August 15 2007—Merge Healthcare, Milwaukee, announced Monday 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 its common stock is subject to delisting from the NASDAQ Global Market.

"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," said Ken Rardin, CEO of Merge. "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 it has not satisfied a rule for continued listing on NASDAQ because it did not file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 in a timely manner. Merge’s common stock is, therefore, subject to delisting from the NASDAQ Global Market.