Back to GetFilings.com

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934        

For the fiscal year ended December 31, 2002

¨    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE        

SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-26387

BE INCORPORATED

(Exact name of Registrant as specified in its charter)

655 West Evelyn Avenue, Suite 6, Mountain View, California 94041

(Address of principal executive offices, including zip code)

(650) 965-4842

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $0.001 PAR VALUE

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 such filing requirements for the past 90 days.  Yes  þ  No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).  Yes  ¨  No  þ

The approximate aggregate market value of the Common Stock held by non-affiliates of the Registrant, based upon the last sale price of the Common Stock reported on the Nasdaq National Market, as of March 15, 2002 (the effective date of filing of the Company’s Certificate of Dissolution with the Delaware Secretary of State, and the delisting of the Company’s stock from the Nasdaq National Market), was approximately $5,383,074.

The number of shares of Common Stock outstanding as of March 15, 2002 was 38,450,527.

Table of Contents

BE INCORPORATED

FORM 10-K ANNUAL REPORT

FOR THE FISCAL YEAR ENDED

DECEMBER 31, 2002

Table of Contents

2

Table of Contents

PART I

ITEM 1.    BUSINESS

BUSINESS OF BE INCORPORATED

THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE PURSUANT TO THE PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY’S BUSINESS, MANAGEMENT’S BELIEFS AND ASSUMPTIONS MADE BY MANAGEMENT. WORDS SUCH AS “ANTICIPATES,” “EXPECTS,” “INTENDS,” “PLANS,” “BELIEVES,” “SEEKS,” “ESTIMATES,” “LIKELY” AND VARIATIONS OF SUCH WORDS AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT; THEREFORE, ACTUAL RESULTS AND OUTCOMES MAY DIFFER MATERIALLY FROM WHAT IS EXPRESSED OR FORECASTED IN ANY SUCH FORWARD-LOOKING STATEMENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE THOSE SET FORTH ABOVE UNDER “FACTORS AFFECTING OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION” AND ELSEWHERE IN THIS REPORT AS WELL AS THOSE NOTED IN OUR PUBLIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”). THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD- LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO THESE DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN THE SECTIONS TITLED “FACTORS AFFECTING OUR BUSINESS OPERATING RESULTS AND FINANCIAL CONDITION” AND “BUSINESS” UNDER ITEM 1 IN THIS ANNUAL REPORT ON FORM 10-K.

Be was founded in 1990 and prior to the cessation of its business operations offered software solutions designed for Internet appliances and digital media applications.

Prior to the cessation of business operations Be’s software solution products consisted of (i) BeIA: the Complete Internet Appliance Solution ^TM, comprised of three components: BeIA Client Platform, BeIA Management and Administration Platform and BeIA Integration Services; and (ii) BeOS, our operating system designed for digital media applications. Prior to 1998, Be had no revenues and our operations consisted primarily of research and development. In December 1998, Be shipped the first version of BeOS, our desktop operating system targeted primarily to end users. Prior releases of BeOS were targeted primarily to software developers. Having experienced losses and negative cash flow from operations since inception, in the latter half of 1999 we began a review of our BeOS desktop operating system business model and its potential to create stockholder value. As a result of the barriers to entry and intense competition in the market relevant to the BeOS operating system, the then anticipated market for the BeIA operating system and the limited resources available to Be for the development and marketing of its products, we announced our intention to shift our primary focus from the marketing and distribution of BeOS to the development, marketing and deployment of BeIA, our software solution intended for Internet appliances.

While we were initially successful in 2000 in rapidly entering the developing Internet appliance market, and our efforts culminated in the execution of a contract with Sony for its eVilla Network Entertainment Center in early 2001, the Internet appliance market as a whole unfortunately failed to materialize as anticipated. Despite our efforts in the Internet appliance market, Be’s financial difficulties continued and we were unable to generate revenues sufficient to meet operating expenses. In April and July of 2001, we substantially reduced our workforce and announced the elimination of our sales and marketing departments in order to conserve resources.

