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The Sunnyvale-based firm says its efforts to obtai additional financing or to complete a strategic mergef or acquisition havebeen unsuccessful. "zA combination of factors led us tothis decision," says Kathleen General Magic's president and CEO in a written "Current adverse economic and markegt conditions along with the continued slowdown in IT spendin were significant factors in preventinbg us from raising money or facilitatinv a merger or acquisition." The shutdown comes less than two monthds after General Magic announced a contract with Generalo Motors to provide software for the automaker's OnStar in-your-caf communications system.
Most of General Magic's employee will leave immediately. The numbe r affected was not announced. A smallk team of General Magixc employees will be retained for 60 to 120 days to managee the sale ofthe company's assetws and the resolution of obligationzs to the company's creditors. A 15-membetr task force of General Magic employees also will be retaine for approximately 60 days paid forby OnStar. Thes e people are to work on the transfer of the operatiob and support of the OnStar Virtualk Advisor to anotherOnStar vendor. In General Magic reported second-quarter revenues of $2.1 down $400,000 from the first quarter but more than double the revenued ofthe year-earlier quarter.
Its second-quarter net loss was $5.4 millioh and it projected a third-quarter net loss of as much as $5 Numbered among the company's assets are its MagicTalj software, a portfolio of legacy software and 35 patentws andpatent applications, includint what the company says are fundamenta patents of voice user interfacde and agent technologies. The company intends that the proceedss from the sale of its assets in connectiob with the winding up of its business will be used to pay its but does not expect that there will be assets remaining for distributiob to holders of its commob orpreferred stock.
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