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Merge Could Face Bankruptcy


May 12, 2008

Medical imaging software vendor Merge Technologies has announced it may not have the cash to continue operating beyond June 30 and may have to seek bankruptcy protection.

The Milwaukee-based company also announced its first quarter financial results, showing continued losses and reduced revenue. The quarterly net loss totaled $7.8 million, compared with a loss of $9.7 million during the same period last year. Merge now has generated losses from operations during nine consecutive quarters. Its 23 cents per share loss in the first quarter, however, was two cents less than investment analysts expected. Quarterly revenue was $13.7 million, down 14% from the same period a year ago.

Available cash and equivalents at the end of March totaled $8.5 million, compared with $14 million at the end of December. The company also has no credit facility and is entirely dependent on operating cash flow to meet its capital needs.

Merge also announced it has divested its operations in France and China to focus on core businesses. It received no cash proceeds from the divestments. The company’s stock price fell three cents per share, or 8.6%, to 32 cents in morning trading on May 12. More information is available at merge.com.

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