | ------ | -
|                                       |  | Work forcereduction |        |   | Facilitycosts |   |     | Other |  |   | Total |  
|Fiscal 2007 Restructuring Plan         |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  
|Balance as of June 30, 2006            |  | $                   |       |   |               | $ |    |       |  | $ |      |   |  | $ |       |  
|Accruals                               |  |                     | 5,679  |   |               |   | 213 |       |  |   | 203   |   |  |   | 6,095  |  
|Cash payments                          |  |                     | (3,700 | ) |               |   | (35 | )     |  |   | (203  | ) |  |   | (3,938 | )
|Foreign exchange and other adjustments |  |                     | (21    | ) |               |   | (15 | )     |  |   |      |   |  |   | (36    | )
|                                       |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  
|Balance as of March 31, 2007           |  | $                   | 1,958  |   |               | $ | 163 |       |  | $ |      |   |  | $ | 2,121  |  
|                                       |  |                     |        |   |               |   |     |       |  |   |       |   |  |   |        |  

The following table outlines restructuring charges incurred under our Fiscal 2007 restructuring
plan, by segment, for the nine months ended March 31, 2007.



|                                                                |  |                     |       |               |   |       |  |       |     |  |   |      
|--------------------------------------------------------------- |  | ------------------- | ----- | ------------- | - | ----- |  | ----- | --- |  | - | -----
|                                                                |  | Work forcereduction |       | Facilitycosts |   | Other |  | Total
|Fiscal 2007 Restructuring Planby Segment                       |  |                     |       |               |   |       |  |       |     |  |   |      
|North America                                                   |  | $                   | 2,072 |               | $ |      |  | $     | 140 |  | $ | 2,212
|Europe                                                          |  |                     | 3,607 |               |   | 213   |  |       | 51  |  |   | 3,871
|Other                                                           |  |                     |      |               |   |      |  |       | 12  |  |   | 12   
|                                                                |  |                     |       |               |   |       |  |       |     |  |   |      
|Total charge by segment for the nine months endedMarch 31, 2007 |  | $                   | 5,679 |               | $ | 213   |  | $     | 203 |  | $ | 6,095
|                                                                |  |                     |       |               |   |       |  |       |     |  |   |      

Fiscal 2006 Restructuring

In the three months ended September 30, 2005, our Board approved, and we began to implement restructuring activities to streamline our operations and
consolidate our excess facilities (Fiscal 2006 restructuring plan). These charges relate to work force reductions, abandonment of excess facilities and other miscellaneous direct costs. On a quarterly basis, we conduct an evaluation of
these balances and revise our assumptions and estimates, as appropriate. In the three and nine months ended March 31, 2007, we recorded recoveries from special charges of $115,000 and $842,000, respectively. The provision related to workforce
reduction is expected to be paid by September 30, 2007, and the provisions relating to the abandonment of excess facilities, such as contract settlements and lease costs, are expected to be paid by January 2014.

A reconciliation of the beginning and ending liability is shown below.



|                                       |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  
|-------------------------------------- |  | -------------------- | ------ | - | -------------- | - | ------ | ----- |  | - | ----- | - |  | - | ------ | -
|                                       |  | Work force reduction |        |   | Facility costs |   |        | Other |  |   | Total |  
|Fiscal 2006 Restructuring Plan         |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  
|Balance as of June 30, 2006            |  | $                    | 2,685  |   |                | $ | 4,135  |       |  | $ | 9     |   |  | $ | 6,829  |  
|Accruals (recoveries)                  |  |                      | (620   | ) |                |   | (324   | )     |  |   | 102   |   |  |   | (842   | )
|Cash payments                          |  |                      | (1,817 | ) |                |   | (2,301 | )     |  |   | (112  | ) |  |   | (4,230 | )
|Foreign exchange and other adjustments |  |                      | (59    | ) |                |   | 143    |       |  |   |      |   |  |   | 84     |  
|                                       |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  
|Balance as of March 31, 2007           |  | $                    | 189    |   |                | $ | 1,653  |       |  | $ | (1    | ) |  | $ | 1,841  |  
|                                       |  |                      |        |   |                |   |        |       |  |   |       |   |  |   |        |  



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The following table outlines restructuring charges incurred and recovered under our Fiscal 2006
restructuring plan, by segment, for the nine months ended March 31, 2007.



|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|----------------------------------------------------------------------------- |  | ------------------- | ---- | - | -------------- | - | ---- | ----- |  | - | ----- | - |  | - | ---- | -
|                                                                              |  | Work forcereduction |      |   | Facility costs |   |      | Other |  |   | Total |  
|Fiscal 2006 Restructuring Planby Segment                                     |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|North America                                                                 |  | $                   | (189 | ) |                | $ | (320 | )     |  | $ | 19    |   |  | $ | (490 | )
|Europe                                                                        |  |                     | (423 | ) |                |   | (4   | )     |  |   | 88    |   |  |   | (339 | )
|Other                                                                         |  |                     | (8   | ) |                |   |     |       |  |   | (5    | ) |  |   | (13  | )
|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  
|Total charge (recoveries) by segment for the nine months ended March 31, 2007 |  | $                   | (620 | ) |                | $ | (324 | )     |  | $ | 102   |   |  | $ | (842 | )
|                                                                              |  |                     |      |   |                |   |      |       |  |   |       |   |  |   |      |  

Fiscal 2004 Restructuring

In the three months ended March 31, 2004, we recorded a restructuring charge of approximately $10.0 million relating primarily to our North America
segment (Fiscal 2004 Restructuring Plan). The charge consisted primarily of costs associated with a workforce reduction, excess facilities associated with the integration of the IXOS acquisition, write downs of capital assets and legal
costs related to the termination of facilities. All actions relating to employer workforce reductions were completed, and the related costs expended as of March 31, 2006. On a quarterly basis, we conduct an evaluation of these balances and
revise our assumptions and estimates, as appropriate. The provision for facility costs is expected to be substantially paid by 2011.

