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Tech Industry, merge in stock swap

    What do two similar dot-coms do when their stocks are miles from 52-week highs and hovering around $1? Merge.

    Internet communications services companies JFAX.COM (Nasdaq: JFAX) and (Nasdaq: EFAX) said on Friday they had signed a definitive merger deal.

    JFAX closed at 1 1/2 Thursday, off from a 52-week high of 10 5/16, and eFax closed at 1 1/32, off its high of 19 1/2 for the year. EFax was running low on cash and was about to be delisted from the Nasdaq.

    Under the agreement, JFAX will issue 13 million shares for eFax, which will become a JFAX subsidiary. Based on Thursday's closing stock prices, the transaction is worth about $23.4 million. EFax shareholders get a slight premium. JFAX grows its subscriber base to 3 million.

    JFAX had loaned eFax $5 million to keep the company in business ahead of the merger. As of March 31, eFax had $1.6 million in cash. In regulatory filings, eFax said its losses and lack of working capital raised "substantial doubt regarding the company's ability to continue as a going concern."

    JFAX had $20.9 million in cash as of March 31. The merger is expected to close in the fourth quarter.

    Meanwhile, eFax said in a separate statement that it no longer complied with Nasdaq's listing requirements. The company appealed and asked that it remain a Nasdaq stock until the merger of The Nasdaq will give its decision in a few weeks. If eFax is delisted, it can trade on the Nasdaq SmallCap market or trade over the counter.