8-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 1, 2006

RADISYS CORPORATION

(Exact name of registrant as specified in its charter)

Oregon	0-26844	93-0945232
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

5445 NE Dawson Creek Drive
Hillsboro, Oregon	97124
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (503) 615-1100

No Change
(Former Name or Former Address, if Changed Since Last Report)

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:

o Written communications pursuant to Rule 425 under the Securities Act

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

TABLE OF CONTENTS

EXHIBIT 23.1

EXHIBIT 99.1

EXHIBIT 99.2

EXHIBIT 99.3

EXPLANATORY NOTE

RadiSys Corporation (“RadiSys”) hereby amends and supplements Item 9.01 of its Current Report on 8-K (File No. 000-26844) filed on September 1, 2006 to include the financial statements of Convedia Corporation, the business acquired, and the unaudited pro forma financial information required by Item 9.01.

Item 9.01. Financial Statements and Exhibits.

(a)	Financial statements of business acquired.
	The following audited consolidated financial statements of Convedia Corporation as of March 31, 2006 and for the year then ended are filed as Exhibit 99.1 and incorporated herein by this reference:

	Page
Independent Auditors’ Report	F-1
Consolidated Balance Sheet as of March 31, 2006	F-2
Consolidated Statement of Loss for the year ended March 31, 2006	F-3
Consolidated Statement of Changes in Shareholders’ Equity for the year ended March 31, 2006	F-4
Consolidated Statement of Cash Flows for the year ended March 31, 2006	F-5
Notes to the Consolidated Financial Statements as of and for the year ended March 31, 2006	F-6

The following unaudited interim condensed consolidated financial statements of Convedia Corporation as of June 30, 2006 and for the three month period ended June 30, 2006 and 2005 are filed as Exhibit 99.2 and incorporated herein by this reference:

	Page
Interim Condensed Consolidated Balance Sheet as of June 30, 2006 (unaudited)	F-21
Interim Condensed Consolidated Statements of Loss for the three months ended June 30, 2006 and 2005 (unaudited)	F-22
Interim Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2006 and 2005 (unaudited)	F-23
Interim Condensed Consolidated Statements of Loss for the three months ended June 30, 2006 and 2005 (unaudited)	F-22
Notes to the Condensed Consolidated Financial Statements as of and for the three months ended June 30, 2006	F-24

(b)	Pro forma financial information.
	The following unaudited pro forma combined financial information with respect to the transaction is furnished as Exhibit 99.3 and incorporated herein by this reference:

	Page
Pro Forma Combined Financial Information (unaudited)	F-26
Pro Forma Combined Balance Sheet as of June 30, 2006 (unaudited)	F-27
Pro Forma Combined Statement of Operations for the year ended December 31, 2006 (unaudited)	F-28
Pro Forma Combined Statement of Operations for the six months ended June 30, 2006 (unaudited)	F-29
Notes to Pro Forma Combined Financial Statements (unaudited)	F-30

(d) Exhibits.

Exhibit
No.	Description
2.1	Arrangement Agreement among RadiSys Corporation, Convedia Corporation and RadiSys Canada Inc., effective as of July 26, 2006. (previously filed)
10.1	RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.2	Form of Notice of Option Grant for United States employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.3	Form of Notice of Option Grant for Canada employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.4	Form of Notice of Option Grant for international employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.5	Form of Notice of Option Grant for China employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.6	Form of Restricted Stock Grant Agreement for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.7	Form of Restricted Stock Unit Grant Agreement for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
23.1	Consent of Independent Auditors
99.1	Audited consolidated financial statements of Convedia Corporation as of March 31, 2006 and for the year ended March 31, 2006
99.2	Unaudited interim condensed consolidated financial statements of Convedia Corporation as of June 30, 2006 and for the three months ended June 30, 2006 and 2005
99.3	Unaudited pro forma combined financial information as of June 30, 2006 and the year ended December 31, 2005 and the six months ended June 30, 2006

SIGNATURE

     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 thereunto duly authorized.

	RADISYS CORPORATION
	an Oregon corporation
Date: September 26, 2006	By:	/s/ Brian Bronson
	Name: Brian Bronson
	Title:   VP of Finance and Business Development

EXHIBIT INDEX

Exhibit
No.	Description
2.1	Arrangement Agreement among RadiSys Corporation, Convedia Corporation and RadiSys Canada Inc., effective as of July 26, 2006. (previously filed)
10.1	RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.2	Form of Notice of Option Grant for United States employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.3	Form of Notice of Option Grant for Canada employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.4	Form of Notice of Option Grant for international employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.5	Form of Notice of Option Grant for China employees for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.6	Form of Restricted Stock Grant Agreement for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
10.7	Form of Restricted Stock Unit Grant Agreement for RadiSys Corporation Stock Plan for Convedia Employees. (previously filed)
23.1	Consent of Independent Auditors
99.1	Audited consolidated financial statements of Convedia Corporation as of March 31, 2006 and for the year ended March 31, 2006
99.2	Unaudited interim condensed consolidated financial statements of Convedia Corporation as of June 30, 2006 and for the three month period ended June 30, 2006 and 2005
99.3	Unaudited pro forma combined financial information as of June 30, 2006 and the year ended December 31, 2005 and the six months ended June 30, 2006

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the registration statement Nos. 333-49092 and 333-111547 on Form S-3 and Registration Statement Nos. 33-80577, 333-00514, 333-46473, 333-80087, 333-80089, 333-85093, 333-38966, 333-38988, 333-50582, 333-50584, 333-68362, 333-106670, 333-111520, 333-116570, 333-126189 and 333-137060 on Form S-8 of RadiSys Corporation of our report dated May 12, 2006, except as to Note 13, which is as of September 1, 2006, with respect to the consolidated balance sheet of Convedia Corporation at March 31, 2006 and the consolidated statement of loss, changes in shareholders equity and cash flows for the year then ended, which report appears in the Current Report on Form 8-K/A of RadiSys Corporation, dated September 1, 2006.

/s/ DELOITTE & TOUCHE LLP

Vancouver, British Columbia
September 25, 2006

EX-99.1

Exhibit 99.1

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of
Convedia Corporation

We have audited the consolidated balance sheet of Convedia Corporation as at March 31, 2006 and the consolidated statement of loss, changes in shareholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. These standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as at March 31, 2006 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States.

/s/ DELOITTE & TOUCHE LLP

Chartered Accountants
Vancouver, British Columbia
May 12, 2006 (except as to Note 13, which is as of September 1, 2006)

F - 1

CONVEDIA CORPORATION
CONSOLIDATED BALANCE SHEET
March 31, 2006
(Stated in U.S. dollars)

Assets
Current
Cash and cash equivalents	$	4,368,333
Accounts receivable and other (Note 3)		3,491,898
Investment tax credits receivable (Note 11)		1,228,700
Inventories and advances (Note 4)		837,396
Prepaid expenses and deposits		395,691
Total current assets		10,322,018
Plant and equipment (Note 5)		1,000,639
Total assets	$	11,322,657
Liabilities
Current
Accounts payable and accrued liabilities (Note 6)	$	2,890,995
Deferred revenue		647,489
Obligations under term loan, current portion (Note 7)		129,833
Total current liabilities		3,668,317
Due to Technology Partnerships Canada (Note 8)		754,297
Obligations under term loan, long-term portion (Note 7)		197,767
Total liabilities		4,620,381
Commitments and contingency (Note 9)
Shareholders’ Equity
Preference shares (Note 10)		29,704,010
Common shares (Note 10)		32,882,912
Additional paid in capital		843,306
Deficit		(56,727,952	)
Total shareholders’ equity		6,702,276
Total liabilities and shareholders’ equity	$	11,322,657

See accompanying notes to the consolidated financial statements.

F - 2

CONVEDIA CORPORATION
CONSOLIDATED STATEMENT OF LOSS
Year ended March 31, 2006
(Stated in U.S. dollars)

Revenue	$	13,724,630
Expenses
Cost of sales		4,521,432
Research and development		7,468,123
Selling		4,699,780
General and administrative		1,952,250
Loss from operations		(4,916,955	)
Other
Foreign exchange gain		24,574
Interest income		190,061
Interest expense		(14,399	)
Total other		200,236
Loss before income taxes		(4,716,719	)
Tax recovery from investment tax credits		(600,869	)
Net loss	$	(4,115,850	)

See accompanying notes to the consolidated financial statements.

F - 3

CONVEDIA CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Year ended March 31, 2006

			Common shares									Total
			Class A voting				Additional					shareholders’
	Amount		Number		Amount		paid in capital		Deficit			equity
Balance at March 31, 2005	$	29,704,010		34,347,825	$	32,863,564	$	840,878	$	(52,612,102	)	$	10,796,350
Stock options issued to advisors		—		—		—		2,428		—			2,428
Issued on exercise of warrants		—		888,889		17,768		—		—			17,768
Issued on exercise of options		—		79,017		1,580		—		—			1,580
Net loss		—		—		—		—		(4,115,850	)		(4,115,850	)
Balance at March 31, 2006	$	29,704,010		35,315,731	$	32,882,912	$	843,306	$	(56,727,952	)	$	6,702,276

See accompanying notes to the consolidated financial statements.

