SCO reports deeper loss, shrinking revenue

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Clarification

"Costs for the SCOsource program are high, however: $4.3
million for the quarter and $19.7 million for the entire year.
Through a new agreement that caps payments to law firm
Boies Schiller & Flexner, the company expects to pay $3
million in legal fees. "

Under the new agreement the legal fee are capped at $31
million (excluding contingencies), of which only 1.7 million
has been paid (at end Q4) and $5 million placed in an
escrow account. This leaves a balance of $24.3 million at
EOY2004.

$13 million was paid immediately after the EOY (lawyers
like to get paid, accountants prefer it to appear in the next
years accounts) and the remaining balance outstanding will
be paid at $2 million a quarter over the next 5
quarters.

Given the announce cash reserves this leaves SCO with only
$7 million to operate their business. At the rate of burn in
the company (and declining revenues), I think SCO will be
lucky to survive through the period of litigation!

Posted by: Richard Flude   Posted on: 12/21/04 You are currently: a Guest | Members login | Terms of Use

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