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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, 2008oro

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(State or Other Jurisdiction
    of
    Incorporation or Organization)

94-3300396(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-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





CARDIAC
    SCIENCE CORPORATION
  2008
    FORM 10-K
    ANNUAL REPORT
  TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


2Item 1A.


Risk Factors


18Item 1B.


Unresolved Staff Comments


29Item 2.


Properties


29Item 3.


Legal Proceedings


29Item 4.


Submission of Matters to a Vote of Security
    Holders


29PART IIItem 5.


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


30Item 6.


Selected Financial Data


32Item 7.


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


33Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


45Item 8.


Financial Statements and Supplementary Data


46Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


84Item 9A.


Controls and Procedures


84Item 9B.


Other Information


84PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


85Item 11.


Executive Compensation


85Item 12.


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


85Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


85Item 14.


Principal Accountant Fees and Services


85PART IVItem 15.


Exhibits and Financial Statement Schedules


85Signatures


87EX-10.9EX-10.14EX-10.15EX-10.18EX-10.19EX-10.25EX-10.43EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   i




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##### Table of Contents



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
     4




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Cardiac
    Monitoring Products
      Resting
    ECG systems
  low-cost
  Cardiac
    stress testing systems
    Holter
    monitoring systems
    Cardiac
    rehabilitation telemetry systems
    Cardiology
    data management systems (informatics)
    Related
    products and supplies
   5




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Services
  non-medical 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. third-party
  Defibrillation
    Products
   6




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




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Services
    Advantages
    of our defibrillation products:
    Dependability. ®
  Arrhythmia Detection.
  Variable Escalating Biphasic Defibrillation
    Energy.
  Ease of Use.
  Flexibility.
  Rugged design.
  Growth
    Strategy
   8




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Exploit
    under-penetrated and emerging market segments
    Create
    opportunities through innovation
    Broaden
    our distribution
        Leverage
    our services capabilities
    Pursue
    strategic mergers and acquisitions
   9




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Business
    Advantages
    Cardiology focus.
  Industry leading brands.
  Commitment to innovation.
  Leading market positions.
    Global distribution and service network.
  Our
    Organization
  Sales
    and Marketing
   10




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Customer
    Service and Support
      Research
    and Development
   11




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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.
 15




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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;
    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.  International Regulation.
  European Union.
 16




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Canada.
  Other Countries. and/or
  Intellectual
    Property
        Customers
   17




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Employees
    Foreign
    Operations
    Available
    Information
  http://www.cardiacscience.com. Form 10-K, Form 10-Q, Form 8-K
  Item 1.A.
    Risk
    Factors  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.
   18




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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.   19




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Our
    business is subject to intense competition, which may reduce the
    demand for our products.
    
    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.    Physio-Control
  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 quarterly operating results;
    changes in financial estimates or recommendations by securities
    analysts; 20




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
    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;
    additions or departures of key personnel;
    sales of a large number of shares of our common stock;
    adverse litigation;
    unfavorable legislative or regulatory decisions;
    general market conditions: and
    timing of major competitors return to the AED market.    We
    were not profitable in 2008 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 our recently announced
    restructuring.
    We are
    subject to many laws and governmental regulations and any
    adverse regulatory action may materially adversely affect our
    business operations and financial results.
    
    take a significant amount of time;
    require the expenditure of substantial resources; 21




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
    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 may
    be required to implement a costly product recall or corrective
    action.
    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 acquisitions, divestitures, strategic alliances,
    and other significant corporate events;
    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;
    changes in the demand for our products;
    varying sales cycles that can take up to a year or more; 22




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
    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.    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;
    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.   23




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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.
      Quality
    problems with our processes, goods and services could harm our
    reputation for producing high quality products and erode our
    competitive advantage.
    If we
    do not maintain or grow revenues from our support services or
    consumables, our operating and financial results may be
    negatively impacted.
   24




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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.
  long-term
  
    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.
   25




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Warranty
    and product liability claims could adversely impact our earnings
    and reputation.
    Failure
    to adequately protect our intellectual property rights may cause
    our expenses to increase and our business to
    suffer.
      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.
   26




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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;
    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 purposes of
    complementing our internal research and product development
    activities.
   27




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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.
    Utilization
    of our deferred tax assets may be limited and is dependent on
    future taxable income.
      Our
    future financial results could be adversely impacted by asset
    impairments.
   28




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties        Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   29




