Merge Healthcare Incorporated (NASDAQ: MRGE), a leading provider of innovative enterprise imaging, interoperability and clinical systems that seek to advance healthcare, today clarified the reason for recent trading activity on behalf of certain officers of the company. The Merge management team believes it is appropriate to explain these transactions in greater detail to alleviate potential confusion some investors have expressed.
As stated in the prepared comments on the February 20, 2014 investor earnings conference call, certain officers of Merge held in-the-money, non-qualified stock options representing the right to acquire 1.2 million shares of the company’s common stock that will expire in the second and third quarter of 2014 if not exercised. As these options have begun to be exercised, these officers have reported the transactions to the Securities and Exchange Commission by filing the required Form 4s, which are publicly available. These Form 4s set forth both shares exercised (under code M) and shares sold (under code S). As is often the case when options are exercised, a portion of the shares acquired upon exercise are expected to be sold to cover the exercise price due to the company and withholding for taxes, with the remainder of shares received continuing to be held by the respective employee. Given the relatively large number of options as compared to the company’s average daily trading volume, the sales of shares of the company’s common stock in connection with the exercise of these options has and is expected to occur over a number of days, which has and will result in several Form 4s being filed, the earlier of which may reflect the sale of all of the shares received upon exercise of the stock options due to the fact that the exercise price and withholding taxes must be satisfied with the first options exercised.
“This is a fairly common occurrence among public companies, and we are happy to address any additional questions the public or investors may have,” said Justin Dearborn, CEO at Merge Healthcare. “Speaking for the officers with expiring stock options, we would have preferred to have this activity occur with the stock trading at a higher price, but the expiration of these options, granted six years ago, dictates the timing of the option exercise. Furthermore, our preference would have been to have each of our transactions reported in a single Form 4, but trading volume precluded that from happening as well. The other officers and I believe that our record of acquiring shares through either open market purchases or via sell-to-cover exercise transactions speaks for itself. We are confident that the business is strong and are optimistic about its future.”
Merge is a leading provider of innovative enterprise imaging, interoperability and clinical systems that seek to advance healthcare. Merge’s enterprise and cloud-based technologies for image intensive specialties provide access to any image, anywhere, any time. Merge also provides clinical trials software with end-to-end study support in a single platform and other intelligent health data and analytics solutions. With solutions that have been used by providers for more than 25 years, Merge is helping to reduce costs, improve efficiencies and enhance the quality of healthcare worldwide. For more information, visit merge.com and follow us @MergeHealthcare.
Cautionary Notice Regarding Forward-Looking Statements
The matters discussed in this press release may include forward-looking statements, which could involve a number of risks and uncertainties. When used in this press release, the words “will,” “believes,” “intends,” “anticipates,” “expects” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those expressed in, or implied by, such forward-looking statements. The potential risks and uncertainties include those risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2013, which is on file with the SEC and are available on our investor relations website at merge.com and on the SEC website at www.sec.gov. Except as expressly required by the federal securities laws, Merge undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements.