Struggling SCO gets $13.1 million cash infusion

announced a 19% workforce reduction, today said it has received a much-needed cash infusion amounting to $13.1 million.

The struggling software vendor in Santa Cruz, Calif., said the new financing is coming through a private placement facilitated by Security Research Associates Inc., a Larkspur, Calif.-based brokerage firm that plans to sell 3.3 million shares of SCO's stock to its clients.

Also included are warrants that could be used to buy more SCO shares or the stock of Caldera Inc., an Orem, Utah-based Linux vendor that's buying SCO's Unix server and professional services business units under a deal announced last month (see story).

SCO said the cash infusion will provide funding needed to develop its Web-based Tarantella software, the one business unit that the company -- which is in the process of changing its name to Tarantella Inc. -- will continue to own after the sale of the other two operations to Caldera is completed.

The Tarentella product can be used to connect multiple applications via the Internet, according to SCO. Mike Orr, president of the company's Tarantella division, said in a statement today that the new financing will "place us in a much stronger position" to capitalize on the software and meet projected growth targets.

Last Friday, SCO said it would lay off 190 workers to prepare for the Unix server and professional services sell-off to Caldera (see story). The deal with Caldera came shortly after SCO reported a loss of $19.2 million on revenue of $26.9 million for its third fiscal quarter which ended June 30, 2000.

Copyright © 2000 IDG Communications, Inc.

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