UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported)
July
18, 2008
DIGIRAD
CORPORATION
(Exact
name of registrant as specified in its charter)
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Delaware
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000-50789
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33-0145723
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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13950
Stowe Drive
Poway,
California 92064
(Address
of principal executive offices, including zip code)
(858)
726-1600
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
8.01.
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Other
Events
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On
July
18, 2008, the board of directors of Digirad Corporation revised the charter
of
its Audit Committee.
The
revised Audit Committee charter is attached hereto as Exhibit 99.1 and is also
available on the Company’s website at http://www.digirad.com. The contents of
the Company’s website are not part of this Current Report on Form
8-K.
This
information and the exhibit hereto are being furnished and shall not be deemed
to be "filed" for purposes of Section 18 of the Securities Exchange Act of
1934,
as amended (the "Exchange Act"), or otherwise subject to the liability of that
section, nor shall they be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as expressly
set forth by specific reference in such a filing.
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Item
9.01.
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Financial
Statements and Exhibits
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(c)
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Exhibits.
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Exhibit
No.
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Description
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99.1
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Digirad
Corporation Audit Committee Charter
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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DIGIRAD
CORPORATION
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| By: |
/s/
Todd Clyde
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Chief
Financial Officer
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Date: July
23,
2008
Exhibit
99.1
The
Audit Committee Charter
(Amended
July 18, 2008)
Status
The
Audit Committee is a committee of the Board of Directors.
Membership
The
Audit Committee shall consist of three or more directors all of whom in the
judgment of the Board of Directors shall be independent in accordance with
NASDAQ listing standards and applicable Securities and Exchange Commission
requirements. Each member shall in the judgment of the Board of Directors
be
financially literate. At least one member of the Audit Committee shall in
the
judgment of the Board of Directors be an audit committee financial expert
in
accordance with the rules and regulations of the Securities and Exchange
Commission.
Purpose
The
Audit Committee shall represent and assist the Board of Directors with the
oversight of: (a) the integrity of the Company's financial statements, (b)
the
effectiveness of the Company’s internal controls over financial reporting, (c)
the independent registered public accountant's qualifications and independence,
(d) the Company's compliance with legal and regulatory requirements, (e)
the
performance of the Company’s independent registered public accountants, and (f)
the independent registered public accounting firm’s qualifications and
independence. Except as otherwise required by applicable laws, regulations
or
listing standards, all major decisions are considered by the Board of Directors
as a whole.
Responsibilities
The
Committee has the responsibilities and powers set forth in this Charter.
Management is responsible for the preparation, presentation, and integrity
of
the Company’s financial statements, for the appropriateness of the accounting
principles and reporting policies that are used by the Company and for
establishing and maintaining internal control over financial reporting. The
independent registered public accountants are responsible for auditing the
Company’s financial statements and for reviewing the Company’s unaudited interim
financial statements.
The
Committee, in carrying out its responsibilities, believes its policies and
procedures should remain flexible, in order to best react to changing conditions
and circumstances. The Committee will take appropriate actions to monitor
the
overall corporate “tone” for quality financial reporting, sound business risk
practices, and ethical behavior.
The
following shall be the principal duties and responsibilities of the Committee.
These are set forth as a guide with the understanding that the Committee
may
supplement them as appropriate.
Page
1 of 5
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1.
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Select,
retain (subject to ratification by the Company's stockholders)
and
terminate, when appropriate, the independent registered public
accountants; set the independent registered public accountant's
compensation, oversee the work of the independent registered public
accountant (including resolution of disagreements between management
and
the auditor regarding financial reporting and internal control-related
matters) and pre-approve all audit services to be provided by the
independent registered public accountant. Any accounting firm retained
by
the Company to prepare or issue an audit report or perform other
financial
statement audit, review or attest services for the Company must
report
directly to the Audit Committee.
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2.
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Pre-approve
all audit and non-audit services provided by the independent
registered
public accountants, including specific pre-approval of internal
control
and tax related services. The Committee may delegate pre-approval
authority to a member of the Audit Committee. The decisions
of any
Committee member to whom pre-approval authority is delegated
must be
presented to the full Committee at its next scheduled meeting.
