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Caldera IPO filing reveals plans and shareholders

And Noorda's sitting on a tidy slice...

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Caldera Systems' draft IPO filed at the SEC on Monday shows that the company plans to raise a maximum of $57.5 million and will trade under the ticker symbol CALD, but it will be some time before the issue is priced. The statement shows the company has never made a profit, and had net losses of $7.9 million on revenue of $1.06 million in 1998 and $9.3 million on revenue of $3.1 million in 1999. Furthermore, Caldera expects the losses to continue, so the offer has all the hallmarks of being successful in these irrational (no, wonderful - Ed) times. In the last FY, some 10 per cent of revenue came from services. Caldera Systems has 108 employees. In September 1999, Caldera's US trademark applications for OpenLinux and Linux for Business were rejected, although a trademark application for Caldera Systems is pending. The company was split from Caldera Inc in September 1998, with DR-Dos and embedded client software going to Lineo, the other company split from the holding company. There is cross-ownership between the Caldera companies, with 1.25 million shares of Caldera Systems being sold to Lineo for 3,238,437 shares of Lineo in the last few days. Caldera Inc had received $19.9 million for Linux assets from Linux Systems. It is planned to change the company registration from Utah to Delaware, where takeover law and officer liability is more favourable for companies. Microsoft used to be registered in Delaware, like most large corporations, but the state of Washington changed its law with respect to officer liability, in order to accommodate Microsoft's desire to be registered in the state, it was believed. Caldera is trying to carve out a niche as a "leading provider of Linux for eBusiness", but there is no mention of a portal strategy. The prospectus points to reliance on technology partners like Citrix, Novell and Sun, but in view of the recent $30 million investment by these companies in Caldera, there would appear to be little to fear on that front. It is revealed that in December 1999 and January 2000, Caldera issued 5,000,000 shares of Series B convertible preferred stock at a purchase price of $6.00 per share to Chicago Venture Partners, Citrix, Egan Managed-Capital, Novell, Sun and SCO, with Citrix, Egan, Novell, Sun and MTI Technology (a Noorda company) nominating a director. The filing, made the same day as the investments were announced, does not show how the shares to the new investors were distributed, but a revised filing will no doubt reveal this. These investments now look to be very good if the Linux factor continues to hold up in the market. Caldera paid Sun $1.3 million for rights to Java. Caldera is relying significantly on its business relationship with evergreen for eBuilder, a Java-based component framework expected around mid-year. It had always been assumed that former Novell CEO Ray Noorda effectively owned Caldera through his Canopy family trust, and this is confirmed: through Canopy and personally he has 83.8 per cent, with MTI holding 16.1 per cent. Ransom Love, the Caldera Systems CEO, has 533,000 options. Also announced on Monday was an IPO by Playboy.com, with Bear Stearns being the co-underwriter of the Playboy and Caldera offerings. ®

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