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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 Form 10-K
  FOR ANNUAL AND TRANSITION
    REPORTS PURSUANT TO
    SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission File Number:
    000-51512
  
 Cardiac Science
    Corporation
 (Exact Name of Registrant as
    Specified in its Charter)
  Delaware

94-3300396(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)3303 Monte Villa Parkway, Bothell, WA(Address of Principal
    Executive Offices)

98021(Zip Code)   (425) 402-2000
 (Registrants Telephone
    Number, Including Area Code)
  Securities Registered Pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.001 par value

NASDAQ Global Market   Securities Registered Pursuant to Section 12(g) of the
    Act: None.
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller
    reporting company)   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 





CARDIAC
    SCIENCE CORPORATION
  2009
    FORM 10-K
    ANNUAL REPORT
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.

Business


2Item 1A.

Risk Factors


18Item 1B.

Unresolved Staff Comments


32Item 2.

Properties


32Item 3.

Legal Proceedings


32Item 4.

Reserved


32PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


32Item 6.

Selected Financial Data


34Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


35Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


49Item 8.

Financial Statements and Supplementary Data


50Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


89Item 9A.

Controls and Procedures


89Item 9B.

Other Information


89PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


89Item 11.

Executive Compensation


89Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


90Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


90Item 14.

Principal Accountant Fees and Services


90PART IVItem 15.

Exhibits and Financial Statement Schedules


90Signatures


91EX-10.4EX-10.5EX-10.13EX-10.17EX-10.20EX-10.22EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   i




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PART 1  This Annual Report on
    Form 10-K
    contains forward-looking statements relating to Cardiac Science
    Corporation. Except for historical information, the following
    discussion contains forward-looking statements for purposes of
    the safe harbor provisions under the Private Securities
    Litigation Reform Act of 1995. The words believe,
    expect, intend,
    anticipate, will, may,
    variations of such words, and similar expressions identify
    forward-looking statements, but their absence does not mean that
    the statement is not forward-looking. These forward-looking
    statements reflect managements current expectations and
    involve risks and uncertainties. Our actual results could differ
    materially from results that may be anticipated by such
    forward-looking statements. The principal factors that could
    cause or contribute to such differences include, but are not
    limited to, those discussed under the heading Risk
    Factors on Item 1A of this report and those discussed
    elsewhere in this report. Readers are cautioned not to place
    undue reliance on these forward-looking statements, which speak
    only as of the date of this report. We undertake no obligation
    to revise any forward-looking statements to reflect events or
    circumstances that may subsequently arise. Readers are urged to
    review and consider carefully the various disclosures made in
    this report and in our other filings made with the SEC that
    disclose and describe the risks and factors that may affect our
    business, prospects and results of operations. The terms
    the Company, us, we, and
    our refer to Cardiac Science Corporation and its
    majority-owned subsidiaries.
  Item 1.
    Business  Overview
  ® ® ®
    Industry
    Background
    Our
    Markets
     2




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Cardiac
    Monitoring Market
  What is
    Cardiac Monitoring?
    How is
    Cardiac Monitoring Performed?
    What are
    the Challenges Related to Cardiac Monitoring?
      Defibrillation
    Market
  What is
    Defibrillation?
    How is
    Defibrillation Performed?
     3




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What Are
    the Challenges Related to Defibrillation?
              Our
    Products and Services
      Cardiac
    Monitoring Products
   4




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Resting
    ECG systems
    Cardiac
    stress testing systems
    Holter
    monitoring systems
    Cardiac
    rehabilitation telemetry systems
    Vital
    signs monitors
  2
  Cardiology
    data management systems (informatics)
    Related
    products and supplies
   5




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Services
  on-site
  Advantages
    of our cardiac monitoring products:
    Ease of use.
  Effective data capture. side-by-side
  Improved diagnostic speed and accuracy.
  Wireless and network compatibility.
    Flexible open technology for integration with EMR, HIS, and
    other information systems.
  Defibrillation
    Products
   6




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®
      Public
    Access AEDs
      Professional
    AEDs
    Traditional
    Defibrillators
      Defibrillation
    Supplies and Accessories
    Services
   7




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Advantages
    of our defibrillation products:
    Dependability. ®
  Arrhythmia Detection.
  Variable Escalating Biphasic Defibrillation
    Energy.
  Ease of Use.
  Flexibility.
  Rugged design.
  Growth
    Strategy
  Our growth strategy is to:
  Enhance
    our monitoring portfolio
   8




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Broaden
    our AED portfolio
    Bring
    new and simplified procedures to primary care
    physicians
    Deepen
    our distribution into international markets
    Leverage
    our services capabilities
    Pursue
    strategic mergers and acquisitions
   9




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Business
    Advantages
    Cardiology
    focus
    Leading
    brands and market positions
          Global
    distribution and service network
          Commitment
    to innovation
   10




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Our
    Organization
  Sales and
    Marketing
                  Customer
    Service and Support
     11




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Research
    and Development
      Technology
        Manufacturing
    and Supply
       12




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Our
    Competition
    Product

CompetitorsAEDs

Philips, Medtronic, Zoll Medical, Schiller, Welch AllynResting ECG systems

General Electric, Philips, Midmark, Welch Allyn, SchillerCardiac stress testing systems

General Electric, Philips, Midmark, Welch Allyn, SchillerHolter monitoring systems

SpaceLabs, General Electric, Philips, Midmark, SchillerCardiac rehabilitation telemetry systems

Life Sensing Instruments, Scott CareCardiology data management systems

General Electric, PhilipsTraditional (non-AED) defibrillators

Zoll, Medtronic, Philips     
    quality, accuracy, and reliability;
    reputation of the provider;
    relative ease of use;
    depth and breadth of features;
    quality of customer support;
    capability to assist in deployment and training;
    frequency of updates;
    flexibility to integrate products with other devices and systems
    from multiple vendors;
    availability of third-party reimbursement;
    conformity to standards of care; and
    price.  and/or
  Third-Party
    Reimbursement
   13




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Government
    Regulation of Medical Devices
    
    product design and development;
    product testing;
    product manufacturing;
    product labeling and packaging;
    product handling, storage, and installation;
    pre-market clearance or approval;
    advertising and promotion;
    product sales, distribution, and servicing; and
    post-market surveillance.  FDAs Pre-market Clearance and Approval
    Requirements. post-amendment pre-amendment
  510(k) Clearance Process.
   14




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and/or
  Pre-market Approval Process. pre-amendment
    pre-amendment
  Clinical or Market Trials.
  Pervasive and Continuing FDA Regulation.
  
    Quality System regulation, which requires manufacturers to
    follow design, testing, control, documentation and other quality
    assurance procedures during the manufacturing process;
    Establishment Registration, which requires establishments
    involved in the production and distribution of medical devices,
    intended for commercial distribution in the U.S., to register
    with the FDA; 15




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
    Medical Device Listing, which requires manufacturers to list the
    devices they have in commercial distribution with the FDA;
    Labeling regulations, which prohibit misbranded
    devices from entering the market, as well as prohibit the
    promotion of products for unapproved or off-label
    uses and impose other restrictions on labeling; and
    Post-market surveillance including Medical Device Reporting
    (MDR), which requires manufacturers report to the FDA if their
    device may have caused or contributed to a death or serious
    injury, or malfunctioned in a way that would likely cause or
    contribute to a death or serious injury if it were to recur.    
    fines, injunctions, and civil penalties;
    mandatory recall or seizure of our products;
    administrative detention or banning of our products;
    operating restrictions, partial suspension or total shutdown of
    production;
    refusing our request for 510(k) clearance or pre-market approval
    of new product versions;
    revocation of 510(k) clearance or pre-market approvals
    previously granted; and
    criminal penalties.    and/or
  International Regulation.
  European Union.
 16




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Canada.
  Other Countries. and/or
  Intellectual
    Property
     17




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Customers
    Employees
    Foreign
    Operations
    Available
    Information
  http://www.cardiacscience.com. Form 10-K, Form 10-Q, Form 8-K
  Item 1A.
    Risk
    Factors  We are
    subject to many laws and governmental regulations and any
    adverse regulatory action may materially adversely affect our
    business operations and financial results.
   18




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
    take a significant amount of time;
    require the expenditure of substantial resources;
    involve stringent clinical and pre-clinical testing;
    involve modifications, repairs or replacements of our
    products; and
    result in limitations on the proposed uses of our products.      We
    face numerous challenges in implementing a field initiative to
    address the component issue that led to our AED ship-hold in
    late June 2009 and our business, financial position and results
    of operations may be negatively impacted by the costs and other
    commitments needed to carry out the initiative.
      
    since we have no experience designing and carrying out a field
    initiative or other corrective action plan of the magnitude
    under contemplation, we are likely to encounter challenges that
    could cause a delay in the implementation of the field
    initiative or negatively impact its effectiveness;
    the actual costs to implement the proposed field initiative
    could exceed the $18.5 million estimate taken as a charge
    in the third quarter of 2009 due to a variety of factors,
    including the number of impacted devices, the customer and
    geographical segments related to the impacted devices, the
    logistical processes we employ to carry out any field upgrades
    involved in the initiative, the customer response rate in
    implementing any field upgrades involved in the process and the
    level of required follow up with customers, the extent to which
    we may rely on third parties to carry out the field initiative
    and associated costs, and the length of time and other 19




