##### Table of Contents



UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington D.C. 20549
   FORM 20-F
   ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF
 THE SECURITIES EXCHANGE ACT OF
    1934
   For the Fiscal Year Ended
    December 31, 2006

Commission FileNo. 0-29154    IONA Technologies PLC
 (Exact name of Registrant as
    specified in its charter and translation of Registrants
    name into English)
   Ireland
 (Jurisdiction of incorporation
    or organization)
   The IONA Building
 Shelbourne Road, Ballsbridge
 Dublin 4, Ireland
 (Address of principal executive
    offices)
   Securities registered pursuant to Section 12(b) of the
    Act:
  Ordinary Shares, 0.0025 Par Value Per Share
 (Title of Class)
   Securities registered pursuant to Section 12(g) of the
    Act: None
   Securities for which there is a reporting obligation pursuant
    to Section 15(d) of the Act:  None
   Indicate number of shares outstanding of each of the
    issuers
 classes of capital or common stock as of December 31,
    2006:
  35,657,209* Ordinary Shares, 0.0025 Par Value
      X
   X
   X
  Rule 12b-2
 X
   X
  Rule 12b-2
 X




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This annual report on
    Form 20-F
    was not prepared for filing in Ireland in compliance with Irish
    law or the listing rules of the Irish Stock Exchange.
  Unless otherwise provided herein or required by the context,
    references to we, us, the
    Company or IONA in this annual report shall
    mean IONA Technologies PLC and its world-wide subsidiaries,
    collectively.
  We have a secondary listing on the Irish Stock Exchange. For
    this reason, we are not subject to the same ongoing regulatory
    requirements as those which would apply to an Irish company with
    a primary listing on the Irish Stock Exchange, including the
    requirement that certain transactions require the approval of
    shareholders. For further information, shareholders should
    consult their own financial advisor.
  Our financial statements are presented in U.S. dollars
    and are prepared in accordance with United States generally
    accepted accounting principles. All references in this annual
    report to dollars and $ are to
    U.S. dollars, and all references to euro or
     are to European Union euro. Except as
    otherwise stated herein, all monetary amounts in this annual
    report have been presented in dollars.
  Except for amounts contained in or derived from our
    Consolidated Financial Statements and unless otherwise
    indicated, all conversions of amounts herein from euro to
    dollars have been made at an exchange rate of 1.3161 dollars to
    one euro, based upon the noon buying rate in New York City for
    cable transfers in foreign currencies for customs purposes by
    the Federal Reserve Bank of New York as of December 29,
    2006.
  The terms
    Orbix®
    and
    IONA®
    used in this annual report are our registered trademarks. The
    terms
    ArtixTM
    and
    Celtixtm
    are our trademarks.
    CORBA®
    is a registered trademark of the Object Management Group, Inc.
    in the United States and other countries.
    J2EETM
    is a trademark of Sun Microsystems, Inc. All other trademarks
    appearing in this annual report are the property of their
    respective holders.




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TABLE OF
    CONTENTS
  PageItem 1.

IDENTITY OF
    DIRECTORS, SENIOR MANAGEMENT AND ADVISERS


1Item 2.

OFFER STATISTICS
    AND EXPECTED TIMETABLE


1Item 3.

KEY
    INFORMATION


2A.  Selected
    Financial Data


2B.  Capitalization
    and Indebtedness


3C.  Reasons
    for the Offer and Use of Proceeds


3D.  Risk
    Factors


3Item 4.

INFORMATION ON THE
    COMPANY


12A.  History
    and Development of the Company


12B.  Business
    Overview


12C.  Organizational
    Structure


20D.  Property,
    Plants and Equipment


20Item 4A.

UNRESOLVED STAFF
    COMMENTS


20Item 5.

OPERATING AND
    FINANCIAL REVIEW AND PROSPECTS


21A.  Operating
    Results


21B.  Liquidity
    and Capital Resources


34C.  Research
    and Development, Patents and Licenses, etc


35D.  Trend
    Information


35E.  Off-Balance
    Sheet Arrangements


35F.  Tabular
    Disclosure of Contractual Obligations


35G.  Safe
    Harbor


35Item 6.

DIRECTORS, SENIOR
    MANAGEMENT AND EMPLOYEES


36A.  Directors
    and Senior Management


36B.  Compensation


39C.  Board
    Practices


42D.  Employees


44E.  Share
    Ownership


44Item 7.

MAJOR SHAREHOLDERS
    AND RELATED PARTY TRANSACTIONS


49A.  Major
    Shareholders


49B.  Related
    Party Transactions


49C.  Interests
    of Experts and Counsel


50Item 8.

FINANCIAL
    INFORMATION


50A.  Consolidated
    Financial Statements and Other Financial Information


50B.  Significant
    Changes


50Item 9.

THE OFFER AND
    LISTING


51A.  Offer
    and Listing Details


51B.  Plan
    of Distribution


52C.  Markets


52D.  Selling
    Shareholders


52E.  Dilution


52F.  Expenses
    of the Issue


52




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PageItem 10.

ADDITIONAL
    INFORMATION


53A.  Share
    Capital


53B.  Memorandum
    and Articles of Association


53C.  Material
    Contracts


53D.  Exchange
    Controls


54E.  Taxation


54F.  Dividends
    and Paying Agents


62G.  Statements
    by Experts


62H.  Documents
    on Display


62I.  Subsidiary
    Information


63Item 11.

QUANTITATIVE AND
    QUALITATIVE DISCLOSURES ABOUT MARKET RISK


63Item 12.

DESCRIPTION OF
    SECURITIES OTHER THAN EQUITY SECURITIES


63Item 13.

DEFAULTS, DIVIDEND
    ARREARAGES AND DELINQUENCIES


63Item 14.

MATERIAL
    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
    PROCEEDS


63Item 15T.

CONTROLS AND
    PROCEDURES


64Item 16.

[RESERVED]


64Item 16A.

AUDIT COMMITTEE
    FINANCIAL EXPERT


64Item 16B.

CODE OF
    ETHICS


65Item 16C.

PRINCIPAL
    ACCOUNTANT FEES AND SERVICES


65Item 16D.

EXEMPTIONS FROM THE
    LISTING STANDARDS FOR AUDIT COMMITTEES


66Item 16E.

PURCHASE OF EQUITY
    SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS


66Item 17.

FINANCIAL
    STATEMENTS


67Item 18.

FINANCIAL
    STATEMENTS


67Item 19.

EXHIBITS


68Ex-8.1 Active Subsidiaries of IONA Technologies PLCEx-12.1 Certification of Principal Executive OfficerEx-12.2 Certification of Principal Financial OfficerEx-13.1 Section 906 Certification of CEOEx-13.2 Section 906 Certification of CFOEx-15.1 Consent of Ernst & Young




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This annual report, and other reports, proxy statements and
    other communications to shareholders, as well as oral statements
    made by our officers or agents, contain forward-looking
    statements within the meaning of the safe harbor
    provisions of the Private Securities Litigation Reform Act of
    1995 that relate to future events or our future financial
    performance. In some cases, you can identify forward-looking
    statements by terminology, such as may,
    will, should, could,
    expect, plan, anticipate,
    believe, estimate, project,
    predict, intend, potential,
    or continue or the negative of such terms or other
    comparable terminology, although not all forward-looking
    statements contain such terms. In addition, these
    forward-looking statements include, but are not limited to,
    statements regarding, among other things, our future revenue,
    operating income (loss), net income (loss) per ordinary share
    and per ADS, products and services, sources of liquidity,
    markets, anticipated tax rates, and plans and objectives of
    management. Such statements are neither promises nor guarantees
    but rather are subject to a number of risks and uncertainties
    which could cause actual results to differ materially from those
    described in the forward-looking statements. Factors that may
    cause such variation are discussed in Item 5
    Operating and Financial Review and Prospects,
    Item 3.D. Risk Factors and our other reports
    filed with the Securities and Exchange Commission.
  PART I
  Item 1.
    Identity
    Of Directors, Senior Management And Advisers    Item 2.
    Offer
    Statistics And Expected Timetable   -1-




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Item 3.
    Key
    Information  A.
    Selected
    Financial Data    Year Ended December 31,2006


2005


2004


2003


2002(in thousands, except per share data)Consolidated Statement of
    Operations Data:Revenue:Product revenue

$
42,056


$
33,630


$
30,735


$
35,737


$
73,452Service revenue


35,782



33,176



37,284



38,453



49,778Total revenue


77,838



66,806



68,019



74,190



123,230Cost of revenue:Cost of product revenue


523



636



435



949



4,760Cost of service revenue


13,220



11,684



11,790



14,275



25,458Total cost of revenue


13,743



12,320



12,225



15,224



30,218Gross profit


64,095



54,486



55,794



58,966



93,012Operating expenses:Research and development


15,946



15,848



17,204



27,134



38,256Sales and marketing


33,221



30,293



29,263



41,180



72,644General and administrative


12,375



9,287



8,808



10,590



13,496Amortization of other assets






94



374



374



7,040Restructuring






(189
)






20,525



20,763Impairment of goodwill


















276,808Adjustment of acquisition
    liabilities










(600
)






Impairment of other assets and
    property and equipment














3,271



32,336Total operating expenses


61,542



55,333



55,049



103,074



461,343Income (loss) from operations


2,553



(847
)


745



(44,108
)


(368,331
)Interest income, net


1,738



825



286



483



1,069Net exchange (loss) gain


(559
)


99



(273
)


337



(502
)Income (loss) before provision for
    income taxes


3,732



77



758



(43,288
)


(367,764
)Provision for income taxes


1,212



920



566



948



1,543Net income (loss)

$
2,520


$
(843
)

$
192


$
(44,236
)

$
(369,307
)Basic net income (loss) per
    ordinary share and per ADS

$
0.07


$
(0.02
)

$
0.01


$
(1.33
)

$
(11.58
)Shares used in computing basic net
    income (loss) per ordinary share and per ADS


35,648



35,139



34,570



33,335



31,890Diluted net income (loss) per
    ordinary share and per ADS

$
0.07


$
(0.02
)

$
0.01


$
(1.33
)

$
(11.58
)Shares used in computing diluted
    net income (loss) per ordinary share and per ADS


36,269



35,139



36,333



33,335



31,890     -2-




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At December 31,2006


2005


2004


2003


2002(in thousands, except per share data)Consolidated Balance Sheet
    Data:Cash, cash equivalents, restricted
    cash and marketable securities

$
53,964


$
52,116


$
59,915


$
56,649


$
81,650Working capital

$
42,769


$
33,384


$
32,085


$
30,417


$
63,766Total assets

$
85,097


$
77,103


$
80,826


$
90,038


$
131,604Ordinary shares (number)


35,930



35,360



34,804



34,006



32,835Ordinary share value (par value)

$
99


$
98


$
96


$
94


$
91Total shareholders equity

$
43,797


$
35,241


$
34,962


$
33,112


$
74,905Dividends declared per share

$



$



$



$



$
     B.
    Capitalization
    and Indebtedness    C.
    Reasons
    for the Offer and Use of Proceeds    D.
    Risk
    Factors  A decline
    in information technology spending may result in a decrease in
    our revenue or lower growth rates.
      Our
    lengthy and variable sales cycle makes it difficult to predict
    our operating results.
    
    alternative approaches to integration of enterprise applications,
    competitive product offerings and pricing,
    limited internal resources and purchasing priorities, and
    rapidly changing software technologies and standards.   -3-




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We may
    experience fluctuations in quarterly revenue that could
    adversely impact our operating results.
      
    similarly to others in the software industry, a significant
    number of our prospective customers decide whether to enter into
    license agreements with us within the last month of each quarter
    in the hope of obtaining more favorable terms;
    difficulty predicting the size and timing of customer orders due
    to our lengthy and variable sales cycle and our customers
    often lengthy internal approval and expenditure authorization
    processes;
    the demand for our products may change;
    customers may unexpectedly postpone orders due to changes in
    their strategic priorities, project objectives, budget or
    personnel;
    customer evaluations and purchasing processes vary significantly
    from company to company, and a customers internal approval
    and expenditure authorization process can be difficult and time
    consuming to complete, even after selection of a vendor;
    the number, timing and significance of product enhancements and
    new product announcements by us and our competitors may affect
    purchase decisions; and
    we may have to defer revenue under our revenue recognition
    policies.    We have
    experienced significant variations in operating results and
    anticipate that we will continue to do so in the
    future.
    Our
    future revenue depends upon the evolution and adoption of Web
    services and related integration and infrastructure solutions in
    support of new computing models including SOA.
     -4-