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3.
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At
least annually, the Committee will obtain and review a report by
the
independent registered public accountants describing: (a) the firm’s
internal quality control procedures; (b) any material issues raised
by the
most recent internal quality control review, or peer review, of
the firm,
or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or
more
independent audits carried out by the firm, and any steps taken
to deal
with any such issues; and (c) all relationships between the independent
registered public accountants and the Company (to assess the auditors’
independence).
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4.
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After
reviewing the foregoing report and the independent registered public
accountants’ work throughout the year, the Committee shall evaluate the
auditor’s qualifications, performance and independence. Such
evaluation shall also include the review and evaluation of the
lead audit
partner and take into account the opinions of management and the
Company’s
personnel responsible for the annual
audit.
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5.
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Oversee
the rotation of the lead audit partner of the independent registered
public accountant having primary responsibility for the audit and
the
audit partner responsible for reviewing the audit at least every
five
years.
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6.
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Among
other things, review with the independent registered public accountants,
as the Committee determines is appropriate: (a) its audit plan,
including
the scope and results of the audit, including the adequacy of staffing
and
budget or compensation; (b) any problems or difficulties that the
independent registered public accountant encountered in the course
of the
audit work, including any restrictions on the scope of the independent
registered public accountants’ activities or access to requested
information, and management's response; (c) any
accounting adjustments that were noted or proposed by the auditors
but
were “passed” (as immaterial or otherwise) and all
alternative treatments of financial information within generally
accepted
accounting principles that have been discussed with management;
(d) any
communications between the audit team and the audit firm’s national office
respecting auditing or accounting issues or internal control-related
issues presented by the engagement; (e) other material written
communications between the independent registered public accountant
and
management, such as any management letter or schedule of unadjusted
differences; and (f) any questions, comments or suggestions the
independent registered public accountant may have relating to the
internal
controls over financial reporting and accounting practices and
procedures
of the Company or its subsidiaries.
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Page
2of 5
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7.
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Discuss
with management and the independent registered public accountants
any
changes in internal controls over financial reporting that have
materially
affected or are reasonably likely to materially affect the Company’s
internal control over financial reporting that are required to
be
disclosed, and as the Committee deems appropriate, any other material
changes in internal controls over financial reporting that were
considered
for disclosure in the Company’s periodic filings with the SEC.
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8.
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Discuss
with management and the independent registered public accountants
management’s process for assessing the effectiveness of internal control
over financial reporting under Section 404 of the Sarbanes-Oxley
Act,
including any significant deficiencies or material weaknesses identified.
If deficiencies are identified, the Committee shall discuss with
the
independent registered public accountants the characterization
of
deficiencies. The Committee shall also discuss with management
its
remediation plan to address deficiencies identified. The Committee
shall
ensure that the disclosures describing any identified material
weaknesses
and management’s remediation plans are clear and complete.
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9.
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Discuss
with management its process for performing its required quarterly
certifications under Section 302 of the Sarbanes-Oxley
Act.
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10.
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Review
management’s report on the effectiveness of internal control over
financial reporting as of the end of each fiscal year and the independent
registered public accountants’ report on the effectiveness of internal
control over financial reporting.
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11.
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Review
with management and the independent registered public accountants
the
annual and quarterly financial statements of the Company, including:
(a)
the Company's disclosures under “Management's Discussion and Analysis of
Financial Condition and Results of Operations”; (b) any material changes
in accounting principles or practices used in preparing the financial
statements prior to the filing of a report on Form 10-K or 10-Q with
the Securities and Exchange Commission; and (c) any other matters
required
to be communicated to the Committee by the independent registered
public
accountants under the standards of the Public Company Accounting
Oversight
Board (PCAOB).
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12.
