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Merge Technologies said it expects to restate results for certain prior periods to adjust for the accounting of revenue related to about 15 software contracts worth about $2m, sending shares down as much as 20 per cent in late electronic trade.

Merge Technologies Inc, a provider of medical imaging software and services, said it expects to restate results for certain prior periods to adjust for the accounting of revenue related to about 15 software contracts worth about $2m, sending shares down as much as 20 per cent in late electronic trade.

Merge also said it expects earnings before interest, taxes, depreciation, and amortization (EBITDA) after adjusting for certain items will not be positive until the second half of calendar 2008.

The company, which does business as Merge Healthcare, said it expects to restate results for 2004, 2005, 2006 and the first three quarters of 2007, by the end of the year. The restatement is expected to hurt revenue for the years 2004, 2005 and 2006 by a total of about $1m and increase revenue by less than $100,000 a quarter thereafter. Merge expects to report restated revenue of $15m to $16m for the quarter ended March 31 and revenue of $13m to $14m for the quarter ended June 30.

Merge shares fell to $3.0 in late electronic trade after closing at $3.42 on the Nasdaq.