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resources required to complete the field initiative, among
    others, see Note 2  Corrective Action
    Liabilities to the Consolidated Financial Statements in
    Item 8 of this report for further discussion on this matter;  
    implementation of the proposed field initiative, as well as
    attendant publicity, may create a negative perception of our AED
    products in the market, leading to a decline in sales that could
    materially adversely impact our financial position and results
    of operations;
    we will need to devote technical, management, logistics and
    other resources to the implementation of the proposed field
    initiative, which could detract from our ability to operate our
    core business and hinder our ability to carry out initiatives
    relating to new products or product enhancements;
    despite implementation of the field initiative, some devices may
    still fail at a time when they are being used to deliver
    therapy, which could lead to product liability claims against us
    that, if successful, could adversely impact our financial
    position and results of operations or negatively impact the
    markets perception of our products;
    the plan will require the expenditure of significant amounts of
    cash which, in combination with expected operating losses in
    2010, may negatively impact our liquidity or at least constrain
    our ability to pursue strategic initiatives such as
    acquisitions, new product development, or other growth
    initiatives; and  and/or
  We
    face numerous challenges in implementing a recall announced on
    February 3, 2010, and our business, financial position and
    results of operations may be negatively impacted by the costs
    and other commitments needed to carry out the recall and correct
    the product issue.
      
    we may encounter challenges that could cause a delay in the
    implementation of the recall or manufacture of replacement units;
    the actual costs to implement the recall may exceed the
    $2.5 million charge taken in the fourth quarter of 2009 due
    to a variety of factors, including the number of impacted
    devices, the customer and geographical segments related to the
    impacted devices, the logistical processes we employ to carry
    out the recall, the customer response rate and customer
    cooperation and the level of required follow up with customers,
    the extent to which we may rely on third parties to assist and
    associated costs, and the length of time and other resources
    required to complete the field initiative, among others; 20




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
    implementation of the recall, as well as attendant publicity,
    may create a negative perception of our AED products in the
    market, leading to a decline in sales that could materially
    adversely impact our financial position and results of
    operations;
    we will need to devote technical, management, logistics and
    other resources to the implementation of the recall, which could
    detract from our ability to operate our core business and hinder
    our ability to carry out initiatives relating to new products or
    product enhancements;
    despite implementation of the recall, some devices may still
    fail at a time when they are being used to deliver therapy,
    which could lead to product liability claims against us that, if
    successful, could adversely impact our financial position and
    results of operations or negatively impact the markets
    perception of our products;
    the recall will require the expenditure of significant amounts
    of cash which, in combination with expected operating losses in
    2010, may negatively impact our liquidity or at least constrain
    our ability to pursue strategic initiatives such as
    acquisitions, new product development, or other growth
    initiatives; and
    the FDA may require us to implement a more costly corrective
    action plan or recall, or require us to stop shipments of our
    AEDs for a period of time, if it does not concur with our
    proposed corrective action plan, including changes to our
    manufacturing process, in which case our business could be
    subject to severe disruption and the cost involved could have a
    material adverse effect on our liquidity.  Our
    cash and cash equivalents may not be sufficient to fund future
    operations and we may not be able to secure additional sources
    of financing or obtain financing on acceptable
    terms.
      We may
    be required to implement other costly product recalls or
    corrective actions.
   21




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Quality
    problems with our processes, goods and services could harm our
    reputation for producing high quality products and erode our
    competitive advantage.
    Warranty
    and product liability claims could adversely impact our earnings
    and reputation.
    Our
    business may be adversely affected by deteriorating economic
    conditions.
    We
    rely significantly on our distributors and strategic selling
    alliances to generate sales of our products; if we do not
    maintain our relationships with these parties or they fail to
    successfully distribute our products, our sales and operating
    results will likely suffer.
     22




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We are
    dependent upon licensed and purchased technology for some of our
    products, and we may not be able to renew these licenses or
    purchase agreements in the future.
    Our
    international business is subject to risks that could adversely
    affect our profitability and operating results.
    
    changes in foreign medical reimbursement programs and policies;
    changes in foreign regulatory requirements;
    local product preferences and product requirements;
    longer-term receivables than are typical in the U.S.;
    fluctuations in foreign currency exchange rates;
    less protection of intellectual property in some countries
    outside of the U.S.;
    trade protection measures and import and export licensing
    requirements;
    work force instability;
    political and economic instability;
    inherent control risks associated with operations based outside
    the U.S.; and
    complex tax and cash management issues.    Our
    business is subject to intense competition, which may reduce the
    demand for our products.
   23




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
    greater financial and technical resources;
    greater variety of products;
    greater product pricing, discounting and bundling flexibility;
    patent portfolios that may present an obstacle to our conduct of
    business;
    stronger brand recognition and marketing resources; and
    larger distribution and sales networks.    We may
    be unable to increase sales of our cardiac monitoring products
    and services, which could cause our stock price to
    decrease.
    Our
    financial results could be impacted by the credit risk of our
    customers.
    Our
    stock price is volatile, and you may not be able to sell your
    shares for a profit.
    
    actual or anticipated variations in operating results;
    changes in our business, operations, or prospects;
    product issues necessitating recalls or other corrective actions
    and related regulatory actions;
    changes in financial estimates or recommendations by securities
    analysts;
    conditions or trends in medical devices and diagnostic
    cardiology products markets;
    announcements by us or our competitors of significant customer
    wins or losses, gains or losses of distributors, technological
    innovations, new products or services;
    announcements by us or our competitors of significant
    acquisitions, strategic partnerships, joint ventures or capital
    commitments; 24




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
    additions or departures of key personnel;
    sales of a large number of shares of our common stock;
    adverse litigation;
    unfavorable legislative or regulatory decisions; and
    general market conditions.    We
    were not profitable in 2008 or 2009 and we may be unable to
    return to profitability in the future, which could result in a
    decline in our stock price.
    Our
    business may be adversely affected by
    restructurings.
    Our
    quarterly revenues and operating results are unpredictable and
    may vary significantly.
    
    effects of domestic and foreign economic conditions on our
    industry
    and/or
    customers, which conditions have significantly deteriorated in
    the last year and are expected to continue to decline for the
    foreseeable future;
    the impact of a ship-hold, recalls or other corrective actions,
    or regulatory actions resulting from quality concerns relating
    to our products;
    the impact of acquisitions, divestitures, strategic alliances,
    and other significant corporate events; 25




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
    changes in our ability to obtain products and product components
    that are manufactured for us by third parties;
    delays in the development or commercial introduction of new
    versions of products;
    the ability to attain and maintain production volumes and
    quality levels for our products and product components;
    the impact of a ship-hold on any of our products due to quality
    control concerns;
    changes in the demand for our products;
    varying sales cycles that can take up to a year or more;
    changes in the mix of products we sell, which could affect our
    revenue levels as well as our gross margins;
    unpredictable budgeting cycles of our customers;
    delays in obtaining regulatory clearance for new versions of our
    products;
    increased product and price competition;
    the impact of regulatory changes on the availability of
    third-party reimbursement to customers of our products;
    the loss of key personnel;
    the loss of key distributors or distribution companies;
    seasonality in the sales of our products;
    the impact of longer buying cycles; and
    the impact of employee turnover.  period-to-period
  If we
    are unsuccessful in developing and commercializing new versions
    of our products, our operating results will
    suffer.
    
    accurately assess and provide compelling solutions to customer
    needs;
    develop products that are functional and easy to use;
    quickly and cost-effectively obtain regulatory clearance or
    approval;
    price competitively;
    manufacture and deliver on time;
    control costs associated with manufacturing, installation,
    warranty and maintenance;
    manage customer acceptance and payment; 26




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
    limit demands by our customers for retrofits;
    access new interface standards needed for product connectivity;
    anticipate and meet demands of our international customers for
    products featuring local language capabilities; and
    anticipate and compete effectively with our competitors
    efforts.    Interruption
    or cancellation of supply, and our inability to secure
    alternative suppliers on a timely basis, would likely harm our
    ability to ship products to our customers, decrease our revenues
    and increase our costs.
    Inadequate
    levels of reimbursement from governmental or other third-party
    payers for procedures using our products may cause revenues to
    decrease.
      If we
    do not maintain or grow revenues from our support services or
    consumables, our operating and financial results may be
    negatively impacted.
   27




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Our
    lack of customer purchase contracts and our limited order
    backlog make it difficult to predict sales and plan
    manufacturing requirements, which can lead to lower revenues,
    higher expenses and reduced margins.
    
