Merge Technologies, Milwaukee, faces delisting from the Nasdaq Global Market because it did not file in a timely fashion its quarterly report for the quarter ended June 30, the company announced. The medical-imaging software and services provider missed its filing because it needs to correct an error in how it has recognized revenue from software and maintenance contracts over the past several years.
Merge said in a news release that it will be required to restate its audited financial statements for 2004, 2005 and 2006; other financial information included in the annual report for year-end 2006; and the unaudited financial statements included in its quarterly report for the quarter ended March 31. Merge is working with an independent public accounting firm and other advisers to make the corrections and file amendments.
In announcing the need for a closer look at its financial statements on Aug. 10, Merge said that it needed to review 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. Instead, it used its 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 maintenance period.
The restatement is not the result of improprieties by any of our personnel, said Ken Rardin, chief executive officer, in a news release.
Merge will request a hearing before a Nasdaq panel to review the delisting determination. -- by Jean DerGurahian
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