F - 4

CONVEDIA CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended March 31, 2006
(Stated in U.S. dollars)

	2006
Operating activities:
Net loss	$	(4,115,850	)
Items not affecting cash
Amortization and depreciation		494,915
Stock compensation expense		2,428
Unrealized foreign exchange loss		30,634
Changes in operating assets and liabilities:
Accounts receivable and other		(1,314,279	)
Investment tax credits receivable		201,264
Inventories and advances		1,367,806
Prepaid expenses and deposits		(148,439	)
Accounts payable and accrued liabilities		139,846
Deferred revenue		268,487
Cash used in operations		(3,073,188	)
Investing activity:
Purchase of plant and equipment		(544,989	)
Cash used in investing		(544,989	)
Financing activities:
Proceeds on exercise of warrants		17,768
Proceeds on exercise of options		1,580
Due to Technology Partnerships Canada		(253,471	)
Obligations under term loan		327,600
Cash provided by financing		93,477
Decrease in cash and cash equivalents		(3,524,700	)
Cash and cash equivalents, beginning of year		7,893,033
Cash and cash equivalents, end of year	$	4,368,333

See accompanying notes to the consolidated financial statements.

F - 5

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

1.	NATURE OF BUSINESS
	The Corporation was incorporated on September 8, 1994 under the Canada Business Corporations Act and commenced active operations in August 1995. The Corporation develops and supplies next generation, Softswitch compliant media servers that enable communications service providers to rapidly deliver innovative and differentiated voice and video services over the Internet Protocol (“IP”) networks.
2.	ACCOUNTING POLICIES
	The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the following significant accounting policies:

(a)	Basis of consolidation
	The consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries, Convedia Inc. (United States) and Convedia Limited (United Kingdom). All material intercompany balances and transactions have been eliminated.
(b)	Use of estimates
	The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are used for, but not limited to, accounting for doubtful accounts, estimates of amounts recoverable from investment tax credits, provisions for obsolete inventory, estimates of future cost associated with the product warranties, estimates of recoverability of long-lived assets, amortization, income taxes, and contingencies. Actual results may differ from those estimates.
(c)	Foreign currency translation
	The Corporation’s functional currency is the U.S. dollar. Monetary assets and liabilities denominated in other than the U.S. dollar are translated using the exchange rates prevailing at the balance sheet date. Revenues and expenses are translated using average exchanges rates prevailing during the period. Gains and losses on foreign currency transactions are recorded in operations.

F - 6

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

2. ACCOUNTING POLICIES (Continued)

(d)	Cash and cash equivalents
	Cash and cash equivalents consist of cash on hand and balances with banks, and investments in securities with initial terms to maturity of three months or less.
(e)	Inventories and advances
	Inventories are valued at the lower of cost and net realizable value, with cost being determined using the first-in, first-out method. Inventories consist of raw materials, work-in-process and finished goods. Advances on inventory are contractual obligations for inventory purchased by the Corporation’s manufacturer.
(f)	Plant and equipment
	Plant and equipment are recorded at cost and are amortized on a declining balance-basis at annual rates calculated to amortize the cost of the assets over their estimated useful lives as follows:

Office equipment		20	%
Vehicle		30	%
Computer hardware		30	%
Computer software		30% - 100	%
Leasehold improvements	lease term

	In the year of acquisition one-half of the above rates are used.
(g)	Impairment of long-lived assets
	The Corporation periodically compares the carrying value of its long-lived assets to the undiscounted net cash flows from their future use and eventual disposal. The Corporation records an impairment loss in the period when it is determined that the carrying value exceeds those undiscounted estimates of future cash flows. The impairment loss is measured as the excess of the carrying value of the asset over its fair value.
(h)	Research and development costs
	Research and development costs are expensed as incurred.

F - 7

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

2. ACCOUNTING POLICIES (Continued)

(i)	Investment tax credits
	Investment tax credits relating to scientific research and experimental development are accounted for using the deferral method. To the extent there is reasonable assurance the credits will be realized, they are recorded in the year the related expenditure is made as an income tax recovery.
(j)	Revenue recognition
	Revenue consists of product sales, installation and training and support.

(i)	The Corporation recognizes revenues for product sales on delivery provided evidence of an arrangement with a customer exists, revenue is fixed or determinable, and collection is probable. Provisions for warranty related costs are recorded in the period in which the revenue is recognized based on warranty terms (one year to two years) and prior experience. During the year ended March 31, 2006, $29,015 was charged to the product warranty accrual.
(ii)	Revenues from installation and training services are recognized as these services are performed.
(iii)	Revenues from support services are recognized ratably over the contractual term. When customers are billed in advance of performance of the services, the revenue is deferred until such time as the services are performed.

	The Corporation accounts for bundled sales (product sale, installations, training and support) as multiple-element arrangements. The Corporation recognizes revenue for the elements separately as (i) the sales of the products, installation, training and support represent separate earnings processes, and (ii) revenue is allocated among the elements based on evidence of the fair value of the elements.
	Deferred revenue represents cash received for revenue not yet earned and support revenue which has not yet been earned.
(k)	Advertising
	The Corporation expenses advertising costs as they are incurred. Advertising expense is included in selling expenses and amounted to $383,092 in the year ended March 31, 2006.

F - 8

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

2. ACCOUNTING POLICIES (Continued)

(l)	Income taxes
	Deferred income taxes relate to the expected future tax consequences of differences between the carrying amount of balance sheet items and their corresponding tax values. Deferred tax assets, if any, are recognized only to the extent that, in the opinion of management, it is more likely than not that the deferred income tax assets will be realized. Deferred income tax assets and liabilities are adjusted for currently enacted tax laws and rates.
(m)	Stock-based compensation plan
	The Corporation has elected under FAS No. 123, Accounting for Stock Based Compensation, to account for employee options using the intrinsic value method. As all stock options are granted with an exercise price equal or higher than the market value of the underlying common shares on the date of the grant, no compensation expense is required to be recognized. FAS 123 uses a fair value method of calculating the cost of stock options grants. Had compensation cost for the employee stock option plan been determined by this method, the Corporation’s net loss would have been as follows:

Net loss
As reported	$	(4,115,850	)
Less: Additional employee compensation expense determined under the fair value based method		(16,361	)
Pro forma net loss	$	(4,132,211	)

The Corporation recognizes the calculated benefit at the date of granting the stock options on a straight-line basis over the shorter of the expected service period and the vesting period. The Corporation has estimated the fair value of each option on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

Expected dividend yield		0	%
Expected stock price volatility		0-25	%
Risk-free interest rate		3.18-4.06	%
Expected life of options	5 years

The stock-based compensation plan is described in Note 10.

F - 9

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

2. ACCOUNTING POLICIES (Continued)

(n) Financial instruments

(i)	Financial risk
	Certain balances are denominated in Canadian dollars and as a result, the Corporation is at risk to fluctuations in foreign exchange rates. For the year ending March 31, 2006 average Canadian dollar balances held in cash and cash equivalents amounted to Cdn$3 million. In addition, a significant portion of the Corporation’s expenses are denominated in Canadian dollars. The Corporation does not use derivative instruments to reduce its exposure to foreign currency.
(ii)	Fair values
	The fair values of the Corporation’s cash and cash equivalents, accounts and other receivables, deposits, accounts payable and accrued liabilities approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The fair value of the amount due to Technology Partnerships Canada is not readily determinable as it is dependent on future revenue. The Corporation has recorded the maximum amount repayable in the financial statements (Note 8).
(iii)	Concentration of business risk and economic dependence
	The Corporation is exposed to customer concentration risk as one customer represents 18% of the Corporation’s revenue and 18% of trade accounts receivable for the year ended March 31, 2006.

(o)	Comprehensive income
	SFAS No. 130, Reporting Comprehensive Income, requires a full set of general purpose financial statements to be expanded to include the reporting of “comprehensive income”. For the year ended March 31, 2006, there are no items other than net loss that require reporting in comprehensive income.
(p)	Segment information
	SFAS No. 131, Disclosure About Segments of an Enterprise and Related Information, requires companies to report selected information about operating segments, as well as enterprise-wide disclosures about products, services, geographic areas and major customers. The Company has determined it conducts its operations in one business segment.

