Ex.1022
`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`WASHINGTON, D.C. 20549
`
`FORM 8-K/A
`
`CURRENT REPORT
`Pursuant to Section 13 or 15(d)
`of the Securities Exchange Act of 1934
`
`Date of Report (Date of earliest event reported)
`January 31, 2023
`
`Open Text Corporation
`
`(Exact name of registrant as specified in its charter)
`
`Canada
`(State or Other Jurisdiction of
`Incorporation or Organization)
`
`0-27544
`(Commission
`File Number)
`
`98-0154400
`(I.R.S. Employer
`Identification Number)
`
`275 Frank Tompa Drive, Waterloo, Ontario, Canada N2L 0A1
`(Address of Principal Executive Offices) (Zip Code)
`
`(519) 888-7111
`(Registrant’s Telephone Number, Including Area Code)
`
`Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
`following provisions:
`☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
`☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
`☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
`☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of each class
`Common Stock without par value
`
`Trading
`symbol
`OTEX
`
`Name of each exchange
`on which registered
`NASDAQ Global Select Market
`
`Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
`chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
`Emerging growth company ☐
`If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
`new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
`
`

`

`Explanatory Note
`On January 31, 2023, Open Text Corporation (“OpenText” or the “Company”), filed with the Securities and Exchange Commission a Current Report on
`Form 8-K (the “Original Report”) to report that, among other things, effective as of January 31, 2023, the Company completed its acquisition of the
`entire issued and to be issued share capital of Micro Focus International Limited (formerly known as Micro Focus International plc) (“Micro Focus”), a
`provider of software technology and services that help customers accelerate digital transformation, through a subsidiary of the Company, Open Text UK
`Holding Limited, for 532 pence per share in cash, resulting in an aggregate purchase price of approximately $5.8 billion, inclusive of Micro Focus’ cash
`and debt, subject to final adjustments (the “Acquisition”). The Acquisition was implemented by means of a court-sanctioned scheme of arrangement
`under Part 26 of the UK Companies Act 2006.
`
`This amendment to the Original Report (the “Amendment”) is being filed solely to amend Item 9.01 of the Original Report in order to provide the
`consolidated financial statements of Micro Focus and the unaudited pro forma financial information with respect to the Acquisition required by Item
`9.01(a) and Item 9.01(b) of Form 8-K, respectively, which were excluded from the Original Report in accordance with the provisions of that item and
`which are filed as exhibits hereto.
`
`The audited consolidated financial statements of Micro Focus for the years ended October 31, 2022 and 2021 were prepared in accordance with
`International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and have not been prepared in
`accordance with U.S. GAAP. IFRS differs in certain respects from U.S. GAAP and thus the consolidated financial statements of Micro Focus may not be
`comparable to financial statements of U.S. or Canadian companies prepared in accordance with U.S. GAAP. The consolidated financial statements of
`Micro Focus were approved by Micro Focus’ board of directors prior to closing of the Acquisition and OpenText was not involved in the preparation of
`such consolidated financial statements of Micro Focus.
`
`The unaudited pro forma financial information included in this Amendment has been prepared for illustrative purposes only, as required by Form 8-K. It
`is not necessarily indicative of the consolidated financial position or results of operations that would have been realized had OpenText acquired Micro
`Focus on the dates indicated in the pro forma financial information, nor is it meant to be indicative of any future consolidated financial position or future
`results of operations that OpenText will experience. The unaudited pro forma financial information combines the historical consolidated balance sheet
`and results of operations of OpenText and the historical consolidated statement of financial position and results of operations of Micro Focus after
`giving effect to the Acquisition, the financing of the Acquisition and the pro forma effects of certain assumptions and adjustments described therein. The
`historical consolidated statement of financial position and results of operations of Micro Focus, utilized for purposes of preparing the unaudited pro
`forma financial information, are not based on the same period end as OpenText.
`
`For further information regarding the Acquisition and this Form 8-K/A, contact the person signing this Form 8-K/A at the phone number specified on the
`cover page of this report.
`
`Except as described in this Amendment, all other information in the Original Report remains unchanged.
