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Some Caldera 2001-2002 SEC Filings - The Caldera-Tarantella Deal - 2 Updates
Tuesday, July 26 2005 @ 06:42 AM EDT

When the SCO Group filed its Complaint (and then later its Second Amended Complaint, which is their final one, the one that matters), it filed as Caldera Systems, Inc. That's because that is who they were.

In the Complaint, however, it wrote about the history of its dispute with IBM using the voice of oldSCO, the Santa Cruz Operation, later known as Tarantella. It goes on and on about its research and development of Unix products, its entering into the Project Monterey deal with IBM, and the wonders of Unix, as if it were not Caldera, but oldSCO, the company that did all those things. Santa Cruz Operation continues to exist as Tarantella and in fact Sun Microsystems just acquired it on July 13, 2005, and so it is now a division of Sun Microsystems.

The SCO Group is not oldSCO. It bought software divisions from Tarantella, but it didn't acquire Tarantella, as Sun's later acquisition demonstrates. The SCO Group is just the new name for Caldera, what they decided to call themselves, and that didn't happen until after the IBM lawsuit was launched. You can see that by looking at the header in the original Complaint, which was filed as Caldera Systems, Inc. v. IBM, not SCO Group v. IBM. Later, after Caldera changed its name, it changed the title of the case to SCO v. IBM. Not being the Santa Cruz Operation, oldSCO, or Tarantella, Caldera was not a party to the Project Monterey agreement. It was oldSCO that was, which is why today's The SCO Group would like to be viewed as standing in their shoes for purposes of the litigation. If anyone had a contractual beef with IBM, it was oldSCO, not Caldera, because it was the Santa Cruz Operation that entered into the contract with IBM to do Project Monterey.

Caldera was a Linux company, which in May of 2001 purchased Unix products and services divisions from Tarantella and then began morphing first into a Linux and Unix company and finally into a Unix company as it is known today. Well. Some of us view them as a litigation company. So when reading the Complaint, one is really required to suspend reality and listen to them talk about Linux being their competition back then, and how IBM did the most awful thing by helping Linux become a product suitable for business, something it otherwise could not have done, at least not so quickly.

Linux was not a competitor to that company. Caldera, in the words of Bryan Sparks, who founded the first iteration of Caldera in 1994, was "the first company to invest heavily in the establishment of Linux as an acceptable business solution."

Sparks was founder and CEO of both Caldera, Inc., the company which brought suit against Microsoft over DR DOS, and then Lineo, Inc., which was spun off from Caldera, and now he's with Solera Networks. Yes, that Solera Networks. Caldera, Inc. was founded by Sparks as a start-up venture funded by The Canopy Group. Yes, that Canopy Group. As you will see, MTI was also an investor. Yes, that MTI.

Caldera Systems, Inc. was the iteration that Ransom Love was the President and CEO of, and then when the Tarantella deal happened, they formed Caldera International, Inc., and Caldera Systems became a subsidiary. The quotation is from a 1999 Caldera press release, and it continues:

"Five years after forming Caldera, we are now launching Lineo for the purpose of defining the commercial embedded Linux marketplace and obtaining wide market implementation of this incredible operating system environment in compact devices worldwide."

"OEMs see the benefit of embedding Linux into their devices and have requested an embedded OpenLinux solution," said Ransom Love, President and CEO of Caldera Systems, Inc. "Embedix will define the embedded Linux market as OpenLinux has defined the Linux for business market."

In just four weeks, at Linux World, the industry's largest Linux-focused trade show, Lineo will be announcing a partnership with the world's leading provider of embedded computing technology and will be detailing the first broad market Linux-based embedded devices.

Lineo is calling its embedded Linux platform Embedix, which is based upon OpenLinux -- Caldera Systems' successful boxed Linux product targeted at desktops, servers and high-availability solutions. Embedix is a specially configured Linux platform designed to meet the strict memory, storage and performance requirements of embedded systems. Lineo has already developed and sold Embedix-based solutions to a select group of OEMs. Lineo's embedded Linux development environment, code named "Hurricane", includes the complete set of OpenLinux technologies paired with special tools for producing software for embedded systems.

All of this is background for some older Caldera SEC filings I've been looking through, and what simply leaps off the page is that when Caldera/nowSCO told the court that Linux was a hobbyist platform until IBM started to meddle and that it never would have been a competitive threat as quickly as it did, they were pretending to the court that they were always a Unix business, speaking not as Caldera, but as if they were oldSCO/Tarantella. Whatever were they thinking? Linux wasn't their competition back then. They were a Linux company, the first to push Linux in the enterprise, at the very time that IBM got interested in Linux.

The SEC filings couldn't be more clear that Caldera was a Linux company, first and foremost, and even after they bought the UNIX assets of oldSCO/thenTarantella in 2001, and even after Darl McBride's coming on board, for a while they continued to push Linux in the enterprise as well as Unix. IBM was a partner, and Linux was their business, not their competition. The stated dream back then was to get Unix and Linux to work together, to run Linux applications on Unix seamlessly.

By 2003, their SEC filings describe them as a UNIX company and list Linux as their competition, but that isn't the way it was back in 2001 and earlier. They not only sold Linux to enterprise customers, I also note that they had an extensive education and training program for the business community for both Linux (any distribution) and later for their flavor of Unix. Is it credible that they could do that and never notice what was in Linux, specifically the blocks of code they claim IBM should not have donated and that they claimed in their complaint they never knowingly distributed under the GPL? I find that hard to believe, particularly when I note in 2001 filings that they were teaching using the 2.4+ Linux kernel.

UPDATE: Groklaw member ff5166 found an article by Steven J. Vaughan-Nichols from August of 2000, shortly after the Caldera-Tarantella deal, that tells us that Caldera was cutting edge with that kernel, the first to release a "technology developer release preview" of Linux 2.4:

As time goes on, you can expect to see the product lines start to merge as Caldera integrates the best features of Unix and Linux together. In the short term, you can expect to see a major revision to OpenServer; UnixWare gain the ability to run binary Linux applications; and, given that Caldera was the first to release a "technology developer release preview" (a.k.a. a late beta) of the soon to be arriving Linux kernel, Linux 2.4, one of the first Linux 2.4 releases.
Now tell me how they didn't know what they were releasing under the GPL.

Their complaint lists the summer of 2000 as the time period when IBM executives were talking about their contributions to Linux to improve its enterprise functionality. But Caldera at that same time, and later, was offering to build customized Linux operating systems for business customers. They taught them how to *administer* Linux, not just install it. They also offered Linux certification testing.