F - 10

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

2. ACCOUNTING POLICIES (Continued)

(q)	Recent accounting pronouncements
	In March 2004, the FASB issued EITF 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments, which provides new guidance for assessing impairment losses on investments. Additionally, EITF 03-1 includes new disclosure requirements for investments that are deemed to be temporarily impaired. In September 2004, the FASB delayed the accounting provision of EITF 03-1; however, the disclosure requirements remain effective for annual periods ending after June 15, 2004. The adoption of the disclosure provisions of EITF 03-1 did not have a material impact on the Corporation’s consolidated financial statements. The Corporation does not expect the accounting provisions of EITF 03-1 to have a material impact on its consolidated financial position, results of operations or cash flows.
	In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 151, Inventory Costs, An Amendment of ARB No. 43, Chapter 4 (“SFAS 151”). This statement amends the guidance of ARB No. 43, Chapter 4, Inventory Pricing and requires that abnormal amounts of idle facility expense, freight, handling costs and wasted material be recognized as current period charges. In addition, this statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. SFAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Corporation does not anticipate that the implementation of this standard will have a material impact on its financial position, results of operations or cash flows.
	In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. SFAS No. 123R is effective for annual periods beginning after December 15, 2005 and, thus, will be effective for the Corporation beginning with the first quarter of fiscal 2007. The Corporation is currently evaluating the impact of SFAS No. 123 on its financial position and results of operations. See Stock-based compensation plan above for information related to the pro forma effects on the reported net income and net income per share when applying the fair value recognition provisions of the previous SFAS No. 123 to stock-based employee compensation.

F - 11

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

2. ACCOUNTING POLICIES (Continued)

(q)	Recent accounting pronouncements (continued)
	In December 2004, the FASB issued SFAS No. 153, Exchanges of Non-monetary Assets — An Amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions. SFAS No. 153 eliminates the exception from fair value measurement for non-monetary exchanges of similar productive assets in paragraph 21 (b) of APB Opinion No. 29, Accounting for Non-monetary Transactions, and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 specifies that a non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for fiscal periods beginning after June 15, 2005. The adoption of SFAS No. 153 did not have a material impact on the Corporation’s consolidated financial position, results of operations or cash flows.
	In May 2005, the FASB issued SFAS Statement No. 154, Accounting Changes and Error Corrections (“SFAS 154”). SFAS 154 is a replacement of Accounting Principles Board Opinion No. 20 (“APB 20”) and FASB Statement No. 3. SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. It establishes retrospective application, or the latest practicable date, as the required method for reporting a change in accounting principle and the reporting of a correction of an error. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005 and the Corporation will adopt this standard on April 1, 2006. The Corporation does not expect that the adoption of SFAS 154 will have a material impact on the consolidated results of operations, financial condition and cash flows.
	On July 14, 2005, the FASB issued an exposure draft of a proposed Interpretation, Accounting for Uncertain Tax Positions — an Interpretation of FASB Statement No. 109. The proposed interpretation would require companies to recognize the best estimate of an uncertain tax position only if it is probable of being sustained on audit by the taxation authorities. Subsequently, the tax benefit would be derecognized (by either recording a tax liability or decreasing a tax asset) when the probable threshold is no longer met and it is more likely than not that the tax position will not be sustained. The proposed Interpretation would be effective for years ending after December 15, 2005 and treated as a change in accounting policy. It would require companies to assess all uncertain tax positions and only those meeting the probable threshold at the transition date would continue to be recognized. The difference between the amount previously recognized and the amount recognized after applying the proposed Interpretation would be recorded as the cumulative-effect adjustment in the 2005 statement of earnings (restatement is not permitted). The comment period ended September 12, 2005. The Company does not expect the proposed Interpretation to have a material impact on its results.

F - 12

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

2. ACCOUNTING POLICIES (Continued)

(q)	Recent accounting pronouncements (continued)
	In October 2005, the FASB issued FASB Staff Position FAS 123(R)-2, Practical Accommodation to the Application of Grant Date as Defined in FAS 123(R) (“FSP 123(R)-2”). FSP 123(R)-2 provides guidance on the application of grant date as defined in SFAS No. 123(R). In accordance with this standard a grant date of an award exists if (a) the award is a unilateral grant and (b) the key terms and conditions of the award are expected to be communicated to an individual recipient within a relatively short time period from the date of approval. The Corporation will adopt this standard when it adopts SFAS No. 123(R), and does not anticipate that the implementation of this Statement will have a significant impact on results of operations.
	In November 2005, the FASB issued FASB Staff Position FAS 123(R)-3, Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards (“FSP 123(R)-3”). FSP 123(R)-3 provides an elective alternative method that establishes a computational component to arrive at the beginning balance of the accumulated paid-in capital pool related to employee compensation and a simplified method to determine the subsequent impact on the accumulated paid-in capital pool of employee awards that are fully vested and outstanding upon the adoption of SFAS No. 123(R). The Corporation is currently evaluating this transition method.

3. ACCOUNTS RECEIVABLE AND OTHER

Trade accounts recoverable (net of allowance for doubtful accounts in 2006 of $Nil)	$	3,403,711
Interest receivable and other		19,021
Input tax credits receivable		69,166
	$	3,491,898

The Corporation has mitigated its credit risk by obtaining accounts receivable insurance or requiring a customer letter of credit on 93% of the Corporation’s revenue and 98% of the accounts receivable balance for the year ending March 31, 2006. Revenue, based on the location of end customers, was earned in Canada ($443,687), the United States and Mexico ($6,791,857), Asia and Australia ($4,318,643), and Europe and the Middle East ($2,170,443).

F - 13

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

4. INVENTORIES AND ADVANCES

Raw materials	$	161,092
Work in progress		36,300
Finished goods		225,411
Advances on inventory		414,593
	$	837,396

5. PLANT AND EQUIPMENT

			Accumulated		Net book
	Cost		amortization		value
Office equipment	$	324,109	$	192,796	$	131,313
Vehicle		36,512		21,305		15,207
Computer hardware		1,380,176		733,186		646,990
Computer software		673,671		524,476		149,195
Leasehold improvements		117,042		59,108		57,934
	$	2,531,510	$	1,530,871	$	1,000,639

	All of the Company’s long-lived assets are located in Canada.
6.	ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Trade accounts payable	$	1,876,698
Accrued compensation and other employee benefits payable		911,260
Product warranty accrual		103,037
	$	2,890,995

F - 14

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

7.

CREDIT FACILITIES

On May 12, 2005, the Corporation entered into an agreement with a Canadian subsidiary of a major U.S. bank for the provision of credit facilities to the Corporation. The credit facilities consist of an operating line to a maximum of $3,000,000 to support working capital and term loans for approximately $1,000,000 to support capital expenditures. Interest is payable monthly. The operating line bears interest at U.S. prime rate and the loans bear interest at U.S. prime rate plus 0.25%. The credit facilities are secured by a first priority general security interest on the Corporation’s assets. At March 31, 2006, there was $Nil owing on the operating line and $327,600 owing on the loans. As at March 31, 2006, the minimum payments under the term loans are as follows:

2007	$	129,833
2008		140,747
2009		57,020
	$	327,600

8.	DUE TO TECHNOLOGY PARTNERSHIPS CANADA
	In fiscal 1998, the Corporation entered into a technology and application development project agreement with Technology Partnerships Canada under which it received contributions totalling Cdn$1,089,740. In exchange for this contribution, the Corporation agreed to a 2% royalty on gross revenue, beginning April 1999, to a maximum of Cdn$1,560,000. During fiscal 2002, the Corporation recorded the difference between the amount received and the maximum amount repayable of Cdn$470,260 as a financing cost. At March 31, 2006, remaining royalties payable to Technology Partnerships Canada were $754,297 (Cdn$880,339). The Technology Partnerships Canada agreement expires on the earlier of full repayment of Cdn$1,560,000 and July 31, 2007.
9.	COMMITMENTS AND CONTINGENCY

(a) The Corporation has obligations under operating leases that expire in May 2007. As at March 31, 2006, the minimum lease payments are as follows:

2007	$	750,039
2008		127,753
	$	877,792

(b) During the year ended March 31, 2006, the Corporation entered into a non-cancellable non-returnable purchase agreement with a supplier to secure inventory parts. At March 31, 2006, the remaining obligation under the purchase agreement was $119,000.

F - 15

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

9. COMMITMENTS AND CONTINGENCY (Continued)

(c) In connection with certain corporate transactions, the Corporation may be required to pay certain amounts to advisors.