`
`Completion of Acquisition or Disposition of Assets
`Item 2.01
`This Amendment on Form 8-K/A amends and supplements the Original Report to include the historical audited consolidated financial statements of
`Micro Focus and the unaudited pro forma condensed combined financial information required by Item 9.01(a) and Item 9.01(b) of Form 8-K,
`respectively, which were excluded from the Original Report in accordance with the provisions of that item. All disclosure under Item 2.01 in the
`Original Report is hereby incorporated by reference into this Item 2.01. Except as set forth herein, no modifications have been made to information
`contained in the Original Report, and the Company has not updated any information contained therein to reflect events that have occurred since the date
`of the Original Report. The Original Report is available under the Company’s profile on SEDAR at www.SEDAR.com.
`
`Upon completion of the Acquisition, Micro Focus became an indirect wholly owned subsidiary of the Company. The expected effect of the Acquisition
`on the Company’s financial position is outlined in the unaudited pro forma condensed combined financial information included in this Amendment.
`Other than changes as a result of the Acquisition and the integration of Micro Focus, the Company does not currently plan or propose to make any
`material changes in its business or affairs, either generally or with respect to Micro Focus, that would reasonably be expected to have a significant effect
`on the results of operations or financial position of OpenText.
`
`To the knowledge of the Company, there has been no valuation opinion obtained within the last 12 months by the Company or Micro Focus required by
`securities legislation or a Canadian exchange or market to support the consideration paid by the Company for Micro Focus.
`
`

`

`The Acquisition was not a transaction with an “informed person” (as such terms are defined in Canadian National Instrument 51-102 – Continuous
`Disclosure Obligations), associate or affiliate of the Company.
`
`Financial Statements and Exhibits.
`Item 9.01.
`
`(a)
`Financial statements of businesses or funds acquired.
`The consolidated financial statements of Micro Focus required by Item 9.01(a) of Form 8-K are attached hereto as Exhibit 99.1 and incorporated
`by reference into this Item 9.01(a).
`
`(b)
`
`Pro forma financial information.
`The unaudited pro forma financial information required by Item 9.01(b) of Form 8-K is attached hereto as Exhibit 99.2 and incorporated herein by
`reference into this Item 9.01(b).
`
`Exhibits.
`(d)
`The following exhibits are filed as part of this Current Report:
`
`Exhibit
`No.
`
`23.1
`99.1
`99.2
`
`Description
`Consent of KPMG LLP, Independent Registered Public Accounting Firm for Micro Focus.
`Audited consolidated financial statements of Micro Focus for the years ended October 31, 2022 and 2021.
`Unaudited pro forma condensed combined balance sheet as of December 31, 2022, the unaudited pro forma condensed combined statements
`of operations for the year ended June 30, 2022 and the six months ended December 31, 2022 and the notes related thereto.
`Cover Page Interactive Data File (embedded within the Inline XBRL document)
`
`
`
`
`104
`
`

`

`Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
`undersigned hereunto duly authorized.
`
`Date: April 10, 2023
`
` OPEN TEXT CORPORATION
`
`
`
`SIGNATURES
`
`
`
`
`
`
` /s/ Michael F. Acedo
` Name: Michael F. Acedo
`Title:
`Executive Vice-President, Chief Legal Officer & Corporate
`Secretary
`
`
`
`
`
`

`

`Consent of Independent Registered Public Accounting Firm
`
`We consent to the incorporation by reference in Registration Statement Nos. 333-249181, 333-214427, 333-184670, 333-146351, 333-146350,
`333-121377, 333-109505 and 333-87024 on Form S-8 and Registration Statement No. 333-261510 on Form S-3 of Open Text Corporation of our report
`dated January 30, 2023, with respect to the consolidated financial statements of Micro Focus International Limited (formerly Micro Focus International
`plc), which report appears in this Current Report on Form 8-K/A of Open Text Corporation dated April 10, 2023.