    if we overestimate our requirements we may be obligated to
    purchase more components or third-party products than is
    required;
    if we underestimate our requirements, our third-party
    manufacturers and suppliers may have an inadequate product or
    product component inventory, which could interrupt manufacturing
    of our products and result in delays or cancellations in
    shipments and loss of revenues;
    we may also experience shortages of product components from time
    to time, which also could delay the manufacturing of our
    products; and
    over or under production can lead to higher expense, lower than
    anticipated revenues, and reduced margins.  If
    market conditions cause us to reduce the selling price of our
    products, or our market share is negatively affected by the
    activities of our competitors, our margins and operating results
    will decrease.
    If we
    are unable to retain our executive officers and hire and retain
    other key personnel, we may not be able to sustain or grow our
    business.
    Failure
    to adequately protect our intellectual property rights may cause
    our expenses to increase and our business to
    suffer.
   28




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Our
    technology may become obsolete, which would negatively impact
    our ability to sell our products.
    Our
    reliance on a principal manufacturing facility may impair our
    ability to respond to natural disasters or other unforeseen
    catastrophic events.
    We may
    make future acquisitions, which involve numerous risks that
    could impact our business and results of
    operations.
    
    difficulties in integrating the operations, technologies, and
    products of the acquired companies;
    the risk of diverting managements attention from normal
    daily operations of the business;
    potential difficulties in completing projects associated with
    in-process research and development; 29




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
    risks of entering markets in which we have no, or limited,
    direct prior experience and where competitors in such markets
    have stronger market positions;
    initial dependence on unfamiliar supply chains or relatively
    small supply partners;
    insufficient revenues to offset increased expenses associated
    with acquisitions;
    the risk that acquired lines of business may reduce or replace
    the sales of existing products; and
    the potential loss of key employees of the acquired companies.    We may
    need additional capital to continue our acquisition growth
    strategy.
    Our
    internal research and product development activities are
    complemented by acquisitions, investments and alliances. We
    cannot guarantee that any previous or future acquisitions,
    investments or alliances will be successful for the purpose of
    complementing our internal research and product development
    activities.
    Future
    issuances of our common stock could dilute existing stockholders
    and cause our stock price to decline.
    Our
    charter documents and Delaware law contain provisions that could
    make it more difficult for a third party to acquire
    us.
   30




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Realization
    of our deferred tax assets is uncertain.
    Changes
    in tax laws and unanticipated tax liabilities could adversely
    affect our effective income tax rate and
    profitability.
  non-U.S. earnings
  Our
    future financial results could be adversely impacted by asset
    impairments.
   31




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties        Item 3.
    Legal
    Proceedings    Item 4.
    Reserved PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities      Stock PriceHigh

LowFiscal 2009First Quarter

$
7.70


$
2.56Second Quarter


4.58



2.83Third Quarter


4.42



3.00Fourth Quarter


4.09



2.09Fiscal 2008First Quarter

$
9.75


$
7.60Second Quarter


9.75



7.60Third Quarter


11.00



7.57Fourth Quarter


10.31



5.00    32




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Recent
    Sales of Unregistered Securities
    Performance
    Comparison Graph
    COMPARISON
    OF 52 MONTH CUMULATIVE TOTAL RETURN*
    Among Cardiac Science Corporation, The NASDAQ Composite Index
    
    And The S&P Health Care Equipment Index
  
    *
    
    $100 invested on 9/1/05 in stock or 8/31/05 in index, including
    reinvestment of dividends. Fiscal year ending December 31.  ©
 33




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Item 6.
    Selected
    Financial Data    Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except share and per share data)Consolidated Statements of Operations Data(1):Revenues

$
156,848


$
206,153


$
182,131


$
155,429


$
106,650Cost of revenues


80,665



103,870



93,715



82,195



59,794Corrective action costs


21,000















Gross profit


55,183



102,283



88,416



73,234



46,856Operating Expenses:Research and development


14,950



16,426



13,020



11,733



9,353Sales and marketing


48,047



50,733



46,195



39,960



24,957General and administrative


26,134



22,417



19,176



19,072



14,233Impairment of goodwill






107,671











Litigation and related expenses










3,808



3,855



893Licensing income and litigation settlement










(6,000
)






Total operating expenses


89,131



197,247



76,199



74,620



49,436Operating income (loss)


(33,948
)


(94,964
)


12,217



(1,386
)


(2,580
)Other income (expense):Interest income (expense), net


66



489



402



(16
)


325Other income (expense), net


102



635



799



782



(487
)Total other income (expense)


168



1,124



1,201



766



(162
)Income (loss) before income tax (expense) benefit


(33,780
)


(93,840
)


13,418



(620
)


(2,742
)Income tax (expense) benefit


(42,462
)


(4,093
)


(4,924
)


615



1,473Net income (loss)


(76,242
)


(97,933
)


8,494



(5
)


(1,269
)Less: net income attributable to noncontrolling interests


(755
)


(451
)


(4
)


54



31Net income (loss) attributable to Cardiac Science Corporation

$
(76,997
)

$
(98,384
)

$
8,490


$
49


$
(1,238
)Net income (loss) per share attributable to CardiacScience Corporation:Basic(2)

$
(3.31
)

$
(4.30
)

$
0.37


$
0.00


$
(0.08
)Diluted(2)

$
(3.31
)

$
(4.30
)

$
0.37


$
0.00


$
(0.08
)Weighted average shares outstanding:Basic(2)


23,263,717



22,869,920



22,697,113



22,502,040



14,695,261Diluted(2)


23,263,717



22,869,920



23,197,911



22,555,326



14,695,261Consolidated Statements of Cash Flows Data:Cash provided by (used in) operatingactivities

$
(4,943
)

$
17,743


$
13,297


$
8,764


$
(850
)Cash used in investing activities

$
(4,170
)

$
(4,262
)

$
(3,788
)

$
(3,307
)

$
(18,053
)Cash provided by financing activities

$
864


$
769


$
828


$
816


$
547Effect of exchange rate changes on cash

$
460


$
246


$
3


$



$
   34




---



##### Table of Contents



Year Ended December 31,2009

2008

2007

2006

2005(In thousands)Consolidated Balance Sheet Data:Cash and cash equivalents

$
26,866


$
34,655


$
20,159


$
9,819


$
3,546Total assets


116,060



170,208



262,671



247,645



248,557Current liabilities


50,442



37,960



35,219



31,294



33,832Long-term liabilities


5,389







54



679



1,806Total Cardiac Science Corporation shareholders equity

$
58,936


$
131,703


$
227,271


$
215,597


$
212,791     (1)
    
    The business combination of Quinton and CSI in September 2005
    materially affects the comparability of information contained in
    this table.(2)
    
    Shares prior to September 1, 2005 have been retroactively
    adjusted to reflect the conversion of Quinton shares into
    Cardiac Science Corporation shares at a ratio of 0.77184895
    Cardiac Science Corporation shares for each Quinton share. See
    Item 8, Note 1 to the Consolidated Financial
    Statements for a reconciliation of the denominators used in
    computing basic and diluted income (loss) per share for 2009,
    2008 and 2007.  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  You should read the following discussion and analysis in
    conjunction with our consolidated financial statements and
    related notes included elsewhere in this report. Except for
    historical information, the following discussion contains
    forward-looking statements within the meaning of the safe harbor
    provisions under the Private Securities Litigation Reform Act of
    1995. All statements other than statements of historical fact,
    including future results of operations or financial position,
    made in this Annual Report on
    Form 10-K
    are forward looking. The words believe,
    expect, intend, anticipate,
    will, may, variations of such words, and
    similar expressions identify forward-looking statements, but
    their absence does not mean that the statement is not
    forward-looking. These forward-looking statements reflect
    managements current expectations and involve risks and
    uncertainties. Our actual results could differ materially from
    results that may be anticipated by such forward-looking
    statements due to various uncertainties. The principal factors
    that could cause or contribute to such differences include, but
    are not limited to, the factors discussed in the section
    entitled Risk Factors and those discussed elsewhere
    in this report. Readers are cautioned not to place undue
    reliance on these forward-looking statements, which speak only
    as of the date of this report. We undertake no obligation to
    revise any forward-looking statements to reflect events or
    circumstances that may subsequently arise. Readers are urged to
    review and consider carefully the various disclosures made in
    this report and in our other filings made with the SEC that
    disclose and describe the risks and factors that may affect our
    business, prospects and results of operations. The terms
    the Company, us, we and
    our refer to Cardiac Science Corporation and our
    majority-owned subsidiaries.
  Business
    Overview
  ® ® ®
 35




---



##### Table of Contents



Critical
    Accounting Estimates and Policies
    and
  Deferred Tax Assets and Income Taxes.
    Stock-Based Compensation.
  Indefinite Lived Intangible Assets.
   36




---



##### Table of Contents



Valuation of Long-Lived Assets.
      Accounts Receivable.
  Inventories.
  Warranty.
  Corrective Action Costs.
   37




---



##### Table of Contents



Goodwill.
    Software Revenue Recognition.
    Revenue Recognition.
   38




---



##### Table of Contents



Recent
    Accounting Pronouncements
    2009-13. 605-25,
  2009-14. 985-605,
 39




---



##### Table of Contents



2009-13.
  Results
    of Operations
  Overview
    of 2009 Results
  During 2009, we:
  
