Merge Technologies has put a bit more context around its announcement
earlier this week that it was delaying the release of quarterly financial
results, saying the company will take a second look at how it books revenue from licensing, maintenance and support contracts.
In a news release, the Milwaukee-based vendor of medical imaging software
and services said that the delay was because it is examining whether it
has been properly recognizing revenue from certain software contracts
dating back to 2004 and earlier periods. The contracts at issue include
both a license of software and related maintenance and support.
Specifically, the company is reviewing, in consultation with its public
accountants, whether the company should have recognized the entire value
of the bundled contract as revenue over the period for which maintenance
and support may be provided to the customer. The approach being
considered is different from the companys historical practice of
recognizing the fair value of the software principally in the initial
year of the contract and the fair value of the maintenance over the
No date was given on when the financial statements for the quarter and six-month period ended June 30 would be released. The company was diligently working with its advisers and will file the quarterly report as soon as possible.
In July 2006, Merge announced it had been given a deadline by the Nasdaq
Listing Qualifications Panel to file its year-end and two quarterly
financial reports for 2005 or risk being de-listed.