10.  SHARE CAPITAL

(a)	Authorized
	An unlimited number of Class A Voting Common Shares
	An unlimited number of Class B non-voting Common Shares
	An unlimited number of Preference Shares issuable in Series
	150,000,000 Series 1 Preference shares
	While there are an unlimited number of common shares authorized, under protective provisions attaching to the Series 1 Preference Shares, the Corporation shall not without first obtaining approval of not less than 60% of the then outstanding Series 1 Preference Shares, issue or reserve for issue more than an aggregate of 125,000,000 Class A Common Shares and Class B Common Shares.
	A holder of a Class A Voting Common Share is entitled to convert each share into a Class B Non-voting Common Share at any time. A holder of a Class B Non-voting Common Share is entitled, upon a substantial change in control of the Corporation, to convert each share into a Class A Voting Common Share. The two classes of common shares are equal in all respects except with respect to voting and conversion rights.
	A holder of Series 1 Preference Shares is entitled to the number of votes that the holder would be entitled to if such shares had been converted into common shares. Series 1 Preference Shares are convertible at any time into Class A Voting common shares. The conversion price of the Series 1 Shares will be subject to adjustment to prevent dilution in the event the Corporation issues additional shares (other than reserved employee shares, shares to lenders, strategic partners or in connection with the acquisition of a company or technology as approved by the Board of Directors) at a purchase price less than the then applicable conversion price of the Series 1 Shares. The Series 1 Shares carry the right to receive an 8% non-cumulative dividend whenever funds are legally available and when and as declared by the Board. In the event of a liquidation, dissolution or winding up of the Corporation, the Series 1 Shares will first be entitled to receive a preference to the holders of the Common Shares equal to 1.5 times the original purchase price plus any dividends declared but not paid. Any remaining assets will then be allocated pro rata until the holders of the Series 1 Shares have received 3 times the original purchase price plus any unpaid dividends. Any remaining assets will be allocated to the common shareholders. The Series 1 Shares are subject to mandatory conversion immediately prior to the closing of an initial public offering.

F - 16

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

10. SHARE CAPITAL (Continued)

(b)	Stock option plan
	On November 1, 2001 the Corporation’s Shareholders approved the Stock Option Plan effective as of September 17, 2001. Under the Stock Option Plan, the Board is empowered to grant options to purchase Class A Common Shares to directors, officers, current full-time or part-time employees and consultants of the Corporation or its subsidiary. The Board of Directors has reserved an aggregate of 24,400,000 Class A Common Shares for issuance upon the exercise of options granted under the Stock Option Plan. 4,159,279 options have been exercised, leaving a balance of 20,240,721 shares reserved for issuance upon exercise of options. Options are to be granted with an exercise price determined by the Board of Directors based on the fair market value of the Class A Common Shares on the day prior to the date that such option is granted. In the case of incentive stock options (as defined in the Stock Option Plan) for U.S. resident optionees, the exercise price of an option will be determined by the Board of Directors based on either: (i) the fair market value of the Class A Common Shares on the date that such option is granted, or (ii) 110% of the fair market value of the Class A Common Shares on the date that such option is granted.
	The Stock Option Plan provides that, unless otherwise determined by the Board of Directors or the Compensation Committee (with the approval of all of the directors nominated by the holders of Series 1 Shares), the options vest one-quarter on the first anniversary and the remaining options vest monthly over the next 36 months. The options remain exercisable until the fifth anniversary of the date of grant, unless otherwise specified by the Board of Directors or the Compensation Committee with the approval of the Board of Directors.

F - 17

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

10. SHARE CAPITAL (Continued)

(c)	Stock option plan activity
	Activity in the stock option plans for the year ended March 31, 2006 is summarized below:

						Weighted
						average
				Exercise		exercise
	Options			prices		price
Options outstanding, March 31, 2005		15,172,494		$0.02 and Cdn$0.70		$	0.02
Granted		3,288,350			$0.02-0.10	$	0.03
Exercised		(79,017	)		$0.02	$	0.02
Expired		(483,830	)	$0.02 and Cdn$0.70		$	0.15
Options outstanding, March 31, 2006		17,897,997		$0.02-0.10 and Cdn$.0.70		$	0.02

Information regarding stock options outstanding and exercisable at March 31, 2006 is summarized below:

		Options outstanding					Options exercisable
		Number		Weighted	Weighted		Number		Weighted
		outstanding		average	average		exercisable		average
Exercise		at March 31,		contractual	exercise		at March 31,		exercise
price		2006		life	price		2006		price
$	0.02		17,367,997	3.4 years	$	0.02		7,726,385	$	0.02
$	0.05		375,000	4.5 years	$	0.05		—	$	0.05
$	0.10		152,000	4.9 years	$	0.10		—	$	0.10
Cdn$	0.70		3,000	1.2 years	Cdn$	0.70		2,750	Cdn$	0.70

F - 18

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

11.	INCOME TAXES
	Reconciliation between expected income taxes computed at the statutory rate and the provision for income taxes is as follows at March 31, 2006:

Income taxes at statutory rate of 34.12%	$	(1,610,000	)
Tax benefit not recognized on current year losses		1,490,000
Unclaimed unbenefited scientific research and experimental development expenditures		73,000
Refundable investment tax credits claimed		600,869
Other permanent differences		47,000
	$	600,869

The Company’s significant deferred tax assets and liabilities at March 31, 2006 are as follows:

Deferred tax assets
Operating loss carryforwards	15,300,000
Undepreciated capital cost of plant and equipment	2,000,000
Scientific research and experimental development expenditures	2,000,000
	19,300,000
Valuation allowance	(19,300,000	)
Net deferred tax assets	—
Deferred tax liabilities	—

The Corporation has approximately Cdn$46,632,122 of non-capital losses for Canadian tax purposes expiring between 2006 and 2015, Cdn$6,699,000 in undepreciated capital cost and Cdn$6,706,000 in unclaimed scientific research and experimental development expenditures to be carried forward and applied against future income for tax purposes. In addition, the Corporation, through its U.S. subsidiary, has net operating loss carryforwards for United States tax purposes of approximately $4,750,000 that expire in various years through 2021. The potential benefit of these losses has not been reflected in these financial statements as a full valuation allowance has been taken.

F - 19

CONVEDIA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006
(Stated in U.S. dollars unless otherwise indicated)

12.	RELATED PARTY TRANSACTIONS
	Alcatel Canada Inc.
	At March 31, 2006, an amount of $9,500 is due to Alcatel Canada Inc. (“Alcatel”), a shareholder. During fiscal 2006, the Corporation paid rent of $535,423 to Alcatel and sold product and services of $1,645,433 to the Alcatel group of companies.
	On March 30, 2001, the Corporation entered into a license agreement with Alcatel for the design of the hi-power shelf that is part of Convedia’s CMS 6000 product. During fiscal 2006, royalties of $26,750 were paid to Alcatel.
	On October 31, 2002 the Corporation entered into a one-year lease with Alcatel for the period June 1, 2003 to May 31, 2004. On March 1, 2004, the lease was renewed for an additional year. On March 4, 2005, the lease was amended to add additional space and to extend the existing lease to May 31, 2007. Minimum lease payments are disclosed in Note 9.
	These transactions are in the normal course of business and are measured at the exchange amount, which is the consideration established and agreed to by the noted parties.
13.	SUBSEQUENT EVENT
	On July 26, 2006, the Company and RadiSys Canada, Inc. (“RadiSys”), a corporation incorporated under the laws of Canada and a wholly-owned subsidiary of RadiSys Corporation, entered into an Arrangement Agreement (the “Arrangement Agreement”) pursuant to which RadiSys would acquire all of the capital stock of the Company (the “Arrangement”). On September 1, 2006, the Arrangement was consummated, whereupon RadiSys acquired all of the capital stock of the Company and the Company became a wholly-owned subsidiary of RadiSys. Pursuant to the Arrangement Agreement, RadiSys paid $105 million in cash at closing. Up to an additional $10 million in cash is payable based on a contingent payment formula tied to achieving certain profitability goals during the twelve-month period beginning October 1, 2006. The Arrangement was approved by the Supreme Court of British Columbia and by the shareholders and option holders of the Company.

F - 20

EX-99.2

Exhibit 99.2

CONVEDIA CORPORATION
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2006
(Stated in U.S. dollars)
(Unaudited)

Assets
Current
Cash and cash equivalents	$	4,207,471
Accounts receivable and other		4,461,983
Investment tax credits receivable		321,661
Inventories and advances		1,313,556
Prepaid expenses and deposits		359,154
Total current assets		10,663,825
Plant and equipment		970,971
Total assets	$	11,634,796
Liabilities
Current
Accounts payable and accrued liabilities	$	3,642,715
Deferred revenue		701,269
Obligations under term loan, current portion		156,013
Total current liabilities		4,499,997
Due to Technology Partnerships Canada		703,712
Obligations under term loan, long-term portion		180,568
Total liabilities		5,384,277
Shareholders’ Equity
Preference shares		29,704,010
Common shares		32,882,912
Additional paid in capital		843,306
Deficit		(57,179,709	)
Total shareholders’ equity		6,250,519
Total liabilities and shareholders’ equity	$	11,634,796

F - 21

CONVEDIA CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS
Three month periods ended June 30, 2006 and 2005
(Stated in U.S. dollars)
(Unaudited)

	2006			2005
Revenue	$	5,262,101		$	2,432,791
Expenses
Cost of sales		1,548,257			770,814
Research and development		2,282,339			1,575,246
Selling		1,324,683			1,183,635
General and administrative		635,859			418,128
Total expenses		5,791,138			3,947,823
Loss from operations		(529,037	)		(1,515,032	)
Other
Foreign exchange gain (loss)		28,131			(122,098	)
Interest income		56,084			37,762
Interest expense		(6,935	)		—
Total other		77,280			(84,336	)
Loss before income taxes		(451,757	)		(1,599,368	)
Tax recovery from investment tax credits		—			(143,312	)
Net loss	$	(451,757	)	$	(1,456,056	)

