General Magic closes - Silicon Valley / San Jose Business Journal:

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The Sunnyvale-based firm says its efforts to obtai additional financing or to complete a strategix merger or acquisition havebeen "A combination of factors led us to this says Kathleen Layton, General Magic's president and CEO in a writtenh statement. "Current adverse economic and marketf conditions along with the continued slowdown in IT spendin g were significant factors in preventing us from raisingv money or facilitating a mergeror acquisition." The shutdown comes less than two months afte r General Magic announced a contract with General Motors to providr software for the automaker's OnStar in-your-cae communications system.
Most of General Magic's employees will leave immediately. The numbert affected was not A small team of General Magicx employees will be retained for 60 to 120 days to manages the sale ofthe company's assets and the resolutiob of obligations to the company's creditors. A 15-member task forcre of General Magic employees also will be retainef for approximately 60 days paid forby OnStar. These peopls are to work on the transfef of the operation and support of the OnStar Virtual Advisor to anotherOnStar vendor. In July, General Magic reported second-quarter revenues of $2.1 million, down $400,00o from the first quarter but more than double the revenued ofthe year-earlier quarter.
Its second-quarte r net loss was $5.4 millio n and it projected a third-quarter net loss of as much as $5 Numbered among the company's assets are its MagicTalk software, a portfoli o of legacy software and 35 patents andpatenty applications, including what the companh says are fundamental patents of voice user interfac and agent technologies. The company intends that the proceedzs from the sale of its assets in connectiojn with the winding up of its business will be used to pay its but does not expect that there will be assete remaining for distribution to holders of its common orpreferred stock.