SEC FORM 3

SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person^*

Reed Douglas MD

(Last)

(First)

(Middle)

C/O VECTOR FUND MANAGEMENT

1751 LAKE COOK ROAD, SUITE 350

(Street)

DEERFIELD

60015

(City)

(State)

(Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
06/09/2004

3. Issuer Name and Ticker or Trading Symbol
DIGIRAD CORP [ DRAD ]

4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
	Officer (give title below)	Other (specify below)

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	962	I	By Vector Later-Stage Equity Fund, L.P.⁽²⁾⁽³⁾
Common Stock	296	I	By Vector Later-Stage Equity Fund II, L.P.⁽²⁾⁽³⁾
Common Stock	889	I	By Vector Later-Stage Equity Fund II (Q.P.) L.P.⁽²⁾⁽³⁾

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
1. Title of Derivative Security (Instr. 4)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
Series G Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	783,008	⁽¹⁾	I	By Vector Later-Stage Equity Fund, L.P.⁽²⁾
Series G Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	241,210	⁽¹⁾	I	By Vector Later-Stage Equity Fund II, L.P.⁽²⁾
Series G Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	723,632	⁽¹⁾	I	By Vector Later-Stage Equity Fund II (Q.P.), L.P.⁽²⁾
Series G Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	20,000	⁽¹⁾	I	By Palivaccini Partners, LLC⁽²⁾⁽³⁾
Series H Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	145,342	⁽¹⁾	I	By Vector Later-Stage Equity Fund, L.P.⁽²⁾
Series H Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	55,417	⁽¹⁾	I	By Vector Later-Stage Equity Fund II, L.P.⁽²⁾
Series H Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	166,250	⁽¹⁾	I	By Vector Later-Stage Equity Fund II (Q.P.), L.P.⁽²⁾
Series H Preferred Stock	⁽¹⁾	⁽¹⁾	Common Stock	10,062	⁽¹⁾	I	By Palivacinni Partners, LLC⁽²⁾⁽³⁾
Warrant (Right to Purchase)	01/25/2002	01/25/2007	Common Stock	6	$1,050	I	By Vector Later-Stage Equity Fund II, L.P.⁽²⁾
Warrant (Right to Purchase)	01/25/2002	01/25/2007	Common Stock	18	$1,050	I	By Vector Later-Stage Equity Fund II (Q.P.), L.P.⁽²⁾
Series E Preferred Stock Warrant (Right to Purchase)	09/29/2002	⁽⁴⁾	Common Stock	6	$2,125.2	I	By Vector Later-Stage Equity Fund II, L.P.⁽²⁾
Series E Preferred Stock Warrant (Right to Purchase)	09/29/2002	⁽⁴⁾	Common Stock	18	$2,125.2	I	By Vector Later-Stage Equity Fund II (Q.P.), L.P.⁽²⁾

Explanation of Responses:

1. Immediately following the closing of the initial public offering of the Issuer's Common Stock, all outstanding shares of Preferred Stock will be automatically converted into shares of the Issuer's Common Stock for no additional consideration.

2. Reporting Person is a managing director of Vector Fund Management, L.P., which is the general partner of Vector Later-Stage Equity Fund, L.P., and Vector Fund Management II, LLC, which is the general partner of each of Vector Later-Stage Equity Fund II, L.P. and Vector Later-Stage Equity Fund II (Q.P.), L.P. and is a managing member of Palivacinni Partners, LLC. Reporting Person disclaims beneficial ownership of the shares held by Vector Later-Stage Equity Fund, L.P., Vector Later-Stage Equity Fund II, L.P. and Vector Later-Stage Equity Fund II (Q.P.), L.P., except to the extent of his pecuniary interests in the named fund. Reporting Person may be deemed to share voting and investment power with respect to the shares held by Vector Later-Stage Equity Fund, L.P., Vector Later-Stage Equity Fund II, L.P. and Vector Later-Stage Equity Fund II (Q.P.), L.P. with the other managing director of Vector Fund Management, L.P. and Vector Fund Management II, LLC.

3. Reporting Person disclaims beneficial ownership of the shares held by Palivacinni Partners, LLC, except to the extent of his pecuniary interests in the entity. Reporting Person may be deemed to have voting and investment power with respect to the shares held by Palivacinni Partners, LLC with the other managing members.

4. The right to purchase under this warrant will terminate unless exercised prior to the closing of the initial public offering of the Issuer's Common Stock.

Remarks:

	Douglas Reed, MD	06/09/2004
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.