##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Amendment No. 1
 Form 10-K/A
 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 1934
 For the fiscal year ended December 31, 2005
 or
 o
    
    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
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)3303 Monte Villa Parkway, Bothell, WA
    
    98021(Address of Principal Executive Offices)
    
    (Zip Code)
 (425) 402-2000  (Registrants Telephone Number, Including Area Code)
 Securities Registered Pursuant to Section 12(b) of the Act: None.
 Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value.
 o þ
  o þ
  þ o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
 o þ




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##### 



CARDIAC SCIENCE CORPORATION
 2005 FORM 10-K/A ANNUAL REPORT
 TABLE OF CONTENTS
 PART IIIItem 10.
    
    Executive Officers and Directors of the Company
    2Item 11.
    
    Executive Compensation
    6Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    13Item 13.
    
    Certain Relationships and Related Transactions
    20Item 14.
    
    Principal Accountant Fees and Services
    21PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    22Signatures
    
    
    23
 EXPLANATORY NOTE
 The terms us, we and our and the Company refer to Cardiac Science Corporation and our
majority owned subsidiaries.
    1




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##### 



PART III
 Item 10. Executive Officers and Directors of the Registrant.
  Name
    
    Age
    
    PositionManagement:John R. Hinson
    
    
    43
    
    
    President, Chief Executive Officer and DirectorMichael K. Matysik
    
    
    46
    
    
    Senior Vice President, Chief Financial Officer
and SecretaryAllan Criss
    
    
    46
    
    
    Vice President, Acute CarePeter Foster
    
    
    48
    
    
    Vice President, Public Access DefibrillationDavid M. Hadley
    
    
    56
    
    
    Vice President, ResearchBrian Lee
    
    
    50
    
    
    Vice President, EngineeringKurt B. Lemvigh
    
    
    45
    
    
    Vice President, InternationalDarryl Lustig
    
    
    50
    
    
    Vice President, Primary CareGarry Norris
    
    
    48
    
    
    Vice President, MarketingNon-employee Directors:Raymond W. Cohen
    
    
    46
    
    
    Chairman of the BoardRuediger Naumann-Etienne
    
    
    59
    
    
    Vice Chairman of the BoardBruce J. Barclay
    
    
    49
    
    
    DirectorW. Robert Berg
    
    
    62
    
    
    DirectorJue-Hsien Chern
    
    
    51
    
    
    DirectorHarvey N. Gillis
    
    
    60
    
    
    DirectorRay E. Newton, III
    
    
    41
    
    
    DirectorJeffrey F. ODonnell, Sr.
    
    
    45
    
    
    Director
 Raymond W. Cohen
 John R. Hinson
 Michael K. Matysik
 Allan R. Criss
 2




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##### 



Peter L. Foster
 David M. Hadley, Ph.D.
 Brian R. Lee
 Kurt B. Lemvigh
 Darryl R. Lustig
 Garry Norris
 3




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##### 



Ruediger Naumann-Etienne, Ph.D
 Bruce Barclay
 W. Robert Berg
 Jue-Hsien Chern, Ph.D.
 Harvey N. Gillis
 Ray E. Newton, III
 4




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##### 



Jeffrey ODonnell, Sr.
 Director Independence
  
    
    Bruce Barclay, W. Robert Berg, Jue-Hsien Chern, Harvey N. Gillis and Jeffrey F.
ODonnell, Sr., who represent a majority of our directors, are independent;
    
    John Hinson, our Chief Executive Officer does not meet the definition of independence
specified under Nasdaq Marketplace Rule 4200(a)(15) because he is an employee;
    
    Raymond W. Cohen and Ruediger Naumann-Etienne, the Chairman and Vice Chairman,
respectively, served as employees in 2005, and under applicable Nasdaq Marketplace Rules
may not be deemed to be independent until three years following their respective
terminations as an employees; and
    
    Ray E. Newton, III was not independent as a result of the contractual arrangements between CSI, a predecessor company, and Perseus LLC, which with its affiliated funds
Perseus Acquisition/Recapitalization Fund, LLC, Perseus Market Opportunity Fund, LP and
Cardiac Science Co-Investment, LP beneficially owns approximately 14% of our outstanding
common stock.
 Board Committees and Meetings
  Audit Committee
 5




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##### 



Compensation Committee.
 Nominating and Governance Committee.
  Code of Ethics
  Section 16(a) Beneficial Ownership Reporting Compliance
   Item 11. Executive Compensation.
 Non-employee Directors Compensation
  Annual Director Stipend
    
    $
    15,000Annual Committee Chair Stipend:Audit Committee
    
    $
    10,000
 6




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##### 



Compensation Committee
    
    $
    7,500Nominating and Governance Committee
    
    $
    5,000Board Meeting Fee
    
    $1,000/meetingCommittee Meeting Fee
    
    $700/meetingTelephonic Meetings
    
    60% of Regular Meeting Fees
   Initial Stock Option Grant (upon appointment)(1)
    
