<Page>

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark one)
   [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended JANUARY 31, 2002
                                       OR
   [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

           For the transition period from ____________to ____________

                         Commission file number 0-29911

                           CALDERA INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


            Delaware                                    87-0662823
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

                               355 South 520 West
                                    Suite 100
                               Lindon, Utah 84042
              (Address of principal executive office and zip code)

                                 (801) 765-4999
              (Registrant's telephone number, including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days.

YES [X] NO [ ]

AS OF MARCH 15, 2002, THERE WERE 14,428,783 SHARES OF THE REGISTRANT'S COMMON
STOCK OUTSTANDING.

<Page>

                           CALDERA INTERNATIONAL, INC.

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                 Page
                                                                                Number
                                                                                ------
<S>                                                                             <C>
PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
         Condensed Consolidated Balance Sheets as of January 31, 2002 and
            October 31, 2001....................................................    3
         Condensed Consolidated Statements of Operations and Comprehensive
            Loss for the three months ended January 31, 2002 and 2001...........    4
         Condensed Consolidated Statements of Cash Flows for the three
            months ended January 31, 2002 and 2001..............................    5
         Notes to Condensed Consolidated Financial Statements...................    7
Item 2.  Management's Discussion and Analysis of Financial Condition and
            Results of Operations...............................................   13
Item 3.  Quantitative and Qualitative Disclosures About Market Risk.............   20
         Risk Factors...........................................................   21
PART II. OTHER INFORMATION
Item 1.  Legal Proceedings......................................................   28
Item 6.  Exhibits and Reports on Form 8-K.......................................   28
Item 7.  Signatures.............................................................   28

</Table>

                                       2
<Page>

                     CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                    (IN THOUSANDS)

<Table>
<Caption>
                                                                  JANUARY 31,      OCTOBER 31,
                                                                     2002             2001
                                                                  -----------      -----------
                                                                  (unaudited)
<S>                                                               <C>              <C>
                                     ASSETS
CURRENT ASSETS:
     Cash and cash equivalents                                     $  26,105       $  22,435
     Available-for-sale securities                                        --           5,943
     Accounts receivable, net of allowance
       for doubtful accounts of
       $460 and $362, respectively                                    13,082          16,742
     Other current assets                                              3,489           3,438
                                                                   ---------       ---------
       Total current assets                                           42,676          48,558
                                                                   ---------       ---------
PROPERTY AND EQUIPMENT:
     Computer and office equipment                                     5,018           5,708
     Leasehold improvements                                            1,098           2,075
     Furniture and fixtures                                              358           1,316
                                                                   ---------       ---------
                                                                       6,474           9,099
     Less accumulated depreciation and amortization                   (2,485)         (2,983)
                                                                   ---------       ---------
       Net property and equipment                                      3,989           6,116
                                                                   ---------       ---------
OTHER ASSETS:
     Goodwill, net                                                     2,334           2,278
     Intangibles, net                                                 14,568          15,408
     Other assets, net                                                 2,434           2,499
                                                                   ---------       ---------
       Total other assets                                             19,336          20,185
                                                                   ---------       ---------
       Total assets                                                $  66,001       $  74,859
                                                                   =========       =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                              $   1,633       $   2,881
     Accrued payroll and benefits                                      6,529           7,013
     Other accrued liabilities                                         7,921           6,628
     Deferred revenue                                                  8,827           8,241
     Royalties payable                                                 2,218           3,066
     Current portion of note payable to Tarantella, Inc.               5,816           3,845
     Taxes payable                                                     1,026           1,353
     Payable to Tarantella, Inc.                                         761             537
     Other current liabilities                                           119             593
                                                                   ---------       ---------
       Total current liabilities                                      34,850          34,157
                                                                   ---------       ---------
LONG-TERM LIABILITIES:
     Note payable to Tarantella, Inc., net of current portion          1,878           3,724
     Other long-term liabilities                                       4,991           2,201
                                                                   ---------       ---------
       Total long-term liabilities                                     6,869           5,925
                                                                   ---------       ---------
COMMITMENTS AND CONTINGENCIES (Note 3)

MINORITY INTEREST                                                        173             173
                                                                   ---------       ---------
STOCKHOLDERS' EQUITY:
     Preferred stock, $0.001 par value; 5,000 shares
       authorized, none outstanding                                       --              --
     Common stock, $0.001 par value; 45,000 shares
       authorized, 14,403 and 14,266 shares
       outstanding, respectively                                          14              14
     Additional paid-in capital                                      217,688         217,209
     Deferred compensation                                            (1,074)         (1,290)
     Accumulated other comprehensive income (loss)                       (97)             87
     Accumulated deficit                                            (192,422)       (181,416)
                                                                   ---------       ---------
       Total stockholders' equity                                     24,109          34,604
                                                                   ---------       ---------
       Total liabilities and stockholders' equity                  $  66,001       $  74,859
                                                                   =========       =========
</Table>

           See accompanying notes to condensed financial statements.

                                       3
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED STATEMENTS OF
                        OPERATIONS AND COMPREHENSIVE LOSS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                                   THREE MONTHS ENDED JANUARY 31,
                                                                      2002            2001
                                                                     --------       --------
                                                                           (unaudited)
<S>                                                                <C>            <C>
REVENUE:
        Products                                                     $ 14,734       $    452
        Services                                                        3,179            602
                                                                     --------       --------
          Total revenue                                                17,913          1,054
                                                                     --------       --------
COST OF REVENUE:
        Products                                                        2,410            227
        Services                                                        3,186            950
                                                                     --------       --------
          Total cost of revenue                                         5,596          1,177
                                                                     --------       --------
GROSS MARGIN (DEFICIT)                                                 12,317           (123)
                                                                     --------       --------
OPERATING EXPENSES:
        Sales and marketing (exclusive of non-cash
          compensation of $57 and $140, respectively)                   8,371          5,520
        Research and development (exclusive of non-cash
          compensation of $67 and $133, respectively)                   5,367          1,869
        General and administrative (exclusive of non-cash
          compensation of $141 and $61, respectively)                   2,724          1,748
        Amortization of intangibles                                       840             --
        Restructuring charge                                            5,261             --
        Cost-sharing arrangement with Tarantella, Inc.                     --            602
        Non-cash compensation                                             265            334
                                                                     --------       --------
          Total operating expenses                                     22,828         10,073
                                                                     --------       --------
LOSS FROM OPERATIONS                                                  (10,511)       (10,196)
                                                                     --------       --------
EQUITY IN LOSS OF AFFILIATE                                                --           (648)
                                                                     --------       --------
OTHER INCOME (EXPENSE):
        Interest income                                                   150          1,008
        Interest expense                                                 (126)            --
        Other income (expense), net                                      (357)            20
                                                                     --------       --------
          Total other income (expense), net                              (333)         1,028
                                                                     --------       --------
LOSS BEFORE INCOME TAXES                                              (10,844)        (9,816)

PROVISION FOR INCOME TAXES                                               (162)           (27)
                                                                     --------       --------
NET LOSS                                                             $(11,006)      $ (9,843)
                                                                     ========       ========
BASIC AND DILUTED NET LOSS PER COMMON SHARE                          $  (0.77)      $  (0.99)
                                                                     ========       ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                             14,355          9,897
                                                                     ========       ========
OTHER COMPREHENSIVE LOSS:
        Net loss attributable to common stockholders                 $(11,006)      $ (9,843)
        Unrealized gain (loss) on available-for-sale securities            --         (1,865)
        Foreign currency translation adjustment                          (184)           (13)
                                                                     --------       --------
COMPREHENSIVE LOSS:                                                  $(11,190)      $(11,721)
                                                                     ========       ========
</Table>

           See accompanying notes to condensed financial statements.

