OPEN TEXT CORP 10-Q

Item 1A. Risk Factors You should carefully consider the risk factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended June 30, 2023. These are not the only risks and uncertainties facing us. Additional risks not currently known to us or that we currently believe are immaterial may also impair our operating results, financial condition and liquidity. Our business is also subject to general risks and uncertainties that affect many other companies. Risks related to the proposed divestiture of the AMC Business The proposed divestiture of the AMC Business is subject to the satisfaction of a number of conditions, and the transaction may not be consummated on the terms or timeline currently contemplated, or at all. The divestiture of the AMC Business remains subject to the satisfaction or waiver of certain customary closing conditions and regulatory approvals. Unanticipated developments could delay, prevent or otherwise adversely affect the divestiture, including delays in obtaining outstanding necessary regulatory approvals or clearances or completing other conditions necessary for closing. We cannot predict whether and when such conditions will be satisfied. If one or more of these conditions is not satisfied, and as a result, we do not complete the proposed divestiture on the terms or timeline currently contemplated, or at all, we will have incurred significant transaction costs, and management’s time and attention from the operation of our remaining business and the execution of our other strategic initiatives would have been diverted, in each case without realizing any benefits of the proposed divestiture. Certain costs associated with the proposed divestiture have already been incurred and are payable even if the proposed divestiture is not consummated. Our stock price may also fluctuate significantly based on market perceptions of the likelihood of the divestiture being completed and/or the timing thereof. If we do not consummate the divestiture, the price of our common shares may decline from the current market price. Further, in the event that the divestiture of the AMC Business is not completed, we will not be able to use the after-tax proceeds to repay outstanding indebtedness as contemplated, which could have an adverse effect on our financial condition, results of operations and/or cash flows. The proposed divestiture of the AMC Business may result in disruptions in our remaining business and to relationships with customers and other business partners. The process of divesting the AMC Business could cause disruptions in our remaining business. Specifically, the constraints on our business imposed by the terms of the divestiture, including the resources required to focus on completing the divestiture, the limitations created by the sale of certain assets we have historically used in our business, and our obligation to provide certain transition services to the buyer following completion of the divestiture for up to 24 months, could have a continuing impact on the execution of our business strategy and our overall operating results. The divestiture could cause customers to delay or to defer decisions with respect to the AMC Business or to end their relationships with us altogether, or otherwise limit our ability to compete for or perform certain contracts or services. Further, the divestiture could be disruptive to our employees, making the execution of business strategies more difficult, and could result in the turnover of key leaders or other personnel. Any of the foregoing could adversely affect our remaining businesses, the financial condition of such businesses and their results of operations and prospects. We may not achieve the intended benefits of the divestiture of the AMC Business. We may not realize some or all of the anticipated benefits from the divestiture with respect to the anticipated performance of our remaining business, or the anticipated benefits from the repayment of certain outstanding indebtedness with the after-tax proceeds therefrom, and the divestiture may in fact adversely affect our business. Our ability to realize the anticipated benefits of the divestiture will depend, to a large extent, on our ability to continue to focus on Cloud and AI opportunities within 83 Table of Contents Information Management and to achieve more predictable growth in the absence of the divested business. Even if ultimately achieved, some of the anticipated benefits may not occur for a significant time period following the completion of the divestiture. In addition, we may retain certain liabilities or obligations related to the AMC Business that may arise under contract or law, or may have difficulties enforcing our rights, contractual or otherwise, against the buyer. Even if we are successful at separating and divesting the AMC Business, the divestiture and the proposed use of after-tax proceeds to repay outstanding indebtedness may not enhance long-term stockholder value as anticipated and the efforts required to complete the divestiture process may be more costly or time-consuming than expected, which could adversely impact our financial condition, results of operations and/or cash flows in the near-term.