`
`Exhibit 23.1
`
`/s/ KPMG LLP
`
`London, United Kingdom
`April 10, 2023
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Exhibit 99.1
`
`
`
`1
`
`Consolidated financial statements and notes
`
` 2
`
` Consolidated statement of comprehensive income
` Consolidated statement of financial position
`5
` Consolidated statement of changes in equity
`7
` Consolidated statement of cash flows
`9
`10 Summary of significant accounting policies
`25 Notes to the consolidated financial statements
`103 Report of Independent Registered Public Accounting Firm
`
`Consolidated financial statements
`
`
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Consolidated statement of comprehensive income
`For the year ended 31 October 2022
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`Continuing operations
`Revenue
`Cost of sales
`Gross profit
`Selling and distribution expenses
`Research and development expenses
`Administrative expenses
`Other operating income
`Operating loss
`Operating profit prior to depreciation, amortisation and exceptional items
`Depreciation and amortisation
`Exceptional items
`Operating loss
`Finance costs
`Finance income
`Net finance costs
`Loss before tax
`Taxation1
`Loss from continuing operations
`Profit from discontinued operation (attributable to equity shareholders of the Company)
`Loss for the year
`Attributable to:
`Equity shareholders of the Company
`Loss for the year
`
`
`Year ended
`Year ended
`31 October
`31 October
`2022
`2021
`$m
`$m
` Note
`
`
` 2 2,534.5 2,899.9
`
`(715.5)
`
`(776.3)
` 1,819.0 2,123.6
`
` (1,145.1) (1,344.6)
`
`
`(462.6)
`
`(521.8)
`
`(730.4)
`
`(522.8)
`
`9.0 —
`
`
`(510.1)
`
`(265.6)
`
`878.7 1,044.9
`
` 3
`(890.2) (1,063.4)
` 4
`(498.6)
`(247.1)
`
`(510.1)
`
`(265.6)
` 6
`(262.7)
`(253.9)
` 6
`111.4
`1.7
` 6
`(151.3)
`(252.2)
`
`(661.4)
`
`(517.8)
` 7
`42.5
`82.7
`
`(618.9)
`
`(435.1)
` 28
`3.2
`10.7
`
`(615.7)
`
`(424.4)
`
`
`
`
`(615.7)
`
`
`(615.7)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`(424.4)
`(424.4)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
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`
`
`
`
`
`
`
`
` 1
`
`Taxation includes a debit of $0.4m (2021: credit $76.3m) relating to exceptional items, see note 4.
`
`
`
`
`
`2
`
`
`Consolidated financial statements
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`
`Year ended
`31 October
`2021
`$m
`
`(424.4)
`
`
`
`33.4
`
`0.2
`
` —
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
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`
`
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`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`42.2
`
`(8.0)
`
` —
`
`(7.8)
`
`6.0
`
`(8.1)
`
`68.6
`
`126.5
`
`(297.9)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`(297.9)
`(297.9)
`
`
`
`
`
`
`
`
`Loss for the year
`Other comprehensive (expense)/income for the year:
`Items that will not be reclassified to profit or loss
`Continuing operations:
`Actuarial gain on pension schemes liabilities
`Actuarial gain on non-plan pension assets
`Deferred tax movement on pension schemes
`Continuing operations: Items that may be subsequently reclassified to profit or loss
`Cash flow hedge movements
`Current tax movement on cash flow hedge movements
`Deferred tax movement on cash flow hedge movements
`Deferred tax movement on currency translation differences
`Current tax movement on Euro loan foreign exchange hedging
`Deferred tax movement on Euro loan foreign exchange hedging
`Currency translation differences
`Other comprehensive (expense)/income for the year
`Total comprehensive expense for the year
`Attributable to:
`Equity shareholders of the Company
`Total comprehensive expense for the year
`Total comprehensive expense attributable to the equity shareholders of the Company arises from:
`Continuing operations
`Discontinued operation
`Total comprehensive expense for the year
`Earnings per share (cents)
`
`From continuing and discontinued operations
`– basic
`– diluted
`From continuing operations
`– basic
`– diluted
`
`Consolidated financial statements
`
`Year ended
`31 October
`2022
`$m
`
`(615.7)
`
`
`
`81.3
`0.5
`(20.3)
`
`105.5
`(6.8)
`(16.8)
`40.2
`(6.3)
`—
`(320.2)
`(142.9)
`(758.6)
`
`(758.6)
`(758.6)
`
`(761.8)
`3.2
`(758.6)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`cents
`
` (190.13)
` (190.13)
`
` (191.12)
` (191.12)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Note
`
`
`
`
`
`
`
`
`
` 20
`
` 20
`
` 7
`
`
`
` 25
`
` 25
`
` 25
`
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`
`
`
`
`
`
`
`
`
`
`
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`
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`
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` 28
`
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`
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`
`
`
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`
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`
`
`
`
`
`
`
`
`
` 9
` 9
`
` 9
` 9
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`(308.6)
`10.7
`(297.9)
`
`
`
`cents
`
` (126.12)
` (126.12)
`
`
`
`
`
`
`
`
`
`
`
`
`
` (129.30)
` (129.30)
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`3
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`
`
`From continuing and discontinued operations
`– basic
`– diluted
`From continuing operations
`– basic
`– diluted
`The accompanying notes form part of the financial statements.
