##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K





ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES EXCHANGE ACT OF 1934


For the Fiscal Year Ended: June 30, 2005


Commission File Number: 000-30027





Moldflow Corporation


(Exact name of registrant as specified in its charter)


|                                                                    |  |                                            
|------------------------------------------------------------------- |  | -------------------------------------------
|Delaware                                                            |  | 04-3406763                                 
|(State or other jurisdiction of
     incorporation or organization) |  | (I.R.S. Employer
    Identification Number)

492 Old Connecticut Path, Suite 401 Framingham, MA
01701


(Address of principal executive offices, including zip
code)


(508) 358-5848


(Registrants telephone number, including area code)


Securities registered pursuant to Section 12(b) of the
Act:


None


Securities registered pursuant to Section 12(g) of the
Act:


Common Stock, $0.01 par value per share


Preferred Stock Purchase Rights





þ o


o


þ o


o þ




DOCUMENTS INCORPORATED BY REFERENCE












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MOLDFLOW CORPORATION


ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED
JUNE 30, 2005


TABLE OF CONTENTS


|                                                                 |  |                                                                                                                      |      |      |    | 
|---------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- | ---- | ---- | -- | 
|                                                                 |  |                                                                                                                      |      | Page |   
|                                                                 |  |                                                                                                                      |      |      |   
|Part I.                                                          |  |                                                                                                                      |      |      |    | 
|Item 1.                                                          |  | Business                                                                                                             |      |      | 2  | 
|Item 2.                                                          |  | Properties                                                                                                           |      |      | 8  | 
|Item 3.                                                          |  | Legal Proceedings                                                                                                    |      |      | 8  | 
|                                                                
|Part II.                                                         |  |                                                                                                                      |      |      |    | 
|Item 5.                                                          |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |      |      | 9  | 
|Item 6.                                                          |  | Selected Financial Data                                                                                              |      |      | 10 | 
|Item 7.                                                          |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |      |      | 11 | 
|Item 7A.                                                         |  | Quantitative and Qualitative Disclosures
    about Market Risk                                                       |      |      | 37 | 
|Item 8.                                                          |  | Financial Statements and Supplementary
    Data                                                                      |      |      | 38 | 
|Item 9.                                                          |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosures                            |      |      | 38 | 
|Item 9A.                                                         |  | Controls and Procedures                                                                                              |      |      | 38 | 
|                                                                
|Part III.                                                        |  |                                                                                                                      |      |      |    | 
|Item 10.                                                         |  | Directors and Executive Officers of the
    Registrant                                                               |      |      | 39 | 
|Item 11.                                                         |  | Executive Compensation                                                                                               |      |      | 40 | 
|Item 12.                                                         |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                   |      |      | 40 | 
|Item 13.                                                         |  | Certain Relationships and Related
    Transactions                                                                   |      |      | 40 | 
|Item 14.                                                         |  | Principal Accountant Fees and Services                                                                               |      |      | 40 | 
|                                                                
|Part IV.                                                         |  |                                                                                                                      |      |      |    | 
|Item 15.                                                         |  | Exhibits and Financial Statement
    Schedules                                                                       |      |      | 41 | 
|Exhibit Index                                                    |  |                                                                                                                      | 42   |     
|Signatures                                                       |  |                                                                                                                      | 45   |     
|Schedule II. Valuation and Qualifying
    Accounts               |  |                                                                                                                      | 46   |     
|Index to Consolidated Financial
    Statements                   |  |                                                                                                                      | F-1  |     
|Notes to Consolidated Financial
    Statements                   |  |                                                                                                                      | F-6  |     
|Report of Independent Registered Public
    Accounting Firm      |  |                                                                                                                      | F-32 |     
|Ex-21.1 Subsidiaries of the Registrant                          
|Ex-23.1 Consent of Independent Registered Public Accounting Firm
|Ex-31.1 Certification of Chief Executive Officer                
|Ex-31.2 Certification of Chief Financial Officer                
|Ex-32.1 Section 1350 Certification of Chief executive Officer   
|Ex-32.2 Section 1350 Certification of Chief Financial Officer   



1



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##### Table of Contents



This Annual Report on Form 10-K contains forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and 21E of the Securities
Exchange Act of 1934, as amended. You can identify these
statements by forward-looking words such as may,
will, expect, anticipate,
believe, estimate and
continue or similar words. You should read
statements that contain these words carefully because they
discuss our future expectations, contain projections of our
future results of operations or of our financial condition, or
state other forward-looking information. We believe
that it is important to communicate our future expectations to
our investors. However, there may be events in the future that
we are not able to accurately predict or control and that may
cause our actual results to differ materially from the
expectations we describe in our forward-looking statements.
Investors are cautioned that all forward-looking statements
involve risks and uncertainties, and actual results may differ
materially from those discussed as a result of various factors,
including those factors described in Risk Factors and
Important Factors That May Affect Future Results beginning
on page 31. Readers should not place undue reliance on our
forward-looking statements, and we assume no obligation and do
not intend to update any forward-looking statements.







PART I







|        |         
|------- | --------
|Item 1. | Business

Overview








Available Information


www.moldflow.com. www.sec.gov.


2



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Our Products




Design Analysis Solutions Products




Moldflow Plastics
Advisers®






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Part Advisertm
    is a user-friendly application which enables product designers
    without expertise in designing plastic parts to address key
    manufacturing concerns in the preliminary design stage.
    Part Adviser offers practical advice for the broad range of
    problems it identifies without the need to consult with
    engineers who specialize in plastic part design. Part designers
    are able to receive rapid feedback on the extent to which a
    number of factors, including modifications such as part
    geometry, material selection or plastic fill locations, affect
    the manufacturability of a plastic part. In addition,
    Part Adviser facilitates design collaboration by enabling
    the designer to create reports which can be instantly shared
    with fellow design team members across the Internet.                                  
|
| | Mold
    Advisertm
    extends the capabilities of Part Adviser to allow users to
    create and simulate plastic flow through single cavity,
    multi-cavity and family molds. Users can optimize gate type,
    size and location as well as runner layout, size and
    cross-sectional shape. Analysis results include cycle time,
    clamp tonnage and shot size, all of which help the
    design-to-manufacturing team to size the injection molding
    machine, minimize cycle times and reduce manufacturing waste.
    Optional Mold Adviser add-on modules allow users to simulate
    more phases of the injection molding process and evaluate molded
    part performance and cooling circuit design. This product
    eliminates the need to design and build molds through trial and
    error efforts, enabling a mold designer to create molds quickly
    and efficiently.



| |                           
| | --------------------------
| | Moldflow Plastics Insight®



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Manufacturing Solutions Products




Real-Time Production Management
Systems




| |           
| | ----------
| | Shotscope®





| |            
| | -----------
| | Celltracktm



Process Optimization and
Control Products




| |          
| | ---------
| | Altanium®



4



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| |                         
| | ------------------------
| | Moldflow Plastics Xpert®

®


Our Customers




Sales and Marketing






Backlog




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Customer Support and Other Services




| |                              
| | -----------------------------
| | Customer Support and Training





| |                    
| | -------------------
| | Consulting Services





| |                          
| | -------------------------
| | Material Testing Services



Competition






Research and Development






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Proprietary Rights










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Manufacturing






Compliance with Environmental Provisions




Employees









|        |           
|------- | ----------
|Item 2. | Properties










|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings



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PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities



|               |  |      |       |  |      |   |       |      |  |   |       |  |  |   |       | 
|-------------- |  | ---- | ----- |  | ---- | - | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|               |  | 2005 |       |  | 2004 |  
|               |  |      |       |  |      |  
|               |  | High |       |  | Low  |   |       | High |  |   | Low   | 
|               |  |      |       |  |      |   |       |      |  |   |       | 
|First quarter  |  | $    | 12.75 |  |      | $ | 10.51 |      |  | $ | 10.15 |  |  | $ | 8.33  | 
|Second quarter |  | $    | 15.42 |  |      | $ | 11.77 |      |  | $ | 11.63 |  |  | $ | 9.50  | 
|Third quarter  |  | $    | 17.40 |  |      | $ | 14.30 |      |  | $ | 13.63 |  |  | $ | 10.15 | 
|Fourth quarter |  | $    | 16.01 |  |      | $ | 12.21 |      |  | $ | 12.57 |  |  | $ | 9.68  | 









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|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data



|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |        |        |        |  |       |        |        | 
|------------------------------------------------------------ | ------------------------------------------ | ------------------------------------- | ----- | ------ | ------ |  | ----- | ------ | ------ |  | ----- | ------ | ------ | ---- | ------ | ------ | ------ |  | ----- | ------ | ------ | 
|                                                             |                                            | Year Ended June 30,                   |      
|                                                             |                                            |                                       |      
|                                                             |                                            | 2005                                  |       |        | 2004   |  |       | 2003   |        |  | 2002  |        |        | 2001 |       
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|                                                             |                                            | (In thousands, except per share data) |      
|Statement of Operations Data:                                |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |        |        |        |  |       |       
|Revenue:                                                     |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |        |        |        |  |       |       
|                                                             | Product                                    |                                       | $     | 38,227 |        |  | $     | 26,063 |        |  | $     | 17,259 |        |      | $      | 17,870 |        |  | $     | 24,494 |       
|                                                             | Services                                   |                                       |       | 26,191 |        |  |       | 22,610 |        |  |       | 19,366 |        |      |        | 17,218 |        |  |       | 15,449 |       
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|                                                             |                                            | Total revenue                         |       |        | 64,418 |  |       |        | 48,673 |  |       |        | 36,625 |      |        |        | 35,088 |  |       |        | 39,943 | 
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|Costs and expenses:                                          |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |        |        |        |  |       |       
|                                                             | Cost of product revenue                    |                                       |       | 8,866  |        |  |       | 5,203  |        |  |       | 2,964  |        |      |        | 2,518  |        |  |       | 1,846  |       
|                                                             | Cost of services revenue                   |                                       |       | 6,341  |        |  |       | 4,536  |        |  |       | 1,210  |        |      |        | 1,401  |        |  |       | 1,440  |       
|                                                             | Research and development                   |                                       |       | 7,993  |        |  |       | 6,471  |        |  |       | 5,650  |        |      |        | 6,234  |        |  |       | 6,642  |       
|                                                             | Selling and marketing                      |                                       |       | 22,233 |        |  |       | 20,009 |        |  |       | 18,638 |        |      |        | 18,134 |        |  |       | 19,396 |       
|                                                             | General and administrative                 |                                       |       | 12,007 |        |  |       | 8,548  |        |  |       | 7,242  |        |      |        | 6,660  |        |  |       | 6,095  |       
|                                                             | Restructuring charges                      |                                       |       |       |        |  |       | 508    |        |  |       | 405    |        |      |        | 1,272  |        |  |       |       |       
|                                                             | Amortization of goodwill                   |                                       |       |       |        |  |       |       |        |  |       |       |        |      |        |       |        |  |       | 1,100  |       
|                                                             | Amortization of acquired intangible assets |                                       |       | 289    |        |  |       | 445    |        |  |       | 605    |        |      |        | 656    |        |  |       | 601    |       
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|                                                             |                                            | Total costs and operating expenses    |       |        | 57,729 |  |       |        | 45,720 |  |       |        | 36,714 |      |        |        | 36,875 |  |       |        | 37,120 | 
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|Income (loss) from operations                                |                                            |                                       | 6,689 |        |        |  | 2,953 |        |        |  | (89   | )      |        |      | (1,787 | )      |        |  | 2,823 |       
|Interest income, net                                         |                                            |                                       | 1,663 |        |        |  | 1,212 |        |        |  | 1,089 |        |        |      | 1,455  |        |        |  | 2,139 |       
|Other income (loss), net                                     |                                            |                                       | 70    |        |        |  | (15   | )      |        |  | (198  | )      |        |      | 1,712  |        |        |  | 272   |       
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|                                                             |                                            | Income before income taxes            |       |        | 8,422  |  |       |        | 4,150  |  |       |        | 802    |      |        |        | 1,380  |  |       |        | 5,234  | 
|Provision for income taxes                                   |                                            |                                       | 1,665 |        |        |  | 1,522 |        |        |  | 920   |        |        |      | 600    |        |        |  | 1,726 |       
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|                                                             |                                            | Net income (loss)                     |       | $      | 6,757  |  |       | $      | 2,628  |  |       | $      | (118   | )    |        | $      | 780    |  |       | $      | 3,508  | 
|                                                             |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |       
|Net income (loss) per common share:                          |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |        |        |        |  |       |       
|                                                             | Basic                                      |                                       | $     | 0.63   |        |  | $     | 0.26   |        |  | $     | (0.01  | )      |      | $      | 0.08   |        |  | $     | 0.36   |       
|                                                             | Diluted                                    |                                       | $     | 0.58   |        |  | $     | 0.24   |        |  | $     | (0.01  | )      |      | $      | 0.08   |        |  | $     | 0.35   |       
|Shares used in computing net income (loss) per common share: |                                            |                                       |       |        |        |  |       |        |        |  |       |        |        |      |        |        |        |  |       |       
|                                                             | Basic                                      |                                       |       | 10,761 |        |  |       | 10,277 |        |  |       | 10,020 |        |      |        | 10,076 |        |  |       | 9,658  |       
|                                                             | Diluted                                    |                                       |       | 11,625 |        |  |       | 10,839 |        |  |       | 10,020 |        |      |        | 10,360 |        |  |       | 10,124 |       

10



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|                                                   |  |                |         |  |      |   |        |      |  |   |        |  |  |      |        |  |  |   |        | 
|-------------------------------------------------- |  | -------------- | ------- |  | ---- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  |  | - | ------ | 
|                                                   |  | As of June 30, |        
|                                                   |  |                |        
|                                                   |  | 2005           |         |  | 2004 |   |        | 2003 |  |   | 2002   |  |  | 2001 |       
|                                                   |  |                |         |  |      |   |        |      |  |   |        |  |  |      |       
|                                                   |  | (In thousands) |        
|Balance Sheet Data:                                |  |                |         |  |      |   |        |      |  |   |        |  |  |      |        |  |  |   |        | 
|Cash, cash equivalents and marketable securities   |  | $              | 60,233  |  |      | $ | 51,652 |      |  | $ | 52,140 |  |  | $    | 50,867 |  |  | $ | 45,719 | 
|Working capital                                    |  |                | 55,988  |  |      |   | 42,866 |      |  |   | 45,624 |  |  |      | 44,133 |  |  |   | 42,511 | 
|Total assets                                       |  |                | 107,029 |  |      |   | 94,358 |      |  |   | 79,477 |  |  |      | 76,013 |  |  |   | 71,455 | 
|Long-term obligations (excluding deferred revenue) |  |                | 1,079   |  |      |   | 1,257  |      |  |   | 641    |  |  |      | 614    |  |  |   | 104    | 
|Stockholders equity                               |  |                | 80,149  |  |      |   | 69,579 |      |  |   | 60,649 |  |  |      | 58,640 |  |  |   | 57,593 | 






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations



Forward-Looking Statements


This portion of our Annual Report contains forward-looking
statements. Investors are cautioned that all forward-looking
statements involve risks and uncertainties, and actual results
may differ materially from those discussed as a result of
various factors, including those factors described in Risk
Factors and Important Factors That May Affect Future
Results beginning on page 31. Readers should not
place undue reliance on our forward-looking statements, and we
assume no obligation and do not intend to update any forward-
looking statements.


Our Strategy






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Reporting Periods




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Critical Accounting Policies and Significant Judgments and
Estimates






| |   |                                                                                    
| | - | -----------------------------------------------------------------------------------
| |  | revenue recognition,                                                               
|
| |  | asset valuation allowances,                                                        
|
| |  | acquisition accounting,                                                            
|
| |  | impairment of acquired intangible assets, goodwill and other
    long-lived assets,
|
| |  | restructuring charges,                                                             
|
| |  | income tax accounting,                                                             
|
| |  | hedge accounting,                                                                  
|
| |  | capitalization of software development costs, and                                  
|
| |  | stock option accounting.                                                           





| |                    
| | -------------------
| | Revenue Recognition





| |                                                                                
| | -------------------------------------------------------------------------------
| | Packaged Software Products and Collaborative Production
    Management Products





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| |                               
| | ------------------------------
| | Hot Runner Process Controllers





| |        
| | -------
| | General









14



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| |                           
| | --------------------------
| | Asset Valuation Allowances







| |                       
| | ----------------------
| | Acquisition Accounting







| |                                                                                   
| | ----------------------------------------------------------------------------------
| | Impairment of Acquired Intangible Assets, Goodwill and
    Other Long-Lived Assets





| |   |                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------
| |  | significant underperformance of a product line or operating
    activity relative to projected future operating results,
|
| |  | significant changes in the manner of our use of the acquired
    assets or the strategy for our overall business, and   
|
| |  | significant negative industry or economic trends.                                                                       

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| |                      
| | ---------------------
| | Restructuring Charges







| |                      
| | ---------------------
| | Income Tax Accounting



16



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| |                 
| | ----------------
| | Hedge Accounting





| |                                             
| | --------------------------------------------
| | Capitalization of Software Development Costs



17



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| |                        
| | -----------------------
| | Stock Option Accounting





Overview of Fiscal 2005 Results of Operations




| |                     
| | --------------------
| | Highlights included:



| |   |                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------
| |  | growth in total revenue to $64.4 million in 2005 from
    $48.7 million in 2004,                     
|
| |  | growth in DAS revenue to $47.2 million in 2005 from
    $37.9 million in 2004,                       
|
| |  | growth in MS revenue to $17.2 million in 2005 from
    $10.8 million in 2004,                        
|
| |  | growth in earnings to $0.58 per diluted share in 2005 from
    $0.24 per diluted share in 2004, and  
|
| |  | the generation of $6.3 million of cash from operations in
    2005, compared to $6.5 million in 2004.



| |                                              
| | ---------------------------------------------
| | Summary of fiscal 2005 operating performance:

|                                                                                             |  |                |        |  |         |  |     |               |  |   |         |  |  |  |     |  
|-------------------------------------------------------------------------------------------- |  | -------------- | ------ |  | ------- |  | --- | ------------- |  | - | ------- |  |  |  | --- | -
|                                                                                             |  | Fiscal Year    |        |  | As a %  |  |     | Fiscal Year   |  |   | As a %  | 
|                                                                                             |  | Ended          |        |  | of      |  |     | Ended         |  |   | of      | 
|                                                                                             |  | June 30, 2005  |        |  | Revenue |  |     | June 30, 2004 |  |   | Revenue | 
|                                                                                             |  |                |        |  |         |  |     |               |  |   |         | 
|                                                                                             |  | (In thousands) |       
|Revenue                                                                                      |  | $              | 64,418 |  |         |  | 100 | %             |  | $ | 48,673  |  |  |  | 100 | %
|Cost of revenue                                                                              |  |                | 15,207 |  |         |  | 24  |               |  |   | 9,739   |  |  |  | 20  |  
|Research and development, selling and marketing, and general and
    administrative expenses |  |                | 42,233 |  |         |  | 66  |               |  |   | 35,028  |  |  |  | 72  |  
|Restructuring charges                                                                        |  |                |       |  |         |  |    |               |  |   | 508     |  |  |  | 1   |  
|Amortization of acquired intangible assets                                                   |  |                | 289    |  |         |  |    |               |  |   | 445     |  |  |  | 1   |  
|                                                                                             |  |                |        |  |         |  |     |               |  |   |         | 
|Income from operations                                                                       |  | $              | 6,689  |  |         |  | 10  | %             |  | $ | 2,953   |  |  |  | 6   | %
|                                                                                             |  |                |        |  |         |  |     |               |  |   |         | 