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities      Stock PriceHigh


LowFiscal 2008First Quarter

$
9.75


$
7.60Second Quarter


9.75



7.60Third Quarter


11.00



7.57Fourth Quarter


10.31



5.00Fiscal 2007First Quarter

$
9.64


$
7.40Second Quarter


11.45



8.93Third Quarter


11.50



8.55Fourth Quarter


10.75



7.35    30




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Performance
    Comparison Graph
    COMPARISON
    OF 40 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 & 8/31/05 in
    index-including reinvestment of dividends.
    Fiscal year ending December 31.  ©
 31




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Item 6.
    Selected
    Financial Data    Year Ended December 31,2008


2007


2006


2005


2004(In thousands, except share and per share data)Consolidated Statements of Operations Data(1):Revenues

$
206,153


$
182,131


$
155,429


$
106,650


$
89,603Cost of revenues


103,870



93,715



82,195



59,794



50,302Gross profit


102,283



88,416



73,234



46,856



39,301Operating Expenses:Research and development


16,426



13,020



11,733



9,353



7,397Sales and marketing


50,733



46,195



39,960



24,957



18,378General and administrative


22,417



19,176



19,072



14,233



8,348Impairment of goodwill


107,671















Litigation and related expenses






3,808



3,855



893



Licensing income and litigation settlement






(6,000
)










Total operating expenses


197,247



76,199



74,620



49,436



34,123Operating income (loss)


(94,964
)


12,217



(1,386
)


(2,580
)


5,178Other Income (Expense):Interest income (expense), net


489



402



(16
)


325



(70
)Other income (expense), net


635



799



782



(487
)


1,031Total other income (expense)


1,124



1,201



766



(162
)


961Income (loss) before income tax (expense) benefit and minority
    interest


(93,840
)


13,418



(620
)


(2,742
)


6,139Income tax (expense) benefit


(4,093
)


(4,924
)


615



1,473



8,890Income (loss) before minority interests


(97,933
)


8,494



(5
)


(1,269
)


15,029Minority interests


(451
)


(4
)


54



31



39Net income (loss)

$
(98,384
)

$
8,490


$
49


$
(1,238
)

$
15,068Basic income (loss) per share(2)

$
(4.30
)

$
0.37


$
0.00


$
(0.08
)

$
1.47Diluted income (loss) per share(2)

$
(4.30
)

$
0.37


$
0.00


$
(0.08
)

$
1.39Shares used in computing basic income (loss) per share(2)


22,869,920



22,697,113



22,502,040



14,695,261



10,236,838Shares used in computing diluted income (loss) per share(2)


22,869,920



23,197,911



22,555,326



14,695,261



10,814,680Consolidated Statements of Cash Flows Data:Cash provided by (used in) operating activities

$
17,743


$
13,348


$
8,764


$
(850
)

$
6,259Cash used in investing activities

$
(4,352
)

$
(3,788
)

$
(3,307
)

$
(18,053
)

$
(41
)Cash provided by financing activities

$
859


$
780


$
816


$
547


$
15,499Effect of exchange rate changes on cash

$
246


$



$



$



$
   32




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##### Table of Contents



Year Ended December 31,2008


2007


2006


2005


2004(In thousands)Consolidated Balance Sheet Data:Cash and cash equivalents

$
34,655


$
20,159


$
9,819


$
3,546


$
21,902Total assets


170,208



262,671



247,645



248,557



77,175Current liabilities


37,960



35,219



31,294



33,832



18,682Long-term liabilities






54



679



1,806



Total shareholders equity


131,703



227,271



215,597



212,791



58,334     (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 2008,
    2007 and 2006.  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
  ® ® ® ®
 33




---



##### Table of Contents



Critical
    Accounting Estimates and Policies
    and
  Goodwill.
      Deferred Tax Assets and Income Taxes.
    Stock-based Compensation.
 34




---



##### Table of Contents



Intangible Assets.
        Accounts Receivable.
  Valuation of Long-Lived Assets.
  Inventories.
 35




---



##### Table of Contents



Warranty.
  Software Revenue Recognition. 97-2 (SOP 97-2), SOP 98-9, SOP 97-2, (SOP 98-9). SOP 97-2 when-and-if
    Revenue Recognition.
      No. 00-21,
 36




---



##### Table of Contents



(EITF 00-21)
    Recent
    Accounting Pronouncements
  FAS 142-3, FAS 142-3), and/or FAS 142-3 FAS 142-3
        FAS 157-2, FAS 157-2),
 37




---



##### Table of Contents



FAS 157-2. Form 10-K FAS 157-2
  07-5, (EITF 07-5). EITF 07-5 EITF 07-5 EITF 07-5,
  Results
    of Operations
  Overview
    of 2008 Results
    