`
`Consolidated financial statements
`
`
`
`Year ended
`31 October
`2022
`$m
`
`pence
`
` (151.12)
` (151.12)
`
` (151.91)
` (151.91)
`
`
`
`
`
` Note
`
`
`
`
` 9
`
` 9
`
`
`
` 9
`
` 9
`
`
`
`
`
`
`
`
`
`Year ended
`31 October
`2021
`$m
`
`
`pence
`(91.78)
`(91.78)
`
`
`
`
`
`
`
`
`
`
`
`
`
`(94.09)
`(94.09)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`4
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Consolidated statement of financial position
`As at 31 October 2022
`
`
`
`Non-current assets
`Goodwill
`Other intangible assets
`Property, plant and equipment
`Non-current tax receivable
`Deferred tax asset
`Financial assets
`Trade and other receivables
`Other non-current assets
`
`Current assets
`Trade and other receivables
`Other current assets
`Current tax receivables
`Cash and cash equivalents
`
`Current assets classified as held for sale
`
`31 October
`2022
`$m
`
`31 October
`2021
`$m
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
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`
`
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`
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`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Note
`
`
`
`
` 10 3,050.6 3,725.5
` 11 3,475.5 4,331.2
` 12
`187.6
`228.6
` 7
`40.6
`48.0
` 7
`13.0
`15.0
` 22
`69.8
`—
` 14
`14.3
`19.6
` 13
`51.9
`71.6
` 6,903.3 8,439.5
`
`
`
`
` 14
`948.6
`886.3
` 13
`40.1
`33.0
` 7
`22.9
`59.1
` 15
`536.2
`558.4
` 1,547.8 1,536.8
`
` 28
`—
`370.3
` 1,547.8 1,907.1
`
` 8,451.1 10,346.6
`
`
`
`
` 16
`510.5
`513.2
` 22
`75.1
`134.9
` 19
`143.3
`65.7
` 7
`124.8
`94.1
` 18
`934.1
`984.6
` 1,787.8 1,792.5
`
` 28
`—
`68.4
` 1,787.8 1,860.9
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
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`
`
`
`
`
`5
`
`Total assets
`Current liabilities
`Trade and other payables
`Financial liabilities
`Provisions
`Current tax liabilities
`Contract liabilities
`
`Current liabilities classified as held for sale
`
`
`Consolidated financial statements
`
`
`
`

`

`31 October
`2022
`$m
`
`31 October
`2021
`$m
`
`
`
`MICRO FOCUS INTERNATIONAL PLC
`
`
`
`Non-current liabilities
`Contract liabilities
`Financial liabilities
`Retirement benefit obligations
`Provisions
`Other non-current liabilities
`Non-current tax liabilities
`Deferred tax liabilities
`
`Total liabilities
`Net assets
`Capital and reserves
`Share capital
`Share premium account
`Other reserves
`Retained earnings
`Total equity
`
`
`
`
`
`
`
`
`
`
`
`
` Note
`
`
`
`171.8
` 18
`131.8
` 22 3,967.5 4,643.7
` 20
`64.7
`147.1
` 19
`13.0
`19.8
` 21
`9.8
`31.3
` 7
`81.0
`91.9
` 7
`415.8
`599.1
` 4,723.6 5,664.7
`
` 6,511.4 7,525.6
`
` 1,939.7 2,821.0
`
`
`
`
` 23
`47.5
`47.4
` 24
`47.6
`46.8
` 25 1,983.7 3,847.2
`
`(139.1) (1,120.4)
`
` 1,939.7 2,821.0
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`The accompanying notes form part of the financial statements.