    Generated revenue of $156.8 million, a decrease of
    approximately 24% compared to 2008. This decrease was mostly due
    to reduced AED sales in Japan as a result of weak local market
    conditions combined with the introduction of a competitive
    product by our sole Japanese distributor. In addition, we
    experienced reduced sales of our AEDs in North America and of
    cardiac monitoring products globally as a result of a weakened
    economy. Sales of AEDs outside of North America, excluding
    Japan, increased by 8%, despite the weak economy.
    Recorded charges totaling $21.0 million during the year
    ended December 31, 2009 related to two separate voluntary
    corrective actions associated with our AEDs. These charges
    related to: (1) a corrective action to deploy a field
    software update, which we announced in November 2009, associated
    with approximately 300,000 AEDs manufactured between June 2003
    and June 2009, for which a charge of $18.5 million was
    recorded in the third quarter, and (2) a voluntary recall,
    which we announced in February 2010, of approximately 12,200
    AEDs manufactured between October 2009 and January 2010, for
    which a charge of $2.5 million was recorded in the fourth
    quarter.
    Incurred a non cash charge to income tax expense of
    $42.2 million to increase the valuation allowance against
    our deferred tax assets.
    Incurred a net loss per share of $3.31, as compared to a net
    loss per share of $4.30 for 2008.
    Used cash from operations of $4.9 million, compared to the
    generation of positive cash from operations of
    $17.7 million for 2008. We ended the year with a cash
    balance of $26.9 million.
    Progressed in our efforts to position the company for improved
    future results, including the recruitment of several new
    executives, improved R&D effectiveness, enhancements to IT
    and quality system infrastructure and more active corporate
    development.  Looking
    Forward
  flat-to-modest
     40




---



##### Table of Contents



and/or
           41




---



##### Table of Contents



Revenues
      Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2009


2008 to 2009


2008


2007 to 2008


2007(Dollars in thousands)Defibrillation products

$
85,858



(29.6
)%

$
121,946



25.2
%

$
97,382% of total revenue


54.8
%






59.2
%






53.5
%Cardiac monitoring products


53,378



(18.6
)%


65,556



(4.5
)%


68,624% of total revenue


34.0
%






31.8
%






37.7
%Service


17,612



(5.6
)%


18,651



15.7
%


16,125% of total revenue


11.2
%






9.0
%






8.9
%Total revenues

$
156,848



(23.9
)%

$
206,153



13.2
%

$
182,131   Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
        Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
     42




---



##### Table of Contents



Gross
    Profit
      Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2009


2008 to 2009


2008


2007 to 2008


2007(Dollars in thousands)Defibrillation products

$
49,487



(26.2
)%

$
67,053



27.3
%

$
52,664% of defibrillation products revenue


57.6
%






55.0
%






54.1
%Corrective action costs


(21,000
)


n/m







n/m



Cardiac monitoring products


21,641



(26.0
)%


29,260



(8.6
)%


32,000% of cardiac monitoring products revenue


40.5
%






44.6
%






46.6
%Service


5,055



(15.3
)%


5,970



59.1
%


3,752% of service revenue


28.7
%






32.0
%






23.3
%Total gross profit

$
55,183



(46.0
)%

$
102,283



15.7
%

$
88,416% of total revenue


35.2
%






49.6
%






48.5
%   Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
     43




---



##### Table of Contents



Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
        Operating
    Expenses
               44




---



##### Table of Contents



Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2009


2008 to 2009


2008


2007 to 2008


2007(Dollars in thousands)Research and development

$
14,950



(9.0
)%

$
16,426



26.2
%

$
13,020% of total revenue


9.5
%






8.0
%






7.1
%Sales and marketing


48,047



(5.3
)%


50,733



9.8
%


46,195% of total revenue


30.6
%






24.6
%






25.4
%General and administrative


26,134



16.6
%


22,417



16.9
%


19,176% of total revenue


16.7
%






10.9
%






10.5
%Impairment of goodwill






n/m



107,671



n/m



% of total revenue


0.0
%






52.2
%






0.0
%Litigation and related expenses






n/m







n/m



3,808% of total revenue


0.0
%






0.0
%






2.1
%Licensing income and litigation settlement






n/m







n/m



(6,000
)% of total revenue


0.0
%






0.0
%






(3.3
)%Total operating expenses

$
89,131



(54.8
)%

$
197,247



158.9
%

$
76,199% of total revenue


56.8
%






95.7
%






49.0
%   Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
        Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
       45




---



##### Table of Contents



Other
    Income and Expense
      sub-lease
  Income
    Taxes
     46




---



##### Table of Contents



Liquidity
    and Capital Resources
  Cash
    flows for the years ended December 31, 2009, 2008 and 2007
    were as follows:
  Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2009


2008 to 2009


2008


2007 to 2008


2007(Dollars in thousands)Cash provided by (used in) operating activities

$
(4,943
)


(127.9
)%

$
17,743



33.4
%

$
13,297Cash used in investing activities


(4,170
)


2.2
%


(4,262
)


(12.5
)%


(3,788
)Cash provided by financing activities


864



12.4
%


769



(7.1
)%


828Effect of exchange rate changes on cash


460



87.0
%


246



n/m



3Total change in cash and cash equivalents

$
(7,789
)


(153.7
)%

$
14,496



40.2
%

$
10,340          47




---



##### Table of Contents



and/or
      Form 10-K.
 48




---



##### Table of Contents



Contractual
    Obligations
    Less than


1-3


3-5


AfterContractual Obligations

Total


1 Year


Years


Years


5 YearsOperating leases

$
12,786


$
2,133


$
4,210


$
3,258


$
3,185Purchase obligations


32,916



32,916











Total contractual obligations

$
45,702


$
35,049


$
4,210


$
3,258


$
3,185       Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk   49




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  CARDIAC
    SCIENCE CORPORATION
    AND SUBSIDIARIES
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Managements Report on Internal Control Over
    Financial Reporting


51Report of Independent Registered Public
    Accounting Firm


52Consolidated Balance Sheets


53Consolidated Statements of Operations


54Consolidated Statements of Equity and
    Comprehensive Income (Loss)


55Consolidated Statements of Cash Flows


56Notes to Consolidated Financial Statements


57Schedule II  Valuation and
    Qualifying Accounts


88  50




---



##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  Rules 13a-15(f). Internal Control  Integrated Framework
   51




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
  KPMG
    LLP
    52




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
 CONSOLIDATED
    BALANCE SHEETS  December 31,2009


2008(In thousands, except share amounts)ASSETSCurrent Assets:Cash and cash equivalents

$
26,866


$
34,655Accounts receivable, net of allowance for doubtful accounts of
    $1,017 and $1,186, respectively


24,228



31,665Inventories


23,581



24,692Deferred income taxes






8,366Prepaid expenses and other current assets


3,702



3,144Total current assets


78,377



102,522Other assets


872



428Machinery and equipment, net of accumulated depreciation and
    amortizationof $17,490 and $15,190, respectively


8,406



6,994Deferred income taxes


31



28,452Intangible assets, net of accumulated amortization of $17,876
    and $13,889, respectively


27,988



31,278Investments in unconsolidated entities


386



534Total assets

$
116,060


$
170,208LIABILITIES AND EQUITYCurrent Liabilities:Accounts payable

$
11,030


$
12,711Accrued liabilities


12,216



13,535Warranty liability


4,028



3,796Deferred revenue


7,919



7,918Corrective action liabilities


15,249



Total current liabilities


50,442



37,960Deferred income taxes


5,389



Total liabilities


55,831



37,960Equity:Cardiac Science Corporation shareholders equity:Preferred stock (10,000,000 shares authorized),
    $0.001 par value, no shares issued or outstanding as of
    December 31, 2009 and 2008, respectively






Common stock (65,000,000 shares authorized),
    $0.001 par value, 23,566,320 and 22,998,364 shares
    issued and outstanding at December 31, 2009 and 2008,
    respectively


231,159



227,303Accumulated other comprehensive income (loss)


304



(70
)Accumulated deficit


(172,527
)


(95,530
)Total Cardiac Science Corporation shareholders equity


58,936



131,703Noncontrolling interests


1,293



545Total equity


60,229



132,248Total liabilities and equity

$
116,060


$
170,208    53




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF OPERATIONS  Year Ended December 31,2009


2008


2007(In thousands, except share and per share data)Revenues:Products

$
139,236


$
187,502


$
166,006Service


17,612



18,651



16,125Total revenues


156,848



206,153



182,131Cost of Revenues:Products


68,108



91,189



81,342Corrective action costs


21,000







Service


12,557



12,681



12,373Total cost of revenues


101,665



103,870



93,715Gross profit


55,183



102,283



88,416Operating Expenses:Research and development


14,950



16,426



13,020Sales and marketing


48,047



50,733



46,195General and administrative


26,134



22,417



19,176Impairment of goodwill






107,671



Litigation and related expenses










3,808Licensing income and litigation settlement










(6,000
)Total operating expenses


89,131



197,247



76,199Operating income (loss)


