8-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

Amendment No. 1 to CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 15, 2006

APPLIX, INC.

(Exact Name of Registrant as Specified in Charter)

Massachusetts	0-25040	04-2781676
(State or Other Juris-	(Commission	(IRS Employer
diction of Incorporation	File Number)	Identification No.)

289 Turnpike Road, Westborough, Massachusetts	01581
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (508) 870-0300

(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 (see General Instruction A.2. below):

     o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Ex-23.1 Consent of Deloitte Accountants B.V.

Ex-99.1 Consolidated Financial Statements of Temtec International

Ex-99.2 Unaudited Statements of Operations of Applix, Inc.

This Amendment No. 1 to Current Report on Form 8-K/A is filed for the purpose of filing the historical consolidated financial statements of Temtec International B.V. required by Item 9.01(a) and the pro forma financial information required by Item 9.01(b).

Item 9.01. Financial Statements and Exhibits

     (a) Financial Statements of Businesses Acquired

     The financial statements required by this item are included as Exhibit 99.1 to this Current Report on Form 8-K/A and incorporated herein by reference.

     (b) Pro Forma Financial Information

     The pro forma financial information required by this item is included as Exhibit 99.2 to this Current Report on Form 8-K/A and incorporated herein by reference.

     (d) Exhibits

     See Exhibit Index attached hereto.

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 hereunto duly authorized.

	APPLIX, INC.
Date: August 29, 2006	By:	/s/ Milton A. Alpern
		Milton A. Alpern
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
2.1+	Share Purchase Agreement of the Shares in the Capital of Temtec International B.V. by and among Applix, Inc., the Sellers (as defined therein) and Temtec International B.V., dated June 15, 2006 is incorporated herein by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 000-25040), filed with the Securities and Exchange Commission on June 21, 2006.
10.1	Second Loan Modification Agreement by and between Applix, Inc. and Silicon Valley Bank, dated June 15, 2006 is incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-25040), filed with the Securities and Exchange Commission on June 21, 2006.
23.1	Independent Auditors’ Consent of Deloitte Accountants B.V.
99.1	Consolidated Financial Statements of Temtec International B.V.
99.2	Unaudited Pro Forma Condensed Combined Statements of Operations of Applix, Inc.

⁺ Applix, Inc. hereby agrees to furnish supplementally a copy of any omitted schedules to this agreement to the Securities and Exchange Commission upon its request.

EX-23.1

Exhibit 23.1

INDEPENDENT AUDITORS’ CONSENT

We consent to the incorporation by reference in Registration Statements Nos. 33-89382, 333-02340, 333-06303, 333-16963, 333-20853, 333-52603, 333-80861, 333-39462, 333-57670, 333-63550, 333-97101, 333-107027, 333-117762 and 333-126092 of Applix, Inc. on Form S-8 of our report dated August 29, 2006, relating to the consolidated financial statements of Temtec International B.V. as of December 31, 2005 and for the year then ended, appearing in this Current Report on Form 8-K/A of Applix, Inc. dated August 29, 2006.

/s/ Deloitte Accountants B.V.

Eindhoven, The Netherlands
August 29, 2006

EX-99.1

Exhibit 99.1

TEMTEC INTERNATIONAL B.V.

Consolidated Financial Statements

As of and for the Year Ended December 31, 2005

Table of Contents

	Page
	No.
Independent Auditors’ Report	F-1
Consolidated Balance Sheet as of December 31, 2005	F-2
Consolidated Statement of Operations for the year ended December 31, 2005	F-3
Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2005	F-4
Condensed Consolidated Statement of Cash Flows for the year ended December 31, 2005	F-5
Notes to Consolidated Financial Statements	F-6

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Stockholders
of Temtec International B.V.

We have audited the accompanying consolidated balance sheet of Temtec International B.V. and subsidiaries as of December 31, 2005 and the related consolidated statement of income, stockholders’ equity, and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards as established by the Auditing Standards Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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, such consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2005, and the results of it’s operations and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte Accountants B.V.

Eindhoven, The Netherlands
August 29, 2006

F-1

Temtec International B.V.

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2005

	EURO
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	€	98,169
Accounts receivable, net of allowances of €47,995		2,240,125
Prepaid expenses and other		318,376
Total current assets		2,656,670
RESTRICTED CASH		19,267
PROPERTY AND EQUIPMENT, Net		187,698
TOTAL	€	2,863,635
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	€	344,680
Accrued expenses		441,921
Deferred revenue		1,804,280
Current portion of debt		290,822
Total current liabilities		2,881,703
NOTE PAYABLE — RELATED PARTY		159,986
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDERS’ EQUITY:
Common stock, Euro 500 par value; 640 shares authorized; 192 shares issued and outstanding per December 31, 2005		96,000
Additional paid-in capital		354,668
Accumulated deficit		(610,073	)
Accumulated other comprehensive loss		(18,649	)
Total stockholders’ equity		(178,054	)
TOTAL	€	2,863,635

See notes to consolidated financial statements.