18



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Results of Operations




|                              |                                            |                                    |      |      |       |   |     |      |       |   |      |      |       |  
|----------------------------- | ------------------------------------------ | ---------------------------------- | ---- | ---- | ----- | - | --- | ---- | ----- | - | ---- | ---- | ----- | -
|                              |                                            | Fiscal Year Ended June 30,         |     
|                              |                                            |                                    |     
|                              |                                            | 2005                               |      |      | 2004  |   |     | 2003 |      
|                              |                                            |                                    |      |      |       |   |     |      |      
|Revenue:                      |                                            |                                    |      |      |       |   |     |      |       |   |      |     
|                              | Product                                    |                                    |      | 59.3 | %     |   |     | 53.5 | %     |   |      | 47.1 | %    
|                              | Services                                   |                                    |      | 40.7 |       |   |     | 46.5 |       |   |      | 52.9 |      
|                              |                                            |                                    |      |      |       |   |     |      |      
|                              |                                            | Total revenue                      |      |      | 100.0 | % |     |      | 100.0 | % |      |      | 100.0 | %
|                              |                                            |                                    |      |      |       |   |     |      |      
|Costs and expenses:           |                                            |                                    |      |      |       |   |     |      |       |   |      |     
|                              | Cost of product revenue                    |                                    |      | 13.8 | %     |   |     | 10.7 | %     |   |      | 8.1  | %    
|                              | Cost of services revenue                   |                                    |      | 9.8  |       |   |     | 9.3  |       |   |      | 3.3  |      
|                              | Research and development                   |                                    |      | 12.4 |       |   |     | 13.3 |       |   |      | 15.4 |      
|                              | Selling and marketing                      |                                    |      | 34.5 |       |   |     | 41.1 |       |   |      | 50.9 |      
|                              | General and administrative                 |                                    |      | 18.6 |       |   |     | 17.7 |       |   |      | 19.7 |      
|                              | Restructuring charges                      |                                    |      |     |       |   |     | 1.0  |       |   |      | 1.1  |      
|                              | Amortization of acquired intangible assets |                                    |      | 0.5  |       |   |     | 0.9  |       |   |      | 1.7  |      
|                              |                                            |                                    |      |      |       |   |     |      |      
|                              |                                            | Total costs and operating expenses |      |      | 89.6  |   |     |      | 94.0  |   |      |      | 100.2 |  
|                              |                                            |                                    |      |      |       |   |     |      |      
|Income (loss) from operations |                                            |                                    | 10.4 |      |       |   | 6.0 |      |       |   | (0.2 | )   
|Interest income, net          |                                            |                                    | 2.6  |      |       |   | 2.5 |      |       |   | 3.0  |     
|Other income (loss), net      |                                            |                                    | 0.1  |      |       |   | 0.0 |      |       |   | (0.6 | )   
|                              |                                            |                                    |      |      |       |   |     |      |      
|                              | Income before income taxes                 |                                    |      | 13.1 |       |   |     | 8.5  |       |   |      | 2.2  |      
|Provision for income taxes    |                                            |                                    | 2.6  |      |       |   | 3.1 |      |       |   | 2.5  |     
|                              |                                            |                                    |      |      |       |   |     |      |      
|                              | Net income (loss)                          |                                    |      | 10.5 | %     |   |     | 5.4  | %     |   |      | (0.3 | )%   
|                              |                                            |                                    |      |      |       |   |     |      |      

Revenue






| |   |                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------
| |  | license fees for our packaged software,                                                                                                          
|
| |  | product fees for our collaborative production management
    products, and                                                                       
|
| |  | services revenue derived from maintenance and support related to
    our products, consulting, implementation, training and material
    testing.

19



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##### Table of Contents





|         |          |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        |  |  |  |    |   |  |   |        | 
|-------- | -------- | -------------- | - | ----------- | - |  | - | ------ | ----------- |  | ---- | -- | - | ------ | - | ------ | - |  | - | ------ |  |  |  | -- | - |  | - | ------ | 
|         |          |                |   | Increase    |   |  |   |        | Increase    |  |      |   
|         |          |                |   | Compared    |   |  |   |        | Compared    |  |      |   
|         |          |                |   | to Prior    |   |  |   |        | to Prior    |  |      |   
|         |          |                |   | Fiscal Year |   |  |   |        | Fiscal Year |  |      |   
|         |          | Fiscal         |   |             |   |  |   | Fiscal |             |  |      |    |   | Fiscal |  
|         |          | 2005           |   |             | $ |  |   | %      |             |  | 2004 |    |   | $      |   |        | % |  |   | 2003   | 
|         |          |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 
|         |          | (In thousands) |  
|Revenue: |          |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        |  |  |  |    |   |  |   |       
|         | Product  |                | $ | 38,227      |   |  | $ | 12,164 |             |  |      | 47 | % |        | $ | 26,063 |   |  | $ | 8,804  |  |  |  | 51 | % |  | $ | 17,259 | 
|         | Services |                |   | 26,191      |   |  |   | 3,581  |             |  |      | 16 |   |        |   | 22,610 |   |  |   | 3,244  |  |  |  | 17 |   |  |   | 19,366 | 
|         |          |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 
|         | Total    |                | $ | 64,418      |   |  | $ | 15,745 |             |  |      | 32 | % |        | $ | 48,673 |   |  | $ | 12,048 |  |  |  | 33 | % |  | $ | 36,625 | 
|         |          |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 



|                             |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        |  |  |  |    |   |  |   |        |  
|---------------------------- | --------------- | -------------- | - | ----------- | - |  | - | ------ | ----------- |  | ---- | -- | - | ------ | - | ------ | - |  | - | ------ |  |  |  | -- | - |  | - | ------ | -
|                             |                 |                |   | Increase    |   |  |   |        | Increase    |  |      |   
|                             |                 |                |   | Compared    |   |  |   |        | Compared    |  |      |   
|                             |                 |                |   | to Prior    |   |  |   |        | to Prior    |  |      |   
|                             |                 |                |   | Fiscal Year |   |  |   |        | Fiscal Year |  |      |   
|                             |                 | Fiscal         |   |             |   |  |   | Fiscal |             |  |      |    |   | Fiscal |  
|                             |                 | 2005           |   |             | $ |  |   | %      |             |  | 2004 |    |   | $      |   |        | % |  |   | 2003   | 
|                             |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 
|                             |                 | (In thousands) |  
|Revenue:                     |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        |  |  |  |    |   |  |   |       
|                             | Asia/ Australia |                | $ | 20,658      |   |  | $ | 4,396  |             |  |      | 27 | % |        | $ | 16,262 |   |  | $ | 3,859  |  |  |  | 31 | % |  | $ | 12,403 |  
|                             | Americas        |                |   | 22,933      |   |  |   | 7,775  |             |  |      | 51 |   |        |   | 15,158 |   |  |   | 5,093  |  |  |  | 51 |   |  |   | 10,065 |  
|                             | Europe          |                |   | 20,827      |   |  |   | 3,574  |             |  |      | 21 |   |        |   | 17,253 |   |  |   | 3,096  |  |  |  | 22 |   |  |   | 14,157 |  
|                             |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 
|                             | Total           |                | $ | 64,418      |   |  | $ | 15,745 |             |  |      | 32 | % |        | $ | 48,673 |   |  | $ | 12,048 |  |  |  | 33 | % |  | $ | 36,625 |  
|                             |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 
|Percentage of total revenue: |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        |  |  |  |    |   |  |   |       
|                             | Asia/ Australia |                |   | 32          | % |  |   |        |             |  |      |    |   |        |   | 33     | % |  |   |        |  |  |  |    |   |  |   | 34     | %
|                             | Americas        |                |   | 36          |   |  |   |        |             |  |      |    |   |        |   | 31     |   |  |   |        |  |  |  |    |   |  |   | 27     |  
|                             | Europe          |                |   | 32          |   |  |   |        |             |  |      |    |   |        |   | 36     |   |  |   |        |  |  |  |    |   |  |   | 39     |  
|                             |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 
|                             | Total           |                |   | 100         | % |  |   |        |             |  |      |    |   |        |   | 100    | % |  |   |        |  |  |  |    |   |  |   | 100    | %
|                             |                 |                |   |             |   |  |   |        |             |  |      |    |   |        |   |        |   |  |   |        | 

20



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##### Table of Contents





| |                
| | ---------------
| | Product revenue



|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |   |  |  |     |   |  |   |        |  
|------------------------------------ | ------------------------- | -------------- | - | ----------- | - |  | - | ------ | ----------- |  | ---- | --- | - | ------ | - | ------ | - |  | - | ----- | - |  |  | --- | - |  | - | ------ | -
|                                     |                           |                |   | Increase    |   |  |   |        | Increase    |  |      |    
|                                     |                           |                |   | (Decrease)  |   |  |   |        | (Decrease)  |  |      |    
|                                     |                           |                |   | Compared    |   |  |   |        | Compared    |  |      |    
|                                     |                           |                |   | to Prior    |   |  |   |        | to Prior    |  |      |    
|                                     |                           |                |   | Fiscal Year |   |  |   |        | Fiscal Year |  |      |    
|                                     |                           | Fiscal         |   |             |   |  |   | Fiscal |             |  |      |     |   | Fiscal |  
|                                     |                           | 2005           |   |             | $ |  |   | %      |             |  | 2004 |     |   | $      |   |        | % |  |   | 2003  |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|                                     |                           | (In thousands) |  
|Asia/ Australia product revenue:     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |   |  |  |     |   |  |   |       
|                                     | Design Analysis Solutions |                | $ | 12,401      |   |  | $ | 3,061  |             |  |      | 33  | % |        | $ | 9,340  |   |  | $ | 2,782 |   |  |  | 42  | % |  | $ | 6,558  |  
|                                     | Manufacturing Solutions   |                |   | 43          |   |  |   | (9     | )           |  |      | (17 | ) |        |   | 52     |   |  |   | (117  | ) |  |  | (69 | ) |  |   | 169    |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|                                     | Total                     |                |   | 12,444      |   |  |   | 3,052  |             |  |      | 32  |   |        |   | 9,392  |   |  |   | 2,665 |   |  |  | 40  |   |  |   | 6,727  |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|Americas product revenue:            |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |   |  |  |     |   |  |   |       
|                                     | Design Analysis Solutions |                |   | 3,485       |   |  |   | 1,368  |             |  |      | 65  |   |        |   | 2,117  |   |  |   | (315  | ) |  |  | (13 | ) |  |   | 2,432  |  
|                                     | Manufacturing Solutions   |                |   | 12,149      |   |  |   | 5,838  |             |  |      | 93  |   |        |   | 6,311  |   |  |   | 4,536 |   |  |  | 256 |   |  |   | 1,775  |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|                                     | Total                     |                |   | 15,634      |   |  |   | 7,206  |             |  |      | 86  |   |        |   | 8,428  |   |  |   | 4,221 |   |  |  | 100 |   |  |   | 4,207  |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|Europe product revenue:              |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |   |  |  |     |   |  |   |       
|                                     | Design Analysis Solutions |                |   | 7,943       |   |  |   | 1,939  |             |  |      | 32  |   |        |   | 6,004  |   |  |   | 1,761 |   |  |  | 42  |   |  |   | 4,243  |  
|                                     | Manufacturing Solutions   |                |   | 2,206       |   |  |   | (33    | )           |  |      | (2  | ) |        |   | 2,239  |   |  |   | 157   |   |  |  | 8   |   |  |   | 2,082  |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|                                     | Total                     |                |   | 10,149      |   |  |   | 1,906  |             |  |      | 23  |   |        |   | 8,243  |   |  |   | 1,918 |   |  |  | 30  |   |  |   | 6,325  |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|Total product revenue:               |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |   |  |  |     |   |  |   |       
|                                     | Design Analysis Solutions |                |   | 23,829      |   |  |   | 6,368  |             |  |      | 36  |   |        |   | 17,461 |   |  |   | 4,228 |   |  |  | 32  |   |  |   | 13,233 |  
|                                     | Manufacturing Solutions   |                |   | 14,398      |   |  |   | 5,796  |             |  |      | 67  |   |        |   | 8,602  |   |  |   | 4,576 |   |  |  | 114 |   |  |   | 4,026  |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|                                     | Total                     |                | $ | 38,227      |   |  | $ | 12,164 |             |  |      | 47  | % |        | $ | 26,063 |   |  | $ | 8,804 |   |  |  | 51  | % |  | $ | 17,259 |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|Percentage of total product revenue: |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |   |  |  |     |   |  |   |       
|                                     | Design Analysis Solutions |                |   | 62          | % |  |   |        |             |  |      |     |   |        |   | 67     | % |  |   |       |   |  |  |     |   |  |   | 77     | %
|                                     | Manufacturing Solutions   |                |   | 38          |   |  |   |        |             |  |      |     |   |        |   | 33     |   |  |   |       |   |  |  |     |   |  |   | 23     |  
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  
|                                     | Total                     |                |   | 100         | % |  |   |        |             |  |      |     |   |        |   | 100    | % |  |   |       |   |  |  |     |   |  |   | 100    | %
|                                     |                           |                |   |             |   |  |   |        |             |  |      |     |   |        |   |        |   |  |   |       |  







21



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##### Table of Contents







| |                                          
| | -----------------------------------------
| | Design Analysis Solutions Product Revenue









| |                                        
| | ---------------------------------------
| | Manufacturing Solutions Product Revenue







| |                 
| | ----------------
| | Services Revenue





22



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##### Table of Contents





| |                
| | ---------------
| | Cost of Revenue

|                                 |          |                |        |             |   |   |       |        |             |  |      |    |   |        |       |       |   |   |       |       |  |  |     |     |   |   |       |       | 
|-------------------------------- | -------- | -------------- | ------ | ----------- | - | - | ----- | ------ | ----------- |  | ---- | -- | - | ------ | ----- | ----- | - | - | ----- | ----- |  |  | --- | --- | - | - | ----- | ----- | 
|                                 |          |                |        | Increase    |   |   |       |        | Increase    |  |      |   
|                                 |          |                |        | Compared    |   |   |       |        | Compared    |  |      |   
|                                 |          |                |        | to Prior    |   |   |       |        | to Prior    |  |      |   
|                                 |          |                |        | Fiscal Year |   |   |       |        | Fiscal Year |  |      |   
|                                 |          | Fiscal         |        |             |   |   |       | Fiscal |             |  |      |    |   | Fiscal |      
|                                 |          | 2005           |        |             | $ |   |       | %      |             |  | 2004 |    |   | $      |       |       | % |   |       | 2003  | 
|                                 |          |                |        |             |   |   |       |        |             |  |      |    |   |        |       |       |   |   |       |       | 
|                                 |          | (In thousands) |       
|Cost of revenue:                 |          |                |        |             |   |   |       |        |             |  |      |    |   |        |       |       |   |   |       |       |  |  |     |     |   |   |       |      
|                                 | Product  |                | $      | 8,866       |   |   | $     | 3,663  |             |  |      | 70 | % |        | $     | 5,203 |   |   | $     | 2,239 |  |  |     | 76  | % |   | $     | 2,964 | 
|                                 | Services |                |        | 6,341       |   |   |       | 1,805  |             |  |      | 40 |   |        |       | 4,536 |   |   |       | 3,326 |  |  |     | 275 |   |   |       | 1,210 | 
|                                 |          |                |        |             |   |   |       |        |             |  |      |    |   |        |       |       |   |   |       |       | 
|                                 |          | $              | 15,207 |             |   | $ | 5,468 |        |             |  | 56   | %  |   | $      | 9,739 |       |   | $ | 5,565 |       |  |  | 133 | %   |   | $ | 4,174 |      
|                                 |          |                |        |             |   |   |       |        |             |  |      |    |   |        |       |       |   |   |       |       | 
|As a percentage of total revenue |          |                | 24     | %           |   |   |       |        |             |  |      |    |   |        | 20    | %     |   |   |       |       |  |  |     |     |   |   | 11    | %    



| |                        
| | -----------------------
| | Cost of Product Revenue







| |                         
| | ------------------------
| | Cost of Services Revenue





23



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##### Table of Contents





| |                         
| | ------------------------
| | Research and Development

|                                 |  |                |       |              |   |   |       |   |              |  |             |   |  |   |       |   |   |   |     |             |  |  |    |   |  |   |       |  
|-------------------------------- |  | -------------- | ----- | ------------ | - | - | ----- | - | ------------ |  | ----------- | - |  | - | ----- | - | - | - | --- | ----------- |  |  | -- | - |  | - | ----- | -
|                                 |  |                |       | Increase     |   |   |       |   | Increase     |  |             |  
|                                 |  |                |       | Compared to  |   |   |       |   | Compared to  |  |             |  
|                                 |  |                |       | Prior Fiscal |   |   |       |   | Prior Fiscal |  |             |  
|                                 |  |                |       | Year         |   |   |       |   | Year         |  |             |  
|                                 |  |                |       |              |   |   |       |   |              |  |             |  
|                                 |  | Fiscal 2005    |       |              | $ |   |       | % |              |  | Fiscal 2004 |   |  | $ |       |   | % |   |     | Fiscal 2003 | 
|                                 |  |                |       |              |   |   |       |   |              |  |             |   |  |   |       |   |   |   |     |             | 
|                                 |  | (In thousands) |      
|Research and development         |  | $              | 7,993 |              |   | $ | 1,522 |   |              |  | 24          | % |  | $ | 6,471 |   |   | $ | 821 |             |  |  | 15 | % |  | $ | 5,650 |  
|As a percentage of total revenue |  |                | 12    | %            |   |   |       |   |              |  |             |   |  |   | 13    | % |   |   |     |             |  |  |    |   |  |   | 15    | %







| |                      
| | ---------------------
| | Selling and Marketing

|                                 |  |                |        |              |   |   |       |   |              |  |             |   |  |   |        |   |   |   |       |             |  |  |   |   |  |   |        |  
|-------------------------------- |  | -------------- | ------ | ------------ | - | - | ----- | - | ------------ |  | ----------- | - |  | - | ------ | - | - | - | ----- | ----------- |  |  | - | - |  | - | ------ | -
|                                 |  |                |        | Increase     |   |   |       |   | Increase     |  |             |  
|                                 |  |                |        | Compared to  |   |   |       |   | Compared to  |  |             |  
|                                 |  |                |        | Prior Fiscal |   |   |       |   | Prior Fiscal |  |             |  
|                                 |  |                |        | Year         |   |   |       |   | Year         |  |             |  
|                                 |  |                |        |              |   |   |       |   |              |  |             |  
|                                 |  | Fiscal 2005    |        |              | $ |   |       | % |              |  | Fiscal 2004 |   |  | $ |        |   | % |   |       | Fiscal 2003 | 
|                                 |  |                |        |              |   |   |       |   |              |  |             |   |  |   |        |   |   |   |       |             | 
|                                 |  | (In thousands) |       
|Selling and marketing            |  | $              | 22,233 |              |   | $ | 2,224 |   |              |  | 11          | % |  | $ | 20,009 |   |   | $ | 1,371 |             |  |  | 7 | % |  | $ | 18,638 |  
|As a percentage of total revenue |  |                | 35     | %            |   |   |       |   |              |  |             |   |  |   | 41     | % |   |   |       |             |  |  |   |   |  |   | 51     | %