The
activity of the provision for the Fiscal 2004 restructuring Plan is as follows for the nine months ended March 31, 2007:



|                                       |  |                |       |  
|-------------------------------------- |  | -------------- | ----- | -
|                                       |  | Facility costs |      
|Fiscal 2004 Restructuring Plan         |  |                |       |  
|Balance as of June 30, 2006            |  | $              | 1,170 |  
|Cash payments                          |  |                | (402  | )
|Foreign exchange and other adjustments |  |                | 387   |  
|                                       |  |                |       |  
|Balance as of March 31, 2007           |  | $              | 1,155 |  
|                                       |  |                |       |  

Income taxes

We recorded a provision for income taxes of $1.9 million for the three months ended March 31, 2007 compared to $2.6 million for the three months ended March 31, 2006. This decrease in the provision for
income taxes is related to higher income being earned in jurisdictions with a lower statutory rate.

Our deferred tax assets, totaling
$247.5 million, are based upon available income tax losses and future income tax deductions. Our ability to use these income tax losses and future income tax deductions is dependent upon us generating income in the tax jurisdictions in which such
losses or deductions arose. The recognized deferred tax liability of $113.7 million is primarily made up of three components. The first component relates to $106.8 million arising from the amortization of timing differences relating to acquired
intangible assets and future income inclusions. The second component, of $3.0 million, relates primarily to deferred credits arising from non capital losses and un-deducted scientific research and development experimental expenditures acquired at a
discount on asset acquisitions, which will be included in income as they are utilized. The third component, of $3.9 million, relates to other timing differences. We record a valuation allowance against deferred income tax assets when we believe it
is more likely than not that some portion or all of the deferred income tax assets will not be realized. Based on the reversal of deferred income tax liabilities, projected future taxable income, the character of the income tax asset and tax
planning strategies, we have determined that a valuation allowance of



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$168.8 million is recorded in respect of our deferred income tax assets as at March 31, 2007. (A valuation allowance of $127.5 million was required for
the deferred income tax assets as at June 30, 2006). This valuation allowance is primarily attributable to valuation allowances set up based on losses incurred in the year in certain foreign jurisdictions. In order to fully utilize the
recognized deferred income tax assets of $78.7 million, we will need to generate aggregate future taxable income in applicable jurisdictions of approximately $191.9 million. Based on our current projection of taxable income, for the periods in the
jurisdictions in which the deferred income tax assets are deductible, we believe that it is more likely than not that we will realize the benefit of the recognized deferred income tax assets as of March 31, 2007.

Liquidity and Capital Resources

The following table
summarizes the changes in our cash and cash equivalents and cash flows over the periods indicated:



|                               |  |                              |         |   |                             |   |        |          |  |   |        |   |  |      |          |   |          |   |         |   |  |   |          |  
|------------------------------ |  | ---------------------------- | ------- | - | --------------------------- | - | ------ | -------- |  | - | ------ | - |  | ---- | -------- | - | -------- | - | ------- | - |  | - | -------- | -
|                               |  | Three months ended March 31, |         |   | Nine months ended March 31, |  
|(in thousands)                 |  | 2007                         |         |   | 2006                        |   |        | $ Change |  |   | 2007   |   |  | 2006 |          |   | $ Change |  
|Net cash provided by (used in) |  |                              |         |   |                             |   |        |          |  |   |        |   |  |      |          |   |          |   |         |   |  |   |          |  
|Operating activities           |  | $                            | 41,342  |   |                             | $ | 28,699 |          |  | $ | 12,643 |   |  | $    | 82,407   |   |          | $ | 45,371  |   |  | $ | 37,036   |  
|Investing activities           |  | $                            | (13,073 | ) |                             | $ | (4,902 | )        |  | $ | (8,171 | ) |  | $    | (424,477 | ) |          | $ | (28,440 | ) |  | $ | (396,037 | )
|Financing activities           |  | $                            | 5,675   |   |                             | $ | 1,665  |          |  | $ | 4,010  |   |  | $    | 390,274  |   |          | $ | 17,122  |   |  | $ | 373,152  |  

Net Cash Provided by Operating Activities

The increase in operating cash flow of $12.6 million during the three months ended March 31, 2007, compared to the same period in the prior fiscal
year, was primarily due to an increase in the impact of changes in operating assets and liabilities of $20.3 million offset by a reduction of non-cash charges of $4.2 million and a reduction of $3.5 million in net income for the period.

The increase in operating cash flow of $37.0 million during the nine months ended March 31, 2007 was primarily due to an increase in net income
of $16.3 million, the impact of non-cash charges of $2.2 million and changes in operating assets and liabilities of $18.5 million.

Net Cash Used in
Investing Activities

The increase in net cash used in investing activities of $8.2 million during the three months ended
March 31, 2007 compared to the same period in the prior fiscal year, was primarily due to $4.1 million in cash, paid for Momentum and an increase in acquisition related costs of $6.3 million offset by reduction in capital expenditures of
approximately $2.0 million.

The increase in net cash used in investing activities of $396.0 million during the nine months ended
March 31, 2007, compared to the same period in the prior fiscal year, was primarily due to $384.8 million in cash, paid for Hummingbird, $4.1 million in cash, paid for Momentum, and an increase in acquisition related costs of $24.7 million,
offset by a reduction in capital expenditures of approximately $12.2 million and lower cash outlays on prior period acquisitions of $6.1 million.

Net Cash Provided by Financing Activities

The increase in net cash provided by financing activities of $4.0 million
during the three months ended March 31, 2007 compared, to the same period in the prior fiscal year, was mainly due to a $4.8 million increase in the proceeds received from the issuance of our Common Shares, offset by a $1.0 million repayment on
our long-term debt.



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The increase in net cash provided by financing activities of $373.2 million during the nine months ended
March 31, 2007 compared to the same period in the prior fiscal year was mainly due to a $377.1 million increase in our bank financing and a $5.4 million increase in the proceeds we received from the issuance of our Common shares. These
increases were offset by debt issuance costs in the amount of $7.4 million and debt repayments of $2.2 million.