One filing in January of 2002, their 10-K, the annual report for the fiscal year ended October 31, 2001, says, "Our Linux products, however, are specifically suited for and targeted toward the requirements of business." I think they had to know back then what was in there. And how can they claim that they didn't release all the code in Linux under the GPL, if they knew back then what was in there? Obviously, that will be a difficult sell.

That 10K is also where we read about the acquisition of Unix from Tarantella. I found that after buying the UNIX assets from Tarantella, they didn't realize the money they anticipated. They list the reasons, one of them being "a weakening of partner relationships", which at first you might think could mean disappointment over IBM not going forward. However, the dates are clear. In the Complaint, it says IBM told oldSCO it was finished with Project Monterey on May 1, 2001. Caldera bought Tarantella's Unix assets on May 7, 2001. They surely can't complain that they didn't know, unless oldSCO/Tarantella didn't tell them. IBM had no duty to say anything to Caldera, I wouldn't think. But if Tarantella failed to mention it, that would be something else again. They also list what they got from Tarantella, and it's interesting to note that while they list trademarks in the category of intangible assets, they do not list copyrights.

I have collected some excerpts from that 10K, filed on January 18, 2002, as well as some later filings in 2002, because they include important pieces of the puzzle that need to be in our permanent collection. There were quite a few exhibits attached, and if anyone is in Washington and can get hold of them, I'd find it interesting indeed to read them. There has been a great deal of focus on what SCO got from Novell, but the other important question is, what did Caldera get from Tarantella? It's been a missing piece. Some of these exhibits may fill in that gap.

I've marked certain highlights in colored text, but you may notice other things I've missed. That's the advantage of many eyeballs. To compare what they said in these SEC filings with their Second Amended Complaint, here are a few snips to refresh your memory:

22. In the business computing environment for the Fortune 1000 and other large corporations (often called the “enterprise” environment), UNIX is widely used. As detailed below, before IBM's involvement in and improper contributions to Linux, Fortune 1000 companies were not using Linux for mission critical applications, such as wire transfers and satellite control systems. Linux, as an operating system, simply was incapable of performing such high level enterprise computing before IBM's improper contributions to Linux. . . .

36. Seeing this emerging trend, it became evident to SCO that Intel chips would gradually gain widespread acceptance for use in the enterprise marketplace.

37. Therefore, while other major UNIX vendors modified UNIX for their respective RISC-based computing platforms, SCO developed and licensed the UNIX-based operating system for Intel-based processors for enterprise use that is now known as “SCO OpenServer.”

38. SCO’s early engineers faced difficult design challenges in modifying UNIX for effective use on an Intel processing platform. The principal design constraint centered on the limited processing power the Intel chip possessed in the early 1980’s. The Intel chip (designed as it was for personal computers) was not nearly as powerful as the enterprise RISC chips used by IBM, Sun, SGI and others in their respective UNIX offerings.

39. Despite the early design constraint of Intel’s limited processing power, SCO was able to develop a version of UNIX for Intel PCs with full multi-processing and multi-user support as well as excellent reliability. A PC running SCO's OpenServer UNIX was a much more viable business application platform than the same PC running any available version of Windows. SCO found an appropriate enterprise market niche for the early versions of SCO OpenServer as a highly reliable platform for business critical applications such as point-of-sale control, inventory control and transactions processing. Intel systems running UNIX were fully capable of performing multi-user business applications and could do so at a much lower cost (and just as reliably) as the proprietary mini-computer hardware sold by other UNIX vendors, such as Sun and IBM.. . .

48. On or about September 19, 1995, The Santa Cruz Operation, Inc. acquired all right, title and interest in and to UNIX and UnixWare source code, the AT&T Software and Sublicensing Agreements, the copyrights, claims arising after the closing date against any party and all related and ancillary products and rights from Novell, excepting only the right to certain existing ongoing royalty payments which was retained by Novell.

49. From and after September 1995, SCO dedicated significant amounts of funding and a large number of UNIX software engineers, many of whom were original AT&T UNIX software engineers, to upgrade UnixWare for high-performance computing on Intel processors.

50. By approximately 1998, SCO had completed the majority of this task. That is to say, UnixWare had largely been modified, tested and "enterprise hardened" to use Intel-based processors in competition against IBM and Power PC chips, the Sun SPARC chip and all other high-performance computing UNIX platforms for all complex computing demands. The term "enterprise hardened" means to assure that a software product is fully capable of performing under the rigorous demands of enterprise use.

51. SCO was ready to offer large enterprise customers high-end UNIX computing platforms based on inexpensive Intel processors. Given the rapid growth of Intel's performance capabilities and Intel's popularity in the marketplace, SCO found itself in a highly desirable market position. . . .

56. By about May 2001, all technical aspects of Project Monterey had been substantially completed. The only remaining tasks of Project Monterey involved marketing and branding tasks to be performed substantially by IBM.

57. On or about May 2001, IBM notified plaintiff that it refused to proceed with Project Monterey, and that IBM considered Project Monterey to be “dead.” . . .

The Functional Limitations of Linux Before IBM’s Involvement

80. The first versions of Linux evolved through bits and pieces of various contributions by numerous software developers using single or dual processor computers. Unlike IBM, virtually none of these software developers and hobbyists had access to enterprise-scale equipment and testing facilities for Linux development. Without access to such equipment, facilities and knowledge of sophisticated development methods learned in many years of UNIX development it would be difficult, if not impossible, for the Linux development community to create a grade of Linux adequate for enterprise use.

81. Also, unlike IBM, the original Linux developers did not have access to multiprocessor code or multi-processor development methods needed to achieve high-end enterprise functionality.

82. To make Linux of necessary quality for use by enterprise customers, it needed to be re-designed and upgraded to accommodate complex multi-processor functionality that had taken UNIX nearly 20 years to achieve. This rapid re-design was not feasible or even possible at the enterprise level without (a) a high degree of design coordination, (b) access to expensive and sophisticated design and testing equipment; (c) access to UNIX code and development methods; (d) UNIX architectural experience; and (e) a very significant financial investment. The contributions of IBM, which had access to UNIX System V Protected Materials and years of enterprise level experience, made possible this rapid redesign of Linux for enterprise use.

