Southern Home Medical Equipment Inc. (OTCBB: SHOM.PK), a holding company providing healthcare services, staffing and durable medical equipment to medical institutions, said today that it has suspended  plans to merge with Washington, D.C., area medical clinics. Additionally, it announced revenue rose 27.5 percent in the third quarter.

The company signed in May a letter of intent to merge with a network of medical clinics in the Washington, D.C., area. At the time, the company said the merger would bolster its annual revenue to about $7 million. Southern Home Medical posted revenue of $930,655 in 2010.

In the third quarter, revenue rose to $289,869, up 27.5 percent over revenue of $227,151 the prior year.

"We are pleased with our progress into the last half of 2011, but we have made the decision to suspend the potential acquisition/merger. It simply is not in the best interest of SHOM at this time. We will continue to evaluate this position through the remainder of 2011," said President and CEO of Southern Home Medical, Jeff Sarvis.

The company cites a net loss of $542.00 in the third quarter, compared with net income of $44,600 in the third quarter of 2010. Taking into account audit expenses of $74,312.00 related to the merger, the company would have posted net income of $73,770 for the quarter, a 65.0 percent increase over the year-ago quarter.