We undertook extensive activities since early 2000 to evaluate and pursue financing alternatives for the company to allow for its continuation and the creation of value for Be stockholders. We endeavored to obtain additional equity capital from numerous sources. Private placements with institutions, funds and private investors, equity lines of credit and private placements with strategic investors were all thoroughly investigated. By the end of March 2001, it was clear no adequate source of capital was available on terms beneficial to Be stockholders. Faced with this reality, our board of directors approved the exploration of strategic and financial alternatives for maximizing stockholder value. Alternatives considered included, but were not limited to, a merger or similar business combination, an equity investment by a strategic investor, or the sale of all or substantially all of the business or assets for stock or cash in a transaction of the type ultimately entered into with Palm, Inc. (“Palm”).

3

Table of Contents

Beginning in April 2001, we worked with professional financial advisors with the intent of maximizing the return of value to stockholders under the circumstances. We conducted an extensive search for potential interested parties, directly contacted a number of these parties and discussed with them a variety of possible transactions. As part of this effort, we held numerous discussions and negotiations with third parties, including Palm, in an effort to obtain financing necessary to the continuation or the potential sale of Be’s business. Except for the proposed transaction with Palm, these discussions did not result in any acceptable offers and during this period our financial resources continued to deteriorate.

On August 16, 2001, our Board of Directors unanimously adopted resolutions approving the sale of substantially all Be’s intellectual property and other technology assets (the “Asset Sale”) to ECA Subsidiary Acquisition Corporation, a Delaware corporation and an indirect wholly-owned subsidiary of Palm pursuant to an Asset Purchase Agreement dated August 16, 2001, as amended on September 10, 2001 (the “Purchase Agreement”). On October 9, 2001, we filed a definitive proxy statement soliciting stockholder approval for the Asset Sale and the dissolution of the Company pursuant to a plan of dissolution (the “Plan of Dissolution”). The Plan of Dissolution provides for the orderly liquidation of Be’s remaining assets, the winding-up of Be’s business and operations and the dissolution of the Company. In accordance with the terms of the Plan of Dissolution, Be will pay, or provide for the payment of, all of its liabilities and obligations following the approval of the Board to proceed with the liquidation and dissolution of the Company. If there are any remaining assets after the payment, or the provision for payment, of all of its liabilities and obligations, Be will then distribute such assets to its stockholders in one or more distributions.

At a special meeting of stockholders held on November 12, 2001, the stockholders of Be approved the Asset Sale and the Plan of Dissolution. The Asset Sale was completed on November 13, 2001. Under the terms of the Purchase Agreement, Be received an aggregate of 4,104,478 shares of Palm common stock valued at approximately $11,000,000 on the closing date of the transaction.

On January 16, 2002, we liquidated the vast majority of our remaining equipment and hard assets by selling our remaining inventory, equipment and other assets at auction. Proceeds from this sale as well as the consideration received from the sale of Palm stock received under the terms of the Purchase Agreement are owed to Be or are being held by the Company for distribution to stockholders in accordance with the Plan of Distribution.

Pursuant to the terms of the Asset Sale, we also retained certain rights, assets and liabilities in connection with the transaction, including our cash and cash equivalents, receivables, certain contractual liabilities under in-licensing agreements, and rights to assert and bring certain claims and causes of action, including under antitrust laws. On February 15, 2002, we engaged Susman Godfrey LLP on a contingency basis to bring forth claims against Microsoft Corporation for the destruction of Be’s business resulting from anticompetitive business practices. On February 19, 2002, we filed a lawsuit in the United States District Court in San Francisco alleging, among other things, Microsoft harmed Be through a series of illegal, exclusionary and anticompetitive acts designed to maintain its monopoly in the Intel-compatible PC operating system market and created exclusive dealing arrangements with PC OEMs prohibiting the sale of PCs with multiple preinstalled operating systems (the “Microsoft Litigation”). On August 21, 2002, the Judicial Panel on Multidistrict Litigation ordered the Microsoft Litigation transferred to the federal district court for the District of Maryland in Baltimore, to be coordinated by Judge Frederick Motz.