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If we
    fail to keep pace with rapidly evolving technology and changing
    customer needs, our business will suffer.
    The loss
    of one or more major customers could materially and adversely
    affect our results of operations and financial
    condition.
    We derive
    a significant amount of revenue from customers in a limited
    number of industries and our business and results of operations
    could be adversely affected by significant changes in those
    industries.
    Potential
    defects or errors in our software products could cause our
    revenue to decrease, cause us to lose customers, damage our
    reputation, expose us to litigation and harm our revenues or
    earnings.
    
    loss of customers,
    damage to our reputation,
    loss or delay of market acceptance or revenue,
    increased service or warranty costs, or
    legal action by our customers.   -5-




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If we do
    not manage our expenses and geographically dispersed operations
    successfully, we may be unable to respond to changing market
    conditions.
      We may be
    required to delay the recognition of revenue until future
    periods, which could adversely impact our operating
    results.
    
    we are required to accept extended payment terms;
    the transaction involves contingent payment terms or fees;
    the transaction involves acceptance criteria or there are
    identified product-related issues; or
    license agreements include products that are under development
    or other undelivered elements.    We depend
    on large transactions to derive a significant portion of our
    revenue, and the delay or loss of any large customer order could
    adversely affect our quarterly or annual operating
    results.
    We
    currently derive most of our revenue from a limited number of
    products.
   -6-




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If we do
    not successfully expand and manage our direct sales force and
    other distribution channels, we may not be able to increase our
    revenue.
    
    disputes and channel conflict regarding marketing strategy,
    exclusive territories and customer relationships that could
    negatively affect our business or result in costly litigation;
    increased promotion of competing IT integration
    solutions; and
    abrupt discontinuation of their relationships with us or support
    for our products or services.      We
    operate in highly competitive markets and we may be unable to
    compete successfully.
      
    enterprise infrastructure software,
    enterprise application integration software,
    web services integration software,
    enterprise service bus software, and
    open source software projects and products.    
    the demand for our products,
    the development of software by others that is competitive with
    our products,
    the price at which others offer comparable products,
    the ability of our competitors to respond effectively to
    customer needs,
    the ability of our competitors to market their products
    aggressively and effectively, and
    the ability of our competitors to hire, retain and motivate key
    personnel. -7-




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We may be
    unable to attract and retain highly qualified
    personnel.
    We face
    various risks associated with our international operations that
    could cause our operating results to suffer.
    
    fluctuations in currency exchange rates that could make our
    products more expensive in certain countries;
    political unrest, war or terrorism in various jurisdictions;
    unexpected changes in regulatory requirements, tariffs and other
    trade barriers that reduce the flexibility of our business
    operations;
    failure to enter into relationships with local resellers, system
    integrators or other third party vendors, or to introduce
    localized products;
    difficulties in staffing and managing foreign operations;
    longer accounts receivable payment cycles and difficulties in
    collecting accounts receivable; and
    differing laws affecting the enforceability of our intellectual
    property rights resulting in the potential loss of our
    proprietary information.   -8-




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Acquisitions
    may be necessary for the continued growth of our business. We
    may be unable to identify or complete suitable acquisitions, and
    any acquisitions we do complete may create business difficulties
    or be dilutive to our current shareholders.
    
    the negative effects of the acquisition on our financial and
    strategic position and reputation;
    the failure of an acquired business to further our strategies;
    the failure of the acquisition to result in expected benefits,
    which may include benefits relating to enhanced revenues,
    technology, human resources, costs savings, operating
    efficiencies and other synergies;
    the difficulty and cost of integrating the acquired business,
    including costs and delays in implementing common systems and
    procedures and costs and delays caused by communication
    difficulties or geographic distances between sites;
    the assumption of liabilities of the acquired business,
    including debt and litigation-related liabilities;
    the impairment of acquired assets;
    the diversion of our managements attention from other
    business concerns;
    the impairment of relationships with customers or suppliers of
    the acquired business or our customers or suppliers;
    the loss of key employees of the acquired company; and
    the incompatibility of business cultures.    If our
    effective tax rate increases, our business and financial results
    would be adversely impacted.
    Our
    U.S. holders of our ordinary shares or ADSs could suffer
    adverse tax consequences if we are characterized as a passive
    foreign investment company.
   -9-




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The
    rights of shareholders in Irish corporations may be more limited
    than the rights of shareholders in
    U.S. corporations.
    We have a
    limited ability to protect our intellectual property rights, and
    others could obtain and use our technology without our
    authorization.
    If we are
    unable to obtain rights, or lose existing rights, to use and
    incorporate third-party technology into our products, we may
    have to stop selling and shipping products and incur significant
    development or license expenses to develop or otherwise obtain
    replacement technology.
    
    stop using the third-party technology,
    stop selling and shipping our products in which the third-party
    technology is used, or
    incur significant expenses to identify and obtain replacement
    technology or develop similar technology or to obtain a new
    license to the third-party technology.    We may be
    exposed to significant liability if we infringe upon the
    intellectual property or proprietary rights of others.
    
    discontinue the use of certain processes,
    cease the use and sale of infringing products and services,
    pay damages,
    expend significant resources to develop non-infringing
    technology,
    obtain licenses to competing technology, or
    indemnify customers under certain clauses relating to
    intellectual property rights in our licenses. -10-




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We
    recently undertook an open source initiative that may not be
    profitable or achieve widespread acceptance.
          Legislative
    actions and potential new accounting pronouncements may result
    in increased costs that would affect our future financial
    position and results of operations. We have already incurred,
    and will continue to incur, significant increased costs
    associated with our compliance with the internal controls
    requirements of the Sarbanes-Oxley Act of 2002.
       -11-




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Item 4.
    Information
    on the Company  A.
    History
    and Development of the Company  About
    IONA
      Certain
    Investments
    B.
    Business
    Overview  Overview
        Industry
    Background
  off-the-shelf in-house
   -12-




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CORBA.
  Web services.
    Service-oriented architecture. line-of-business
         -13-




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IONAs
    Opportunity
              Strategy
  hub-and-spoke
   -14-




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
    Maintain Technological Leadership in Standards-based
    Computing.  We have a history of technological
    leadership and dedication to continuous product improvement. Our
    CORBA-based Orbix product family is the leading enterprise CORBA
    solution. Our Web services-based Artix product family and our
    open source programs, including the Celtix product family,
    continue the Orbix tradition by addressing the integration
    needs, from mainframe environments to mobile computing
    platforms, of large IT organizations through high performance,
    standards-based solutions. We will continue to invest heavily in
    research and development. By promoting and embracing existing
    and emerging industry standards and refining the innovative
    distributed approach to SOA that we pioneered in our products,
    we intend to facilitate the broad acceptance of our offerings.
    We may acquire businesses, products or technologies that we
    believe will enhance and expand our current product offerings.
    Expand Our Customer Base, While Retaining Our Existing
    Customers.  Many of our customers are Global
    2000 companies in a variety of industries, including
    telecommunications, financial services,
    manufacturing/distribution and government, that are deeply
    invested in both our products and our architectural approach to
    integration. The strategic importance of our products allows us,
    working with our partners, to develop strong relationships with
    our customers key technology decision makers. In addition,
    our strategic selling approach facilitates broad adoption of our
    products throughout a customers IT organization. All of
    these factors combine to represent an opportunity for us to
    continue to present new generations of technology solutions to
    our existing enterprise customers. At the same time, the broader
    popularity of Web services gives us an opportunity to go beyond
    our traditional customer base to attract new customers that have
    deployed complex, costly and heterogeneous computing
    environments. We believe these new customers are interested in
    the reductions in IT cost and complexity that Web services and
    SOA can deliver. We also believe these new customers will find
    our traditional, distributed architectural approach, combined
    with our new generation of Web services integration solutions,
    compelling and competitive.
    Leverage and Expand Strategic Alliances.  We
    understand that relationships with leading software and other
    technology vendors, as well as system integrators, create
    opportunities to gain customers in broader markets than those
    otherwise available to us. We are focused on leveraging our
    established relationships and forging new alliances to enhance
    our marketing, selling and implementation initiatives. We
    believe that many of these vendors and system integrators seek
    to partner with strong infrastructure technology providers that
    will enable them to more rapidly satisfy customer needs. We have
    existing relationships with leading software and technology
    vendors, such as AmberPoint, BEA, Business Objects, IBM,
    Microsoft, Oracle, Sun Microsystems and Lansa, and global system
    integrators, such as BearingPoint, Computer Sciences Corporation
    (CSC), LogicaCMG, NEC, NS Solutions, Satyam, CGI and Wipro. We
    believe that these relationships better enable us to sell
    additional products to our existing customer base, acquire new
    customers and enhance our market share.  Products
   -15-




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Artix
          Orbix
        Celtix
   -16-




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point-to-point
    Services
  on-site
  e-mail
  Product
    Development and Management
      Customers
    Financial

Telecom

Government

ManufacturingCredit Suisse Group

AT&T

N.A.S.A.

BoeingGAD

Beijing Mobile

National Geospatial-Intelligence
    Agency

Lockheed MartinJPMorgan Chase

Marconi

U.S. Dept. of Transportation

ToshibaGoldman Sachs

Nokia

U.S. Environmental Protection
    AgencyRaymond James

O2

National Diet Library (Japan)Reuters

SprintSentenial

Fujitsu TelecommunicationsWinterthur Insurance

Aepona3 Italy  -17-




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Sales and
    Marketing
            Competition
        
    enterprise application infrastructure providers,
    enterprise application integration software vendors,
    Web services integration companies,
    ESB vendors, and
    open source software projects and products.    
    potential customers perception of our market leadership in
    a demanding and fast-moving technology environment;
    our continued conformity to industry standards, and
    customers ongoing preference for standards-based products; -18-




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
    breadth of product offerings, including open source software
    projects and products;
    product features and functionality;
    product
    ease-of-adoption
    and
    ease-of-use;
    product quality;
    our customer service and support;
    security, reliability, availability and other enterprise
    qualities of service;
    product and service pricing; and
    our reputation and financial viability.  Patents
    and Proprietary Technology
          Employees
      As of December 31,2006


2005


2004Product Development and Management


135



127



131Services


55



58



53Marketing


16



15



17Sales


90



91



93Finance and Administration


55



50



52Total


351



341



346  -19-




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Legal
    Proceedings
    Government
    Regulations
      Principal
    Markets
    Seasonality
    and Raw Materials
    C.
    Organizational
    Structure    D.
    Property,
    Plants and Equipment    Location

Total Space


Occupied Space


Sublet Space


Lease Expiration

Right to TermDublin, Ireland


55,900



21,400



33,000


July 31, 2023

July 31, 2013Waltham, MA


30,331



30,331






July 31, 2011

    Item 4A.  Unresolved
    Staff Comments   -20-




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Item 5.
    Operating
    and Financial Review and Prospects  The following discussion and analysis of financial condition
    and results of operations should be read in conjunction with our
    Consolidated Financial Statements for the periods specified and
    associated notes included in Item 3.A. Selected
    Financial Data. The following discussion and analysis of
    financial condition and results of operations contains
    forward-looking statements within the meaning of the safe
    harbor provisions of the Private Securities Litigation
    Reform Act of 1995 that relate to future events or our future
    financial performance. In some cases, you can identify
    forward-looking statements by terminology, such as
    may, will, should,
    could, expect, plan,
    anticipate, believe,
    estimate, project, predict,
    intend, potential, or
    continue or the negative of such terms or other
    comparable terminology, although not all forward-looking
    statements contain such terms. In addition, these
    forward-looking statements include, but are not limited to,
    statements regarding, among other things, our plans, objectives,
    expectations and intentions. These forward-looking statements
    are neither promises nor guarantees but rather are subject to a
    number of risks and uncertainties which could cause actual
    results to differ materially from those described in the
    forward-looking statements, including risks and uncertainties
    relating to IONAs cost reduction efforts; the launch of
    IONAs integration software; growth in market demand for
    Web services and integration; IONAs sales model; volume,
    timing and seasonal patterns of product sales; impact of
    competitive products and pricing; development, launch and market
    acceptance of new and improved products; the integration of any
    future acquisitions; undetected errors in software; anticipated
    tax rates; and general economic conditions, including their
    effect on the acquisition of new accounts and the time required
    to close revenue transactions. Further reference should be made
    to Item 3.D. Risk Factors.
  A.
    Operating
    Results  Overview
            