That brings us to the next step in this saga, the sale of the Unix products by Tarantella to Caldera. Question: if oldSCO/Tarantella was doing so wonderfully, until IBM in May of 2001 pulled the plug, which is the story SCO tells in the Complaint, how come Caldera, a Linux startup that had yet to turn a profit was able to buy their Unix assets that exact same month and year? The deal was dated May 7, 2001.

Let's take a look now at Caldera's SEC filing, their annual report regarding 2001 that they filed in January of 2002, note how little it matches the story told to the court, and you'll find out the rest of the story. There are other tidbits in there too that I thought you'd find interesting, like how many employees they had back then (400 in May of 2002, after some layoffs) and the name of the IPO shareholder lawsuit, E. Adams v. Caldera Systems, Inc., (Case # 01-CV-6271).

And you'll note with interest that Caldera proudly lists its participation in the "IA64 Linux Project, an Intel-sponsored initiative to port the Linux kernel to the Intel Itanium processor." Later, as you can read in this article from June 13, 2002 in The Register, Caldera backed off from the project and from 64-bit Open Unix, but note the reason given by them back then was due to feedback from Intel and from their customers, not because of mean old IBM:

As the legacy Unix variant, OpenServer was never likely to be ported to Itanium, but sizable investment has gone in to projects to develop a 64-bit version of Open Unix, both with IBM on the Monterey project and through SCO's Gemini project that created UnixWare 7, the predecessor to the current Open Unix 8. Feedback from Intel and customers, however, has led Caldera to the conclusion that there is enough life in the 32-bit market.

"The feedback from Intel and our customers is that 64-bit addressing today just isn't a priority, and the 32-bit processors are just getting better and better," said Caldera's VP EMEA, Chris Flynn. "32-bit is good enough for most people's processing requirements." That appears to suggest that Open Unix and OpenServer's lifespan will last only as long as 32-bit processors continue to sell, but Flynn maintained that the operating systems will remain available as long as customers want them.

"There's plenty of mileage in 32-bit Unix," he said. "Until our customers tell us that they don't want Unix and they don't want 32-bit Intel any more, which I don't see happening, then nothing's going to change. 32-bit is just great for customers over the next few years, but we do have choices, and we could move forward with our 64-bit projects."

One of those choices will be 64-bit Linux, which is being developed through the IA-64 Linux Project, and will be available from Caldera. Flynn believes that by the time users are looking to purchase 64-bit servers and operating systems in volume, Linux will have gained the robustness and scalability it requires to compete with Unix in the enterprise market.

Another option Caldera has on the shelf is IBM's AIX 5L, which was developed from the Monterey project between IBM and SCO. In 2001, Caldera offered a preview of the AIX 5L operating system for Itanium to developers, and it remains a possibility that Caldera will offer IBM's Unix for 64-bit users should there be the demand.

2d Update: Here are some of the contracts and agreements in the Tarantella deal:
Caldera Systems, Inc./Caldera Holding, Inc./Santa Cruz Operation, Inc. Agreement and Plan of Reorganization dated August 1, 2000, in SEC filing; see also here and here on Groklaw and on Findlaw. Here's a version with the three amendments attached, one in September of 2000, and one in December of 2000, and one February of 2001. Here's just the Third Amendment dated February 9, 2001. Voting Agreement between Doug Michels, as shareholder, and Caldera and the new Caldera Holding Company.

I've also placed them in the permanent Contracts page. I've also found a Caldera International 5/16/2001 SEC filing, a 13D with exhibits attached, including stockholder agreement, secured promissory note, form of security agreement, and escrow agreement.

With that background, take a look at Caldera's SEC self-portrait from 2001-2002:

********************************************************

From the Caldera International, Inc.'s 10-K, the annual report for the fiscal year ended October 31, 2001:

The Linux for eBusiness solution must be able to accommodate business applications and be able to interoperate properly with the diverse environment of internal corporate information systems and the internet. It must have the flexibility to be maintained centrally or managed remotely. Finally, a solution must adhere and conform to commercial standards to incorporate the latest technological advancement and ensure wide acceptance.

The UNIX(TM) operating system complements Linux and addresses many of the drawbacks noted above for Linux. UNIX, the precursor to Linux, has had a long history of business implementation, and has attracted a robust list of both customers and vendors that provide solutions. Sun, Hewlett Packard, IBM, Tarantella (formerly The Santa Cruz Operation) and others have developed a large base of UNIX business applications to conduct internet and local transactions. On the Intel platform, Caldera's OpenServer and OpenUNIX represent the only tangible low cost Intel UNIX available for business (HP and Sun being the only other providers), and these offerings have permitted businesses, particularly small to medium businesses, to take advantage of the reliability of this operating system at a relatively low cost.

In comparison to Linux, UNIX has had almost a 20-year advantage in deployment. However, Linux is already overtaking UNIX in the growth and development of new software as Linux is increasingly viewed as an internet-friendly operating system that excels in price and quality and is seen as an alternative development platform. Caldera's efforts to unify Linux and UNIX provides the business customer the ideal option of developing a single application that can now scale from the smallest device to the most comprehensive operating environment available on Intel. . . .

The Caldera Solution

Caldera provides operating systems and web-enabled software products that enable solution providers servicing small to medium businesses to build reliable, replicatable solutions. These solutions are built on the Linux and UNIX operating systems, and are delivered through a global channel of resellers. Key benefits of our solution include:

FOCUSED BUSINESS FRAMEWORK. Caldera has always had a business focus with Linux, and now with UNIX, and has created a system that fosters product development, deployment, management, support, and services for business clients. . . .

COMPREHENSIVE, DISTRIBUTION-NEUTRAL EDUCATION AND TRAINING. Many companies are delivering different versions of Linux called distributions. We provide a comprehensive distribution-neutral training program for Linux and for Caldera's UNIX. Our courses focus on educating and training the business community on the benefits of these operating systems for business use. We offer a comprehensive set of courses designed to prepare students to develop, deploy and manage Linux and UNIX in a business environment, including system, network and internet administration and programming. We offer high-quality instructor-led training through our own training center at our headquarters and also offer our educational programs indirectly through our Caldera Open Learning Providers around the world.

OPEN SOURCE ADVOCATE. We fully embrace the open source model and continuously contribute tools and technology to the open source community to the betterment of our products. We foster, and regularly contribute to, multiple open source development projects that enhance the capability of our products and services. These efforts serve to collaboratively enhance the capability and quality of the technology to foster greater market growth. . . .

OPENLINUX

OpenLinux is an ideal product for building internet-enabled business solutions. Based on the Linux 2.4 kernel, the product is a fully integrated and stable Linux operating system. . . .

