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 of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
275 Frank Tompa Drive, Waterloo, Ontario, CanadaN2L 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.
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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 EVP, Chief Legal Officer and Corporate Development
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