Term loan and Revolver

On October 2, 2006, we entered into a $465.0 million credit agreement with a Canadian chartered bank consisting of a $390.0
million term loan facility and a $75.0 million committed revolving long-term credit facility (the revolver). The term loan was used to partially finance the Hummingbird acquisition and the revolver will be used for general business
purposes. The credit agreement is guaranteed by us and certain of our subsidiaries.

Term loan

The term loan has a seven year term expiring on October 2, 2013, and bears interest at a floating rate of LIBOR plus 2.50%. The term loan principal
repayments are equal to 0.25% ($975,000) of the original principal amount, due each quarter with the remainder due at the end of the term.

On May 2, 2007, we announced that we would be making an additional payment of $30.0 million against the term loan in May 2007. This pre-payment is within the terms of our lending agreement. See Note 19 Subsequent Events to
the Interim Financial Statements.

In October 2006, we also entered into an interest-rate collar agreement that has the economic effect of
circumscribing the floating portion of the interest rate obligations associated with $195.0 million of the term loan, within an upper limit of 5.34% and a lower limit of 4.79%.

Revolver

The revolver has a
five year term and expires on October 2, 2011. Borrowings under this facility bear interest at rates specified in the credit agreement. The revolver replaced a CAD $40.0 million line of credit that we previously had with the same bank. There
were no borrowings outstanding under the revolver as of March 31, 2007.

The credit agreement covering the term loan, the revolver and
the term loan agreement relating to a mortgage on our Waterloo building also contain covenants that require us to maintain certain financial ratios. As of March 31, 2007 we were in compliance with all such covenants.

We believe funds generated from the expected results of operations, and available cash and cash equivalents will be sufficient to finance our strategic
initiatives for the next fiscal year. In addition, our revolving credit facility is available for additional working capital needs or investment opportunities. There can be no assurance, however, that we will continue to generate cash flows, at or
above, current levels or that we will be able to maintain our ability to borrow under our revolving credit facility.

Repurchase Program

On May 2, 2007, we filed a notice of intention with the Ontario Securities Commission to make a normal course issuer
bid to repurchase up to a maximum of 2,494,053 Common Shares on the NASDAQ Global Select Market (NASDAQ) (Repurchase Program). Repurchases, if any are made, will be determined by our Board of Directors and will
begin on or after May 7, 2007, in accordance with the rules and regulations of the



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NASDAQ. This Repurchase Program will terminate on the earlier of May 6, 2008, or the date on which a total of 2,494,053 Common Shares have been
repurchased pursuant to its terms. For details, see Note 19 Subsequent Events to the Interim Financial Statements.

Commitments and
Contractual Obligations

We have entered into the following contractual obligations with minimum annual payments for the indicated
fiscal periods as follows:



|                              |  |                        |         |      |   |              |  |              |         |                 |   |         |  |   |        
|----------------------------- |  | ---------------------- | ------- | ---- | - | ------------ |  | ------------ | ------- | --------------- | - | ------- |  | - | -------
|                              |  | Payments due by period
|                              |  | Total                  |         | 2007 |   | 2008 to 2009 |  | 2010 to 2011 |         | 2012 and beyond
|Long-term debt obligations    |  | $                      | 595,672 |      | $ | 8,853        |  | $            | 70,433  |                 | $ | 79,688  |  | $ | 436,698
|Operating lease obligations * |  |                        | 99,059  |      |   | 6,588        |  |              | 46,200  |                 |   | 32,644  |  |   | 13,627 
|Purchase obligations          |  |                        | 5,924   |      |   | 1,047        |  |              | 3,962   |                 |   | 915     |  |   |       
|                              |  |                        |         |      |   |              |  |              |         |                 |   |         |  |   |        
|                              |  | $                      | 700,655 |      | $ | 16,488       |  | $            | 120,595 |                 | $ | 113,247 |  | $ | 450,325
|                              |  |                        |         |      |   |              |  |              |         |                 |   |         |  |   |        

---

|* | Net of $6.6 million of non-cancelable sublease income to be received from properties which we have subleased to other parties.
|- | ------------------------------------------------------------------------------------------------------------------------------

We recorded rental expense of $3.9 million and $10.0 million during the three and nine months ended March 31, 2007, respectively.

Rental expense of $1.8 million and $9.1 million was recorded during the three and nine months ended March 31, 2006, respectively.

The long-term debt obligations are comprised of interest and principal payments on our $390.0 million term loan agreement and a 5 year mortgage on our
headquarters in Waterloo, Ontario.

IXOS domination agreement

We have guaranteed a payment by IXOS to the minority shareholders of IXOS of an annual compensation of Euro 0.42 per share (Annual Compensation).

The IXOS domination agreement was registered on August 23, 2005. In the quarter ended September 30, 2005, we commenced accruing the amount
payable to minority shareholders of IXOS on account of Annual Compensation. This amount has been accounted for as a guaranteed dividend, payable to the minority shareholders, and is recorded as a charge to minority interest in the
unaudited condensed consolidated statements of income.

Based on the number of minority IXOS shareholders as of March 31, 2007, the
estimated amount of Annual Compensation was approximately $124,000 for the three months ended March 31, 2007 and $377,000 for the nine months ended March 31, 2007. Additionally, an amount of approximately $397,000 was paid, against
previously accrued amounts, to the IXOS minority shareholders on account of Annual Compensation for the year ended June 30, 2006. Because we are unable to predict, with reasonable accuracy, the number of IXOS minority shareholders in future
periods, we are unable to predict the amount of Annual Compensation that will be payable in future years.

Litigation

From time to time, we are subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. While the
outcome of these proceedings and claims cannot be predicted with



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certainty, our management does not believe that the outcome of any of these legal matters will have a material adverse effect on our consolidated financial
position, results of operations and cash flows.