    7,500 sharesAdditional Annual Stock Option Grants (1)(2)
    
    7,500 shares
 
 (1)
    
    One-twelfth of the options granted to non-employee directors will vest and become fully
exercisable monthly over one year. However, if a non-employee director resigns or retires
from the board before all options granted to the director have fully vested, any unvested
options will accelerate and become fully vested immediately prior to the termination of the
directors services. The exercise price for all options granted to non-employee directors is
the fair market value of our common stock on the date of grant. Options have a ten-year term,
except that options expire six months after a non-employee director ceases service as a
director for reasons other than death or retirement, in which case the option terminates after
one year.(2)
    
    Granted immediately following each years annual meeting, except that any non-employee
director who received an initial grant within three months before or on the date of an annual
meeting will not receive an annual grant until immediately following the second annual meeting
after the date of the initial grant.  Director Stipend
    
    $
    5,000Committee Chair Stipend:Audit Committee
    
    $
    3,333Compensation Committee
    
    $
    2,500Nominating and Governance Committee
    
    $
    1,667Board Meeting Fee
    
    $1,000/meetingCommittee Meeting Fee
    
    $700/meetingTelephonic Meetings
    
    60% of Regular Meeting Fees
  7




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##### 



Name
    
    Number of OptionsRuediger Naumann-Etienne
    
    
    10,000Bruce J. Barclay
    
    
    15,000W. Robert Berg
    
    
    10,000Jue-Hsien Chern
    
    
    10,000Harvey N. Gillis
    
    
    10,000Jeffrey F. ODonnell, Sr.
    
    
    15,000
  Other Director Compensation
     Executive Compensation
 Summary Compensation Table
  8




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##### 



Long TermCompensationAnnual Compensation
    
    AwardsOther Annual
    
    Shares Underlying
    
    All OtherName & Principal Position
    
    Year
    
    Salary ($)
    
    Bonus ($)
    
    Compensation
    
    Options (#)
    
    Compensation ($)John R. Hinson
    
    
    2005
    
    
    
    268,173
    
    
    
    70,000
    
    
    
    (1
    )
    
    
    50,000
    
    
    
    3,390
    (2)President and CEO
    
    
    2004
    
    
    
    250,000
    
    
    
    80,025
    
    
    
    (1
    )
    
    
    80,000
    
    
    
    3,3902003
    
    
    
    232,692
    
    
    
    81,690
    
    
    
    (1
    )
    
    
    50,000
    
    
    
    3,356Michael K. Matysik
    
    
    2005
    
    
    
    198,985
    
    
    
    45,000
    
    
    
    
    
    
    
    25,000
    
    
    
    3,445
    (3)Senior Vice President and CFO
    
    
    2004
    
    
    
    183,481
    
    
    
    54,539
    
    
    
    
    
    
    
    50,000
    
    
    
    3,4062003
    
    
    
    175,000
    
    
    
    49,183
    
    
    
    
    
    
    
    25,000
    
    
    
    3,256Peter Foster(4)
    
    
    2005
    
    
    
    200,000
    
    
    
    66,322
    (5)
    
    
    (7
    )
    
    
    15,000
    
    
    
    2,099
    (8)Vice
President, Public Access Defibrillation
    
    
    2004
    
    
    
    65,128
    
    
    
    17,090
    (6)
    
    
    (7
    )
    
    
    15,000
    
    
    
    1,650Kurt B. Lemvigh
    
    
    2005
    
    
    
    279,665
    
    
    
    30,127
    (9)
    
    
    (12
    )
    
    
    15,000
    
    
    
    15,102
    (13)Vice President, International
    
    
    2004
    
    
    
    240,613
    
    
    
    47,685
    (10)
    
    
    (12
    )
    
    
    7,500
    
    
    
    12,9932003
    
    
    
    199,734
    
    
    
    28,377
    (11)
    
    
    (12
    )
    
    
    5,000
    
    
    
    10,786Darryl R. Lustig
    
    
    2005
    
    
    
    172,765
    
    
    
    65,212
    (14)
    
    
    (17
    )
    
    
    20,000
    
    
    
    3,256
    (18)Vice President, Primary Care
    
    
    2004
    
    
    
    166,477
    
    
    
    82,937
    (15)
    
    
    (17
    )
    
    
    20,000
    
    
    
    3,2562003
    
    
    
    152,184
    
    
    
    81,831
    (16)
    
    
    (17
    )
    
    
    15,000
    
    
    
    1,848
 
 (1)
    
    Mr. Hinson received a car allowance in each of these years.(2)
    
    Consists of matching contributions of $3,000 made by us to his 401(k) savings and retirement
plan account and life insurance premiums of $390 paid by us for term life insurance for his
benefit.(3)
    
    Consists of matching contributions of $3,000 made by us to his 401(k) savings and retirement
plan account and life insurance premiums of $445 paid by us for term life insurance for his
benefit.(4)
    
    Mr. Foster was hired by CSI in August 2004.(5)
    