`
`Consolidated financial statements
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`6
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Consolidated statement of changes in equity
`For the year ended 31 October 2022
`Year ended 31 October 2022
`
`
`
`
`
`
`
`
`
`
`
`
`
`Other reserves
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`(91.3)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Foreign
`Capital
`currency
`Share
`Total
`Merger
`Hedging
`redemption
`translation
`Retained
`premium
`Share
`equity
`reserve
`reserve
`reserve
`reserve
`earnings
`account
`capital
`$m
`$m
`$m
`$m
`$m
`$m
`$m
`$m
`
`
` Note
`
`(268.0) 2,485.0 (28.9) 1,659.1 2,821.0
` 47.4
`46.8 (1,120.4)
`Balance as at 1 November 2021
`
` — —
`(615.7) —
`— — — (615.7)
`
`Loss for the financial year
` — —
`61.5
`(286.3)
`— 81.9 — (142.9)
`
`Other comprehensive expense for the year
` — —
`(554.2)
`(286.3)
`— 81.9 — (758.6)
`Total comprehensive expense for the year
`
`Transactions with owners
`
`
`
`
`
`
`
`
`
`8 — —
`(91.3) —
`— — —
`
`Dividends
`Share options:
`
`
`
`
`
`
`
`
`
`0.9
` 23,24 0.1
`0.8 — —
`— — —
`Issue of share capital – share options
`33.6
`26 — —
`33.6 —
`— — —
`
`Share-based payment charge
`1.3
`7 — —
`1.3 —
`— — —
`
`Deferred tax on share options
`(67.2)
` — —
`(67.2) —
`— — —
`Purchase of treasury shares1
`
`25 — — 1,659.1 —
`— — (1,659.1) —
`Transfer from merger reserve
`
` 0.1
`0.8
`981.3
`(286.3)
`— 81.9 (1,659.1) (881.3)
`Total movements for the year
`
` 47.5
`47.6
`(139.1)
`(554.3) 2,485.0 53.0 — 1,939.7
`Balance as at 31 October 2022
`
`The accompanying notes form part of the financial statements.
`
`Consolidated financial statements
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
`
`
`
`
`
`
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`
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`
`
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`
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`
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`
`
`
`
`
`
`
`7
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Year ended 31 October 2021
`
`
`
`
`
`
`
`
`
`
`
`
`
`Other reserves
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
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`
`
`
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`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`(81.1)
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Foreign
`Capital
`currency
`Share
`Total
`Merger
`Hedging
`redemption
`translation
`Retained
`premium
`Share
`equity
`reserve
`reserve
`reserve
`reserve
`earnings
`account
`capital
`$m
`$m
`$m
`$m
`$m
`$m
`$m
`$m
` Note
`
`
`(741.3) (326.7) 2,485.0 (63.1) 1,767.4 3,215.1
`
` 47.3 46.5
`(424.4) — — — — (424.4)
`
` — —
`33.6
`58.7 — 34.2 — 126.5
`
` — —
`(390.8)
`58.7 — 34.2 — (297.9)
`
` — —
`
`
`
`
`
`
`
`
`
`(81.1) — — — —
`
`8 — —
`
`
`
`
`
`
`
`
`
`0.3
`(0.1) — — — —
` 23,24 0.1
`0.3
`12.0
`12.0 — — — —
`
`26 — —
`(0.2)
`(0.2) — — — —
`
`7 — —
`(27.2)
`(27.2) — — — —
`
` — —
`108.3 — — — (108.3) —
`
`25 — —
`(379.1)
`58.7 — 34.2 (108.3) (394.1)
`
` 0.1
`0.3
`
` 47.4 46.8 (1,120.4) (268.0) 2,485.0 (28.9) 1,659.1 2,821.0
`
`
`Balance as at 1 November 2020
`Loss for the financial year
`Other comprehensive income for the year
`Total comprehensive expense for the year
`Transactions with owners
`Dividends
`Share options:
`Issue of share capital – share options
`Share-based payment charge
`Deferred tax on share options
`Purchase of treasury shares1
`Transfer from merger reserve
`Total movements for the year
`Balance as at 31 October 2021
`
`During the year ended 31 October 2022 the Micro Focus Employee Benefit Trust (“EBT”) purchased 12 million of the Group’s 10p ordinary
`shares from the market (year ended 31 October 2021: 4 million 10p ordinary shares). The EBT will hold these shares to satisfy future exercises of
`share options. In accordance with the requirement of IFRS 10 the EBT is treated as if it is a subsidiary of the Group. As a result, the purchase of
`shares held by the EBT is reported as a purchase of treasury shares by the Group.