                                       4
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<Table>
<Caption>
                                                               THREE MONTHS ENDED JANUARY 31,
                                                                    2002           2001
                                                                  --------       --------
                                                                        (unaudited)
<S>                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                       $(11,006)      $ (9,843)
   Adjustments to reconcile net loss to net
   cash used in operating activities:
      Loss on disposal of assets                                     1,288             --
      Depreciation and amortization                                    843            201
      Amortization of intangibles                                      840             --
      Non-cash compensation                                            265            334
      Issuance of common stock to certain members
      of the board of directors for services                           126             --
      Amortization of debt discount                                    125             --
      Equity in loss of affiliate                                       --            648
      Changes in operating assets and liabilities
         Accounts receivable, net                                    3,660            705
         Other current assets                                          (51)           579
         Other assets                                                    9            (39)
         Accounts payable                                           (1,248)           188
         Payable to Tarantella, Inc.                                   224           (898)
         Accrued payroll and benefits                                 (484)            --
         Other accrued liabilities                                   1,293            886
         Deferred revenue                                              586             83
         Royalties payable                                            (848)            --
         Taxes payable                                                (327)            --
         Other current liabilities                                    (474)            --
         Other long-term liabilities                                 2,790             --
                                                                  --------       --------
            Net cash used in operating activities                   (2,389)        (7,156)
                                                                  --------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                   (4)          (163)
   Loan to Tarantella, Inc.                                             --         (7,000)
   Purchase of available-for-sale securities                            --         (8,128)
   Deferred acquisition costs                                           --           (450)
   Proceeds from available-for-sale securities                       5,943         14,369
                                                                  --------       --------
            Net cash provided by (used in) investing activities      5,939         (1,372)
                                                                  --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from sale of common stock through ESP program              230             --
   Proceeds from exercise of common stock options                       74            250
                                                                  --------       --------
            Net cash provided by financing activities                  304            250
                                                                  --------       --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                 3,854         (8,278)
EFFECT OF FOREIGN EXCHANGE RATES ON CASH                              (184)            77
CASH AND CASH EQUIVALENTS, beginning of period                      22,435         36,560
                                                                  --------       --------
CASH AND CASH EQUIVALENTS, end of period                          $ 26,105       $ 28,359
                                                                  ========       ========
</Table>

           See accompanying notes to condensed financial statements.

                                       5
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                       THREE MONTHS ENDED JANUARY 31,
                                                                             2002        2001
                                                                            ------      ------
                                                                                (unaudited)
<S>                                                                    <C>         <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

        Cash paid for income taxes                                          $  269      $    4


SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
        FINANCING ACTIVITIES:

        Reclassification and write-down of equity method
               investment in marketable security                            $   --      $2,310

</Table>

           See accompanying notes to condensed financial statements.

                                       6
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


(1)  ORGANIZATION AND DESCRIPTION OF BUSINESS

     Caldera International, Inc. ("Caldera" or the "Company") was originally
incorporated as Caldera Systems, Inc. ("Caldera Systems"), a Utah corporation on
August 21, 1998, and reincorporated as a Delaware corporation on March 6, 2000.
In March 2000, Caldera Systems completed an initial public offering of its
common stock.

     Caldera Systems developed and marketed software and provided related
services that enabled the development, deployment and management of Linux-based
specialized servers and internet devices that extended the eBusiness
infrastructure. Caldera Systems sold and distributed its software and related
products indirectly through distributors and solutions providers, which include
value-added resellers ("VARs"), original equipment manufacturers ("OEMs"), and
systems integrators, as well as directly to end-user customers. These sales
occurred throughout the United States and in certain international locations.

     On May 7, 2001, a new holding company, Caldera International, Inc, was
formed to acquire substantially all of the assets, liabilities and operations of
the server and professional services groups of Tarantella, Inc. ("Tarantella"),
formerly The Santa Cruz Operation, Inc., pursuant to an Agreement and Plan of
Reorganization (the "Agreement"), dated as of August 1, 2000 as amended. Under
the Agreement, Caldera acquired the tangible and intangible assets used in the
server and professional services groups, including all of the capital stock of
certain Tarantella subsidiaries. In connection with this acquisition, Caldera
Systems was acquired by the newly formed holding company. Each share of existing
Caldera Systems common stock, as well as options to purchase shares of Caldera
Systems common stock, were converted into an equal number of shares of Caldera
common stock and options to purchase shares of Caldera common stock.

     The acquired operations 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.

     Caldera's business is focused on serving the small to medium business
market's ("SMBs") need to have reliable, cost effective Linux and UNIX operating
systems and software products to power computers. Caldera also provides web
based applications and products and services to facilitate connections to the
internet for its customer base. Caldera is seeking to expand its business by
providing products and services to businesses outside its core market strengths
in retail, manufacturing, hospitality, banking and finance. Most of these
markets and customers are accessed through an indirect, leveraged channel of
partners, which includes distributors and solution providers (collectively,
"resellers"). This system is extended to a global level, with Caldera offices
worldwide, locally supporting customers and resellers with minor modifications
to fit the particular country's unique needs.

                                       7
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


(2)  SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements of
Caldera and subsidiaries have been prepared by the Company pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC"). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the following disclosures, when read in conjunction with
the financial statements and the notes thereto included in the Company's most
recent Form 10-K, are adequate to make the information presented not misleading.

     The condensed consolidated financial statements reflect all adjustments
that, in the opinion of management, are necessary to present fairly the
financial position and results of operations of the Company as of the balance
sheet dates and for the periods presented. Operating results for the three
months ended January 31, 2002 are not necessarily indicative of the results that
may be expected for the year ending October 31, 2002. In addition, operating
results for the three months ended January 31, 2002 are not directly comparable
to the corresponding prior year period due to the significant acquisition that
occurred May 7, 2001.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

REVENUE RECOGNITION

     The Company's revenue is primarily from two sources: (i) product license
revenue, primarily from product sales to resellers and end users, including
large scale enterprises, and royalty revenue, primarily from initial license
fees and ongoing royalties from product sales by source code OEMs (original
equipment manufacturers); and (ii) service and support revenue, primarily from
providing software updates, support and education and consulting services to end
users.

     The Company recognizes product revenue upon shipment if a signed contract
exists, the fee is fixed and determinable, collection of resulting receivables
is probable and product returns are reasonably estimable, except for sales to
distributors, which are recognized upon sale by the distributor to resellers or
end users.

     For contracts involving multiple elements (i.e. delivered and undelivered
products, maintenance and other services), the Company allocates revenue to each
component of the contract based on objective evidence of its fair value, which
is specific to the Company. The fair value of each element is based on the price
if sold separately. The Company recognizes revenue allocated to undelivered
products when the criteria for product revenue set forth above have been met.

     The Company recognizes revenue from maintenance fees for ongoing customer
support and product updates ratably over the period of the maintenance contract.
Payments for

                                       8
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


maintenance fees are generally made in advance and are non-refundable. For
revenue allocated to education and consulting services or derived from the
separate sale of such services, the Company recognizes revenue as the related
services are performed.

     The Company recognizes product revenue from royalty payments upon receipt
of quarterly royalty reports from OEMs related to their product sales.

     The Company performs ongoing credit evaluations of its customers' financial
condition and does not require collateral. The Company maintains allowances for
potential credit losses and such losses have been within management's
expectations.

GOODWILL AND INTANGIBLE ASSETS

     Goodwill and intangible assets are the result of the acquisition of certain
assets and operations from Tarantella and the acquisition of the WhatIfLinux
technology from Acrylis, Inc. Upon adoption of Statement of Financial Accounting
Standard ("SFAS") No. 142, the Company reassessed the useful lives of its
intangible assets. The following table summarizes the components of goodwill and
intangible assets and their useful lives:

<Table>
<Caption>
                                                    ESTIMATED
                                                   USEFUL LIFE
                                                   -----------
<S>                                                <C>
Intangible assets:
   Distribution/reseller channel                       5 years
   Existing technology - Tarantella                    5 years
   Existing technology - Acrylis                       2 years
   Trade name and trademarks                           5 years
Goodwill                                               Indefinite
</Table>

     The following table reconciles the reported net loss for the three months
ended January 31, 2002 and 2001 for the effects of items that would no longer be
amortized as a result of the adoption of SFAS No. 142:

<Table>
<Caption>
                                              THREE MONTHS ENDED          THREE MONTHS ENDED
                                               JANUARY 31, 2002            JANUARY 31, 2001
                                            -----------------------    -----------------------
                                                  (per share)                (per share)
<S>                                         <C>            <C>         <C>            <C>
Net loss as reported                        $(11,006)      $  (0.77)   $ (9,843)      $  (0.99)
Amortization of equity method goodwill            --          --            217           0.02
                                            --------       --------    --------       --------
   Adjusted net loss                        $(11,006)      $  (0.77)   $ (9,626)      $  (0.97)
                                            ========       ========    ========       ========
</Table>