    Revenue growth provides an important guide to our overall
    business growth and the success of our sales and marketing
    efforts;
    Gross margin is an indicator of our offering mix, competitive
    pricing pressures and the cost of our operations; -21-




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##### Table of Contents




    Growth in our Artix revenue is an indicator of the success of
    our focused sales efforts;
    Earnings Per Share is an indicator of our overall performance;
    Liquidity and cash flows; and
    Open source program growth is an indicator of market acceptance
    of our introductory software.  Critical
    Accounting Policies and Estimates
    
    Revenue Recognition,
    Share-Based Compensation,
    Accounting for Income Taxes,
    Allowances for Doubtful Accounts, and
    Foreign Currency.    Revenue
    Recognition
  97-2, Software Revenue Recognition SOP 98-4 98-9
      
    we enter into a legally binding arrangement with a customer for
    the license of software,
    delivery has occurred,
    customer payment is deemed fixed or determinable and free of
    contingencies or significant uncertainties, and
    collection is probable.     -22-




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##### Table of Contents




    Support contracts are regularly sold on a stand-alone basis to
    customers that choose to renew the support contract beyond the
    initial term. Support contract pricing is based on established
    list pricing. The renewal purchases at consistent pricing
    provide the basis for VSOE on the support contracts. Support
    revenue is recognized ratably over the contract term.
    Consulting contracts are regularly sold on a stand-alone basis
    to customers requesting these services. Consulting contract
    pricing is at a daily flat rate and customers purchase an
    appropriate number of service days. The consulting services
    delivered on a stand-alone basis at consistent pricing provide
    the basis for VSOE on the consulting contracts. Consulting
    revenue is recognized as the services are performed.            Share-Based
    Compensation
  Share-Based Payment Accounting
    for Stock Issued to Employees Accounting for Share-based Compensation
   -23-




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##### Table of Contents



Accounting
    for Income Taxes
     -24-




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##### Table of Contents



Allowances
    for Doubtful Accounts
    Foreign
    Currency
    Recent
    Accounting Pronouncements
  Accounting for
    Uncertainty in Income Taxes
 -25-




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##### Table of Contents



Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial Liabilities
    Including an amendment of FASB Statement No. 115
 -26-




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##### Table of Contents



Results
    of Operations
    Year Ended December 31,2006


2005


2004Revenue:Product revenue


54.0
%


50.3
%


45.2
%Service revenue


46.0



49.7



54.8Total revenue


100.0



100.0



100.0Cost of revenue:Cost of product revenue


0.7



1.0



0.7Cost of service revenue


17.0



17.5



17.3Total cost of revenue


17.7



18.5



18.0Gross margin


82.3



81.5



82.0Operating expenses:Research and development


20.5



23.7



25.3Sales and marketing


42.7



45.3



43.0General and administrative


15.9



13.9



13.0Amortization of other assets






0.1



0.5Restructuring






(0.3
)


Adjustment of acquisition
    liabilities










(0.9
)Total operating expenses


79.1



82.7



80.9Income (loss) from operations


3.3



(1.2
)


1.1Interest income, net


2.2



1.2



0.4Net exchange (loss) gain


(0.7
)


0.1



(0.4
)Income before provision for income
    taxes


4.8



0.1



1.1Provision for income taxes


1.6



1.4



0.8Net income (loss)


3.2
%


(1.3
)%


0.3
%Gross margin:Product (as a percentage of
    product revenue)


98.8
%


98.1
%


98.6
%Service (as a percentage of
    service revenue)


63.1
%


64.8
%


68.4
%   Year
    Ended December 31, 2006 Compared to Year Ended
    December 31, 2005
  Total
    Revenue
    Year Ended December 31,2006


2005


% ChangeAmericas

$
42.7


$
32.2



32.6
%Europe, Middle East and Africa


22.7



26.0



(12.7
)Asia-Pacific Rim


12.4



8.6



44.7Total revenue

$
77.8


$
66.8



16.5
%    -27-




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##### Table of Contents



Year Ended December 31,2006


2005


% Change($ in millions)Product revenue

$
42.0


$
33.6



25.1
%Service revenue


35.8



33.2



7.9Total revenue

$
77.8


$
66.8



16.5
%     Cost
    of Product Revenue
  Year Ended December 31,2006


2005


% Change($ in millions)Cost of product revenue

$
0.5


$
0.6



(17.8
)%Gross margin


98.8
%


98.1
%   year-over-year
  Cost
    of Service Revenue
  Year Ended December 31,2006


2005


% Change($ in millions)Cost of service revenue

$
13.2


$
11.7



13.1
%Gross margin


63.1
%


64.8
%     Research
    and Development
  Year Ended December 31,2006


2005


% Change($ in millions)Research and development

$
15.9


$
15.8



0.6
%Percentage of revenue


20.5
%


23.7
%  -28-




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##### Table of Contents



Sales
    and Marketing
  Year Ended December 31,2006


2005


% Change($ in millions)Sales and marketing

$
33.2


$
30.3



9.7
%Percentage of revenue


42.7
%


45.3
%     General
    and Administrative
  Year Ended December 31,2006


2005


% Change($ in millions)General and administrative

$
12.4


$
9.3



33.3
%Percentage of revenue


15.9
%


13.9
%     Amortization
    of Other Assets
   -29-




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##### Table of Contents



Restructuring
    Income
    (Loss) from Operations
    Interest
    Income, Net
    Net
    Exchange (Loss) Gain
    Provision
    for Income Taxes
     -30-




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##### Table of Contents



Year
    Ended December 31, 2005 Compared to Year Ended
    December 31, 2004
  Total
    Revenue
    Year Ended December 31,2005


2004Americas

$
32.2


$
34.9Europe, Middle East and Africa


26.0



22.8Asia-Pacific Rim


8.6



10.3Total revenue

$
66.8


$
68.0     Year Ended December 31,2005


2004


% Change($ in millions)Product revenue

$
33.6


$
30.7



9.4
%Service revenue


33.2



37.3



(11.0
)Total revenue

$
66.8


$
68.0



(1.8
)%     Cost
    of Product Revenue
  Year Ended December 31,2005


2004


% Change($ in millions)Cost of product revenue

$
0.6


$
0.4



50.0
%Gross margin


98.1
%


98.6
%     Cost
    of Service Revenue
  Year Ended December 31,2005


2004


% Change($ in millions)Cost of service revenue

$
11.7


$
11.8



(0.8
)%Gross margin


64.8
%


68.4
%    -31-




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##### Table of Contents



Research
    and Development
  Year Ended December 31,2005


2004


% Change($ in millions)Research and development

$
15.8


$
17.2



(7.9
)%Percentage of revenue


23.7
%


25.3
%     Sales
    and Marketing
  Year Ended December 31,2005


2004


% Change($ in millions)Sales and marketing

$
30.3


$
29.3



3.5
%Percentage of revenue


45.3
%


43.0
%     General
    and Administrative
  Year Ended December 31,2005


2004


% Change($ in millions)General and administrative

$
9.3


$
8.8



5.7
%Percentage of revenue


13.9
%


13.0
%     Amortization
    of Other Assets
    Restructuring
   -32-




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##### Table of Contents



Adjustment
    of Acquisition Liabilities
    (Loss)
    Income from Operations
    Interest
    Income, Net
    Net
    Exchange Gain (Loss)
    Provision
    for Income Taxes
      Exposure
    to Currency Fluctuations
   -33-




---



##### Table of Contents



B.
    Liquidity
    and Capital Resources      2006


2005


2004($ in thousands)Cash and equivalents, beginning of
    period

$
27,936


$
33,250


$
31,517Net cash provided by (used in)
    operating activities


968



(5,267
)


1,407Net cash provided by (used in)
    investing activities


7,246



(1,169
)


(1,294
)Net cash provided by financing
    activities


1,419



1,122



1,620Cash and equivalents, end of period

$
37,569


$
27,936


$
33,250           available-for-sale.
 -34-




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##### Table of Contents



C.
    Research
    and Development, Patents and Licenses, etc.      D.
    Trend
    Information    E.
    Off-Balance
    Sheet Arrangements    F.
    Tabular
    Disclosure of Contractual Obligations    Payment Due by PeriodLess than


1-3


3-5


More thanContractual Obligations

Total


1 year


years


years


5 years($ in thousands)Operating Lease Obligations

$
23,440


$
4,717


$
7,873


$
6,671


$
4,179     G.
    Safe
    Harbor   -35-




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##### Table of Contents



Item 6.
    Directors,
    Senior Management and Employees  A.
    Directors
    and Senior Management    Name

Age


PositionKevin C. Melia


59


Chairman of the BoardChristopher J. Horn


50


Vice Chairman of the BoardPeter M. Zotto+


62


Chief Executive Officer and
    DirectorRobert C. McBride


62


Chief Financial OfficerEric A. Newcomer


52


Chief Technology OfficerChristopher M. Mirabile


40


General Counsel and SecretaryLawrence E. Alston, Jr.


45


Vice President of Corporate
    Strategy and Product ManagementWilliam B. McMurray


45


Vice President of Worldwide Sales
    and MarketingSean Baker+


47


Chief Corporate Scientist and
    DirectorIvor Kenny*


77


Non-Executive DirectorJames D. Maikranz*+


60


Non-Executive DirectorBruce J. Ryan


63


Non-Executive DirectorFrancesco Violante*


56


Non-Executive Director     
    
    Member of Audit Committee*
    
    Member of Compensation Committee
    
    Member of Nominating and Corporate Governance Committee+
    
    Member of New Markets Committee  Kevin C. Melia U.S.-based U.S.-based U.S.-based
  Christopher J. Horn U.S.-based
  Peter M. Zotto
 -36-




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##### Table of Contents



e-learning
  Robert C. McBride 17-year
  Eric A. Newcomer Understanding SOA with Web Services , Understanding Web
    Services Principles of Transaction Processing and/or
  Christopher M. Mirabile
  Lawrence E. Alston, Jr. U.S.-based U.S.-based
  William B. McMurray U.S.-based U.S.-based U.S.-based
 -37-




---



##### Table of Contents



Sean Baker
  Ivor Kenny Executive-in-Residence
  James D. Maikranz e-business
  Bruce J. Ryan
  Francesco Violante
 -38-




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##### Table of Contents



B.
    Compensation    Long-Term CompensationNumber of


Pension RetirementSalary and





Securities Underlying


andFees($)


Bonus($)


Options(#)


Similar Benefits($)All directors and executive
    officers as a group (14 persons)(1)(2)(3)(4)

$
2,176,639


$
2,016,349
(5)


2,828,217


$
49,338     (1)
    
    Includes compensation paid to William Burgess for his service as
    a director during the fiscal year ended December 31, 2006.
    Mr. Burgess died on February 8, 2006.(2)
    
    Includes compensation paid to John Conroy for his services as a
    director during the fiscal year ended December 31, 2006.
    Mr. Conroy retired from the Board of Directors on
    January 25, 2007.(3)
    
    Robert McBride served as a consultant to us from October 2005
    until being hired as an employee and appointed as our Chief
    Financial Officer on February 27, 2006. The consulting fees
    paid to Mr. McBride during the year up to the date of his
    appointment as CFO are not included in the table above.(4)
    
    Includes compensation paid to Bruce J. Ryan for his service as a
    director during the fiscal year ended December 31, 2006.
    Mr. Ryan was appointed as a director on June 1, 2006
    and subsequently confirmed by election to our board by the
    shareholders at the 2006 Annual Meeting.(5)
    
    Excludes $460,536 in bonuses earned by our executive officers
    for the fiscal year ended December 31, 2005 that was paid
    in 2006.    DirectorsName