PROFESSIONAL CONSULTING AND CUSTOM DEVELOPMENT SERVICES

Our UNIX and Linux consulting services include project management, software development and programming, migration tools and services, and development of customized Linux operating systems. We assist our end-user customers, ISVs and solution providers in planning, creating, implementing and deploying business application solutions.

EDUCATION AND TRAINING SERVICES

Our educational programs and products are designed to help our customers learn to develop, deploy and administer both Linux and UNIX operating environments for Intel systems. Our courses provide preparation for UNIX and Linux certification. Linux certification tests are provided by an independent organization named "The Linux Professional Institute".

Caldera develops comprehensive training curriculum for both UNIX and Linux. Caldera has a program to authorize independent training centers around the world, named the Caldera Open Learning Provider program. Authorized Open Learning Providers use the Caldera supplied UNIX and Linux curriculum to customize and deliver instructor led training classes. . . .

Our Linux products, however, are specifically suited for and targeted toward the requirements of business. . . .

SOFTWARE ENGINEERING AND DEVELOPMENT

The acquisition of the server and professional services divisions from Tarantella increased both the size and breadth of skill in Caldera's engineering group to support Caldera's existing Linux and Volution products in addition to the UNIX products. Our engineering team is highly regarded in our industry as having some of the most talented individuals in delivering trusted computing technology, specifically for Intel-architecture systems. These skills have been put to good use in the delivery of our latest products as well as a number of professional services engagements with Intel and others. . . .

Our delivery of Open UNIX 8.0 with the Linux Kernel Personality was a milestone in the Intel UNIX world as it established a bridge between the well established UNIX environment and the new world of Linux by creating an environment on which Linux applications can run unchanged on UNIX. A key proof point for this capability was established when the Linux version on Oracle's 9i database was fully certified on Open UNIX 8. This capability ultimately allows our customers to run the same applications on either Linux or UNIX and provides a means to support Linux applications on much larger hardware platforms, such as the UNISYS ES7000 with 32 Intel Pentium Xeon CPUs, than the Linux operating system can effectively support today. Looking forward, we will leverage our UNIX expertise to collaborate with our partners and the Linux community to attain similar capability as demand for Linux on the next generation Itanium processor increases. . . .

Certain components of OpenLinux have been developed and made available for licensing under the GNU General Public License and similar licenses, which generally allow any person or organization to copy, modify and distribute the software. The only restriction is that any resulting or derivative work must be made available to the public under the same terms.

We own the registered trademark "CALDERA(R)" and also have license rights relating to "CALDERA SYSTEMS(TM)", a pending trademark application. In September 1999, the United States Patent and Trademark Office rejected our applications for "OpenLinux(TM)" and "Linux for Business(TM)". We filed our response with respect to the rejection of the "OpenLinux" trademark on March 28, 2000. Our trademark application for "Linux for Business" was suspended on April 24, 2000, pending disposition of prior applications. We have recently been informed that resolution of these applications will remain pending until a determination has been made by the United States Patent and Trademark Office as to the treatment of LINUX related trademark applications generally. In Europe, the European Community Trade Marks Office has approved our application for registration of the trademark "OpenLinux(TM)". . . . .

EMPLOYEES

As of October 31, 2001, we had a total of 545 employees. Of the total employees, 146 were in software engineering, 117 in sales, 58 in marketing, 87 in customer service and technical support, 34 in customer delivery, and 103 in administration. . . .

RISK FACTORS

Our business model is based on an expectation that we can create and develop demand from the corporate community for product and service offerings, which will include both UNIX and Linux products and services,. . . .

As a result of the registration that occurred in connection with the Tarantella transaction, we have a large number of shares of common stock outstanding and available for resale. This also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. Certain holders of our common stock also have certain demand and piggyback registration rights obligating us to register their shares under the Securities Act for sale, including the rights held by the selling stockholders. ...

ITEM 3. LEGAL PROCEEDINGS

In July 2001, Caldera and certain of its officers and directors were named as defendants in lawsuits filed in the United States District Court for the Southern District of New York (the "Actions"). The first lawsuit was filed on July 11, 2001, and entitled E. Adams v. Caldera Systems, Inc. (Case # 01-CV-6271). Based on comments made in open court by attorneys representing certain plaintiffs, over two hundred similar cases have been filed against other issuers. The Court has indicated that it is in the process of considering a consolidation of the Actions. Certain of the plaintiffs have sought appointment as a lead plaintiff with approval of their respective law firms as lead plaintiffs' counsel. The various complaints allege claims against Caldera, certain of our officers and directors, and the underwriters of our initial public offering under the Securities Act of 1933, as amended. The complaints also allege claims solely against the underwriters under the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended. We believe that the claims against Caldera and any of its officers and directors are without legal merit and we intend to defend them vigorously. On August 8, 2001, all pending cases against all underwriters and issuers were reassigned to a U.S. District Court Judge, Southern District of New York. The time for Caldera to answer or to move to dismiss the complaint is presently adjourned pending further instruction from the court.

The Company is not aware of any improper conduct by the Company, its officers and directors, or its underwriters, and the Company denies any liability relating thereto. The Company has notified its underwriters and insurance companies of the existence of the claims.

On September 17, 2001 Caldera was named as a defendant in a matter entitled K. McCrabb v. Caldera Systems, Inc. (Case # CV801505), on October 5, 2001 Caldera was named as a defendant in a matter entitled N. Maabadi v. Caldera Systems Inc. (Case # 802043), and on October 11, 2001 Caldera was named as a defendant in a matter entitled A. Milligan v. Caldera Systems, Inc. (Case # 802190). All three lawsuits were filed by former employees in the Superior Court of California, County of Santa Clara, claiming breach of contract regarding the payment of bonuses and severance payments. All three matters are in discovery stage, and the ultimate outcomes are not yet determinable. The Company believes that it has viable defenses in each of the three matters. . . .

As of October 31, 2001, Caldera had over 18,000 beneficial stockholders. Caldera has not declared or paid any cash dividends on shares of its common stock and plans to retain its future earnings, if any, to fund the development and growth of its business.