    Posted record revenue of $206.2 million, representing 13%
    growth over 2007
    Expanded global AED distribution, particularly in Europe and
    Japan, and achieved significant market share increases
    Introduced new and updated products, including a new cardiac
    rehabilitation system, increased connectivity options for stress
    systems and new non-English language versions of a number of
    products
    Achieved record operating cash flow
    Were added to the Russell
    3000®

    Index
    Incurred a full pre-tax write-off of previously acquired
    goodwill totaling $107.7 million, resulting primarily from
    the significant downturn in the global economy and related
    decreases in our market capitalization during the fourth quarter
    of 2008 and the first quarter of 2009.
    Recorded a $1.2 million charge related to the
    reorganization of our marketing and product development
    organizations, including a 12% reduction in work force, in order
    to realign our cost structure, become more flexible and
    efficient in our operations, and operate profitably in a range
    of scenarios related to economic uncertainty    
    Announced an alliance with Syncroness that will allow us to be
    quicker to market with product solutions that meet the needs of
    existing customers as well as broader markets we are addressing  Looking
    Forward
   38




---



##### Table of Contents



Revenues
      Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2008


2007 to 2008


2007


2006 to 2007


2006(Dollars in thousands)Defibrillation products

$
121,946



25.2
%

$
97,382



44.5
%

$
67,414% of revenue


59.2
%






53.5
%






43.4
%Cardiac monitoring products


65,556



(4.5
)%


68,624



(3.4
)%


71,016% of revenue


31.8
%






37.7
%






45.7
%Service


18,651



15.7
%


16,125



(5.1
)%


16,999% of revenue


9.0
%






8.9
%






10.9
%Total revenues

$
206,153



13.2
%

$
182,131



17.2
%

$
155,429  39




---



##### Table of Contents



Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
        Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
        Gross
    Profit
   40




---



##### Table of Contents



Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2008


2007 to 2008


2007


2006 to 2007


2006(Dollars in thousands)Defibrillation products

$
67,053



27.3
%

$
52,664



45.5
%

$
36,183% of defibrillation products revenue


55.0
%






54.1
%






53.7
%Cardiac monitoring products


29,260



(8.6
)%


32,000



(1.2
)%


32,390% of cardiac monitoring products revenue


44.6
%






46.6
%






45.6
%Service


5,970



59.1
%


3,752



(19.5
)%


4,661% of service revenue


32.0
%






23.3
%






27.4
%Total gross profit

$
102,283



15.7
%

$
88,416



20.7
%

$
73,234% of total revenue


49.6
%






48.5
%






47.1
%   Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
      Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
      Operating
    Expenses
         41




---



##### Table of Contents



Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2008


2007 to 2008


2007


2006 to 2007


2006(Dollars in thousands)Research and development

$
16,426



26.2
%

$
13,020



11.0
%

$
11,733% of total revenue


8.0
%






7.1
%






7.5
%Sales and marketing


50,733



9.8
%


46,195



15.6
%


39,960% of total revenue


24.6
%






25.4
%






25.7
%General and administrative


22,417



16.9
%


19,176



0.5
%


19,072% of total revenue


10.9
%






10.5
%






12.3
%Impairment of goodwill


107,671



n/m







n/m



% of total revenue


52.2
%






0.0
%Litigation and related expenses






n/m



3,808



(1.2
)%


3,855% of total revenue


0.0
%






2.1
%






2.5
%Licensing income and litigation settlement






n/m



(6,000
)


n/m



% of total revenue


0.0
%






(3.3
)%






0.0
%Total operating expenses

$
197,247



158.9
%

$
76,199



2.1
%

$
74,620% of total revenue


95.7
%






41.8
%






48.0
%   Year
    Ended December 31, 2008 Compared to Year Ended
    December 31, 2007
         42




---



##### Table of Contents



Year
    Ended December 31, 2007 Compared to Year Ended
    December 31, 2006
            Other
    Income and Expense
        Income
    Taxes
   43




---



##### Table of Contents



Liquidity
    and Capital Resources
  Cash flows for the years ended December 31, 2008, 2007
    and 2006 were as follows:
  Year Ended





Year Ended





Year EndedDecember 31,


% Change


December 31,


% Change


December 31,2008


2007 to 2008


2007


2006 to 2007


2006(Dollars in thousands)Cash provided by operating activities

$
17,743



32.9
%

$
13,348



52.3
%

$
8,764Cash used in investing activities


(4,352
)


(14.9
)%


(3,788
)