                                       9
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)

PRO FORMA FINANCIAL INFORMATION

     The following table sets forth certain pro forma financial information for
the three months ended January 31, 2001 had the Tarantella acquisition and the
WhatIfLinux technology acquisition been completed as of November 1, 2000 (in
thousands):

<Table>
<Caption>
                                                 THREE MONTHS ENDED
                                                  JANUARY 31, 2001
                                                 ------------------
<S>                                              <C>
Revenue                                             $ 25,544
Net loss from operations                             (16,976)
Net loss                                             (16,746)
Basic and diluted net loss per common share         $  (1.50)
</Table>

NET LOSS PER COMMON SHARE

     Basic net loss per common share ("Basic EPS") is computed by dividing net
loss by the weighted average number of common shares outstanding. Diluted net
loss per common share ("Diluted EPS") is computed by dividing net loss by the
sum of the weighted average number of common shares and the dilutive potential
common share equivalents then outstanding. Potential common share equivalents
consist of shares issuable upon the exercise of outstanding stock options. There
were approximately 4.0 million and approximately 1.5 million outstanding options
to purchase common shares as of January 31, 2002 and 2001, respectively, which
were not included in the computation of diluted net loss per common share as
their effect would have been anti-dilutive, decreasing the net loss per common
share.

(3)  COMMITMENTS AND CONTINGENCIES

LITIGATION

     Four lawsuits have been filed against the Company, certain of its officers
and directors, and the underwriters of the Company's Initial Public Offering in
the Unites States District Court for the Southern District of New York by
parties alleging violations of the securities laws. The complaints allege
certain improprieties regarding the circumstances surrounding the underwriters'
conduct during the IPO and the failure to disclose such conduct in the
registration statement. Over 300 other issuers, and their underwriters and
officers and directors, have been sued in similar cases pending in the same
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 court recently suspended the requirement that
the Company file an answer to the complaints pending further notification from
the court. The Company has notified its underwriters and insurance companies of
the existence of the claims.

     In September and October 2001, Caldera was named as a defendant in three
different actions 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. The Company believes that two of those matters
have settled, but final settlement documents have not yet been completed. The
remaining matter remains in discovery stage, and the parties are discussing
settlement options.

                                       10
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


OPERATING LEASE GUARANTEE

     In connection with the acquisition from Tarantella, Tarantella agreed to
continue as the lessee for certain facilities in the UK. The Company and
Tarantella are working together to complete the necessary assignment agreements
so that Tarantella will be the tenant and bear full financial responsibility for
these leases. When these assignments are complete, the Company believes that its
UK subsidiary may be named as a second guarantor, and may be liable under these
lease obligations in the event that Tarantella defaults.

(4)  STOCKHOLDERS' EQUITY

REVERSE STOCK SPLIT

     On December 17, 2001, Caldera's board of directors approved a four-for-one
reverse stock split for holders of common stock. On March 4, 2002, the
stockholders approved this reverse stock split. As of March 14, 2002, our
outstanding common shares will be reduced from 57.6 million shares to
approximately 14.4 million shares. The reverse stock split has been
retroactively reflected in the accompanying consolidated financial statements
and notes thereto for all periods presented.

STOCK-BASED COMPENSATION

     During the three months ended January 31, 2002, the Company granted 1.3
million stock options with an average exercise price of $1.20 per share. None of
these stock options were granted at prices that were below the quoted market
price on the date of grant. As of January 31, 2002, there were approximately 4.0
million stock options outstanding with a weighted average exercise price of
$7.40 per share.

     Amortization of deferred compensation was approximately $0.3 million during
each of the three-month periods ended January 31, 2002 and 2001.

EMPLOYEE STOCK PURCHASE PLAN

     On November 30, 2001, employees participating in the Company's employee
stock purchase plan acquired 87,500 shares of common stock at a price of $2.62
per share.

(5)  RESTRUCTURING CHARGE

     In the first quarter of 2002, in connection with management's plan to
reduce operating expenses, the Company announced a restructuring plan, which
resulted in a one-time charge of $5.3 million. The restructuring included the
elimination of various positions within sales, marketing, product development
and administration, the elimination of non-essential office space and facilities
that will be permanently idle, and the write-off of certain long-term assets. Of
the $5.3 million in total restructuring charges, $0.8 million related to
severance costs, $0.9 million related to the write-off of certain long-term
assets and leasehold improvements and $3.6 million related to facilities. As of
January 31, 2002, $1.6 million of the restructuring costs had been paid.

                                       11
<Page>

                  CALDERA INTERNATIONAL, INC. AND SUBSIDIARIES

                         NOTES TO CONDENSED CONSOLIDATED
                        FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


(6)  SEGMENT INFORMATION

     During the first quarter of 2002, the Company has organized into two
operating business units. These business units include the OS Licenses and
Services division and the Volution Web Services division. During the first
quarter of 2002, management allocated resources and reviewed operating results
for both of these divisions. Resources are allocated and reviewed to the
operating income (loss) level for each of these divisions. It is impractical to
provide historical information for these two divisions for periods prior to
fiscal 2002 as these divisions did not exist prior to the first quarter of 2002.
Segment disclosures for the Company's operating divisions are as follows (in
thousands):

<Table>
<Caption>
                               OS LICENSES     VOLUTION WEB
                               AND SERVICES       SERVICES    CORPORATE        TOTAL
                               ------------    ------------   ---------       --------

<S>                            <C>             <C>            <C>             <C>
Revenue                          $ 17,885       $     28       $     --       $ 17,913
Cost of goods sold                  5,595              1             --          5,596
                                 --------       --------       --------       --------
   Gross margin                    12,290             27             --         12,317
                                 --------       --------       --------       --------
Sales and marketing                 7,350          1,021             --          8,371
Research and development            3,947          1,420             --          5,367
General and administrative          2,180            544             --          2,724
Other                                  --             --          6,366          6,366
                                 --------       --------       --------       --------
   Total operating expenses        13,477          2,985          6,366         22,828
                                 --------       --------       --------       --------
   Operating loss                $ (1,187)      $ (2,958)      $ (6,366)      $(10,511)
                                 ========       ========       ========       ========
</Table>

     The Company generates products and services revenue in geographic locations
outside of the United States. Revenue attributed to individual countries or
regions based on the location of sales to unaffiliated customers for the three
months ended January 31, 2002 and 2001 is as follows (in thousands):

<Table>
<Caption>
                                       2002          2001
                                      -------      -------
<S>                                   <C>          <C>
Revenue:
  United States                       $ 8,151      $   711
  Europe, Middle East and Africa        7,005           41
  Asia                                  1,850          284
  Canada and Latin America                907           18
                                      -------      -------
     Total revenue                    $17,913      $ 1,054
                                      =======      =======
</Table>

     Long-lived assets, which include property and equipment as well as goodwill
and intangible assets, by location consists of the following as of January 31,
2002 and October 31, 2001 (in thousands):

<Table>
<Caption>
                                January 31,  October 31,
                                   2002         2001
                                ----------   -----------
<S>                             <C>          <C>
Long-lived assets:
  United States                   $19,873      $22,491
  International                     1,018        1,311
                                  -------      -------
     Total long-lived assets      $20,891      $23,802
                                  =======      =======
</Table>

                                       12
<Page>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following discussion should be read in conjunction with our condensed
consolidated financial statements and notes thereto, included elsewhere in this
quarterly filing and our annual report on Form 10-K for the year ended October
31, 2001 filed with the Securities and Exchange Commission, including the
audited financial statements contained therein. This discussion contains
forward-looking statements that involve risks and uncertainties often indicated
by such words as "estimates", "anticipates", "continue", "expects", "intends",
"believes" and similar expressions. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of
various factors, including those set forth below under "Risk Factors" and
elsewhere in this quarterly filing.

OVERVIEW

     We originally incorporated as Caldera Systems, Inc. ("Caldera Systems"), a
Utah corporation on August 21, 1998, and reincorporated as a Delaware
corporation on March 6, 2000. In March 2000, we completed an initial public
offering of our common stock. 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.