24



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##### Table of Contents









| |                           
| | --------------------------
| | General and Administrative

|                                 |  |                |        |              |   |   |       |   |              |  |             |   |  |   |       |   |   |   |       |             |  |  |    |   |  |   |       |  
|-------------------------------- |  | -------------- | ------ | ------------ | - | - | ----- | - | ------------ |  | ----------- | - |  | - | ----- | - | - | - | ----- | ----------- |  |  | -- | - |  | - | ----- | -
|                                 |  |                |        | Increase     |   |   |       |   | Increase     |  |             |  
|                                 |  |                |        | Compared to  |   |   |       |   | Compared to  |  |             |  
|                                 |  |                |        | Prior Fiscal |   |   |       |   | Prior Fiscal |  |             |  
|                                 |  |                |        | Year         |   |   |       |   | Year         |  |             |  
|                                 |  |                |        |              |   |   |       |   |              |  |             |  
|                                 |  | Fiscal 2005    |        |              | $ |   |       | % |              |  | Fiscal 2004 |   |  | $ |       |   | % |   |       | Fiscal 2003 | 
|                                 |  |                |        |              |   |   |       |   |              |  |             |   |  |   |       |   |   |   |       |             | 
|                                 |  | (In thousands) |       
|General and administrative       |  | $              | 12,007 |              |   | $ | 3,459 |   |              |  | 40          | % |  | $ | 8,548 |   |   | $ | 1,306 |             |  |  | 18 | % |  | $ | 7,242 |  
|As a percentage of total revenue |  |                | 19     | %            |   |   |       |   |              |  |             |   |  |   | 18    | % |   |   |       |             |  |  |    |   |  |   | 20    | %









| |                      
| | ---------------------
| | Restructuring Charges

|                                 |  |                |   |              |  |    |     |   |              |             |        |  |   |   |     |   |  |   |             |  |  |  |    |   |  |   |     |  
|-------------------------------- |  | -------------- | - | ------------ |  | -- | --- | - | ------------ | ----------- | ------ |  | - | - | --- | - |  | - | ----------- |  |  |  | -- | - |  | - | --- | -
|                                 |  |                |   | Decrease     |  |    |     |   | Increase     |             |        | 
|                                 |  |                |   | Compared to  |  |    |     |   | Compared to  |             |        | 
|                                 |  |                |   | Prior Fiscal |  |    |     |   | Prior Fiscal |             |        | 
|                                 |  |                |   | Year         |  |    |     |   | Year         |             |        | 
|                                 |  |                |   |              |  |    |     |   |              |             |        | 
|                                 |  | Fiscal 2005    |   | $            |  |    | %   |   |              | Fiscal 2004 |        |  | $ |   |     | % |  |   | Fiscal 2003 | 
|                                 |  |                |   |              |  |    |     |   |              |             |        |  |   |   |     |   |  |   |             | 
|                                 |  | (In thousands) |  
|Restructuring charges            |  | $              |  |              |  | ($ | 508 | ) |              |             | (100%) |  |   | $ | 508 |   |  | $ | 103         |  |  |  | 25 | % |  | $ | 405 |  
|As a percentage of total revenue |  |                |  |              |  |    |     |   |              |             |        |  |   |   | 1   | % |  |   |             |  |  |  |    |   |  |   | 1   | %

25



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| |                                           
| | ------------------------------------------
| | Amortization of Acquired Intangible Assets

|                                           |  |                |     |                   |   |   |      |            |              |  |             |    |  |   |     |   |   |   |      |             |  |  |     |    |  |   |     |  
|------------------------------------------ |  | -------------- | --- | ----------------- | - | - | ---- | ---------- | ------------ |  | ----------- | -- |  | - | --- | - | - | - | ---- | ----------- |  |  | --- | -- |  | - | --- | -
|                                           |  |                |     |                   |   |   |      | (Decrease) |              |  |            
|                                           |  |                |     | (Decrease)        |   |   |      |            | Compared to  |  |             |   
|                                           |  |                |     | Compared to       |   |   |      |            | Prior Fiscal |  |             |   
|                                           |  |                |     | Prior Fiscal Year |   |   |      |            | Year         |  |             |   
|                                           |  |                |     |                   |   |   |      |            |              |  |             |   
|                                           |  | Fiscal 2005    |     |                   | $ |   |      | %          |              |  | Fiscal 2004 |    |  | $ |     |   | % |   |      | Fiscal 2003 | 
|                                           |  |                |     |                   |   |   |      |            |              |  |             |    |  |   |     |   |   |   |      |             | 
|                                           |  | (In thousands) |    
|Amortization of acquired intangible assets |  | $              | 289 |                   |   | $ | (156 | )          |              |  | (35         | )% |  | $ | 445 |   |   | $ | (160 | )           |  |  | (26 | )% |  | $ | 605 |  
|As a percentage of total revenue           |  |                |    |                   |   |   |      |            |              |  |             |    |  |   | 1   | % |   |   |      |             |  |  |     |    |  |   | 2   | %







| |                     
| | --------------------
| | Interest Income, Net







| |                         
| | ------------------------
| | Other Income (Loss), Net







| |                           
| | --------------------------
| | Provision for Income Taxes



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| |                      
| | ---------------------
| | Business Combinations



|             |  |                                   |  |                                                                                                                                                                                                                                                                                                                                                                                    
|------------ |  | --------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date         |  | Company                           |  | Details                                                                                                                                                                                                                                                                                                                                                                            
|             |  |                                   |  |                                                                                                                                                                                                                                                                                                                                                                                    
|January 2004 |  | American MSI Corporation          |  | The acquisition of American MSI Corporation provided us advanced
    hot runner process controller products that assure that
    materials are kept in an optimal state until injected into the
    part cavity during the manufacturing process. This acquisition
    has been integrated into our Manufacturing Solutions business
    unit.                                     
|January 2003 |  | Côntrole de Processus Industriels |  | The acquisition of the ongoing operations and certain assets of
    Côntrole de Processus Industriels brought us a product that
    monitors production equipment in a plastics manufacturing
    factory, providing real-time data capture and monitoring in a
    networked environment. This acquisition has been integrated into
    our Manufacturing Solutions business unit.

Liquidity and Capital Resources


|                                                              |  |                            |        |  |      |   |         |      |  |   |         |  
|------------------------------------------------------------- |  | -------------------------- | ------ |  | ---- | - | ------- | ---- |  | - | ------- | -
|                                                              |  | Fiscal Year Ended June 30, |       
|                                                              |  |                            |       
|                                                              |  | 2005                       |        |  | 2004 |   |         | 2003 | 
|                                                              |  |                            |        |  |      |   |         |      | 
|                                                              |  | (In thousands)             |       
|Net cash provided by operating activities                     |  | $                          | 6,338  |  |      | $ | 6,467   |      |  | $ | 2,384   |  
|Net cash provided by (used in) investing activities           |  |                            | 2,991  |  |      |   | (10,827 | )    |  |   | (13,398 | )
|Net cash provided by (used in) financing activities           |  |                            | 2,490  |  |      |   | 1,226   |      |  |   | (524    | )
|Effect of exchange rate changes on cash and cash equivalents  |  |                            | 1,104  |  |      |   | 801     |      |  |   | 2,224   |  
|                                                              |  |                            |        |  |      |   |         |      | 
|Net increase (decrease) in cash and cash equivalents          |  |                            | 12,923 |  |      |   | (2,333  | )    |  |   | (9,314  | )
|Cash and cash equivalents, beginning of year                  |  |                            | 35,987 |  |      |   | 38,320  |      |  |   | 47,634  |  
|                                                              |  |                            |        |  |      |   |         |      | 
|Cash and cash equivalents, end of year                        |  | $                          | 48,910 |  |      | $ | 35,987  |      |  | $ | 38,320  |  
|                                                              |  |                            |        |  |      |   |         |      | 
|Marketable securities, end of year                            |  | $                          | 11,323 |  |      | $ | 15,665  |      |  | $ | 13,820  |  
|                                                              |  |                            |        |  |      |   |         |      | 
|Cash, cash equivalents and marketable securities, end of year |  | $                          | 60,233 |  |      | $ | 51,652  |      |  | $ | 52,140  |  
|                                                              |  |                            |        |  |      |   |         |      | 





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Contractual Obligations




|                            |       |                        |       |        |        |   |       |           |      |   |           |       |  |         |       |       |  |   |       |       | 
|--------------------------- | ----- | ---------------------- | ----- | ------ | ------ | - | ----- | --------- | ---- | - | --------- | ----- |  | ------- | ----- | ----- |  | - | ----- | ----- | 
|                            |       | Payments Due by Period |      
|                            |       |                        |      
|                            |       |                        |       | Less   |        |   |       |           | More |  
|                            |       |                        |       | Than   |        |   |       |           | Than |  
|                            |       | Total                  |       |        | 1 Year |   |       | 1-3 Years |      |   | 3-5 Years |       |  | 5 Years |      
|                            |       |                        |       |        |        |   |       |           |      |   |           |       |  |         |      
|                            |       | (In thousands)         |      
|Operating lease obligations |       | $                      | 9,462 |        |        | $ | 2,256 |           |      | $ | 4,707     |       |  | $       | 1,067 |       |  | $ | 1,432 |      
|Purchase obligations(1)     |       |                        | 1,683 |        |        |   | 1,439 |           |      |   | 244       |       |  |         |      |       |  |   |      |      
|                            |       |                        |       |        |        |   |       |           |      |   |           |       |  |         |      
|                            | Total |                        | $     | 11,145 |        |   | $     | 3,695     |      |   | $         | 4,951 |  |         | $     | 1,067 |  |   | $     | 1,432 | 
|                            |       |                        |       |        |        |   |       |           |      |   |           |       |  |         |      






|    |                                                                                                                                                                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For the purposes of this table, contractual obligations for
    purchase of goods or services are defined as agreements that are
    enforceable and legally binding and that specify all significant
    terms, including: fixed or minimum quantities to be purchased;
    fixed, minimum or variable price provisions; and the approximate
    timing of the transaction.

Off-Balance Sheet Financing Arrangements




Recent Accounting Pronouncements








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The
American Jobs Creation Act








Impact of Inflation




Risk Factors and Important Factors That May Affect Future
Results






| |                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our business model is changing as we further develop and
    exploit our Manufacturing Solutions products, and our recent
    reorganization of our sales, marketing and support staff along
    business unit lines may result in disruption in our
    sales.



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| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Failure to comply with Section 404 of Sarbanes-Oxley
    Act of 2002 may have a negative impact on investor
    confidence.





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | A general economic slowdown, particularly in our end
    markets, may impact our results.





| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are dependent on third parties such as resellers and
    distributors to distribute a substantial portion of our
    Manufacturing Solutions products.





| |                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our quarterly operating results are subject to significant
    fluctuations and, as a result, period-to-period comparisons of
    our results of operations are not necessarily meaningful and
    should not be relied upon as indicators of future
    performance.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | seasonal slowdowns, in particular, in our first and to a lesser
    extent our third fiscal quarter, in many of the markets in which
    we sell our products,                                                                                                                                                                                                                                                                                                      
|
| |  | changes in the mix of products and services we provide because
    sales of our Manufacturing Solutions products and our services
    will result in lower gross margins and may result in a longer
    selling cycle, which effect may be more significant following
    the acquisition of AMSI, which will result in a higher
    percentage of sales coming from our Manufacturing Solutions
    products as compared to our Design Analysis Solutions products,

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the timing and magnitude of capital expenditures, including
    costs relating to the expansion of our operations and
    infrastructure, and planned program spending, such as that
    required for major marketing initiatives or tradeshows,                                                                                                                                                                                              
|
| |  | introductions of new services or enhancements by us and our
    competitors and changes in our and our competitors pricing
    policies,                                                                                                                                                                                                                                                                                                     
|
| |  | our increased use of third parties such as distributors, OEM
    partners and resellers which may lessen the control we have over
    revenue and earnings during any particular period,                                                                                                                                                                                                                                                      
|
| |  | the timing and magnitude of our tax expense, resulting from the
    globally distributed nature of our selling and research and
    development operations and certain on-going tax audits or
    investigations by various local tax authorities that may lead to
    the loss of certain planned-for tax benefits, or increased
    taxable income in certain jurisdictions that may not be offset
    by losses in other tax jurisdictions,
|
| |  | fluctuations in our tax rate from quarter to quarter due to the
    impact of discrete events, including the settlement of claims,
    the management of audits and other inquiries, the acquisition of
    other companies or other events,                                                                                                                                                                                                  
|
| |  | the impact of expensing stock-based compensation,                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | currency and exchange rate fluctuations,                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | timing and integration of acquisitions, and                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | costs of compliance with the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                                                      





| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | If we experience delays in introducing new products or if
    our existing or new products do not achieve market acceptance,
    we may lose revenue.





| |   |                                             
| | - | --------------------------------------------
| |  | rapid technological advances,               
|
| |  | evolving industry standards,                
|
| |  | changes in end-user requirements,           
|
| |  | intense competition,                        
|
| |  | technically complex products,               
|
| |  | frequent new product introductions, and     
|
| |  | evolving offerings by product manufacturers.





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| |                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our acquisition of AMSI and any future mergers,
    acquisitions and strategic relationships may result in lost
    revenue caused by business disruptions and missed opportunities
    caused by the distraction of our management.





| |                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we determine that any of our goodwill or intangible
    assets, including technology purchased in acquisitions, are
    impaired, we would be required to take a charge to earnings,
    which could have a material adverse effect on our results of
    operations.





| |                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we become subject to intellectual property infringement
    claims, we could incur significant expenses and we could be
    prevented from offering specific products or services.





| |                                                                                   
| | ----------------------------------------------------------------------------------
| | We may lose sales if we are unable to protect important
    intellectual property.



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| |   |                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we cannot be certain that our pending United States and foreign
    patent applications will result in issued patents or that the
    claims allowed are or will be sufficiently broad to protect our
    technology,                                                                                                  
|
| |  | third parties may design around our patented technologies or
    seek to challenge or invalidate our patented technologies,                                                                                                                                                                                            
|
| |  | patents of others may have an adverse effect on our ability to
    do business,                                                                                                                                                                                                                                        
|
| |  | the contractual provisions that we rely on, in part, to protect
    our trade secrets and proprietary knowledge may be breached, and
    we may not have adequate remedies for any breach and our trade
    secrets and proprietary information may be disclosed to the
    public,                                    
|
| |  | our trade secrets may also become known without breach of such
    agreements or may be independently developed by competitors,                                                                                                                                                                                        
|
| |  | foreign countries, including some of those in which we do
    business, may reduce or limit the protection of our intellectual
    property rights and software piracy, particularly in certain
    countries in Asia, may result in lost revenue in those countries
    or to customers with worldwide operations, and
|
| |  | the cost of enforcing our intellectual property rights may
    reduce our future profitability.                                                                                                                                                                                                                        



| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | Our financial condition or results of operations may be
    adversely affected by international business risks.







| |   |                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | decreased liquidity resulting from longer accounts receivable
    collection cycles typical of certain foreign countries,                                                                                                                         
|
| |  | decreased revenue on foreign sales resulting from possible
    foreign currency exchange and conversion issues,                                                                                                                                   
|
| |  | lower productivity resulting from difficulties managing our
    sales, support and research and development operations across
    many countries,                                                                                                 
|
| |  | decreased earnings based on changes in tax regulations in
    foreign jurisdictions or the timing of required tax payments in
    foreign jurisdictions that may not yet be offset by tax benefits
    arising from losses in other jurisdictions,
|
| |  | lost revenue resulting from difficulties associated with
    enforcing agreements and collecting receivables through foreign
    legal systems,                                                                                                   
|
| |  | interruptions of our operations due to political and social
    conditions of the countries in which we do business,                                                                                                                              
|
| |  | lost revenue resulting from the imposition by foreign
    governments of trade protection measures, and                                                                                                                                           
|
| |  | higher cost of sales resulting from import or export licensing
    requirements.                                                                                                                                                                  



| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have more limited financial and other resources than
    many of our competitors and potential competitors and may be
    unable to compete successfully against them.



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| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | Disruption of operations at our development or
    manufacturing facilities could interfere with our product
    development and production cycles.





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Our Manufacturing Solutions products may lead to product
    liability claims against us.





| |                                                                         
| | ------------------------------------------------------------------------
| | We make estimates in determining our worldwide income tax
    provision.







| |                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our net income and earnings per share will be
    significantly reduced as a result of the requirement that we
    record compensation expense for shares issued under our stock
    plans.



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| |                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our stock price is highly volatile and our stock price
    could experience substantial declines and our managements
    attention may be diverted from more productive tasks.





| |   |                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------
| |  | revenues and operating results failing to meet the expectations
    of securities analysts or investors in any quarter,
|
| |  | downward revisions in securities analysts estimates or
    changes in general market conditions,                      
|
| |  | changes in our senior management personnel,                                                                            
|
| |  | distribution or sale of shares of our common stock by insiders
    or affiliated persons,                              
|
| |  | technological innovations by competitors or in competing
    technologies,                                             
|
| |  | a decrease in the demand for our common stock,                                                                         
|
| |  | investor perception of our industry or our prospects, and                                                              
|
| |  | general technology or economic trends.                                                                                 





| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Information we provide to investors is accurate as of the
    date we disseminate it.








|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures About Market
    Risk





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##### Table of Contents














|        |                                            
|------- | -------------------------------------------
|Item 8. | Financial Statements and Supplementary Data








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosures








|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Evaluation of Disclosure Controls and Procedures




Changes in Internal Control Over Financial Reporting




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Managements Report on Internal Control over Financial
Reporting












Internal
Control  Integrated Framework.









PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

Directors.


Executive Officers.


Section 16(a) Beneficial Ownership Reporting
Compliance.


Code of Ethics.