Following the approval of the Board to proceed with the liquidation and dissolution of the Company, on March 15, 2002 we filed a certificate of dissolution with the Delaware Secretary of State in accordance with the Plan of Dissolution approved by stockholders on November 12, 2001 and as set forth in the Definitive Proxy Statement filed with the Securities and Exchange Commission on October 9, 2001. We set a record date of March 15, 2002 (the “Record Date”) for purposes of determining the stockholders that will be eligible to participate in the distribution of Be’s assets, if any. Also on that day, we closed our stock transfer books and ceased recording transfers of shares of our Common Stock. We also voluntarily delisted from the Nasdaq National Market and our shares stopped trading on the Nasdaq beginning the next trading day following the filing of the certificate of dissolution.

Pursuant to Delaware law, Be will continue to exist for three years after the dissolution becomes effective or for such longer period as the Delaware Court of Chancery shall direct, solely for the purposes of prosecuting and defending lawsuits (including but not limited to pursuing its antitrust case against Microsoft), settling and closing its business in an orderly manner, disposing of any remaining property, discharging its liabilities and distributing to its stockholders any remaining assets, but not for the purpose of continuing any business. In accordance with the Plan of Dissolution, after payment in full of all claims finally determined to be due, we will make distributions of any remaining assets (including assets acquired after the Record Date), if any, only to stockholders of record as of the Record Date. The timing and amounts of any such distributions will be determined by our Board of Directors in accordance with the Plan of Dissolution. We may also establish a liquidating trust for the purpose of pursuing the Microsoft Litigation, liquidating the remaining assets of Be, paying or providing for the payment of Be’s remaining liabilities and obligations, and making distributions to Be’s stockholders, if any. If a liquidating trust is established, stockholders will receive beneficial interests in the assets transferred to the liquidating trust in proportion to the number of Be’s shares owned by such stockholders as of the Record Date.

4

Table of Contents

Employees

As of December 31, 2002, we had only one general and administrative employee, our President and General Counsel who remains with the Company in order to facilitate the wind up of the Company’s activities.

Available Information

We maintain a site on the world-wide web at www.beincorporated.com; however, information found on our website is not incorporated by reference into this report. We make available free of charge on or through our website our SEC filings, including our annual report of Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

FACTORS AFFECTING OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION

The following is a discussion of certain risks, uncertainties and other factors that currently impact or may impact our business, operating results and/or financial condition. Anyone evaluating us and making an investment decision with respect to our Common Stock or other securities is cautioned to carefully consider these factors, along with similar factors and cautionary statements contained in our filings with the Securities and Exchange Commission.

Our stockholders may be liable to our creditors for an amount up to the amount received from Be if our reserves for payments to creditors are inadequate.

Although we filed a certificate of dissolution on March 15, 2002 with the State of Delaware, Be will continue to exist for three years following this date or for such longer period as the Delaware Court of Chancery shall direct for the purpose of prosecuting and defending lawsuits and enabling Be to close its business, to dispose of its property, to discharge its liabilities and to distribute to its stockholders any remaining assets. Under Delaware law, in the event Be fails to create an adequate contingency reserve for payment of its expenses and liabilities during this period, each Be stockholder could be held liable for payment to Be’s creditors of such stockholder’s pro rata share of amounts owed to creditors in excess of the contingency reserve. The liability of any stockholder would be limited to the amounts previously received by such stockholder from Be (and from any liquidating trust or trusts). As a result, a stockholder could be required to return all distributions previously made to such stockholder and would receive no amounts from Be under the Plan of Dissolution. Moreover, in the event a stockholder has paid taxes on amounts previously received, a repayment of all or a portion of such amount could result in a stockholder incurring a net tax cost if the stockholder’s repayment of an amount previously distributed does not cause a commensurate reduction in taxes payable. Although Be intends to exercise caution in setting up its contingency reserve and making distributions to stockholders, there can be no assurance that the contingency reserve established by Be will be adequate to cover our expenses and liabilities.

Our stock transfer books were closed on March 15, 2002, the final record date, after which any trades will not be recorded by us.