F-2

Temtec International B.V.

CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2005

	EURO
REVENUES
Software licenses	€	2,318,634
Professional services and maintenance		2,482,814
Total revenues		4,801,448
COSTS OF REVENUES		956,467
GROSS MARGIN		3,844,981
OPERATING EXPENSES:
Research and development		489,212
Sales and marketing		3,181,265
General and administrative		859,795
Total operating expenses		4,530,272
LOSS FROM OPERATIONS		(685,291	)
NON-OPERATING (EXPENSE) INCOME:
Interest expense, net		(20,540	)
Other expense, net		(27,271	)
LOSS BEFORE INCOME TAXES		(733,102	)
INCOME TAX BENEFIT		37,342
NET LOSS	€	(695,760	)

See notes to consolidated financial statements.

F-3

Temtec International B.V.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
YEAR ENDED DECEMBER 31, 2005

								Accumulated
					Retained			Other
			Additional		Earnings			Comprehensive
	Common		Paid-in		(Accumulated			(Loss)
	Stock		Capital		Deficit)			Income			Total
BALANCES, January 1, 2005	€	96,000	€	354,668	€	85,687		€	(53,373	)	€	482,982
Net loss						(695,760	)					(695,760	)
Foreign currency exchange translation adjustments									34,724			34,724
Comprehensive loss												(661,036	)
BALANCES, December 31, 2005	€	96,000	€	354,668	€	(610,073	)	€	(18,649	)	€	(178,054	)

See notes to consolidated financial statements.

F-4

Temtec International B.V.

CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 2005

	EURO
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	€	(695,760	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		94,329
Accounts receivable		(579,362	)
Prepaid expenses and other assets		(187,728	)
Accounts payable		219,744
Accrued and other liabilities		968,960
Net cash used in operating activities		(179,817	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(70,620	)
Net cash used in investing activities		(70,620	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit agreements, net		157,187
Payments on note payable — related party		(63,995	)
Net cash provided by financing activities		93,192
Effect of exchange rate changes on cash		48,802
Decrease in cash and cash equivalents		(108,443	)
CASH AND CASH EQUIVALENTS, Beginning of year		206,612
CASH AND CASH EQUIVALENTS, End of year	€	98,169
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION —
Cash paid for interest	€	26,260
Cash paid for income taxes	€	36,821

See notes to consolidated financial statements.

F-5

TEMTEC INTERNATIONAL B.V.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2005

1.	ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
	Organization - Temtec International B.V. (the “Company”), a privately-held Netherlands company, is engaged in the development and sale of analytic software for creating, managing and delivering operational performance management applications throughout the enterprise.
	These consolidated financial statements have been prepared for inclusion in an amendment to Form 8-K to be filed with the United States of America Securities and Exchange Commission as a result of the acquisition of the Company by Applix, Inc.
	Principles of Consolidation - The consolidated financial statements include the accounts of Temtec International B.V. and all of its subsidiaries. All inter-company transactions and balances have been eliminated.
	Use of Estimates - The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted 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 revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates and assumptions in these financial statements relate to, among other items, the useful lives of property and equipment, domestic and foreign income tax liabilities, valuation of deferred tax assets, the allowance for doubtful accounts and accrued liabilities.
	Cash and Cash Equivalents - The Company considers all highly liquid investments purchased with original maturities of less than three months at the date of purchase to be cash equivalents.
	Restricted Cash - Restricted cash represents deposits placed with a financial institution as collateral for letters of credit issued to a lessor.
	Concentration of Credit Risk and Allowance for Doubtful Accounts - Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents and accounts receivable. The Company’s cash equivalents consist of checking and savings accounts, money market accounts, and certificates of deposit. The Company’s accounts receivables are derived from services provided to enterprises and the sale of the Company’s software licenses. The Company performs ongoing credit evaluations of its customers’ financial condition and limits the amount of credit extended when deemed necessary, but generally requires no collateral.
	An allowance for doubtful accounts is provided for customer accounts receivable, which management believes may not be collectible. The following table provides a rollforward of the allowance for doubtful accounts for the year ended December 31, 2005 (in euros):

F-6

Balance, beginning of year	€	—
Bad debt expense		79,081
Write-offs		(31,086	)
Balance, end of year	€	47,995

Certain Significant Risks and Uncertainties - The Company operates in a rapidly changing environment, and accordingly, can be affected by a variety of factors. For example, management of the Company believes that changes in any of the following areas could have a significant negative effect on the Company in terms of its future financial position, results of operations or cash flows: ability to increase revenues; the hiring, training and retention of key employees; market acceptance of the Company’s products and services; fundamental changes in the technology underlying the Company’s software products; arbitration, litigation or other claims against the Company; changes in the regulatory environment; undetected errors or delays in new products; product introductions by competitors and price competition; and the ability to obtain additional financing.

