1102542--1/27/2006--SCO_GROUP

related topics

{stock, price, share}

{property, intellectual, protect}

{stock, price, operating}

{product, market, service}

{interest, director, officer}

{competitive, industry, competition}

{operation, international, foreign}

{provision, law, control}

{investment, property, distribution}

{customer, product, revenue}

{personnel, key, retain}

{control, financial, internal}

{regulation, government, change}

We do not have a history of profitable operations. We may not prevail in our SCO Litigation, which may adversely affect our ability to continue in business. We operate in a highly competitive market and face significant competition from a variety of current and potential sources; many of our current and potential competitors have greater financial and technical resources than we do; thus, we may fail to compete effectively. If the market for UNIX continues to contract, our business will be harmed. We may lose the support of industry partners leading to an accelerated decline in our UNIX products and services revenue. Our claims relating to our UNIX intellectual property may subject us to additional legal proceedings. We rely on our indirect sales channel for distribution of our products, and any disruption of our channel at any level could adversely affect the sales of our products. Our future SCOsource licensing revenue is uncertain. Fluctuations in our operating results or the failure of our operating results to meet the expectations of public market analysts and investors may negatively impact our stock price. Our foreign-based operations and sales create special problems, including the imposition of governmental controls and taxes and fluctuations in currency exchange rates that could hurt our results. If we are unable to retain key personnel in an intensely competitive environment, our operations could be adversely affected. Our Engagement Agreement with the law firms representing us in the SCO Litigation requires us to pay for expert, consulting and other costs, which could harm our liquidity position if these costs are higher than anticipated. We have issued options under our equity compensation plans without complying with registration or qualification requirements under the securities laws of California, Georgia and possibly other states, and, as a result, we may incur rescission liability for such options and may face additional potential claims under state securities laws. Our stock price is volatile. Fluctuations in our operating results or the failure of our operating results to meet the expectations of public market analysts and investors may negatively impact our stock price There are risks associated with the potential exercise of our outstanding options. Common stock available for resale may depress the market price of our common stock. Our stock price could decline further because of the activities of short sellers. The right of our Board of Directors to authorize additional shares of preferred stock could adversely impact the rights of holders of our common stock. Our stockholder rights plan could make it more difficult for a hostile bid for our company or a change of control transaction to succeed at current market prices for our stock.

Full 10-K form ▸

1102542--1/27/2006--SCO_GROUP_INC