                                       13
<Page>

PRO FORMA THREE MONTHS ENDED JANUARY 31, 2002 AND 2001

     The following table shows our pro forma results of operations for the first
quarter of 2001 assuming the Tarantella Acquisition been completed at the
beginning of the first quarter of 2001 (in thousands):

<Table>
<Caption>
                                  CALDERA      TARANTELLA     PRO FORMA       PRO FORMA
                                  SYSTEMS      ACQUISITION    ADJUSTMENTS       TOTAL
                                 --------      -----------    -----------     ---------
<S>                              <C>           <C>            <C>             <C>
Revenue                          $  1,054       $ 24,490       $     --       $ 25,544
Cost of revenue                     1,177          6,798             --          7,975
                                 --------       --------       --------       --------
   Gross margin (deficit)            (123)        17,692             --         17,569

Sales and marketing                 5,520         10,757             --         16,277
Product development                 1,869          5,155             --          7,024
General and administrative          1,748          2,956             --          4,704
Other                                 936            205          5,399          6,540
                                 --------       --------       --------       --------
   Total operating expenses        10,073         19,073          5,399         34,545
                                 --------       --------       --------       --------
   Loss from operations          $(10,196)      $ (1,381)      $ (5,399)      $(16,976)
                                 ========       ========       ========       ========
</Table>

     The pro forma adjustments above consist primarily of the amortization of
goodwill and intangible assets as a result of the Tarantella Acquisition. The
following discussion assumes the Tarantella Acquisition had been in effect for
the three months ended January 31, 2001.

REVENUE

     Revenue was $17.9 million for the first quarter of 2002 and $25.5 million
(pro forma) for the first quarter of 2001, a decrease of $7.6 million, or 30
percent. During the first quarter of 2002, 82 percent of our revenue was
generated from the sale of products. During the first quarter of 2001, 84
percent of our revenue was generated from the sale of products. The decrease in
revenue for the first quarter of 2002 compared to the first quarter of 2001 is
attributable to decreased sales of OpenServer and UNIXWare products acquired
from Tarantella. Because both of these product lines are mature, we anticipate
that sales of these products will continue to decline. However, we are seeking
to offset this anticipated decline with revenue derived from new and future
product offerings.

COST OF REVENUE AND GROSS MARGIN

     Cost of revenue was $5.6 million for the first quarter of 2002 and $8.0
million (pro forma) for the first quarter of 2001, a decrease of $2.4 million or
30 percent. The decrease in cost of revenue was attributable to decreased
revenue in the first quarter of 2002. Gross margin for the first quarter of 2002
and the first quarter of 2001 were consistent at 69 percent.

OPERATING EXPENSES

     SALES AND MARKETING. Sales and marketing expenses were $8.4 million for the
first quarter of 2002 and $16.3 million (pro forma) for the first quarter of
2001, a decrease of $7.9 million or 49 percent. Sales and marketing expenses
represented 47 percent of total revenue for the first quarter of 2002, a decline
from 64 percent of total revenue for the first quarter of 2001. The significant
decrease in sales and marketing expenses is attributable to our recent
restructuring activities that have resulted in reduced employees and related
costs. Other decreases in sales and marketing expenses have resulted from
decreased travel, lower commissions and less co-operative advertising as a
result of lower revenue.

                                       14
<Page>

     RESEARCH AND DEVELOPMENT. Research and development expenses were $5.4
million for the first quarter of 2002 and $7.0 million (pro forma) for the first
quarter of 2001, a decrease of $1.6 million, or 23 percent. Research and
development expenses represented 30 percent of total revenue for the first
quarter of 2002, an increase from 27 percent of total revenue for the first
quarter of 2001. The decrease in the dollar amount of research and development
costs in the first quarter of 2002 compared to the first quarter of 2001 is
primarily attributable to fewer employees and our efforts to consolidate
development work on our operating systems.

     GENERAL AND ADMINISTRATIVE. General and administrative expenses were $2.7
million for the first quarter of 2002 and $4.7 million (pro forma) for the first
quarter of 2001, a decrease of $2.0 million, or 42 percent. General and
administrative expenses represented 15 percent of total revenue for the first
quarter of 2002, a decrease from 18 percent of total revenue for the first
quarter of 2001. The significant decrease in general and administrative expenses
is primarily attributable to our recent restructuring activities that has
resulted in reduced employee and related costs.

     OTHER. Other expenses consist primarily of non-cash amortization of
intangible assets, non-cash compensation and restructuring charges. Other
expenses were $6.4 million for the first quarter of 2002 and $6.5 million (pro
forma) for the first quarter of 2001. Included in other expenses for the first
quarter of 2002 were restructuring charges of $5.3 million. We did not have any
restructure charges in the first quarter of 2001. Non-cash amortization was $1.1
million for the first quarter of 2002 and $5.7 million for the first quarter of
2002. The significant decrease in non-cash amortization was attributed to a
fourth quarter write-off of $73.7 million for goodwill and intangible assets
acquired during fiscal 2001 that significantly decreased the per quarter
amortization for these assets.

HISTORICAL THREE MONTHS ENDED JANUARY 31, 2002 AND 2001

     During fiscal 2002, the Company anticipates that as a percentage of total
revenue, sales and marketing, research and development and general and
administrative expenses will decrease significantly from fiscal 2001 due to
recent cost-cutting measures and reductions in operating expenses. For the first
quarter of 2001, the high sales and marketing, product development and general
and administrative expense as a percentage of revenue was attributed to lower
than anticipated Linux revenue and increased spending in anticipation of the
completion of the Tarantella Acquisition.

REVENUE

     Revenue was $17.9 million for the first quarter of 2002, and $1.1 million
for the first quarter of 2001. During the first quarter of 2002, 82 percent of
our revenue was generated from the sale of products. During the first quarter of
2001, 43 percent of our revenue was generated from the sale of products. Revenue
from international customers accounted for 54 percent of total revenue for the
first quarter of 2002 and 33 percent for the first quarter of 2001. The increase
in international revenue and product revenue are the result of operations
acquired from Tarantella and the Company's increased focus on customers and
markets outside the United States. The significant increase in revenue during
the 2002 three-month period from the 2001 period as well as the increase in the
percentage of product revenue to total revenue was attributable almost solely to
the operations acquired from Tarantella.

     PRODUCTS. Product revenue was $14.7 million for the first quarter of 2002
and $0.5 million for the first quarter of 2001. The increase in product revenue
during the first quarter of 2002 over the first quarter of 2001 was primarily
attributable to sales of OpenServer and UNIXWare products acquired from
Tarantella. Product revenue derived from Linux products and integrated

                                       15
<Page>

Linux and UNIX products was approximately five percent of total product revenue
during the first quarter of 2002.

     SERVICES. Service revenue was $3.2 million for the first quarter of 2002
and $0.6 million for the first quarter of 2001. The increase in service revenue
during the first quarter of 2002 over the first quarter of 2001 was attributable
to revenue generated by the support and professional services groups acquired
from Tarantella. We are continuing to enhance our services offerings in an
effort to grow our future services revenue and complement our current products.

COST OF REVENUE

     COST OF PRODUCTS REVENUE. Cost of products revenue was $2.4 million for the
first quarter of 2002 and $0.2 million for the first quarter of 2001. Cost of
products revenue as a percentage of products revenue was 16 percent for the
first quarter of 2002 and 50 percent for the first quarter of 2001. The decrease
in the cost of products revenue percentage for the first quarter of 2002
compared to the first quarter of 2001 was attributable to a higher proportion of
internet and electronic distribution orders associated with the acquired
products. For the remainder of fiscal 2002, we expect the cost of products
revenue as a percentage of products revenue to remain approximately consistent
with the first quarter of fiscal 2002.

     COST OF SERVICES REVENUE. Cost of services revenue was $3.2 million for the
first quarter of 2002 and $1.0 million for the first quarter of 2001. Cost of
services revenue as a percentage of services revenue was 100 percent for the
first quarter of 2002 and 158 percent for the first quarter of 2001. The higher
cost of services revenue as a percentage of services revenue for the first
quarter of 2001 compared to the first quarter of 2002 was attributable to the
our initial costs to establish a support services department that was not yet
generating sufficient revenue to cover all related expenses. For the remainder
of fiscal 2002, we expect cost of services revenue as a percentage of services
revenue will remain approximately consistent with the first quarter of fiscal
2002.