Salary


Bonus


Fees


TotalKevin C. Melia









$
180,000


$
180,000Christopher J. Horn









$
90,000


$
90,000Peter M. Zotto

$
346,500


$
500,000
(4)





$
846,500Sean Baker

$
99,883










$
99,883William Burgess(1)









$
10,500


$
10,500John Conroy(2)









$
66,000


$
66,000Ivor Kenny









$
66,000


$
66,000James D. Maikranz









$
60,000


$
60,000Bruce J. Ryan(3)









$
43,500


$
43,500Francesco Violante









$
54,000


$
54,000     (1)
    
    William Burgess died on February 8, 2006.(2)
    
    John Conroy retired from the Board of Directors on
    January 25, 2007.(3)
    
    Bruce J. Ryan was appointed as a director on June 1, 2006
    and subsequently confirmed by election to our board by the
    shareholders at the 2006 Annual Meeting.(4)
    
    Excludes a $175,000 bonus earned by Peter Zotto for the fiscal
    year ended December 31, 2005 that was paid in 2006.   -39-




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##### Table of Contents



Non-Executive







Annual Per PersonDirector / Chairman

Monthly Fee


Board Meeting Fee


MaximumChairman

$
3,000


$
3,000


$
72,000Member

$
3,000


$
1,500


$
48,000     Committee





Nominating and Corporate

New MarketsChairman/

Compensation

Audit Committee

Governance Committee

Committee MeetingMember

Committee Meeting Fee

Meeting Fee

Meeting Fee

FeeChairman

$3,000 (annual maximum of $12,000)

$3,000 (annual maximum $24,000)

$3,000 (annual maximum of $12,000)

$3,000 (annual maximum $24,000)Member

$1,500 (annual maximum of $6,000)

$1,500 (annual maximum of $12,000)

$1,500 (annual maximum of $6,000)

$1,500 (annual maximum of $12,000)   out-of-pocket
 -40-




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##### Table of Contents



Number of Options

Exerciseto Purchase Ordinary

Price PerName

Shares

Share

Expiration DateKevin C. Melia

21,000

$
4.11


2016Christopher J. Horn

21,000

$
4.11


2016Peter M. Zotto

125,000

$
3.68


2016Robert C. McBride

300,000

$
3.75


2016Eric A. Newcomer

40,000

$
4.30


2016Christopher M. Mirabile

50,000

$
4.30


2016Lawrence E. Alston, Jr.

65,000

$
4.30


2016William B. McMurray

75,000

$
4.30


2016Sean Baker







John Conroy(1)

21,000(1)

$
4.11


(1)Ivor Kenny

3,000

$
4.11


2016James D. Maikranz

3,000

$
4.11


2016Bruce J. Ryan(2)

30,000

$
4.16


2016Francesco Violante

3,000

$
4.11


2016
     (1)
    
    John Conroy retired from the board of directors on
    January 25, 2007. The 21,000 share options have
    expired.(2)
    
    Bruce J. Ryan was appointed as a director on June 1, 2006
    and subsequently confirmed by election to our board by the
    shareholders at the 2006 Annual Meeting.   -41-




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##### Table of Contents



C.
    Board
    Practices    Termination/RenewalName

Office(s) Held

Commencement of Office

Date of Office(1)Kevin C. Melia

Non-Executive Director

May 1994

2008Chairman of the Board

May 2003

Not applicableChristopher J. Horn

Non-Executive Director

March 1991

2009Vice-Chairman

April 2005

Not applicablePeter M. Zotto

Chief Executive Officer

April 2005

Not applicableDirector

April 2005

2007Eric A. Newcomer

Chief Technology Officer

April 2002

Not applicableChristopher M. Mirabile

General Counsel

September 2003

Not applicableSecretary

September 2003

Not applicableLawrence E. Alston, Jr.(2)

Vice President Corporate Strategy
    and Product Management

January 2007

Not applicableRobert C. McBride(3)

Chief Financial Officer

February 2006

Not applicableWilliam B. McMurray(4)

Vice President of Worldwide Sales
    and Marketing

January 2004

Not applicableSean Baker

Director

March 1991

2008Chief Corporate Scientist

May 2003

Not applicableJohn Conroy(5)

Non-Executive Director

May 2001

Not applicableIvor Kenny

Non-Executive Director

August 1999

2007James D. Maikranz

Non-Executive Director

July 2001

2008Bruce J. Ryan(6)

Non-Executive Director

June 2006

2009Francesco Violante

Non-Executive Director

May 2001

2007     (1)
    
    Unless otherwise indicated, the date of termination or renewal
    is the date of our Annual General Meeting in the calendar year
    listed. On April 27, 2007, our Board of Directors
    designated our executive officers to include only those
    individuals listed as executive officers in Item 6.A. above.(2)
    
    Lawrence E. Alston served as Vice President of Marketing from
    May 2004 until his appointment as Vice President Corporate
    Strategy and Product Management in January 2007.(3)
    
    Robert McBride who had served as a consultant to us from October
    2005, was hired as an employee and was appointed our Chief
    Financial Officer in February 2006.(4)
    
    William McMurray served as Vice President of Worldwide Sales
    from January 2004 until his appointment as Vice President of
    Worldwide Sales and Marketing in January 2007.(5)
    
    John Conroy retired from the Board of Directors on
    January 25, 2007.(6)
    
    Bruce J. Ryan was appointed as a director on June 1, 2006
    and subsequently confirmed by election to our board by the
    shareholders at the 2006 Annual Meeting.    Form 20-F
 -42-




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##### Table of Contents



Board
    Committees
  Audit Committee.
  Compensation Committee. and/or
  Nominating and Corporate Governance
    Committee.
  New Markets Committee.
 -43-




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##### Table of Contents



D.
    Employees    E.
    Share
    Ownership    Number ofOrdinaryShareswhichmay be






Number ofAcquired






Ordinary Sharesupon the






which may beExercise of






Acquired uponOptions






the vesting of

ExpirationNumber of

Percentage of

granted


Range of



Phantom Share

Date ofOrdinary

Outstanding

under


Exercise

Expiration

Units granted

PhantomShares

Ordinary

Option


Price

Date

under Option

ShareName

Held

Shares(1)

Schemes(2)


of Options

of Options

Schemes(3)

Units(4)Kevin C. Melia

46,044

*


226,250


$2.25-74.50

2009-2016




Christopher J. Horn

2,338,414

6.53%


24,200


$3.25-18.75

2008-2016




Peter M. Zotto

24,000(5)

*


820,000


$3.00-5.30

2013 -2017

41,500


2008-2010Eric A. Newcomer

8,234

*


254,632


$1.99-7.33

2013-2017

11,000


2008-2010Christopher M. Mirabile

200

*


242,101


$1.99-7.33

2013-2017

14,000


2008-2010Robert C. McBride(6)



*


300,000


$3.75

2016

33,000


2008-2010Lawrence E. Alston, Jr.



*


290,625


$2.85- 5.30

2014-2016

14,000


2008-2010William B. McMurray

6,000

*


380,000


$2.85- 5.30

2014-2017

16,500


2008-2010Sean Baker

1,170,885

3.26%


77,700


$1.99-7.33

2013-2014




William Burgess(7)



*


36,000


$3.25-3.42

2013-2015




John Conroy

18,000

*


66,000
(8)

$2.25-43.15

2007




Ivor Kenny

11,800

*


80,334


$2.25-74.50

2009-2016




James Maikranz

750

*


63,000


$2.25-33.80

2011-2016




Bruce J. Ryan(9)



*


30,000


$4.16

2016




Francesco Violante

1,300

*


63,000


$2.25-43.15

2011-2016




     *
    
    Represents less than 1% of
    outstanding ordinary shares.(1)
    
    The percentage of outstanding
    shares is based on 35,966,390 ordinary shares outstanding as of
    March 31, 2007, which excludes (a) an aggregate of up
    to 272,418 ordinary shares issuable as of March 31, 2007,
    to the former Netfish shareholders prior to reduction for
    indemnification payments to which we may be entitled and
    (b) outstanding share options and phantom share units. -44-




---



##### Table of Contents



(2)
    
    The following table sets forth the
    number of share options that were vested as of March 31,
    2007, for each director and executive officer:  Name

Number of Vested OptionsKevin C. Melia


205,250Christopher J. Horn


9,200Peter M. Zotto


443,750Eric A. Newcomer


144,319Christopher M. Mirabile


114,913Robert C. McBride


75,000Lawrence E. Alston, Jr.


93,750William B. McMurray


168,750Sean Baker


67,825William Burgess


36,000John Conroy


66,000Ivor Kenny


77,334James Maikranz


54,000Bruce J. Ryan


10,000Francesco Violante


60,000   (3)
    
    All phantom share units were
    granted under the 2006 Share Incentive Plan and have two
    requirements for vesting: (i) the satisfaction of certain
    performance-based objectives and (ii) the passage of time.
    If certain specified minimum performance-based objectives for
    the 2007 fiscal year are not achieved, then none of the phantom
    share units will vest and the award will automatically lapse. If
    the minimum performance-based objectives are achieved, depending
    on the Companys total performance on a sliding scale
    between the minimum performance-based objectives and the target
    performance-based objectives, between thirty percent (30%) and
    one hundred percent (100%) of an award may vest over time from
    the date of grant. If the target performance-based objectives
    are exceeded, depending on the Companys total performance
    on a sliding scale, up to a maximum of one hundred and twenty
    percent (120%) of an award may vest over time from the date of
    grant. The purchase price per share upon the vesting of the
    phantom share units is 0.0025 or par value per share.The following table sets forth the
    maximum number of phantom share units that could be earned by
    each executive officer if the target performance-based
    objectives are exceeded:  Number of PhantomName

Share UnitsPeter M. Zotto


49,800Eric A. Newcomer


13,200Christopher M. Mirabile


16,800Robert C. McBride


39,600Lawrence E. Alston, Jr.


16,800William B. McMurray


19,800   (4)
    
    If certain specified minimum
    performance-based objectives for the 2007 fiscal year are not
    achieved, then none of the phantom share units will vest and the
    award will automatically lapse.(5)
    
    Excludes 795 shares owned by
    Mr. Zottos children.(6)
    
    Robert McBride served as a
    consultant to us from October 2005 until being hired as an
    employee and appointed as our Chief Financial Officer (and an
    executive officer) on February 27, 2006.(7)
    
    William Burgess died on
    February 8, 2006. The table includes only the number of
    options beneficially owned by the Burgess estate.(8)
    
    John Conroy retired from the Board
    of Directors on January 25, 2007. The 66,000 share
    options have expired.(9)
    
    Bruce Ryan was appointed as a
    director on June 1, 2006 and subsequently confirmed by
    election to our board by the shareholders at the 2006 Annual
    Meeting.    2006 Share
    Incentive Plan
   -45-




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##### Table of Contents




    Share options (both incentive and non-qualified options), share
    appreciation rights, restricted share awards, unrestricted share
    awards, phantom share units and performance based awards may be
    granted or awarded to employees, consultants, directors and
    officers under the 2006 Share Incentive Plan;
    The 2006 Share Incentive Plan will be administered by
    either the Board of Directors or the Compensation Committee of
    the Board of Directors. The Board of Directors has designated
    the Compensation Committee as the administrator of the
    2006 Share Incentive Plan;
    The maximum number of shares that may be issued under the
    2006 Share Incentive Plan is the sum of (i) 4,000,000
    ordinary shares, plus (ii) shares subject to awards
    outstanding under the 1997 Share Option Scheme and
    1997 Director Share Option Scheme that are subsequently
    forfeited, cancelled, held back upon exercise of an option or
    settlement of an award to cover the exercise price or tax
    withholding, reacquired by the Company prior to vesting,
    satisfied without the issuance of shares or otherwise terminated
    (other than by exercise). As of December 31, 2006, an
    aggregate of 4,144,108 of our ordinary shares are reserved for
    issuance upon the exercise of options outstanding and options
    available for grant under the 2006 Share Incentive Plan.
    No more than twenty-five percent (25%) of shares issued under
    the 2006 Plan may be awarded as incentive options. Each share
    subject to unrestricted share awards, restricted share awards or
    phantom share units will be considered to be the equivalent of
    1.5 shares subject to a share option for purposes of
    calculating the maximum share limit;
    The Compensation Committee has the authority to select the
    individuals who will receive awards and determine the terms of
    the awards granted, including: (1) the number of shares
    subject to each award; (2) the date the award becomes
    exercisable or vests; (3) the exercise or purchase price
    (which in the case of an incentive share option cannot be less
    than the market price of the ordinary shares as of the date of
    grant or, in the case of an employee holding more than 10% of
    the combined voting power of IONA, 110% of the market price of
    the ordinary shares as of the date of grant); (4) the
    duration of the award; and (5) the time, manner and form of
    payment upon exercise or vesting of an award; and
    Any material amendment (other than an amendment that curtails
    the scope of the 2006 Share Incentive Plan) is subject to
    approval by the Companys shareholders.     -46-