39



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|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation








|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions








|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accountant Fees and Services



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##### Table of Contents






PART IV







|         |                                           
|-------- | ------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules

Consolidated Financial Statements




Financial Statement Schedule




|                                                |  |          |    | 
|----------------------------------------------- |  | -------- | -- | 
|                                                |  | Page No. |   
|                                                |  |          |   
|Schedule II  Valuation and Qualifying Accounts |  |          | 46 | 



List of Exhibits




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EXHIBIT INDEX


|        |    |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | -- | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      
|No.     |    | Title
|        |    |      
|        | 2  | .1    |  | Agreement and Plan of Merger, dated February 11, 2000, by
    and among the Registrant, Moldflow Merger Corp. (a subsidiary of
    the Registrant), Advanced CAE Technology, Inc. d/b/a C-Mold
    (C-Mold) and certain stockholders of C-Mold.
    (Previously filed as an exhibit to the Companys
    Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)                                                                                   
|       
|        | 2  | .2    |  | Agreement and Plan of Merger by and among Moldflow Corp., MF
    Merger Sub I, Inc., American MSI Corp., the Timothy and
    Deborah Triplett Family Trust, Timothy L. Triplett and Deborah
    A. Triplett, dated January 23, 2004. (Previously filed as
    an exhibit to the Companys Quarterly Report on
    Form 10-Q for the fiscal quarter ended December 27,
    2003 filed with the Securities and Exchange Commission on
    February 10, 2004 and incorporated by reference thereto.)
|       
|        | 3  | .1    |  | Third Amended and Restated Certificate of Incorporation of the
    Registrant. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended April 1, 2000 filed with the Securities and
    Exchange Commission on May 12, 2000 and incorporated by
    reference thereto.)                                                                                                                                                               
|       
|        | 3  | .2    |  | Second Amended and Restated By-laws of the Registrant.
    (Previously filed as an exhibit to the Companys Quarterly
    Report on Form 10-Q for the fiscal quarter ended
    April 1, 2000 filed with the Securities and Exchange
    Commission on May 12, 2000 and incorporated by reference
    thereto.)                                                                                                                                                                                   
|       
|        | 3  | .3    |  | Certificate of Amendment of Third Amended and Restated
    Certificate of Incorporation. (Previously filed as an exhibit to
    the Companys Annual Report on Form 10-K for the
    fiscal year ended June 30, 2002 filed with the Securities
    and Exchange Commission on September 19, 2002 and
    incorporated by reference thereto.)                                                                                                                                                     
|       
|        | 3  | .4    |  | Certificate of Designations, Preferences and Rights of a Series
    of Preferred Stock of Moldflow Corporation classifying and
    designating the Series A Junior Participating Preferred
    Stock. (Previously filed as an exhibit to the Companys
    Registration Statement on Form 8-A filed with the
    Securities and Exchange Commission on February 3, 2003 and
    incorporated by reference thereto.)                                                                              
|       
|        | 4  | .1    |  | Shareholder Rights Agreement, dated as of January 29, 2003,
    between Moldflow Corporation and EquiServe Trust Company, as
    Rights Agent. (Previously filed as an exhibit to the
    Companys Registration Statement on Form 8-A filed
    with the Securities and Exchange Commission on February 3,
    2003 and incorporated by reference thereto.)                                                                                                                                     
|       
|        | 10 | .1    |  | Form of Incentive Stock Option Agreement for Executive Officers
    under the Moldflow Corporation 2000 Stock Option and Incentive
    Plan. (Previously filed as an exhibit to the Companys
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    September 25, 2004 filed with the Securities and Exchange
    Commission on November 3, 2004 and incorporated by
    reference thereto.)                                                                                        
|       
|        | 10 | .2    |  | Form of Non-Qualified Stock Option Agreement for Executive
    Officers under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended September 25, 2004 filed with the Securities
    and Exchange Commission on November 3, 2004 and
    incorporated by reference thereto.)                                                                                    
|       
|        | 10 | .3    |  | Form of Non-Qualified Stock Option Agreement for Non-Employee
    Directors under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended September 25, 2004 filed with the Securities
    and Exchange Commission on November 3, 2004 and
    incorporated by reference thereto.)                                                                                
|       
|        | 10 | .4    |  | Amended and Restated Employment Agreement dated as of
    July 8, 2005 between Christopher L. Gorgone and Moldflow
    Corporation, previously filed as an exhibit to the
    Companys Current Report on Form 8-K filed on
    July 14, 2005, and incorporated herein by reference.**                                                                                                                                                                                                           

42



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|        |    |       |  |                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      
|No.     |    | Title
|        |    |      
|       
|        | 10 | .5    |  | Lease between Moldflow Corporation and 492 OCP, LLC dated as of
    January 28, 2005 previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q filed on
    February 2, 2005, and incorporated herein by reference                                                                                                                   
|       
|        | 10 | .6    |  | Loan Modification Agreement dated as of January 31, 2005
    between Moldflow Corporation and Silicon Valley Bank previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q filed on February 2, 2005, and incorporated
    herein by reference.                                                                                 
|       
|        | 10 | .7    |  | Moldflow Corporation 2000 Stock Option and Incentive Plan, as
    amended. (Previously filed as an exhibit to the Companys
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    December 28, 2002 filed with the Securities and Exchange
    Commission on February 7, 2003 and incorporated by
    reference thereto.)                       
|       
|        | 10 | .8    |  | Form of Incentive Stock Option Agreement under the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. (Previously
    filed as an exhibit to the Companys Registration Statement
    on Form S-1 (File No. 333-95289) and incorporated by
    reference thereto.)                                                                               
|       
|        | 10 | .9    |  | Form of Non-Qualified Stock Option Agreement for Company
    Employees under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)                                                     
|       
|        | 10 | .10   |  | Moldflow Corporation Employee Stock Purchase Plan. (Previously
    filed as an exhibit to the Companys Registration Statement
    on Form S-1 (File No. 333-95289) and incorporated by
    reference thereto.)                                                                                                                                              
|       
|        | 10 | .11   |  | Moldflow Corporation 1997 Equity Incentive Plan. (Previously
    filed as an exhibit to the Companys Registration Statement
    on Form S-1 (File No. 333-95289) and incorporated by
    reference thereto.)                                                                                                                                                
|       
|        | 10 | .12   |  | Form of Director Indemnification Agreement to be entered into
    between the Registrant and each non-employee director.
    (Previously filed as an exhibit to the Companys
    Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)**                                                                      
|       
|        | 10 | .13   |  | Form of Non-Qualified Stock Option Agreement for Non-Employee
    Directors under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)**                                              
|       
|        | 10 | .14   |  | Loan Agreement as of November 13, 2001 between Silicon
    Valley Bank and Moldflow Corporation. (Previously filed as an
    exhibit to the Companys Quarterly Report on Form 10-Q
    for the fiscal quarter ended December 29, 2001 filed with
    the Securities and Exchange Commission on February 11, 2002
    and incorporated by reference thereto.)
|       
|        | 10 | .15   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Kenneth R. Welch.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed July 14, 2005 and incorporated by reference
    thereto.)                                                                                        
|       
|        | 10 | .16   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Timothy Triplett.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed on July 14, 2005 and incorporated by
    reference thereto.)                                                                                     
|       
|        | 10 | .17   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and A. Roland Thomas.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed on July 14, 2005 and incorporated by
    reference thereto.)                                                                                     
|       
|        | 10 | .18   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Ian M. Pendlebury.**
    (Previously filed as an exhibit to the Companys Current
    Report on Form 8-K filed on July 14, 2005 and
    incorporated by reference thereto.)                                                                                    
|       
|        | 10 | .19   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Peter K. Kennedy.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed on July 14, 2005 and incorporated by
    reference thereto.)                                                                                     

43



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|        |    |       |  |                                                                                                                                                                                                                                                                                                                                                   
|------- | -- | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      
|No.     |    | Title
|        |    |      
|       
|        | 10 | .20   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Lori M. Henderson.**
    (Previously filed as an exhibit to the Companys Current
    Report on Form 8-K filed on July 14, 2005 and
    incorporated by reference thereto.)                                                                         
|       
|        | 10 | .21   |  | Third Amendment to the Moldflow Corporation 2000 Stock Option
    and Incentive Plan. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended December 27, 2003 filed with the Securities
    and Exchange Commission on February 10, 2004 and
    incorporated by reference thereto.)
|       
|        | 21 | .1    |  | Subsidiaries of the Registrant. (Filed herewith.)                                                                                                                                                                                                                                                                                                 
|       
|        | 23 | .1    |  | Consent of PricewaterhouseCoopers LLP. (Filed herewith.)                                                                                                                                                                                                                                                                                          
|       
|        | 31 | .1    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer. (Filed herewith.)                                                                                                                                                                                                                                                          
|       
|        | 31 | .2    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer. (Filed herewith.)                                                                                                                                                                                                                                                          
|       
|        | 32 | .1    |  | Section 1350 Certification of Chief Executive Officer.(1)
    (Filed herewith.)                                                                                                                                                                                                                                                                   
|       
|        | 32 | .2    |  | Section 1350 Certification of Chief Financial Officer.(1)
    (Filed herewith.)                                                                                                                                                                                                                                                                   






| |    |                                                                                                                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | ** | Management contract or compensatory plan or arrangement required
    to be filed as an exhibit to this form pursuant to
    Item 15(c) of this report.



|    |                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This certification shall not be deemed filed for
    purposes of Section 18 of the Securities Exchange Act of
    1934, or otherwise subject to the liability of that section, nor
    shall it be deemed incorporated by reference into any filing
    under the Securities Act of 1933 or the Securities Exchange Act
    of 1934.

Exhibits




Other Financial Statements




44



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##### Table of Contents






SIGNATURES






| |                     
| | --------------------
| | Moldflow Corporation



| |     |                           
| | --- | --------------------------
| | By: | /s/ Christopher L. Gorgone

| |                             
| | ----------------------------
| |                             
| | Christopher L. Gorgone      
| | Executive Vice President and
| | Chief Financial Officer     





|                               |  |                                                                                                                         |  |                    |  | 
|------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------- |  | ------------------ |  | 
|Signature                      |  | Title                                                                                                                   |  | Date              
|                               |  |                                                                                                                         |  |                   
|                              
|/s/ A. Roland
    Thomas       |  | President, Chief Executive
    Officer and Chairman of the
    Board of Directors
    (Principal Executive Officer)     |  | September 13, 2005
|                              
|/s/ Christopher L.
    Gorgone |  | Executive Vice President and Chief Financial Officer
    (Principal Financial Officer and Principal Accounting Officer) |  | September 13, 2005
|                              
|/s/ Roger E.
    Brooks        |  | Director                                                                                                                |  | September 13, 2005
|                              
|/s/ Frank W. Haydu
    III     |  | Director                                                                                                                |  | September 13, 2005
|                              
|/s/ Robert J.
    Lepofsky     |  | Director                                                                                                                |  | September 13, 2005
|                              
|/s/ Robert P.
    Schechter    |  | Director                                                                                                                |  | September 13, 2005

45



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SCHEDULE II





Schedule II.     Valuation and
Qualifying Accounts


|                                  |                                        |                |   |       |           |  |   |            |        |  |         |       |     |  |   |       | 
|--------------------------------- | -------------------------------------- | -------------- | - | ----- | --------- |  | - | ---------- | ------ |  | ------- | ----- | --- |  | - | ----- | 
|                                  |                                        | Beginning      |   |       |           |  |   |            | Ending | 
|Item                              |                                        | Balance        |   |       | Additions |  |   | Deductions |        |  | Balance |      
|                                  |                                        |                |   |       |           |  |   |            |        |  |         |      
|                                  |                                        | (In thousands) |  
|For the year ended June 30, 2005: |                                        |                |   |       |           |  |   |            |        |  |         |       |     |  |   |      
|                                  | Allowance for doubtful accounts        |                | $ | 420   |           |  | $ | 58         | (a)    |  | $       | (323) | (b) |  | $ | 155   | 
|                                  | Deferred tax asset valuation allowance |                |   | 1,514 |           |  |   | 885        | (a)    |  |         | (432) | (c) |  |   | 1,967 | 
|For the year ended June 30, 2004: |                                        |                |   |       |           |  |   |            |        |  |         |       |     |  |   |      
|                                  | Allowance for doubtful accounts        |                |   | 347   |           |  |   | 139        | (a)    |  |         | (66)  | (b) |  |   | 420   | 
|                                  | Deferred tax asset valuation allowance |                |   | 789   |           |  |   | 852        | (a)    |  |         | (127) | (c) |  |   | 1,514 | 
|For the year ended June 30, 2003: |                                        |                |   |       |           |  |   |            |        |  |         |       |     |  |   |      
|                                  | Allowance for doubtful accounts        |                |   | 315   |           |  |   | 92         | (a)    |  |         | (60)  | (b) |  |   | 347   | 
|                                  | Deferred tax asset valuation allowance |                |   | 370   |           |  |   | 595        | (a)    |  |         | (176) | (c) |  |   | 789   | 






|    |  |                                                                                                                                                                                                                                                                                                                                                 
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Additional provisions and foreign currency translation effects.                                                                                                                                                                                                                                                                                 
|   
|(b) |  | Specific write-offs, collections of previously reserved items
    and foreign currency translation effects. For the fiscal year
    ended June 30, 2005, deductions included write-offs of
    $173,000 and collections of previously reserved items of
    $150,000 that were recorded as a benefit to general and
    administrative expenses.
|   
|(c) |  | Utilization of net operating loss carryforwards, reductions in
    other deferred tax assets and foreign currency translation
    effects.                                                                                                                                                                                                      

46



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##### Table of Contents






INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                                                                                        |  |  |      | 
|------------------------------------------------------------------------------------------------------- |  |  | ---- | 
|Consolidated Balance Sheet at June 30,
    2005 and 2004                                                |  |  | F-2  | 
|Consolidated Statement of Operations for
    the years ended June 30, 2005, 2004 and 2003               |  |  | F-3  | 
|Consolidated Statement of
    Stockholders Equity for the years ended June 30,
    2005, 2004 and 2003 |  |  | F-4  | 
|Consolidated Statement of Cash Flows for
    the years ended June 30, 2005, 2004 and 2003               |  |  | F-5  | 
|Notes to Consolidated Financial
    Statements                                                          |  |  | F-6  | 
|Report of Independent Registered Public
    Accounting Firm                                             |  |  | F-32 | 

F-1



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##### Table of Contents



MOLDFLOW CORPORATION





CONSOLIDATED BALANCE SHEET


|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         |  |        |        |        | 
|------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------ | ------ | ------- | ------- |  | ------ | ------ | ------ | 
|                                                                    |                                                                                                                                                                                                  | June 30,                                   |       
|                                                                    |                                                                                                                                                                                                  |                                            |       
|                                                                    |                                                                                                                                                                                                  | 2005                                       |        |         | 2004    | 
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                    |                                                                                                                                                                                                  | (In thousands, except                      |       
|                                                                    |                                                                                                                                                                                                  | share and per share                        |       
|                                                                    |                                                                                                                                                                                                  | data)                                      |       
|ASSETS                                                             
|Current assets:                                                     |                                                                                                                                                                                                  |                                            |        |         |         |  |        |       
|                                                                    | Cash and cash equivalents                                                                                                                                                                        |                                            | $      | 48,910  |         |  | $      | 35,987 |       
|                                                                    | Marketable securities                                                                                                                                                                            |                                            |        | 11,323  |         |  |        | 14,467 |       
|                                                                    | Accounts receivable, net of allowance for doubtful accounts of
    $155 and $420 at June 30, 2005 and 2004, respectively                                                                         |                                            |        | 13,449  |         |  |        | 8,578  |       
|                                                                    | Inventories                                                                                                                                                                                      |                                            |        | 1,381   |         |  |        | 1,246  |       
|                                                                    | Prepaid expenses                                                                                                                                                                                 |                                            |        | 3,013   |         |  |        | 3,442  |       
|                                                                    | Other current assets                                                                                                                                                                             |                                            |        | 2,589   |         |  |        | 2,063  |       
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                    |                                                                                                                                                                                                  | Total current assets                       |        |         | 80,665  |  |        |        | 65,783 | 
|Fixed assets, net                                                   |                                                                                                                                                                                                  |                                            | 3,336  |         |         |  | 3,502  |       
|Marketable securities                                               |                                                                                                                                                                                                  |                                            |       |         |         |  | 1,198  |       
|Acquired intangible assets, net                                     |                                                                                                                                                                                                  |                                            | 1,555  |         |         |  | 1,986  |       
|Goodwill                                                            |                                                                                                                                                                                                  |                                            | 18,622 |         |         |  | 18,625 |       
|Other assets                                                        |                                                                                                                                                                                                  |                                            | 2,851  |         |         |  | 3,264  |       
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                    | Total assets                                                                                                                                                                                     |                                            | $      | 107,029 |         |  | $      | 94,358 |       
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                   
|LIABILITIES AND STOCKHOLDERS EQUITY                               
|Current liabilities:                                                |                                                                                                                                                                                                  |                                            |        |         |         |  |        |       
|                                                                    | Accounts payable                                                                                                                                                                                 |                                            | $      | 3,764   |         |  | $      | 3,251  |       
|                                                                    | Accrued expenses                                                                                                                                                                                 |                                            |        | 10,165  |         |  |        | 9,653  |       
|                                                                    | Deferred revenue                                                                                                                                                                                 |                                            |        | 10,748  |         |  |        | 10,013 |       
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                    |                                                                                                                                                                                                  | Total current liabilities                  |        |         | 24,677  |  |        |        | 22,917 | 
|Deferred revenue                                                    |                                                                                                                                                                                                  |                                            | 1,124  |         |         |  | 605    |       
|Other long-term liabilities                                         |                                                                                                                                                                                                  |                                            | 1,079  |         |         |  | 1,257  |       
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                    | Total liabilities                                                                                                                                                                                |                                            |        | 26,880  |         |  |        | 24,779 |       
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|Contingencies, commitments and guarantor arrangements
    (Note 19) |                                                                                                                                                                                                  |                                            |        |         |         |  |        |       
|Stockholders equity:                                               |                                                                                                                                                                                                  |                                            |        |         |         |  |        |       
|                                                                    | Preferred stock, $0.01 par value; 5,000,000 shares
    authorized; no shares issued and outstanding at June 30,
    2005 and 2004                                                                |                                            |        |        |         |  |        |       |       
|                                                                    | Common stock, $0.01 par value; 40,000,000 shares
    authorized; 10,930,954 shares issued and outstanding at
    June 30, 2005 and 10,619,432 shares issued and
    outstanding at June 30, 2004 |                                            |        | 109     |         |  |        | 106    |       
|                                                                    | Additional paid-in capital                                                                                                                                                                       |                                            |        | 69,626  |         |  |        | 67,554 |       
|                                                                    | Retained earnings (accumulated deficit)                                                                                                                                                          |                                            |        | 5,295   |         |  |        | (1,462 | )     
|                                                                    | Accumulated other comprehensive income                                                                                                                                                           |                                            |        | 5,119   |         |  |        | 3,381  |       
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                    |                                                                                                                                                                                                  | Total stockholders equity                 |        |         | 80,149  |  |        |        | 69,579 | 
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 
|                                                                    |                                                                                                                                                                                                  | Total liabilities and stockholders equity |        | $       | 107,029 |  |        | $      | 94,358 | 
|                                                                    |                                                                                                                                                                                                  |                                            |        |         |         | 