Property and Equipment - Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of 3 to 5 years as detailed below.

	Estimated
	Useful Life
Asset Type	(In Years)
Furniture and fixtures		5
Computer equipment		3
Software		3

Long-Lived Assets - The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. No impairments have been recorded to date.

Revenue Recognition - The Company generates revenues mainly from licensing the rights to use its software products and providing services. The Company sells products primarily through a direct sales force, indirect channel partners and original equipment manufacturers (“OEMs”). The Company accounts for software revenue transactions in accordance with Statement of Position (“SOP”) 97-2, “Software Revenue Recognition,” as amended. Revenues from software arrangements are recognized when:

• Persuasive evidence of an arrangement exists, which is when a non-cancelable sales and software license agreement has been signed, or purchase order has been received;

• Delivery has occurred. Delivery occurs through electronic delivery of the License Code to the customer allowing him to download and activate the software;

• The customer’s fee is deemed to be fixed or determinable and free of contingencies or significant uncertainties;

• Collectibility is probable; and

• Vendor specific objective evidence of fair value exists for all undelivered elements, maintenance and, in certain instances, professional services.

     The Company uses the residual method under SOP 98-9, “Modification of SOP 97-2, Software Revenue Recognition with Respect to Certain Transactions”. Under the residual method, the fair value of the undelivered elements is deferred and the remaining portion of the arrangement fee is allocated to the delivered elements and is recognized as revenue, assuming all other conditions for revenue

F-7

recognition have been satisfied. Substantially all of the Company’s product revenue is recognized in this manner. If the Company cannot determine the fair value of any undelivered element included in an arrangement, the Company will defer revenue until all elements are delivered, until services are performed or until fair value of the undelivered elements can be objectively determined. In circumstances where the Company offers significant and incremental fair value discounts for future purchases of other software products or services to its customers as part of an arrangement, utilizing the residual method, the Company defers the value of the discount and recognizes such discount to revenue as the related product or service is delivered.

     As part of an arrangement, end-user customers typically purchase maintenance contracts and in certain instances, professional services. Maintenance services include telephone and Web-based support as well as rights to unspecified upgrades and enhancements, when and if the Company makes them generally available. Substantially all of the Company’s software license revenue is earned from perpetual licenses of off-the-shelf software requiring no modification or customization. Therefore, professional services are deemed to be non-essential to the functionality of the software and typically are for implementation planning, loading of software, training, building simple interfaces and running test data.

     Revenues from maintenance services are recognized ratably over the term of the maintenance contract period, which is typically one year, based on vendor specific objective evidence of fair value. Vendor specific objective evidence of fair value is based upon the amount charged when maintenance is sold separately, which is typically the contract’s renewal rate.

     Revenues for professional services are generally recognized on a time and material basis as services are delivered. These services typically do not relate to transactions involving software and related maintenance services. These services typically pertain to application design and development for strategic performance management, management reporting and analytics, and planning and forecasting. Revenues from professional services are generally recognized when: (1) a non-cancelable agreement for the services has been signed or a customer’s purchase order has been received; and (2) the professional services have been delivered.

     The Company’s license arrangements with its end-user customers and indirect channel partners do not include any rights of return, acceptance provisions or price protection, nor do arrangements with indirect channel partners typically include any sell-through contingencies.

     The Company’s arrangements with indirect channel partners and end-user customers do include a standard warranty provision whereby the Company will use reasonable efforts to cure material nonconformity or defects of the software from the Company’s published specifications. The standard warranty provision does not provide the indirect channel partners or end-user customer with the right of refund.

     At the time the Company enters into an arrangement, the Company assesses the probability of collection of the fee and the payment terms granted to the customer. For end-user customers and indirect channel partners, the Company’s typical payment terms are due within 30 to 90 days of the invoice date. If the payment terms for the arrangement are considered extended (generally, if payment is due greater than 90 days), the Company defers revenue under these arrangements and such revenue is recognized, assuming all other conditions for revenue recognition have been satisfied, when the payment of the arrangement fee becomes due.