OPERATING EXPENSES

     SALES AND MARKETING. Sales and marketing expenses were $8.4 million for the
first quarter of 2002 and $5.5 million for the first quarter of 2001. Sales and
marketing expenses represented 47 percent of total revenue for the first quarter
of 2002 and were 524 percent of total revenue for the first quarter of 2001. The
increase in the dollar amount of sales and marketing expense in the first
quarter of 2002 compared to the first quarter of 2001 was attributable to
increased personnel and related costs as a result of the acquisition of the
operations from Tarantella, increased spending related to the branding of
Caldera International and costs incurred for product launches. For the first
quarter of 2001, the high sales and marketing expense as a percentage of revenue
was attributed to lower than anticipated Linux revenue and increased spending in
anticipation of the completion of the Tarantella Acquisition.

     RESEARCH AND DEVELOPMENT. Research and development expenses were $5.4
million for the first quarter of 2002 and $1.9 million for the first quarter of
2001. Research and development costs represented 30 percent of total revenue for
the first quarter of 2002 and 177 percent of total revenue for the first quarter
of 2001. The increase in the dollar amount of research and development expenses
in the first quarter of 2002 compared to the first quarter of 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.

     GENERAL AND ADMINISTRATIVE. General and administrative expenses were $2.7
million for the first quarter of 2002 and $1.7 million for the first quarter of
2001. General and administrative

                                       16
<Page>

expenses represented 15 percent of total revenue for the first quarter of 2002
and 166 percent of total revenue for the first quarter of 2001. The increase in
general and administrative expenses in the first quarter of 2002 compared to the
first quarter of 2001 was primarily attributable to increased personnel and
related costs to support the expanded operations as a result of the acquisition
of the operations from Tarantella. Other increases in general and administration
expense were for increased professional services and facilities costs.

     AMORTIZATION OF INTANGIBLES. We recorded $0.8 million in non-cash
amortization in the first quarter of 2002 related to the amortization of
intangible assets in connection with the acquisition of the assets and
operations from Tarantella and the WhatIfLinux technology acquired from Acrylis,
Inc. During the first quarter of 2001, we did not have any intangible assets to
amortize.

     Effective November 1, 2001, we no longer amortize goodwill in accordance
with the adoption of SFAS No. 142.

         RESTRUCTURING CHARGE. During the first quarter of 2002, we recorded a
restructuring charge of $5.3 million related to worldwide corporate
restructurings. The restructuring primarily included severance related to a
reduction in personnel, the accrual of future lease payments related to the
elimination of permanently idle and non-essential portions of facilities and the
write-off of long-term assets and leasehold improvements. During the first
quarter of 2001, the Company did not have a restructuring charge.

     NON-CASH COMPENSATION. In connection with stock option grants made to
employees in prior years, we recorded non-cash compensation of $0.3 million for
the first quarter of 2002 and $0.3 million for the first quarter of 2001.

     COST-SHARING ARRANGEMENT WITH TARANTELLA, INC. After entering into the
reorganization agreement with Tarantella to acquire the server software and
professional services groups, we agreed to reimburse Tarantella for certain
employee payroll and related costs attributed to employees critical to our
future success. We recorded $0.6 million for the cost-sharing arrangement during
the first quarter of 2001. During the first quarter of 2002, we had no such
cost-sharing arrangement with Tarantella.

EQUITY IN LOSS OF AFFILIATE

     Until January 5, 2001, we had been accounting for our investment in Ebiz
Enterprises, Inc. ("Ebiz") using the equity method of accounting. Under the
equity method, we recognized our portion of the net income or net loss of Ebiz
in our consolidated statement of operations. During the first quarter of 2001 we
recognized $0.6 million related to our portion of Ebiz's net loss and the
amortization of the difference between our investment and the amount of
underlying equity in the net assets of Ebiz. Subsequent to January 5, 2001, the
investment in Ebiz was accounted for under the cost method, and since been
written down to $0.

OTHER INCOME (EXPENSE), NET

     Other income (expense), net, which consists principally of interest
expense, interest income and other income, was $(0.3) million for the first
quarter of 2002 and $1.0 million for the first quarter of 2001. Net other
expense for the first quarter of 2002 was primarily attributed to losses on the
disposal of property and equipment.

                                       17
<Page>

PROVISION FOR INCOME TAXES

     The provision for income taxes was $162,000 for the first quarter of 2002
and $27,000 for the first quarter of 2001. The provision for income taxes was
primarily related to earnings generated from foreign subsidiaries.

LIQUIDITY AND CAPITAL RESOURCES

     Since inception, we have funded our operations primarily through loans from
our major stockholder and through sales of common and preferred stock.

     As of January 31, 2002, we had cash and cash equivalents of $26.1 million
and working capital of $7.8 million. Our total cash and equivalents increased by
$3.7 million from October 31, 2001. This increase resulted from the sale of
available-for-sale securities of $5.9 million offset primarily by cash used in
operations.

     Our net cash used in operations during the three months ended January 31,
2002 was $2.4 million. Cash used in operations was primarily attributable to the
net loss of $11.0 million, of which $5.3 million related to restructuring
activities. Approximately $3.7 of the restructuring total represents cash
payments to be made in future periods. The net loss was partially offset by
non-cash expenses of $3.5 million and cash provided by changes in operating
assets and liabilities of $5.1 million. Cash used in operations has declined due
to our recent cost-cutting actions.

     Our investing activities have historically consisted of equipment
purchases, investing in strategic partners and the purchase and sale of
available-for-sale securities. During the three months ended January 31, 2002,
cash provided by investing activities was $5.9 million, which was generated from
the sale of available-for-sale securities.

     Our financing activities provided $0.3 million during the first quarter of
2002 as a result of the exercise of vested stock options and the purchase of
shares of common stock by our employees through the employee stock purchase
program.

     We do not engage in any off balance sheet financing arrangements.

     Our accounts receivable balance decreased from $16.7 million as of October
31, 2001 to $13.1 million as of January 31, 2002, primarily related to strong
collection efforts. The allowance for doubtful accounts was $0.5 million as of
January 31, 2002, which represented approximately four percent of the total
accounts receivable balance. Our write-offs of uncollectable accounts have not
been material. For the first quarter of 2002, days sales outstanding was 66
days, a decrease from 80 days for the fourth quarter of 2001.

     We generate revenue in Central and South America. Historically, revenue and
expenses in this region have not been significant. In recent months, the
economies of the countries of this region, Argentina in particular, have
experienced significant volatility. We have reviewed our sales to customers and
our accounts receivable from customers in this region and have established
reserves for potential bad debts as we believe appropriate. We believe our
overall exposure related to transactions in this region is not material.

     As of January 31, 2002, we had one outstanding debt obligation in the
amount of $8.0 million to Tarantella. This note is payable in four quarterly
installments starting in May 2002.

     We have entered into operating leases for our corporate offices located in
the United States and our international sales offices. We have commitments under
these leases that extend through fiscal 2008. In recent corporate restructuring
activities, we have partially vacated some of these facilities, but still have
contractual obligations to continue to make ongoing lease

                                       18
<Page>

payments that will use available cash. We have pursued and will pursue sublease
opportunities, as available, to minimize this use of cash; however, there can be
no assurance that we will be successful in eliminating or reducing cash
expenditures for these leases.

     The following table summarizes our contractual obligations as of January
31, 2002 (in thousands):

<Table>
<Caption>
                          NOTE       OPERATING
                         PAYABLE       LEASES       TOTAL
                         -------     ---------     -------
<S>                      <C>         <C>           <C>
Less than one year       $ 6,000      $ 4,803      $10,803
One to three years         2,000       11,487       13,487
Three or more years           --        4,096        4,096
                         -------      -------      -------
   Total payments        $ 8,000      $20,386      $28,386
                         =======      =======      =======
</Table>

     In connection with the acquisition from Tarantella, Tarantella agreed to
continue as the lessee for certain facilities in the UK. We are working with
Tarantella to complete the necessary assignment agreements so that Tarantella
will be the tenant and bear full financial responsibility for these leases. When
these assignments are complete, we believe that our UK subsidiary may be named
as a second guarantor, and may be liable under these lease obligations in the
event that Tarantella defaults. Future operating lease payments under these
leases extend through 2020 and total $11.2 million.