F-2



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##### Table of Contents



MOLDFLOW CORPORATION





CONSOLIDATED STATEMENT OF OPERATIONS


|                                                             |                                            |                                    |       |        |        |  |       |        |        |  |       |        |        |  
|------------------------------------------------------------ | ------------------------------------------ | ---------------------------------- | ----- | ------ | ------ |  | ----- | ------ | ------ |  | ----- | ------ | ------ | -
|                                                             |                                            | Year Ended June 30,                |      
|                                                             |                                            |                                    |      
|                                                             |                                            | 2005                               |       |        | 2004   |  |       | 2003   |       
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|                                                             |                                            | (In thousands, except              |      
|                                                             |                                            | per share data)                    |      
|Revenue:                                                     |                                            |                                    |       |        |        |  |       |        |        |  |       |       
|                                                             | Product                                    |                                    | $     | 38,227 |        |  | $     | 26,063 |        |  | $     | 17,259 |       
|                                                             | Services                                   |                                    |       | 26,191 |        |  |       | 22,610 |        |  |       | 19,366 |       
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|                                                             |                                            | Total revenue                      |       |        | 64,418 |  |       |        | 48,673 |  |       |        | 36,625 |  
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|Costs and expenses:                                          |                                            |                                    |       |        |        |  |       |        |        |  |       |       
|                                                             | Cost of product revenue                    |                                    |       | 8,866  |        |  |       | 5,203  |        |  |       | 2,964  |       
|                                                             | Cost of services revenue                   |                                    |       | 6,341  |        |  |       | 4,536  |        |  |       | 1,210  |       
|                                                             | Research and development                   |                                    |       | 7,993  |        |  |       | 6,471  |        |  |       | 5,650  |       
|                                                             | Selling and marketing                      |                                    |       | 22,233 |        |  |       | 20,009 |        |  |       | 18,638 |       
|                                                             | General and administrative                 |                                    |       | 12,007 |        |  |       | 8,548  |        |  |       | 7,242  |       
|                                                             | Restructuring charges                      |                                    |       |       |        |  |       | 508    |        |  |       | 405    |       
|                                                             | Amortization of acquired intangible assets |                                    |       | 289    |        |  |       | 445    |        |  |       | 605    |       
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|                                                             |                                            | Total costs and operating expenses |       |        | 57,729 |  |       |        | 45,720 |  |       |        | 36,714 |  
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|Income (loss) from operations                                |                                            |                                    | 6,689 |        |        |  | 2,953 |        |        |  | (89   | )     
|Interest income                                              |                                            |                                    | 1,665 |        |        |  | 1,248 |        |        |  | 1,106 |       
|Interest expense                                             |                                            |                                    | (2    | )      |        |  | (36   | )      |        |  | (17   | )     
|Other income (loss), net                                     |                                            |                                    | 70    |        |        |  | (15   | )      |        |  | (198  | )     
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|                                                             |                                            | Income before income taxes         |       |        | 8,422  |  |       |        | 4,150  |  |       |        | 802    |  
|Provision for income taxes                                   |                                            |                                    | 1,665 |        |        |  | 1,522 |        |        |  | 920   |       
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|                                                             |                                            | Net income (loss)                  |       | $      | 6,757  |  |       | $      | 2,628  |  |       | $      | (118   | )
|                                                             |                                            |                                    |       |        |        |  |       |        |       
|Net income (loss) per common share:                          |                                            |                                    |       |        |        |  |       |        |        |  |       |       
|                                                             | Basic                                      |                                    | $     | 0.63   |        |  | $     | 0.26   |        |  | $     | (0.01  | )     
|                                                             | Diluted                                    |                                    | $     | 0.58   |        |  | $     | 0.24   |        |  | $     | (0.01  | )     
|Shares used in computing net income (loss) per common share: |                                            |                                    |       |        |        |  |       |        |        |  |       |       
|                                                             | Basic                                      |                                    |       | 10,761 |        |  |       | 10,277 |        |  |       | 10,020 |       
|                                                             | Diluted                                    |                                    |       | 11,625 |        |  |       | 10,839 |        |  |       | 10,020 |       



F-3



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##### Table of Contents





MOLDFLOW CORPORATION





CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY


|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   |        |       |   |  |   |       |  
|-------------------------------------------------------------------------------- | ---------------------------------------------------------------- | --------------------------------- | ---------- | ---------- | ----- | - | -------------- | ------- |  | -------- | ------ | - | ---------- | -------- | -------- | --------- | ------------ | - | ----- | ------------ |  | ----- | ------------- | - |  | ------------- | --- | - | ------------- | - | ------ | ------ | - | - | ----- | ----- | - | - | ------ | ----- | - |  | - | ----- | -
|                                                                                 |                                                                  | Common Stock                      |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              | 
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          | Notes  |   |            | Retained |          |           | Accumulated  |   |       |              |  |      
|                                                                                 |                                                                  |                                   |            | Additional |       |   | Treasury Stock |         |  | Deferred |        |   | Receivable |          |          | Earnings/ |              |   | Other |              |  | Total |               |   | 
|                                                                                 |                                                                  | Shares                            |            |            | Par   |   |                | Paid-In |  |          |        |   |            | Stock    |          |           | from         |   |       | (Accumulated |  |       | Comprehensive |   |  | Stockholders |     |   | Comprehensive |  
|                                                                                 |                                                                  | Issued                            |            |            | Value |   |                | Capital |  |          | Shares |   |            | Cost     |          |           | Compensation |   |       | Stockholders |  |       | Deficit)      |   |  | Income (Loss) |     |   | Equity        |   |        | Income |  
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  
|                                                                                 |                                                                  | (In thousands, except share data) |           
|Balance at June 30, 2002                                                         |                                                                  |                                   | 10,146,175 |            |       | $ | 101            |         |  | $        | 62,769 |   |            |          | (35,362  | )         |              | $ | (327  | )            |  | $     | (8            | ) |  | $             | (29 | ) |               | $ | (3,972 | )      |   | $ | 106   |       |   | $ | 58,640 |       |   |  |   |      
|Purchase of treasury stock                                                       |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          | (194,165 | )         |              |   | (909  | )            |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | (909   | )     |   |  |   |      
|Exercise of stock options                                                        |                                                                  |                                   | 71,124     |            |       |   | 1              |         |  |          | 67     |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 68     |       |   |  |   |      
|Issuance of stock under employee stock purchase plan                             |                                                                  |                                   |            |            |       |   |                |         |  |          | (22    | ) |            |          | 44,110   |           |              |   | 310   |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 288    |       |   |  |   |      
|Amortization of deferred compensation                                            |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       | 8             |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 8      |       |   |  |   |      
|Net repayment of notes receivable from stockholders                              |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               | 29  |   |               |   |        |        |   |   |       |       |   |   | 29     |       |   |  |   |      
|Tax benefits from exercise of stock options                                      |                                                                  |                                   |            |            |       |   |                |         |  |          | 53     |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 53     |       |   |  |   |      
|Comprehensive income:                                                            |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   |        |       |   |  |   |      
|                                                                                 | Net loss                                                         |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        | (118   | ) |   |       |       |   |   |        | (118  | ) |  | $ | (118  | )
|                                                                                 | Change in unrealized losses on investments, net of taxes         |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | (993  | ) |   |        | (993  | ) |  |   | (993  | )
|                                                                                 | Change in unrealized losses on hedging instruments, net of taxes |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | 306   |   |   |        | 306   |   |  |   | 306   |  
|                                                                                 | Foreign currency translation adjustment                          |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | 3,277 |   |   |        | 3,277 |   |  |   | 3,277 |  
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  
|                                                                                 | Comprehensive income                                             |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   |        |       |   |  | $ | 2,472 |  
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  
|Balance at June 30, 2003                                                         |                                                                  |                                   | 10,217,299 |            |       |   | 102            |         |  |          | 62,867 |   |            |          | (185,417 | )         |              |   | (926  | )            |  |       |              |   |  |               |    |   |               |   | (4,090 | )      |   |   | 2,696 |       |   |   | 60,649 |       |   |  |   |      
|Issuance of common stock in connection with the acquisition of
    AMSI (Note 3) |                                                                  |                                   | 202,424    |            |       |   | 2              |         |  |          | 3,644  |   |            |          | 146,864  |           |              |   | 745   |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 4,391  |       |   |  |   |      
|Exercise of stock options                                                        |                                                                  |                                   | 199,709    |            |       |   | 2              |         |  |          | 963    |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 965    |       |   |  |   |      
|Issuance of stock under employee stock purchase plan                             |                                                                  |                                   |            |            |       |   |                |         |  |          | 80     |   |            |          | 38,553   |           |              |   | 181   |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 261    |       |   |  |   |      
|Comprehensive income:                                                            |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   |        |       |   |  |   |      
|                                                                                 | Net income                                                       |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        | 2,628  |   |   |       |       |   |   |        | 2,628 |   |  | $ | 2,628 |  
|                                                                                 | Change in unrealized losses on investments, net of taxes         |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | (607  | ) |   |        | (607  | ) |  |   | (607  | )
|                                                                                 | Change in unrealized losses on hedging instruments, net of taxes |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | (19   | ) |   |        | (19   | ) |  |   | (19   | )
|                                                                                 | Foreign currency translation adjustment                          |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | 1,311 |   |   |        | 1,311 |   |  |   | 1,311 |  
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  
|                                                                                 | Comprehensive income                                             |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   |        |       |   |  | $ | 3,313 |  
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  
|Balance at June 30, 2004                                                         |                                                                  |                                   | 10,619,432 |            |       |   | 106            |         |  |          | 67,554 |   |            |          |         |           |              |   |      |              |  |       |              |   |  |               |    |   |               |   | (1,462 | )      |   |   | 3,381 |       |   |   | 69,579 |       |   |  |   |      
|Exercise of stock options                                                        |                                                                  |                                   | 298,120    |            |       |   | 3              |         |  |          | 1,816  |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 1,819  |       |   |  |   |      
|Issuance of stock under employee stock purchase plan                             |                                                                  |                                   | 13,402     |            |       |   |                |         |  |          | 256    |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   | 256    |       |   |  |   |      
|Comprehensive income:                                                            |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   |        |       |   |  |   |      
|                                                                                 | Net income                                                       |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        | 6,757  |   |   |       |       |   |   |        | 6,757 |   |  | $ | 6,757 |  
|                                                                                 | Change in unrealized losses on investments, net of taxes         |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | 17    |   |   |        | 17    |   |  |   | 17    |  
|                                                                                 | Change in unrealized losses on hedging instruments, net of taxes |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | (6    | ) |   |        | (6    | ) |  |   | (6    | )
|                                                                                 | Foreign currency translation adjustment                          |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       | 1,727 |   |   |        | 1,727 |   |  |   | 1,727 |  
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  
|                                                                                 | Comprehensive income                                             |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |   |   |       |       |   |   |        |       |   |  | $ | 8,495 |  
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  
|Balance at June 30, 2005                                                         |                                                                  |                                   | 10,930,954 |            |       | $ | 109            |         |  | $        | 69,626 |   |            |          |         |           |              | $ |      |              |  | $     |              |   |  | $             |    |   |               | $ | 5,295  |        |   | $ | 5,119 |       |   | $ | 80,149 |       |   |  |   |      
|                                                                                 |                                                                  |                                   |            |            |       |   |                |         |  |          |        |   |            |          |          |           |              |   |       |              |  |       |               |   |  |               |     |   |               |   |        |        |  



F-4



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##### Table of Contents



MOLDFLOW CORPORATION





CONSOLIDATED STATEMENT OF CASH FLOWS


|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |       |         |        |         |       |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------------ | ------ | ----- | ------ | ------ | ------- | ----- | ------- | ------ | ------- | ----- | ------- | -
|                                                             |                                                                                              | Year Ended June 30,                                                              |                                                       
|                                                             |                                                                                              |                                                                                  |                                                       
|                                                             |                                                                                              | 2005                                                                             |                                                        |        | 2004  |        |        | 2003    |      
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|                                                             |                                                                                              | (In thousands)                                                                   |                                                       
|Cash flows from operating activities:                        |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |       |         |        |        
|                                                             | Net income (loss)                                                                            |                                                                                  | $                                                      | 6,757  |       |        | $      | 2,628   |       |         | $      | (118    | )    
|                                                             | Adjustments to reconcile net income (loss) to net cash provided
    by operating activities: |                                                                                  |                                                        |        |       |        |        |         |       |         |        |         |      
|                                                             |                                                                                              | Depreciation of fixed assets                                                     |                                                        |        | 1,484 |        |        |         | 1,428 |         |        |         | 1,429 |        
|                                                             |                                                                                              | Amortization of acquired intangible assets                                       |                                                        |        | 431   |        |        |         | 505   |         |        |         | 605   |        
|                                                             |                                                                                              | Amortization of capitalized software development costs                           |                                                        |        | 574   |        |        |         | 286   |         |        |         | 146   |        
|                                                             |                                                                                              | Provisions for doubtful accounts                                                 |                                                        |        | (92   | )      |        |         | 139   |         |        |         | 92    |        
|                                                             |                                                                                              | Foreign exchange (gains) losses                                                  |                                                        |        | (83   | )      |        |         | 1     |         |        |         | 160   |        
|                                                             |                                                                                              | Write-off of assets due to restructuring activities                              |                                                        |        |      |        |        |         |      |         |        |         | 471   |        
|                                                             |                                                                                              | Other non-cash charges or expenses                                               |                                                        |        | 47    |        |        |         | 13    |         |        |         | 78    |        
|                                                             |                                                                                              | Changes in operating assets and liabilities, net of effects of
    acquisitions: |                                                        |        |       |        |        |         |       |         |        |         |       |        
|                                                             |                                                                                              |                                                                                  | Accounts receivable                                    |        |       | (4,795 | )      |         |       | (621    | )      |         |       | 47      |  
|                                                             |                                                                                              |                                                                                  | Inventories, prepaid expenses and other current assets |        |       | (371   | )      |         |       | (16     | )      |         |       | (882    | )
|                                                             |                                                                                              |                                                                                  | Other assets                                           |        |       | 151    |        |         |       | (156    | )      |         |       | (157    | )
|                                                             |                                                                                              |                                                                                  | Accounts payable                                       |        |       | 481    |        |         |       | 649     |        |         |       | 399     |  
|                                                             |                                                                                              |                                                                                  | Accrued expenses and other long-term liabilities       |        |       | 361    |        |         |       | 638     |        |         |       | (583    | )
|                                                             |                                                                                              |                                                                                  | Deferred revenue                                       |        |       | 1,393  |        |         |       | 973     |        |         |       | 697     |  
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|                                                             |                                                                                              |                                                                                  | Net cash provided by operating activities              |        |       | 6,338  |        |         |       | 6,467   |        |         |       | 2,384   |  
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|Cash flows from investing activities:                        |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |       |         |        |        
|                                                             | Purchases of fixed assets                                                                    |                                                                                  |                                                        | (1,167 | )     |        |        | (1,035  | )     |         |        | (1,240  | )    
|                                                             | Capitalization of software development costs                                                 |                                                                                  |                                                        | (201   | )     |        |        | (856    | )     |         |        | (669    | )    
|                                                             | Purchases of marketable securities                                                           |                                                                                  |                                                        | (5,096 | )     |        |        | (11,105 | )     |         |        | (14,822 | )    
|                                                             | Sales of marketable securities                                                               |                                                                                  |                                                        | 9,455  |       |        |        | 9,260   |       |         |        | 4,235   |      
|                                                             | Acquisition of AMSI, net of cash acquired                                                    |                                                                                  |                                                        |       |       |        |        | (7,091  | )     |         |        |        |      
|                                                             | Acquisition of CPI                                                                           |                                                                                  |                                                        |       |       |        |        |        |       |         |        | (902    | )    
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|                                                             |                                                                                              |                                                                                  | Net cash provided by (used in) investing activities    |        |       | 2,991  |        |         |       | (10,827 | )      |         |       | (13,398 | )
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|Cash flows from financing activities:                        |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |       |         |        |        
|                                                             | Proceeds from issuance of common stock                                                       |                                                                                  |                                                        | 2,490  |       |        |        | 1,226   |       |         |        | 356     |      
|                                                             | Purchase of treasury stock                                                                   |                                                                                  |                                                        |       |       |        |        |        |       |         |        | (909    | )    
|                                                             | Collection of notes receivable from stockholders                                             |                                                                                  |                                                        |       |       |        |        |        |       |         |        | 29      |      
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|                                                             |                                                                                              |                                                                                  | Net cash provided by (used in) financing activities    |        |       | 2,490  |        |         |       | 1,226   |        |         |       | (524    | )
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|Effect of exchange rate changes on cash and cash equivalents |                                                                                              |                                                                                  | 1,104                                                  |        |       |        | 801    |         |       |         | 2,224  |        
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|Net increase (decrease) in cash and cash equivalents         |                                                                                              |                                                                                  | 12,923                                                 |        |       |        | (2,333 | )       |       |         | (9,314 | )      
|Cash and cash equivalents, beginning of year                 |                                                                                              |                                                                                  | 35,987                                                 |        |       |        | 38,320 |         |       |         | 47,634 |        
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|Cash and cash equivalents, end of year                       |                                                                                              | $                                                                                | 48,910                                                 |        |       | $      | 35,987 |         |       | $       | 38,320 |        
|                                                             |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |      
|Supplemental disclosure of cash flow information:            |                                                                                              |                                                                                  |                                                        |        |       |        |        |         |       |         |        |        
|                                                             | Cash paid during the year for income taxes                                                   |                                                                                  | $                                                      | 1,764  |       |        | $      | 1,233   |       |         | $      | 2,814   |      



F-5



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##### Table of Contents






MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                             
|-- | --------------------------------------------
|1. | Basis of Presentation and Nature of Business











|   |                                           
|-- | ------------------------------------------
|2. | Summary of Significant Accounting Policies

Principles of Consolidation




Foreign Currency Translation




Cash and Cash Equivalents




Marketable Securities




F-6



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Concentration of Credit Risk






Fair Value of Financial Instruments




Hedging






Inventories




F-7



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Fixed Assets




Goodwill and Acquired Intangible Assets






|                       |  |             |       | 
|---------------------- |  | ----------- | ----- | 
|                       |  | Estimated   |      
|                       |  | Useful Life |      
|                       |  | (Years)     |      
|                       |  |             |      
|Customer base          |  |             | 3.5-7 | 
|Developed technology   |  |             | 4-7   | 
|Non-compete agreements |  |             | 1-5   | 
|Customer order backlog |  |             | 0.5   | 