Research and Development - Research and development costs are expensed as incurred. Capitalization of computer software developed for resale is accounted for in accordance with FASB Statement No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed.

Accordingly, capitalization of software costs begins upon the establishment of technological feasibility,

F-8

generally demonstrated by a working model or an operative version of the computer software product. As of December 31, 2005, no such internal research and development costs qualified for capitalization and accordingly no such amounts were capitalized as of December 31, 2005.

Income Taxes - The Company accounts for income taxes under an asset and liability approach. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax reporting purposes, net operating loss carry forwards and other tax credits measured by applying currently enacted tax laws. Valuation allowances are provided when necessary to reduce deferred tax assets to an amount that is more likely than not to be realized.

Foreign Currency Translation — The Company considers the functional currency of its foreign subsidiaries to be the local currency, and accordingly, the financial statements of the foreign subsidiaries are translated into Euros using exchange rates in effect at the period end for assets and liabilities and average exchange rates during each reporting period for the results of operations. Adjustments resulting from translation of foreign subsidiary financial statements are reported on the balance sheet in accumulated other comprehensive income (loss) within stockholders’ equity. The Company has determined that its inter-company payables and receivables balances with its foreign subsidiaries are short-term in nature and as a result, the Company re-measures these balances at each period end and records any related foreign currency gains and losses in its consolidated statements of operations. The short-term inter-company balances with its foreign subsidiaries are denominated in the British pound and the U.S. dollar.

Comprehensive Loss - Components of comprehensive loss include net loss as well as gains and losses from foreign currency translation adjustments.

Advertising Expense - Advertising costs are expensed as incurred. Advertising expense amounted to Euro 283,663 in 2005.

Recently Issued Accounting Standards

     In November 2005, the FASB issued FASB Staff Position FAS115-1/124-1, The meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments (“FSP FAS 115-1/124-1”). This position amends FASB Statements No. 115, Accounting for Certain Investments in Debt and Equity Securities, and No. 124, The Equity Method of Accounting for Investments in Common Stock. This position specifies guidance to be used in determining whether an investment is other than temporarily impaired. This position is effective for reporting periods beginning after December 15, 2005. The Company does not expect adoption of this statement to have a material impact on its financial position or results of operations.

     In July 2006, the Financial Accounting Standards Board issued Interpretation No. (FIN) 48, “Accounting for Uncertainty in Income Taxes,” which is effective January 1, 2007. The purpose of FIN 48 is to clarify and set forth consistent rules for accounting for uncertain tax positions in accordance with SFAS 109, “Accounting for Income Taxes” by requiring the application of a “more likely than not” threshold for the recognition and de-recognition of tax positions. The Company is currently assessing what impact, if any, the adoption of this statement will have on its consolidated financial statements.

F-9

2.	BALANCE SHEET DETAILS
	Property and Equipment

	December 31,
	2005
	EURO
Furniture and Fixtures	€	211,301
Computer Equipment		361,349
Software		102,334
Accumulated depreciation and amortization		(487,286	)
Property and equipment, net	€	187,698

Accrued expenses

	December 31,
	2005
	EURO
Accrued holiday allowance obligations	€	100,069
Accounts payable		132,023
Accrued taxes and social security obligations		100,172
Accrued salaries and commissions		96,760
Other accrued expenses		12,897
Total	€	441,921

3. DEBT

Credit Facility — The Company has a credit facility available with Fortis Bank (“Fortis”) of Euro 500,000 with an interest rate equal to 2.25% plus the Fortis’ base interest for balances owed on the credit facility less than or equal to Euro 225,000 and an interest rate equal to 2.75% plus the Fortis base interest for balances owed on the credit facility greater than Euro 225,000. Interest accrued on the facility at a rate of 5.4% as of December 31, 2005. As of December 31, 2005, the amount outstanding under the credit facility was Euro 290,822. The Agreement contains certain covenants that include, among other requirements, the maintenance of specified financial ratios. Substantially all assets of the Company are pledged as collateral as well as subordination of the Note Payable with Synergia Capital Partners B.V. The credit facility is guaranteed by Temtec USA, Inc. and Temtec UK Ltd., both of which are wholly owned subsidiaries of the Company.

Note Payable – Related Party - The Company has a convertible subordinated note payable (“Note Payable” with a shareholder, Synergia Capital Partners B.V., entered into in October 2000 with a principal amount of Euro 383,968 and an interest rate of 6.75%. As of December 31, 2005, an amount of Euro 159,986 was outstanding. The loan was convertible into shares of common stock of the Company only in the event that the Company is in default of the loan. The loan is also subordinated to the amounts outstanding under the credit facility with Fortis Bank and no redemption is allowed without permission of the Fortis Bank. The original maturity date of the note payable was October 1, 2005, but was extended in accordance with the note agreement as amounts were outstanding under the credit facility with Fortis Bank. The note payable was repaid by the former shareholders subsequent to the Company being acquired by Applix, Inc. in June 2006 (See Note 9).