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The
Committee’s review of the financial statements shall include, when
appropriate, (a) major issues regarding accounting principles and
financial statement presentations, including any significant changes
in
the Company’s selection or application of accounting principles, and major
issues as to the adequacy of the Company’s internal control over financial
reporting and any specific remedial actions adopted in light of
significant deficiencies or material weaknesses; (b) discussions
with
management and the independent registered public accountants regarding
significant financial reporting issues and judgments made in connection
with the preparation of the financial statements and the reasonableness
of
those judgments, including analyses of the effects of alternative
GAAP
methods on the financial statements; (c) consideration of the effect
of
regulatory and accounting initiatives, as well as off-balance sheet
structures, on the financial statements; and (d) consideration
of the
judgment of both management and the independent registered public
accountants about the quality, not just the acceptability of accounting
principles; and (e) the clarity of the disclosures in the financial
statements.
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Page
3of 5
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13.
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The
Committee shall review a report from the independent public accountants,
prior to the filing of the Company’s Annual report on Form 10-K on all
critical accounting policies and practices of the Company; all
material
alternative treatments of financial information within GAAP that
have been
discussed with management, including the ramifications of the use
of such
alternative treatments and disclosures and the treatment preferred
by the
independent registered public accountants; and other material written
communications between the independent registered public accountants
and
management.
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14.
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Recommend
to the Board of Directors, based on the review described in the
responsibilities above, whether the annual financial statements
should be
included in the annual report on Form 10-K.
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15.
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Review
and discuss with management any earnings press release or change
in
financial guidance information before it is distributed to third
parties.
This does not pertain to financial information provided to third
parties
under a confidentiality agreement.
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16.
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Review
and approve all related party transactions required to be disclosed
pursuant to SEC Regulation S-K, Item 404, and discuss with
management the
business rationale for the transactions and whether appropriate
disclosures have been made.
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17.
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Discuss
Company policies with respect to risk assessment and risk management,
including the risk of fraud, and review contingent liabilities
and risks
that may be material to the Company and major legislative and regulatory
developments which could materially impact the Company's contingent
liabilities and risks. The
Committee also shall discuss the Company’s major financial risk exposures
and the steps management has taken to monitor and control such
exposures.
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18.
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Serve
as the Qualified Legal Compliance Committee for management and
review (a)
management’s assessment of the status of compliance with laws,
regulations, and internal procedures; (b) the scope and status
of systems
designed to promote Company compliance with laws, regulations and
internal
procedures, through receiving reports from management, legal counsel
and
third parties as determined by the Audit Committee; and (c) business
ethics and “up the ladder” reporting issues. The Committee shall review
the Company’s code of conduct and programs that management has established
to monitor compliance with such code.
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19.
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As
the Committee deems appropriate, the Committee shall review with
senior
management the Company’s overall anti-fraud programs and
controls.
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4of 5
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20.
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Review
and approve the Company’s procedures for the confidential and anonymous
receipt, retention and treatment of complaints regarding the Company's
accounting, internal controls over financial reporting and auditing
matters, as well as for the confidential, anonymous submissions
by Company
employees of concerns regarding accounting or auditing matters.
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21.
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Set
clear hiring policies for employees or former employees of
the independent
registered public accountants that meet the SEC regulations
and stock
exchange listing standards.
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22.
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Obtain
the advice and assistance, as appropriate, of independent counsel
and
other advisors as necessary to fulfill the responsibilities of
the Audit
Committee, and receive appropriate funding from the Company, as
determined
by the Audit Committee, for the payment of compensation to any
such
advisors.
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23.
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Ensure
that a performance evaluation of the Audit Committee and its members
is
completed annually. The
Committee also shall discuss with the independent registered public
accountants the accountants’ observations related to the effectiveness of
the Committee.
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24.
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Review
and reassess the
charter at least annually and obtain the approval of the Board
of
Directors.
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Meetings
The
Audit Committee shall meet at least quarterly and at such other times as
it
deems necessary to fulfill its responsibilities. The Audit Committee shall
periodically meet separately, in executive session, with management and the
independent registered public accountants. The Audit Committee shall report
regularly to the Board of Directors with respect to its activities and make
recommendations to the Board of Directors as appropriate.
Report
The
Audit Committee shall prepare a report each year for inclusion in the Company's
proxy statement.
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