Long-Lived Assets




Revenue Recognition




F-8



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                                
| | -------------------------------------------------------------------------------
| | Packaged Software Products and Collaborative Production
    Management Products









| |                               
| | ------------------------------
| | Hot Runner Process Controllers





| |        
| | -------
| | General



F-9



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








Software Development Costs






Advertising Costs




Income Taxes




Accounting for Stock-Based Compensation




F-10



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                    |                                                                                                                             |                        |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------- | --------------------------------------------------------------------------------------------------------------------------- | ---------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                    |                                                                                                                             | Year Ended June 30,    |  
|                                    |                                                                                                                             |                        |  
|                                    |                                                                                                                             | 2005                   |   |        | 2004 |  |   | 2003   |  
|                                    |                                                                                                                             |                        |   |        |      |  |   |        |  
|                                    |                                                                                                                             | (In thousands,         |  
|                                    |                                                                                                                             | except per share data) |  
|Net income (loss):                  |                                                                                                                             |                        |   |        |      |  |   |        |   |  |   |       
|                                    | As reported                                                                                                                 |                        | $ | 6,757  |      |  | $ | 2,628  |   |  | $ | (118   | )
|                                    | Less: stock-based employee compensation expense determined under
    the fair value based method, net of related tax effect |                        |   | (3,414 | )    |  |   | (4,438 | ) |  |   | (4,765 | )
|                                    |                                                                                                                             |                        |   |        |      |  |   |        |  
|                                    | Pro forma                                                                                                                   |                        | $ | 3,343  |      |  | $ | (1,810 | ) |  | $ | (4,883 | )
|                                    |                                                                                                                             |                        |   |        |      |  |   |        |  
|Net income (loss) per common share: |                                                                                                                             |                        |   |        |      |  |   |        |   |  |   |       
|                                    | Basic  As reported                                                                                                         |                        | $ | 0.63   |      |  | $ | 0.26   |   |  | $ | (0.01  | )
|                                    | Basic  Pro forma                                                                                                           |                        | $ | 0.33   |      |  | $ | (0.18  | ) |  | $ | (0.49  | )
|                                    | Diluted  As reported                                                                                                       |                        | $ | 0.58   |      |  | $ | 0.24   |   |  | $ | (0.01  | )
|                                    | Diluted  Pro forma                                                                                                         |                        | $ | 0.30   |      |  | $ | (0.18  | ) |  | $ | (0.49  | )



|                                |  |                     |      |   |      |  |      |      |  |  |      |  
|------------------------------- |  | ------------------- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                |  | Year Ended June 30, |     
|                                |  |                     |     
|                                |  | 2005                |      |   | 2004 |  |      | 2003 | 
|                                |  |                     |      |   |      |  |      |      | 
|Dividend yield                  |  |                     |     |   |      |  |     |      |  |  |     |  
|Volatility                      |  |                     | 83.5 | % |      |  | 88.8 | %    |  |  | 69.8 | %
|Risk-free interest rate         |  |                     | 3.5  | % |      |  | 3.1  | %    |  |  | 3.0  | %
|Expected option life (in years) |  |                     | 4.4  |   |      |  | 4.7  |      |  |  | 4.7  |  

Net Income (Loss) Per Common Share




Comprehensive Income






F-11



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Use of Estimates




Recent Accounting Pronouncements






The
American Jobs Creation Act






F-12



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|   |             
|-- | ------------
|3. | Acquisitions

American MSI Corporation






F-13



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                   |                       |   |        |        | 
|---------------------------------- | --------------------- | - | ------ | ------ | 
|Cash and cash equivalents          |                       | $ | 439    |       
|Accounts receivable                |                       |   | 1,557  |       
|Inventories                        |                       |   | 867    |       
|Other current assets               |                       |   | 44     |       
|Fixed assets                       |                       |   | 213    |       
|Customer base                      |                       |   | 560    |       
|Developed technology               |                       |   | 1,000  |       
|Non-compete agreements             |                       |   | 200    |       
|Backlog of customer orders         |                       |   | 40     |       
|Long-term deferred tax assets      |                       |   | 656    |       
|Goodwill                           |                       |   | 9,032  |       
|                                   |                       |   |       
|                                   | Total assets acquired |   |        | 14,608 | 
|Current liabilities                |                       |   | (1,966 | )     
|Long-term deferred tax liabilities |                       |   | (720   | )     
|                                   |                       |   |       
|                                   |                       | $ | 11,922 |       
|                                   |                       |   |       





|                                    |         |                      |        |      |      |   |        |       |  
|----------------------------------- | ------- | -------------------- | ------ | ---- | ---- | - | ------ | ----- | -
|                                    |         | Year Ended June 30,  |       
|                                    |         |                      |       
|                                    |         | 2004                 |        |      | 2003 |  
|                                    |         |                      |        |      |      |  
|                                    |         | (In thousands except |       
|                                    |         | per share data)      |       
|Revenue                             |         | $                    | 53,586 |      |      | $ | 46,571 |      
|Net income (loss)                   |         |                      | 2,689  |      |      |   | (723   | )    
|Net income (loss) per common share: |         |                      |        |      |      |   |        |      
|                                    | Basic   |                      | $      | 0.26 |      |   | $      | (0.07 | )
|                                    | Diluted |                      | $      | 0.24 |      |   | $      | (0.07 | )

Côntrole de Processus Industriels s.a.r.l.




F-14



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                            |  |   |      |  
|--------------------------- |  | - | ---- | -
|Inventories                 |  | $ | 36   |  
|Property and equipment      |  |   | 53   |  
|Non-compete covenants       |  |   | 100  |  
|Customer base               |  |   | 85   |  
|Goodwill                    |  |   | 843  |  
|Current liabilities assumed |  |   | (222 | )
|                            |  |   |     
|                            |  | $ | 895  |  
|                            |  |   |     





|                                    |         |                          |        |       |  
|----------------------------------- | ------- | ------------------------ | ------ | ----- | -
|                                    |         | Year Ended June 30, 2003 |       
|                                    |         |                          |       
|                                    |         | (In thousands except     |       
|                                    |         | per share data)          |       
|Revenue                             |         | $                        | 36,777 |      
|Net income (loss)                   |         |                          | (421   | )    
|Net income (loss) per common share: |         |                          |        |      
|                                    | Basic   |                          | $      | (0.04 | )
|                                    | Diluted |                          | $      | (0.04 | )



|   |                                        
|-- | ---------------------------------------
|4. | Goodwill and Acquired Intangible Assets



F-15



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                              |                                                          |                     |        |   |      |   |        |       | 
|--------------------------------------------- | -------------------------------------------------------- | ------------------- | ------ | - | ---- | - | ------ | ----- | 
|                                              |                                                          | Year Ended June 30, |       
|                                              |                                                          |                     |       
|                                              |                                                          | 2005                |        |   | 2004 |  
|                                              |                                                          |                     |        |   |      |  
|                                              |                                                          | (In thousands)      |       
|Beginning balance                             |                                                          | $                   | 18,625 |   |      | $ | 9,670  |      
|Additions:                                    |                                                          |                     |        |   |      |   |        |      
|                                              | AMSI acquisition (Manufacturing Solutions business unit) |                     |        |  |      |   |        | 9,032 | 
|Foreign exchange impact and other adjustments |                                                          |                     | (3     | ) |      |   | (77    | )    
|                                              |                                                          |                     |        |   |      |  
|Ending balance                                |                                                          | $                   | 18,622 |   |      | $ | 18,625 |      
|                                              |                                                          |                     |        |   |      |  





|                            |                        |               |       |       |               |   |        |          |   |       |          |     |  |              |       |       |          |           |        |             |   |   |       |     |  |  |  |           | 
|--------------------------- | ---------------------- | ------------- | ----- | ----- | ------------- | - | ------ | -------- | - | ----- | -------- | --- |  | ------------ | ----- | ----- | -------- | --------- | ------ | ----------- | - | - | ----- | --- |  |  |  | --------- | 
|                            |                        | June 30, 2005 |       |       | June 30, 2004 |   |        |         
|                            |                        |               |       |       |               |   |        |         
|                            |                        | Gross         |       |       |               |   | Net    |          |   | Gross |          |     |  |              | Net   |       |          | Weighted- |       
|                            |                        | Carrying      |       |       | Accumulated   |   |        | Carrying |   |       | Carrying |     |  | Accumulated  |       |       | Carrying |           |        | Average     |  
|                            |                        | Amount        |       |       | Amortization  |   |        | Amount   |   |       | Amount   |     |  | Amortization |       |       | Amount   |           |        | Useful Life |  
|                            |                        |               |       |       |               |   |        |          |   |       |          |     |  |              |       |       |          |           |        |             |  
|Acquired intangible assets: |                        |               |       |       |               |   |        |          |   |       |          |     |  |              |       |       |          |           |        |             |   |   |       |     |  |  |  |          
|                            | Customer base          |               | $     | 987   |               |   | $      | (380     | ) |       | $        | 607 |  |              | $     | 987   |          |           | $      | (226        | ) |   | $     | 761 |  |  |  | 6.7 years | 
|                            | Developed technology   |               |       | 1,675 |               |   |        | (870     | ) |       |          | 805 |  |              |       | 1,675 |          |           |        | (724        | ) |   |       | 951 |  |  |  | 5.8 years | 
|                            | Customer order backlog |               |       | 40    |               |   |        | (40      | ) |       |          |    |  |              |       | 40    |          |           |        | (33         | ) |   |       | 7   |  |  |  | 0.5 years | 
|                            | Non-compete agreements |               |       | 1,411 |               |   |        | (1,268   | ) |       |          | 143 |  |              |       | 1,411 |          |           |        | (1,144      | ) |   |       | 267 |  |  |  | 3.5 years | 
|                            |                        |               |       |       |               |   |        |          |   |       |          |     |  |              |       |       |          |           |        |             |  
|                            |                        | $             | 4,113 |       |               | $ | (2,558 | )        |   | $     | 1,555    |     |  | $            | 4,113 |       |          | $         | (2,127 | )           |   | $ | 1,986 |     |  |  |  |          
|                            |                        |               |       |       |               |   |        |          |   |       |          |     |  |              |       |       |          |           |        |             |  





F-16



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                     |  |                |       | 
|-------------------- |  | -------------- | ----- | 
|                     |  | Estimated      |      
|                     |  | Amortization   |      
|Year Ending June 30, |  | Expense        |      
|                     |  |                |      
|                     |  | (In thousands) |      
|2006                 |  | $              | 345   | 
|2007                 |  |                | 314   | 
|2008                 |  |                | 298   | 
|2009                 |  |                | 246   | 
|Thereafter           |  |                | 352   | 
|                     |  |                |      
|                     |  | $              | 1,555 | 
|                     |  |                |      



|   |                                                        
|-- | -------------------------------------------------------
|5. | Derivative Financial Instruments and Hedging Activities











|   |            
|-- | -----------
|6. | Inventories



|               |  |                |       |  |      |   |       | 
|-------------- |  | -------------- | ----- |  | ---- | - | ----- | 
|               |  | June 30,       |      
|               |  |                |      
|               |  | 2005           |       |  | 2004 |  
|               |  |                |       |  |      |  
|               |  | (In thousands) |      
|Raw materials  |  | $              | 991   |  |      | $ | 708   | 
|Finished goods |  |                | 390   |  |      |   | 538   | 
|               |  |                |       |  |      |  
|               |  | $              | 1,381 |  |      | $ | 1,246 | 
|               |  |                |       |  |      |  

F-17



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                           
|-- | --------------------------
|7. | Software Development Costs





|                                |  |                |        |   |      |   |       |  
|------------------------------- |  | -------------- | ------ | - | ---- | - | ----- | -
|                                |  | June 30,       |       
|                                |  |                |       
|                                |  | 2005           |        |   | 2004 |  
|                                |  |                |        |   |      |  
|                                |  | (In thousands) |       
|Gross carrying amount           |  | $              | 2,328  |   |      | $ | 2,127 |  
|Less  accumulated amortization |  |                | (1,077 | ) |      |   | (503  | )
|                                |  |                |        |   |      |  
|Net carrying amount             |  | $              | 1,251  |   |      | $ | 1,624 |  
|                                |  |                |        |   |      |  



|   |             
|-- | ------------
|8. | Fixed Assets



|                                                 |  |             |      |                |          |   |        |      |  |   |        |  
|------------------------------------------------ |  | ----------- | ---- | -------------- | -------- | - | ------ | ---- |  | - | ------ | -
|                                                 |  | Estimated   |      |                | June 30, |  
|                                                 |  | Useful Life |      |                |          |  
|                                                 |  | (Years)     |      |                | 2005     |   |        | 2004 | 
|                                                 |  |             |      |                |          |   |        |      | 
|                                                 |  |             |      | (In thousands) |         
|Land                                             |  |             |     |                |          | $ | 273    |      |  | $ | 248    |  
|Buildings                                        |  |             | 30   |                |          |   | 1,797  |      |  |   | 1,477  |  
|Equipment                                        |  |             | 5-7  |                |          |   | 1,495  |      |  |   | 1,342  |  
|Computer equipment                               |  |             | 3-5  |                |          |   | 4,828  |      |  |   | 5,140  |  
|Furniture and fixtures                           |  |             | 7-10 |                |          |   | 639    |      |  |   | 806    |  
|Computers and equipment under capital leases     |  |             | 3-7  |                |          |   | 640    |      |  |   | 582    |  
|Software                                         |  |             | 3-5  |                |          |   | 448    |      |  |   | 512    |  
|Other                                            |  |             | 3-10 |                |          |   | 651    |      |  |   | 582    |  
|                                                 |  |             |      |                |          |   |        |      | 
|                                                 |  |             |      |                |          |   | 10,771 |      |  |   | 10,689 |  
|Less  accumulated depreciation and amortization |  |             |      |                |          |   | (7,435 | )    |  |   | (7,187 | )
|                                                 |  |             |      |                |          |   |        |      | 
|                                                 |  |             |      |                |          | $ | 3,336  |      |  | $ | 3,502  |  
|                                                 |  |             |      |                |          |   |        |      | 



F-18



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                 
|-- | ----------------
|9. | Accrued Expenses



|                                                   |  |                |        |  |      |   |       | 
|-------------------------------------------------- |  | -------------- | ------ |  | ---- | - | ----- | 
|                                                   |  | June 30,       |       
|                                                   |  |                |       
|                                                   |  | 2005           |        |  | 2004 |  
|                                                   |  |                |        |  |      |  
|                                                   |  | (In thousands) |       
|Employee wages, commissions and other compensation |  | $              | 1,858  |  |      | $ | 2,175 | 
|Employee leave costs                               |  |                | 2,134  |  |      |   | 1,673 | 
|Employee retirement costs                          |  |                | 711    |  |      |   | 556   | 
|Professional fees                                  |  |                | 1,518  |  |      |   | 1,059 | 
|Income and withholding taxes                       |  |                | 2,684  |  |      |   | 2,475 | 
|Restructuring costs                                |  |                | 105    |  |      |   | 310   | 
|Warranty                                           |  |                | 120    |  |      |   | 254   | 
|Other                                              |  |                | 1,035  |  |      |   | 1,151 | 
|                                                   |  |                |        |  |      |  
|                                                   |  | $              | 10,165 |  |      | $ | 9,653 | 
|                                                   |  |                |        |  |      |  



|    |                    
|--- | -------------------
|10. | Restructuring Plans

January 2004 Plan






|                                    |  |                |      |  
|----------------------------------- |  | -------------- | ---- | -
|                                    |  | Employee       |     
|                                    |  | Severance      |     
|                                    |  | Costs          |     
|                                    |  |                |     
|                                    |  | (In thousands) |     
|Restructuring charge in fiscal 2004 |  | $              | 508  |  
|Cash payments                       |  |                | (303 | )
|                                    |  |                |     
|Balance at June 30, 2004            |  |                | 205  |  
|Cash payments                       |  |                | (205 | )
|                                    |  |                |     
|Balance at June 30, 2005            |  | $              |     |  
|                                    |  |                |     

March 2003 Plan




F-19



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




April 2002 Plan




|                                              |  |                |   |             |  |   |       |   |       |   |   |  |  |   |      |  
|--------------------------------------------- |  | -------------- | - | ----------- |  | - | ----- | - | ----- | - | - |  |  | - | ---- | -
|                                              |  | Employee       |   | Lease       |  |   |       |   |      
|                                              |  | Severance      |   | Termination |  |   | Other |   |      
|                                              |  | Costs          |   | Costs       |  |   | Costs |   | Total |  
|                                              |  |                |   |             |  |   |       |   |       |  
|                                              |  | (In thousands) |  
|Balance at June 30, 2003                      |  | $              |  |             |  | $ | 596   |   |       | $ |  |  |  | $ | 596  |  
|Cash payments                                 |  |                |   |             |  |   | (103  | ) |       |   |   |  |  |   | (103 | )
|Foreign exchange impact and other adjustments |  |                |   |             |  |   | 53    |   |       |   |   |  |  |   | 53   |  
|                                              |  |                |   |             |  |   |       |   |       |   |   | 
|Balance at June 30, 2004                      |  | $              |  |             |  |   | 546   |   |       | $ |  |  |  |   | 546  |  
|                                              |  |                |   |             |  |   |       |   |       |   |   | 
|Cash payments                                 |  |                |   |             |  |   | (108  | ) |       |   |   |  |  |   | (108 | )
|Foreign exchange impact and other adjustments |  |                |   |             |  |   | 9     |   |       |   |   |  |  |   | 9    |  
|                                              |  |                |   |             |  |   |       |   |       |   |   | 
|Balance at June 30, 2005                      |  |                |   |             |  | $ | 447   |   |       |   |   |  |  | $ | 447  |  
|                                              |  |                |   |             |  |   |       |   |       |   |   | 



|    |                  
|--- | -----------------
|11. | Credit Facilities







F-20



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                
|--- | ---------------
|12. | Preferred Stock





|    |             
|--- | ------------
|13. | Common Stock









|    |               
|--- | --------------
|14. | Treasury Stock





|    |            
|--- | -----------
|15. | Stock Plans

Stock Option Plan






F-21



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                                                               |  |        |           |          |       |   |       |        |          |   |           |   |  |          |       |  |       |   |           |   |  |   |       | 
|-------------------------------------------------------------- |  | ------ | --------- | -------- | ----- | - | ----- | ------ | -------- | - | --------- | - |  | -------- | ----- |  | ----- | - | --------- | - |  | - | ----- | 
|                                                               |  | 2005   |           |          | 2004  |   |       | 2003   |         
|                                                               |  |        |           |          |       |   |       |        |         
|                                                               |  |        |           | Weighted |       |   |       |        | Weighted |   |           |   |  | Weighted |      
|                                                               |  |        |           | Average  |       |   |       |        | Average  |   |           |   |  | Average  |      
|                                                               |  |        |           | Exercise |       |   |       |        | Exercise |   |           |   |  | Exercise |      
|                                                               |  | Shares |           |          | Price |   |       | Shares |          |   | Price     |   |  | Shares   |       |  | Price |  
|                                                               |  |        |           |          |       |   |       |        |          |   |           |   |  |          |       |  |       |  
|Outstanding at beginning of year                               |  |        | 2,634,157 |          |       | $ | 9.77  |        |          |   | 2,433,206 |   |  | $        | 9.33  |  |       |   | 1,618,975 |   |  | $ | 12.23 | 
|Granted                                                        |  |        | 337,800   |          |       |   | 12.20 |        |          |   | 557,180   |   |  |          | 10.34 |  |       |   | 1,134,350 |   |  |   | 4.79  | 
|Exercised                                                      |  |        | (349,947  | )        |       |   | 7.72  |        |          |   | (199,709  | ) |  |          | 4.83  |  |       |   | (71,124   | ) |  |   | 0.95  | 
|Canceled                                                       |  |        | (134,743  | )        |       |   | 12.74 |        |          |   | (156,520  | ) |  |          | 11.25 |  |       |   | (248,995  | ) |  |   | 9.92  | 
|                                                               |  |        |           |          |       |   |       |        |          |   |           |   |  |          |       |  |       |  
|Outstanding at end of year                                     |  |        | 2,487,267 |          |       | $ | 10.22 |        |          |   | 2,634,157 |   |  | $        | 9.77  |  |       |   | 2,433,206 |   |  | $ | 9.33  | 
|                                                               |  |        |           |          |       |   |       |        |          |   |           |   |  |          |       |  |       |  
|Options exercisable at end of year                             |  |        | 1,733,684 |          |       |   |       |        |          |   | 1,423,647 |   |  |          |       |  |       |   | 864,084   |   |  |   |       | 
|Weighted average fair value of options granted during the year |  | $      | 7.08      |          |       |   |       |        |          | $ | 7.09      |   |  |          |       |  |       | $ | 2.79      |   |  |   |       | 
|Options available for future grant                             |  |        | 1,078,224 |          |       |   |       |        |          |   | 1,205,683 |   |  |          |       |  |       |   | 1,538,108 |   |  |   |       | 





