DIGIRAD CORPORATION (NASDAQ:DRAD) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.Entry into a Material Definitive Agreement.

On December 22, 2017, DMS Heath Technologies, Inc. (“DMS”), an indirect wholly owned subsidiary of Digirad Corporation (“Digirad” or the “Company”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) by and between DMS and Philips North America LLC (“Philips”), to which DMS agreed sell to Philips, for purchase price of $8,000,000 (the “Purchase Price”), all of DMS’ customer contracts (the “Assigned Contracts”) relating to its post-warranty service business (the “Transaction”). The Purchase Price is subject to certain post-closing adjustments and upon closing the Transaction a portion of the Purchase Price ($500,000) will be held in escrow to satisfy the indemnification obligations of DMS under the Purchase Agreement.

The completion of the Transaction is subject to customary closing conditions. The Transaction is not subject to approval by the Company’s stockholders. The Purchase Agreement includes customary representations and warranties and imposes certain indemnification and other customary post-closing obligations on DMS and Philips. DMS and its affiliates are also subject to certain non-competition obligations as more fully set forth in the Purchase Agreement.

The Purchase Agreement provides DMS and Philips with certain termination rights, including if the closing of the Transaction has not occurred by February 7, 2018, or such later date as mutually agreed to in writing by DMS and Philips.

Prior to entering into the Purchase Agreement, DMS was party to certain agreements with Philips’ affiliates that enabled DMS to provide contract sales services for larger imaging systems, patient monitoring systems and other select products of Philips’ affiliates, as well as installation and certain post warranty service contracts within a defined customer class and region in the upper Midwest region of the United States.

In connection with entering into the Purchase Agreement, DMS and Philips Electronics North America Corporation (“Philips Healthcare”) entered into an agreement to which DMS would continue, until January 31, 2018, to provide installation and warranty services to that certain Service Agreement effective April 1, 2014 included as ScheduleC to that certain Consolidated Agreement, dated April 1, 2014, as amended on June 9, 2015, between Philips Healthcare and DMS.

The foregoing summary of the Purchase Agreement is qualified in its entirety by reference to the text of the Purchase Agreement, which will be included as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

On December 27, 2017, the Company issued a press release relating to the Transaction. A copy of the press release is furnished as Exhibit99.1 attached to this Form8-K and incorporated into this item 7.01 by reference.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

DIGIRAD CORP Exhibit
EX-99.1 2 exhibit991pressreleasephil.htm EXHIBIT 99.1 Exhibit Exhibit 99.1News ReleaseFor immediate releaseFor more information contact:December 27,…
To view the full exhibit click here

About DIGIRAD CORPORATION (NASDAQ:DRAD)

Digirad Corporation is a provider of diagnostic solutions. The Company’s business is organized into two segments: Diagnostic Services and Diagnostic Imaging. The Company provides in-office nuclear cardiology and ultrasound imaging services. It also provides cardiac event monitoring services to physician practices, hospitals and imaging centers through its Diagnostic Services business segment. The Company sells solid-state gamma cameras for nuclear cardiology and general nuclear medicine applications, as well as provides service on the products it sells through its Diagnostic Imaging business segment. Diagnostic Services also offers remote cardiac event monitoring services, which include provision of a monitor, remote monitoring by registered nurses and monitoring support for its patients and physician customers. Its nuclear cameras feature detectors based on solid-state technology. Its cameras are used in hospitals, imaging centers, physician offices, and by mobile service providers.