OVERVIEW

We began operations in 1994 as Caldera, Inc. In July 1996, through an asset purchase, Caldera, Inc. acquired an additional business unit that was not engaged in developing and marketing Linux software. Caldera, Inc. subsequently made the strategic determination to separate its two business lines into separate entities and, under an Asset Purchase Agreement dated as of September 1, 1998, as amended, sold the assets relating to its business of developing and marketing Linux software to Caldera Systems, Inc., a newly formed corporation. Caldera Systems subsequently completed an initial public offering in March 2000. On May 7, 2001, Caldera Systems completed its acquisition of the assets and operations of the server and professional services groups of Tarantella Inc., formerly known as The Santa Cruz Operation, Inc., pursuant to an Agreement and Plan of Reorganization, dated August 1, 2000, as subsequently amended (the "Tarantella Acquisition"). In order to facilitate this acquisition, Caldera International, Inc. was formed and Caldera Systems became a wholly owned subsidiary of Caldera International. Former holders of shares and options to purchase shares of Caldera Systems received an equal number of shares and options to purchase shares in Caldera International. As used herein, Caldera, or the Company, refers to Caldera International, its subsidiaries, and its two predecessors, Caldera Systems and the portion of Caldera, Inc. related to the Linux software business.

Prior to the acquisition of the UNIX and OpenServer product lines from Tarantella, substantially all of our revenue was derived from sales of Linux products and related services. Currently, over 90 percent of our revenue is derived from sales of products acquired from Tarantella.

RESEARCH AND DEVELOPMENT. Research and development expenses were $16.8 million in fiscal 2001, $5.0 million in fiscal 2000 and $2.3 million in fiscal 1999 representing an increase of $11.8 million from fiscal 2000 to fiscal 2001 and an increase of $2.7 million from fiscal 1999 to fiscal 2000. Research and development costs represented 41 percent of total revenue in fiscal 2001, 116 percent of total revenue in fiscal 2000 and 76 percent of total revenue in fiscal 1999. The increase in research and development expenses from fiscal 2000 to fiscal 2001 was attributable to increased personnel and related costs as a result of the acquisitions of the WhatiIfLinux technology from Acrylis and operations from Tarantella as our personnel focused on the development of Linux and UNIX operating systems. The increase in research and development expenses from fiscal 1999 to fiscal 2000 was due to an increased investment in the number of software developers, quality assurance personnel and outside contractors to support the Company's product development and testing activities including the development of training courses and technical support offerings. . . .

WRITE-DOWN OF GOODWILL AND INTANGIBLES. During the fourth quarter of fiscal 2001 we determined that various assets related to the operations acquired from Tarantella and Acrylis were impaired and that the book value as of October 31, 2001 exceeded the current estimates of fair value. As a result, we recorded a $73.7 million write-down of goodwill and intangible assets. The asset write-down is the result of significant unanticipated decreases in actual and forecasted revenue of the acquired operations, a significant decline in market valuations and general economic conditions, particularly in the information technology sector, a weakening of certain partner relationships, the loss of certain key executives and other factors. During fiscal 2000 and 1999 the Company did not have any write-down of goodwill and intangible assets. . ..

WRITE-DOWN OF INVESTMENTS. During fiscal 2001, the Company determined that the current carrying value of certain of its investments would most likely not be realized and write-downs were necessary. The Company recorded write-downs of approximately $8.3 million related to these investments. The Company did not have any impairment charges during fiscal 2000 or fiscal 1999. As of October 31, 2001, the Company's remaining investment balance was approximately $1.2 million and was related to Lineo, Inc. During fiscal 2000 and 1999 the Company did not record any write-down of its investments.

At the time of the acquisition, Tarantella had invested approximately 76 man-months of effort (or approximately $0.8 million) in the UNIXWare 8 product and anticipated 122 man-months of effort (or approximately $1.2 million) to complete UNIXWare 8. UNIXWare 8 was estimated to be approximately 38 percent complete at the time of the acquisition.

The Messaging Server product is an entirely new product, which provides messaging functionality on top of existing UNIXWare products. At the time of the acquisition, Tarantella had invested approximately 36 man-months of effort (or approximately $0.4 million) in the Messaging Server product and anticipated 12 man-months of effort (or $0.1 million) to complete Messaging Server. Messaging Server was estimated to be approximately 75 percent complete at the time of the acquisition. . . . .

COST-SHARING ARRANGEMENT WITH TARANTELLA, INC. During August 2000 and after entering into the reorganization agreement with Tarantella to acquire the server software and professional services groups, the Company and Tarantella agreed that Caldera would reimburse Tarantella for certain employee payroll and related costs. The costs for which the Company agreed to reimburse Tarantella were related to employees that Tarantella had identified for termination in a company-wide layoff in September 2000. The Company viewed these employees as a critical part of the success of the new combined company and Tarantella agreed to retain the employees if the Company would reimburse Tarantella for a portion of their payroll and related costs. At the time the Company committed to reimburse Tarantella for these employee costs, the ultimate amount was not determinable and both parties agreed that the amount would be determined prior to the completion of the acquisition. During December 2000, both parties agreed, pursuant to an amendment to the reorganization agreement, that Caldera would reimburse Tarantella $1.5 million relating to services rendered from August though December 2000. Accordingly, during fiscal 2001 and fiscal 2000 the Company recorded $0.6 million and $0.9 million, respectively, for the cost-sharing arrangement. . . .

Investing activities have historically consisted of purchases of property and equipment, investments in strategic partners as well as a $15.0 million payment during fiscal 1999 to our predecessor, in connection with the reorganization of our predecessor and Caldera's own incorporation. Cash provided by investing activities was $23.2 million during fiscal 2001. This consisted of $23.0 million paid, net of cash acquired, for the assets and operations from Tarantella and the WhatIfLinux technology from Acrylis as well as $1.5 million paid for the purchase of equipment. . . .

Additionally, during the year ended October 31, 2000, Caldera invested $2.0 million in the common stock of Evergreen Internet, Inc., a strategic partner, paid $3.0 million to Ebiz Enterprises, Inc. for 3.0 million shares of common stock and paid $1.4 million for property and equipment. Caldera also received $15.0 million from the sale of 2.0 million shares of Lineo common stock. . . .

During fiscal 1999, cash provided by financing activities consisted primarily of $15.5 million of equity funding received from The Canopy Group and $3.0 million of equity funding from MTI Technology Corporation. Additionally, Caldera received $4.8 million from The Canopy Group under a secured convertible promissory note agreement that accrued interest at the prime rate less one-half percent that was calculated at 7.25 percent. . . .

As of October 31, 2001, the Company had one outstanding non-interest bearing debt obligation with a face amount of $8.0 million to Tarantella. This note is payable in four quarterly installments starting in the Company's third quarter of fiscal 2002. As of October 31, 2000, the Company had no outstanding debt obligations. . . . .