(33,948
)


(94,964
)


12,217Other Income:Interest income


66



489



479Interest expense










(77
)Other income, net


102



635



799Total other income


168



1,124



1,201Income (loss) before income tax expense


(33,780
)


(93,840
)


13,418Income tax expense


(42,462
)


(4,093
)


(4,924
)Net income (loss)


(76,242
)


(97,933
)


8,494Less: net income attributable to noncontrolling interests


(755
)


(451
)


(4
)Net income (loss) attributable to Cardiac Science Corporation

$
(76,997
)

$
(98,384
)

$
8,490Net income (loss) per share attributable toCardiac Science Corporation:Basic

$
(3.31
)

$
(4.30
)

$
0.37Diluted

$
(3.31
)

$
(4.30
)

$
0.37Weighted average shares outstanding:Basic


23,263,717



22,869,920



22,697,113Diluted


23,263,717



22,869,920



23,197,911    54




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME (LOSS)  TotalCardiacAccumulated


Retained


ScienceOther


Earnings


CorporationComprehensive


(Accumulated


Shareholders


Noncontrolling


TotalShares


Amount


Income (Loss)


Deficit)


Equity


Interests


Equity(In thousands)Balance, December 31, 2006


22,598


$
221,213


$
20


$
(5,636
)

$
215,597


$
75


$
215,672Issuance of common stock upon exercise of stock options


74



368











368







368Stock-based compensation






2,257











2,257







2,257Proceeds from issuance of stock under employee stock purchase
    plan


80



553











553







553Stock awards


44























Minimum tax withholding on stock awards


(14
)


(141
)










(141
)






(141
)Investment in consolidated joint venture by noncontrolling
    interest






















48



48Comprehensive income :Net income














8,490



8,490



4



8,494Unrealized gain on
    available-for-sale
    securities, net of income tax effect of $87










147







147







147Total comprehensive income


















8,637



4



8,641Balance, December 31, 2007


22,782



224,250



167



2,854



227,271


$
127



227,398Issuance of common stock upon exercise of stock options


86



500











500







500Stock-based compensation






2,194











2,194







2,194Proceeds from issuance of stock under employee stock purchase
    plan


90



603











603







603Stock awards


60























Minimum tax withholding on stock awards


(20
)


(244
)










(244
)






(244
)Purchase of noncontrolling interest






















(33
)


(33
)Comprehensive income (loss):Net income (loss)














(98,384
)


(98,384
)


451



(97,933
)Unrealized loss on
    available-for-sale
    securities, net of income tax effect of ($65)










(128
)






(128
)






(128
)Foreign currency translation adjustments










(109
)






(109
)






(109
)Total comprehensive income (loss)


















(98,621
)


451



(98,170
)Balance, December 31, 2008


22,998



227,303



(70
)


(95,530
)


131,703



545



132,248Issuance of common stock uponexercise of stock options


193



528











528







528Stock-based compensation






2,670











2,670







2,670Proceeds from issuance of stock under employee stock purchase
    plan


169



464











464







464Stock awards


148























Minimum tax withholding on stock awards


(42
)


(128
)










(128
)






(128
)Issuance of common stock in asset acquisition


100



322











322







322Comprehensive income (loss):Net income (loss)














(76,997
)


(76,997
)


755



(76,242
)Unrealized loss on
    available-for-sale
    securities, net of income tax effect of ($37)










(110
)






(110
)






(110
)Foreign currency translation adjustments










484







484



(7
)


477Total comprehensive income (loss)


















(76,623
)


748



(75,875
)Balance, December 31, 2009


23,566


$
231,159


$
304


$
(172,527
)

$
58,936


$
1,293


$
60,229    55




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2009


2008


2007(In thousands)Operating Activities:Net income (loss)

$
(76,242
)

$
(97,933
)

$
8,494Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Stock-based compensation


2,645



2,173



2,233Gain on disposal of machinery and equipment










(16
)Depreciation and amortization


6,294



6,327



6,746Impairment of goodwill






107,671



Licensing income and litigation settlement










(6,000
)Deferred income taxes


42,215



3,093



4,494Changes in operating assets and liabilities, net of businesses
    acquired:Accounts receivable, net


8,939



(2,825
)


(2,468
)Inventories


1,100



(2,877
)


(4,153
)Prepaid expenses and other assets


(2,545
)


(645
)


(304
)Accounts payable


(1,511
)


(543
)


1,031Accrued liabilities


(1,320
)


2,940



1,531Warranty liability


232



585



679Corrective action liabilities


15,249







Deferred revenue


1



(223
)


1,030Net cash provided by (used in) operating activities


(4,943
)


17,743



13,297Investing Activities:Purchases of short-term investments






(845
)


(1,240
)Maturities of short-term investments






1,195



1,437Purchases of machinery and equipment


(3,856
)


(3,911
)


(2,014
)Purchases of intangibles


(370
)






Purchase of patents as part of litigation settlement










(1,000
)Proceeds from repayment of notes


110



38



Cash paid for acquisitions


(54
)


(739
)


(971
)Net cash used in investing activities


(4,170
)


(4,262
)


(3,788
)Financing Activities:Proceeds from exercise of stock options and issuance of shares
    under employee stock purchase plan


992



1,103



921Minimum tax withholding on stock awards


(128
)


(244
)


(141
)Investment in consolidated joint venture by noncontrolling
    interest










48Purchase of shares from noncontrolling interest






(90
)


Net cash provided by financing activities


864



769



828Effect of exchange rate changes on cash and cash equivalents


460



246



3Net change in cash and cash equivalents


(7,789
)


14,496



10,340Cash and cash equivalents, beginning of period


34,655



20,159



9,819Cash and cash equivalents, end of period

$
26,866


$
34,655


$
20,159Supplemental disclosures of cash flow information:Cash paid for income taxes, net of refunds

$
420


$
1,026


$
338Cash paid for interest









$
25Supplemental disclosures of noncash investing and financing
    activities:Intangible assets acquired in licensing income and litigation
    settlement

$







$
6,000Increase (decrease) in accrued machinery and equipment purchases

$
(212
)

$
396



Conversion of accounts receivable to note receivable

$
228


$
330



Acquisitions of intangible assets

$
322







    56




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Summary
    of Significant Accounting Policies  Organization
    and Description of Business
  ® ® ®
    Basis
    of Presentation
  Basis of
    Presentation
        Liquidity
   57




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    and/or
      Use of
    Estimates
   58




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cash
    Equivalents
    Short-term
    Investments
  available-for-sale.
    Accounts
    Receivable
    Inventories
  and/or
  Machinery
    and Equipment
      Indefinite
    Lived Intangible Assets
     59




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Valuation
    of Long-Lived Assets
        Goodwill
     60




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Deferred
    Tax Assets and Income Taxes
    Litigation
    and Other Contingencies
    Restructuring
    Costs
    Revenue
    Recognition
       61




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
                Sales
    Returns
    Segment
    Reporting
   62




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Export
    Sales
    Foreign
    Currency Transactions and Translation
      Advertising
    Costs
    Warranty
    and Corrective Action Costs
         63




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Research
    and Development Costs
    Noncontrolling
    Interests
    Comprehensive
    Income (Loss)
  available-for-sale
    December 31,2009


2008(In thousands)Unrealized gain on securities, net of income tax effect of zero
    and ($37), respectively

$
(71
)

$
39Foreign currency translation adjustments


375



(109
)Total accumulated other comprehensive income (loss)

$
304


$
(70
)   Financial
    Instruments and Concentrations of Credit Risk
  and/or
  Stock-Based
    Compensation
   64




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Net
    Income (Loss) Per Share
      Year Ended December 31,2009


2008


2007(In thousands, except share data)Numerator:Net income (loss) attributable to Cardiac Science Corporation

$
(76,997
)

$
(98,384
)

$
8,490Denominator:Weighted average shares for basic calculation


23,263,717



22,869,920



22,697,113Incremental shares from employee stock options, non-vested stock
    awards and ESPP










500,798Weighted average shares for diluted calculation


23,263,717



22,869,920



23,197,911     Year Ended December 31,2009

2008

2007Antidilutive shares issuable upon exercise of stock options


3,129,923



2,896,877



2,459,875Antidilutive shares issuable upon exercise of warrants






237,775



288,984Antidilutive shares related to non-vested stock awards and ESPP


1,215,460



289,836



194,904Total


4,345,383



3,424,488



2,943,763   Accounting
    for Licensing Income and Litigation Settlement
   65




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Litigation
    and Related Expenses
        Customer
    and Vendor Concentrations
    Year Ended December 31,Customer

2009

2008

2007Nihon Kohden Corporation



*


19
%


11
%   *
    
    Did not exceed 10%.      Year Ended December 31,Vendor

2009

2008

2007Vendor 1


14
%


18
%


16
%    66




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Taxes
    Collected from Customers and Remitted to Governmental
    Authorities
    Reclassifications
    Recent
    Accounting Pronouncements
    2009-13. 605-25,
  2009-14. 985-605, 2009-13.
 67