(14.5
)%


(3,307
)Cash provided by financing activities


859



10.1
%


780



(4.4
)%


816Effect of exchange rate changes on cash


246



n/m







n/m



Total change in cash and cash equivalents

$
14,496



40.2
%

$
10,340



64.8
%

$
6,273          44




---



##### Table of Contents



Form 10-K.
  Contractual
    Obligations
    Less Than


1-3


3-5


AfterContractual Obligations

Total


1 Year


Years


Years


5 YearsOperating leases

$
14,377


$
1,830


$
4,058


$
4,144


$
4,345Purchase obligations


42,066



42,066











Total contractual obligations

$
56,443


$
43,896


$
4,058


$
4,144


$
4,345       Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk   45




---



##### 



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


47Report of Independent Registered Public
    Accounting Firm


48Consolidated Balance Sheets


50Consolidated Statements of Operations


51Consolidated Statements of Shareholders
    Equity and Comprehensive Income (Loss)


52Consolidated Statements of Cash Flows


53Notes to Consolidated Financial Statements


54Schedule II  Valuation and
    Qualifying Accounts


83   46




---



##### Table of Contents



MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING  Rules 13a-15(f). Internal Control  Integrated Framework
   47




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     Internal Control  Integrated Framework
       48




---



##### Table of Contents



Internal Control  Integrated Framework
       49




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2008


2007(In thousands)ASSETSCurrent Assets:Cash and cash equivalents

$
34,655


$
20,159Short-term investments






350Accounts receivable, net of allowance for doubtful accounts of
    $1,186 and $500, respectively


31,665



29,439Inventories


24,692



21,794Deferred income taxes


8,366



9,558Prepaid expenses and other current assets


3,144



2,509Total current assets


102,522



83,809Other assets


428



125Machinery and equipment, net of accumulated depreciation of
    $15,190 and $13,065, respectively


6,994



5,056Deferred income taxes


28,452



30,288Intangible assets, net of accumulated amortization of $13,889
    and $9,927, respectively


31,278



35,053Investments in unconsolidated entities


534



727Goodwill






107,613Total assets

$
170,208


$
262,671LIABILITIES AND SHAREHOLDERS EQUITYCurrent Liabilities:Accounts payable

$
12,711


$
12,792Accrued liabilities


13,535



11,075Warranty liability


3,796



3,211Deferred revenue


7,918



8,141Total current liabilities


37,960



35,219Other liabilities






54Total liabilities


37,960



35,273Minority interests


545



127Commitments and contingenciesShareholders Equity:Preferred stock (10,000,000 shares authorized),
    $0.001 par value, no shares issued or outstanding as of
    December 31, 2008 and 2007, respectively






Common stock (65,000,000 shares authorized),
    $0.001 par value, 22,998,364 and 22,781,648 shares
    issued and outstanding at December 31, 2008 and 2007,
    respectively


227,303



224,250Accumulated other comprehensive income (loss)


(70
)


167Retained earnings (deficit)


(95,530
)


2,854Total shareholders equity


131,703



227,271Total liabilities and shareholders equity

$
170,208


$
262,671    50




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  Year Ended December 31,2008


2007


2006(In thousands, except share and per share data)Revenues:Products

$
187,502


$
166,006


$
138,430Service


18,651



16,125



16,999Total revenues


206,153



182,131



155,429Cost of Revenues:Products


91,189



81,342



69,857Service


12,681



12,373



12,338Total cost of revenues


103,870



93,715



82,195Gross profit


102,283



88,416



73,234Operating Expenses:Research and development


16,426



13,020



11,733Sales and marketing


50,733



46,195



39,960General and administrative


22,417



19,176



19,072Impairment of goodwill


107,671







Litigation and related expenses






3,808



3,855Licensing income and litigation settlement






(6,000
)


Total operating expenses


197,247



76,199



74,620Operating income (loss)


(94,964
)


12,217



(1,386
)Other Income:Interest income


489



479



242Interest expense






(77
)


(258
)Other income, net


635



799



782Total other income


1,124



1,201



766Income (loss) before income tax (expense) benefit and minority
    interests


(93,840
)


13,418



(620
)Income tax (expense) benefit


(4,093
)


(4,924
)


615Income (loss) before minority interests


(97,933
)


8,494



(5
)Minority interests


(451
)


(4
)


54Net income (loss)

$
(98,384
)

$
8,490


$
49Net income (loss) per share  basic

$
(4.30
)

$
0.37


$
0.00Net income (loss) per share  diluted

$
(4.30
)

$
0.37


$
0.00Weighted average shares outstanding  basic


22,869,920



22,697,113



22,502,040Weighted average shares outstanding  diluted


22,869,920



23,197,911



22,555,326    51




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
    (LOSS)
  AccumulatedOther


