8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  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):  October 7, 2004

FISCHER IMAGING CORPORATION

(Exact Name of Registrant as Specified in Charter)

DELAWARE	0-19386	36-2756787
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
12300 North Grant Street Denver, Colorado 80241
(Address of Principal Executive Offices) (Zip Code)

(303) 452-6800

(Registrant’s Telephone Number, Including Area Code)

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:

oWritten communications pursuant to Rule 425 under the Securities Act

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 4.01 – Changes in Registrant’s Certifying Accountant

The Board of Directors of Fischer Imaging Corporation (the "Company"), acting on the recommendation of its Audit Committee, replaced Ernst & Young LLP (“E&Y”) with Ehrhardt Keefe Steiner & Hottman PC (“EKS&H”) on October 6, 2004 as the Company’s independent public accountants for 2004.  The Company notified both firms on October 7, 2004.

E&Y’s reports on the Company’s consolidated financial statements for the past two years contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the two most recent fiscal years and through October 7, 2004, there were no disagreements with E&Y on any matter of accounting principles or practices, financial disclosure, or auditing scope or procedure, which if not resolved to E&Y’s satisfaction, would have caused E&Y to make reference to the subject matter in its report on the financial statements for such years.

During the two most recent years and through October 7, 2004, there were no reportable events as described in Regulation S-K Item 304(a)(1)(v) except as follows:

In connection with its audits of the Company’s consolidated financial statements for the year ended December 31, 2003 and for each of the three years in the period ended December 31, 2002, E&Y advised the Audit Committee by a letter dated April 14, 2004 relating to all years audited, and other reports to the Audit Committee, that it noted certain matters involving internal control that it considered to be material weaknesses that constitute reportable conditions under standards established by the American Institute of Certified Public Accountants.  These conditions were considered by E&Y in determining the nature, timing, and extent of the procedures performed in their audits and did not affect their reports related to the audits of the Company’s consolidated financial statements for the year ended December 31, 2003 and for each of the three years in the period ended December 31, 2002.  These internal control weaknesses and the Company’s remedial actions were previously disclosed in Item 14 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, and Item 9A of the Annual Report on Form 10-K for the year ended December 31, 2003.  Copies of these disclosures are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference.  The Company continues to implement changes and evaluate the need for better internal controls.

The Company has authorized E&Y to respond fully to the inquiries of the successor accountant concerning this matter.

During the Company’s two most recent years and through October 7, 2004, the Company did not consult EKS&H with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, or any other matters or reportable events as set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

The Company provided E&Y with a copy of the foregoing disclosures.  Attached as Exhibit 16.1 is a copy of E&Y’s letter, dated October 8, 2004, indicating whether it agrees with such statements.

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Item 9.01 – Financial Statements, and Exhibits.

(c)Exhibits.

16.1Letter from Ernst & Young LLP.

99.1Item 14 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

99.2Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

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SIGNATURE

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.

	FISCHER IMAGING CORPORATION
Date:  October 12, 2004	By:	/s/ DAVID KIRWAN
	Senior Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
16.1	Letter from Ernst & Young LLP.
99.1	Item 14 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.
99.2	Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

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EX-16.1

Exhibit 16.1

October 8, 2004

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC  20549

Gentlemen:

We have read Item 4 of Form 8-K dated October 7, 2004 of Fischer Imaging Corporation and are in agreement with the statements contained in the paragraphs 1, 2, 3, 4, 5, 6, 7 and 8 therein.  We have no basis to agree or disagree with other statements of the registrant contained therein.

Regarding the registrant’s statement concerning the lack of internal control to prepare financial statements, included in the fifth paragraph therein, we had considered such matter in determining the nature, timing and extent of procedures performed in our audit of the registrant’s 2003 financial statements.

/s/ Ernst & Young LLP

EX-99.1

Exhibit 99.1

Item 14 – Controls and Procedures

a) Evaluation of disclosure controls and procedures:

In early 2003, we identified several accounting inaccuracies and errors that significantly affected our previously reported financial results. Under the direction of our Board of Directors, and primarily our Audit Committee, we completed a comprehensive analysis of our accounting policies and practices and a restatement of our previously reported financial results for 2000, 2001 and nine months ended September 29, 2002. Our new auditors, Ernst & Young LLP, completed a re-audit of our consolidated financial statements for 2000 and 2001 and has also performed an audit of our 2002 annual financial statements.