Off-Balance Sheet Arrangements

We do not enter into off-balance sheet financing as a matter of practice except for the use of operating leases for office space, computer equipment, and
vehicles. In accordance with U.S. GAAP, neither the lease liability nor the underlying asset is carried on the balance sheet, as the terms of the leases do not meet the criteria for capitalization.

Recently Issued Accounting Standards

In February
2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an
Amendment of FASB Statement No. 115 SFAS 159). SFAS 159 permits an entity to choose to measure many financial instruments and certain other items at fair value. Most of the provisions in SFAS 159 are elective; however, the
amendment to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. SFAS 159 is effective for us beginning July 1, 2008.
We are currently assessing the potential impact that the adoption of SFAS 159 will have on our financial statements.

In September 2006,
the United States Securities Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Current Year Misstatements,
(SAB 108). SAB 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a one-time cumulative effect transition
adjustment. SAB 108 is effective for our fiscal year 2007 annual financial statements. We are currently assessing the potential impact that the adoption of SAB 108 will have on our financial statements.

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS)
No. 157, Fair Value Measurements, (SFAS 157), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157
does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. This statement is effective for us beginning July 1, 2008.
We are currently assessing the potential impact that the adoption of SFAS 157 will have on our financial statements.

In July 2006, the
FASB issued FASB Interpretation No. 48 on Accounting for Uncertain Tax Positionsan interpretation of FASB Statement No. 109, Accounting for Income Taxes (FIN 48). Under FIN 48, an entity should presume that a
taxing authority will examine its tax position when evaluating the position for recognition and measurement; therefore, assessment of the probability of the risk of examination is not appropriate. In applying the provisions of FIN 48, there will be
distinct recognition and measurement evaluations. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical merits, that the
position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize will be measured as
the maximum amount which is more likely than not, to be realized. The tax position should be derecognized when it is no longer more likely than not of being sustained. On subsequent recognition and measurement the maximum amount which is more likely
than not to be recognized at each reporting date will represent managements best estimate, given the



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information available at the reporting date, even though the outcome of the tax position is not absolute or final. Subsequent recognition, derecognition, and
measurement should be based on new information. A liability for interest or penalties or both will be recognized as deemed to be incurred based on the provisions of the tax law, that is, the period for which the taxing authority will begin assessing
the interest or penalties or both. The amount of interest expense recognized will be based on the difference between the amount recognized in the financial statements and the benefit recognized in the tax return. On transition, the change in net
assets due to applying the provisions of the final interpretation will be considered as a change in accounting principle with the cumulative effect of the change treated as an offsetting adjustment to the opening balance of retained earnings in the
period of transition. FIN 48 will be effective for us as of July 1, 2007. We are currently assessing the potential impact that the adoption of FIN 48 will have on our financial statements.

Critical Accounting Policies and Estimates

For a
discussion of the critical accounting policies that affect our more significant judgments and estimates used in the preparation of our financial statements, please refer to our most recently filed Annual Report on Form 10-K, for the fiscal year
ending June 30, 2006.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are primarily exposed to market
risks associated with fluctuations in interest rates and foreign currency exchange rates.

Interest rate risk

Our exposure to interest rate fluctuations relates primarily to our term loan, as we had no borrowings outstanding under our line of credit at
March 31, 2007. The term loan bears a floating interest rate of LIBOR plus 2.5%. As of March 31, 2007, an adverse change in LIBOR of 100 basis points (1.0%) would have the effect of increasing our annual interest payment on the term
loan by approximately $3.9 million assuming the loan balance as of March 31, 2007 is outstanding for the entire period.

We manage our
interest rate exposure, relating to 50% of the above mentioned term loan, with an interest rate collar that partially hedges the fluctuation in LIBOR. The collar has a notional value of $195.0 million, a cap rate of 5.34% and a floor rate of 4.79%.
This has the effect of circumscribing our maximum floating interest rate risk within the range of 5.34% to 4.79%. The collar expires in December 2009.

Foreign currency risk

A substantial portion of our cash and cash equivalents are held in currencies other than the U.S.
dollar, on account of our global operations. As of March 31, 2007, this balance represented approximately 71% of our total cash and cash equivalents. A 10% adverse change in foreign exchange rates versus the U.S. dollar would have decreased our
reported cash and cash equivalents by approximately 7%.

Our global operations expose us to foreign currency fluctuations. Revenues and
related expenses generated from our international subsidiaries are generally denominated in the functional currencies of the local countries. Our primary currencies include Euros, Canadian Dollars, Swiss Francs and British Pounds. The unaudited
condensed consolidated statements of income of our global operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies, the foreign currency
conversion of these foreign currency denominated transactions into U.S. dollars results in reduced revenues, operating expenses and net income for our international operations. Similarly, our revenues, operating expenses and net income will increase
for our international operations, if the U.S. dollar weakens against foreign currencies. We cannot predict the effect foreign exchange fluctuations will have on our results going forward. However, if there is an adverse change in foreign exchange
rates versus the U.S. dollar, it could have a material effect on our results of operations.



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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of the Chief Executive Officer and Chief
Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15 (e) promulgated under the Securities Exchange Act of 1934, as amended (the
Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were
effective to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and
Exchange Commissions rules and forms, and that material information is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding
required disclosure.

Changes in Internal Controls over Financial Reporting

Based on the evaluation completed by our management, in which our Chief Executive Officer and Chief Financial Officer participated, our management has
concluded that there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2007 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.



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PART II OTHER INFORMATION

Item 1A. Risk Factors

Risk Factors

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the
Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, and is subject to the safe harbors created by those sections. These forward-looking statements involve known and unknown risks as well as
uncertainties, including those discussed in the following cautionary statements and elsewhere in this Quarterly Report on Form 10-Q. The actual results that we achieve may differ materially from any forward-looking statements, which reflect
managements opinions only as of the date hereof. You should carefully review the following factors, as well as the other information set forth herein, when evaluating us and our business. If any of the following risks were to occur, our
business, financial condition and results of operations would likely suffer. In that event, the trading price of our Common Shares would likely decline. Such risks are further discussed from time to time in our filings filed from time to time with
the SEC.