We closed our stock transfer books and discontinued recording transfers of Common Stock at the close of business on March 15, 2002 (the “Record Date”), the date of effectiveness of the Certificate of Dissolution we filed with the Delaware Secretary of State. Thereafter, certificates representing our Common Stock will not be assignable or transferable on our books except by will, intestate succession or operation of law. Although our Common Stock currently trades on the “over-the-counter” securities market, the proportionate interests of our stockholders have been fixed on the basis of their respective stock holdings at the close of business on the Record Date, and, after the Record Date, any distributions made by us will be made solely to the stockholders of record at the close of business on the Record Date, except as may be necessary to reflect subsequent transfers recorded on our books as a result of any assignments by will, intestate succession or operation of law. For any other trades after the Record Date, the seller and purchaser of the stock will need to negotiate and rely on contractual obligations between themselves with respect to the allocation of stockholder proceeds arising from ownership of the shares.

5

Table of Contents

Our financial statements for the 2001 and 2002 fiscal years have not been audited.

We did not perform an audit of our fiscal 2001 or 2002 financials that were filed with our annual reports on Form 10-K. In order to further curtail expenses in connection with our wind-up and dissolution, we filed unaudited financial statements with our Form 10-K, as amended, for the 2001 fiscal year and again with our Form 10-K for the 2002 fiscal year. Because these financial statements were not audited by an outside auditor, such statements could be subject to change or the financial information included therein may be materially different from audited financial information. There can be no assurance that such changes or differences would not be significant. In addition, the fact that our 2001 and 2002 financial statements have not been audited could subject us to penalties or other sanctions, which could harm our shareholders.

Our stock was delisted from the Nasdaq National Market on March 15, 2002 and is significantly less liquid than before.

We voluntarily requested that our stock be delisted from trading on the Nasdaq Stock Market on March 15, 2002 due to the fact that we had ceased our business operations. Following delisting, the ability of stockholders to buy and sell our shares has been materially impaired, and is limited primarily to over-the-counter quotation services, such as Pink Sheets, that handle high-risk ventures and are not regulated by the Securities and Exchange Commission. There is no guarantee that our stock will continue to be quoted on over-the-counter markets. If we are unable to comply with the requirements for continued listing for over-the-counter markets such as the Pink Sheets, our stock may no longer be eligible for quotation on such services. For example, following our failure to timely file audited financial statements with our Annual Report on Form 10-K for the 2001 fiscal year, our stock was removed from quotation on the OTC Bulletin Board. The removal of our stock from quotation from regulated quotation services may further limit the liquidity of our Common Stock and impair stockholders’ ability to buy and sell our shares.

We cannot guarantee how much cash, if any, will be available to distribute to our stockholders and if there is cash to distribute, the timing of any such distribution.

There is currently no firm timetable for the distribution of proceeds to our stockholders because of contingencies inherent in winding up Be’s business. The proportionate interests of all of our stockholders will be fixed on the basis of their respective stock holdings at the close of business on the Record Date, and after such date, any distributions made by us will be made solely to stockholders of record on the close of business on the Record Date, except to reflect permitted transfers. We are, however, currently unable to predict the precise nature, amount or timing of any distribution to stockholders. The actual nature, amount and timing of all distributions will be determined by our Board of Directors, in its sole discretion.

Uncertainties as to the precise net value of our non-cash assets, the resolution of our outstanding claim against Microsoft Corporation and the ultimate amount of our debts and liabilities make it impracticable to predict the aggregate net value ultimately distributable to stockholders. Claims, liabilities and expenses from operations (including costs associated with the sale of our remaining assets and the settlement of our remaining liabilities, taxes, legal and accounting fees and miscellaneous office expenses) will continue to be incurred. These expenses will reduce the amount of cash available for ultimate distribution to stockholders. However, no assurances can be given that available cash and amounts received on the sale of assets will be adequate to provide for our obligations, liabilities, expenses and claims and to make cash distributions to stockholders. If such available cash and amounts received from the sale of assets are not adequate to provide for our obligations, liabilities, expenses and claims, we may not be able to distribute meaningful cash, or any cash, to our stockholders.

6

Table of Contents

The filing of the antitrust lawsuit against Microsoft or the engagement of legal counsel for that purpose does not guarantee that the outcome of the suit will be favorable for Be.