     We believe that our current liquidity position, including approximately
$26.1 million of cash and cash equivalents, will be sufficient to meet our
operating requirements for at least the next twelve months. We are continuing to
implement cost cutting measures in our efforts to achieve profitability.
However, there can be no assurance that we will be successful in achieving our
revenue and operating expense projections. Accordingly, we may be required to
obtain additional equity or debt funding to finance our operations. We cannot
provide any assurance that additional funding will be available in amounts or on
terms acceptable to us. If sufficient funds are not available or are not
available on acceptable terms, our operations could be adversely impacted and
our ability to fund expansion, take advantage of acquisition opportunities,
develop or enhance our products and services, or otherwise respond to
competitive or operational pressures could be significantly limited.

CRITICAL ACCOUNTING POLICIES

     Our critical accounting policies include the following:

          o    Revenue recognition;

          o    Impairment of long-lived assets; and

          o    Allowances for doubtful accounts and product returns.

     We recognize revenue in accordance with Statement of Accounting Position
("SOP") 97-2, as amended, and Staff Accounting Bulletin ("SAB") 101. Revenue
recognition in accordance with these pronouncements can be complex due to the
nature and variability of our sales transactions. We recognize product revenue
upon shipment if a signed contract exists, the fee is fixed and determinable,
collection of resulting receivables is probable and product returns are
reasonably estimable, except for sales to distributors, which are recognized
upon sale by the distributor to resellers or end users. For contracts involving
multiple elements (i.e. delivered and undelivered products, maintenance and
other services), we allocate revenue to each component of the contract based on
objective evidence of its fair value, which is specific to us. The fair value of
each

                                       19
<Page>

element is based on the price if sold separately. We recognize revenue allocated
to undelivered products when the criteria for product revenue set forth above
have been met.

     We recognize revenue from maintenance fees for ongoing customer support and
product updates ratably over the period of the maintenance contract. Payments
for maintenance fees are generally made in advance and are non-refundable. For
revenue allocated to education and consulting services or derived from the
separate sale of such services, we recognize revenue as the related services are
performed. We recognize product revenue from royalty payments upon receipt of
quarterly royalty reports from OEMs related to their product sales.

     Further implementation guidelines relating to SOP 97-2 and related
modifications may result in unanticipated changes in our revenue recognition
practices and such changes could significantly affect our future revenue and
results of operations.

     We review our long-lived assets for impairment when events or changes in
circumstances indicate that the book value of an asset may not be recoverable.
We evaluate, at each balance sheet date, whether events and circumstances have
occurred which indicate possible impairment. The carrying value of a long-lived
asset is considered impaired when the anticipated cumulative undiscounted cash
flows of the related asset or group of assets is less than the carrying value.
In that event, a loss is recognized based on the amount by which the carrying
value exceeds the estimated fair market value of the long-lived asset.

     Subsequent to the acquisition of certain assets and operations from
Tarantella, we 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 indicated the recorded values of the long-lived assets
were impaired. As a result, we performed a valuation of our long-lived assets as
of October 31, 2001 and concluded that a $73.7 million write-down of goodwill
and intangible assets was necessary. As a result of this write-down, at January
31, 2002, we have a net remaining balance for intangible assets of $14.6 million
and a net remaining balance for goodwill of $2.3 million.

     Had different assumptions or criteria been used to evaluate and measure the
impairment, the amount of the impairment write-off could have been materially
different than the $73.7 million recorded. Further write downs of goodwill and
intangibles may be necessary if the future undiscounted cash flows of these
assets are less than the carrying value.

     We offer credit terms on the sale of our products to a significant majority
of our customers and require no collateral from these customers. We perform
ongoing credit evaluations of our customers' financial condition and maintain an
allowance for doubtful accounts receivable based upon our historical collection
experience and expected collectibility of all accounts receivable. We also
maintain an allowance for estimated returns based on our historical experience.
Our actual bad debts and returns may differ from our estimates and the
differences may be material.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FOREIGN CURRENCY RISK

     We have many foreign offices and operations primarily in Europe and Asia.
As a result, a substantial portion of our revenue is derived from sales to
customers outside the United States. Most of this international revenue is
denominated in U.S. dollars. However, a substantial portion of the operating
expenses related to the foreign-based sales are denominated in foreign
currencies and therefore operating results are affected by changes in the U.S.
dollar exchange rate in relation

                                       20
<Page>

to foreign currencies such as the U.K. pound sterling and the Euro, among
others. If the U.S. dollar weakens compared to the U.K. pound sterling and the
Euro, our operating expenses of foreign operations will be higher when
translated back into U.S. dollars and additional funds may be required to meet
these obligations. Our revenue can also be affected by general economic
conditions in the United States, Europe and other international markets. Our
results of operations may be affected in the short term by fluctuations in
foreign currency exchange rates or general economic conditions. Historically,
these amounts have not been significant.

INTEREST RATE RISK

     The primary objective of our cash management strategy is to invest
available funds in a manner that assures maximum safety and liquidity and
maximizes yield within such constraints. We do not borrow money for short-term
investment purposes.

INVESTMENT RISK

     We have invested in equity instruments of privately held and public
companies in the high-technology industry for business and strategic purposes.
Investments in privately held companies are included under the caption `other
assets' in the consolidated balance sheet and are accounted for under the cost
method if our ownership is less than 20 percent and we are not able to exercise
influence over operations. Our only investment to date in a public company is in
Ebiz Enterprises, Inc. Our investment policy is to regularly review the
assumptions and operating performance of these companies and to record
impairment losses when events and circumstances indicate that these investments
may be impaired.

     The stock market in general, and the market for shares of technology
companies in particular, has experienced extreme price fluctuations. In
addition, factors such as new product introductions by our competitors and us
may have a significant impact on the market price of our common stock.
Furthermore, quarter-to-quarter fluctuations in our results of operations caused
by changes in customer demand may have a significant impact on the market price
of our stock. These conditions could cause the price of our stock to fluctuate
substantially over short periods of time.

RISK FACTORS

WE ARE A NEW COMPANY WITH A LIMITED OPERATING HISTORY, WHICH MAY MAKE IT
DIFFICULT FOR YOU TO ASSESS THE RISKS RELATED TO OUR BUSINESS.

     Although we began operations in 1994, during the past 24 months we have
substantially revised our business plan, made additions to our product lines,
hired a significant number of new employees, including key members of our
management team, and completed two acquisitions. As a company in a new and
rapidly evolving industry, we face risks and uncertainties relating to our
ability to successfully implement our strategy. You must consider the risks,
expenses and uncertainties that a company like ours, operating with an unproven
business model, faces in a new and rapidly evolving market such as the market
for Linux and UNIX software. These risks also include our ability to:

     o    broaden awareness of the Caldera brand;

     o    maintain our current, and develop new, strategic relationships with
          technology partners and solution providers;

     o    continue to develop and upgrade product offerings tailored for
          business;

     o    respond effectively to competitive pressures; and

                                       21
<Page>

     o    generate revenue from the sale of our software products, services,
          education programs and training.

     If we cannot address these risks and uncertainties or are unable to execute
our strategy, we may not be successful.

WE HAVE NOT BEEN PROFITABLE AND WE EXPECT OUR LOSSES TO CONTINUE.

     We have not been profitable. The operations recently acquired from
Tarantella have not recently been profitable and their revenue has been
declining. If our revenue declines or grows at a slower rate than anticipated or
we are unable to efficiently reduce operating expenses, we may not achieve or
sustain profitability or generate positive cash flow. For the three months ended
January 31, 2002, we incurred a net loss of $11.0 million. We may find it
necessary to accelerate expenditures relating to product development and support
and our sales and marketing efforts beyond our current expectations or otherwise
increase our financial commitment to creating and maintaining brand awareness
among potential customers. If we are unable to achieve positive cash flow from
operations, we will not be able to implement our business plan without
additional funding, which may not be available to us.

OUR PRODUCT AND SERVICE OFFERINGS MAY NOT BE ACCEPTED.