    Includes $66,322 in sales commission.(6)
    
    Includes $17,090 in sales commission.(7)
    
    Mr. Foster received membership fees in a health club in each of these years.(8)
    
    Consists of matching contributions of $1,859 made by us to his 401(k) savings and retirement
plan account and life insurance premiums of $240 paid by us for term life insurance for his
benefit.(9)
    
    Includes $30,127 in sales bonuses.(10)
    
    Includes $47,685 in sales bonuses.(11)
    
    Includes $28,377 in sales bonuses.(12)
    
    We made lease payments on a car used by Mr. Lemvigh in each of these years.(13)
    
    Consists of contributions of $15,102 made by us to his pension plan.(14)
    
    Includes $45,212 in sales bonuses.(15)
    
    Includes $65,069 in sales bonuses.(16)
    
    Includes $47,294 in sales bonuses.(17)
    
    Mr. Lustig received a car allowance in each of these years.(18)
    
    Consists of matching contributions of $,3000 made by us to his 401(k) savings and retirement
plan account and life insurance premiums of $256 paid by us for term life insurance for his
benefit. 9




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##### 



Option Grants In Last Fiscal Year
  Individual GrantsNumber of
    
    % of Total
    
    
    
    
    
    
    
    
    
    Potential Realizable Value atSecurities
    
    Options
    
    Exercise
    
    
    
    
    
    Assumed Annual Rates ofUnderlying
    
    Granted to
    
    Price Per
    
    
    
    
    
    Share Price Appreciation forOptions
    
    Employees in
    
    Share
    
    
    
    
    
    Option Term (3)Name
    
    Granted (#)(1)
    
    Fiscal Year(2)
    
    ($/Share)
    
    Expiration Date
    
    5% ($)
    
    10% ($)John R. Hinson
    
    
    50,000
    
    
    
    10.3
    %
    
    $
    9.05
    
    
    
    11/9/2015
    
    
    $
    284,500
    
    
    $
    721,000Michael K. Matysik
    
    
    25,000
    
    
    
    5.2
    %
    
    $
    9.05
    
    
    
    11/9/2015
    
    
    $
    142,250
    
    
    $
    360,500Peter Foster
    
    
    15,000
    
    
    
    3.1
    %
    
    $
    9.05
    
    
    
    11/9/2015
    
    
    $
    85,350
    
    
    $
    218,300Kurt B. Lemvigh
    
    
    15,000
    
    
    
    3.1
    %
    
    $
    9.05
    
    
    
    11/9/2015
    
    
    $
    85,350
    
    
    $
    216,300Darryl R. Lustig
    
    
    20,000
    
    
    
    4.1
    %
    
    $
    9.05
    
    
    
    11/9/2015
    
    
    $
    113,800
    
    
    $
    288,400
 
 (1)
    
    The per share exercise price is the fair market value of our common stock on the date of
grant. The options set forth above were vested 100% upon grant and are fully exercisable.(2)
    
    Based on options to purchase a total of 483,336 shares of our common stock granted to
employees during fiscal year 2005.(3)
    
    The potential realizable value calculated based on the term of the option at the time of
grant (10 years). Stock price appreciation of 5% and 10% is assumed pursuant to rules
promulgated by the Securities and Exchange Commission and does not represent a prediction of
our stock price performance. Actual gains, if any, are dependent on the actual future
performance of our common stock and no gain to the optionee is possible unless the stock price
increases over the option term, which will benefit all stockholders. Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
  Number of SecuritiesUnderlying
    
    Value of UnexercisedUnexercised Options
    
    In-the-Money Optionsat Fiscal Year-End (#)
    
    at Fiscal Year-End ($)(1)Name
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableJohn R. Hinson
    
    
    292,720
    
    
    
    44,705
    
    
    $
    1,147,064
    
    
    $
    14,409Michael K. Matysik
    
    
    172,131
    
    
    
    26,534
    
    
    $
    17,494
    
    
    $
    7,205Peter Foster
    
    
    40,000
    
    
    
    0
    
    
    $
    0
    
    
    $
    0Kurt B. Lemvigh
    
    
    30,000
    
    
    
    0
    
    
    $
    0
    
    
    $
    0Darryl R. Lustig
    
    
    39,374
    
    
    
    19,218
    
    
    $
    10,496
    
    
    $
    4,324
 
 (1)
    
    Based on the difference between the fair market value on the December 31, 2005 ($9.05 per
share) and the exercise price. Employment Contracts, Change-in-Control Arrangements and Termination of Employment
 Employment Contracts
  Mr. Hinson
 10




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##### 



Mr. Matysik
 Mr. Lustig
   Severance
    
    Continuation of HealthName
    
    Benefit
    
    and Other Benefits (in months)John R. Hinson
    
    
    150
    %
    
    
    18Michael K. Matysik
    
    
    100
    %
    
    
    12Darryl R. Lustig
    
    
    50
    %
    
    
    6
  Mr. Lemvigh
 11




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##### 



Mr. Foster
   Termination of Employment
  Change-in-Control Arrangements
   12




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##### 



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  
    
    each person known to the board of directors to own beneficially 5% or more of our common stock;
    
    each of our current directors;
    
    each of the executive officers named in the summary compensation table; and
    
    all of our current directors and executive officers as a group.
 Percent of Shares Beneficially Owned
 Number of Shares
    
