SCO to restate its previous financial results
SCO is to restate its financial position for several quarters last year in order to comply with Nasdaq rules and stay listed on the exchange.
The controversial Unix company fell foul of the Nasdaq after failing to hand in its full year report on time as it attempted to iron out problems accounting for an employee compensation program.
It says it has now secured a meeting for 17 March with the Nasdaq Listing Qualifications Panel and has outlined the issues it will subsequently resolve.
It says it listed stock issued under the compensation plan as permanent rather than temporary equity in the first, second and third quarters of 2004 and may have to offer to buy those back.
There are also issues related to a $50mn investment in the company. The stock bought by the investment subsequently changed to a status that meant SCO no longer had to pay dividends. They were recorded in SCO’s financial reports as equity, when they should have been liabilities.
Finally SCO will restate around $233,000 of stock-based compensation expense to the first quarter from the second.
While SCO’s current position remains unaffected, insiders predict that these issues could cost SCO half a million dollars for its fiscal 2005.