Our acquisition of Hummingbird may adversely affect our operations and finances in the short term

On October 2, 2006 we acquired all of the issued and outstanding common shares of Hummingbird. The Hummingbird shares were acquired for cash, which
required us to borrow the necessary funds from a syndicate of leading financial institutions to help to pay for the Hummingbird acquisition. The interest costs associated with this credit facility will materially increase our operating expenses,
which may materially and adversely affect our profitability as well as the price of our Common Shares. The Hummingbird acquisition represents a significant and unique opportunity for our business. However, the size of the acquisition and the
inevitable integration challenges that will result from the acquisition may divert managements attention from the normal daily operations of our existing businesses, products and services. We cannot ensure that we will be successful in
retaining key Hummingbird employees. In addition, our operations may be disrupted if we fail to adequately retain and motivate all of the employees of the newly merged entity.

Our success depends on our relationships with strategic partners

We rely on close cooperation
with partners for sales and product development as well as for the optimization of opportunities which arise in our competitive environment. If any of our partners should decide for any reason to terminate or scale back their cooperative efforts
with us, our business, operating results, and financial condition may be adversely affected.

If we do not continue to develop new technologically
advanced products, future revenues will be negatively affected

Our success depends upon our ability to design, develop, test,
market, license and support new software products and enhancements of current products on a timely basis in response to both competitive threats and marketplace demands. In addition, new software products and enhancements must remain compatible with
standard platforms and file formats. We continue to enhance the capability of our Livelink software to enable users to form workgroups and collaborate on private intranets as well as on the Internet. Often, we must integrate software licensed or
acquired from third parties with our proprietary software to create or improve our products. These products are important to the success of our strategy. If we are unable to achieve a successful integration with third party software, we may not be
successful in developing and marketing our new software products and enhancements. If we are unable to successfully integrate the technologies to develop new software products and enhancements to existing products, or to complete products currently
under development, which we license or acquire from third parties our operating results will materially suffer. In addition, if the integrated or new products or enhancements do not achieve acceptance by the marketplace, our operating results will
materially suffer. Also, if new industry standards emerge that we do not anticipate or adapt to, our software products could be rendered obsolete and, as a result, our business, as well as our ability to compete in the marketplace, would be
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If our products and services do not gain market acceptance, we may not be able to increase our revenues

We intend to pursue our strategy of growing the capabilities of our ECM software offerings through our proprietary research and
development of new product offerings. In response to customer requests, we continue to enhance Livelink and many of our optional components and we continue to set the standard for ECM capabilities. The primary market for our software and services is
rapidly evolving which means that the level of acceptance of products and services that have been released recently or that are planned for future release by the marketplace is not certain. If the markets for our products and services fail to
develop, develop more slowly than expected or become subject to intense competition, our business will suffer. As a result, we may be unable to: (i) successfully market our current products and services, (ii) develop new software products,
services and enhancements to current products and services, (iii) complete customer installations on a timely basis, or (iv) complete products and services currently under development. If our products and services are not accepted by our
customers or by other businesses in the marketplace, our business and operating results will be materially affected.

Current and future competitors
could have a significant impact on our ability to generate future revenue and profits

The markets for our products are intensely
competitive, and are subject to rapid technological change and other pressures created by changes in our industry. We expect competition to increase and intensify in the future as the pace of technological change and adaptation quickens and as
additional companies enter into each of our markets. Numerous releases of competitive products have occurred in recent history and can be expected to continue in the near future. We may not be able to compete effectively with current competitors and
potential entrants into our marketplace. If other businesses were to engage in aggressive pricing policies with respect to competing products, or if the dynamics in our marketplace resulted in increasing bargaining power by the consumers of our
products and services, we would need to lower our prices. This could result in lower revenues or reduced margins, either of which may materially and adversely affect our business and operating results.

We are confronting two inexorable trends in our industry; the consolidation of our competitors and the commoditization of our products and services

The acquisition of Documentum Inc. by EMC Corporation in December 2003 and International Business Machines Corporations
acquisition of FileNet Corporation in October 2006 have changed the marketplace for our goods and services. As a result of these acquisitions, two comparable competitors to our company have been replaced by larger and better capitalized companies.
In addition, other large corporations with considerable financial resources either have products that compete with the products we offer, or have the ability to encroach on our competitive position within our marketplace. These large,
well-capitalized companies have the financial resources to engage in competition with our products and services on the basis of marketing, services or support. They also have the ability to introduce items that compete with our maturing products and
services. For example, Microsoft has launched SharePoint, a product which provides the same benefits that some of our ECM products provide at a lower cost to the customer. The threat posed by larger competitors and the goods and services that these
companies can produce at a lower cost to our target customers may materially increase our expenses and reduce our revenues. Any material adverse effect on our revenue or cost structure may materially reduce the price of our Common Shares.

Acquisitions, investments, joint ventures and other business initiatives may negatively affect our operating results

We continue to seek out opportunities to acquire or invest in businesses, products and technologies that expand, complement or otherwise relate to our
current business. We also consider from time to time, opportunities to engage in joint ventures or other business collaborations with third parties to address particular market segments. These activities create risks such as the need to integrate
and manage the businesses and products acquired with our own business and products, additional demands on our management, resources, systems, procedures and controls, disruption of our ongoing business, and diversion of managements attention



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from other business concerns. Moreover, these transactions could involve substantial investment of funds and/or technology transfers and the acquisition or
disposition of product lines or businesses. Also, such activities could result in one-time charges and expenses and have the potential to either dilute the interests of existing shareholders or result in the assumption of debt. Such acquisitions,
investments, joint ventures or other business collaborations may involve significant commitments of financial and other resources of our company. Any such activity may not be successful in generating revenue, income or other returns to us, and the
financial or other resources committed to such activities will not be available to us for other purposes. For example, the Hummingbird Connectivity family of products maintains a dominant position in its marketplace. As a result, future growth
opportunities could be limited for this family of products. Our inability to address limited growth opportunities for this family of products, as well our inability to address other risks associated with other acquisitions or investments in
businesses, may negatively affect our operating results.