    Percent ofName of Beneficial Owner
    
    Beneficially Owned (1)
    
    Outstanding SharesEntities affiliated with Perseus L.L.C. (2)
    
    
    3,151,773
    
    
    
    14.0
    %2099 Pennsylvania Avenue, Suite 900
Washington, D.C. 20006-7813J. Carlo Cannell (3)
    
    
    1,729,224
    
    
    
    7.7
    %150 California Street, 5th Floor
San Francisco, CA 94111Goldman Sachs Asset Management, L.P. (4)
    
    
    1,270,824
    
    
    
    5.7
    %32 Old Slip
New York, NY 10005Wells Fargo & Company (5)
    
    
    1,204,605
    
    
    
    5.4
    %420 Montgomery Street
San Francisco, CA 94104Raymond W. Cohen (6)
    
    
    277,825
    
    
    
    1.2
    %Ruediger Naumann-Etienne (7)
    
    
    477,045
    
    
    
    2.1
    %John R. Hinson (8)
    
    
    479,692
    
    
    
    2.1
    %Michael K. Matysik (9)
    
    
    199,893
    
    
    
    *Peter Foster (10)
    
    
    32,436
    
    
    
    *Kurt Lemvigh (11)
    
    
    40,000
    
    
    
    *Darryl R. Lustig (12)
    
    
    48,401
    
    
    
    *Bruce J. Barclay (13)
    
    
    27,500
    
    
    
    *Harvey N. Gillis (14)
    
    
    33,154
    
    
    
    *W. Robert Berg (15)
    
    
    34,698
    
    
    
    *Jue-Hsien Chern (16)
    
    
    28,936
    
    
    
    *Ray E. Newton, III (17)
    
    
    
    
    
    
    *Jeffrey F. ODonnell, Sr. (18)
    
    
    27,500
    
    
    
    *All directors and executive officers (17 persons) (19)
    
    
    2,136,170
    
    
    
    8.9
    %
 
 *
    
    Less than one percent. 13




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##### 



(1)
    
    Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities
Exchange Act. In computing the number of shares beneficially owned by a person or a group and
the percentage ownership of that person or group, shares of our common stock subject to
options currently exercisable or exercisable within 60 days after April 1, 2006 are deemed
outstanding, but are not deemed outstanding for the purpose of computing the percentage
ownership of any other person. As of April 1, 2006, we had 22,475,369 shares of common stock
outstanding. Except as otherwise indicated in the footnotes to this table and subject to
applicable community property laws, each shareholder named in the table has sole voting and
investment power with respect to the number of shares listed opposite the shareholders name.
Unless otherwise indicated, the address of each of the individuals and entities named below
is: c/o Cardiac Science Corporation, 3303 Monte Villa Parkway, Bothell, Washington 98021.(2)
    
    Consists of 96,888 shares issuable upon exercise of outstanding warrants and 3,054,885 shares
owned by Perseus Acquisition/Recapitalization Fund, LLC, Perseus Market Opportunity Fund, LP
and Cardiac Science Co-Investment, LP. Frank H. Pearl, an executive officer of Perseus, LLC,
may be deemed a beneficial owner of the shares.Ray E. Newton, III, is a member of our board of directors and a Managing Director of Perseus,
LLC. Perseus Acquisition/Recapitalization Management, LLC is a Managing Member of Perseus
Acquisition/Recapitalization Fund, LLC. Perseuspur, LLC is a Managing Member of Perseus
Acquisition/Recapitalization Management, L.L.C. By reason of such relationships, each of (i)
Perseus Acquisition/ Recapitalization Management, LLC and (ii) Perseuspur, LLC may be deemed to
have the power to direct the voting and disposition of the shares beneficially owned by Perseus
Acquisition/Recapitalization Fund, LLC. Mr. Frank H. Pearl may also be deemed to have the power
to direct the voting and disposition of the shares beneficially owned by Perseus
Acquisition/Recapitalization Fund, LLC.Perseus Market Opportunity Partners, L.P. is a General Partner of Perseus Market Opportunity
Fund, L.P. Perseus Market Opportunity Partners GP, L.L.C. is a General Partner of Perseus
Market Opportunity Partners, L.P. Perseus, LLC is a Managing Member of Perseus Market
Opportunity Partners, G.P., L.L.C. Perseuspur, LLC is a Managing Member of Perseus, LLC. By
reason of such relationships, each of (i) Perseus Market Opportunity Partners, L.P., (ii)
Perseus Market Opportunity Partners GP, L.L.C., (iii) Perseus, LLC and (iv) Perseuspur, LLC may
be deemed to have the power to direct the voting and disposition of the shares beneficially
owned by Perseus Market Opportunity Fund, L.P. Mr. Frank H. Pearl, a Managing Director of
Perseus, LLC, may also be deemed to have the power to direct the voting and disposition of the
shares beneficially owned by Perseus Market Opportunity Fund, L.P.Perseus Acquisition/Recapitalization Management, L.L.C. is a General Partner of Cardiac Science
Co-Investment, L.P. Perseuspur, LLC is a Managing Member of Perseus
Acquisition/Recapitalization Management L.L.C. By reason of such relationships, each of (i)
Perseus Acquisition/Recapitalization Management, L.L.C. and (ii) Perseuspur, LLC may be deemed
to have the power to direct the voting and disposition of the shares beneficially owned by
Cardiac Science Co-Investment, L.P. Mr. Frank H. Pearl may also be deemed to have the power to
direct the voting and disposition of the shares beneficially owned by Cardiac Science
Co-Investment, L.P.(3)
    
