Diagnostic image and information systems and advanced visualization developer Merge Healthcare reported 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 it was notified yesterday that its common stock is subject to delisting from the NASDAQ Global Market.
The Milwaukee-based company said that 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 its personnel.
Ken Rardin, Merge’s chief executive officer, said that the firm is committed to resolving this matter quickly, and while doing so, will not lose its focus on its business and its customers.
Merge said it intends to request a hearing before a NASDAQ Listing Qualifications Panel to review the staff determination on the delisting. No action will be taken to delist Merge’s common stock until the Panel has completed its review, though there can be no assurance that the Panel will grant its request for continued listing.
In addition, Merge suspended its Form S-1 related to issuance of its common stock in exchange for exchangeable shares of Merge/Cedera ExchangeCo Limited. According to the company, no shares of its common stock may be issued for such exchangeable shares until further notice.