30 Aug Merge files financial reports by market opening
West Allis, Wis. – Merge Healthcare has announced that it has met a NASDAQ Stock Market deadline for filing financial reports prior to today’s market opening, but has asked for an extension on filing its second quarter 2006 report.
The medical imaging and software developer was given an Aug. 29 deadline for filing its 2005 annual and first quarter 2006 reports, or face delisting from the NASDAQ. The company said it met that deadline, but was still awaiting word from the stock market on whether it had regained compliance with listing requirements.
Merge has asked NASDAQ for an extension, to Sept. 8, to file financial statements for the quarter that ended on June 30. Efforts to reach representatives of Merge and the NASDAQ were unsuccessful.
In its financial report, the company acknowledged that it was less profitable than indicated in previous reports, and that former executives did not use internal accounting controls.
The company has seen five executives leave this year, including founder William Mortimore. The departures came in the wake of financial difficulties that include inaccurate financial reporting and the filing of seven class-action lawsuits stemming from Merge’s 2005 acquisition of Cedara Software for $325 million.
Merge shareholders filed the suits, alleging the company had issued false statements in its purchase of Cedara Software. The suit sparked an investigation that led to the discovery of material errors in its financial statements.
For 2005, Merge reported a net loss of $2.65 million, or 11 cents per share, with total net sales on software and service of $82.6 million. Its first quarter 2006 performance continued that trend, as it reported a net loss of $4.9 million, or 15 cents per share, with total net sales of $16.19 million.
More information about the company’s filings for 2005 (form 10-K) and the first quarter of 2006 (form 10-Q) are available.
Merge’s stock has dropped from $28 per share earlier this year, and the uncertainty about the company’s NASDAQ listing caused at least one research firm, Wachovia Securities, to suspend its research coverage of Merge.
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