Anti-Linux company SCO's latest report to the Securities and Exchange Commission has warned that its latest reorganization could result in shareholders losing their shirts.

It said that its shareholders could end up with nothing and its court case with Novell might have to be abandoned because its assets could be frozen.

SCO's Unix business fell 26 pe cent and it had a loss of $2.9m. It thinks that its Unix sales have fallen because of the negative publicity of the SCO litigation and competition from Linux.