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2.
    Corrective
    Action Liabilities      Charged toBeginning

Product Cost





End ofof Period

of Revenues

Adjustments

Expenditures

Period(In thousands)Year ended December 31, 2009

$



$
21,000


$



$
(5,751
)

$
15,249          68




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        3.
    Segment
    Reporting       69




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2009


2008


2007(In thousands)Defibrillation products

$
85,858


$
121,946


$
97,382Cardiac monitoring products


53,378



65,556



68,624Service


17,612



18,651



16,125Total

$
156,848


$
206,153


$
182,131     Year Ended December 31,2009


2008


2007(In thousands)Domestic

$
105,811


$
125,172


$
135,646Foreign


51,037



80,981



46,485Total

$
156,848


$
206,153


$
182,131         4.
    Restructuring
    Costs       70




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    5.
    Inventories    2009


2008(In thousands)Raw materials

$
18,752


$
20,871Finished goods


4,829



3,821Total inventories

$
23,581


$
24,692   6.
    Machinery
    and Equipment    DepreciableLives


2009


2008Equipment


(2-14 years
)

$
20,019


$
16,853Furniture and fixtures


(2-13 years
)


2,609



2,444Leasehold improvements


(1-10 years
)


3,268



2,887Subtotal






25,896



22,184Less: Accumulated depreciation and amortization






(17,490
)


(15,190
)Net machinery and equipment





$
8,406


$
6,994    71




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   7.
    Intangible
    Assets    AccumulatedUseful life

Cost


Amortization


NetIntangible assets not subject to amortization:Burdick trade name



$
3,400


$



$
3,400Cardiac Science trade name




11,380







11,380Cardiac Science Deutschland trade name




192







192Total intangible assets not subject to amortization




14,972







14,974Intangible assets subject to amortization:Cardiac Science customer relationships

5 years


8,650



(7,497
)


1,153Cardiac Science developed technology

8 years


11,330



(6,137
)


5,193Burdick distributor relationships

10 years


1,400



(980
)


420Burdick developed technology

7 years


860



(860
)


Patents and patent applications

5-10 years


960



(933
)


27Patent rights

6-13 years


7,692



(1,469
)


6,223Total intangible assets subject to amortization




30,892



(17,876
)


13,016Total



$
45,864


$
(17,876
)

$
27,988       2010

$
3,3432011


2,1902012


2,1872013


1,5672014


623Thereafter


3,106Total:

$
13,016   8.
    Investments
    in Unconsolidated Entities  available-for-sale,
 72




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008ScImage

$
84


$
84Biotel


217



371Other


85



79Total investment in unconsolidated entities

$
386


$
534   ScImage
    Biotel,
    Inc.
    9.
    Goodwill      Increases Due toBeginning of Period

Acquisitions

Impairment

End of PeriodYear ended December 31, 2008

$
107,613


$
58


$
(107,671
)

$
     Goodwill
    Impairment
     73




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
             74




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10.
    Accrued
    Liabilities and Warranty    2009


2008Accrued compensation and benefits

$
5,619


$
5,862Other accrued liabilities


6,597



7,673Total accrued liabilities

$
12,216


$
13,535     Charged toBeginning

Product Cost

Warranty

End ofof Period

of Revenues

Expenditures

Period(In thousands)Year ended December 31, 2007

$
2,532


$
2,986


$
(2,307
)

$
3,211Year ended December 31, 2008

$
3,211


$
3,890


$
(3,305
)

$
3,796Year ended December 31, 2009

$
3,796


$
2,866


$
(2,634
)

$
4,028   11.
    Income
    Taxes    Year Ended December 31,2009


2008


2007U.S.

$
(36,926
)

$
(94,968
)

$
12,866Foreign


3,146



1,128



552Total

$
(33,780
)

$
(93,840
)

$
13,418  75




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009


2008


2007Current:Federal

$
(819
)

$
492


$
338State


68



190



84Foreign


998



318



8Total current income tax expense


247



1,000



430Deferred:Federal


35,329



3,383



4,452State


6,917



(290
)


42Foreign


(31
)






Total deferred income tax expense


42,215



3,093



4,494Total income tax expense

$
42,462


$
4,093


$
4,924     Year Ended December 31,2009

2008

2007Federal income tax provision (benefit) at U.S. statutory rates


(34.0
)%


(34.0
)%


34.0
%Nondeductible impairment of goodwill






22.5
%


Meals and entertainment


0.5
%


0.2
%


1.3
%Stock-based compensation


0.3
%


0.1
%


2.1
%Research and development credits


(1.8
)%


(0.8
)%


(4.4
)%State income taxes, net of federal benefit


(1.4
)%


0.2
%


2.9
%Foreign rate difference


(0.5
)%


(0.1
)%


(0.7
)%Increase in valuation allowance


161.5
%


16.1
%


Other, net


1.2
%


0.1
%


1.5
%Provision for income taxes


125.8
%


4.3
%


36.7
%      76




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        The Worker,
    Homeownership, and Business Assistance Act of 2009
        with-and-without with-and-without
 77




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2009


2008Deferred tax assets:Net operating loss carryforwards

$
37,467


$
29,971Stock-based compensation


2,461



2,122Research and experimentation and alternative minimum tax credits


7,898



7,897Inventory basis difference


1,005



995Warranty liability


1,468



1,369Corrective action liabilities


5,560



Deferred revenue


775



799Accrued compensation, severance, relocation


684



660Intangible assets, including tax deductible goodwill


13,010



14,448Other assets


1,461



1,518Other


429



1,230Gross deferred tax assets


72,218



61,009Less: valuation allowance


(69,720
)


(15,155
)Net deferred tax assets


2,498



45,854Deferred tax liabilities:Burdick intangible assets


(153
)


(246
)Burdick trade name intangible asset


(1,240
)


(1,226
)Cardiac Science intangible assets


(2,314
)


(3,423
)Cardiac Science trade name


(4,149
)


(4,104
)Marketable equity securities






(37
)Gross deferred tax liabilities


(7,856
)


(9,036
)Net deferred tax assets (liabilities)

$
(5,358
)

$
36,818   2009


2008Current deferred tax assets

$



$
8,366Deferred tax assets, noncurrent


31



28,452Deferred tax liabilities, noncurrent


(5,389
)


Net deferred tax assets / (liabilities)

$
(5,358
)

$
36,818   Form 10-K
 78




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      and/or
    12.
    Commitments
    and Contingencies  Lease
    Commitments
      OperatingLeasesYear:2010

$
2,1332011


2,1192012


2,0912013


2,0982014


1,160Thereafter


3,185Total

$
12,786    79




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Other
    Commitments
    Guarantees
    and Indemnities
    Legal
    Proceedings
    13.
    Shareholders
    Equity  Preferred
    Stock
    Common
    Stock
      14.
    Stock-Based
    Compensation Plans       80




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2009


2008


2007Stock options

$
1,005,000


$
1,054,000


$
1,638,000Non-vested stock awards


1,355,000



936,000



423,000Vested stock awards


18,000



25,000



27,000ESPP


292,000



179,000



169,000Total

$
2,670,000


$
2,194,000


$
2,257,000     Year Ended December 31,2009


2008


2007Stock options plans:Volatility


51.1% - 55.0%



48.2% - 48.5%



48.6% - 50.9%Expected term (years)


6.50



6.25



6.25Risk-free interest rate


2.7%



3.4%



4.8%Expected dividend yield










Fair value of options granted

$
2.06


$
4.63


$
5.31Employee stock purchase plan:Volatility


40.0%



27.0%



37.0%Expected term (years)


0.5



0.5



0.5Risk-free interest rate


2.1%



4.5%



4.5%Expected dividend yield










Fair value of employee stock purchase rights

$
1.73


$
2.01


$
2.14Non-vested stock:Fair value of non-vested stock awards granted

$
3.60


$
9.04


$
9.35      81




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Outstanding shares  2002 Plan


2,319,861Outstanding shares  1997 Plan


810,062Stock options available for grant


123,418Outstanding restricted stock grants


1,045,460Employee stock purchase plan shares available for issuance


755,343Total common shares reserved for future issuance


5,054,144       2002 Plan 
   82




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Shares


Weighted Average


Weighted Average


AggregateSubject to


Exercise Price


Remaining


IntrinsicOptions


Per Share


Contractual Life


Value(In thousands)Outstanding, December 31, 2008


2,063,065


$
8.00Granted


970,000



3.74Exercised


(193,098
)


2.81Forfeited and cancelled


(520,106
)


8.95Outstanding, December 31, 2009


2,319,861


$
6.43



8.3


$
Exercisable, December 31, 2009


1,191,553


$
8.03



6.2


$
   Non-vested Stock Awards 
     83




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Weighted AverageShares


Grant-Date Fair ValueNon-vested balance, December 31, 2008


388,002


$
9.02Granted


871,197



3.60Vested


(148,240
)


8.93Forfeited


(65,499
)