    Beneficial ownership of shares as reported on Schedule 13G/A filed with the Securities and
Exchange Commission on February 15, 2006. According to such filing, J. Carlo Cannell has sole
voting power and sole dispositive power with respect to all shares. Mr. Cannell is the
controlling member of Cannell Capital, LLC, an investment adviser.(4)
    
    Beneficial ownership of shares as reported on Schedule 13G/A filed with the Securities and
Exchange Commission on February 6, 2006. According to such filing, Goldman Sachs Asset
Management, L.P. has sole voting power with respect to 1,083,337 shares and sole dispositive
power with respect to all shares.(5)
    
    Beneficial ownership of shares as reported on Schedule 13G/A filed with the Securities and
Exchange Commission on March 6, 2006. The Schedule 13G/A reports each of Wells Fargo &
Company owns 1,204,605 shares and Wells Capital Management Incorporated owns 1,180,095 shares.
The Schedule 13G/ A also reports that Wells Fargo & Company is a parent holding company and
that Wells Capital Management Incorporated is a registered investment advisor. As reported in
the Schedule 13G/A, each of Wells Fargo & Company has sole voting power with respect to
1,092,865 shares and sole dispositive power with respect to all shares, and Wells Capital
Management Incorporated has sole voting power with respect to 1,092,865 shares and sole
dispositive power with respect to 1,180,095 shares.(6)
    
    Includes 265,000 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(7)
    
    Includes 381,297 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(8)
    
    Includes 303,172 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(9)
    
    Includes 178,161 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(10)
    
    Includes 30,000 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006. 14




---



##### 



(11)
    
    Consists of 40,000 shares issuable upon exercise of options which are currently exercisable
or exercisable within 60 days after April 1, 2006.(12)
    
    Includes 43,393 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(13)
    
    Consists of 27,500 shares issuable upon exercise of options which are currently exercisable
or exercisable within 60 days after April 1, 2005.(14)
    
    Includes 29,295 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(15)
    
    Includes 29,295 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(16)
    
    Includes 25,436 shares issuable upon exercise of options which are currently exercisable or
exercisable within 60 days after April 1, 2006.(17)
    
    See Note 2.(18)
    
    Consists of 27,500 shares issuable upon exercise of options which are currently exercisable
or exercisable within 60 days after April 1, 2006.(19)
    
    Includes 1,524,564 shares issuable upon exercise of options which are currently exercisable
or exercisable within 60 days after April 1, 2006. Equity Compensation Plan Information
  Number of securitiesremaining available forNumber of securities
    
    
    
    
    
    future issuance under equityto be issued upon
    
    Weighted-average
    
    compensation plansexercise of
    
    exercise price of
    
    (excluding securitiesoutstanding options,
    
    outstanding options,
    
    reflectedPlan category
    
    warrants and rights
    
    warrants and rights(1)
    
    in the first column)Equity compensation plans approved by security holders
    
    
    1,941,381
    
    
    $
    7.46
    
    
    
    488,739
    (2)(3)(4)Equity compensation plans not approved by security holders
    
    
    1,398,242
    
    
    $
    23.79
    
    
    
    56,340
    (5)Total
    
    
    3,339,623
    
    
    $
    14.51
    
    
    
    545,079
 
 (1)
    
    Weighted average exercise price is calculated for outstanding stock options and does not
include any value with respect to outstanding restricted stock units.(2)
    
    Includes 484,673 shares remaining available for purchase under the 2002 ESPP. The 2002 ESPP
includes an evergreen formula pursuant to which the number of shares authorized for grant will
be increased annually by the least of (1)175,240 shares, (2) an amount equal to 2 percent of
the outstanding shares of the common stock as of the end of the immediately preceding fiscal
year on a fully diluted basis, and (3) a lesser amount determined by our board of directors.
Excludes 175,240 additional shares of common stock that became available for purchase under
the 2002 ESPP on January 1, 2006 pursuant to the evergreen formula.(3)
    