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##### Table of Contents



1997 Share
    Option Scheme
      1997 Director
    Share Option Scheme
       -47-




---



##### Table of Contents



Genesis
    Development Corporation 1997 Stock Option Plan
    Object-Oriented
    Concepts, Inc. Stock Option Plan
    Netfish
    Technologies, Inc. 1999 Stock Option Plan
    1999
    Employee Share Purchase Plan
   -48-




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##### Table of Contents



Item 7.
    Major
    Shareholders and Related Party Transactions  A.
    Major
    Shareholders        Number of


Percentage ofOrdinary Shares


Ordinary SharesName of Beneficial Owner

Beneficially Owned


Beneficially OwnedChristopher J. Horn(1)


2,347,614



6.53
%Schroder Investment Management
    International Ltd.(2)


2,599,864



7.23
%Peninsula Capital Management, LP(3)


4,248,952



11.81
%     (1)
    
    Includes 9,200 ordinary shares subject to outstanding share
    options which were exercisable within the 60 day period
    following March 31, 2007.(2)
    
    Schroder Investments Management International Ltd. reported to
    us on February 7, 2007, that it beneficially owned an
    aggregate of 2,599,864 ADRs as of February 7, 2007.(3)
    
    Peninsula Capital Management, LP reported to us on
    January 8, 2007, that it beneficially owned an aggregate of
    4,248,952 ADRs as of January 8, 2007.        B.
    Related
    Party Transactions   -49-




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##### Table of Contents



C.
    Interests
    of Experts and Counsel    Item 8.
    Financial
    Information  A.
    Consolidated
    Statements and Other Financial Information    Legal
    Proceedings
    Dividend
    Distribution Policy
    B.
    Significant
    Changes     -50-




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##### Table of Contents



Item 9.
    The
    Offer and Listing  A.
    Offer
    and Listing Details    Market
    Price Information
    High


LowYear Ended December 31,
    2002


29.75



1.70Year Ended December 31,
    2003


4.95



1.27Year Ended December 31,
    2004


7.54



2.32Year Ended December 31,
    2005


4.80



2.03Year Ended December 31,
    2006


4.52



2.32Year Ended December 31,
    2005First Quarter


4.80



2.90Second Quarter


3.21



2.30Third Quarter


2.85



2.03Fourth Quarter


2.63



2.23Year Ended December 31,
    2006First Quarter


3.55



2.32Second Quarter


3.70



3.00Third Quarter


3.60



3.10Fourth Quarter


4.52



3.30Year Ended December 31,
    2007First Quarter


4.60



3.69Month EndedOctober 2006


4.52



3.30November 2006


4.45



4.07December 2006


4.29



3.85January 2007


4.31



3.69February 2007


4.60



3.95March 2007


4.55



4.10  -51-




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##### Table of Contents



High


LowYear Ended December 31,
    2002

$
27.14


$
1.65Year Ended December 31,
    2003

$
5.90


$
1.23Year Ended December 31,
    2004

$
9.46


$
2.50Year Ended December 31,
    2005

$
5.95


$
2.52Year Ended December 31,
    2006

$
5.70


$
2.86Year Ended December 31,
    2005First Quarter

$
5.95


$
3.75Second Quarter

$
4.10


$
2.80Third Quarter

$
3.50


$
2.52Fourth Quarter

$
3.58


$
2.57Year Ended December 31,
    2006First Quarter

$
4.60


$
2.86Second Quarter

$
4.75


$
3.82Third Quarter

$
4.64


$
3.87Fourth Quarter

$
5.70


$
4.11Year Ended December 31,
    2007First Quarter

$
6.35


$
4.72Month EndedOctober 2006

$
5.45


$
4.11November 2006

$
5.70


$
5.08December 2006

$
5.59


$
4.60January 2007

$
5.69


$
4.72February 2007

$
6.35


$
5.15March 2007

$
6.28


$
5.25   B.
    Plan
    of Distribution    C.
    Markets    D.
    Selling
    Shareholders    E.
    Dilution    F.
    Expenses
    of the Issue   -52-




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##### Table of Contents



Item 10.
    Additional
    Information  A.
    Share
    Capital    B.
    Memorandum
    and Articles of Association  Memorandum
    and Articles of Association
  Form F-1 No. 333-6396) Form S-8 No. 333-11384) Form F-3 No. 333-81212).
  NASDAQ
    Corporate Governance Disclosures
    C.
    Material
    Contracts  Form 20-F
  Form 20-F.
 -53-




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##### Table of Contents



D.
    Exchange
    Controls        E.
    Taxation  Irish Tax
    Considerations
    Ireland-United
 -54-




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##### Table of Contents



HOLDERS OF ORDINARY SHARES OR ADSs ARE ADVISED TO
    CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE APPLICATION
    OF IRISH TAXATION LAWS TO THEIR PARTICULAR CIRCUMSTANCES IN
    RELATION TO THE PURCHASE, OWNERSHIP OR DISPOSITION OF ORDINARY
    SHARES OR ADSs.
    (i)
    Irish Tax
    Considerations Applicable to Irish Holders      Taxation
    of Dividends
          Disposals
    of Ordinary Shares or ADSs
   -55-




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##### Table of Contents



Capital
    Acquisitions Tax
    Stamp
    Duty
           -56-




---



##### Table of Contents



(ii)  Irish
    Tax Considerations Applicable to U.S. Holders
      Taxation
    of Dividends
        
    the ADR register maintained by the Depositary shows the
    U.S. Holder as having a U.S. address on the
    register; or
    where there is an intermediary between the Depositary and the
    beneficial holder of ADSs, the Depositary receives confirmation
    from the intermediary that the beneficial owners address
    in the intermediarys records is in the U.S.   -57-




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##### Table of Contents



.
  Capital
    Gains on Disposals of Ordinary Shares or ADSs
      Irish
    Capital Acquisitions Tax
        Stamp
    Duty
    Certain
    U.S. Federal Income Tax Considerations
    
    a citizen or resident of the United States, including an alien
    individual who is a lawful permanent resident of the United
    States or who meets the substantial presence residency test
    under U.S. federal income tax laws; -58-




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##### Table of Contents




    a corporation (or other entity treated as a corporation for
    U.S. federal income tax purposes) that is created or
    organized under the laws of the United States, any of the fifty
    states or the District of Columbia, unless otherwise provided by
    Treasury Regulations;
    an estate the income of which is includible in gross income for
    U.S. federal income tax purposes regardless of
    source; or
    a trust, if a U.S. court is able to exercise primary
    supervision over its administration and one or more
    U.S. persons have the authority to control all substantial
    decisions of the trust.    
    a bank, thrift, insurance company, regulated investment company,
    or other financial institution or financial service company;
    a broker or dealer in securities or foreign currency;
    a person who has a functional currency other than the
    U.S. dollar;
    a partnership or other flow-through entity (including a limited
    liability company treated as a partnership for U.S. federal
    income tax purposes);
    an S corporation;
    a person subject to alternative minimum tax;
    a person who owns our ordinary shares or ADSs evidenced by ADRs
    as part of a straddle, hedging transaction, conversion
    transaction, constructive sale transaction or other
    risk-reduction transaction;
    a tax-exempt entity;
    investors who own (directly, indirectly or through attribution)
    10% or more of our outstanding voting shares;
    a person who has ceased to be a U.S. citizen or to be taxed
    as a resident alien; or
    a person who acquired our ordinary shares or ADSs evidenced by
    ADRs in connection with employment or the performance of
    services generally.  non-U.S. tax This discussion does not apply to any
    person who is not a U.S. Holder or to any person who does
    not hold ordinary shares or ADSs.
    U.S. HOLDERS OF OUR ORDINARY SHARES OR ADSs ARE
    ADVISED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
    U.S. FEDERAL, STATE, LOCAL OR
    NON-U.S. TAX
    CONSEQUENCES OF THE PURCHASE, OWNERSHIP OR DISPOSITION OF
    ORDINARY SHARES OR ADSs APPLICABLE IN THEIR PARTICULAR TAX
    SITUATIONS.
 -59-




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##### Table of Contents



Dividends
  121-day
        Sale,
    Exchange or Other Disposition
   -60-




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##### Table of Contents



Passive
    Foreign Investment Company
    
    75% or more of its gross income in a taxable year falls within
    specific categories of passive income; or
    the average percentage of its assets in a taxable year
    (ordinarily determined based on their market value) which
    produce passive income or are held for the production of passive
    income is at least 50%.    
    Excess distributions by us to a U.S. Holder would be taxed
    in a special way. Excess distributions are amounts
    received by a U.S. Holder with respect to our ordinary
    shares or ADSs in any taxable year that exceed 125% of the
    average distributions received by such U.S. Holder from us
    in the shorter of either the three previous years or the
    U.S. Holders holding period for the ordinary shares
    or ADSs before the current taxable year. Excess distributions
    must be allocated ratably to each day that a U.S. Holder
    has held our ordinary shares or ADSs. A U.S. Holder would
    be required to include amounts allocated to the current taxable
    year and years before we became a passive foreign investment
    company as ordinary income. In addition, amounts allocated to
    each taxable year beginning with the year we first became a
    passive foreign investment company would be taxed at the highest
    rate in effect for that year on ordinary income and the tax
    would be subject to an interest charge at the rate applicable to
    deficiencies for income tax.
    The entire amount of gain that is realized by a U.S. Holder
    upon the sale or other disposition of our ordinary shares or
    ADSs evidenced by ADRs would also be considered an excess
    distribution and would be subject to tax as described above.
    The adjusted tax basis in our ordinary shares or ADSs evidenced
    by ADRs acquired from a decedent who was a U.S. Holder of
    the ordinary shares or ADSs would not be increased to equal the
    fair market value of such ordinary shares or ADSs as of the date
    of the decedents death but would instead be equal to the
    decedents adjusted tax basis, if lower. A U.S. Holder
    could not avoid this result by electing to mark our ordinary
    shares or ADSs to market.  shareholder-by-shareholder
    
    if the fair market value of the U.S. Holders ordinary
    shares or ADSs exceeds the U.S. Holders adjusted tax
    basis in such ordinary shares or ADSs as of the close of the
    U.S. Holders taxable year, the U.S. Holder would
    recognize the amount of the excess as ordinary income; -61-




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##### Table of Contents




    if the fair market value of the U.S. Holders ordinary
    shares or ADSs is less than the U.S. Holders adjusted
    tax basis in those ordinary shares or ADSs as of the close of
    the U.S. Holders taxable year, the U.S. Holder
    might recognize the amount of the difference as ordinary loss.
    Losses would be allowed only for the amount of net mark to
    market gain previously included by the U.S. Holder under
    the election for prior taxable years; and
    if the U.S. Holder has elected to mark our ordinary shares
    or ADSs to market for all taxable years during which the
    U.S. Holder owned our ordinary shares or ADSs and we were a
    passive foreign investment company, the excess
    distribution rules generally would not apply to the
    U.S. Holder.    Status of
    IONA as a Passive Foreign Investment Company
    Backup
    Withholding and Information Reporting
    
    furnish its taxpayer identification number (social security or
    employer identification number) and certify that such number is
    correct;
    certify that such U.S. Holder is not subject to backup
    withholding; or
    otherwise comply with the applicable requirements of the backup
    withholding rules.    F.
    Dividends
    and Paying Agents    G.
    Statements
    by Experts    H.
    Documents
    on Display   -62-