|               |  |             |           |          |          |          |           |              |  |  |             |          |  |          |           |  |  |   |       | 
|-------------- |  | ----------- | --------- | -------- | -------- | -------- | --------- | ------------ |  |  | ----------- | -------- |  | -------- | --------- |  |  | - | ----- | 
|               |  |             |           |          |          | Weighted |           |              |  |  |            
|               |  |             |           | Weighted |          |          | Average   |              |  |  |             | Weighted | 
|               |  |             |           | Average  |          |          | Remaining |              |  |  |             | Average  | 
|               |  | Shares      |           |          | Exercise |          |           | Contractual  |  |  | Shares      |          |  | Exercise |          
|Exercise Price |  | Outstanding |           |          | Price    |          |           | Life (Years) |  |  | Exercisable |          |  | Price    |          
|               |  |             |           |          |          |          |           |              |  |  |             |          |  |          |          
|$0.36-$5.00    |  |             | 770,300   |          |          | $        | 4.38      |              |  |  | 2.0         |          |  |          | 634,850   |  |  | $ | 4.33  | 
|$5.01-$10.00   |  |             | 459,172   |          |          |          | 8.98      |              |  |  | 3.1         |          |  |          | 250,570   |  |  |   | 8.35  | 
|$10.01-$15.00  |  |             | 833,645   |          |          |          | 12.14     |              |  |  | 2.8         |          |  |          | 490,114   |  |  |   | 12.62 | 
|$15.01-$20.00  |  |             | 335,500   |          |          |          | 17.29     |              |  |  | 3.2         |          |  |          | 269,500   |  |  |   | 17.67 | 
|$20.01-$25.00  |  |             | 71,550    |          |          |          | 21.78     |              |  |  | 3.3         |          |  |          | 71,550    |  |  |   | 21.78 | 
|$25.01-$30.00  |  |             | 17,100    |          |          |          | 26.27     |              |  |  | 3.6         |          |  |          | 17,100    |  |  |   | 26.27 | 
|               |  |             |           |          |          |          |           |              |  |  |             |          |  |          |          
|$0.36-$30.00   |  |             | 2,487,267 |          |          | $        | 10.22     |              |  |  | 2.7         |          |  |          | 1,733,684 |  |  | $ | 10.26 | 
|               |  |             |           |          |          |          |           |              |  |  |             |          |  |          |          

Employee Stock Purchase Plan




F-22



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                        |  |        |        |  |       |   |       | 
|----------------------- |  | ------ | ------ |  | ----- | - | ----- | 
|                        |  | Shares |        |  | Share |  
|End of Offering Period: |  | Issued |        |  | Price |  
|                        |  |        |        |  |       |  
|December 2002           |  |        | 21,373 |  |       | $ | 6.38  | 
|June 2003               |  |        | 21,978 |  |       | $ | 6.19  | 
|December 2003           |  |        | 16,575 |  |       | $ | 7.51  | 
|June 2004               |  |        | 12,839 |  |       | $ | 9.21  | 
|December 2004           |  |        | 15,201 |  |       | $ | 9.09  | 
|June 2005               |  |        | 12,856 |  |       | $ | 11.02 | 

Shareholder Rights Plan






|    |                                   
|--- | ----------------------------------
|16. | Net Income (Loss) per Common Share



|                                                                                           |               |                        |        |     |      |   |        |      |  |   |        |   | 
|------------------------------------------------------------------------------------------ | ------------- | ---------------------- | ------ | --- | ---- | - | ------ | ---- |  | - | ------ | - | 
|                                                                                           |               | Year Ended June 30,    |       
|                                                                                           |               |                        |       
|                                                                                           |               | 2005                   |        |     | 2004 |   |        | 2003 | 
|                                                                                           |               |                        |        |     |      |   |        |      | 
|                                                                                           |               | (In thousands,         |       
|                                                                                           |               | except per share data) |       
|Net income (loss)                                                                          |               | $                      | 6,757  |     |      | $ | 2,628  |      |  | $ | (118   | )
|                                                                                           |               |                        |        |     |      |   |        |      | 
|Weighted average shares used in computing net income (loss) per
    common share  basic   |               |                        | 10,761 |     |      |   | 10,277 |      |  |   | 10,020 |  
|Effect of dilutive securities:                                                             |               |                        |        |     |      |   |        |      |  |   |        |  
|                                                                                           | Stock options |                        |        | 864 |      |   |        | 562  |  |   |        |  | 
|                                                                                           |               |                        |        |     |      |   |        |      | 
|Weighted average shares used in computing net income (loss) per
    common share  diluted |               |                        | 11,625 |     |      |   | 10,839 |      |  |   | 10,020 |  
|                                                                                           |               |                        |        |     |      |   |        |      | 
|Net income (loss) per common share  basic                                                 |               | $                      | 0.63   |     |      | $ | 0.26   |      |  | $ | (0.01  | )
|Net income (loss) per common share  diluted                                               |               | $                      | 0.58   |     |      | $ | 0.24   |      |  | $ | (0.01  | )

F-23



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |             
|--- | ------------
|17. | Income Taxes



|               |                            |                     |        |       |      |   |        |       |  |   |        |     | 
|-------------- | -------------------------- | ------------------- | ------ | ----- | ---- | - | ------ | ----- |  | - | ------ | --- | 
|               |                            | Year Ended June 30, |       
|               |                            |                     |       
|               |                            | 2005                |        |       | 2004 |   |        | 2003  | 
|               |                            |                     |        |       |      |   |        |       | 
|               |                            | (In thousands)      |       
|Domestic loss  |                            | $                   | (1,048 | )     |      | $ | (1,642 | )     |  | $ | (3,026 | )  
|Foreign income |                            |                     | 9,470  |       |      |   | 5,792  |       |  |   | 3,828  |    
|               |                            |                     |        |       |      |   |        |       | 
|               | Income before income taxes |                     | $      | 8,422 |      |   | $      | 4,150 |  |   | $      | 802 | 
|               |                            |                     |        |       |      |   |        |       | 



|          |                |                     |       |       |      |   |       |       |  |   |     |       |  
|--------- | -------------- | ------------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | --- | ----- | -
|          |                | Year Ended June 30, |      
|          |                |                     |      
|          |                | 2005                |       |       | 2004 |   |       | 2003  | 
|          |                |                     |       |       |      |   |       |       | 
|          |                | (In thousands)      |      
|Current:  |                |                     |       |       |      |   |       |       |  |   |     |      
|          | Federal        |                     | $     |      |      |   | $     | 118   |  |   | $   | (495  | )
|          | State          |                     |       | 10    |      |   |       | 156   |  |   |     | 113   |  
|          | Foreign        |                     |       | 1,915 |      |   |       | 998   |  |   |     | 1,430 |  
|          |                |                     |       |       |      |   |       |       | 
|          | Total current  |                     |       | 1,925 |      |   |       | 1,272 |  |   |     | 1,048 |  
|          |                |                     |       |       |      |   |       |       | 
|Deferred: |                |                     |       |       |      |   |       |       |  |   |     |      
|          | Federal        |                     |       | 19    |      |   |       | 75    |  |   |     | (71   | )
|          | State          |                     |       | 3     |      |   |       | 15    |  |   |     | 10    |  
|          | Foreign        |                     |       | (282  | )    |   |       | 160   |  |   |     | (67   | )
|          |                |                     |       |       |      |   |       |       | 
|          | Total deferred |                     |       | (260  | )    |   |       | 250   |  |   |     | (128  | )
|          |                |                     |       |       |      |   |       |       | 
|          |                | $                   | 1,665 |       |      | $ | 1,522 |       |  | $ | 920 |      
|          |                |                     |       |       |      |   |       |       | 

F-24



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                           |  |                     |        |   |      |   |       |      |  |   |     |  
|------------------------------------------ |  | ------------------- | ------ | - | ---- | - | ----- | ---- |  | - | --- | -
|                                           |  | Year Ended June 30, |       
|                                           |  |                     |       
|                                           |  | 2005                |        |   | 2004 |   |       | 2003 | 
|                                           |  |                     |        |   |      |   |       |      | 
|                                           |  | (In thousands)      |       
|Statutory federal rate of 34%              |  | $                   | 2,863  |   |      | $ | 1,411 |      |  | $ | 273 |  
|State income taxes, net of federal benefit |  |                     | 10     |   |      |   | 156   |      |  |   | 81  |  
|Permanent differences                      |  |                     | 604    |   |      |   | (9    | )    |  |   | (31 | )
|Change in valuation allowance              |  |                     | (434   | ) |      |   | 372   |      |  |   | 419 |  
|Foreign tax rate differential              |  |                     | (1,484 | ) |      |   | (404  | )    |  |   | 248 |  
|Other                                      |  |                     | 106    |   |      |   | (4    | )    |  |   | (70 | )
|                                           |  |                     |        |   |      |   |       |      | 
|                                           |  | $                   | 1,665  |   |      | $ | 1,522 |      |  | $ | 920 |  
|                                           |  |                     |        |   |      |   |       |      | 



|                         |                                                      |                           |      |        |       |  |      |        |       | 
|------------------------ | ---------------------------------------------------- | ------------------------- | ---- | ------ | ----- |  | ---- | ------ | ----- | 
|                         |                                                      | June 30,                  |     
|                         |                                                      |                           |     
|                         |                                                      | 2005                      |      |        | 2004  | 
|                         |                                                      |                           |      |        |       | 
|                         |                                                      | (In thousands)            |     
|Deferred tax assets:     |                                                      |                           |      |        |       |  |      |       
|                         | Net operating loss carryforwards                     |                           | $    | 1,252  |       |  | $    | 935    |      
|                         | Foreign tax credit carryforwards                     |                           |      | 840    |       |  |      | 526    |      
|                         | Accrued expenses not yet deductible for tax purposes |                           |      | 973    |       |  |      | 1,038  |      
|                         | Other                                                |                           |      | 112    |       |  |      | 65     |      
|                         |                                                      |                           |      |        |       | 
|                         |                                                      | Gross deferred tax assets |      |        | 3,177 |  |      |        | 2,564 | 
|                         | Deferred tax asset valuation allowance               |                           |      | (1,967 | )     |  |      | (1,514 | )    
|                         |                                                      |                           |      |        |       | 
|                         |                                                      | Total deferred tax assets |      |        | 1,210 |  |      |        | 1,050 | 
|Deferred tax liabilities |                                                      |                           | (786 | )      |       |  | (884 | )     
|                         |                                                      |                           |      |        |       | 
|                         |                                                      | Net deferred tax asset    |      | $      | 424   |  |      | $      | 166   | 
|                         |                                                      |                           |      |        |       | 





F-25



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|    |              
|--- | -------------
|18. | Benefit Plans

401(k) Savings Plan




Superannuation Plan






|    |                                                      
|--- | -----------------------------------------------------
|19. | Contingencies, Commitments and Guarantor Arrangements



F-26



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                           |  |                     |      |   |      |   |     |      |  |   |    |  
|------------------------------------------ |  | ------------------- | ---- | - | ---- | - | --- | ---- |  | - | -- | -
|                                           |  | Year Ended June 30, |     
|                                           |  |                     |     
|                                           |  | 2005                |      |   | 2004 |   |     | 2003 | 
|                                           |  |                     |      |   |      |   |     |      | 
|                                           |  | (In thousands)      |     
|Beginning balance                          |  | $                   | 254  |   |      | $ | 42  |      |  | $ | 13 |  
|Additional accruals                        |  |                     | 69   |   |      |   | 72  |      |  |   | 31 |  
|Liabilities assumed in acquisition of AMSI |  |                     |     |   |      |   | 189 |      |  |   |   |  
|Settlements made and other adjustments     |  |                     | (203 | ) |      |   | (49 | )    |  |   | (2 | )
|                                           |  |                     |      |   |      |   |     |      | 
|Ending balance                             |  | $                   | 120  |   |      | $ | 254 |      |  | $ | 42 |  
|                                           |  |                     |      |   |      |   |     |      | 

Lease Commitments




|                     |  |                |       | 
|-------------------- |  | -------------- | ----- | 
|                     |  | Operating      |      
|Year Ending June 30, |  | Leases         |      
|                     |  |                |      
|                     |  | (In thousands) |      
|2005                 |  | $              | 2,256 | 
|2006                 |  |                | 1,951 | 
|2007                 |  |                | 1,494 | 
|2008                 |  |                | 1,262 | 
|2009                 |  |                | 1,067 | 
|Thereafter           |  |                | 1,432 | 
|                     |  |                |      
|                     |  | $              | 9,462 | 
|                     |  |                |      





F-27



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Purchase Commitments




|                     |  |                |       | 
|-------------------- |  | -------------- | ----- | 
|                     |  | Purchase       |      
|Year Ending June 30, |  | Commitments    |      
|                     |  |                |      
|                     |  | (In thousands) |      
|2005                 |  | $              | 1,439 | 
|2006                 |  |                | 244   | 
|                     |  |                |      
|                     |  | $              | 1,683 | 
|                     |  |                |      



|    |                                   
|--- | ----------------------------------
|20. | Segment and Geographic Information

Segment Information






F-28



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                       |                                     |                     |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------- | ----------------------------------- | ------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                       |                                     | Year Ended June 30, |  
|                                       |                                     |                     |  
|                                       |                                     | 2005                |   |         | 2004 |  |   | 2003    |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|                                       |                                     | (In thousands)      |  
|Revenue:                               |                                     |                     |   |         |      |  |   |         |   |  |   |        
|Product revenue:                       |                                     |                     |   |         |      |  |   |         |   |  |   |        
|                                       | Design Analysis Solutions           |                     | $ | 23,829  |      |  | $ | 17,461  |   |  | $ | 13,233  |  
|                                       | Manufacturing Solutions             |                     |   | 14,398  |      |  |   | 8,602   |   |  |   | 4,026   |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|                                       | Total product revenue               |                     |   | 38,227  |      |  |   | 26,063  |   |  |   | 17,259  |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|Services revenue:                      |                                     |                     |   |         |      |  |   |         |   |  |   |        
|                                       | Design Analysis Solutions           |                     |   | 23,388  |      |  |   | 20,449  |   |  |   | 18,937  |  
|                                       | Manufacturing Solutions             |                     |   | 2,803   |      |  |   | 2,161   |   |  |   | 429     |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|                                       | Total services revenue              |                     |   | 26,191  |      |  |   | 22,610  |   |  |   | 19,366  |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|Total revenue:                         |                                     |                     |   |         |      |  |   |         |   |  |   |        
|                                       | Design Analysis Solutions           |                     |   | 47,217  |      |  |   | 37,910  |   |  |   | 32,170  |  
|                                       | Manufacturing Solutions             |                     |   | 17,201  |      |  |   | 10,763  |   |  |   | 4,455   |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|                                       | Total revenue                       |                     | $ | 64,418  |      |  | $ | 48,673  |   |  | $ | 36,625  |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|Costs and expenses:                    |                                     |                     |   |         |      |  |   |         |   |  |   |        
|                                       | Design Analysis Solutions           |                     | $ | 21,057  |      |  | $ | 20,177  |   |  | $ | 17,686  |  
|                                       | Manufacturing Solutions             |                     |   | 17,850  |      |  |   | 13,740  |   |  |   | 9,001   |  
|                                       | Unallocated                         |                     |   | 18,822  |      |  |   | 11,803  |   |  |   | 10,027  |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|                                       | Total costs and operating expenses  |                     | $ | 57,729  |      |  | $ | 45,720  |   |  | $ | 36,714  |  
|                                       |                                     |                     |   |         |      |  |   |         |  
|Segment income (loss) from operations: |                                     |                     |   |         |      |  |   |         |   |  |   |        
|                                       | Design Analysis Solutions           |                     | $ | 26,160  |      |  | $ | 17,733  |   |  | $ | 14,484  |  
|                                       | Manufacturing Solutions             |                     |   | (649    | )    |  |   | (2,977  | ) |  |   | (4,546  | )
|                                       | Unallocated                         |                     |   | (18,822 | )    |  |   | (11,803 | ) |  |   | (10,027 | )
|                                       |                                     |                     |   |         |      |  |   |         |  
|                                       | Total income (loss) from operations |                     | $ | 6,689   |      |  | $ | 2,953   |   |  | $ | (89     | )
|                                       |                                     |                     |   |         |      |  |   |         |  