    Includes 4,066 shares remaining available for issuance under the 2002 Plan. The 2002 Plan
includes an evergreen formula pursuant to which the number of shares authorized for grant will
be increased annually by the least of (1) 526,621 shares, (2) an amount equal to 3 percent of
the number of shares of common stock outstanding on a fully diluted basis as of the end of our
immediately preceding fiscal year, and (3) a lesser amount determined by our board of
directors. Excludes 526,621 additional shares of common stock that became available for
issuance under the 2002 Plan on January 1, 2006 pursuant to the evergreen formula. Also
excludes shares that will become issuable under the 2002 Plan if and when they cease to be
subject to outstanding awards (other than by reason of exercise or settlement of the awards)
under our 1998 Plan (which was suspended on the effective date of our initial public
offering). Shares available for issuance under the 2002 Plan may be issued pursuant to stock
options, stock awards or stock units.(4)
    
    Our stock option grant program for nonemployee directors is administered under the 2002 Plan
and provides for the following automatic grants of stock to each of our nonemployee directors:
(1) an initial grant to purchase 7,500 shares of our common stock as of the date of the
directors initial election or appointment to the board and (2) an annual grant to purchase
7,500 shares of our common stock immediately following each years annual shareholders
meeting, except that any nonemployee director who received an initial grant within three
months before an annual meeting of shareholders will not receive an annual grant until
immediately following the second annual meeting after the date of the initial grant. 15




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##### 



One-twelfth of the options granted to non-employee directors will vest and become fully exercisable
monthly over one year. However, if a non-employee director resigns or retires from the board
before all options granted to the director have fully vested, any unvested options will
accelerate and become fully vested immediately prior to the termination of the directors
services. The exercise price for all options granted to non-employee directors is the fair
market value of our common stock on the date of grant. Options have a ten-year term, except
that options expire six months after a non-employee director ceases service as a director for
reasons other than death or retirement, in which case the option terminates after one year.(5)
    
    Consists of 56,340 shares remaining available for issuance under the 1997 Plan, which can be
used for awards to individuals who previously provided services to CSI before the Merger or
who we have hired following the Merger. Shares available for issuance under the 1997 Plan may
be issued pursuant to stock options, stock awards or stock units.
 Description of Equity Compensation Not Approved By Shareholders
 Equity Compensation Awards Granted Outside of the 2002 Plan
   Administration
 Vesting and Exercise
 Transferability
 Adjustment of Shares
 Company Transaction
 16




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##### 



Termination and Amendment
 1997 Stock Option/Stock Issuance Plan and Equity Compensation Awards Granted Outside of the
1997 Plan
  Number of Shares.
 Administration.
 Types of Awards.
 Adjustment of Shares.
 Exercise Prices.
 Term of Options.
 Company Transaction.
 17




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##### 



Option Exercise.
 Termination of Service.
 Termination and Amendment.
 U.S. Federal Income Tax Consequences
  Stock Options.
 Exercise of NSOs.
 18




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##### 



Exercise of ISOs.
  Unrestricted Stock Awards.
 19




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##### 



Restricted Stock Awards With No Election Made under Section 83(b) of the Code.
 Restricted Stock Awards With an Election Made under Section 83(b) of the Code.
 Other General Tax Considerations.
 Item 13. Certain Relationships and Related Transactions.
   20




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##### 



Item 14. Principal Accountant Fees and Services.
  2005Audit fees
    
    $
    1,270,690
    (1)Audit-related fees
    
    
    27,113
    (2)Tax fees
    
    
    4,500
    (3)All other fees
    
    
    17,000
    (4)
 
 (1)
    
    Includes professional services rendered for the audit of Quintons and the Companys
financial statements including those related to the Merger, the reviews of the financial
statements included in Quintons and the Companys quarterly report on Form 10-Q filings,
services that are normally provided by the independent auditor in connection with statutory
and regulatory filings or engagements and services that generally only the independent auditor
can reasonably provide.(2)
    
    Includes fees associated with the audits of pension and other employee benefit plans.(3)
    
    Includes fees associated primarily with the review of the Companys and Quintons tax
returns.(4)
    
    Includes fees associated with the audit of our Shanghai joint venture.   21




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##### 



PART IV
 Item 15. Exhibits and Financial Statement Schedules
 Index to Exhibits:
  22




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##### 



SIGNATURES
  Cardiac Science CorporationBy:

/s/
Michael K. MatysikMichael K. MatysikChief Financial Officer  23




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##### 



EXHIBIT INDEX
 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 (21)4.1
    
    Specimen Stock Certificate (2)4.2
    
    Common Stock and Warrant Purchase Agreement, dated July 20, 2004, by and among Cardiac
Science, Inc., Perseus Market Opportunity Fund, L.P., Winterset Master Fund, L.P., Mill
River Master Fund, L.P., Massachusetts Mutual Life Insurance Company and Walter Villager
(17)4.3
    
