SCO to restate 2004 financial results

IDG News Service - The SCO Group Inc. plans to restate its financial results for the first three quarters of its 2004 fiscal year due to accounting errors, the company said today. The announcement comes as SCO is fighting to prevent a Nasdaq delisting for failing to file its 2004 annual report on time (see story).
Last month, SCO claimed that the filing delay was due to a re-examination of stock grants made under the company's employee compensation plan. But in a statement today, the Lindon, Utah-based company said it also expects to reclassify dividends related to a $50 million October 2003 investment in the company made by BayStar Capital LP. SCO said it repurchased all shares of BayStar's A-1 Convertible Preferred stock last July.
The restatement will not affect the company's previously reported net loss or its earnings per share for the fiscal year, the company said.
The company may have to repurchase certain shares purchased under its employee stock purchase program that were not properly registered during the first three quarters of the company's fiscal year, which ended Oct. 31. SCO will also have to restate $233,000 in stock compensation recorded in the second quarter that actually occurred in the first quarter, the statement said.
In December, SCO reported a net loss of $23.4 million for 2004, a year in which it spent nearly $20 million in legal fees on its lawsuits with IBM and others over intellectual property issues (see story).
The Nasdaq Listing Qualifications Panel has scheduled a hearing on SCO's delisting for March 17, SCO's statement said.