F - 22

CONVEDIA CORPORATION
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three month periods ended June 30, 2006 and 2005
(Stated in U.S. dollars)
(Unaudited)

	2006			2005
Operating activities:
Net loss	$	(451,757	)	$	(1,456,056	)
Items not affecting cash
Amortization and depreciation		96,487			92,394
Changes in operating assets and liabilities:
Accounts receivable and other		(970,085	)		42,165
Investment tax credits receivable		907,039			(128,164	)
Inventories and advances		(476,160	)		151,201
Prepaid expenses and deposits		36,537			(55,016	)
Accounts payable and accrued liabilities		751,720			(730,667	)
Deferred revenue		53,780			412
Cash used in operations		(52,439	)		(2,083,731	)
Investing activity:
Purchase of plant and equipment		(66,869	)		(172,112	)
Cash used in investing		(66,869	)		(172,112	)
Financing activities:
Proceeds on exercise of options		—			8
Due to Technology Partnerships Canada		(50,535	)		(70,905	)
Obligations under term loan		8,981			—
Cash provided by financing		(41,554	)		(70,897	)
Decrease in cash and cash equivalents		(160,862	)		(2,326,740	)
Cash and cash equivalents, beginning of period		4,368,333			7,893,033
Cash and cash equivalents, end of period	$	4,207,471		$	5,566,293

F - 23

RADISYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

1.	UNAUDITED INTERIM FINANCIAL INFORMATION
	The unaudited interim condensed consolidated balance sheet as of June 30, 2006 and the unaudited statements of loss and statements of cash flows for the three months ended June 30, 2006 and June 30, 2005 have been prepared by Convedia Corporation (“Convedia”) pursuant to the rules and regulations of the Securities Exchange Commission (the “SEC”) for interim financial reporting. These consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the consolidated balance sheet, consolidated statements of loss and consolidated statements of cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America. Operating results for the three month period ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending March 31, 2007. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted in accordance with the SEC’s rules and regulations for interim reporting.
2.	SHARE-BASED COMPENSATION
	Prior to April 1, 2006, Convedia accounted for share-based compensation pursuant to the provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and accordingly no compensation expense was recorded for stock options or other share-based awards to employees and non-employee directors that were granted with an exercise price equal to or above the market value per share of the Convedia stock on the grant date. On April 1, 2006, the Convedia adopted SFAS No. 123R, Share-based Payments, using the modified prospective method. This statement requires that stock-based payments be recognized as an expense in the statement of loss based on their fair values on the date of grant, with compensation expense recognized over the period in which the grantee is required to provide service in exchange for the award. Additionally, for any invested awards outstanding at the adoption date, Convedia recognizes compensation expense over the remaining service period using the compensation cost calculated for pro forma disclosure purposes under SFAS No. 123. Prior periods are not revised for comparative purposes. No share-based awards were granted during the quarter ended June 30, 2006.
	For the three months ended June 30, 2006, share-based compensation expense is considered immaterial.
3.	ACCOUNTS RECEIVABLE AND OTHER
	Accounts receivable and other are net of allowance for doubtful accounts of $Nil.
4.	SHARE CAPITAL

(a)

Stock option plan

On November 1, 2001 the Corporation’s Shareholders approved the Stock Option Plan effective as of September 17, 2001. Under the Stock Option Plan, the Board is empowered to grant options to purchase Class A Common Shares to directors, officers, current full-time or part-time employees and consultants of the Corporation or its subsidiary. The Board of Directors has reserved an aggregate of 24,400,000 Class A Common Shares for issuance upon the exercise of options granted under the Stock Option Plan. 4,159,279 options have been exercised, leaving a balance of 20,240,721 shares reserved for issuance upon exercise of options. Options are to be granted with an exercise price determined by the Board of Directors based on the fair market value of the Class A Common Shares on the day prior to the date that such option is granted. In the case of incentive stock options (as defined in the Stock Option Plan) for U.S. resident optionees, the exercise price of an option will be determined by the Board of Directors based on either: (i) the fair market value of the Class A Common Shares on the date that such option is granted, or (ii) 110% of the fair market value of the Class A Common Shares on the date that such option is granted.

F - 24

RADISYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

	The Stock Option Plan provides that, unless otherwise determined by the Board of Directors or the Compensation Committee (with the approval of all of the directors nominated by the holders of Series 1 Shares), the options vest one-quarter on the first anniversary and the remaining options vest monthly over the next 36 months. The options remain exercisable until the fifth anniversary of the date of grant, unless otherwise specified by the Board of Directors or the Compensation Committee with the approval of the Board of Directors.
(b)	Stock option plan activity
	Activity in the stock option plans for the year ended June 30, 2006 is summarized below:

					Weighted
					average
			Exercise		exercise
	Options		prices		price
Options outstanding, March 31, 2006		17,897,997	$0.02-0.10 and Cdn$.0.70		$	0.02
Granted		—		—	$	0.03
Exercised		—		—	$	0.02
Expired		—		—	$	0.15
Options outstanding, June 30, 2006		17,897,997	$0.02-0.10 and Cdn$.0.70		$	0.02

Information regarding stock options outstanding and exercisable at June 30, 2006 is summarized below:

		Options outstanding					Options exercisable
		Number		Weighted	Weighted		Number		Weighted
		outstanding		average	average		exercisable		average
Exercise		at June 30,		contractual	exercise		at June 30,		exercise
price		2006		life	price		2006		price
$	0.02		17,367,997	3.4 years	$	0.02		7,726,385	$	0.02
$	0.05		375,000	4.5 years	$	0.05		—	$	0.05
$	0.10		152,000	4.9 years	$	0.10		—	$	0.10
Cdn$	0.70		3,000	1.2 years	Cdn$	0.70		2,750	Cdn$	0.70

5.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109. The interpretation prescribes a recognition threshold and measurement attributable for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The interpretation is effective for fiscal years beginning after December 15, 2006. Earlier application of the provisions of this interpretation is encouraged if the enterprise has not yet issued financial statements, including interim statements, in the period this interpretation is adopted. Convedia does not expect the interpretation to have a material impact on its results.

F - 25

EX-99.3

Exhibit 99.3

RADISYS CORPORATION
PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

     On July 26, 2006, RadiSys Corporation (“RadiSys”) and Convedia Corporation (“Convedia”) entered into an Arrangement Agreement (the “Arrangement Agreement”) pursuant to which RadiSys would acquire all of the capital stock of Convedia (the “Arrangement”). On September 1, 2006, the Arrangement was consummated, whereupon RadiSys acquired all of the capital stock of Convedia and Convedia became a wholly-owned subsidiary of RadiSys (the “Acquisition”). The Arrangement was approved by the Supreme Court of British Columbia and by the shareholders and option holders of Convedia.

     Pursuant to the Arrangement Agreement, RadiSys paid approximately $105 million in cash at closing (“Initial Consideration”). Up to an additional $10 million in cash (the “Final Consideration”) is payable based on a contingent payment formula tied to achieving certain profitability goals during the twelve-month period beginning October 1, 2006 (“Contingent Payment Provision”). The total preliminary purchase price of the Acquisition which consists of the Initial Consideration and the estimated direct acquisition-related expenses is currently estimated to be approximately $110.9 million and has been accounted for as a purchase business combination under Statement of Financial Accounting Standards No. 141, “Business Combinations.” The Final Consideration and any associated direct expenses will be recorded as additional goodwill when the Contingent Payment Provision is determinable beyond a reasonable doubt.

     The Unaudited Pro Forma Combined Balance Sheet as of June 30, 2006 and the Unaudited Pro Forma Combined Statement of Operations for the six months ended June 30, 2006 and fiscal year ended December 31, 2005 combine the historical RadiSys and Convedia balance sheets and statements of operations as if the Acquisition, which occurred on September 1, 2006, had been completed on June 30, 2006 for purposes of the presentation of the Unaudited Pro Forma Combined Balance Sheet and on January 1, 2005 for purposes of the presentation of the Unaudited Pro Forma Combined Statements of Operations. The Unaudited Pro Forma Combined Balance Sheet combines RadiSys’ unaudited consolidated balance sheet as of June 30, 2006 with Convedia’s unaudited consolidated balance sheet as of June 30, 2006. The Unaudited Pro Forma Combined Statement of Operations for the fiscal year ended December 31, 2005 combines RadiSys’ consolidated statement of operations for the year ended December 31, 2005 with Convedia’s consolidated statement of operations for the year ended March 31, 2006. The Unaudited Pro Forma Combined Statement of Operations for the six months ended June 30, 2006 combines RadiSys’ unaudited consolidated statement of operations for the six months ended June 30, 2006 with Convedia’s unaudited consolidated statement of operations for the six months ended June 30, 2006. Convedia’s historical unaudited consolidated statement of operations for the six months ended June 30, 2006 was derived by adding Convedia’s consolidated statement of operations for the three months ended June 30, 2006 to Convedia’s consolidated statement of operations for the three months ended March 31, 2006. As a result, Convedia’s consolidated statement of operations for the three months ended March 31, 2006 was included in both the Unaudited Pro Forma Combined Statements of Operations for the six months ended June 30, 2006 and the fiscal year ended December 31, 2005. For more information, see footnote (*) on the face of the Unaudited Pro Forma Combined Statement of Operations for the six months ended June 30, 2006, herein.