On February 15, 2002, Be engaged Susman Godfrey LLP on a contingency basis to bring forth claims against Microsoft Corporation for the destruction of Be’s business resulting from anticompetitive business practices. On February 19, 2002, we filed a lawsuit in the United States District Court in San Francisco alleging, among other things, Microsoft harmed Be through a series of illegal, exclusionary and anticompetitive acts designed to maintain its monopoly in the Intel-compatible PC operating system market and created exclusive dealing arrangements with PC OEMs prohibiting the sale of PCs with multiple preinstalled operating systems. On August 21, 2002, the Judicial Panel on Multidistrict Litigation ordered the lawsuit against Microsoft transferred to the federal district court for the District of Maryland in Baltimore, to be coordinated by Judge Frederick Motz. While Susman Godfrey was hired by Be to represent the company and to seek a recovery for the benefit of stockholders, Susman Godfrey does not directly represent the stockholders themselves, either individually or as a class. The filing of the antitrust lawsuit or the engagement of legal counsel for that purpose does not guarantee that the outcome of the suit will be in Be’s favor or that stockholders can assume that any distribution of proceeds will occur as a result of a settlement of the lawsuit or a judgment against Microsoft. In addition, we have engaged Susman Godfrey on a contingency basis such that any amounts collected as a result of a settlement of the lawsuit or a judgment against Microsoft would be divided between Be, for the benefit of its stockholders, and Susman Godfrey under the terms of the engagement letter entered into between the parties.

The proceeds from the sale of our remaining assets may be less than anticipated.

Sales of any remaining assets will be made on such terms as are approved by the Board of Directors and may be conducted by competitive bidding, public sales or privately negotiated sales. The prices at which we will be able to sell these assets will depend largely on factors beyond our control such as general market conditions. Because some of our remaining assets may decline in value over time, we may not be able to consummate the sale of these assets in time to generate meaningful value. In addition, we may not obtain as high a price for a particular asset as we might secure if we were not in liquidation.

We may be unable to negotiate settlements with respect to our remaining liabilities.

We are currently in the process of negotiating settlements with respect to our remaining obligations and liabilities which include, without limitation, tax obligations, claims by licensees, and contractual and trade payables with third parties including vendors and service providers. If we are unable to successfully negotiate termination of these obligations, we will have fewer cash proceeds to distribute to our stockholders.

If Be fails to retain the services of its remaining executive officer and Board members, the plan of dissolution may not succeed.

The success of the Plan of Dissolution depends in large part upon Be’s ability to retain the services of its current President and Board of Directors. For this reason, Be approved incentive arrangements with its President and the three remaining members of its Board of Directors. Despite these arrangements, the retention of qualified personnel is particularly difficult under Be’s current circumstances.

We may continue to incur the expense of complying with public company reporting requirements and the risk of not fully complying with such requirements.

We have an obligation to continue to comply with the applicable reporting requirements of the Securities Exchange Act of 1934, as amended, even though compliance with such reporting requirements is economically burdensome. We may face additional expenses or be forced to pay penalties if it is determined that we are not in compliance with reporting or other requirements.

The decline in the value of our stock and our resulting cessation of business operations and dissolution could give rise to securities class action claims against us, which could deplete any proceeds that may be distributed to stockholders.

Securities class action claims have been brought against companies in the past where the market price of the company’s securities has fallen due to an inability of the company to achieve operational profitability. Any such litigation could be very costly and divert our remaining resources from being available for distribution to our stockholders. Any adverse determination in this kind of litigation could also deplete our cash position, and reduce proceeds that would otherwise be distributed to our stockholders. In addition, in order to preserve proceeds for distribution to stockholders, we filed unaudited financial statements with its Annual Report on Form 10-K, as amended, for the 2001 fiscal year and with its Annual Report on Form 10-K for the 2002 fiscal year. As a result, we are not currently in compliance with the reporting requirements of the Securities Exchange Act of 1934, as amended, and our President cannot make certain certifications in connection with the filing of this periodic report as required by the Sarbanes-Oxley Act of 2002.

7

Table of Contents

ITEM 2.    PROPERTIES

The lease on our principal executive offices located in approximately 23,963 square feet of space in Menlo Park, California, expired on February 28, 2002. We now lease an office of approximately 400 square feet in Mountain View, California.