F-10

4.	STOCKHOLDERS’ EQUITY
	Common Stock
	The Company has 640 authorized shares of Common Stock, Euro 500 par value per share. As of December 31, 2005, 192 shares of common stock were issued and outstanding.
5.	INCOME TAXES

     Income from operations before income taxes for the year ended December 31, 2005 was taxed under the following jurisdictions:

Netherlands	€	(818,547	)
United States		70,884
United Kingdom		14,561
Total	€	(733,102	)

     The components of the income tax (benefit) provision for the year ended December 31, 2005 are as follows:

Current:
Netherlands	€	(56,411	)
United States		15,861
United Kingdom		3,208
Total current		(37,342	)
Deferred:
Netherlands		—
United States		—
United Kingdom		—
Total deferred		—
Total income tax benefit	€	(37,342	)

F- 11

The approximate tax effect of each type of temporary difference and carry forward at December 31, 2005 is as follows:

Deferred tax assets (liabilities):
Net operating loss carry forwards	€	479,201
Capitalized software costs		428,000
Deferred revenue		25,150
Prepaid expenses		(3,339	)
Accounts receivable		13,895
Total deferred tax assets (liabilities)		942,907
Valuation allowance		(942,907	)
Deferred tax assets, net	€	—

The following schedule reconciles the difference between the statutory income tax rate and the effective income tax rate for the year ended December 31, 2005:

Netherlands statutory rate	€	(229,906	)
Foreign tax rate differentials		(9,826	)
Increase in valuation allowance		205,275
Other		(2,885	)
Income tax benefit	€	(37,342	)

     The effective tax rate during 2005 was lower than the statutory rate primarily due to an unbenefitted current year taxable loss.

     The Company had net operating loss carry forwards of approximately Euro 479,201 at December 31, 2005 for Dutch tax purposes. Under current legislation, these net operating losses can in principle be offset against taxable income in future years. However, legislation is pending to restrict the carry forward to 9 years. If this legislation is implemented, the 2005 net operating losses can in principle be offset against profits through the year 2014.

     A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. As a result of the Company’s review of its available evidence supporting the deferred tax asset, the Company provided a valuation allowance for the full amount of the deferred tax asset due to the uncertainty of realization. Any subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 31, 2005 would be reported in the statement of operations.

6. EMPLOYEE BENEFIT PLAN

     The Company operates defined contribution retirement benefit plans for all qualifying employees in the Netherlands. The assets of the plans are held separately from those of the Company in funds under the control of trustees. Where there are employees who leave the plans prior to vesting fully in the contributions, the contributions payable by the Company are reduced by the amount of forfeited contributions. The only obligation of the Company with respect to the retirement benefit plan is to make the specified contributions. The total cost charged to income of Euro 35,731 represents contributions payable to these schemes plans by the Company. As of December 31, 2005, contributions of Euro 7,194 due in respect of the current reporting period had not been paid over to the plans.

F- 12

     The Company has a defined contribution 401(k) plan (the “Plan”) for all qualifying employees in the United States of America, in which all full time employees are eligible to participate once they have attained 21 years of age. The Company may make discretionary contributions to the Plan as determined by the Board of Directors. Employee and employer contributions vest immediately. The Company’s matching contribution to the Plan was Euro 25,556 (US$ 30,651) for the year ended December 31, 2005.

     During 2005, the Company did not offer an employment benefit plan for employees at Temtec UK Ltd.

7. COMMITMENTS AND CONTINGENCIES

Contingencies

     The Company is not aware of any pending litigation, to which the Company is or may become a party, which could result in a material adverse impact on its consolidated results of operations or financial condition.

     During the past years administrative regulation with regards to value-added tax (“VAT”) has changed. The Company is not able to demonstrate that they have fully complied with these changed regulations. Accordingly there is a potential risk that the Dutch tax authorities may question the VAT assessment as submitted by the Company. At this time, the Company cannot reasonably estimate an assessment, if any, that would result from this issue. Accordingly, no provision has been made in the financial statements. However, it is possible that provisions may be required in future periods if it becomes probable that an amount could be assessed and that amount can be reasonably estimated.

Indemnification

     The Company has frequently agreed to indemnification provisions in software license agreements with customers and in its real estate leases in the ordinary course of its business.