     The Unaudited Pro Forma Combined Financial Statements should be read together with the financial statements including the notes to these statements of RadiSys included in RadiSys’ Annual Report on Form 10-K for the year ended December 31, 2005 and the historical audited and unaudited financial statements of Convedia included in Exhibits 99.1 and 99.2 of this Current Report on Form 8-K/A.

     The pro forma adjustments reflecting the consummation of the Acquisition included in the Unaudited Pro Forma Combined Financial Statements are based on the purchase method of accounting, available financial information and certain estimates and assumptions set forth in the notes to the Unaudited Pro Forma Combined Financial Statements. Specifically, the unaudited pro forma combined balance sheet is presented to give effect to the Acquisition as if the transaction had been consummated on June 30, 2006. As a result, the pro forma adjustments giving effect to the allocation of the preliminary purchase price are based on the fair values of the tangible and intangible assets acquired and liabilities assumed as of June 30, 2006 and may be affected and materially changed by the results of Convedia’s operations up to the closing date (September 1, 2006) of the Acquisition.

     As of June 30, 2006, the allocation of the estimated preliminary cash purchase price of $110.9 million is summarized as follows: tangible assets acquired and liabilities assumed — $9.2 million, identifiable intangible assets — $47.4 million, deferred employee compensation — $1.9 million, in-process research and development charge — $14.0 million and goodwill — $38.4 million. The valuation of the tangible and identifiable intangible assets and liabilities are subject to final valuations and further review by management, which may result in material adjustments. Adjustments to these estimates will be included in the final allocation of the purchase price of Convedia. The excess of the purchase price over the tangible and identifiable intangible assets acquired and liabilities assumed has been allocated to goodwill.

     Until the Final Consideration and any associated direct expenses are determinable beyond a reasonable doubt and the valuation of the tangible and identifiable intangible assets and liabilities is considered final, the purchase price is preliminary and subject to adjustment. The pro forma adjustments do not reflect any operating efficiencies or additional costs that may result with respect to the combined business of RadiSys and Convedia.

     The Unaudited Pro Forma Combined Financial Statements as of and for the six months ended June 30, 2006 and year ended December 31, 2005 do not purport to represent what the actual financial condition or results of operations of the combined businesses would have been if the acquisition of Convedia had occurred on the dates indicated in these pro forma combined financial statements nor does this information purport to project our results or financial position for any future periods.

F - 26

RADISYS CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(In thousands of U.S. Dollars)

											Pro Forma
	RadiSys		Convedia								Combined
	June 30,		June 30,			Pro Forma					June 30,
	2006		2006			Adjustments					2006
							(Note 2)
ASSETS
Current assets:
Cash and cash equivalents	$	130,769	$	4,207		$	(106,040	)	(a	)	$	28,936
Short term investments, net		112,150		—			—					112,150
Accounts receivable, net		57,538		4,339			—					61,877
Other receivables		2,103		445			(322	)	(b	)		2,226
Inventories, net		15,669		1,314			1,657		(c	)		18,640
Assets held of sale		2,105		—			—					2,105
Other current assets		3,000		359			1,814		(d	)		5,173
Deferred tax assets		7,399		—			—					7,399
Total current assets		330,733		10,664			(102,891	)				238,506
Property and equipment, net		11,710		971			—					12,681
Goodwill		27,463		—			38,402		(e	)		65,865
Intangible assets, net		1,699		—			47,400		(f	)		49,099
Long-term deferred tax assets		19,748		—			—					19,748
Other assets		4,092		—			574		(g	)		4,666
Total assets	$	395,445	$	11,635		$	(16,515	)			$	390,565
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	46,467	$	1,736		$	—				$	48,203
Accrued wages and bonuses		6,294		1,007			—					7,301
Accrued interest payable		224		2			—					226
Accrued restructuring		26		—			—					26
Other accrued liabilities		9,862		1,599			4,776		(h	)		16,237
Obligations under term loan, current portion		—		156			(156	)	(i	)		—
Total current liabilities		62,873		4,500			4,620					71,993
Long-term liabilities:
Convertible senior notes, net		97,345		—			—					97,345
Convertible subordinated notes, net		2,504		—			—					2,504
Due to Technology Partnerships Canada		—		704			(704	)	(j	)		—
Obligations under term loan, long-term portion		—		180			(180	)	(i	)		—
Total long-term liabilities		99,849		884			(884	)				99,849
Total liabilities		162,722		5,384			3,736					171,842
Shareholders’ equity:
Preferred stock		—		29,704			(29,704	)	(k	)		—
Common stock		202,703		32,884			(32,884	)	(k	)		202,703
Additional paid in capital		—		843			(843	)	(k	)		—
Retained earnings (deficit)		26,060		(57,180	)		43,180		(l	)		12,060
Accumulated other comprehensive income:
Cumulative translation adjustments		3,960		—			—					3,960
Total shareholders’ equity		232,723		6,251			(20,251	)				218,723
Total liabilities and shareholders’ equity	$	395,445	$	11,635		$	(16,515	)			$	390,565

See accompanying notes to the Unaudited Pro Forma Combined financial statements.

F - 27

RADISYS CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(In thousands of U.S. Dollars, except per share data)

	RadiSys			Convedia
	For the Six			For the Six
	Months Ended			Months Ended			Pro Forma					Pro Forma
	June 30, 2006			June 30, 2006 *			Adjustments					Combined
Revenues	$	150,350		$	9,403		$	—				$	159,753
Cost of sales		109,023			2,919			(115	)	(m	)		111,827
Gross margin		41,327			6,484			115					47,926
Research and development		19,841			4,572			372		(n	)		24,785
Selling, general and administrative		17,689			4,029			851		(o	)		22,569
Intangible assets amortization		461			—			8,248		(p	)		8,709
Restructuring and other charges		(174	)		—			—					(174	)
Income (loss) from operations		3,510			(2,117	)		(9,356	)				(7,963	)
Interest expense		(869	)		(13	)		13		(q	)		(869	)
Interest income		4,871			106			(2,368	)	(r	)		2,609
Other expense, net		475			50			—					525
Income (loss) before income tax provision (benefit)		7,987			(1,974	)		(11,711	)				(5,698	)
Income tax provision (benefit)		2,202			(458	)		(3,631	)	(s	)		(1,887	)
Net income (loss)	$	5,785		$	(1,516	)	$	(8,080	)			$	(3,811	)
Net income (loss) per share:
Basic	$	0.28										$	(0.18	)
Diluted	$	0.24										$	(0.18	)
Weighted average shares outstanding:
Basic		20,858											20,858
Diluted		25,731											20,858

* Convedia’s historical unaudited consolidated statement of operations for the six months ended June 30, 2006 was derived by adding Convedia’s consolidated statement of operations for the three months ended June 30, 2006 to Convedia’s consolidated statement of operations for the three months ended March 31, 2006. As a result, Convedia’s consolidated statement of operations for the three months ended March 31, 2006 was included in both the Unaudited Pro Forma Combined Statements of Operations for the six months ended June 30, 2006 and the fiscal year ended December 31, 2005. (See Note 4)

See accompanying notes to the Unaudited Pro Forma Combined financial statements.

F - 28

RADISYS CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(In thousands of U.S. Dollars, except per share data)

	RadiSys			Convedia
	For the Year			For the Year
	Ended			Ended
	December 31,			March 31,			Pro Forma					Pro Forma
	2005			2006			Adjustments					Combined
Revenues	$	260,234		$	13,725		$	—				$	273,959
Cost of sales		183,398			4,522			62		(m	)		187,982
Gross margin		76,836			9,203			(62	)				85,977
Research and development		29,784			7,468			751		(n	)		38,003
Selling, general and administrative		30,084			6,652			1,404		(o	)		38,140
Intangible assets amortization		2,052			—			16,496		(p	)		18,548
Restructuring and other charges		1,128			—			—					1,128
Income (loss) from operations		13,788			(4,917	)		(18,713	)				(9,842	)
Loss on repurchase of convertible subordinated notes		(50	)		—			—					(50	)
Interest expense		(2,053	)		(14	)		14		(q	)		(2,053	)
Interest income		6,337			190			(4,735	)	(r	)		1,792
Other (expense) income, net		(879	)		24			—					(855	)
Income (loss) before income tax provision (benefit)		17,143			(4,717	)		(23,434	)				(11,008	)
Income tax provision (benefit)		1,185			(601	)		(7,577	)	(s	)		(6,993	)
Net income (loss)	$	15,958		$	(4,116	)	$	(15,857	)			$	(4,015	)
Net income (loss) per share:
Basic	$	0.79										$	(0.20	)
Diluted	$	0.68										$	(0.20	)
Weighted average shares outstanding:
Basic		20,146											20,146
Diluted		24,832											20,146

See accompanying notes to the Unaudited Pro Forma Combined financial statements.