Issuance of common shares for cash in an initial public offering at $14.00 per share, net . . .

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash payment to Caldera, Inc. in asset acquisition - - (14,964) . . . .

Issuance of common shares in exchange for investment in Lineo, Inc. $ - $ 10,000 $ -

Distribution to majority stockholder for fair value of shares issued in excess of the carryover basis of the investment in Lineo, Inc. $ - $ (10,000) $ -

Distribution to majority stockholder for license rights $ - $ (451) $ -

Contribution of additional shares of Lineo, Inc. from majority stockholder $ - $ 1,966 $ - . . . .

The acquired operations of Tarantella provide server software for networked business computing and are a leading producer of UNIX server operating systems. In addition, these operations provide professional services to implement and maintain UNIX system software products. The acquisition provided Caldera with international offices and a Linux/UNIX distribution channel with thousands of resellers worldwide. . . . Subsequent to the acquisition of certain assets and operations from Tarantella (see Note 3), the Company has experienced significant unanticipated decreases in actual and forecasted revenue of the acquired operations, a significant decline in market valuations and general conditions, particularly in the information technology sector, a weakening of partner relationships, the loss of certain key executives and other factors which indicate the recorded values of the long-lived assets were impaired. As a result, the Company performed a valuation of its long-lived assets as of October 31, 2001 and concluded that a $73.7 million write-down of goodwill and intangible assets was necessary. . . .

(3) ACQUISITIONS

TARANTELLA, INC.

On May 7, 2001, the Company acquired certain assets, liabilities and operations from Tarantella, Inc in exchange for: (i) the issuance of 16 million shares of common stock (1.6 million of which are being held in escrow for a one-year period); (ii) the issuance of options to purchase up to an aggregate of 1.7 million shares of Caldera common stock in exchange for options to purchase Tarantella common stock previously held by individuals who became employees of Caldera; (iii) $23 million in cash, including the forgiveness of $7 million previously advanced to Tarantella; and (iv) a non-interest bearing promissory note in the amount of $8 million that will be paid in quarterly installments of $2 million beginning July 2002. In addition, if the OpenServer line of business generates revenue in excess of specified thresholds during the three-year period following the acquisition, Caldera will pay Tarantella 45% of such excess revenue. The following table summarizes the components of the consideration paid to Tarantella (in thousands, except per share data):

Consideration paid:

Fair value of Caldera common stock (16,000 shares at $3.47 per share) $ 55,520

Fair value of options to purchase 1,661 shares of common stock issued in exchange for 3,323 outstanding Tarantella options 4,201

Cash 23,000

Note payable (discounted at 6.5%) 7,322

Direct expenses 3,744

Total consideration $ 93,787 . . . .

The Company has accounted for the acquisition of the assets and operations from Tarantella using the purchase method of accounting. Under this method, the total purchase price, including direct fees and expenses, was allocated to the tangible and intangible assets acquired and the liabilities assumed based upon their respective fair values. The following table summarizes the allocation of the consideration to the tangible and intangible assets acquired and liabilities assumed (in thousands):

Purchase price allocation:
Liabilities assumed net of tangible assets acquired $ (5,482)

Accrual for severance payments, non-essential facilities and related costs (3,011)

Intangible assets acquired: Distribution/reseller channel 26,700

Existing technology (consisting primarily of UNIXWare and OpenServer) 5,800

Acquired in-process research and development 1,500

Trade name and trademarks 800

Distribution agreement 1,400

Goodwill 66,080

Total $ 93,787 . . . .

6) NOTE PAYABLE TO TARANTELLA, INC.

As discussed in Note 3, the Company issued to Tarantella an unsecured, non-interest bearing promissory note in the amount of $8.0 million. Four quarterly payments of $2.0 million are payable to Tarantella beginning in the Company's third fiscal quarter of 2002. Because the promissory note was non-interest bearing, the promissory note has been recorded at a discount using an interest rate of 6.5 percent. As of October 31, 2001, the current portion of the note payable was $3.8 million, which represented the discounted value of the two payments to be paid during fiscal 2002. The remaining two payments will be made during fiscal 2003. . . .

(10) RELATED PARTY TRANSACTIONS

TARANTELLA, INC.

As discussed in Note 3, the Company acquired certain assets, liabilities and operations from Tarantella, Inc. during fiscal 2001. Prior to the acquisition, the Company and Tarantella had entered into a strategic business agreement that provided for certain joint marketing activities between the parties. Additionally, both parties entered into a distribution agreement to sell each other's products. During the six months ended April 30, 2001, Caldera paid to Tarantella approximately $1.1 million for the purchase of products that were sold to Caldera customers.

Subsequent to the acquisition, Caldera and Tarantella have paid certain operating costs on each other's behalf, mostly pertaining to activities in foreign operations. On a monthly basis, each party submits the actual operating costs for reimbursement. As of October 31, 2001, the Company owed Tarantella approximately $0.5 million for these operating costs. . . .

LINEO

In January 2000, the Company acquired an ownership interest in Lineo, Inc., the successor entity to the operations of the Predecessor that were not acquired by Caldera in the reorganization discussed in Note 1. The chairman of the Company's board of directors and one other director are also directors of Lineo. During fiscal 2000 and 1999, the Company had sales to Lineo of approximately $34,000 and $2,000, respectively.

MTI TECHNOLOGY CORPORATION

A director of the Company is the chairman of the board of MTI Technology Corporation ("MTI"). Additionally, another Company director is the current president and chief executive officer of MTI. During fiscal 2000 and 1999, the Company had sales to MTI of approximately $31,000 and $3,000, respectively. . . . .

(3) Exhibits are incorporated herein by reference or are filed with this report as indicated below:

EXHIBIT NUMBER DESCRIPTION

2.1 Agreement and Plan of Reorganization by and among Caldera Systems, Inc., Caldera International, Inc. ("Registrant") and The Santa Cruz Operation, Inc., and related amendments (incorporated by reference to Exhibit 2.1 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

3.1 Amended and Restated Certificate of Incorporation of Caldera International, Inc. (incorporated by reference to Exhibit 3.1 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

3.2 Amended and Restated Bylaws of Caldera International Inc. (incorporated by reference to Exhibit 3.2 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

4.1 Form of certificate of common stock (incorporated by reference to Exhibit 4.1 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.1 Caldera 1998 Stock Option Plan (incorporated by reference to Exhibit 10.3 to Caldera's Registration Statement on Form S-1 (File No. 333-94351)).