RetainedComprehensive


EarningsShares


Amount


Income (Loss)


(Deficit)


Total(In thousands, except share amounts)Balance, December 31, 2005


22,410,344


$
218,335


$
5


$
(5,549
)

$
212,791Cumulative effect of adjustment resulting from the adoption of
    SAB No. 108, net of tax














(136
)


(136
)Issuance of common stock upon exercise of stock options


79,012



232











232Stock-based compensation






2,062











2,062Proceeds from issuance of stock under employee stock purchase
    plan


92,199



665











665Stock awards


23,516















Minimum tax withholding on stock awards


(7,057
)


(81
)










(81
)Comprehensive income:Net income














49



49Unrealized gain on
    available-for-sale
    securities, net of income tax effect of $12










20







20Foreign currency translation adjustments










(5
)






(5
)Total comprehensive income


















64Balance, December 31, 2006


22,598,014



221,213



20



(5,636
)


215,597Issuance of common stock uponexercise of stock options


73,693



368











368Stock-based compensation






2,257











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


80,078



553











553Stock awards


43,927















Minimum tax withholding on stock awards


(14,064
)


(141
)










(141
)Comprehensive income:Net income














8,490



8,490Unrealized gain on
    available-for-sale
    securities, net of income tax effect of $87










147







147Total comprehensive income


















8,637Balance, December 31, 2007


22,781,648


$
224,250


$
167


$
2,854


$
227,271Issuance of common stock upon exercise of stock options


86,232



500











500Stock-based compensation






2,194











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


89,670



603











603Stock awards


60,476















Minimum tax withholding on stock awards


(19,662
)


(244
)










(244
)Comprehensive loss:Net loss














(98,384
)


(98,384
)Unrealized loss on
    available-for-sale
    securities, net of income tax effect of $65










(128
)






(128
)Foreign currency translation adjustments










(109
)






(109
)Total comprehensive loss


















(98,621
)Balance, December 31, 2008


22,998,364


$
227,303


$
(70
)

$
(95,530
)

$
131,703    52




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2008


2007


2006(In thousands)Operating Activities:Net income (loss)

$
(98,384
)

$
8,490


$
49Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Stock-based compensation


2,173



2,233



2,028(Gain) loss on disposal of machinery and equipment






(16
)


58Depreciation and amortization


6,327



6,746



6,261Impairment of goodwill


107,671







Licensing income and litigation settlement






(6,000
)


Deferred income taxes


3,093



4,494



(781
)Minority interests


451



55



(54
)Changes in operating assets and liabilities, net of businesses
    acquired:Accounts receivable, net


(2,825
)


(2,468
)


(1,189
)Inventories


(2,877
)


(4,153
)


2,956Prepaid expenses and other assets


(645
)


(304
)


1,189Accounts payable


(543
)


1,031



411Accrued liabilities


2,940



1,531



(1,604
)Warranty liability


585



679



(95
)Deferred revenue


(223
)


1,030



(465
)Net cash provided by operating activities


17,743



13,348



8,764Investing Activities:Purchases of short-term investments


(845
)


(1,240
)


(839
)Maturities of short-term investments


1,195



1,437



292Purchase of patents as part of litigation settlement






(1,000
)


Purchases of machinery and equipment


(3,911
)


(2,014
)


(1,249
)Proceeds from repayment of notes


38







238Cash paid for acquisitions


(829
)


(971
)


(1,749
)Net cash used in investing activities


(4,352
)


(3,788
)


(3,307
)Financing Activities:Proceeds from exercise of stock options and issuance of shares
    under employee stock purchase plan


1,103



921



897Minimum tax withholding on stock awards


(244
)


(141
)


(81
)Net cash provided by financing activities


859



780



816Effect of exchange rate changes on cash


246







Net change in cash and cash equivalents


14,496



10,340



6,273Cash and cash equivalents, beginning of period


20,159



9,819



3,546Cash and cash equivalents, end of period

$
34,655


$
20,159


$
9,819Supplemental disclosures of cash flow information:Cash paid for income taxes, net of refunds

$
1,026


$
338


$
204Cash paid for interest





$
25


$
54Supplemental disclosures of noncash investing and financing
    activities:Intangible assets acquired in licensing income and litigation
    settlement





$
6,000



Machinery and equipment purchases accrued but not yet paid for

$
396







Conversion of accounts receivable note to note receivable

$
330







    53




---



##### 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
      Use of
    Estimates
    Cash
    Equivalents
   54




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Short-term
    Investments
  available-for-sale other-than-temporary
    Accounts
    Receivable
    Inventories
  and/or
  Machinery
    and Equipment
    Intangible
    Assets
     55




