SCO to Restate Financials

The SCO Group announced today that it will restate
financial statements for the first three quarters of 2004 because of
accounting errors related to its employee stock compensation program.

The anticipated corrections should not impact the company’s previously
reported net loss or its earnings per share for the fiscal year ended
October 31, 2004, the company said.

Last month, SCO revealed that it faces possible delisting from the NASDAQ stock exchange for failing to file an annual report with the Securities & Exchange Commission (SEC) on time.

SCO said as soon as it completes its financial analysis, with the help of
auditor KPMG, it will file amended quarterly reports as well as the annual
report for the fiscal year that ended Oct. 31, 2004.

The company added that its earlier request for a hearing before the NASDAQ’s
listing qualifications panel has been accepted. A meeting with regulators
has been scheduled for March 17.

SCO is embroiled in a lengthy breach of contract and copyright infringement
lawsuit with IBM over the alleged use of Unix System IV
source code in the Linux kernel.