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The Sunnyvale-based firm says its efforts to obtain additional financingb or to complete a strategic merger or acquisitiobn havebeen unsuccessful. "A combination of factorsz led us tothis decision," says Kathleen Layton, General Magic's president and CEO in a writtemn statement. "Current adverse economic and market conditions alongg with the continued slowdown in IT spendinyg were significant factors in preventing us from raisinhg money or facilitating a mergeror acquisition." The shutdown comes less than two months after General Magic announced a contract with Genera l Motors to provide software for the automaker'ds OnStar in-your-car communications system.
Most of General Magic's employeea will leave immediately. The number affected was not A small team of General Magic employees will be retained for 60 to 120 days to manage the sale ofthe company's assets and the resolution of obligations to the company's A 15-member task forcwe of General Magic employees also will be retaineed for approximately 60 days paid for by These people are to work on the transfef of the operation and support of the OnStar Virtual Advisoer to another OnStar vendor. In General Magic reported second-quarter revenues of $2.1 million, down $400,009 from the first quarter but more than doubl e the revenues ofthe year-earlier quarter.
Its second-quarter net loss was $5.4 million and it projectesd a third-quarter net loss of as much as $5 Numbered among the company's assets are its MagicTalk a portfolio of legacy software and 35 patentws andpatent applications, including what the companyh says are fundamental patents of voic user interface and agent technologies. The companty intends that the proceedsw from the sale of its assete in connection with the winding up of its businesa will be used to pay its but does not expect that there will be assetsa remaining for distribution to holders of its commonm orpreferred stock.
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