    Amended and Restated Registration Rights Agreement, dated July 20, 2004, by and among
Cardiac Science, Inc., Perseus Market Opportunity Fund, L.P., Winterset Master Fund,
L.P., Mill River Master Fund, L.P., Massachusetts Mutual Life Insurance Company and
Walter Villager (17)4.4
    
    Form of Warrant (17)4.5
    
    Form of Warrant issued to Perseus Acquisition /Recapitalization Fund, L.L.C., Perseus
Market Opportunity Fund, L.P. and Cardiac Science Co-Investment, L.P. (22)10.1
    
    Senior Note and Warrant Conversion Agreement dated as of February 28, 2005 among CSQ
Holding Company, Cardiac Science, Inc. and the purchasers listed on the signature pages
thereto (1)10.2 *
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and John R. Hinson dated as
of February 6, 2004 (10)10.3
    
    Assumption and Amendment Agreement dated as of September 28, 2005 among Silicon Valley
Bank, Cardiac Science Corporation, Quinton Cardiology, Inc. and Cardiac Science Operating
Company (19)10.4
    
    Lease Termination Agreement effective as of September 14, 2005 between Cardiac Science,
Inc. and Terrace Tower Orange County, LLC (20)10.5*
    
    Quinton Cardiology Systems, Inc. 1998 Amended and Restated Equity Incentive Plan (4)10.6*
    
    Quinton Cardiology Systems, Inc. 2002 Stock Incentive Plan (4)10.7*
    
    Quinton Cardiology Systems, Inc. 2002 Employee Stock Purchase Plan (4)10.8*
    
    Quinton Cardiology Systems, Inc. Stock Option Grant Program for Nonemployee Directors (5)10.9*
    
    Quinton Cardiology Systems, Inc. 2004 Management Incentive Plan (13)10.10
    
    OEM Agreement between Quinton Inc. and Mortara Instrument, Inc. dated August 1, 2000 (4)10.11
    
    OEM Agreement between Quinton Inc. and Mortara Instrument, Inc. dated October 17, 2000 (4)10.12
    
    OEM Agreement between Quinton Inc. and Mortara Instrument, Inc. dated October 1, 2001 (6)10.13
    
    Addendum No. 1 to the OEM Agreement between Mortara Instrument, Inc. and Quinton Inc.
dated August 1, 2001 (4)10.14
    
    Loan and Security Agreement between Quinton Cardiology Systems, Inc. and Quinton Inc. and
Silicon Valley Bank dated December 30, 2002 (7)
 24




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##### 



ExhibitNumber
    
    Description10.15
    
    Amendment to Loan Documents between Quinton Cardiology Systems, Inc., Quinton Inc. and
Burdick, Inc. and Silicon Valley Bank dated January 9, 2003 (7)10.16
    
    Streamline Facility Agreement between Quinton Cardiology Systems, Inc. and Quinton Inc.
and Silicon Valley Bank dated as of December 30, 2002 (7)10.17
    
    Cross-Corporate Continuing Guaranty between Quinton Cardiology Systems, Inc. and Quinton
Inc. and Silicon Valley Bank dated December 30, 2002 (7)10.18
    
    Intellectual Property Security Agreement between Quinton Cardiology Systems, Inc. and
Quinton Inc. and Silicon Valley Bank dated December 30, 2002 (7)10.19
    
    Assumption Agreement between Quinton Cardiology Systems, Inc., Quinton Inc. and Burdick,
Inc. and Silicon Valley Bank dated January 9, 2003 (7)10.20
    
    Cross-Corporate Continuing Guaranty between Burdick Inc. and Silicon Valley Bank dated
January 9, 2003 (7)10.21
    
    Intellectual Property Security Agreement between Burdick, Inc. and Silicon Valley Bank
dated January 9, 2003 (7)10.22
    
    Lease Agreement between Carl Ruedebusch LLC and Burdick, Inc. regarding premises at
Deerfield Industrial Park in Deerfield, Wisconsin dated as of April 6, 1998 (7)10.23
    
    Lease Agreement between Quinton Cardiology Systems, Inc. and Hibbs/ Woodinville
Associates, L.L.C. regarding premises at Bothell, Washington, dated August 29, 2003 (8)10.24*
    
    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.) (9)10.25*
    
    Quinton Cardiology Systems, Inc. Stock Option Grant Notice and Stock Option Agreement
between Quinton Cardiology Systems, Inc. and Atul Jhalani, dated as of October 23, 2003
(9)10.26*
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and Michael K. Matysik
dated as of February 6, 2004 (10)10.27*
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and Darryl Lustig dated as
of February 6, 2004 (10)10.28*
    
    Quinton Cardiology Systems, Inc. Stock Option Grant Notice and Stock Option Agreement
between Quinton Cardiology Systems, Inc. and Allan Criss, dated as of March 10, 2004 (10)10.29
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and Allan Criss dated as of
March 1, 2004 (11)10.30
    