10.2 Caldera 1999 Omnibus Stock Incentive Plan, as amended (incorporated by reference to Exhibits 10.3 through 10.4 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.3 Caldera 2000 Employee Stock Purchase Plan, as amended (incorporated by reference to Exhibit 10.9 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.4 Stock Purchase Agreement, dated January 6, 2000, between Caldera and Lineo, Inc. (incorporated by reference to Exhibit 10.11 to Caldera's Registration Statement on Form S-1 (File No. 333-94351)).

10.5 GNU General Public License (incorporated by reference to Exhibit 10.14 to the Registrant's Registration Statement on Form S-1 (File No. 333-94351)).

+10.6 Sun Community Source License version 2.3 dated January 7, 2000, between Caldera and Sun Microsystems, Inc. (incorporated by reference to Exhibit 10.17 to Caldera's Registration Statement on Form S-1 (File No. 333-94351)).

+10.7 Sun Community Source License version 2.7 dated January 7, 2000 between Caldera and Sun Microsystems, Inc. (incorporated by reference to Exhibit 10.18 to Caldera's Registration Statement on Form S-1 (File No. 333-94351)).

10.8 Assignment of Lease dated January 21, 2000, between Caldera and Nextpage, L.C. (incorporated by reference to Exhibit 10.23 to Caldera's Registration Statement on Form S-1 (File No. 333-94351)).

10.9 Form of Indemnification Agreement by and between Caldera and its executive officersand directors (incorporated by reference to Exhibit 10.24 to Caldera's Registration Statement on Form S-1 (File No. 333-94351)).

10.10 Second Amendment to Lease Agreement, dated April 5, 2000, between Caldera and EsNet Properties, L.C. (incorporated by reference to Exhibit 10.2 to Caldera's quarterly report on Form 10-Q for the quarter ended April 30, 2000).

10.11 Lease Agreement, dated October 9, 1997 between Caldera, Inc., a Utah corporation, and EsNet Properties, L.C. (incorporated by reference to Exhibit 10.3 to Caldera's quarterly report on Form 10-Q for the quarter ended April 30, 2000).

10.12 Master Lease dated March 30, 2000, between Caldera and 106th South Business Park, L.C. (incorporated by reference to Exhibit 10.4 to Caldera's quarterly report on Form 10-Q for the quarter ended April 30, 2000).

10.13 Form of Senior Executive Severance Agreement (incorporated by reference to Exhibit 10.31 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.14 Stock Purchase and Sale Agreement between The Canopy Group, Inc., Caldera Systems, Inc. and Metrowerks Holdings, Inc. (incorporated by reference to Exhibit 10.40 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.15 Stockholder Agreement between Lineo, Inc., Bryan Sparks, Dry Canyon Holding Company LLC and Metrowerks Holdings, Inc. (incorporated by reference to Exhibit 10.41 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.16 Warrant Purchase Agreement between Lineo, Inc. and Metrowerks Holdings, Inc. (incorporated by reference to Exhibit 10.42 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.17 Form of Secured Convertible Promissory Note issued by The Santa Cruz Operation, Inc. to Caldera Systems, Inc. (incorporated by reference to Exhibit 10.43 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.18 Form of Security Agreement between The Santa Cruz Operation, Inc., as debtor, and Caldera Systems, Inc., as secured party (incorporated by reference to Exhibit 10.44 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.19 Form of Intercreditor Agreement among The Canopy Group, Inc., The Santa Cruz Operation, Inc. and Caldera Systems, Inc. (incorporated by reference to Exhibit 10.45 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.20 Form of Loan Agreement between The Canopy Group, Inc., The Santa Cruz Operation, Inc. and Caldera Systems, Inc. (incorporated by reference to Exhibit 10.46 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.21 Form of Security Agreement between The Canopy Group, Inc. and The Santa Cruz Operation, Inc. (incorporated by reference to Exhibit 10.47 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.22 Form of Secured Convertible Promissory Note issued by The Santa Cruz Operation, Inc. to The Canopy Group, Inc. (incorporated by reference to Exhibit 10.48 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.23 Form of Secured Promissory Note to be issued by Caldera International, Inc. to The Santa Cruz Operation, Inc. (incorporated by reference to Exhibit 10.49 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

10.24 Form of Security Agreement between Caldera International, Inc., as debtor, and The Santa Cruz Operation, Inc., as secured party (incorporated by reference to Exhibit 10.50 to Caldera's Registration Statement on Form S-4 (File No. 333-45936)).

21.1 Subsidiaries of the Registrant

23.1 Consent of Arthur Andersen LLP, Independent Public Accountants of Caldera . . .

*************************************

From their Form 10Q, filing date: 2002-03-15:

On May 7, 2001, we formed a new holding company, Caldera International ("Caldera"), to acquire substantially all of the assets and operations of the server and professional services groups of Tarantella Inc., formerly known as The Santa Cruz Operation, Inc., pursuant to an Agreement and Plan of Reorganization, dated August 1, 2000 and as subsequently amended (the "Tarantella Acquisition"). In connection with this acquisition, Caldera Systems was acquired by the newly formed holding company. Former holders of shares and options to purchase shares of Caldera Systems received an equal number of shares and options to purchase shares in Caldera International.

Prior to the acquisition of the OpenServer and UNIXWare product lines from Tarantella, substantially all of our revenue was derived from sales of Linux products and related services. Currently, over 90 percent of our total revenue is derived from OpenServer and UNIXWare related products and services.

RESULTS OF OPERATIONS

The Tarantella Acquisition significantly increased our net revenue and operating expenses. Operating results for the first quarter of fiscal 2002 are not directly comparable to the same period in fiscal 2001 because of the acquired operations. Accordingly, a pro forma analysis has been included below.

During the third and fourth quarters of fiscal 2001 and the first quarter of fiscal 2002, we implemented cost cutting measures related to personnel and excess facilities and have reduced overall operating expenses, and anticipate we will continue to make cost-cutting decisions in our efforts to attain profitability. We have reduced headcount from 664 at the time of the Tarantella Acquisition to 523 as of January 31, 2002.

Date: March 15, 2002
CALDERA SYSTEMS, INC.

By: /s/ Robert K. Bench
----------------------
Robert K. Bench
Chief Financial Officer
(Principal Financial Officer)

*******************************************

From their 8K, filing date: 2002-04-02:

Caldera International, Inc. issued the following press release on April 1, 2002.

