From: "Bert Young"
  To: <al@petrofsky.org>
  Subject: FW: FW: SCO's Vista investment
  Date: Tue, 17 May 2005 15:38:51 -0600

  Al,
  Sorry to be so long in responding - but we had to dig out our Vista files to
  check a couple of things. 
  Thanks,
  Bert


  Bert B Young
  Chief Financial Officer - The SCO Group

...


  See answers below marked *****



  > -----Original Message-----
  > From: Al Petrofsky [mailto:al@petrofsky.org] 
  > Sent: Friday, May 13, 2005 2:58 PM
  > To: Bert Young
  > Subject: SCO's Vista investment
  > 
  > Hello,
  > 
  > Congratulations on finding a buyer for SCO's Trolltech stock during
  > Q2.
  > 
  > I notice that another old written-off SCO investment, vista.com, seems
  > to have improved fortunes recently.
  > 
  > I understand from page 68 of SCO's 2003 10-K that in December 2002,
  > SCO acquired 3,313,000 shares of Vista's series C preferred stock
  > (representing a 10% interest in Vista), and that in 2003 Q4 the
  > carrying value was written down to zero.

  > Do I understand correctly that SCO still held Vista stock as of
  > January 31, 2005, the date of your last report?

  *****In connection with the agreement in Q4 to part ways with Vista, the 
  Company disposed of its notes receivable
  and the Series C preferred stock it held in Vista....The Company does 
  not hold any share of Vista stock....

  > 
  > I ask because I notice that the 10-Q/A you filed last month for 2004
  > Q3 says on page 45 that "We disposed of our investment in Vista in
  > fiscal year 2003".  Is that correct, or did you mean to say that it
  > was written off in 2003?
  > 
  *****Disposed of the investment is correct....See the response above....

  > If SCO did dispose of the Vista shares in 2003, then to whom were they
  > transferred?  Or were they redeemed or canceled?  The 2003 10-K
  > describes the disposition of several Vista notes receivable, but
  > doesn't seem to say what became of the preferred stock:
  > 
  >
  *****The value of the series C preferred stock is the 'investment' that 
  is described below as the Company
  paid $500,000 for that investment....the Remaining balance was written 
  off as a result of this....The transaction was
  very complex as you have noted....

      (from 2003 10-K page 68:)
  > 
  >   In December 2002, the Company and Vista entered into a Stock
  >   Purchase Agreement, pursuant to which the Company acquired 3,313,000
  >   shares of Vista's Series C preferred stock for $500,000.  The
  >   3,313,000 shares of Series C preferred stock represent a 10 percent
  >   fully diluted interest in Vista.
  > 
  >   ...
  > 
  >   In September 2003, the Company's board of directors determined that
  >   the current operating relationship with Vista should be
  >   restructured.  As a result of this decision, the Company and Vista
  >   reached an agreement whereby the Company would transfer the
  >   $1,000,000 note receivable plus accrued interest and the two
  >   $100,000 notes receivable plus accrued interest back to Vista's
  >   founder and majority shareholder, in exchange for 100,000 shares of
  >   the Company's common stock held by Vista's founder and majority
  >   shareholder.  Additionally, the Company and Vista's founder and
  >   majority shareholder agreed to transfer two notes receivable the
  >   Company had outstanding from a third party.  As a result of the
  >   above transaction, the Company has removed all notes receivable and
  >   related accrued interest due from Vista as well as any outstanding
  >   amounts characterized as an investment in Vista, and recorded a loss
  >   on disposition of the investment of $250,000 in its statement of
  >   operations for the year ended October 31, 2003.
  > 


  > Thanks for any clarification you can provide.
  > 
  ****See above responses...

  > -Al Petrofsky
  > 
  > 
  >