    Amendment to Loan Documents between Quinton Cardiology Systems, Inc., Quinton Cardiology,
Inc. and Silicon Valley Bank dated December 30, 2004 (12)10.31*
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and Atul Jhalani dated as
of February 6, 2004 (13)10.32*
    
    Form of Stock Option Grant Notice and Stock Option Agreement for grants made pursuant to
the Quinton Cardiology Systems, Inc. 2002 Stock Incentive Plan (13)10.33*
    
    Quinton Cardiology Systems, Inc. Senior Executives  Base Compensation Adjustments 
2005 dated as of February 28, 2005 (13)
 25




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##### 



ExhibitNumber
    
    Description10.34*
    
    Summary of Non-Employee Director Compensation (13)10.35*
    
    Quinton Cardiology Systems, Inc. 2004 Sales Bonus Plan for Darryl Lustig, as amended on
March 14, 2005 (13)10.36*
    
    Quinton Cardiology Systems, Inc. 2004 Sales Bonus Plan for Allan Criss, as amended on
March 14, 2005 (13)10.37*
    
    Quinton Cardiology Systems, Inc. 2005 Sales Incentive Plan for Darryl Lustig (13)10.38*
    
    Quinton Cardiology Systems, Inc. 2005 Sales Incentive Plan for Allan Criss (13)10.39*
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and Brian Lee dated as of
February 6, 2004 (13)10.40*
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and Feroze Motafram dated
as of February 6, 2004 (13)10.41*
    
    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
(13)10.42*
    
    Employment Agreement between Quinton Cardiology Systems, Inc. and David Hadley dated as
of February 6, 2004 (13)10.43*
    
    Cardiac Science, Inc. 1997 Stock Option/Stock Issuance Plan, as amended (14)10.44*
    
    Employment Agreement between Cardiac Science, Inc. and Raymond Cohen, dated December 31,
2002 (16)10.45*
    
    Employment Agreement between Cardiac Science, Inc. and Kurt Lemvigh, dated December 1,
2001 (16)10.46
    
    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. (18)10.47++
    
    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. (18)10.48++
    
    Exclusive Distribution Agreement for United States and Canadian Hospitals dated June 13,
2005, between Cardiac Science, Inc. and GE Medical Systems Information Technologies, Inc.
(18)10.49*
    
    Employment Agreement between Cardiac Science, Inc. and Peter Foster, dated August 30,
2004 (22)10.50*
    
    Employment Agreement effective September 1, 2005 between Cardiac Science Corporation and
Raymond W. Cohen (21)10.51*
    
    Letter Agreement dated as of November 9, 2005 between Cardiac Science Corporation and
Ruediger Naumann-Etienne (21)10.52*
    
    Form of Indemnification Agreement (21)10.53*
    
    Summary of Non-Employee Director Compensation (21)10.54*
    
    Cardiac Science Corporation 2006 Management Incentive Plan (23)10.55*
    
    Quinton Cardiology Systems, Inc. 2005 Management Incentive Plan (13)21.1+
    
    Subsidiaries
 26




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##### 



ExhibitNumber
    
    Description23.1+
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley
Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley
Act of 2002.32.1+
    
    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 2002.32.2+
    
    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.+
    
    Previously filed with the Annual Report on Form 10-K filed on March 16, 2006.
++ 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.(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. 1 to the
Registration Statement on Form S-1/A (File No. 333-83272) filed on March 26, 2002.(6)
    
    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.(7)
    
    Incorporated by reference to Quinton Cardiology Systems, Inc.s Annual Report on Form 10-K
for the year ended December 31, 2002 (File No. 000-49755).(8)
    
    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).(9)
    
    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).(10)
    
    Incorporated by reference to Quinton Cardiology Systems, Inc.s Quarterly Report on Form 10-Q
for the quarter ended March 31, 2004 (File No. 000-49755).(11)
    
    Incorporated by reference to Quinton Cardiology Systems, Inc.s Quarterly Report on Form 10-Q
for the quarter ended June 30, 2004 (File No. 000-49755).(12)
    
    Incorporated by reference to Quinton Cardiology Systems, Inc.s Current Report on Form 8-K
(File No. 000-49755) filed on January 5, 2005.(13)
    
    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).(14)
    
    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. 27




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##### 



(15)
    
    Incorporated by reference to Cardiac Science, Inc.s Current Report on Form 8-K (File No.
000-19567) filed on March 27, 2001.(16)
    
    Incorporated by reference to Cardiac Science, Inc.s Annual Report on Form 10-K for the year
ended December 31, 2002 (File No. 000-19567).(17)
    
    Incorporated by reference to Cardiac Science, Inc.s Current Report on Form 8-K (File No.
000-19567) filed on July 22, 2004.(18)
    
    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).(19)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K (File No. 000-51512)
filed on September 30, 2005.(20)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K (File No. 000-51512)
filed on October 3, 2005.(21)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K (File No. 000-51512)
filed November 15, 2005.(22)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the quarter
ended September 30, 2005 (File No. 000-51512).(23)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K (File No. 000-51512)
filed February 27, 2006. 28