ITEM 3.    LEGAL PROCEEDINGS

Stockholder lawsuit

As previously disclosed in the Company’s filings with the Securities and Exchange Commission, in November 2000, our stock transfer agent, Wells Fargo Bank Minnesota, N.A., received a demand letter from Financial Square Partners, a Be stockholder, alleging damages resulting from the transfer agent’s failure to timely issue its stock certificates. While Be was not named as a party in such demand letter, Be was named as a party on the stockholder’s draft claim attached to the demand letter. On May 9, 2001, the claim was in fact filed in the Superior Court of California, naming Be and Wells Fargo Bank Minnesota, N.A. as defendants, seeking damages in the amount of approximately $2.4 million. A settlement was reached in May 2002 whereby the Company agreed to pay FSP an amount less than the Company’s insurance deductible of $250,000, and the case was subsequently dismissed.

Antitrust lawsuit

On February 15, 2002, Be engaged Susman Godfrey LLP on a contingency basis to bring forth claims against Microsoft Corporation for the destruction of Be’s business resulting from anticompetitive business practices. On February 19, 2002, the Company filed a lawsuit in the United States District Court in San Francisco alleging, among other things, Microsoft harmed Be through a series of illegal, exclusionary and anticompetitive acts designed to maintain its monopoly in the Intel-compatible PC operating system market and created exclusive dealing arrangements with PC OEMs prohibiting the sale of PCs with multiple preinstalled operating systems. On August 21, 2002, the Judicial Panel on Multidistrict Litigation ordered the lawsuit against Microsoft transferred to the federal district court for the District of Maryland in Baltimore, to be coordinated by Judge Frederick Motz.

Be is seeking recovery of an unspecified amount of damages for the benefit of the company and its stockholders.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fiscal year ending December 31, 2002.

8

Table of Contents

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information for Common Stock

Our Common Stock was traded on the Nasdaq National Market (“NNM”) under the symbol “BEOS” from July 19, 1999 to March 15, 2002. On March 15, 2002, we voluntarily delisted from the NNM and our shares stopped trading on the NNM effective March 18, 2002. The following table shows, for the periods indicated, the high and low per share prices of Common Stock, as reported on the NNM. Such prices represent prices between dealers, do not include retail mark-ups, mark-downs or commissions and may not represent actual transactions.

On March 15, 2002, the closing price of our Common Stock as listed on the NNM was $ 0.14 per share. Since March 18, 2002, our Common Stock has traded on “over-the-counter” securities markets such as the “Pink Sheets” market.

Stockholders

As of March 15, 2002, the date we closed our transfer books, we had approximately 335 record holders of our Common Stock.

Dividend Policy

We have never declared or paid cash dividends on our capital stock. We do not anticipate paying any cash dividends on our capital stock in the foreseeable future; however, in the event liquidation proceeds are distributed to stockholders, such proceeds may be distributed in the form of a cash dividend pursuant to the Plan of Dissolution approved by stockholders on November 12, 2001.

Recent Sales of Unregistered Securities

None

9

Table of Contents

ITEM 6.    SELECTED FINANCIAL DATA

The tables that follow present portions of our unaudited consolidated financial statements and are not complete. You should read the following selected financial information in conjunction with our Unaudited Consolidated Financial Statements and related Notes and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report. The historical results presented below are not necessarily indicative of the results to be expected for any future fiscal year. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Management has made estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related footnotes. Application of certain accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In preparing these unaudited financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. Due to the dissolution of the Company and the cessation of our business operations, we believe that the affect of certain accounting policies related to our business operations and our results of operations may no longer be material going-forward. However, it is our belief that certain accounting policies related to our 2002 financial statements remain important to an understanding of our remaining liquidation efforts and the results for the fiscal year 2002.

Consolidated Statement of Net Assets in Liquidation (Unaudited):

Consolidated Statement of Changes in Net Assets in Liquidation (Unaudited):

10

Table of Contents

Consolidated Balance Sheet Data (Unaudited):

Consolidated Statement of Operations Data: