Merge Healthcare to Correct Accounting Error and Received Delisting Notice from Nasdaq

    MILWAUKEE, Aug. 13 /CNW/ -- Merge Technologies Incorporated, doing
business as Merge Healthcare (Nasdaq: MRGE; TSX: MRG), a leading provider of
medical imaging software and services, announced today that it will be
required to correct an error in how it has recognized revenue from certain
software and maintenance contracts dating back to 2004 and earlier and that on
August 13, 2007, the Company was notified that the Company's common stock is
subject to delisting from the NASDAQ Global Market.
    As previously announced in a press release dated August 10, 2007, the
Company's management and Audit Committee of the Board of Directors, in
consultation with its independent registered public accounting firm, has
reviewed the Company's method of recognizing revenue from certain contracts
that contain both a license of software and related maintenance and support.
The Company has now determined that the previous accounting for the revenue is
in error and will require restatement of previously issued financial
statements. While the Company's management and Audit Committee cannot at this
time quantify the impact of the restatement, the Company will be required to
restate its audited financial statements for the years ended December 31,
2004, 2005, and 2006, as well as other financial information included in the
Company's Annual Report on Form 10-K for the year ended December 31, 2006 and
the unaudited financial statements included in its Quarterly Report on Form
10-Q for the quarter ended March 31, 2007 to reflect the proper accounting
treatment.  The Company intends to work expeditiously with its independent
registered public accounting firm and other professional advisors to make the
necessary corrections to its audited financials and file amendments to these
periodic reports and the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2007 as soon as possible.
    Ken Rardin, the Company's Chief Executive Officer, noted, "While we are
obviously disappointed about the restatement of our previously issued
financial statements, it is important to understand that this issue relates to
a very complex technical interpretation of the accounting rules and our
software and maintenance contracts with our customers. The customer contracts
affected are the same contracts that have been used for several years, and the
restatement is not the result of improprieties by any of our personnel.  We
are committed to resolving this matter quickly, and while doing so, will not
lose our focus on our business and our customers."
    The Company received written notice of a NASDAQ Staff Determination that
the Company has not satisfied a rule for continued listing on NASDAQ (NASDAQ
Marketplace Rule 4310(c)(14)) because the Company did not timely file its
Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, and the
Company's common stock is, therefore, subject to delisting from the NASDAQ
Global Market.  As provided for in the NASDAQ Marketplace Rules, the Company
intends to request a hearing before a NASDAQ Listing Qualifications Panel to
review the Staff Determination.  No action will be taken to delist the
Company's common stock until the Panel has completed its review, though there
can be no assurance that the Panel will grant the Company's request for
continued listing.
    In addition, the Company hereby suspends its Form S-1 related to issuance
of the Company's common stock in exchange for exchangeable shares of
Merge/Cedera ExchangeCo Limited.  Accordingly, no shares of the Company's
common stock may be issued for such exchangeable shares until further notice.
    Merge Healthcare is a market leader in the development and delivery of
medical imaging and information management software and services. Our
innovative software solutions use leading-edge imaging software technologies
that accelerate market delivery for our OEM customers, while our end-user
solutions improve our customers' productivity and enhance the quality of
patient care they provide. For additional information, visit our website at
    Except for the historical information herein, the matters discussed in
this news release include forward-looking statements that may involve a number
of risks and uncertainties. When used in this press release, the words "will,"
"believes," "intends," "anticipates," "expects" and similar expressions are
intended to identify forward-looking statements. Actual results could differ
materially from those expressed in, or implied by, the forward-looking
statements based on a number of factors, including, but not limited to, costs,
risks and effects of the past and planned restatement of financial statements
of the Company and other actions that may be taken or required as a result of
such restatement; the Company's inability to timely file reports with the
Securities and Exchange Commission; risks associated with the Company's
inability to meet the requirements of The NASDAQ Stock Market for continued
listing, including possible delisting; costs, risks and effects of legal
proceedings and investigations, including the formal investigation being
conducted by the Securities and Exchange Commission (formerly an informal
inquiry) and class action, derivative, and other lawsuits; the uncertainty
created by, the adverse impact on relationships with customers, potential
customers, suppliers and investors potentially resulting from, and other risks
associated with, the changes in the Company's senior management; risks in
product and technology development, market acceptance of new products and
continuing product demand; the impact of competitive products and pricing; the
Company's ability to integrate acquisitions; changing economic conditions;
credit and payment risks associated with end-user sales, the Company's
dependence on major customers; the Company's dependence on key personnel; and
other risk factors detailed in the Company's filings with the Securities and
Exchange Commission. Except as expressly required by the federal securities
laws, the Company undertakes no obligation to update such factors or to
publicly announce the results of any of the forward-looking statements
contained herein to reflect future events, developments, or changed
circumstances, or for any other reason.

For further information:

For further information: Melanie Gretzon, Director of Corporate
Services,  +1-414-977-4000,, or press, Beth
Frost-Johnson, Senior  Vice President of Marketing, +1-414-977-4254,,  both of Merge Healthcare Web Site:        

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