`The accompanying notes form part of the financial statements.
`
`Consolidated financial statements
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
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`
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`
`
`
`
`
`
`
`
` 1
`
`
`
`
`
`8
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Consolidated statement of cash flows
`For the year ended 31 October 2022
`
`
`
`Cash flows from operating activities
`Cash generated from operations
`Interest paid
`Bank loan costs
`Tax paid
`Net cash generated from operating activities
`Cash flows from investing activities
`Payments for intangible assets
`Purchase of property, plant and equipment
`Interest received
`Payment for acquisition of business and net cash acquired with acquisitions
`Sub lease income receipts
`Investing cash flows generated from disposals
`Tax paid on disposal
`Net cash generated from/(used in) investing activities
`Cash flows used in financing activities
`Proceeds from issue of ordinary share capital
`Purchase of treasury shares and related expenses
`Payment for lease liabilities
`Repayment of bank borrowings
`Proceeds from bank borrowings
`Dividends paid to owners
`Net cash used in financing activities
`Effects of exchange rate changes
`Net decrease in cash and cash equivalents
`Cash and cash equivalents at beginning of the year
`Cash and cash equivalents at end of the year
`The accompanying notes form part of these financial statements.
`
`Consolidated financial statements
`
`
`
`Year ended
`31 October
`2022
`$m
`
`Year ended
`31 October
`2021
`$m
`
`
`
`690.5
`(218.1)
`(1.5)
`(270.3)
`200.6
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` Note
`
`
`
`817.9
`30
`
`(211.0)
`
`
`(24.4)
`
`
`(90.8)
`
`
`491.7
`
`
`
`
`
`(103.0)
`11
`(47.5)
`
`(18.9)
`12
`(17.7)
`
`4.3
`
`1.7
`
`(27.6)
`29
`(12.4)
`
`11.8 —
`17
`
`366.8 —
`28
`
`(10.3) —
`28
`
`223.1
`
`(75.9)
`
`
`
`
`0.9
` 23,24
`0.4
`(67.2)
`23
`(27.2)
`
`(67.4)
`17
`(79.5)
`
`22 (2,085.9)
`(114.1)
`
`22 1,599.3 —
`
`8
`(91.3)
`
`(81.1)
`
`(711.6)
`
`(301.5)
`
`(25.4)
`
`(2.0)
`
`(22.2)
`
`(178.8)
`
`558.4
`
`737.2
`15
`536.2
`
`558.4
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
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`
`
`
`
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`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`9
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Summary of significant accounting policies
`For the year ended 31 October 2022
`General information
`Micro Focus International plc (“Company”) is a public limited company incorporated and domiciled in England and Wales. The address of its registered
`office is: The Lawn, 22-30 Old Bath Road, Newbury, RG14 1QN, UK.
`
`Micro Focus International plc and its subsidiaries (together “Group”) provide innovative software to clients around the world enabling them to
`dramatically improve the business value of their enterprise applications. As at 31 October 2022, the Group had a presence in 47 countries (2021: 48)
`worldwide and employed approximately 10,501 people (2021: 11,355).
`
`As of October 31, 2022 the Company was listed on the London Stock Exchange and its American Depositary Shares are listed on the New York Stock
`Exchange.
`
`The Group consolidated financial statements were authorised for issuance by the board of directors on 30 January 2023.
`
`I Significant accounting policies
` A
`Basis of preparation
`These financial statements have been prepared solely for the purpose of meeting the requirements of the US Securities and Exchange Commission
`(“SEC”) Rule 3-05 of Regulation S-X in relation to the acquisition of the Group by OpenText on 31 January 2023.
`
`The information in this document, which was approved by the Board of Directors on 30 January 2023, does not comprise statutory accounts within the
`meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 October 2022, which contain an unmodified audit report
`under Section 495 of the Companies Act 2006 (which does not make any statements under Section 498 of the Companies Act 2006), will be delivered to
`the Registrar of Companies in accordance with Section 441 of the Companies Act 2006.
`
`The Consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards as issued by
`the International Accounting Standards Board (“IASB”).
`
`The consolidated financial statements are prepared on a going concern basis under the historical cost convention.
`
`The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to
`exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or
`areas where assumptions and estimates are significant to the consolidated financial statements are disclosed below in II, “Critical accounting estimates,
`assumptions and judgements”.