     With respect to software license agreements, these indemnifications generally include provisions indemnifying the customer against losses, expenses, and liabilities from damages that may be awarded against the customer in the event the Company’s software is found to infringe upon a patent or copyright of a third party. The software license agreements generally limit the scope of and remedies for such indemnification obligations in a variety of industry-standard respects, including but not limited to certain geography-based scope limitations, the right to replace or modify an infringing product, and the right to terminate the license and refund a portion of the original license fee within a defined period of time from the original licensing date if a remedy is not commercially practical. The Company believes its internal development processes and other policies and practices limit its exposure related to the indemnification provisions of the software license agreements. To date, the Company has not had to reimburse any of its customers for any losses related to these indemnification provisions.

     With respect to real estate lease agreements, these indemnifications typically apply to claims asserted against the landlord relating to personal injury and property damage which may occur at the leased premises, or to certain breaches of the Company’s contractual obligations. The term of these indemnification provisions generally survive the termination of the agreement, although the provision has the most relevance during the contract term and for a short period of time thereafter. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. The Company has purchased insurance that reduces its monetary exposure for landlord indemnifications. The Company has never paid any amounts to defend lawsuits or settle claims related to these indemnification provisions. Accordingly, the Company believes the estimated fair value of these indemnification arrangements is minimal.

F- 13

Commitments

     The Company leases facilities and automobiles under various operating lease agreements. These leases have terms of 1 to 5 years. Future annual minimum lease payments under all non-cancelable operating leases are as follows:

	EURO
2006	€	280,435
2007		222,398
2008		166,624
2009		124,794
2010		29,707
2011 and thereafter		—
Total	€	823,958

     Rent expense for the year ended December 31, 2005 was Euro 183,016.

8. RELATED PARTY TRANSACTION

     The Company has a lease obligation for certain of its office space located in the Netherlands, which is owned by two employees of the Company. The rent expense relating to this office space is approximately €25,000 annually through the remaining term of the lease, May 1, 2010.

9. SUBSEQUENT EVENTS

     On June 15, 2006, Applix, Inc. (“Applix”), a publicly-held U.S. company that is a global provider of Business Performance Management and Business Intelligence applications based on Applix’s TM1, acquired all of the outstanding capital stock of the Company. The total purchase price for the acquisition was US$15.2 (Euro 12.0) million, consisting of US$11.45 (Euro 9.1) million in cash, US$2.5 (Euro 2.0) million in shares of Applix common stock and approximately US$1.27 (Euro 1.0) million of direct acquisition costs.

*  *  *  *  *  *

F- 14

EX-99.2

Exhibit 99.2

Unaudited Pro Forma Condensed Combined Statements of Operations

The following unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2006 and for the year ended December 31, 2005 are based on the historical financial statements of Applix, Inc. (“Applix”) and Temtec International B.V. (“Temtec”) and give effect to the acquisition of 100% of the outstanding common stock of Temtec by Applix on June 15, 2006 as a purchase acquisition, given the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2006 and for the year ended December 31, 2005 are presented to give effect to the acquisition of 100% of the outstanding common stock of Temtec as if it occurred on January 1, 2005. An unaudited pro forma balance sheet has not been provided, as the impact of the acquisition of Temtec is recorded in the condensed consolidated balance sheet of Applix included in the quarterly report on Form 10-Q for the quarter ended June 30, 2006.

The unaudited pro forma condensed combined statements of operations is presented for illustrative purposes only and is not intended to represent or be indicative of the consolidated results of operations of Applix that would have been reported had the acquisition been consummated as of the dates presented, and should not be taken as representative of future operating results of Applix. The pro forma adjustments are based upon available information and assumptions that Applix believes are reasonable under the circumstances. The euro-denominated condensed consolidated statements of operations for Temtec have been translated into U.S. dollars using the weighted average exchange rates of $1.23 and $1.24 for the six months ended June 30, 2006 and the year ended December 31, 2005, respectively.

Certain pro forma adjustments made to the unaudited pro forma condensed combined statements of operations has been prepared based on preliminary estimates of the fair values of assets acquired from Temtec. The impact of ongoing integration activities and adjustments to fair value of acquired net tangible and intangible assets of Temtec could cause material differences in the information presented.

