13D Filing: Lone Star Value Management and Digirad Corp (DRAD)

UNITED STATES

SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED
IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 3)¹

Digirad Corporation

(Name
of Issuer)

Common Stock, par value $0.0001
per share

(Title of Class of Securities)

253827109

(CUSIP Number)

JEFFREY E. EBERWEIN

LONE STAR VALUE MANAGEMENT, LLC

53 Forest Avenue, 1st Floor

Old Greenwich, Connecticut 06870

(203) 489-9500

(Name, Address and Telephone Number of Person

Authorized to Receive Notices
and Communications)

September 14, 2017

(Date of Event Which Requires
Filing of This Statement)

If
the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule
13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box ¨.

Note:  Schedules
filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See
§ 240.13d-7 for other parties to whom copies are to be sent.

1
The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided
in a prior cover page.

The information required
on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities
Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject
to all other provisions of the Act (however, see the Notes).

The following constitutes
Amendment No. 3 to the Schedule 13D filed by the undersigned (“Amendment No. 3”).  This Amendment No. 3 amends
the Schedule 13D as specifically set forth herein.

Responses to each
item below are incorporated by reference into each other item, as applicable.

Item 2 is hereby amended and restated
to read as follows:

(a)           This statement is filed by:

Each of the foregoing
is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting
Persons is party to that certain Joint Filing Agreement, as filed with the Schedule 13D.  Accordingly, the Reporting
Persons are hereby filing a joint Schedule 13D.

(b)           The
address of the principal office of each of the Reporting Persons is 53 Forest Avenue, 1st Floor, Old Greenwich, Connecticut
06870.

(c)           The principal business of Lone Star Value Investors is investing in securities. The principal business of Lone Star Value
GP is serving as the general partner of Lone Star Value Investors. The principal business of Lone Star Value Management is serving
as the investment manager of Lone Star Value Investors and the Lone Star Value Account. The principal occupation of Mr. Eberwein
is serving as the manager of Lone Star Value GP and the sole member of Lone Star Value Management.

(d)           No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).

(e)           Other than as set forth herein, no Reporting Person has, during the last five years,
been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to such laws. Lone Star Value Management and Mr. Eberwein
are each subject to a Securities and Exchange Commission (“SEC”) administrative order, dated February 14, 2017 (File
No. 3-17847), relating to alleged violations of Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)
and the rules promulgated thereunder, including failing to disclose the members of a stockholder group, and further allegations
that Mr. Eberwein violated Section 16(a) of the Exchange Act and the rules promulgated thereunder, including failing to timely
file initial statements of beneficial ownership on Form 3 and changes thereto on Form 4. Without admitting or denying any violations,
(i) Lone Star Value Management agreed to cease and desist from committing or causing any violations of Section 13(d) of the Exchange
Act and Rules 13d-1 and 13d-2 promulgated thereunder, and paid a civil penalty of $120,000 to the SEC and (ii) Mr. Eberwein agreed
to cease and desist from committing or causing any violations of (x) Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2
promulgated thereunder and (y) Section 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 promulgated thereunder, and paid a civil
penalty to the SEC in the amount of $90,000.

(f)            Mr. Eberwein is a citizen of the United States of America. 

Item 3 is hereby amended and restated to
read as follows:

The 2,811 Shares
directly owned by Lone Star Value GP were acquired upon a pro rata in-kind distribution from Lone Star Value Investors to its partners.

Of the 503,841
Shares directly owned by Mr. Eberwein (i) 378,841 Shares were acquired upon a pro rata in-kind distribution from Lone Star Value
Investors to its partners, (ii) 112,500 Shares were acquired upon a transfer of such Shares from Lone Star Value Co-Invest I, LP
(“Lone Star Value Co-Invest I”), of which Mr. Eberwein is the sole investor and sole owner, and (iii) 12,500
Shares were acquired upon the vesting of certain Restricted Stock Units awarded to Mr. Eberwein in connection with his service
as the Chairman of the Issuer’s Board of Directors (the “Board”). In addition, Mr. Eberwein has been awarded
12,500 Restricted Stock Units in connection with his service as Chairman of the Board, which do not vest until August 8, 2018.

Item 5 is hereby amended and restated to
read as follows:

The aggregate percentage of Shares reported
owned by each person named herein is based upon 19,977,984 Shares outstanding as of August 1, 2017, as reported in the Issuer’s
Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on August 4, 2017.

Percentage: 0%

Percentage: Less than 1%

Percentage: 0%

Percentage: Approximately 2.5%

SIGNATURES

After reasonable inquiry and to the best
of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete
and correct.

Dated:  September 14, 2017