Businesses we acquire may have disclosure controls and procedures and internal controls
over financial reporting that are weaker than or otherwise not in conformity with ours

We have a history of acquiring complementary
businesses with varying levels of organizational size and complexity. Upon consummating an acquisition, we seek to implement our disclosure controls and procedures as well as our internal controls over financial reporting at the acquired company as
promptly as possible. Depending upon the size and complexity of the business acquired, the implementation of our disclosure controls and procedures as well as the implementation of our internal controls over financial reporting at an acquired
company may be a lengthy process. Typically, we conduct due diligence prior to consummating an acquisition, however, our integration efforts may periodically expose deficiencies in the disclosure controls and procedures as well as in internal
controls over financial reporting of an acquired company. We expect that the process involved in completing the integration of our own disclosure controls and procedures as well as our own internal controls over financial reporting at an acquired
business will sufficiently correct any identified deficiencies. However, if such deficiencies exist, we may not be in a position to comply with our periodic reporting requirements and, as a result, our business and financial condition may be
materially harmed.

The length of our sales cycle can fluctuate significantly which could result in significant fluctuations in license revenue being
recognized from quarter to quarter

The decision by a customer to purchase our products often involves a comprehensive
implementation process across our customers network or networks. As a result, licenses of these products may entail a significant commitment of resources by prospective customers, accompanied by the attendant risks and delays frequently
associated with significant expenditures and lengthy sales cycle and implementation procedures. Given the significant investment and commitment of resources required by an organization to implement our software, our sales cycle may be longer
compared to companies in other industries. Over the past fiscal year, we have experienced a lengthening of our sales cycle as customers include more personnel in their decisions and focus on more enterprise-wide licensing deals. In an economic
environment of reduced information technology spending, it may take several months, or even several quarters, for marketing opportunities to materialize. If a customers decision to license our software is delayed or if the installation of our
products takes longer than originally anticipated, the date on which we may recognize revenue from these licenses would be delayed. Such delays could cause our revenues to be lower than expected in a particular period.

Our international operations expose us to business risks that could cause our operating results to suffer

We intend to continue to make efforts to increase our international operations and anticipate that international sales will continue to account for a
significant portion of our revenue. We have increased our presence in the European market, especially since our acquisition of IXOS Software AG (IXOS). These international operations are subject to certain risks and costs, including the
difficulty and expense of administering business and compliance abroad, compliance with both domestic and foreign laws, compliance with domestic and international import and export laws and regulations, costs related to localizing products for
foreign markets, and costs related



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to translating and distributing products in a timely manner. International operations also tend to be subject to a longer sales and collection cycle. In
addition, regulatory limitations regarding the repatriation of earnings may adversely affect cash drawls from foreign operations. Significant international sales may also expose us to greater risk from political and economic instability, unexpected
changes in Canadian, United States or other governmental policies concerning import and export of goods and technology, regulatory requirements, tariffs and other trade barriers. In addition, international earnings may be subject to taxation by more
than one jurisdiction, which could also materially adversely affect our effective tax rate. Also, international expansion may be more difficult, time consuming, and costly. As a result, if revenues from international operations do not offset the
expenses of establishing and maintaining foreign operations, our operating results will suffer. Moreover, in any given quarter, foreign exchange rates can impact revenue adversely.

Our expenses may not match anticipated revenues

We incur operating expenses based upon
anticipated revenue trends. Since a high percentage of these expenses are relatively fixed, a delay in recognizing revenue from transactions related to these expenses could cause significant variations in operating results from quarter to quarter
and, as a result such a delay could materially reduce operating income. If these expenses are not subsequently followed by revenues, our business, financial condition, or results of operations could be materially and adversely affected. In addition,
in July 2005, we announced our 2006 restructuring initiative to restructure our operations with the intention of streamlining our operations. Subsequently, in October 2006 we announced our commitment to a separate restructuring initiative in
response to the Hummingbird acquisition. We will continue to evaluate our operations, and may propose future restructuring actions as a result of changes in the marketplace, including the exit from less profitable operations or the decision to
terminate services which are not valued by our customers. Any failure to successfully execute these initiatives on a timely basis may have a material adverse impact on our operations.

Our products may contain defects that could harm our reputation, be costly to correct, delay revenues, and expose us to litigation

Our products are highly complex and sophisticated and, from time to time, may contain design defects or software errors that are difficult to detect and
correct. Errors may be found in new software products or improvements to existing products after commencement of shipments to our customers. If these defects are discovered, we may not be able to successfully correct such errors in a timely manner.
In addition, despite the extensive tests we conduct on all our products, we may not be able to fully simulate the environment in which our products will operate and, as a result, we may be unable to adequately detect the design defects or software
errors which may become apparent only after the products are installed in an end-users network. The occurrence of errors and failures in our products could result in the delay or the denial of market acceptance of our products; alleviating
such errors and failures may require us to make significant expenditure of our resources. The harm to our reputation resulting from product errors and failures may be materially damaging. Since, we regularly provide a warranty with our products, the
financial impact of fulfilling warranty obligations may be significant in the future. Our agreements with our strategic partners and end-users typically contain provisions designed to limit our exposure to claims. These agreements usually contain
terms such as the exclusion of all implied warranties and the limitation of the availability of consequential or incidental damages. However, such provisions may not effectively protect us against claims and the attendant liabilities and costs
associated with such claims. Although we maintain errors and omissions insurance coverage and comprehensive liability insurance coverage, such coverage may not be adequate to cover all such claims. Accordingly, any such claim could negatively affect
our financial condition.