Evaluation

During this restatement process, in consultation with our auditors, our new senior management team and internal and external finance personnel, under the direction and with the advice of our Audit Committee, conducted an investigation of our disclosure controls and procedures. The investigation included a review of our accounts during the period from January 1, 1998 through December 31, 2002, detailed activity reconciliations, a thorough review of our internal processes and procedures, and a general, company-wide risk assessment to identify the disclosure controls and procedures that could or should have prevented or mitigated the inaccuracies and errors previously reported. Our independent auditors conducted an audit of our consolidated financial statements for 2002 and a re-audit of our 2000 and 2001 consolidated financial statements.

As a result of our investigation, we identified the following significant deficiencies and material weaknesses with regard to our disclosure controls and procedures:

• A number of accounting policies, processes and certain entries and treatments were incorrect and required correction, primarily in the areas of revenue recognition, re-work service inventory, excess and obsolete inventory, warranty inventory, overhead allocations, classification of revenues and expenses and adherence to generally accepted accounting principles.

• Deficiencies related to the design of policies and execution of processes related to accounting for operating activities and our internal control processes.

• General deficiencies related to the disclosure controls environment, including lack of appropriate disclosure policies, certain management decision-making and employees’ misapplication of policies or procedures.

Changes

As a result of our investigation, we implemented actions and modifications to our disclosure controls and procedures in an effort to correct the deficiencies and weaknesses discussed above, including the following:

• We changed our accounting controls and/or policies regarding revenue recognition, un-repaired re-work service inventory, reserves for excess and obsolete inventories, warranty

inventory transactions, overhead allocation to inventory, classification of revenue and expenses, and assured conformity with generally accepted accounting principles.

• We elected a new Chair of our Board of Directors and appointed a new Chief Executive Officer.

• We adopted a Code of Ethics for all of our directors, officers and employees.

• We established a disclosure committee, consisting of the Chief Executive Officer and senior finance personnel, with the participation of our outside auditors, legal counsel and members of senior management. We now follow an extensive review and certification process in connection with our filings with the SEC, including requiring internal representation letters, similar to the certifications by our Chief Executive Officer and Chief Financial Officer, for key financial and accounting personnel.

• We have used significant outside resources to enhance our finance group and to support the preparation of financial statements and reports that we file with the SEC.

• We have implemented and continue to evaluate the need for better internal controls and detailed operating reviews.

• We established an anonymous hotline for our employees to report potential violations of accounting and reporting policies and procedures or of applicable laws or regulations.

We believe that these efforts have addressed the material weaknesses and significant deficiencies that affected our disclosure controls in 2000, 2001 and part of 2002. We continue to refine our disclosure controls and procedures. This process is ongoing and it may take some time to realize all of the benefits from our initiatives; however, our Board of Directors and new senior management team are committed to providing sound disclosure controls and procedures and corporate governance.

However, we implemented actions and modifications to our disclosure controls and procedures in an effort to correct the deficiencies and weaknesses. As a result, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2003. Our disclosure controls and procedures are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in alerting them to material information required to be included in our periodic SEC reports.

b) Changes in internal controls:

Other than as summarized above, since the evaluation date, there have been no significant changes in our internal controls or factors or in other factors that could significantly affect these controls. We will continue to assess our disclosure controls and procedures as we prepare our future filings and will take any further actions that we deem necessary.

EX-99.2

Exhibit 99.2

Item 9A—Controls and Procedures

In early 2003, we identified several accounting inaccuracies and errors that significantly affected our previously reported financial results. Under the direction of our Board of Directors, and primarily our Audit Committee, we completed a comprehensive analysis of our accounting policies and practices and a restatement of our previously reported financial results for 2000, 2001 and nine months ended September 29, 2002. Our new auditors, Ernst & Young LLP, completed a re-audit of our consolidated financial statements for 2000 and 2001 and has also performed an audit of our 2002 annual financial statements. See our Annual Report for 2002 on Form 10-K for a detailed description of our internal review and restatement of our historical financial statements.

As a result of our internal review, our Chief Executive Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934) were not effective during 2003, and, as a result, we were not able to timely file all reports required to be filed by us pursuant to Section 15(d) of the Securities Exchange Act of 1934. Our inability to timely file the required reports is due to, among other things, the fact that management’s time and attention have been consumed by the auditing and re-auditing of our financial statements for the years ended December 31, 2002, 2001 and 2000, and the resulting restatements described in our consolidated financial statements.

However, we implemented actions and modifications to our disclosure controls and procedures in an effort to correct the deficiencies and weaknesses. As a result, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2003. Our disclosure controls and procedures are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in alerting them to material information required to be included in our periodic SEC reports.