CALDERA INTERNATIONAL, INC. AND TARANTELLA, INC.
AGREE ON EARLY REDEMPTION OF PROMISSORY NOTE
AND STOCK REPURCHASE

LINDON, Utah--April 1, 2002--Caldera International, Inc. (Nasdaq: CALDD) today announced it has completed an agreement with Tarantella, Inc. (Nasdaq: TTLA) involving the early redemption of a note currently held by Tarantella. Additionally, Caldera agreed to the buyout of licenses for products bundled in older releases of The Santa Cruz Operation, Inc.'s (SCO's) software, and the buyback of 500,000 shares of Caldera stock, currently owned by Tarantella.

This agreement accelerates certain elements of last year's transaction in which Caldera purchased assets and certain operations from Tarantella, Inc., then known as The Santa Cruz Operation. The details of the current arrangement are:

Caldera has agreed to a $5 million early redemption of their promissory note, which was payable in four quarterly installments of $2 million each.

Caldera also purchased a paid-up license to continue bundling the Tarantella products VisionFS, TermLite and Webtop, which were bundled in SCO OpenServer and UNIXWare products prior to closure of last year's transaction.

Caldera will purchase 500,000 shares of Caldera stock from Tarantella for $555,100.

CALDERA INTERNATIONAL, INC.

Caldera International (Nasdaq: CALDD) provides "Powerful Choices" for businesses through its UNIX, Linux and Volution product lines and services. Based in Lindon, UT, Caldera has representation in 82 countries and 16,000+ resellers worldwide. Caldera Global Services provides reliable localized support and services to partners and customers. For more information on Caldera products and services, visit http://www.caldera.com.

Caldera, the Caldera logos, Caldera Volution, OpenLinux, SCO and the associated SCO logo, and SCO OpenServer are trademarks or registered trademarks of Caldera International, Inc. in the U.S. and other countries. Caldera Global Services is a service mark of Caldera International, Inc. UNIX is a registered trademark of The Open Group in the United States and other countries. Linux is a registered trademark of Linus Torvalds. All other brand or product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

********************************

From their 8K, filing date 2002-05-09:

LINDON, UTAH--MAY 8, 2002-- Caldera International, Inc., a leading provider of business solutions to small-to-medium businesses, today announced that it expects to report revenue in the range of $15.1 to $15.5 million for the second quarter ended April 30, 2002. These latest projections modify earlier projections announced at the end of the prior quarter that Caldera expected revenue to be between $16.0 and $18.0 million. Caldera cited the continued economic weakness and a slower than anticipated increase in IT spending that contributed to the revenue shortfall. Customers are continuing to expand their operations, but at a much slower pace than in past years.

Caldera will provide updated information with regard to the upcoming quarter's revenue outlook in a press release and conference call announcing results for the second quarter on Wednesday, May 29, 2002.

Due to Caldera's revenue shortfall and the company's increased efficiencies, Caldera also announced a 15 percent reduction in the company's worldwide staff, or approximately 73 employees. The reduction will broadly cover all functional and geographic areas of the company. After this reduction, the company will have a total staff of approximately 400 employees.

The company plans to streamline operations by closing offices in Chelmsford, Massachusetts and Erlangen, Germany. Caldera will continue its German operations in Munich and Frankfurt. The restructuring is another step to help the company realize its goal of achieving profitability and is expected to save the company $7.0 million on an annual basis.

"Recognizing the difficult worldwide I.T. market conditions and Caldera's commitment to profitability, we believe that this is a necessary step to protect shareholder value in Caldera," said Ransom Love, Chairman and CEO, Caldera International. "Since the acquisition of the SCO Server division, Caldera has eliminated $9.3 million or 42 percent in quarterly operating expenses as we continue to drive to our profitable operating model."

In addition to the reduction in force, Caldera is also announcing the departure of the company's chief technology officer, Drew Spencer, and Chief Legal Counsel, Harrison Colter. Both Spencer and Colter will continue consulting with the company on a part-time basis. Spencer joined Caldera in 1999 and has held several positions overseeing software development, research and engineering. Colter joined Caldera in 2001 as Caldera's chief legal counsel.

As part of the executive reorganization, Reg Broughton, the company's senior vice president over services and operating systems, will assume responsibilities for the company's global operations. Broughton brings more than 25 years of experience in executing sales, marketing and operational excellence of public and private companies.

***********************

From their 8K, filing date: 2002-07-24, (Darl shows up):

Caldera International, Inc. issued the following press release on July 23, 2002.

CALDERA INTERNATIONAL, INC.
COMPLETES STOCK REPURCHASE

LINDON, UTAH--JULY 22, 2002--Caldera International, Inc. (Nasdaq: CALD) today announced that it has completed the purchase of the shares of its common stock held by Tarantella, Inc. (Nasdaq: TTLA) and MTI Technology Corporation (Nasdaq: MTIC). Caldera acquired 4,304,000 shares or 31% of its issued and outstanding common stock for an aggregate purchase price of $4,029,000, or $0.94 per share. The repurchase of these shares has reduced the number of issued and outstanding shares of the Company to 9,487,000, of which 5,318,000 are held by The Canopy Group, Inc., and the remaining 4,169,000 are held by non-affiliates.

"These shares were an overhang to the market and were depressing Caldera's stock price. The elimination of these shares puts Caldera in a much more attractive position for present shareholders and interested investors," said Bob Bench, CFO, Caldera International. "The repurchase of nearly a third of Caldera's outstanding shares now opens the way for Caldera to raise additional capital at higher prices, and will allow for the market to reach a share price that more closely reflects the value of Caldera. The company has improved its equity position, is essentially debt free, and can now take advantage of expansion opportunities."

"During the next 12 months, Caldera will identify appropriate technologies and companies that will complement our strategy and roadmap," said Darl McBride, president and CEO, Caldera International. "Caldera is in the enviable position of having a worldwide channel sales organization with a vast network of resellers and distributors. We will be active in licensing and acquiring technologies that leverage our channel and add value to our customers."

CALDERA INTERNATIONAL, INC.

Caldera International (Nasdaq: CALD) provides "Powerful Choices" for businesses through its UNIX, Linux and Volution product lines and services. Based in Lindon, UT, Caldera has representation in 82 countries and 16,000+ resellers worldwide. Caldera Global Services provides reliable localized support and services to partners and customers. For more information on Caldera products and services, visit HTTP://WWW.CALDERA.COM.


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