Salt Lake City-based Sensar (SCII) and Israeli start-up Net2Wireless have agreed to end their agreement to merge.
Sensar stock is 98% down from its March peak, from more than $89 to $1.50 intraday.
has notified Sensar that if it merges with Net2, it will be delisted.
Net2 will give Sensar, a Web host and Internet service provider, 3 million shares at a total cost of $1.5 million. That is lower even than $1.86 a share, the exercise price of stock options allocated to its executives, among them Chairman David Rubner.
It will also and give it an option to buy another million shares at $10 each, significantly lower than $27, the price at the company's latest placement.
Sensar, in return, will also write off a $500,000 loan to Net2Wireless.
The start-up's incentive for the merger was to get a Nasdaq listing through the back door. Nasdaq is believed to have nixed the deal because of an earlier legal dispute with two major Net2 stockholders.
Net2Wireless is a specialist in data compression technology that enables faster cellular data transfer and faster Internet access