SCO says US$50m won't affect Linux legal wrangle
SCO says US$50m won't affect Linux legal wrangle
The SCO Group, which has bolstered its cash reserves to the tune of US$50 million, has said the money will not affect the company's efforts to collect fees from companies using or selling the Linux open source operating system.
The Utah-based owner of the Unix operating system, of which it claims large chunks of code have been filched by Linux developers, received the cash injection from private investment company BayStar Capital. The investment in SCO was structured as a private placement of non-voting Series A Convertible Preferred Shares, convertible into common equity at a fixed conversion price of US$16.93 per share, which was the average closing bid price for the Company's common stock for the five previous trading days prior to the date of closing. Upon conversion, BayStar will own an aggregate of approximately 2,953,000 shares of SCO common stock representing 17.5 percent of the company's outstanding shares. The proceeds of the agreement lifts SCO's cash position to US$61 million.
While the cash will not alter the company's position in terms of pursuing companies for recompense over what it sees as an infringement of its intellectual property, SCO's President and CEO, Darl McBride said part of the proceeds would be used to continue to pursue enterprise linux users for payment, as well as funding the ongoing legal battle against IBM and Linux distributor Red Hat.
"Over recent months, we have made significant strides forward in our ongoing effort to protect and enforce the company's intellectual property rights through SCOsource. During the same period, we have been steadily strengthening our core operating business, and in the coming weeks, we look forward to providing the industry and Wall Street with additional details on our plans and initiatives. Now, with a US$50 million investment from BayStar, we believe we have secured the capital necessary to fund all aspects of the long term growth of this company."
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