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##### Table of Contents



I.
    Subsidiary
    Information    Item 11.
    Quantitative
    and Qualitative Disclosures About Market Risk  The following discussion regarding our market risk contains
    forward-looking statements within the meaning of the safe
    harbor provisions of the Private Securities Litigation
    Reform Act of 1995 that relate to future events or our future
    financial performance. In some cases, you can identify
    forward-looking statements by terminology, such as
    may, will, should,
    could, expect, plan,
    anticipate, believe,
    estimate, project, predict,
    intend, potential, or
    continue or the negative of such terms or other
    comparable terminology, although not all forward-looking
    statements contain such terms. These forward-looking statements
    are neither promises nor guarantees but rather are subject to a
    number of risks and uncertainties which could cause actual
    results to differ materially from those described in the
    forward-looking statements, including risks of exchange rate
    fluctuations, interest rate fluctuations and general market
    volatility, that could cause actual results to differ materially
    from those discussed in the forward-looking statements.
        Item 12.
    Description
    of Securities Other Than Equity Securities    PART II
  Item 13.
    Defaults,
    Dividend Arrearages and Delinquencies    Item 14.
    Material
    Modifications to the Rights of Security Holders and Use of
    Proceeds  Use of
    Proceeds from Initial Public Offering
  Form F-1 No. 333-6396)
  Purchase and installation of
    furniture and fixtures

$
14,462,000Purchase and installation of
    machinery and equipment

$
35,101,000Short-term debt instruments

$
9,631,654Redemption of outstanding
    preference shares and payment of accrued and unpaid dividends
    thereon

$
380,000  -63-




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##### Table of Contents



Item 15T.
    Controls
    and Procedures  (a)  Disclosure
    Controls and Procedures
  Rule 13a-15(e))
  (b)  Managements
    Annual Report on Internal Control over Financial
    Reporting
  Rule 13a-15(f)
        (c)  Changes
    in Internal Control over Financial Reporting
  Rule 13a-15
  Item 16.
    [Reserved]  Item 16A.
    Audit
    Committee Financial Expert  Form 20-F.
 -64-




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##### Table of Contents



Item 16B.
    Code
    of Ethics  Form 20-F
  Item 16C.
    Principal
    Accountant Fees and Services  Auditor
    Fees
    Year EndedDecember 31,2006


2005(in thousands)Audit Fees(1)

$
843


$
769Audit-Related Fees(2)


20



19Tax Fees(3)


212



197All Other Fees(4)


2



2Total

$
1,077


$
987     (1)
    
    Audit Fees are fees billed by Ernst & Young
    for professional services rendered for the audit of the annual
    financial statements or services that are normally provided in
    connection with statutory and regulatory filings or engagements,
    including the audit of our consolidated and annual financial
    statements. Audit Fees also include fees billed for statutory
    audits of IONA (including its subsidiaries); the provision of
    consents; and the review of documents filed with the SEC.(2)
    
    Audit-Related Fees consist of the fees billed by
    Ernst & Young for assurance and related services that
    are reasonably related to the performance of the audit or review
    of the financial statements and not reported under Audit
    Fees. Audit-Related Fees includes fees for employee
    benefit plan audits; consultations concerning financial
    accounting and reporting standards; and advisory services
    associated with our financial reporting.(3)
    
    Tax Fees include fees billed by Ernst &
    Young for professional services rendered for tax compliance, tax
    advice, and tax planning. Tax fees also include fees for the
    review, preparation and amending of federal and local tax
    returns of the United States, Ireland and other foreign
    countries.(4)
    
    All Other Fees include fees billed by
    Ernst & Young for products and services other than the
    Audit Fees, Audit-Related Fees and Tax Fees.  Audit
    Committees Pre-approval Policies and Procedures
   -65-




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##### Table of Contents



Item 16D.
    Exemptions
    From the Listing Standards For Audit Committees    Item 16E.
    Purchase
    of Equity Securities by the Issuer and Affiliated
    Purchasers   -66-




---



##### Table of Contents



PART III
  Item 17.
    Financial
    Statements    Item 18.
    Financial
    Statements  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageReport of
    Independent Registered Public Accounting Firm


F-1Consolidated
    Balance Sheets at December 31, 2006 and 2005


F-2Consolidated
    Statements of Operations for each of the three years in the
    period ended
    December 31, 2006


F-3Consolidated
    Statements of Changes in Shareholders Equity for each of
    the three years in the period ended December 31,
    2006


F-4Consolidated
    Statements of Cash Flows for each of the three years in the
    period ended
    December 31, 2006


F-5Notes to
    Consolidated Financial Statements


F-6  -67-




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##### Table of Contents



Item 19.
    Exhibits  Exhibit No.

Description of Exhibit1
.1

Restated Articles of Association,
    as amended, of IONA Technologies PLC (filed as Exhibit 4.2
    to IONAs Registration Statement on
    Form S-8
    (File
    No. 333-11384)
    and incorporated herein by reference)1
.2

Memorandum of Association, as
    amended, of IONA Technologies PLC (filed as Exhibit 3.3 to
    IONAs Registration Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)2
.1

Specimen Certificate representing
    ordinary shares (filed as Exhibit 4.1 to IONAs
    Registration Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)2
.2

Amended and Restated Deposit
    Agreement dated as of April 26, 2004, by and among IONA
    Technologies PLC, Deutsche Bank Trust Company Americas and
    Holders and Beneficial Owners of American Depositary
    Shares Evidenced by American Depositary Receipts (filed as
    Exhibit 2.2 to IONAs annual report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)4
.1

Agreement and Plan of
    Reorganization dated as of February 14, 2001, by and among
    IONA Technologies PLC, NV Acquisition Corp. and Netfish
    Technologies, Inc. (filed as Exhibit 4.4 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2000 and incorporated
    herein by reference)4
.2

Lease dated July 31, 1998, by
    and between AIB Custodial Nominees Limited and IONA Technologies
    PLC (filed as Exhibit 4.5 to IONAs annual report on
    Form 20-F
    for the year ended December 31, 2000 and incorporated
    herein by reference)4
.3

Lease dated March 2, 1999, by
    and between Boston Properties Limited Partnership and IONA
    Technologies, Inc. (filed as Exhibit 4.6 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2000 and incorporated
    herein by reference)4
.4

Executive Share Option Scheme
    (filed as Exhibit 10.1 to IONAs Registration
    Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)4
.5

1997 Share Option Scheme, as
    amended (filed as Exhibit 4.4 to IONAs Registration
    Statement on
    Form S-8
    (File
    No. 333-12326)
    and incorporated herein by reference)4
.6

1997 Director Share Option
    Scheme (filed as Exhibit 10.3 to IONAs Registration
    Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)4
.7

1999 Employee Share Purchase Plan,
    as amended (filed as Exhibit 4.5 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-11384)
    and incorporated herein by reference)4
.8

Genesis Development Corporation
    1997 Stock Option Plan (filed as Exhibit 4.5 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-12326)
    and incorporated herein by reference)4
.9

Object-Oriented Concepts, Inc.
    Stock Option Plan (filed as Exhibit 4.4 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-13224)
    and incorporated herein by reference)4
.10

Netfish Technologies, Inc. 1999
    Stock Option Plan (filed as Exhibit 4.5 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-13494)
    and incorporated herein by reference)4
.11

2006 Share Incentive Plan
    (filed as Exhibit 4.4 to IONAs Registration Statement
    on
    Form S-8
    (File
    No. 333-137364)
    and incorporated herein by reference)4
.12

Non-Executive Directors Change in
    Control Plan (filed as Exhibit 4.12 to IONAs annual
    report on
    Form 20-F
    for the year ended December 31, 2002 and incorporated
    herein by reference)4
.13

Form of Change of Control
    Agreement by and among IONA Technologies, Inc., IONA
    Technologies PLC and each of the executive officers of IONA
    Technologies PLC (filed as Exhibit 4.13 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2002 and incorporated
    herein by reference) -68-




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##### Table of Contents



Exhibit No.

Description of Exhibit4
.14

Employment Agreement by and
    between Peter M. Zotto and IONA Technologies PLC dated as of
    April 14, 2005 (filed as Exhibit 4.14 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2004 and incorporated
    herein by reference)4
.15

Indemnification Agreement by and
    between IONA Technologies PLC and Robert McBride dated as of
    December 19, 2005 (filed as Exhibit 4.15 to
    IONAs annual report on
    Form 20-F
    for the year ended December 31, 2005 and incorporated
    herein by reference)4
.16

Amendment dated August 1,
    2005 to Lease dated March 2, 1999, by and between Boston
    Properties Limited Partnership and IONA Technologies, Inc.
    (filed as Exhibit 4.16 to IONAs annual report on
    Form 20-F
    for the year ended December 31, 2005 and incorporated
    herein by reference)8
.1

Active Subsidiaries of IONA
    Technologies PLC11
.1

Code of Business Conduct and
    Ethics (filed as Exhibit 11.1 to IONAs annual report
    on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)12
.1

Certification of Principal
    Executive Officer12
.2

Certification of Principal
    Financial Officer13
.1

Certification of Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200213
.2

Certification of Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200215
.1

Consent of Independent Registered
    Public Accounting Firm15
.2

Audit Committee Charter (filed as
    Exhibit 14.2 to IONAs annual report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)15
.3

Nominating and Corporate
    Governance Committee Charter (filed as Exhibit 14.3 to
    IONAs annual report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)15
.4

Description of American Depositary
    Receipts (filed as Exhibit 14.4 to IONAs annual
    report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)     
    
    Indicates a management contract or any compensatory plan,
    contract or arrangement. -69-




---



##### Table of Contents



SIGNATURES
  Form 20-F
    By:
    /s/  Peter
    M. Zotto  Peter M. Zotto
 Chief Executive
    Officer
   -70-




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             
  F-1




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC



CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except share and per
    share data) December 31,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
37,569


$
27,936Restricted cash (Note 5)


295



495Marketable securities (Note 2)


16,100



23,685Accounts receivable, net of
    allowance for doubtful accounts of $653 at December 31,
    2006 and $740 at December 31, 2005


26,484



17,949Prepaid expenses


1,524



2,033Other current assets


126



921Total current assets


82,098



73,019Property and equipment, net
    (Note 8)


2,859



3,893Other assets, net


140



191Total assets

$
85,097


$
77,103LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable

$
957


$
2,406Accrued payroll and related
    expenses


7,109



5,385Deferred revenue


20,351



21,618Other accrued liabilities
    (Note 6)


10,912



10,226Total current liabilities


39,329



39,635Long-term deferred revenue


976



1,090Other liabilities (Note 4)


995



1,137Commitments and contingencies






Redeemable preference shares,
    0.0025 par value, 101,250,000 shares authorized;
    None issued and outstanding (Note 9)






Shareholders equity:Ordinary shares,
    0.0025 par value; 150,000,000 shares authorized;
    35,929,627 and 35,360,538 shares issued and outstanding at
    December 31, 2006 and 2005, respectively (Note 9)


99



98Additional paid-in capital


501,992



495,957Accumulated deficit


(458,294
)


(460,814
)Accumulated other comprehensive
    income






Total shareholders equity


43,797



35,241Total liabilities and
    shareholders equity

$
85,097


$
77,103     F-2




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC



CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except share and per
    share data) Year Ended December 31,2006


2005


2004Revenue:Product revenue

$
42,056


$
33,630


$
30,735Service revenue


35,782



33,176



37,284Total revenue (Note 14)


77,838



66,806



68,019Cost of Revenue:Cost of product revenue


523



636



435Cost of service revenue


13,220



11,684



11,790Total cost of revenue


13,743



12,320



12,225Gross profit


64,095



54,486



55,794Operating expenses:Research and development


15,946



15,848



17,204Sales and marketing


33,221



30,293



29,263General and administrative


12,375



9,287



8,808Amortization of other assets






94



374Restructuring (Note 4)






(189
)


Adjustment of acquisition
    liabilities (Note 3)










(600
)Total operating expenses


61,542



55,333



55,049Income (loss) from operations


2,553



(847
)


745Interest income, net


1,738



825



286Net exchange (loss) gain


(559
)