The unaudited pro forma condensed combined statements of operations should be read in conjunction with the historical consolidated financial statements of Temtec included in this Current Report on Form 8-K/A and the condensed consolidated financial statements of Applix included in our Quarterly Report on Form 10-Q for the period ended June 30, 2006.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2006
(In thousands, except per share amounts)

	Historical		Historical			Pro Forma			Pro Forma
	Applix		Temtec			Adjustments			Combined
			(A)
Revenues:
Software license	$	12,619	$	1,095		$			$	13,714
Professional services and maintenance		9,694		1,473						11,167
Total revenues		22,313		2,568						24,881
Cost of revenues		2,340		446						2,786
Gross margin		19,973		2,122						22,095
Operating expenses:
Sales and marketing		10,280		1,368						11,648
Product development		3,307		337						3,644
General and administrative		3,929		515						4,444
Amortization of acquired intangible assets		125					384	(B)		509
Total operating expenses		17,641		2,220			384			20,245
Operating income (loss)		2,332		(98	)		(384	)		1,850
Non-operating income (expense):
Interest and other income (expense), net		475		(20	)		(274	) (C)		181
Income (loss) before taxes		2,807		(118	)		(658	)		2,031
Income tax provision (benefit)		335		8			(207	) (D)		136
Income (loss) from continuing operations	$	2,472	$	(126	)	$	(451	)	$	1,895
Income (loss) from continuing operations per share, basic and diluted:
Continuing operations, basic	$	0.16							$	0.12
Continuing operations, diluted	$	0.15							$	0.11
Weighted average number of shares outstanding:
Basic		15,105					303	(E)		15,408
Diluted		16,581					303	(E)		16,884

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

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UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2005
(In thousands, except per share amounts)

	Historical		Historical			Pro Forma			Pro Forma
	Applix		Temtec			Adjustments			Combined
			(F)
Revenues:
Software license	$	19,488	$	2,877		$			$	22,365
Professional services and maintenance		17,490		3,080						20,570
Total revenues		36,978		5,957						42,935
Cost of revenues		4,005		1,187						5,192
Gross margin		32,973		4,770						37,743
Operating expenses:
Sales and marketing		15,337		3,947						19,284
Product development		5,269		607						5,876
General and administrative		5,095		1,066						6,161
Amortization of acquired intangible assets		250					768	(G)		1,018
Total operating expenses		25,951		5,620			768			32,339
Operating income (loss)		7,022		(850	)		(768	)		5,404
Non-operating income (expenses):
Interest and other income (expense), net		173		(59	)		(452	) (H)		(338	)
Income (loss) before taxes		7,195		(909	)		(1,220	)		5,066
Income tax provision (benefit)		357		(46	)		(384	) (I)		(73	)
Income (loss) from continuing operations	$	6,838	$	(863	)	$	(836	)	$	5,139
Income (loss) from continuing operations per share, basic and diluted:
Continuing operations, basic	$	0.47							$	0.34
Continuing operations, diluted	$	0.42							$	0.31
Weighted average number of shares outstanding:
Basic		14,669					330	(J)		14,999
Diluted		16,451					330	(J)		16,781

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statements.

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APPLIX, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Note 1: Basis of Presentation and Purchase Price Allocation

     The purchase price of Applix’s acquisition of certain assets and the assumption of certain liabilities of Temtec were allocated based on the preliminary estimate of the fair value of the assets and liabilities of Temtec as of the date of acquisition. The fair value of Applix common stock issued in connection with the acquisition of Temtec was estimated at $7.57 per share. Estimated direct expenses related to the acquisition of Temtec of approximately $1.3 million for professional fees and other direct expenses were recorded on the date of acquisition and have been included in the allocation of the purchase price.

     On June 15, 2006, the Company deposited $1 million of the cash consideration and $2 million, or 264,200 shares, of the Company’s common stock into an escrow account for a total escrow amount of $3 million to secure certain indemnification, warranty and claim obligations of the Company to the former stockholders of Temtec. Subject to the provisions of the escrow agreement, one-third of the escrow amount, for which the form of consideration will be determined at the sole discretion of the sellers, will be released within 30 days after the filing of the Company’s 2006 annual financial statements, but in any event no later than May 31, 2007. Also, subject to the provisions of the escrow agreement, the remaining amount of escrow in cash and shares will be released within 30 days after the filing of the Company’s 2007 annual financial statements, but in any event no later than May 31, 2008.

     The preliminary purchase price as of the closing date is shown below (in thousands, except share amounts):

Cash	$	11,455
Common stock (330,252 shares at $7.57 per share)		2,500
Direct acquisition costs		1,273
Total purchase price	$	15,228

     The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over those assigned values was recorded as goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, and other information compiled by management, including independent valuations that utilized established valuation techniques. Goodwill recorded as a result of this acquisition is not deductible for tax purposes.