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Goodwill
      Valuation
    of Long-Lived Assets
   56




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Purchase
    Price Allocations
    Deferred
    Tax Assets and Income Taxes
    Litigation
    and Other Contingencies
    Restructuring
    Costs
    Revenue
    Recognition
  No. 00-21, (EITF 00-21), 97-2, (SOP 97-2) 98-9, (SOP 98-9).
 57




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
          EITF 00-21
     58




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      SOP 97-2, SOP 98-9. SOP 97-2 when-and-if
  Sales
    Returns
    Segment
    Reporting
  non-invasive
  Export
    Sales
    Foreign
    Currency Translation
     59




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Advertising
    Costs
    Warranty
      Research
    and Development Costs
    Comprehensive
    Income (Loss)
    available-for-sale
    Year Ended December 31,2008


2007


2006(In thousands)Net income (loss)

$
(98,384
)

$
8,490


$
49Other comprehensive income (loss)


(237
)


147



15Total comprehensive income (loss)

$
(98,621
)

$
8,637


$
64   Financial
    Instruments and Concentrations of Credit Risk
  and/or
  Stock-Based
    Compensation
   60




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Net
    Income (Loss) Per Share
      Year Ended December 31,2008


2007


2006(In thousands, except share data)Numerator:Net income (loss)

$
(98,384
)

$
8,490


$
49Denominator:Weighted average shares for basic calculation


22,869,920



22,697,113



22,502,040Incremental shares from employee stock options, non-vested stock
    awards and ESPP






500,798



53,286Weighted average shares for diluted calculation


22,869,920



23,197,911



22,555,326     Year Ended December 31,2008


2007


2006Antidilutive shares issuable upon exercise of stock options


2,896,877



2,459,875



2,296,587Antidilutive shares issuable upon exercise of warrants


237,775



288,984



330,834Antidilutive shares related to non-vested stock awards and ESPP


289,836



194,904



Total


3,424,488



2,943,763



2,627,421  61




---



##### Table of Contents



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

2008


2007


2006Nihon Kohden Corporation


19
%


11
%


11
%     *
    
    Did not exceed 10%. 62




---



##### Table of Contents



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

2008


2007


2006Vendor 1


18
%


16
%


12
%Vendor 2


*



*



10
%     *
    
    Did not exceed 10%.    Taxes
    Collected from Customers and Remitted to Governmental
    Authorities
    Reclassifications
    Recent
    Accounting Pronouncements
  FAS 142-3, FAS 142-3), and/or FAS 142-3 FAS 142-3
     63




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      FAS 157-2, FAS 157-2), FAS 157-2. Form 10-K FAS 157-2
  07-5, (EITF 07-5). EITF 07-5 EITF 07-5 EITF 07-5.
  2.
    Segment
    Reporting     64




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Year Ended December 31,2008


2007


2006(In thousands)Defibrillation products

$
121,946


$
97,382


$
67,414Cardiac monitoring products


65,556



68,624



71,016Service


18,651



16,125



16,999Total

$
206,153


$
182,131


$
155,429     Year Ended December 31,2008


2007


2006(In thousands)Domestic

$
125,172


$
135,646


$
117,497Foreign


80,981



46,485



37,932Total

$
206,153


$
182,131


$
155,429       3.
    Restructuring
    Costs         65




---



##### Table of Contents



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











Balance atDecember 31,





Cash





December 31,2005


Additions


Expenditures


Adjustments


2006(In thousands)Vacated facilities

$
2,251


$
93


$
(808
)

$
(152
)

$
1,384Employee severance and retention costs


1,813



233



(1,780
)






266Total

$
4,064


$
326


$
(2,588
)

$
(152
)

$
1,650   Balance at











Balance atDecember 31,





Cash





December 31,2006


Additions


Expenditures


Adjustments


2007(In thousands)Vacated facilities

$
1,384


$



$
(705
)

$



$
679Employee severance and retention costs


266







(266
)






Total

$
1,650


$



$
(971
)

$



$
679   December 31,





Cash





December 31,2007


Additions


Expenditures


Adjustments


2008(In thousands)Vacated facilities

$
679


$



$
(625
)

$



$
54Employee severance and retention






1,203



(248
)






955Total

$
679


$
1,203


$
(873
)

$



$
1,009   4.
    Inventories    2008


2007(In thousands)Raw materials

$
20,871


$
16,543Finished goods


3,821



5,251Total inventories

$
24,692


$
21,794  66




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  5.
    Machinery
    and Equipment    DepreciableLives


