Corel's merger with Borland/Inprise has fallen through because of "significant changes" that have occurred since the merger agreement.

This news comes soon after Corel said in an SEC filing that if the merger didn't go ahead - and other sources of financing weren't found - the company could run out of cash within the next three months.

Under the terms of February's merger agreement, Inprise/Borland shareholders would have received 0.747 of a Corel share for each share of Inprise/Borland stock. At the time, the stock was trading in the region of $20. However, Corel's share price dropped sharply after this, and the company reported first-quarter losses. This prompted Inprise/Borland to re-evaluate the transaction.

In its latest statement, Corel said that it has decided it’s in its best interest to terminate the agreement, but both companies are "parting on amicable terms and will continue to pursue opportunities for ongoing partnerships".

The statement goes on to say that Corel will now fully evaluate offers of alternative financing that it has recently received. It's also planning to realign its cost structure to support current revenue expectations and long-term strategic goals. The company expects to save around $40 million on an "annualized" basis.