Geographic Information




F-29



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##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                     |                                    |                            |   |        |        |  |   |        |        |  |   |        |        | 
|------------------------------------ | ---------------------------------- | -------------------------- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                     |                                    | Fiscal Year Ended June 30, |  
|                                     |                                    |                            |  
|                                     |                                    | 2005                       |   |        | 2004   |  |   | 2003   |       
|                                     |                                    |                            |   |        |        |  |   |        |       
|                                     |                                    | (In thousands)             |  
|Revenue from unaffiliated customers: |                                    |                            |   |        |        |  |   |        |        |  |   |       
|Asia/ Australia:                     |                                    |                            |   |        |        |  |   |        |        |  |   |       
|                                     | Design Analysis Solutions products |                            | $ | 12,401 |        |  | $ | 9,340  |        |  | $ | 6,558  |       
|                                     | Manufacturing Solutions products   |                            |   | 43     |        |  |   | 52     |        |  |   | 169    |       
|                                     | Design Analysis Solutions services |                            |   | 8,204  |        |  |   | 6,850  |        |  |   | 5,658  |       
|                                     | Manufacturing Solutions services   |                            |   | 10     |        |  |   | 20     |        |  |   | 18     |       
|                                     |                                    |                            |   |        |        |  |   |        |       
|                                     |                                    | Total Asia/ Australia      |   |        | 20,658 |  |   |        | 16,262 |  |   |        | 12,403 | 
|                                     |                                    |                            |   |        |        |  |   |        |       
|Americas:                            |                                    |                            |   |        |        |  |   |        |        |  |   |       
|                                     | Design Analysis Solutions products |                            |   | 3,485  |        |  |   | 2,117  |        |  |   | 2,432  |       
|                                     | Manufacturing Solutions products   |                            |   | 12,149 |        |  |   | 6,311  |        |  |   | 1,775  |       
|                                     | Design Analysis Solutions services |                            |   | 5,523  |        |  |   | 5,517  |        |  |   | 5,669  |       
|                                     | Manufacturing Solutions services   |                            |   | 1,776  |        |  |   | 1,213  |        |  |   | 189    |       
|                                     |                                    |                            |   |        |        |  |   |        |       
|                                     |                                    | Total Americas             |   |        | 22,933 |  |   |        | 15,158 |  |   |        | 10,065 | 
|                                     |                                    |                            |   |        |        |  |   |        |       
|Europe:                              |                                    |                            |   |        |        |  |   |        |        |  |   |       
|                                     | Design Analysis Solutions products |                            |   | 7,943  |        |  |   | 6,004  |        |  |   | 4,243  |       
|                                     | Manufacturing Solutions products   |                            |   | 2,206  |        |  |   | 2,239  |        |  |   | 2,082  |       
|                                     | Design Analysis Solutions services |                            |   | 9,661  |        |  |   | 8,082  |        |  |   | 7,610  |       
|                                     | Manufacturing Solutions services   |                            |   | 1,017  |        |  |   | 928    |        |  |   | 222    |       
|                                     |                                    |                            |   |        |        |  |   |        |       
|                                     |                                    | Total Europe               |   |        | 20,827 |  |   |        | 17,253 |  |   |        | 14,157 | 
|                                     |                                    |                            |   |        |        |  |   |        |       
|Consolidated:                        |                                    |                            |   |        |        |  |   |        |        |  |   |       
|                                     | Design Analysis Solutions products |                            |   | 23,829 |        |  |   | 17,461 |        |  |   | 13,233 |       
|                                     | Manufacturing Solutions products   |                            |   | 14,398 |        |  |   | 8,602  |        |  |   | 4,026  |       
|                                     | Design Analysis Solutions services |                            |   | 23,388 |        |  |   | 20,449 |        |  |   | 18,937 |       
|                                     | Manufacturing Solutions services   |                            |   | 2,803  |        |  |   | 2,161  |        |  |   | 429    |       
|                                     |                                    |                            |   |        |        |  |   |        |       
|                                     |                                    | Total consolidated         |   | $      | 64,418 |  |   | $      | 48,673 |  |   | $      | 36,625 | 
|                                     |                                    |                            |   |        |        |  |   |        |       



|                   |                 |                    |   |       |       |  |   |       |       | 
|------------------ | --------------- | ------------------ | - | ----- | ----- |  | - | ----- | ----- | 
|                   |                 | June 30,           |  
|                   |                 |                    |  
|                   |                 | 2005               |   |       | 2004  | 
|                   |                 |                    |   |       |       | 
|                   |                 | (In thousands)     |  
|Fixed assets, net: |                 |                    |   |       |       |  |   |      
|                   | Asia/ Australia |                    | $ | 1,881 |       |  | $ | 1,675 |      
|                   | Americas        |                    |   | 953   |       |  |   | 1,262 |      
|                   | Europe          |                    |   | 502   |       |  |   | 565   |      
|                   |                 |                    |   |       |       | 
|                   |                 | Total consolidated |   | $     | 3,336 |  |   | $     | 3,502 | 
|                   |                 |                    |   |       |       | 



F-30



---



##### Table of Contents



MOLDFLOW CORPORATION


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                                                     
|--- | ----------------------------------------------------
|21. | Selected Quarterly Results of Operations (Unaudited)



|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |       |        |  |     |       |        |  |     |       |       | 
|----------------------------------------- | ------------------------------------------ | ---------------------------------- | ----- | ------ | -------- |  | ----- | -------- | ------ |  | -------- | ----- | ------ | -------- | ----- | ----- | -------- |  | ----- | -------- | ------ |  | -------- | ----- | ------ |  | --- | ----- | ------ |  | --- | ----- | ----- | 
|                                          |                                            | Quarter Ended                      |      
|                                          |                                            |                                    |      
|                                          |                                            | June 30,                           |       |        | Mar. 26, |  |       | Dec. 25, |        |  | Sep. 25, |       |        | June 30, |       |       | Mar. 27, |  |       | Dec. 27, |        |  | Sep. 27, |      
|                                          |                                            | 2005                               |       |        | 2005     |  |       | 2004     |        |  | 2004     |       |        | 2004     |       |       | 2004     |  |       | 2003     |        |  | 2003     |      
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|                                          |                                            | (In thousands)                     |      
|Revenue:                                  |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |       |        |  |     |       |        |  |     |      
|                                          | Product                                    |                                    | $     | 11,251 |          |  | $     | 9,487    |        |  | $        | 9,562 |        |          | $     | 7,927 |          |  | $     | 9,022    |        |  | $        | 7,574 |        |  | $   | 5,113 |        |  | $   | 4,354 |      
|                                          | Services                                   |                                    |       | 7,031  |          |  |       | 6,410    |        |  |          | 6,695 |        |          |       | 6,055 |          |  |       | 6,219    |        |  |          | 5,716 |        |  |     | 5,518 |        |  |     | 5,157 |      
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|                                          |                                            | Total revenue                      |       |        | 18,282   |  |       |          | 15,897 |  |          |       | 16,257 |          |       |       | 13,982   |  |       |          | 15,241 |  |          |       | 13,290 |  |     |       | 10,631 |  |     |       | 9,511 | 
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|Costs and expenses:                       |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |       |        |  |     |       |        |  |     |      
|                                          | Cost of product revenue                    |                                    |       | 3,062  |          |  |       | 2,088    |        |  |          | 1,875 |        |          |       | 1,841 |          |  |       | 2,182    |        |  |          | 1,778 |        |  |     | 605   |        |  |     | 638   |      
|                                          | Cost of services revenue                   |                                    |       | 1,753  |          |  |       | 1,642    |        |  |          | 1,650 |        |          |       | 1,295 |          |  |       | 1,516    |        |  |          | 1,457 |        |  |     | 934   |        |  |     | 629   |      
|                                          | Research and development                   |                                    |       | 2,148  |          |  |       | 2,160    |        |  |          | 2,040 |        |          |       | 1,645 |          |  |       | 1,648    |        |  |          | 1,695 |        |  |     | 1,535 |        |  |     | 1,593 |      
|                                          | Selling and marketing                      |                                    |       | 6,277  |          |  |       | 5,650    |        |  |          | 5,611 |        |          |       | 4,695 |          |  |       | 6,087    |        |  |          | 5,038 |        |  |     | 4,698 |        |  |     | 4,186 |      
|                                          | General and administrative                 |                                    |       | 3,562  |          |  |       | 2,869    |        |  |          | 3,066 |        |          |       | 2,510 |          |  |       | 2,329    |        |  |          | 2,188 |        |  |     | 2,117 |        |  |     | 1,914 |      
|                                          | Restructuring charges                      |                                    |       |       |          |  |       |         |        |  |          |      |        |          |       |      |          |  |       |         |        |  |          | 508   |        |  |     |      |        |  |     |      |      
|                                          | Amortization of acquired intangible assets |                                    |       | 65     |          |  |       | 73       |        |  |          | 73    |        |          |       | 79    |          |  |       | 98       |        |  |          | 126   |        |  |     | 110   |        |  |     | 111   |      
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|                                          |                                            | Total costs and operating expenses |       |        | 16,867   |  |       |          | 14,482 |  |          |       | 14,315 |          |       |       | 12,065   |  |       |          | 13,860 |  |          |       | 12,790 |  |     |       | 9,999  |  |     |       | 9,071 | 
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|Income from operations                    |                                            |                                    | 1,415 |        |          |  | 1,415 |          |        |  | 1,942    |       |        |          | 1,917 |       |          |  | 1,381 |          |        |  | 500      |       |        |  | 632 |       |        |  | 440 |      
|Interest income, net                      |                                            |                                    | 528   |        |          |  | 405   |          |        |  | 384      |       |        |          | 346   |       |          |  | 333   |          |        |  | 321      |       |        |  | 290 |       |        |  | 268 |      
|Other income (loss), net                  |                                            |                                    | 26    |        |          |  | 86    |          |        |  | 16       |       |        |          | (58   | )     |          |  | 37    |          |        |  | (18      | )     |        |  | 9   |       |        |  | (43 | )    
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|                                          | Income before income taxes                 |                                    |       | 1,969  |          |  |       | 1,906    |        |  |          | 2,342 |        |          |       | 2,205 |          |  |       | 1,751    |        |  |          | 803   |        |  |     | 931   |        |  |     | 665   |      
|Provision for (benefit from) income taxes |                                            |                                    | 611   |        |          |  | (139  | )        |        |  | 733      |       |        |          | 460   |       |          |  | 644   |          |        |  | 294      |       |        |  | 336 |       |        |  | 248 |      
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|                                          | Net income                                 |                                    | $     | 1,358  |          |  | $     | 2,045    |        |  | $        | 1,609 |        |          | $     | 1,745 |          |  | $     | 1,107    |        |  | $        | 509   |        |  | $   | 595   |        |  | $   | 417   |      
|                                          |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |      
|Net income per common share:              |                                            |                                    |       |        |          |  |       |          |        |  |          |       |        |          |       |       |          |  |       |          |        |  |          |       |        |  |     |       |        |  |     |      
|                                          | Basic                                      |                                    | $     | 0.12   |          |  | $     | 0.19     |        |  | $        | 0.15  |        |          | $     | 0.16  |          |  | $     | 0.11     |        |  | $        | 0.05  |        |  | $   | 0.06  |        |  | $   | 0.04  |      
|                                          | Diluted                                    |                                    | $     | 0.12   |          |  | $     | 0.17     |        |  | $        | 0.14  |        |          | $     | 0.15  |          |  | $     | 0.10     |        |  | $        | 0.05  |        |  | $   | 0.06  |        |  | $   | 0.04  |      

F-31



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








Consolidated Financial Statements and Financial Statement
Schedule




Internal Control Over Financial Reporting


Internal Control  Integrated Framework Internal Control 
Integrated Framework




F-32



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F-33



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EXHIBIT INDEX


|        |    |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------- | -- | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      
|No.     |    | Title
|        |    |      
|        | 2  | .1    |  | Agreement and Plan of Merger, dated February 11, 2000, by
    and among the Registrant, Moldflow Merger Corp. (a subsidiary of
    the Registrant), Advanced CAE Technology, Inc. d/b/a C-Mold
    (C-Mold) and certain stockholders of C-Mold.
    (Previously filed as an exhibit to the Companys
    Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)                                                                                   
|       
|        | 2  | .2    |  | Agreement and Plan of Merger by and among Moldflow Corp., MF
    Merger Sub I, Inc., American MSI Corp., the Timothy and
    Deborah Triplett Family Trust, Timothy L. Triplett and Deborah
    A. Triplett, dated January 23, 2004. (Previously filed as
    an exhibit to the Companys Quarterly Report on
    Form 10-Q for the fiscal quarter ended December 27,
    2003 filed with the Securities and Exchange Commission on
    February 10, 2004 and incorporated by reference thereto.)
|       
|        | 3  | .1    |  | Third Amended and Restated Certificate of Incorporation of the
    Registrant. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended April 1, 2000 filed with the Securities and
    Exchange Commission on May 12, 2000 and incorporated by
    reference thereto.)                                                                                                                                                               
|       
|        | 3  | .2    |  | Second Amended and Restated By-laws of the Registrant.
    (Previously filed as an exhibit to the Companys Quarterly
    Report on Form 10-Q for the fiscal quarter ended
    April 1, 2000 filed with the Securities and Exchange
    Commission on May 12, 2000 and incorporated by reference
    thereto.)                                                                                                                                                                                   
|       
|        | 3  | .3    |  | Certificate of Amendment of Third Amended and Restated
    Certificate of Incorporation. (Previously filed as an exhibit to
    the Companys Annual Report on Form 10-K for the
    fiscal year ended June 30, 2002 filed with the Securities
    and Exchange Commission on September 19, 2002 and
    incorporated by reference thereto.)                                                                                                                                                     
|       
|        | 3  | .4    |  | Certificate of Designations, Preferences and Rights of a Series
    of Preferred Stock of Moldflow Corporation classifying and
    designating the Series A Junior Participating Preferred
    Stock. (Previously filed as an exhibit to the Companys
    Registration Statement on Form 8-A filed with the
    Securities and Exchange Commission on February 3, 2003 and
    incorporated by reference thereto.)                                                                              
|       
|        | 4  | .1    |  | Shareholder Rights Agreement, dated as of January 29, 2003,
    between Moldflow Corporation and EquiServe Trust Company, as
    Rights Agent. (Previously filed as an exhibit to the
    Companys Registration Statement on Form 8-A filed
    with the Securities and Exchange Commission on February 3,
    2003 and incorporated by reference thereto.)                                                                                                                                     
|       
|        | 10 | .1    |  | Form of Incentive Stock Option Agreement for Executive Officers
    under the Moldflow Corporation 2000 Stock Option and Incentive
    Plan. (Previously filed as an exhibit to the Companys
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    September 25, 2004 filed with the Securities and Exchange
    Commission on November 3, 2004 and incorporated by
    reference thereto.)                                                                                        
|       
|        | 10 | .2    |  | Form of Non-Qualified Stock Option Agreement for Executive
    Officers under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended September 25, 2004 filed with the Securities
    and Exchange Commission on November 3, 2004 and
    incorporated by reference thereto.)                                                                                    
|       
|        | 10 | .3    |  | Form of Non-Qualified Stock Option Agreement for Non-Employee
    Directors under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended September 25, 2004 filed with the Securities
    and Exchange Commission on November 3, 2004 and
    incorporated by reference thereto.)                                                                                
|       
|        | 10 | .4    |  | Amended and Restated Employment Agreement dated as of
    July 8, 2005 between Christopher L. Gorgone and Moldflow
    Corporation, previously filed as an exhibit to the
    Companys Current Report on Form 8-K filed on
    July 14, 2005, and incorporated herein by reference.**                                                                                                                                                                                                           
|       
|        | 10 | .5    |  | Lease between Moldflow Corporation and 492 OCP, LLC dated as of
    January 28, 2005 previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q filed on
    February 2, 2005, and incorporated herein by reference                                                                                                                                                                                                                                                       



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|        |    |       |  |                                                                                                                                                                                                                                                                                                                                                              
|------- | -- | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |      
|No.     |    | Title
|        |    |      
|       
|        | 10 | .6    |  | Loan Modification Agreement dated as of January 31, 2005
    between Moldflow Corporation and Silicon Valley Bank previously
    filed as an exhibit to the Companys Quarterly Report on
    Form 10-Q filed on February 2, 2005, and incorporated
    herein by reference.                                                                                 
|       
|        | 10 | .7    |  | Moldflow Corporation 2000 Stock Option and Incentive Plan, as
    amended. (Previously filed as an exhibit to the Companys
    Quarterly Report on Form 10-Q for the fiscal quarter ended
    December 28, 2002 filed with the Securities and Exchange
    Commission on February 7, 2003 and incorporated by
    reference thereto.)                       
|       
|        | 10 | .8    |  | Form of Incentive Stock Option Agreement under the Moldflow
    Corporation 2000 Stock Option and Incentive Plan. (Previously
    filed as an exhibit to the Companys Registration Statement
    on Form S-1 (File No. 333-95289) and incorporated by
    reference thereto.)                                                                               
|       
|        | 10 | .9    |  | Form of Non-Qualified Stock Option Agreement for Company
    Employees under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)                                                     
|       
|        | 10 | .10   |  | Moldflow Corporation Employee Stock Purchase Plan. (Previously
    filed as an exhibit to the Companys Registration Statement
    on Form S-1 (File No. 333-95289) and incorporated by
    reference thereto.)                                                                                                                                              
|       
|        | 10 | .11   |  | Moldflow Corporation 1997 Equity Incentive Plan. (Previously
    filed as an exhibit to the Companys Registration Statement
    on Form S-1 (File No. 333-95289) and incorporated by
    reference thereto.)                                                                                                                                                
|       
|        | 10 | .12   |  | Form of Director Indemnification Agreement to be entered into
    between the Registrant and each non-employee director.
    (Previously filed as an exhibit to the Companys
    Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)**                                                                      
|       
|        | 10 | .13   |  | Form of Non-Qualified Stock Option Agreement for Non-Employee
    Directors under the Moldflow Corporation 2000 Stock Option and
    Incentive Plan. (Previously filed as an exhibit to the
    Companys Registration Statement on Form S-1 (File
    No. 333-95289) and incorporated by reference thereto.)**                                              
|       
|        | 10 | .14   |  | Loan Agreement as of November 13, 2001 between Silicon
    Valley Bank and Moldflow Corporation. (Previously filed as an
    exhibit to the Companys Quarterly Report on Form 10-Q
    for the fiscal quarter ended December 29, 2001 filed with
    the Securities and Exchange Commission on February 11, 2002
    and incorporated by reference thereto.)
|       
|        | 10 | .15   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Kenneth R. Welch.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed July 14, 2005 and incorporated by reference
    thereto.)                                                                                        
|       
|        | 10 | .16   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Timothy Triplett.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed on July 14, 2005 and incorporated by
    reference thereto.)                                                                                     
|       
|        | 10 | .17   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and A. Roland Thomas.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed on July 14, 2005 and incorporated by
    reference thereto.)                                                                                     
|       
|        | 10 | .18   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Ian M. Pendlebury.**
    (Previously filed as an exhibit to the Companys Current
    Report on Form 8-K filed on July 14, 2005 and
    incorporated by reference thereto.)                                                                                    
|       
|        | 10 | .19   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Peter K. Kennedy.** (Previously
    filed as an exhibit to the Companys Current Report on
    Form 8-K filed on July 14, 2005 and incorporated by
    reference thereto.)                                                                                     
|       
|        | 10 | .20   |  | Amended and Restated Employment Agreement, dated July 8,
    2005, between the Registrant and Lori M. Henderson.**
    (Previously filed as an exhibit to the Companys Current
    Report on Form 8-K filed on July 14, 2005 and
    incorporated by reference thereto.)                                                                                    
|       
|        | 10 | .21   |  | Third Amendment to the Moldflow Corporation 2000 Stock Option
    and Incentive Plan. (Previously filed as an exhibit to the
    Companys Quarterly Report on Form 10-Q for the fiscal
    quarter ended December 27, 2003 filed with the Securities
    and Exchange Commission on February 10, 2004 and
    incorporated by reference thereto.)           



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|        |    |       |  |                                                                                         
|------- | -- | ----- |  | ----------------------------------------------------------------------------------------
|Exhibit |    |      
|No.     |    | Title
|        |    |      
|       
|        | 21 | .1    |  | Subsidiaries of the Registrant. (Filed herewith.)                                       
|       
|        | 23 | .1    |  | Consent of PricewaterhouseCoopers LLP. (Filed herewith.)                                
|       
|        | 31 | .1    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
    Officer. (Filed herewith.)
|       
|        | 31 | .2    |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
    Officer. (Filed herewith.)
|       
|        | 32 | .1    |  | Section 1350 Certification of Chief Executive Officer.(1)
    (Filed herewith.)         
|       
|        | 32 | .2    |  | Section 1350 Certification of Chief Financial Officer.(1)
    (Filed herewith.)         






| |    |                                                                                                                                                       
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | ** | Management contract or compensatory plan or arrangement required
    to be filed as an exhibit to this form pursuant to
    Item 15(c) of this report.



|    |                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This certification shall not be deemed filed for
    purposes of Section 18 of the Securities Exchange Act of
    1934, or otherwise subject to the liability of that section, nor
    shall it be deemed incorporated by reference into any filing
    under the Securities Act of 1933 or the Securities Exchange Act
    of 1934.

Exhibits




Other Financial Statements