8.34Non-vested balance, December 31, 2009


1,045,460


$
4.57   1997 Plan 
    Shares


Weighted Average


Weighted AverageSubject to


Exercise Price


Remaining


Aggregate IntrinsicOptions


Per Share


Contractual Life


Value(In thousands)Outstanding, December 31, 2008


836,312


$
24.11Exercised






Expired


(26,250
)


19.62Outstanding, December 31, 2009


810,062


$
24.23



3.0


$
Exercisable, December 31, 2009


796,937


$
24.49



3.0


$
   Employee Stock Purchase Plan 
 84




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2009

2008

2007Total shares issued under ESPP


169,063



89,670



80,078Proceeds received for shares issued under ESPP

$
464,000


$
603,000


$
553,000   15.
    Fair
    Value Measurement        Fair Value Measurements at December 31,2009 Using:Total Carrying

Quoted Prices in

Significant Other

SignificantValue at December 31,

Active Markets

Observable Events

Unobservable Inputs2009

(Level 1)

(Level 2)

(Level 3)(In thousands of dollars)Assets:Cash equivalents

$
18,617


$
18,617







Investments in unconsolidated entities

$
306


$
306







     Fair Value Measurements at December 31,2008 Using:Total Carrying

Quoted Prices in

Significant Other

SignificantValue at December 31,

Active Markets

Observable Events

Unobservable Inputs2008

(Level 1)

(Level 2)

(Level 3)(In thousands of dollars)Assets:Cash equivalents

$
26,593


$
26,593







Investments in unconsolidated entities

$
450


$
450







  85




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   16.
    Derivatives    17.
    Acquisitions    18.
    Employee
    Benefit Plans    19.
    Subsequent
    Events   86




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   20.
    Quarterly
    Results of Operations (Unaudited)      March 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2008


2008


2008


2008


2009


2009


2009


2009Consolidated Statements of Operations Data:Revenues

$
48,959


$
52,132


$
54,006


$
51,056


$
39,664


$
36,114


$
38,884


$
42,186Cost of Revenues:Product and Service


24,761



26,169



27,887



25,053



19,785



18,563



20,289



22,028Corrective action costs


























18,500



2,500Gross profit


24,198



25,963



26,119



26,003



19,879



17,551



95



17,658Operating Expenses:Research and development


3,863



3,796



4,103



4,664



3,471



3,617



4,270



3,592Sales and marketing


12,189



13,047



12,934



12,563



11,198



11,271



11,923



13,655General and administrative


5,125



5,347



5,096



6,849



5,616



6,349



6,571



7,598Impairment of goodwill














107,671















Total operating expenses


21,177



22,190



22,133



131,747



20,285



21,237



22,764



24,845Operating income (loss)


3,021



3,773



3,986



(105,744
)


(406
)


(3,686
)


(22,669
)


(7,187
)Other income (expense):Interest income (expense), net


115



163



156



55



13



19



23



11Other income (expense), net


211



(125
)


20



529



(148
)


545



158



(453
)Total other income (expense)


326



38



176



584



(135
)


564



181



(442
)Income (loss) before income tax benefit (expense)


3,347



3,811



4,162



(105,160
)


(541
)


(3,122
)


(22,488
)


(7,629
)Income tax benefit (expense)


(1,240
)


(1,407
)


(1,598
)


152



166



1,194



(43,923
)


101Net income (loss)


2,107



2,404



2,564



(105,008
)


(375
)


(1,928
)


(66,411
)


(7,528
)Less: Net income attributable to noncontrolling interests


(53
)


(118
)


(86
)


(194
)


(163
)


(178
)


(135
)


(279
)Net income (loss) attributable to Cardiac Science
    Corporation

$
2,054


$
2,286


$
2,478


$
(105,202
)

$
(538
)

$
(2,106
)

$
(66,546
)

$
(7,807
)Net income (loss) per share attributable to Cardiac Science
    Corporation:Basic

$
0.09


$
0.10


$
0.11


$
(4.58
)

$
(0.02
)

$
(0.09
)

$
(2.85
)

$
(0.33
)Diluted

$
0.09


$
0.10


$
0.11


$
(4.58
)

$
(0.02
)

$
(0.09
)

$
(2.85
)

$
(0.33
)  87




---



##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    (In Thousands)



A summary of the activity in the allowance for doubtful accounts
    follows: ExpensesBeginning

and



End ofof Period

Adjustments

Write-offs

Period(In thousands)Year Ended December 31, 2009

$
1,186


$
1,245


$
(1,414
)

$
1,017Year Ended December 31, 2008


500



972



(286
)


1,186Year Ended December 31, 2007


907



236



(643
)


500  88




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rule 13a-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
      Changes
    in Internal Controls
    Item 9B.
    Other
    Information PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Item 11.
    Executive
    Compensation   89




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services.   PART IV  ITEM 15.
    Exhibits
    and Financial Statement Schedules              92-95
 90




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##### Table of Contents



SIGNATURES    Cardiac Science
    Corporation
  By:
    /s/  Michael
    K. MatysikMichael
    K. Matysik
    Chief Financial Officer      Signature

Title

Date/s/  DAVID
    L. MARVERDavid
    L. Marver

President, Chief Executive Officer and Director (Principal
    Executive Officer)

March 15, 2010/s/  MICHAEL
    K. MATYSIKMichael
    K. Matysik

Senior Vice President, Chief Financial Officer (Principal
    Financial Officer and Principal Accounting Officer)

March 15, 2010/s/  RUEDIGER
    NAUMANN-ETIENNERuediger
    Naumann-Etienne

Chairman of the Board

March 15, 2010/s/  RONALD
    A. ANDREWS, JR.Ronald
    A. Andrews, Jr.

Director

March 15, 2010/s/  W.
    ROBERT BERGW.
    Robert Berg

Director

March 15, 2010/s/  CHRISTOPHER
    J. DAVISChristopher
    J. Davis

Director

March 15, 2010/s/  TIMOTHY
    C. MICKELSONTimothy
    C. Mickelson

Director

March 15, 2010  91




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##### Table of Contents



ExhibitNumber

Description2
.1

Agreement and Plan of Merger dated as of February 28, 2005,
    as amended on June 23, 2005, among Quinton Cardiology
    Systems, Inc., Cardiac Science, Inc., CSQ Holding Company,
    Rhythm Acquisition Corporation, and Heart Acquisition
    Corporation(1)2
.2

Stock Purchase Agreement dated December 23, 2002 by and
    among Spacelabs Medical, Inc., Spacelabs Burdick, Inc., Quinton
    Cardiology Systems, Inc. and Datex-Ohmeda, Inc.(3)3
.1

Amended and Restated Certificate of Incorporation(2)3
.2

Amended and Restated Bylaws(12)4
.1

Specimen Stock Certificate(2)4
.2

Second Amended and Restated Registration Rights Agreement, dated
    as of February 28, 2005, by and among Cardiac Science,
    Inc., and the investors listed on the signature pages thereto(16)10
.1*

Amended and Restated Employment Agreement dated as of
    September 20, 2006 between Cardiac Science Corporation and
    John R. Hinson(15)10
.2*

Consulting Agreement dated as of March 26, 2009 between
    Cardiac Science Corporation and John R. Hinson(22)10
.3*

Quinton Cardiology Systems, Inc. 1998 Amended and Restated
    Equity Incentive Plan(4)10
.4*

Cardiac Science Corporation, Inc. 2002 Stock Incentive Plan10
.5*

Cardiac Science Corporation, Inc. 2002 Employee Stock Purchase
    Plan10
.6*

Cardiac Science Corporation Stock Option Grant Program for
    Nonemployee Directors(17)10
.7*

Cardiac Science, Inc. 1997 Stock Option/Stock Issuance Plan, as
    amended(9)10
.8*

Quinton Cardiology Systems, Inc. Stock Option Grant Notice and
    Stock Option Agreement between Quinton Cardiology Systems, Inc.
    and Feroze Motafram dated as of July 23, 2003(8)10
.9*

Amended and Restated Employment Agreement dated as of
    September 20, 2006 between Cardiac Science Corporation and
    Kurt Lemvigh(15)10
.10*

Amended and Restated Employment Agreement dated as of
    September 20, 2006 between Cardiac Science Corporation and
    Feroze Motafram(21)10
.11*

Separation and Release Agreement dated as of September 17,
    2009 between Cardiac Science Corporation and Feroze Motafram(23)10
.12*

Form of Quinton Cardiology Systems, Inc. Stock Option Grant
    Notice and Stock Option Agreement (This exhibit represents other
    substantially identical documents that have been omitted because
    they are substantially identical to this document in all
    material respects and an Appendix attached to this exhibit sets
    forth material details by which the omitted documents differ
    from this exhibit.)(7)10
.13*

Form of Employment Agreement between Cardiac Science Corporation
    and its executive officers10
.14*

Form of Stock Option Grant Notice and Stock Option Agreement for
    grants made pursuant to the Cardiac Science Corporation 2002
    Stock Incentive Plan(14)10
.15*

Form of Indemnification Agreement(12)10
.16*

Equity Grant Program for Nonemployee Directors under the Cardiac
    Science Corporation 2002 Stock Incentive Plan(21)10
.17*

