8-K
Open Text Corp (OTEX)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________
FORM 8-K
______________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 21, 2020
______________________
Open Text Corporation
(Exact name of Registrant as specified in its charter)
______________________
| Canada | 0-27544 | 98-0154400 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
275 Frank Tompa Drive, Waterloo, Ontario, Canada N2L 0A1
(Address of principal executive offices)
(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 (see General Instruction A.2. below):
☐ 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 | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock without par value | OTEX | 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. ☐
Item 8.01 Other Events
Open Text Corporation (the “Company” or “OpenText”) announced that on December 21, 2020, the Company entered into a closing agreement with the U.S. Internal Revenue Service (“IRS”) resolving all of the previously disclosed proposed adjustments to its taxable income for Fiscal 2010 and Fiscal 2012 (the “IRS Settlement”).
In connection with the IRS Settlement, against the IRS’ total disputed claim value of approximately $830 million, estimated as of December 31, 2020 and inclusive of proposed accrued interest at applicable statutory rates, OpenText will make aggregate payments of approximately $290 million to the IRS in U.S. federal taxes and interest. The IRS Settlement also eliminates approximately $90 million in future withholding taxes that OpenText had expected to pay over the next 10 years.
The Company expects the IRS Settlement to result in an approximately $290 million charge to GAAP-based net income (loss) for the second quarter of Fiscal 2021 ending December 31, 2020, and the Company expects to make payments to the IRS of approximately $290 million in the third quarter of Fiscal 2021, ending March 31, 2021. In connection with the IRS Settlement, the Company also expects to make certain associated State tax and interest payments of approximately $10 million to $15 million throughout calendar 2021.
OpenText believes the IRS Settlement to be in the best interest of all stakeholders, as it closes all past, present and future items related to this matter. The IRS Settlement provides finality to this longstanding matter.
A copy of the press release announcing the above is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 8.01.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release issued by Open Text Corporation on December 22, 2020 |
| 101.INS | XBRL instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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SIGNATURES
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.
| OPEN TEXT CORPORATION | ||
|---|---|---|
| December 22, 2020 | By: | /s/ Gordon A. Davies |
| Gordon A. Davies<br>EVP, Chief Legal Officer and Corporate Development |
Exhibit Index
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release issued by Open Text Corporation on December 22, 2020 |
| 101.INS | XBRL instance document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL taxonomy extension schema. |
| 101.CAL | Inline XBRL taxonomy extension calculation linkbase. |
| 101.DEF | Inline XBRL taxonomy extension definition linkbase. |
| 101.LAB | Inline XBRL taxonomy extension label linkbase. |
| 101.PRE | Inline XBRL taxonomy extension presentation. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Document
Exhibit 99.1
OpenText Announces IRS Matter Settlement
Waterloo, ON, December 22, 2020 - Open Text Corporation (NASDAQ: OTEX), (TSX: OTEX), “The Information Company,” today announced that on December 21, 2020, the Company entered into a closing agreement with the U.S. Internal Revenue Service (IRS) resolving all of the previously disclosed proposed adjustments to its taxable income for Fiscal 2010 and Fiscal 2012 (the “IRS Settlement”).
In connection with the IRS Settlement, against the IRS’ total disputed claim value of approximately $830 million, estimated as of December 31, 2020 and inclusive of proposed accrued interest at applicable statutory rates, OpenText will make aggregate payments of approximately $290 million to the IRS in U.S. federal taxes and interest. The IRS Settlement also eliminates approximately $90 million in future withholding taxes that OpenText had expected to pay over the next 10 years.
The Company expects the IRS Settlement to result in an approximately $290 million charge to GAAP-based net income (loss) for the second quarter of Fiscal 2021 ending December 31, 2020, and the Company expects to make payments to the IRS of approximately $290 million in the third quarter of Fiscal 2021, ending March 31, 2021. In connection with the IRS Settlement, the Company also expects to make certain associated State tax and interest payments of approximately $10 million to $15 million throughout calendar 2021.
OpenText believes the IRS Settlement to be in the best interest of all stakeholders, as it closes all past, present and future items related to this matter. The IRS Settlement provides finality to this longstanding matter.
About OpenText
OpenText, The Information Company™, enables organizations to gain insight through market leading information management solutions, on-premises or in the cloud. For more information about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, including statements about the timing of payments in connection with the IRS Settlement, anticipated impact on financial results, associated State tax and interest payments, and other matters, may be considered forward-looking statements or information under applicable securities laws. These statements are based on OpenText's current expectations, estimates, forecasts and projections about the operating environment, economies and markets in which the Company operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. OpenText's assumptions, although considered reasonable by the company at the date of this press release, may prove to be inaccurate and consequently its actual results could differ materially from the expectations set out herein. For additional information with respect to risks and other factors which could occur, see OpenText's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC and other securities regulators. Unless otherwise required by applicable securities laws, OpenText disclaims any intention or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For more information, please contact:
Harry E. Blount
Senior Vice President, Global Head of Investor Relations
Open Text Corporation
415-963-0825
investors@opentext.com
Copyright ©2020 Open Text. OpenText is a trademark or registered trademark of Open Text. The list of trademarks is not exhaustive of other trademarks. Registered trademarks, product names, company names, brands and service names mentioned herein are property of Open Text. All rights reserved. For more information, visit: http://www.opentext.com/who-we-are/copyright-information.