Failure to protect our intellectual property could harm our ability to compete effectively

We are highly dependent on our ability to protect our proprietary technology. We rely on a combination of copyright, patent, trademark and trade secret
laws, as well as non-disclosure agreements and other contractual provisions to establish and maintain our proprietary rights. Although we hold certain patents and have other



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patents pending, our general strategy is to not seek patent protection. Although we intend to protect our rights vigorously, there can be no assurance that
these measures will, in all cases, be successful. Enforcement of our intellectual property rights may be difficult, particularly in some nations outside of North America in which we seek to market our products. While U.S. and Canadian copyright
laws, international conventions and international treaties may provide meaningful protection against unauthorized duplication of software, the laws of some foreign jurisdictions may not protect proprietary rights to the same extent as the laws of
Canada or of the United States. Software piracy has been, and is expected to be, a persistent problem for the software industry. Certain of our license arrangements have required us to make a limited confidential disclosure of portions of the source
code for our products, or to place such source code into an escrow for the protection of another party. Despite the precautions we have taken, unauthorized third parties, including our competitors, may be able to copy certain portions of our
products or to reverse engineer or obtain and use information that we regard as proprietary. Also, our competitors could independently develop technologies that are perceived to be substantially equivalent or superior to our technologies. Our
competitive position may be affected by our ability to protect our intellectual property.

Other companies may claim that we infringe their
intellectual property, which could materially increase costs and materially harm our ability to generate future revenue and profits

Claims of infringement are becoming increasingly common as the software industry develops and as related legal protections, including patents, are applied to software products. Although we do not believe that our products infringe on the
rights of third-parties, third-parties may assert infringement claims against us in the future. Although most of our technology is proprietary in nature, we do include certain third party software in our products. In these cases, this software is
licensed from the entity holding our intellectual property rights. Although we believe that we have secured proper licenses for all third-party software that is integrated into our products, third parties may assert infringement claims against us in
the future, and any such assertion may result in litigation or may require us to obtain a license for the intellectual property rights of third-parties. Such licenses may not be available, or they may not be available on reasonable terms. In
addition, such litigation could be disruptive to our ability to generate revenue and may result in significantly increased costs as a result of our defense against those claims or our attempt to license the patents or rework our products to ensure
they comply with judicial decisions. Any of the foregoing could have a significant impact on our ability to generate future revenue and profits.

The
loss of licenses to use third party software or the lack of support or enhancement of such software could adversely affect our business

We currently depend on certain third-party software. If such software was not available, we may experience delays or increased costs in the development of licenses for our products. For a limited number of product modules, we rely on
certain software that we license from third-parties, including software that is integrated with internally developed software and which is used in our products to perform key functions. These third-party software licenses may not continue to be
available to us on commercially reasonable terms, and the related software may not continue to be appropriately supported, maintained, or enhanced by the licensors. The loss by us of the license to use, or the inability by licensors to support,
maintain, and enhance any of such software, could result in increased costs or in delays or reductions in product shipments until equivalent software is developed or licensed and integrated with internally developed software. Such increased costs or
delays or reductions in product shipments could adversely affect our business.

A reduction in the number or sales efforts by distributors could
materially impact our revenues

A significant portion of our revenue is derived from the license of our products through third
parties. Our success will depend, in part, upon our ability to maintain access to existing channels of distribution and to gain access to new channels if and when they develop. We may not be able to retain a sufficient number of our existing
distributors or develop a sufficient number of future distributors. Distributors may also give higher priority to the sale of products other than ours (which could include competitors products) or may not devote



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sufficient resources to marketing our products. The performance of third party distributors is largely outside of our control and we are unable to predict
the extent to which these distributors will be successful in marketing and licensing our products. A reduction in sales efforts, a decline in the number of distributors, or our distributors decision to discontinue the sale of our products
could materially reduce revenue.

We must continue to manage our growth or our operating results could be adversely affected

Our markets have continued to evolve at a rapid pace. Moreover, we have grown significantly through acquisitions in the past and continue to review
acquisition opportunities as a means of increasing the size and scope of our business. Finally, we have been subject to increased regulation, including various NASDAQ rules and Section 404 of the Sarbanes-Oxley Act of 2002
(Sarbanes), which has necessitated a significant use of our resources to comply with the increased level of regulation on a timely basis. Our growth, coupled with the rapid evolution of our markets and more stringent regulations, have
placed, and will continue to place, significant strains on our administrative and operational resources and increased demands on our internal systems, procedures and controls. Our administrative infrastructure, systems, procedures and controls may
not adequately support our operations or compliance with such regulations. In addition, our management may not be able to achieve the rapid, effective execution of the product and business initiatives necessary to successfully implement our
operational and competitive strategy and to comply with all regulatory rules. If we are unable to manage growth effectively, or comply with such new regulations, our operating results will likely suffer. Our inability to manage growth or adapt to
regulatory changes may also adversely affect our compliance with our periodic reporting requirements or listing standards, which could result in our delisting from the NASDAQ stock market or in our failure to comply with the rules or the regulations
of the SEC.

Recently enacted and proposed changes in securities laws and related regulations could result in increased costs to us

Recently enacted and proposed changes in the laws and regulations affecting public companies, including the provisions of Sarbanes
and recent rules proposed and enacted by the SEC and NASDAQ, have materially increased our expenses as we respond to the these changes. In particular, compliance with the requirements of Section 404 of Sarbanes has resulted in a higher level of
internal costs and fees from our independent accounting firm and as well as from external consultants. These rules could also adversely affect our ability to obtain certain types of insurance at a reasonable cost, including director and officer
liability insurance. As a result, we may be forced to accept reduced policy limits and coverage and/or incur substantially higher premiums and related costs to obtain the same or similar coverage. The increased difficulty to obtain affordable
director and officer liability insurance could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, on committees of our Board of Directors, or as executive officers.