     The total preliminary purchase price as of the closing date has been allocated as follows (in thousands):

Cash and equivalents	$	317
Accounts receivable, net		1,440
Prepaid expenses and other current assets		243
Property and equipment		175
Accounts payable		(536	)
Accrued expenses		(516	)
Deferred revenue		(1,196	)
Assumed Temtec payroll-related liability		(545	)
Accrued severance liability		(434	)

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Deferred tax liabilities			(1,836	)
Amortizable intangible assets:
Existing technology	1,850
Customer relationships	3,980
Total amortizable intangible assets			5,830
Goodwill			12,286
Total purchase price allocation		$	15,228

     In connection with the purchase price allocation, the Company estimated the fair value of the service obligations of the acquired maintenance contracts of Temtec, which resulted in an adjustment to reduce the deferred revenue balance assumed in purchase accounting.

     The purchase price and related allocation are preliminary and may be revised as a result of adjustments made to the purchase price, additional information regarding liabilities assumed, including contingent liabilities, and revisions of preliminary estimates of fair values made at the date of purchase, based upon final appraisals.

     Intangible assets include amounts recognized for the fair value of existing technology and customer relationships. The intangible asset relating to acquired existing technology will be amortized over its estimated useful life of 5 years. The intangible asset relating to acquired customer relationships will be amortized over its estimated useful life of 10 years.

Note 2: Pro Forma Adjustments

The unaudited pro forma condensed combined statements of operations include the adjustments necessary to give effect to the acquisition as if it had occurred on January 1, 2005. The unaudited pro forma condensed combined statements of operations reflect the allocation of the acquisition cost to the fair value of tangible and intangible assets acquired and liabilities assumed as described in Note 1. There were no intercompany balances between Applix and Temtec. No pro forma adjustments were required to conform Temtec’s accounting policies to Applix’s accounting policies.

The pro forma adjustments to the statements of operations are as follows:

(A) The euro-denominated condensed consolidated statement of operations for Temtec has been translated into U.S. dollars using the weighted average exchange rate of $1.23 for the six months ended June 30, 2006.

(B) Adjustment to record six months of amortization expense of acquired intangibles of $384,000. The pro forma adjustment includes an estimate for amortization of identifiable intangible assets with finite lives that would have been recorded during the six months ended June 30, 2006 covered by the pro forma condensed combined statements of operations relating to the acquisition of Temtec. The identifiable intangible assets are being amortized over periods ranging from 5 to 10 years.

(C) Adjustment to record six months of interest expense of $274,000 relating to the $6.5 million term loan which bears interest at prime plus 0.75%. The pro forma adjustments include an estimate of interest expense based on the historical prime rates plus 0.75% that would have been recorded during the six months ended June 30, 2006 covered by the pro forma condensed combined statements of operations relating to the $6.5 million term loan used to partially finance the acquisition of Temtec.

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(D) Adjustment to record income tax impact of pro forma adjustments for the six months ended June 30, 2006 using the estimated Netherlands statutory rate of 31.5%. Actual effective tax rates may differ from pro forma rates reflected in this unaudited pro forma condensed combined financial information.

(E) Adjustment to reflect the dilutive effect of the shares of common stock issued in connection with the acquisition that would have increased the weighted average shares outstanding for the six months ended June 30, 2006 covered by the pro forma condensed combined statements of operations. The weighted average shares outstanding for historical Applix reflects approximately 27,000 shares of common stock issued in connection with the acquisition of Temtec for the six months ended June 30, 2006 based on the acquisition date of June 15, 2006.

(F) The euro-denominated condensed consolidated statement of operations for Temtec has been translated into U.S. dollars using the weighted average exchange rate of $1.24 for the year ended December 31, 2005.

(G) Adjustment to record twelve months of amortization expense of acquired intangibles of $768,000. The pro forma adjustment includes an estimate for amortization of identifiable intangible assets with finite lives that would have been recorded during the year ended December 31, 2005 covered by the pro forma condensed combined statements of operations relating to the acquisition of Temtec. The identifiable intangible assets are being amortized over periods ranging from 5 to 10 years.

(H) Adjustment to record twelve months of interest expense of $452,000 relating to the $6.5 million term loan which bears interest at prime plus 0.75%. The pro forma adjustment includes an estimate of interest expense based on the historical prime rates plus 0.75% that would have been recorded during the year ended December 31, 2005 covered by the pro forma condensed combined statements of operations relating to the $6.5 million term loan used to partially finance the acquisition of Temtec.

(I) Adjustment to record income tax impact of pro forma adjustments for the year ended December 31, 2005 using the estimated Netherlands statutory rate of 31.5%. Actual effective tax rates may differ from pro forma rates reflected in this unaudited pro forma condensed combined financial information.

(J) Adjustment to reflect the dilutive effect of the shares of common stock issued in connection with the acquisition that would have increased the weighted average shares outstanding for the year ended December 31, 2005 covered by the pro forma condensed combined statements of operations.

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