     We face risks and uncertainties relating to our ability to successfully
implement our strategy. 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.
There is no current market for business solutions combining both Linux and
UNIX-based products and services. At present, the business community favors
Microsoft and other non-Linux operating systems. Our success will depend on
market acceptance of the products we currently offer and the development of
additional products that are accepted by the market.

     In order for our product offering to be accepted we must:

     o    broaden awareness of the Caldera brand;

     o    maintain our current, and develop new, strategic relationships with
          technology partners and solution providers;

     o    continue to develop and upgrade product offerings tailored for
          business; and

     o    respond effectively to competitive pressures.

YOU SHOULD NOT RELY ON OUR QUARTERLY OPERATING RESULTS AS AN INDICATION OF OUR
FUTURE RESULTS. FLUCTUATIONS IN OUR OPERATING RESULTS OR THE FAILURE OF OUR
OPERATING RESULTS TO MEET THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS AND
INVESTORS MAY NEGATIVELY IMPACT OUR STOCK PRICE.

     Fluctuations in our quarterly operating results or our failure to meet the
expectations of analysts or investors, even in the short-term, could cause our
stock price to decline. You should not rely on quarter-to-quarter comparisons of
our results of operations as an indication of future performance. Factors that
may affect our quarterly results include:

     o    the interest level of resellers in recommending our Linux and UNIX
          business solutions to end users;

     o    the introduction, development, timing, competitive pricing and market
          acceptance of our products and services and those of our competitors;

                                       22
<Page>

     o    changes in general economic conditions, such as recessions, that could
          affect capital expenditures and recruiting efforts in the software
          industry in general and in the Linux environment in particular; and

     o    changing business attitudes toward Linux and UNIX as viable operating
          systems compared to other competing systems.

     We also experience fluctuations in operating results in interim periods in
Europe and the Asia Pacific regions due to seasonal slowdowns and economic
conditions in these areas. These periods typically occur during the summer
months.

     As a result of the factors listed above and elsewhere, it is possible that
our results of operations may be below the expectations of public market
analysts and investors in any particular period. This could cause our stock
price to decline. If revenue falls below our expectations and we are unable to
quickly reduce our spending in response, our operating results would be lower
than expected and our stock price may fall.

WE RELY ON OUR INDIRECT SALES CHANNEL FOR DISTRIBUTION OF OUR PRODUCTS, AND ANY
DISRUPTION OF OUR CHANNEL AT ANY LEVEL COULD ADVERSELY AFFECT THE SALES OF OUR
PRODUCTS.

     We have a two-tiered distribution channel. The relationships we have
developed with resellers allow us to offer our Linux and UNIX products and
services to a much larger customer base than we would otherwise be able to reach
through our own direct sales and marketing efforts. Some electronic solution
providers also purchase solutions through our resellers, and we anticipate they
will continue to do so as we expand our product offerings. Because we usually
sell indirectly through resellers, we cannot control the relationships through
which solution providers or equipment integrators purchase our products. In
turn, we do not control the presentation of our products to end-users.
Therefore, our sales could be affected by disruptions in the relationships
between our resellers and electronic solution providers or between electronic
solution providers and end users. Also, resellers and electronic solution
providers may choose not to emphasize our products to their customers. Any of
these occurrences could diminish the effectiveness of our distribution channel
and lead to decreased sales.

OUR BUSINESS MODEL, WHICH RELIES ON A COMBINATION OF OPEN SOURCE SOFTWARE AND
PROPRIETARY TECHNOLOGY, IS UNPROVEN.

     Our business model incorporates as integral elements of our product
offerings both commercial products and open source software. We know of no
company that has built a profitable business based in whole or in part on open
source software. By incorporating open source components in our product
offerings, we face many of the same risks that other open source companies
experience, including the inability to offer warranties and indemnities on
products and services. The open source components included in our products are
available for free from other sources. In addition, by including proprietary
technology in our products that is not freely downloadable we may run counter to
the perception of Linux as an open source model and may alienate the Linux
community. Negative reaction such as this, if widely shared by our customers,
developers or the open source community, could harm our reputation, diminish our
brand and decrease our revenue. Our business will fail if we are unable to
successfully implement our business model.

     Our business model also depends upon incorporating contributions from the
open source community into our products. The viability of our product offerings
depends upon the efforts of the open source community in enhancing products and
making them compatible for use across multiple software and hardware platforms.
There are no guarantees that the open source community will embrace these
products such that programmers will contribute sufficient resources for their
development. If the open source community does not embrace products that we
view as integral to providing eBusiness solutions, we will be required to
devote significant resources to develop these products on our own.

                                       23
<Page>

WE RELY ON INDEPENDENT DEVELOPERS IN THE OPEN SOURCE COMMUNITY, SUCH AS LINUS
TORVALDS, IN ORDER TO RELEASE UPGRADES OF OUR LINUX-BASED PRODUCTS.

     Many of the components of our software products, including the Linux
kernel, the core of the Linux operating system, are developed by independent
developers in the open source community and are available for inclusion in our
products without cost. Linus Torvalds, the original developer of the Linux
kernel, and a small group of independent engineers have in the past developed
and upgraded the Linux kernel. Neither Mr. Torvalds nor any significant
contributor to the Linux kernel is an employee of ours, and none of these
individuals are required to further update the Linux kernel. If these
independent developers and others in the open source community do not further
develop the Linux kernel and other open source software included in our products
on a timely basis, or at all, our ability to enhance our product offerings will
suffer. As a consequence, we will be forced to rely to a greater extent on our
own development efforts or license commercial software products as replacements,
which would increase our expenses and delay enhancements to our products. For
example, in the past we have sometimes been unable to upgrade all open source
components of a product in connection with a proposed release because these
independent developers had not yet made enhancements. Any failure on the part of
the kernel developers to further develop and enhance the kernel could also
stifle the development of additional Linux applications.

IF THE MARKET FOR LINUX BUSINESS SOLUTIONS DOES NOT GROW AS WE ANTICIPATE, WE
MAY NOT BE ABLE TO GROW OUR BUSINESS.

     Our strategy for marketing Linux solutions to businesses depends in part
upon our belief that many businesses will follow a trend away from the use of
networked computers linked by centralized servers and move toward the use of
distributed applications through the internet. We also are relying on electronic
solution providers making these technologies available on Linux and Linux then
becoming a desirable operating system under these circumstances. However, if
businesses, which at present favor Microsoft and other non-Linux operating
systems, do not adopt these trends in the near future, or if Linux is not viewed
as a desirable operating system in connection with these trends, a significant
market for our products may not develop. Factors that may keep businesses from
adopting these trends include:

     o    costs of installing and implementing new hardware devices;

     o    costs of porting legacy systems into new platforms;

     o    security concerns regarding manipulation of data through application
          service providers;

     o    limited adoption of Linux among businesses generally;

     o    lack of adequate Linux-trained professionals and support services; and

     o    lack of standards among Linux products and applications.

     Even if these trends toward distributed applications are adopted, if the
development of Linux products and Linux applications is not sufficient, a
significant market for Linux business solutions such as ours may not
materialize.

                                       24
<Page>

WE OPERATE IN A HIGHLY COMPETITIVE MARKET AND FACE SIGNIFICANT COMPETITION FROM
A VARIETY OF CURRENT AND POTENTIAL SOURCES, INCLUDING RED HAT AND SUN
MICROSYSTEMS; MANY OF OUR CURRENT AND POTENTIAL COMPETITORS HAVE GREATER
FINANCIAL AND TECHNICAL RESOURCES THAN WE DO; THUS, WE MAY FAIL TO COMPETE
EFFECTIVELY.

     Our principal competitors in the Linux market include Red Hat, Sun and
SuSe. In addition, due to the open source nature of Linux, anyone can freely
download Linux and many Linux applications and modify and re-distribute them
with few restrictions. For example, solution providers upon whom we depend for
the distribution of our products could instead create their own Linux solutions
to provide to their customers. Also, established companies and other
institutions could easily produce competing versions of Linux software.

     In the Intel UNIX operating system market, our competitors include
Microsoft, Hewlett Packard and Sun. Linux and Windows 2000 are aggressively
seeking after the current UNIX operating system market.