99



(273
)Income before provision for income
    taxes


3,732



77



758Provision for income taxes
    (Note 13)


1,212



920



566Net income (loss)

$
2,520


$
(843
)

$
192Basic net income (loss) per
    ordinary share and per ADS

$
0.07


$
(0.02
)

$
0.01Shares used in computing basic net
    income (loss) per ordinary share and
    per ADS


35,648



35,139



34,570Diluted net income (loss) per
    ordinary share and per ADS

$
0.07


$
(0.02
)

$
0.01Shares used in computing diluted
    net income (loss) per ordinary share and per ADS (Note 12)


36,269



35,139



36,333     F-3




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC



CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
    EQUITY

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





Deferred


Other


TotalNumber of


Share


Paid-in


Accumulated


Share-Based


Comprehensive


ShareholdersShares


Capital


Capital


Deficit


Compensation


Income


EquityBalance at December 31, 2003


34,005,707


$
94


$
493,260


$
(460,163
)

$
(79
)

$



$
33,112Amortization of deferred
    share-based compensation


















38







38Employee share purchase plan
    (Note 11)


178,255



1



393















394Reversal of deferred share-based
    compensation on expiry or forfeiture of options










(41
)






41







Issuance of ordinary shares on
    exercise of options (Note 10)


619,639



1



1,225















1,226Net income














192











192Balance at December 31, 2004


34,803,601



96



494,837



(459,971
)










34,962Employee share purchase plan
    (Note 11)


173,473



1



425















426Issuance of ordinary shares on
    exercise of options (Note 10)


383,464



1



695















696Net loss














(843
)










(843
)Balance at December 31, 2005


35,360,538



98



495,957



(460,814
)










35,241Employee share purchase plan
    (Note 11)


172,729







473















473Issuance of ordinary shares on
    exercise of options (Note 10)


396,360



1



945















946Share-based compensation
    (Note 10)










4,617















4,617Other comprehensive income


























Net income














2,520











2,520Balance at December 31, 2006


35,929,627


$
99


$
501,992


$
(458,294
)

$



$



$
43,797    F-4




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC



CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands) Year Ended December 31,2006


2005


2004CASH FLOWS FROM OPERATING
    ACTIVITIES:Net income (loss)

$
2,520


$
(843
)

$
192Adjustments to reconcile net
    income (loss) to net cash provided by (used in) operating
    activities:Depreciation and amortization


2,007



2,356



3,060Share-based compensation


4,617







38Provision for doubtful accounts


88



(333
)


188(Profit) loss on marketable
    securities


(233
)


(199
)


138Loss on disposal of property and
    equipment


1



4



50Changes in operating assets and
    liabilities:Restricted cash deposits


200



3,000



250Purchase of marketable securities


(8,927
)


(33,291
)


(27,721
)Sale of marketable securities


8,700



32,975



25,800Accounts receivable


(8,623
)


(4,704
)


10,155Prepaid expenses


509



(430
)


936Other assets


671



200



(617
)Accounts payable


(1,449
)


(196
)


119Accrued payroll and related
    expenses


1,724



(149
)


(1,726
)Other liabilities


544



(5,186
)


(6,724
)Deferred revenue


(1,381
)


1,529



(2,731
)Net cash provided by (used in)
    operating activities

$
968


$
(5,267
)

$
1,407CASH FLOWS FROM INVESTING
    ACTIVITIES:Purchase of property and equipment

$
(799
)

$
(1,169
)

$
(1,122
)Purchase of other assets










(176
)Proceeds from disposal of property
    and equipment










4Purchase of marketable securities


(58,163
)






Sale of marketable securities


66,208







Net cash used in investing
    activities

$
7,246


$
(1,169
)

$
(1,294
)CASH FLOWS FROM FINANCING
    ACTIVITIES:Issuance of shares, net of
    issuance costs

$
1,419


$
1,122


$
1,620Net cash provided by financing
    activities

$
1,419


$
1,122


$
1,620NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS

$
9,633


$
(5,314
)

$
1,733CASH AND CASH EQUIVALENTS AT
    BEGINNING OF PERIOD


27,936



33,250



31,517CASH AND CASH EQUIVALENTS AT END
    OF PERIOD

$
37,569


$
27,936


$
33,250SUPPLEMENTAL DISCLOSURE OF CASH
    FLOW INFORMATION:Income taxes paid

$
1,312


$
263


$
609     F-5




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  1.
    Organization
    and Summary of Significant Accounting Policies  Organization
    Basis of
    Presentation and Principles of Consolidation
      Companies
    Acts, 1963 to 2006
    Foreign
    Currency Translation
  Foreign Currency Translation
  Revenue
    Recognition
  97-2, Software Revenue Recognition SOP 98-4 SOP 98-9 SOP 97-2).
    SOP 97-2,
  
    persuasive evidence of an arrangement exists; F-6




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   
    delivery has occurred;
    fee is fixed or determinable; and
    collectability is probable.      
    Support contracts are regularly sold on a stand-alone basis to
    customers that choose to renew the support contract beyond the
    initial term. Support contract pricing is based on established
    list pricing. The renewal purchases at consistent pricing
    provide the basis for VSOE on the support contracts. Support
    revenue is recognized ratably over the contract term.
    Consulting contracts are regularly sold on a stand-alone basis
    to customers requesting these services. Consulting contract
    pricing is at a daily flat rate and customers purchase an
    appropriate number of service days. The consulting services
    delivered on a stand-alone basis at consistent pricing provide
    the basis for VSOE on the consulting contracts. Consulting
    revenue is recognized as the services are performed.       F-7




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Allowances
    for Doubtful Accounts
      Balance at








Balance atBeginning of


Additions





End ofPeriod


(Reversals)


Deductions(1)


PeriodYear ended December 31, 2006

$
740


$
88


$
175


$
653Year ended December 31, 2005

$
1,073


$
(333
)





$
740Year ended December 31, 2004

$
1,093


$
188


$
208


$
1,073     (1)
    
    Actual write-offs of uncollectible accounts receivable.  Cost of
    Revenue
    Cash
    Equivalents
    Financial
    Instruments
    Marketable
    Securities
   F-8




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  available-for-sale Accounting
    for Certain Investments in Debt and Equity Securities
  Research
    and Development
  Accounting for
    the Costs of Computer Software to be Sold, Leased or Otherwise
    Marketed
  Other
    Assets
    Accounting for
    Impairment of Long-Lived Assets
  
    significant underperformance relative to expected historical or
    projected future operating results;
    significant changes in the manner of the Companys use of
    the acquired assets or the strategy for its overall business;
    significant negative industry or economic trends;
    significant decline in IONAs share price for a sustained
    period; and
    significant decline in IONAs market capitalization
    relative to net book value.  Property
    and Equipment
    Computer equipment

3 yearsLeasehold improvements

4 to 15 yearsOffice equipment

5 yearsFurniture and fixtures

3 to 10 years     Software
    Development Costs
  98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use (SOP 98-1). SOP 98-1,
 F-9




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Concentration
    of Credit Risk
      Compensated
    Absences
  Accounting for Compensated
    Absences.
  Accounting
    for Income Taxes
  Accounting for Income Taxes
  Share-Based
    Compensation
    Share-Based Payment Accounting for Stock Issued to Employees
 F-10




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Accounting for Share-based Compensation
    Year Ended December 31,2005


2004Net (loss) income, as reported

$
(843
)

$
192Add: Share-based compensation
    expense included in reported net (loss) income,
    net of related tax effects






38Deduct: Total share-based employee
    compensation expense determined under fair 
    value based method for all awards, net of related tax effects


(11,516
)


(21,299
)Pro forma net loss

$
(12,359
)

$
(21,069
)Net (loss) income per share:Basic and dilutedas reported

$
(0.02
)

$
0.01Basic and dilutedpro forma

$
(0.35
)

$
(0.61
)   Defined
    Contribution Plans
    Advertising
    and Promotion Expense
    Comprehensive
    Income (Loss)
  Reporting Comprehensive Income
  2006Net income

$
2,520Other comprehensive income (loss):Unrealized holding losses arising
    during period


Less: reclassification adjustment
    for gains realized in net income


Net unrealized losses on
    investments


Total comprehensive income

$
2,520  F-11




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Reclassifications
    Recent
    Accounting Pronouncements
  Accounting for
    Uncertainty in Income Taxes
  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial Liabilities
    Including an amendment of FASB Statement No. 115
  2.
    Marketable
    Securities    F-12




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  As of December 31, 2006Gross


GrossAmortized


Unrealized


Unrealized


MarketCost


Gains


Losses


Value(U.S. dollars in thousands)Corporate bonds

$











$
Auction rate securities


16,100











16,100Total marketable securities

$
16,100


$



$



$
16,100   As of December 31, 2005Gross


GrossAmortized


Unrealized


Unrealized


MarketCost


Gains


Losses


Value(U.S. dollars in thousands)Corporate bonds

$
3,484







(9
)

$
3,475U.S. government agency
    securities


20,240



9



(39
)


20,210Total marketable securities

$
23,724


$
9


$
(48
)

$
23,685     2006


2005


2004(U.S. dollars in thousands)Unrealized loss at beginning of
    year

$
(39
)

$
(139
)

$
(42
)Included in net income (loss) for
    the year


39



100



(97
)Unrealized loss at end of year

$



$
(39
)

$
(139
)   3.
    Acquisition
    of Netfish Technologies, Inc.      4.
    Restructuring     F-13




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
           sub-let,
    Excess Facilities


Severance


Total(U.S. dollars in thousands)Balance at December 31, 2003

$
11,040


$
2,864


$
13,9042004 charges






560



560Cash outlays in 2004


(3,469
)


(2,503
)


(5,972
)2004 adjustments in estimates






(560
)


(560
)Balance at December 31, 2004


7,571



361



7,932Cash outlays in 2005


(5,527
)


(264
)


(5,791
)2005 adjustments in estimates


(92
)


(97
)


(189
)Balance at December 31, 2005


1,952







1,9522006 charges


207







207Cash outlays in 2006


(645
)






(645
)2006 adjustments in estimates


(207
)






(207
)Balance at December 31, 2006

$
1,307


$



$
1,307   5.
    Restricted
    Cash   F-14




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Other
    Accrued Liabilities    As of December 31,2006


2005(U.S. dollars in thousands)Income and other taxes payable

$
4,775


$
4,497Other


6,137



5,729Total other accrued liabilities

$
10,912


$
10,226   7.
    Operating
    Lease Commitments    Year Ending December 31,

Future Lease Payments


Future Rental Income2007

$
4,717


$
2,1672008


4,122



1,0272009


3,751



3772010


3,519



3122011


3,152



312Thereafter


4,179



467Total

$
23,440


$
4,662     8.  Property
    and Equipment, Net
    As of December 31,2006


2005(U.S. dollars in thousands)Computer equipment

$
12,534


$
14,300Leasehold improvements


6,545



6,529Office equipment


647



610Furniture and fixtures


780



780Total property and equipment

$
20,506


$
22,219Accumulated depreciation


(17,647
)


(18,326
)Total property and equipment, net

$
2,859


$
3,893    F-15




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   9.
    Redeemable
    Preference Shares and Shareholders Equity        10.
    Share-Based
    Compensation Plans   F-16




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Available forPlan

Authorized


Outstanding


Future Grants1997 Share Option Scheme


12,900,000



7,006,198



2006 Share Incentive Plan


4,000,000



68,250



4,075,8581997 Director Share Option
    Scheme


500,000



432,000



Genesis Development Corporation
    1997 Stock Option Plan



*


228



Netfish Technologies, Inc. 1999
    Stock Option Plan



*


26,883



17,400,000



7,533,559



4,075,858     *
    
    In connection with acquisitions of Genesis, Inc. and Netfish all
    of the outstanding share options for these plans were converted
    into options to purchase IONAs ordinary shares.    As of Year Ended December 31,2006


2005


2004Number


Weighted


Number


Weighted


Number


Weightedof


Average


of


Average


of


AverageOptions


Exercise Price


Options


Exercise Price


Options


Exercise PriceOutstandingbeginning of
    period


6,621,645


$
4.81



5,605,339


$
4.93



4,103,777


$
3.87Granted


1,814,550



4.15



2,469,850



4.05



3,075,250



5.54Forfeitures


(506,276
)