F - 29

RADISYS CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

1. BASIS OF PRO FORMA PRESENTATION

     On September 1, 2006, RadiSys Corporation (“RadiSys”) completed the acquisition of all of the capital stock of Convedia Corporation (“Convedia”), a privately held corporation incorporated under the laws of Canada, under the terms of the Arrangement Agreement (the “Arrangement Agreement”). Pursuant to the Arrangement Agreement, RadiSys paid approximately $105 million in cash at closing (“Initial Consideration”). Up to an additional $10 million in cash (the “Final Consideration”) is payable based on a contingent payment formula tied to achieving certain profitability goals during the twelve-month period beginning October 1, 2006 (“Contingent Payment Provision”). The total preliminary purchase price of the acquisition which consists of the Initial Consideration and the estimated direct acquisition-related expenses is currently estimated to be approximately $110.9 million and has been accounted for as a nontaxable purchase business combination under Statement of Financial Accounting Standards No. 141, “Business Combinations.” The Final Consideration and any associated direct expenses will be recorded as additional goodwill when the Contingent Payment Provision is determinable beyond a reasonable doubt.

     The Unaudited Pro Forma Combined Balance Sheet as of June 30, 2006 and the Unaudited Pro Forma Combined Statement of Operations for the six months ended June 30, 2006 and fiscal year ended December 31, 2005 combine the historical RadiSys and Convedia balance sheets and statements of operations as if the Acquisition, which occurred on September 1, 2006, had been completed on June 30, 2006 for purposes of the presentation of the Unaudited Pro Forma Combined Balance Sheet and on January 1, 2005 for purposes of the presentation of the Unaudited Pro Forma Combined Statements of Operations.

     The total preliminary purchase price of the acquisition is as follows (in thousands):

Cash paid for Initial Consideration	$	105,000
Direct transaction costs		5,858
Total preliminary purchase price	$	110,858

     The preparation of these unaudited pro forma combined financial statements requires management to make estimates and judgments that may affect the reported amounts of assets, liabilities, and revenues and expenses. On an on-going basis, management evaluates its estimates. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Preliminary Estimated Purchase Price Allocation

     The preliminary estimated allocation of the purchase price to Convedia’s tangible and identifiable intangible assets acquired and liabilities assumed was based on their estimated fair values as of June 30, 2006 and may be affected and materially changed by the results of Convedia’s operations up to the closing date (September 1, 2006) of the acquisition. The valuation of the tangible and identifiable intangible assets and liabilities are subject to updated valuations and further review by management, which may result in material adjustments. Adjustments to these estimates will be included in the final allocation of the purchase price of Convedia. The excess of the purchase price over the tangible and identifiable intangible assets acquired and liabilities assumed has been allocated to goodwill.

     Until the Final Consideration and any associated direct expenses are determinable beyond a reasonable doubt and the valuation of the tangible and identifiable intangible assets and liabilities is considered final, the purchase price is preliminary and subject to adjustment. The pro forma adjustments do not reflect any operating efficiencies or additional costs that may result with respect to the combined business of RadiSys and Convedia.

F - 30

RADISYS CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

     The total preliminary purchase price of $110.9 million has been allocated for purposes of the unaudited pro forma financial statements as follows (in thousands):

Fair value of tangible assets acquired and liabilities assumed:
Cash and cash equivalents	$	3,167
Accounts receivable, net		4,339
Other receivables		123
Inventories, net		2,971
Short-Term deferred tax assets		2,661
Other current assets		702
Property and equipment, net		971
Long-term deferred tax assets		7,893
Deferred tax asset valuation allowance		(2,483	)
Other assets		574
Accounts payable		(1,736	)
Accrued wages and bonuses		(1,007	)
Accrued interest payable		(2	)
Other accrued liabilities		(920	)
Deferred tax liabilities		(2,661	)
Long-term deferred tax liabilities		(5,410	)
		9,182
Deferred compensation		1,874
Identifiable intangible assets		47,400
In-process research and development charges		14,000
Goodwill		38,402
Total preliminary purchase price	$	110,858

Tangible assets acquired and liabilities assumed

     As previously noted, the preliminary estimated allocation of the purchase price to Convedia’s tangible assets acquired and liabilities assumed was based on their estimated fair values as of June 30, 2006 and may be affected and materially changed by the results of Convedia’s operations up to the closing date (September 1, 2006) of the acquisition. These estimates are based on a preliminary valuation and are subject to updated valuations and further review by management, which may result in material adjustments.

     The following table summarizes the estimated fair value of the property and equipment acquired from Convedia and their estimated useful lives (in thousands):

			Weighted Average
	Preliminary		Remaining Useful
	Fair Value		Life (in years)
Leasehold improvements	$	45		1
Furniture and office equipment		145		4
Computer software		132		2
Computer hardware		649		2
Total property and equipment	$	971

     At June 30, 2006, Convedia’s remaining royalties payable to Technology Partnerships Canada amounted to $704 thousand and amounts outstanding under a term loan payable to a Canadian subsidiary of a major U.S. bank amounted to $336 thousand.

     In fiscal 1998, Convedia entered into a technology and application development project agreement with Technology Partnerships Canada under which it received contributions totalling Cdn$1.1 million. In exchange for this contribution, Convedia agreed to a 2% royalty on gross revenue, beginning April 1999, to a maximum of approximately Cdn$1.6 million. During fiscal 2002, Convedia recorded the difference between the amount received and the maximum amount repayable of Cdn$470 thousand as a financing cost. The Technology Partnerships Canada agreement expires on the earlier of full repayment of Cdn$1.6 million or July 31, 2007. On August 31, 2006, prior to the closing of the Acquisition, Convedia paid

F - 31

RADISYS CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

Technology Partnerships Canada $785 thousand which settled the liability in full, and terminated the Technology Partnerships Canada agreement.

     On May 12, 2005, Convedia entered into an agreement with a Canadian subsidiary of a major U.S. bank (the “holder”) for the provision of credit facilities. The credit facilities consisted of an operating line to a maximum of $3,000,000 to support working capital and term loans for approximately $1,000,000 to support capital expenditures. Interest was payable monthly. The operating line bears interest at U.S. prime rate and the loans bear interest at U.S. prime rate plus 0.25%. The credit facilities are secured by a first priority general security interest on Convedia’s assets. At June 30, 2006, there were no amounts outstanding on the operating line and $336 thousand outstanding on the term loan. Prior to the closing of the Acquisition, on August 31, 2006, Convedia paid the term loan in full and the holder of the credit facilities release its security interest on Convedia’s assets.

Deferred Compensation

     According to the terms of the Acquisition Agreement, all outstanding Convedia stock options vested and considered exercised immediately upon closing or September 1, 2006. The proceeds of which would be distributed as follows: 75% of the purchase price per share less the exercise price was paid to the option holder at closing or September 1, 2006 and the remaining 25% is to be paid in full to those Convedia employees still employed by RadiSys after one year of service. The 75% paid at the time of the acquisition is included in the purchase price and is allocated to goodwill. The remaining 25% is recorded as deferred compensation and amortized through the Statement of Operations for the life of the asset (one year).

Identifiable intangible assets

     We have estimated the fair value of the acquired identifiable intangible assets, which are subject to amortization, using the income approach. These estimates are based on a preliminary valuation and are subject to final valuations and further review by management, which may result in material adjustments. The following table sets forth the components of these other intangible assets and their weighted average estimated useful lives (in thousands):

			Weighted Average
	Preliminary		Remaining Useful
	Fair Value		Life (in years)
Core and developed technology		35,900		3.0
Trademark and tradename		2,900		4.9
Customer-related intangible		8,200		2.4
Backlog		400		0.2
Total acquired identifiable intangible assets	$	47,400

In-process research and development

     In-process research and development (“IPRD”) represents Convedia research and development projects that had not reached technological feasibility and had no alternative future use when acquired. Using the income approach to value the IPRD, RadiSys determined that $14.0 million of the purchase price represents purchased in-process technology. Due to its non-recurring nature, the IPRD charge has been excluded from the unaudited pro forma combined statements of operations. The IPRD costs will be expensed in RadiSys’ consolidated financial statements in the third quarter of 2006.