If we are not able to attract and retain top employees, our ability to compete may be harmed

Our performance is substantially dependent on the performance of our executive officers and key employees. The loss of the services of any of our
executive officers or other key employees could significantly harm our business. We do not maintain key person life insurance policies on any of our employees. Our success is also highly dependent on our continuing ability to identify,
hire, train, retain and motivate highly qualified management, technical, sales and marketing personnel. In particular, the recruitment of top research developers and experienced salespeople remains critical to our success. Competition for such
people is intense, and we may not be able to attract, integrate or retain highly qualified technical, sales or managerial personnel in the future.

Our products rely on the stability of infrastructure software that, if not stable, could negatively impact the effectiveness of our products, resulting in harm to our reputation and business

Our developments of Internet and intranet applications depend and will depend on the stability, functionality and scalability of the infrastructure
software of the underlying intranet, such as the infrastructure software



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produced by Sun Microsystems, Inc., Hewlett-Packard Company, Oracle Corporation, Microsoft Corporation and others. If weaknesses in such infrastructure
software exist, we may not be able to correct or compensate for such weaknesses. If we are unable to address weaknesses resulting from problems in the infrastructure software such that our products do not meet customer needs or expectations, our
reputation, and consequently, our business may be significantly harmed.

Our quarterly revenues and operating results are likely to fluctuate which
could materially impact the price of our Common Shares

We experience, and we are likely to continue to experience, significant
fluctuations in quarterly revenues and operating results caused by many factors, including:



| |  |  | changes in the demand for our products;
| | - |  | ---------------------------------------



| |  |  | the introduction or enhancement of products by us and our competitors;
| | - |  | ----------------------------------------------------------------------



| |  |  | market acceptance of enhancements or products;
| | - |  | ----------------------------------------------



| |  |  | delays in the introduction of products or enhancements by us or our competitors;
| | - |  | --------------------------------------------------------------------------------



| |  |  | customer order deferrals in anticipation of upgrades and new products;
| | - |  | ----------------------------------------------------------------------



| |  |  | changes in the lengths of sales cycles;
| | - |  | ---------------------------------------



| |  |  | changes in our pricing policies or those of our competitors;
| | - |  | ------------------------------------------------------------



| |  |  | delays in product installation with customers;
| | - |  | ----------------------------------------------



| |  |  | the mix of distribution channels through which products are licensed;
| | - |  | ---------------------------------------------------------------------



| |  |  | the mix of products and services sold;
| | - |  | --------------------------------------



| |  |  | the timing of restructuring charges taken in connection with acquisitions completed by us;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | the mix of international and North American revenues;
| | - |  | -----------------------------------------------------



| |  |  | foreign currency exchange rates;
| | - |  | --------------------------------



| |  |  | Acquisitions; and
| | - |  | -----------------



| |  |  | general economic conditions
| | - |  | ---------------------------

A
cancellation or deferral of even a small number of licenses or delays in the installation of our products could have a material adverse effect on our operations in any particular quarter. As a result of the timing of product introductions and the
rapid evolution of our business as well as of the markets we serve, we cannot predict whether seasonal patterns experienced in the past will continue. For these reasons, you should not rely upon period-to-period comparisons of our financial results
to forecast future performance. Our quarterly revenue and operating results may vary significantly and which could materially reduce the market price of our Common Shares.

The volatility of our stock price could lead to losses by shareholders

The market price of
our Common Shares has been subject to wide fluctuations. Such fluctuations in market price may continue in response to quarterly variations in operating results, announcements of technological innovations or new products that are relevant to our
industry, changes in financial estimates by securities analysts or other events or factors. In addition, financial markets experience significant price and volume fluctuations that particularly affect the market prices of equity securities of many
technology companies. These fluctuations have often resulted from the failure of such companies to meet market expectations in a particular quarter and thus may or may not be related to the underlying operating performance of such companies. Broad
market fluctuations or any failure of our operating results in a particular quarter to meet market expectations may



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adversely affect the market price of our Common Shares. Occasionally, periods of volatility in the market price of a companys securities, may lead to
the institution of securities class action litigation against a company. Due to the volatility of our stock price, we could be the target of such securities litigation in the future. Such litigation could result in substantial costs to defend our
interests and a diversion of managements attention and resources, each of which would have a material adverse effect on our business and operating results.

We may have exposure to greater than anticipated tax liabilities

We are subject to income taxes as well as other
taxes in a variety of jurisdictions and our tax structure is subject to review by both domestic and foreign taxation authorities. The determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment.
Although we believe our estimates are reasonable, the ultimate outcome with respect to the taxes we owe may differ from the amounts recorded in our financial statements which may materially affect our financial results in the period or periods for
which such determination is made.



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Item 6. Exhibits

The following exhibits are filed with this report:



|              |  |                                                                                                                                                                    
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibit                                                                                                                                             
|31.1          |  | Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|              | 
|31.2          |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
|              | 
|32.1          |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              
|              | 
|32.2          |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant
has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                  |  |  |  |                       |  |                        |  |                                      
|----------------- |  |  |  | --------------------- |  | ---------------------- |  | -------------------------------------
|                  |  |  |  | OPEN TEXT CORPORATION
|                  |  |  | 
|Date: May 7, 2007 |  |  |  | By:                   |  | /s/    JOHN SHACKLETON
|                  |  |  |  |                       |  |                        |  | John Shackleton                      
|                  |  |  |  |                       |  |                        |  | President and Chief Executive Officer
|                  |  |  | 
|                  |  |  |  |                       |  | /s/    PAUL
MCFEETERS 
|                  |  |  |  |                       |  |                        |  | Paul McFeeters                       
|                  |  |  |  |                       |  |                        |  | Chief Financial Officer              



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OPEN TEXT CORPORATION

Index to Exhibits



|              |  |                                                                                                                                                                    
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibit                                                                                                                                             
|31.1          |  | Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|              | 
|31.2          |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 
|              | 
|32.1          |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              
|              | 
|32.2          |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              



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