4.52



(1,070,080
)


4.67



(954,049
)


4.22Exercised


(396,360
)


2.36



(383,464
)


2.06



(619,639
)


2.09Outstandingend of period


7,533,559


$
4.81



6,621,645


$
4.81



5,605,339


$
4.93Exercisable at end of period


3,832,783


$
5.42



2,715,672


$
5.74



1,836,493


$
6.41     Options Outstanding


Options ExercisableWeighted











WeightedAverage


Weighted








Average


WeightedRemaining


Average


Aggregate





Remaining


Average


AggregateRange of

Number of


Contractual Life


Exercise


Intrinsic


Number of


Contractual Life


Exercise


IntrinsicExercise Prices

Shares


(Years)


Price


Value


Shares


(Years)


Price


Value$1.99 - $3.50


3,242



7.3


$
2.78


$
7,020



2,128



6.9


$
2.61


$
4,906$3.51 - $5.00


2,047



8.9



4.18



1,555



244



7.6



4.40



127$5.01 - $6.50


1,173



7.8



5.33







571



7.6



5.35



$6.51 - $8.00


873



6.9



7.34







691



6.9



7.33



$8.00 - $74.50


199



3.6



30.31







199



3.6



30.31



Total


7,534



7.6


$
4.81


$
8,575



3,833



6.9


$
5.42


$
5,033  F-17




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2006


2005


2004Risk-free interest rate


5.04
%


4.39
%


4.00
%Expected dividend yield










Expected volatility


75.3
%


77.0
%


95.1
%Expected life (years)


3.26



3.89



3.77         2006


2005


2004Risk-free interest rate


4.8
%


2.0
%


2.0
%Expected dividend yield










Expected volatility


75.1
%


78.0
%


93.8
%Expected life


6 months



6 months



6 months      F-18




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    11.  1999
    Employee Share Purchase Plan
    12.
    Net
    Income (Loss) Per Ordinary Share and ADS    Year Ended December 31,2006


2005


2004(In thousands, except per share data)Numerator:Numerator for basic and diluted
    net income (loss) per ordinary share and ADSincome (loss)
    available to ordinary shareholders

$
2,520


$
(843
)

$
192Denominator:Denominator for basic net income
    (loss) per ordinary and ADS shareweighted average ordinary
    shares and ADS


35,648



35,139



34,570Effect of employee share options


621







1,763Denominator for diluted net income
    (loss) per ordinary share and ADS


36,269



35,139



36,333Basic net income (loss) per
    ordinary share and ADS

$
0.07


$
(0.02
)

$
0.01Diluted net income (loss) per
    ordinary share and ADS

$
0.07


$
(0.02
)

$
0.01     13.
    Income
    Taxes    Year Ended December 31,2006


2005


2004(U.S. dollars in thousands)Ireland*

$
238


$
(2,717
)

$
(1,118
)Rest of World


3,494



2,794



1,876Total

$
3,732


$
77


$
758     *
    
    Domestic F-19




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended December 31,2006


2005


2004(U.S. dollars in thousands)Current:Ireland

$
520


$
448


$
92Rest of World


692



472



474Total current


1,212



920



566Deferred:Ireland










Rest of World










Total deferred










Total provision for income taxes

$
1,212


$
920


$
566     Year Ended December 31,2006


2005


2004(U.S. dollars in thousands)Income taxes computed at the Irish
    statutory income tax rate of 12.5%

$
467


$
10


$
95State tax, net of federal benefit


42







Income (loss) from Irish
    manufacturing operations at lower rates


(134
)


123



25Operating losses not utilized






490



192Operating losses utilized


(1,273
)


(1,548
)


(372
)Income (loss) subject to different
    rates of tax


1,123



1,736



405Income not subject to tax


(201
)


(106
)


(37
)Non-deductible expenses


770



101



324Other items


418



114



(66
)Total provision for income taxes

$
1,212


$
920


$
566     Year Ended December 31,2006


2005


2004(U.S. dollars in thousands)Deferred tax assets:Principally net operating loss
    carryforwards

$
61,124


$
62,040


$
55,629Total deferred tax assets


61,124



62,040



55,629Valuation allowance


(61,124
)


(62,040
)


(55,629
)Net deferred tax assets

$



$



$
      F-20




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##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                14.
    Industry
    and Geographic Information  Disclosures About
    Segments of an Enterprise and Related Information
   F-21




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##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Revenue
    by Geographic Region:
  Year Ended December 31,2006


2005


2004(U.S. dollars in thousands)Americas

$
42,680


$
32,199


$
34,860Europe, Middle East and Africa


22,680



25,982



22,804Asia-Pacific Rim


12,478



8,625



10,355Consolidated total

$
77,838


$
66,806


$
68,019     Long
    Lived Assets by Geographic Region:
  As of December 31,2006


2005


2004(U.S. dollars in thousands)Country of DomicileIreland

$
1,815


$
2,469


$
3,498Foreign CountriesAmericas


947



1,228



1,352Asia-Pacific Rim


237



387



442Consolidated total

$
2,999


$
4,084


$
5,292   15.
    Related
    Party Transactions       F-22




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         16.
    Contingencies    17.
    Guarantees     F-23




---



##### Table of Contents



IONA
    TECHNOLOGIES PLC
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   18.
    Quarterly
    Financial Information (Unaudited)  Q1


Q2


Q3


Q42006


2006


2006


2006


Total(In thousands, except per share data)Revenue

$
17,004


$
17,722


$
20,325


$
22,787


$
77,838Gross profit

$
13,603


$
14,336


$
16,849


$
19,307


$
64,095(Loss) income from operations

$
(654
)

$
(346
)

$
762


$
2,791


$
2,553Net (loss) income

$
(621
)

$
(232
)

$
497


$
2,876


$
2,520Basic net (loss) income per
    ordinary share and per ADS

$
(0.02
)

$
(0.01
)

$
0.01


$
0.08


$
0.07Shares used in computing basic net
    (loss) income per ordinary share and per ADS


35,434



35,563



35,725



35,870



35,648Diluted net (loss) income per
    ordinary share and per ADS

$
(0.02
)

$
(0.01
)

$
0.01


$
0.08


$
0.07Shares used in computing diluted
    net (loss) income per ordinary share and per ADS


35,434



35,563



36,330



36,949



36,269   March 31,


June 30,


September 30,


December 31,2006


2006


2006


2006(In thousands)Cash and cash equivalents

$
29,130


$
28,824


$
28,803


$
37,569Marketable securities

$
23,941


$
25,658


$
20,767


$
16,100Total assets

$
72,372


$
71,308


$
73,321


$
85,097Total shareholders equity

$
36,366


$
37,604


$
39,938


$
43,797     19.
    Subsequent
    Events (Unaudited)     F-24




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##### Table of Contents



EXHIBIT INDEX
  Exhibit No.

Description of Exhibit1
.1

Restated Articles of Association,
    as amended, of IONA Technologies PLC (filed as Exhibit 4.2
    to IONAs Registration Statement on
    Form S-8
    (File
    No. 333-11384)
    and incorporated herein by reference)1
.2

Memorandum of Association, as
    amended, of IONA Technologies PLC (filed as Exhibit 3.3 to
    IONAs Registration Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)2
.1

Specimen Certificate representing
    ordinary shares (filed as Exhibit 4.1 to IONAs
    Registration Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)2
.2

Amended and Restated Deposit
    Agreement dated as of April 26, 2004, by and among IONA
    Technologies PLC, Deutsche Bank Trust Company Americas and
    Holders and Beneficial Owners of American Depositary
    Shares Evidenced by American Depositary Receipts (filed as
    Exhibit 2.2 to IONAs annual report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)4
.1

Agreement and Plan of
    Reorganization dated as of February 14, 2001, by and among
    IONA Technologies PLC, NV Acquisition Corp. and Netfish
    Technologies, Inc. (filed as Exhibit 4.4 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2000 and incorporated
    herein by reference)4
.2

Lease dated July 31, 1998, by
    and between AIB Custodial Nominees Limited and IONA Technologies
    PLC (filed as Exhibit 4.5 to IONAs annual report on
    Form 20-F
    for the year ended December 31, 2000 and incorporated
    herein by reference)4
.3

Lease dated March 2, 1999, by
    and between Boston Properties Limited Partnership and IONA
    Technologies, Inc. (filed as Exhibit 4.6 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2000 and incorporated
    herein by reference)4
.4

Executive Share Option Scheme
    (filed as Exhibit 10.1 to IONAs Registration
    Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)4
.5

1997 Share Option Scheme, as
    amended (filed as Exhibit 4.4 to IONAs Registration
    Statement on
    Form S-8
    (File
    No. 333-12326)
    and incorporated herein by reference)4
.6

1997 Director Share Option
    Scheme (filed as Exhibit 10.3 to IONAs Registration
    Statement on
    Form F-1
    (File
    No. 333-6396)
    and incorporated herein by reference)4
.7

1999 Employee Share Purchase Plan,
    as amended (filed as Exhibit 4.5 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-11384)
    and incorporated herein by reference)4
.8

Genesis Development Corporation
    1997 Stock Option Plan (filed as Exhibit 4.5 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-12326)
    and incorporated herein by reference)4
.9

Object-Oriented Concepts, Inc.
    Stock Option Plan (filed as Exhibit 4.4 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-13224)
    and incorporated herein by reference)4
.10

Netfish Technologies, Inc. 1999
    Stock Option Plan (filed as Exhibit 4.5 to IONAs
    Registration Statement on
    Form S-8
    (File
    No. 333-13494)
    and incorporated herein by reference)4
.11

2006 Share Incentive Plan
    (filed as Exhibit 4.4 to IONAs Registration Statement
    on
    Form S-8
    (File
    No. 333-137364)
    and incorporated, herein by reference)4
.12

Non-Executive Directors Change in
    Control Plan (filed as Exhibit 4.12 to IONAs annual
    report on
    Form 20-F
    for the year ended December 31, 2002 and incorporated
    herein by reference)4
.13

Form of Change of Control
    Agreement by and among IONA Technologies, Inc., IONA
    Technologies PLC and each of the executive officers of IONA
    Technologies PLC (filed as Exhibit 4.13 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2002 and incorporated
    herein by reference)4
.14

Employment Agreement by and
    between Peter M. Zotto and IONA Technologies PLC dated as of
    April 14, 2005 (filed as Exhibit 4.14 to IONAs
    annual report on
    Form 20-F
    for the year ended December 31, 2004 and incorporated
    herein by reference)




---



##### Table of Contents



Exhibit No.

Description of Exhibit4
.15

Indemnification Agreement by and
    between IONA Technologies PLC and Robert McBride dated as of
    December 19, 2005 (filed as Exhibit 4.15 to
    IONAs annual report on
    Form 20-F
    for the year ended December 31, 2005 and incorporated
    herein by reference)4
.16

Amendment dated August 1,
    2005 to Lease dated March 2, 1999, by and between Boston
    Properties Limited Partnership and IONA Technologies, Inc.
    (filed as Exhibit 4.16 to IONAs annual report on
    Form 20-F
    for the year ended December 31, 2005 and incorporated
    herein by reference)8
.1

Active Subsidiaries of IONA
    Technologies PLC11
.1

Code of Business Conduct and
    Ethics (filed as Exhibit 11.1 to IONAs annual report
    on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)12
.1

Certification of Principal
    Executive Officer12
.2

Certification of Principal
    Financial Officer13
.1

Certification of Chief Executive
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200213
.2

Certification of Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200215
.1

Consent of Independent Registered
    Public Accounting Firm15
.2

Audit Committee Charter (filed as
    Exhibit 14.2 to IONAs annual report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)15
.3

Nominating and Corporate
    Governance Committee Charter (filed as Exhibit 14.3 to
    IONAs annual report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)15
.4

Description of American Depositary
    Receipts (filed as Exhibit 14.4 to IONAs annual
    report on
    Form 20-F
    for the fiscal year ended December 31, 2003 and
    incorporated herein by reference)     
    
    Indicates a management contract or any compensatory plan,
    contract or arrangement.