2. PRO FORMA ADJUSTMENTS

     The following pro forma adjustments are included in the unaudited pro forma combined statements of operations and the unaudited pro forma combined balance sheet:

(a) Adjustments to cash and cash equivalents (in thousands):

To reflect the cash payment for the Initial Consideration	$	105,000
To reflect the payment in full of the amounts outstanding on the Convedia term loan and the Convedia royalties payable to Technology Partnerships Canada prior to the closing of the acquisition		1,040
	$	106,040

F - 32

RADISYS CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

(b) Adjustment to reflect the write off of the Convedia investment tax credits. Investment tax credits relating to scientific research and experimental development were accounted for using the deferral method. To the extent there was reasonable assurance the credits would be realized, they were recorded in the year the related expenditure was made as an income tax benefit. To receive the credit accrued through March 2006, Convedia must remain a Canadian-controlled private company. Upon the closing of the Acquisition, Convedia ceased to be a Canadian-controlled private company and, as such, this receivable, in the amount of $322 thousand became uncollectible.

(c)

Adjustment to reflect the write up of Convedia’s inventories to fair value. RadiSys determined the fair value of the finished goods inventory as the estimated selling price less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort. RadiSys determined that the historical cost basis of the work-in-process and raw materials inventories was equal to replacement cost. Due to its non-recurring nature, the effect of the write up of Convedia’s inventories to fair value has been excluded from the unaudited pro forma combined statements of operations.

(d)

Adjustments to other current assets (in thousands):

To record the current portion of the write-up associated with excess of fair value over cost of the operating lease for Convedia’s facilities	$	343
To record the portion of the preliminary purchase price allocated to deferred compensation		1,874
To eliminate RadiSys’ direct transaction costs		(403	)
	$	1,814

(e)	Adjustments to goodwill to record the allocation of the purchase price.
(f)	Adjustment to intangible assets, net to record the allocation of the purchase price.

(g)	Adjustment to record the long-term portion of the write-up associated with excess of fair value over cost of the operating lease for Convedia’s facilities.
(h)	Adjustments to other accrued liabilities (in thousands):

To write down deferred revenue to fair value	$	(622	)
To write off the deferred rent liability		(57	)
To eliminate RadiSys’ direct transaction costs		(403	)
To record an accrual for direct transaction costs		5,858
	$	4,776

(i) Adjustment to record the payment in full of the amounts outstanding on the Convedia term loan prior to the closing of the acquisition.

(j) Adjustment to record the payment in full of the amounts outstanding for royalties payable to Technology Partnerships Canada prior to the closing of the acquisition.

(k) Adjustment to eliminate Convedia’s Preferred stock, Common stock, and Additional paid in capital at the time of the acquisition.

(l) Adjustment to retained earnings (in thousands):

To record the elimination of Convedia’s accumulated deficit	$	57,180
To record the allocation of the purchase price to IPRD		(14,000	)
	$	43,180

F - 33

RADISYS CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

(m) Adjustments to cost of sales (in thousands):

	For the Six			For the
	Months Ended			Year Ended
	June 30, 2006			December 31, 2005
To record amortization of deferred compensation	$	237		$	454
Reclassification of Convedia’s sales commissions to selling, general and administrative expenses, consistent with RadiSys financial statement presentation		(352	)		(392	)
	$	(115	)	$	62

(n)	Adjustments to record the amortization of deferred compensation to research and development expenses.
(o)	Adjustments to selling, general and administrative expenses (in thousands):

	For the Six		For the Year
	Months Ended		Ended
	June 30, 2006		December 31, 2005
To record amortization of deferred compensation	$	328	$	669
To record the amortization of the excess of fair value over cost of the operating lease for Convedia’s facilities		171		343
Reclassification of Convedia’s sales commissions from cost of sales, consistent with RadiSys financial statement presentation		352		392
	$	851	$	1,404

(p) Adjustments to record amortization of acquired identifiable intangible assets resulting from the allocation of preliminary purchase price.

(q) Adjustment to reflect the reduction of interest expense due to the payment in full of the amounts outstanding on the Convedia term loan prior to the closing of the acquisition.

(r)	Adjustment to reflect the estimated decrease in interest income due to the decrease in cash associated with the Initial Consideration.
(s)	Adjustments to income tax provision (benefit) (in thousands):

	For the Six			For the Year
	Months Ended			Ended
	June 30, 2006			December 31, 2005
To reflect the elimination of Convedia income tax benefit	$	458		$	601
To record the tax benefit associated with intangible asset amortization		(2,804	)		(5,609	)
To record the tax benefit associated with deferred compensation amortization		(319	)		(637	)
To record the reduction of the tax provision associated with the estimated decrease of interest income associated with the cash payment for the Initial Consideration		(908	)		(1,816	)
To record the tax benefit associated with amortization of the excess fair value of the operating lease for Convedia’s facilities		(58	)		(116	)
	$	(3,631	)	$	(7,577	)

3. STOCK-BASED COMPENSATION

     According to the terms of the Acquisition Agreement, all outstanding Convedia stock options vested and considered exercised immediately upon closing or September 1, 2006. Convedia recorded the required pre-acquisition stock-based compensation charge related to the acceleration of vesting of options in its pre-acquisition financial statements. On August 31, 2006, the Compensation and Development Committee of the Board of Directors (the “Compensation Committee”) of

F - 34

RADISYS CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

RadiSys adopted the RadiSys Corporation Stock Plan for Convedia Employees (the “Plan”) for awards to be made in connection with the acquisition of Convedia. The Plan became effective as of September 1, 2006 (the “Effective Date”). The Plan permits the granting of stock options, restricted stock and restricted stock units. The maximum number of shares of common stock with respect to which awards may be granted is 365,000 shares (subject to adjustment in accordance with the Plan). The awards may only be granted to employees transferred from Convedia in connection with the acquisition of Convedia and in connection with the future hiring of new employees of Convedia. Unless sooner terminated by the Board of Directors, the Plan will terminate on the tenth anniversary of the Effective Date.

     The Plan provides that the Compensation Committee will determine the option price at which common stock may be purchased, but the price will not be less than the fair market value of the common stock on the date the option is granted. The Compensation Committee will determine the term of each option, but no option will be exercisable more than 10 years after the date of grant.

     In connection with the closing of the acquisition of Convedia, the Compensation Committee awarded stock options, restricted stock units and restricted stock for 169,300, 132,905 and 5,800 shares of RadiSys common stock, respectively, to the Convedia employees in accordance with the Plan. The Convedia stock option grants were issued under an option agreement that provides, among other things, that the option grant vests over a 3 year period; specifically, 33% of the options vest one year after the grant date and approximately 2.75% of the options vest monthly for 24 months after the first year. The restricted stock unit and restricted share grants were issued under an agreement that provides, among other things, that the restricted stock unit or restricted share grant vests over a three year period; specifically, 33% of the units or shares vest each year following the date of the grant.

     RadiSys currently estimates the stock-based compensation associated with these stock options, restricted stock units and restricted shares to amount to $5.3 million, which will be recognized on a straight-line basis over the requisite service period, which is 3 years from the date of grant.

4. CONVEDIA STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2006

     Operating information about the duplicated quarter is as follows (in thousands):

	Convedia
	For the Three
	Months Ended
	March 31, 2006
Revenues	$	4,141
Cost of sales		1,370
Gross margin		2,771
Research and development		2,290
Selling, general and administrative		2,068
Intangible assets amortization		—
Restructuring and other charges		—
Income (loss) from operations		(1,587	)
Interest expense		(6	)
Interest income		49
Other expense, net		22
Income (loss) before income tax provision (benefit)		(1,522	)
Income tax provision (benefit)		(457	)
Net income (loss)	$	(1,065	)

5. FORWARD-LOOKING STATEMENTS

     The foregoing unaudited pro forma combined financial information contains certain estimates by management and forward-looking statements, within the meaning of and made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties that could cause actual results to differ materially from those described. All statements that relate to future events or to our future performance are forward-looking statements. In some cases, forward looking statements can be identified by terms such as “may,” “will,” “should,” “expect,” “plans,” “seeks,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “seek to continue,” “intends,” or

F - 35

RADISYS CORPORATION
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION
(Unaudited, stated in U.S. Dollars)

other comparable terminology. Although we believe that the expectations expressed in these estimates and forward-looking statements are reasonable, there can be no assurance that our expectations will turn out to be correct. Actual results could differ materially from the outlook, guidance and expectations in these estimates and forward-looking statements as a result of a number of risk factors, including without limitation, (a) that we may not be able to successfully implement our business strategy, (b) that we may not be able to successfully integrate operations, technologies, products or personnel from the acquisition of Convedia, (c) that we may not realize the benefits we are seeking from the Convedia acquisition and such acquisition may be more costly or less profitable than anticipated and may adversely affect the price of our stock, and (d) the factors listed from time to time in RadiSys’ SEC reports, including those listed under “Risk Factors” in RadiSys’ Annual Report on Form 10-K for the year ended December 31, 2005 and in RadiSys’ Quarterly Reports on Form 10-Q filed with the SEC each fiscal quarter, and other filings with the SEC. Although forward-looking statements help provide additional information, investors should keep in mind that forward-looking statements are inherently less reliable than historical information. All information presented in the foregoing pro forma combined financial information is as of September 26, 2006. RadiSys undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in its expectations.

F - 36