2008


2007Equipment


(2-14 years
)

$
16,853


$
13,786Furniture and fixtures


(2-13 years
)


2,444



2,022Leasehold improvements


(1-10 years
)


2,887



2,313Subtotal






22,184



18,121Less: Accumulated depreciation






(15,190
)


(13,065
)Net machinery and equipment





$
6,994


$
5,056     6.
    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






183







183Total intangible assets not subject to amortization






14,963







14,963Intangible assets subject to amortization:Cardiac Science customer relationships


5 years



8,650



(5,767
)


2,883Cardiac Science developed technology


8 years



11,330



(4,721
)


6,609Burdick distributor relationships


10 years



1,400



(840
)


560Burdick developed technology


7 years



860



(737
)


123Patents and patent applications


5-10 years



960



(923
)


37Patent rights


13 years



7,000



(897
)


6,103Total intangible assets subject to amortization






30,200



(13,885
)


16,315Total





$
45,163


$
(13,885
)

$
31,278    67




---



##### Table of Contents



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


3,9572010


3,2582011


2,1042012


2,1022013


1,483Thereafter


3,410   7.
    Investments
    in Unconsolidated Entities  available-for-sale,
    2008


2007ScImage

$
84


$
84Biotel


371



605Other


79



38Total investment in unconsolidated entities

$
534


$
727   ScImage
    Biotel,
    Inc.
    8.
    Goodwill       68




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Increases Due toBeginning of Period


Acquisitions


Impairment


End of PeriodYear ended December 31, 2007

$
107,613










$
107,613Year ended December 31, 2008

$
107,613


$
58


$
(107,671
)


   Goodwill
    impairment
           69




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      9.
    Accrued
    Liabilities and Warranty    2008


2007Accrued compensation and benefits

$
5,862


$
5,713Other accrued liabilities


7,673



5,362Total accrued liabilities

$
13,535


$
11,075     PurchaseAccountingAdjustmentsCharged to


to EstimatedBeginning


Product Cost


Fair Value of


Warranty


End ofof Period


of Revenues


Acquired Warranty


Expenditures


Period(In thousands)Year ended December 31, 2006

$
2,348


$
2,042


$
279


$
(2,137
)

$
2,532Year ended December 31, 2007


2,532



2,986







(2,307
)


3,211Year ended December 31, 2008


3,211



3,890







(3,305
)


3,796   10.
    Credit
    Facility    11.
    Income
    Taxes    Year Ended December 31,2008


2007


2006U.S.

$
(94,968
)

$
12,866


$
(1,184
)Foreign


1,128



552



564Total

$
(93,840
)

$
13,418


$
(620
)  70




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##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year Ended December 31,2008


2007


2006Current:Federal

$
492


$
338


$
State


190



84



Foreign


318



8



166Total current income tax expense


1,000



430



166Deferred:Federal


3,383



4,452



(490
)State


(290
)


42



(291
)Total deferred expense (benefit)


3,093



4,494



(781
)Total income tax expense (benefit)

$
4,093


$
4,924


$
(615
)     Year Ended December 31,2008


2007


2006Federal income tax provision (benefit) at U.S. statutory rates


(34.0
)%


34.0
%


(34.0
)%Nondeductible impairment of goodwill


38.6
%






Meals and entertainment


0.2
%


1.3
%


23.2
%Stock-based compensation


0.1
%


2.1
%


44.3
%Research and development credits


(0.8
)%


(4.4
)%


(124.7
)%State income taxes, net of federal benefit


0.2
%


2.9
%


Foreign rate difference


(0.1
)%


(0.7
)%


(4.1
)%Other, net


0.1
%


1.5
%


(3.9
)%Provision (benefit) for income taxes


4.4
%


36.7
%


(99.2
)%        71




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##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    with-and-without with-and-without
    2008


2007Deferred tax assets:Net operating loss carryforwards

$
29,971


$
35,041Stock-based compensation


2,122



1,704Research and experimentation and alternative minimum tax credits


7,897



6,887Inventory basis difference


995



1,079Warranty liability


1,369



1,162Deferred revenue


799



913Accrued compensation, severance, relocation


660



632Other assets


1,518



1,450Other


1,450



988Gross deferred tax assets


46,781



49,856Deferred tax liabilities:Burdick intangible assets


(246
)


(342
)Burdick trade name intangible asset


(1,226
)


(1,230
)Cardiac Science intangible assets


(4,350
)