Cardiac Science Corporation Management Incentive Plan
    (MIP)  201010
.18*

Form of 1997 Stock Option/Stock Issuance Plan Grant Notice and
    Option Agreement(13)10
.19*

Form of Cardiac Science Corporation Stock Option Grant Notice
    under 2002 Stock Incentive Plan for Non-Employee Directors(17)10
.20*

Form of 2010 Compensation Incentive Plan for Kurt Lemvigh10
.21*

Form of Restricted Stock Unit Agreement under the Cardiac
    Science Corporation 2002 Stock Incentive Plan(21)10
.22*

Form of Restricted Stock Unit Grant Notice for grants made
    pursuant to the Cardiac Science Corporation, Inc. 2002 Stock
    Incentive Plan10
.23

Lease Agreement between Carl Ruedebusch LLC and Burdick, Inc.
    regarding premises at Deerfield Industrial Park in Deerfield,
    Wisconsin dated as of November 26, 2008(21) 92




---



##### Table of Contents



ExhibitNumber

Description10
.24

Lease Agreement between Quinton Cardiology Systems, Inc. and
    Hibbs/ Woodinville Associates, L.L.C. regarding premises at
    Bothell, Washington, dated August 29, 2003(6)10
.25++

OEM Purchase and Supply Agreement between Cardiac Science, Inc.
    and GE Medical Systems Information Technologies, Inc. dated
    July 29, 2003(17)10
.26++

Addendum 1 dated as of March 24, 2004 to OEM Purchase and
    Supply Agreement between Cardiac Science, Inc. and GE Medical
    Systems Information Technologies, Inc. dated July 29,
    2003(17)10
.27

Amendment One dated August 10, 2004 to OEM Purchase and
    Supply Agreement between Cardiac Science, Inc. and GE Medical
    Systems Information Technologies, Inc. dated July 29,
    2003(17)10
.28

Second Amendment dated February 14, 2005 to OEM Purchase
    and Supply Agreement between Cardiac Science, Inc. and GE
    Medical Systems Information Technologies, Inc. dated
    July 29, 2003(17)10
.29+

Third Amendment, dated June 10, 2005, to the OEM Purchase
    and Supply Agreement dated July 29, 2003, as amended,
    between Cardiac Science, Inc. and GE Medical Systems Information
    Technologies, Inc.(11)10
.30+

OEM Purchase Agreement between Cardiac Science, Inc. and GE
    Medical Systems Information Technologies, Inc. dated
    July 29, 2003(17)10
.31

Amendment One dated August 10, 2004 to OEM Purchase
    Agreement between Cardiac Science, Inc. and GE Medical Systems
    Information Technologies, Inc. dated July 29, 2003(17)10
.32

Second Amendment dated February 14, 2005 to OEM Purchase
    Agreement between Cardiac Science, Inc. and GE Medical Systems
    Information Technologies, Inc. dated July 29, 2003(17)10
.33

Third Amendment, dated June 10, 2005, to the OEM Purchase
    Agreement dated July 29, 2003, as amended, between Cardiac
    Science, Inc. and GE Medical Systems Information Technologies,
    Inc.(11)10
.34++

Fourth Amendment dated October 25, 2006 to OEM Purchase
    Agreement between Cardiac Science Corporation and GE Medical
    Systems Information Technologies, Inc. dated July 29,
    2003(17)10
.35++

Fifth Amendment dated September 7, 2007 to OEM Purchase
    Agreement between Cardiac Science Corporation and GE Medical
    Systems Information Technologies, Inc. dated July 29,
    2003(19)10
.36+

Exclusive Distribution Agreement for United States and Canadian
    Hospitals dated June 13, 2005, between Cardiac Science,
    Inc. and GE Medical Systems Information Technologies, Inc.(11)10
.37

First Amendment dated as of September 5, 2007 to
    Exclusivity Agreement by and between Cardiac Science Corporation
    and GE Medical Systems Information Technologies, Inc. dated
    June 10, 2005(19)10
.38

Settlement Agreement by and between Cardiac Science Corporation,
    Koninklijke Philips Electronics N.V. and Philips Electronics
    North America Corporation, dated April 24, 2007(18)10
.39++

Cross-License Agreement by and between Cardiac Science
    Corporation, Koninklijke Philips Electronics N.V. and Philips
    Electronics North America Corporation, dated April 24,
    2007(18)10
.40++

Form of OEM Supply and Purchase Agreement between Cardiac
    Science Corporation and Nihon Kohden Corporation entered into
    July 29, 2008, effective January 1, 2008(20)10
.41++

OEM Supply and Purchase Agreement between Cardiac Science
    Corporation and Nihon Kohden Corporation entered into
    March 31, 2005(21)10
.42

Master Agreement for Professional Services dated as of
    May 29, 2008 between Cardiac Science Corporation and
    Syncroness, Inc.(22)21
.1

Subsidiaries23
.1

Consent of Independent Registered Public Accounting Firm31
.1

Certification of Chief Executive Officer pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 200231
.2

Certification of Chief Financial Officer pursuant to
    Section 302(a) of the Sarbanes-Oxley Act of 200232
.1

Certification of Chief Executive Officer Pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 200232
.2

Certification of Chief Financial Officer Pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002     *
    
    Indicates management contract or compensatory plan or
    arrangement. 93




---



##### Table of Contents



+
    
    Portions of this exhibit are omitted and were filed separately
    with the Securities and Exchange Commission pursuant to Cardiac
    Science Inc.s application requesting confidential
    treatment under
    Rule 24b-2
    of the Securities Exchange Act of 1934, as amended.++
    
    Portions of this exhibit are omitted and were filed separately
    with the Securities and Exchange Commission pursuant to Cardiac
    Science Corporations application requesting confidential
    treatment under Rule 24b-2 of the Securities Exchange Act of
    1934, as amended.(1)
    
    Incorporated by reference to the Registrants Amendment
    No. 3 to the Registration Statement on
    Form S-4/A
    (File
    No. 333-124514)
    filed on July 28, 2005.(2)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    (File
    No. 000-51512)
    filed on September 1, 2005.(3)
    
    Incorporated by reference to Quinton Cardiology Systems,
    Inc.s Current Report on
    Form 8-K
    (File
    No. 000-49755)
    filed on January 17, 2003.(4)
    
    Incorporated by reference to Quinton Cardiology Systems,
    Inc.s Registration Statement on
    Form S-1
    (File
    No. 333-83272)
    filed on February 22, 2002.(5)
    
    Incorporated by reference to Quinton Cardiology Systems,
    Inc.s Amendment No. 3 to the Registration Statement
    on
    Form S-1/A
    (File
    No. 333-83272)
    filed on April 3, 2002.(6)
    
    Incorporated by reference to Quinton Cardiology Systems,
    Inc.s Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2003 (File
    No. 000-49755).(7)
    
    Incorporated by reference to Quinton Cardiology Systems,
    Inc.s Annual Report on
    Form 10-K
    for the year ended December 31, 2003 (File
    No. 000-49755).(8)
    
    Incorporated by reference to Quinton Cardiology Systems,
    Inc.s Annual Report on
    Form 10-K
    for the year ended December 31, 2004 (File
    No. 000-49755).(9)
    
    Incorporated by reference to Cardiac Science, Inc.s
    Definitive Proxy Statement for the Annual Meeting of
    Stockholders (File
    No. 000-19567)
    held on September 9, 2002.(10)
    
    Incorporated by reference to Cardiac Science, Inc.s
    Current Report on
    Form 8-K
    (File No.
    000-19567)
    filed on July 22, 2004.(11)
    
    Incorporated by reference to Cardiac Science, Inc.s
    Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2005 (File
    No. 000-19567).(12)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    (File
    No. 000-51512)
    filed November 15, 2005.(13)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended March 31, 2006 (File
    No. 000-51512).(14)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended June 30, 2006 (File
    No. 000-51512).(15)
    
    Incorporated by reference to the Registrants Current
    Report on
    Form 8-K
    (File
    No. 000-51512)
    filed September 22, 2006.(16)
    
    Incorporated by reference to Registrants Registration
    Statement on
    Form S-4
    (File No.
    333-124514)
    filed on May 2, 2005.(17)
    
    Incorporated by reference to Registrants Annual Report on
    Form 10-K
    for the year ended December 31, 2006 (File
    No. 000-51512).(18)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended June 30, 2007 (File
    No. 000-51512).(19)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended September 30, 2007 (File
    No. 000-51512).(20)
    
    Incorporated by reference to the Registrants Amendment
    No. 1 to its Quarterly Report for the quarter ended
    September 30, 2008 (File
    No. 000-51512)
    filed on December 31, 2008. 94




---



##### Table of Contents



(21)
    
    Incorporated by reference to the Registrants Annual Report
    on
    Form 10-K
    for the year ended December 31, 2008 (File
    No. 000-51512).(22)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended March 31, 2009 (File
    No. 000-51512).(23)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    for the quarter ended September 30, 2009 (File
    No. 000-51512). 95