     Additionally, we have a number of competitors outside the Linux market that
offer server products that are more established than ours. Many of these
competitors have access to greater resources that we do. More recently, the
major competitive alternative to our UNIX and Linux products is Microsoft's NT.
While we believe that our server products retain a competitive advantage in a
number of targeted application areas, the expansion of Microsoft's and our other
competitors' offerings may restrict the overall market available for our server
products, including some markets where we have been successful in the past.

OUR FOREIGN-BASED OPERATIONS AND SALES CREATE SPECIAL PROBLEMS, INCLUDING THE
IMPOSITION OF GOVERNMENTAL CONTROLS AND FLUCTUATIONS IN CURRENCY EXCHANGE RATES
THAT COULD HURT OUR RESULTS.

     We have foreign operations, including development facilities, sales
personnel and customer support operations in Europe, Latin America and Southeast
Asia. These foreign operations are subject to certain inherent risks, including:

     o    potential loss of developed technology through piracy,
          misappropriation, or more lenient laws regarding intellectual property
          protection;

     o    imposition of governmental controls, including trade restrictions;

     o    fluctuations in currency exchange rates and economic instability;

     o    longer payment cycles for sales in foreign countries;

     o    difficulties in staffing and managing the foreign operations;

     o    seasonal reductions in business activity in the summer months in
          Europe and other countries; and

     o    political unrest, particularly in areas in which we have facilities.

     In addition, certain operating expenses will be denominated in local
currencies, creating risk of foreign currency translation losses that could harm
our financial results and cash flows. If we generate profits or losses in
foreign countries, our effective income tax rate could also be increased.

     In Latin America and Southeast Asia in particular, several countries have
suffered and may be especially susceptible to recessions and economic
instability which may lead to increased governmental ownership or regulation of
the economy, higher interest rates, increased barriers to

                                       25
<Page>

entry such as higher tariffs and taxes, and reduced demand for goods
manufactured in the United States resulting in lower revenue.

WE ARE VULNERABLE TO CLAIMS THAT OUR PRODUCTS INFRINGE THIRD-PARTY INTELLECTUAL
PROPERTY RIGHTS, PARTICULARLY BECAUSE OUR PRODUCTS ARE COMPRISED OF MANY
DISTINCT SOFTWARE COMPONENTS DEVELOPED BY THOUSANDS OF INDEPENDENT PARTIES.

     We may be exposed to future litigation based on claims that our products
infringe the intellectual property rights of others. This risk is exacerbated by
the fact that most of the code in our products is developed by independent
parties over whom we exercise no supervision or control and who, themselves,
might not have the same financial resources as us to pay damages to a successful
litigant. Claims of infringement could require us to re-engineer our products or
seek to obtain licenses from third parties in order to continue offering our
products. In addition, an adverse legal decision affecting our intellectual
property, or the use of significant resources to defend against this type of
claim could place a significant strain on our financial resources and harm our
reputation.

OUR COMPETITIVE POSITION COULD DECLINE IF WE ARE UNABLE TO OBTAIN ADDITIONAL
FINANCING TO ACQUIRE BUSINESSES OR TECHNOLOGIES THAT ARE STRATEGIC FOR OUR
SUCCESS, OR OTHERWISE EXECUTE OUR BUSINESS STRATEGY, OR IF WE FAIL TO
SUCCESSFULLY INTEGRATE ANY ACQUISITIONS WITH OUR CURRENT BUSINESS.

     We believe that our current cash and cash equivalents will be sufficient to
fund our working capital and capital expenditure requirements for at least the
next twelve months. However, we may need to raise additional funds to support
more rapid expansion, respond to competitive pressures, acquire complementary
businesses or technologies or respond to unanticipated requirements. We cannot
assure you that additional funding will be available to us in amounts or on
terms acceptable to us. If sufficient funds are not available or are not
available on acceptable terms, our ability to fund our expansion, take advantage
of acquisition opportunities, develop or enhance our services or products, or
otherwise respond to competitive pressures would be significantly limited.

     If appropriate opportunities arise, we intend to acquire businesses,
technologies, services or products that we believe are strategic for our
success. The market for eBusiness solutions for Linux and UNIX products is new
and rapidly evolving and our competitive position could decline if we are unable
to identify and acquire businesses or technologies that are strategic for our
success in this market.

THE GROWTH OF OUR BUSINESS WILL BE DIMINISHED IF THE INTERNET IS NOT ACCEPTED AS
A MEDIUM FOR COMMERCE AND BUSINESS NETWORKING APPLICATIONS.

     An important part of our business strategy is to develop and market our
products for the support of secure business networks hosted on the internet. In
addition, we plan to sell our products and provide a significant amount of
technical support and education via our website. If the internet is not accepted
as a medium for commerce and business networking applications, demand for our
products and services will be diminished. A number of factors may inhibit
Internet usage, including:

     o    inadequate network infrastructure;

     o    lack of knowledge and training on internet use and benefits;

     o    consumer concerns for internet privacy and security;

     o    lack of availability of cost-effective, high-speed service;

                                       26
<Page>

     o    interruptions in internet commerce caused by unauthorized users;

     o    changes in government regulation relating to the internet; and

     o    internet taxation.

     If internet usage grows, the infrastructure may not be able to support the
demands placed on it by that growth and its performance and reliability may
decline. Websites have experienced interruptions as a result of delays or
outages throughout the internet infrastructure. If these interruptions continue,
internet usage may decline.

THE IMPACT OF DOMESTIC AND GLOBAL ECONOMIC CONDITIONS MAY ADVERSELY IMPACT OUR
OPERATIONS.

     During the last several quarters the U.S. economy has experienced an
economic slowdown that has affected the purchasing habits of many consumers
across many industries and across many geographies. This has caused the delay,
or even cancellation of technology purchases. The impact of the slowdown in the
United States is difficult to predict, but may result in decreased sales of our
products, longer sales cycles and lower prices. As a result, if the current
slowdown continues, our revenue and results of operations may be lower than
expected. In addition, the slowdown may also affect the end-user market making
it more difficult for our reseller channel to sell our products.

     Our operations are vulnerable to fires, earthquakes, power loss,
telecommunications failure, and other events outside our control. The occurrence
of any one of these events may have a material adverse impact on our results of
operations.

THE APPROVAL BY OUR STOCKHOLDERS OF A FOUR-FOR-ONE REVERSE STOCK SPLIT MAY
ADVERSELY EFFECT OUR STOCK PRICE AND RESULT IN INCREASED VOLATILITY OF OUR STOCK
PRICE.

     On March 4, 2001, our stockholders approved a four-for-one reverse stock
split of our common stock. Theoretically, the overall value of the Company will
not change as a result of the reverse stock split so that reducing the number of
shares outstanding by a factor of four would increase the per share price by a
value of four. However, a reverse stock split is often viewed negatively by the
market and, consequently, can lead to a decrease in the overall market
capitalization of the Company. As a result, there is no mathematical certainty
as to the increase in the price per share that might be expected as a result of
the reverse stock split, and there can be no assurance that the per share price
will increase proportionately to the reverse stock split. If the per share price
increases by a factor less than the four-for-one reverse stock split, then our
overall market capitalization will be reduced.

     The reverse stock split will reduce our outstanding common stock to
approximately 14.4 million shares. Of this amount, approximately 10.5 million
shares are held by officers, directors, and stockholders owning in excess of 10
percent of the outstanding common stock. This results in approximately 3.9
million shares held in the public float. This reduced number of shares could
result in decreased liquidity in the trading market and potential mismatches
between supply and demand in the market for the common stock at any given time,
which could result in changes in the trading price unrelated to our activities
or prospects.

FUTURE SALES OF OUR COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK PRICE.

     The market price of our common stock could decline as a result of sales of
a large number of shares of our common stock in the market, or the perception
that such sales could occur. 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

                                       27
<Page>

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.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     In September and October 2001, Caldera was named as a defendant in three
different actions 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. During the first quarter of 2001, the Company
believes that two of those matters have settled, but final settlement documents
have not yet been completed. The remaining matter remains in discovery stage,
and the parties are discussing settlement options.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          None.

     (b)  Reports on Form 8-K

          None

ITEM 7. SIGNATURES

     Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Date: March 15, 2002                    CALDERA SYSTEMS, INC.

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


                                       28