`
`The principal accounting policies adopted by the Group in the preparation of the consolidated financial statements are set out below.
`
`The accounting policies adopted are consistent with those of the Annual Report and Accounts for the year ended 31 October 2021 apart from standards,
`amendments to or interpretations of published standards adopted during the year, as set out in Accounting Policy W “Adoption of new and revised
`IFRS.”
`
`Going concern
`In line with IAS 1 Presentation of financial statements, and the FRC guidance on risk management, internal control and related financial and business
`reporting, management has taken into account available information about the future for a period of at least, but not limited to, 12 months from the date
`of approval of the consolidated financial statements when assessing the Group’s ability to continue as a going concern.
`
`In making this assessment, the directors considered the Group’s liquidity and solvency position. In January 2022 the Group refinanced $1.6bn of the
`2024 term loans, extending their maturity until 2027 and extended its Revolving Credit Facility (RCF) by 18 months to December 2026, reducing the
`facility to $250m and increasing the Group’s ability to utilise the facility. In February 2022 $335m of the proceeds from the disposal of the Digital
`
`Consolidated financial statements
`
`
`
`
`
`10
`
`

`

`MICRO FOCUS INTERNATIONAL PLC
`
`Safe business were used to repay borrowings and a further repayment of $100m out of surplus cash was made in July 2022. Following these actions the
`Group’s borrowings at 31 October 2022 are $3,880.0m with Group cash of $536.2m. At 31 October 2022, the RCF remains undrawn. See note 22 for
`further details of the Group’s borrowings, including the RCF, and the refinancing. Whilst the Group has quarterly instalment payments due and,
`dependent on leverage, may be subject to an excess cash sweep against its external borrowing in the period to January 2024, the Group has no term
`loans maturing until June 2024 when $1,280m is due. Notwithstanding the Group’s proposed acquisition by OpenText (see below). The Group would
`otherwise expect to refinance these loans prior to maturity. As the directors expect that these loans would be refinanced they are not considered a
`significant risk to going concern therefore the directors consider the use of a 12-month period to be an appropriate period to assess going concern.
`
`The shareholders of the Company have approved the takeover offer from OpenText. The directors have assessed the impact of this on the going concern
`basis of accounting and have outlined their considerations below. In addition the directors have assessed the Group’s ability to continue as a going
`concern in its own right.
`
`Consideration of the acquisition by Open Text Corporation (OpenText)
`The Group’s financing arrangements include a change of control clause as detailed in note 22 to the financial statements. Subsequent to announcing the
`acquisition OpenText have successfully raised all the required funding from capital markets increasing the previously agreed term loans to an aggregate
`commitment of $3,585m and completing the sale of $1,000m of 6.9% senior secured notes due 2027. In addition the directors reviewed the level of cash
`and undrawn revolving credit facilities reported by OpenText and these provide sufficient resources to repay the remainder of the Groups’ borrowings
`and operate the Group after the completion of the acquisition.
`
`The Directors also examined the intention statements outlined in the Scheme Document, including the commitments by and intention of OpenText
`around the operation of the enlarged group. Accordingly the Directors believe that sufficient liquidity should be in place to allow the Group to continue
`as a going concern.
`
`The Group’s ability to continue as a going concern in its own right
`The Group manages solvency and liquidity as part of its budgeting and performance management. The Group’s forecasting and planning cycle consists
`of a budget and a long-range plan which are used to generate income statement and cash flow projections. The cash flow projections also forecast the
`headroom on the Group’s undrawn RCF and expected net leverage. Actual and forecast liquidity are reviewed at least weekly by the Group’s working
`capital management group which reports to the Chief Financial Officer. As at 31 October 2022, the Group holds a significant level of cash of $536.2m.
`
`The Group’s forecasts, based on reasonable assumptions, indicate that the Group should be able to operate within the level of its currently available and
`expected future facilities. Under the Group’s forecast the RCF is not forecast to be drawn in the period to January 2024, and therefore no tests of this
`covenant are expected to apply.
`
`In assessing going concern, the Group has estimated the financial impact of the severe but plausible scenarios considered in assessing viability on the
`going concern assessment period. This stress testing confirmed that existing projected cash flows and cash management activities provide us with
`significant headroom over the going concern a