(4,125
)Cardiac Science trade name


(4,104
)


(4,117
)Goodwill from treadmill line acquisition






(97
)Marketable equity securities


(37
)


(99
)Gross deferred tax liabilities


(9,963
)


(10,010
)Net deferred tax assets

$
36,818


$
39,846Current deferred tax assets

$
8,366


$
9,558Deferred tax assets, non-current


28,452



30,288Net deferred tax assets

$
36,818


$
39,846   non-U.S. operations
 72




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##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        and/or
  12.
    Commitments
    and Contingencies  Lease
    Commitments
      OperatingLeasesYear:2009

$
1,8302010


2,0232011


2,0352012


2,0462013


2,098Thereafter


4,345Total

$
14,377    73




---



##### 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
     74




---



##### Table of Contents



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


Exercise Price


ExpirationGrant Date

Exercisable


per Share


Date2002


2,500



17.50



20122004


1,500



19.50



20092004


208,776



25.00



2009Total


212,776Weighted average exercise price





$
24.87   14.
    Stock-Based
    Compensation Plans         75




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Year Ended December 31,2008


2007


2006Stock options plans:Volatility


48.2
%-48.5%


48.6
%-50.9%


52.6
%-56.0%Expected term (years)


6.25



6.25



6.25Risk-free interest rate


3.4
%


4.8
%


4.6
%Expected dividend yield










Fair value of options granted

$
4.63


$
5.31


$
4.99Employee stock purchase plan:Volatility


27.0
%


37.0
%


34.0
%Expected term (years)


0.5



0.5



0.5Risk-free interest rate


4.5
%


4.5
%


4.4
%Expected dividend yield










Fair value of employee stock purchase rights

$
2.01


$
2.14


$
2.37Non-vested stock:Fair value of non-vested stock awards granted

$
9.04


$
9.35


$
8.25       Stock Option Plans
   76




---



##### Table of Contents



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


2,063,065Outstanding shares  1997 Plan


833,812Stock options available for grant


824,610Outstanding restricted stock grants


388,002Employee stock purchase plan shares available for issuance


749,986Total common shares reserved for future issuance


4,859,475   2002 Plan 
   77




---



##### Table of Contents



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


Weighted Average


Weighted AverageSubject to


Exercise Price


Remaining


Aggregate IntrinsicOptions


per Share


Contractual Life


Value(In thousands)Outstanding, December 31, 2007


2,106,842


$
7.96Granted


180,000



9.04Exercised


(86,232
)


5.28Forfeited


(137,545
)


10.57Outstanding, December 31, 2008


2,063,065


$
8.00



7.4


$
4,844,000Exercisable, December 31, 2008


1,623,564


$
7.69



6.9


$
3,700,000   1997 Plan 
      Shares


Weighted Average


Weighted AverageSubject to


Exercise Price


Remaining


Aggregate IntrinsicOptions


per Share


Contractual Life


Value(In thousands)Outstanding, December 31, 2007


858,262


$
24.11Exercised






Forfeited or expired


(24,450
)


24.11Outstanding, December 31, 2008


833,812


$
24.11



3.9


$
Exercisable, December 31, 2008


807,562


$
24.62



3.8


$
   Non-vested Stock Awards 
 78




---



##### Table of Contents



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


Grant-Date Fair ValueNon-vested balance, December 31, 2007


152,974


$
8.94Granted


338,127



9.04Vested


(60,401
)


8.94Forfeited


(42,698
)


9.03Non-vested balance, December 31, 2008


388,002


$
9.02   Employee Stock Purchase Plan 
    15.
    Fair
    Value Measurement   79




---



##### Table of Contents



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







   16.
    Derivatives    17.
    Acquisitions    18.
    Employee
    Benefit Plans   80




---



##### Table of Contents



CARDIAC
    SCIENCE CORPORATION AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    19.
    SEC Staff
    Accounting Bulletin No. 108    Lease
    Accounting
   81




---



##### 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 31,2007


2007


2007


2007


2008


2008


2008


2008Consolidated Statements of Operations Data:Revenues

$
41,670


$
44,889


$
45,144


$
50,428


$
48,959


$
52,132


$
54,006


$
51,056Cost of Revenues


21,790



23,123



23,001



25,801



24,761



26,169



27,887



25,053Gross profit


19,880



21,766



22,143



24,627



24,198



25,963



26,119



26,003Operating Expenses:Research and development


2,982



3,090



3,391



3,557



3,863



3,796



4,103



4,664Sales and marketing


11,108



11,445



11,913



11,729



12,189



13,047



12,934



12,563General and administrative


4,512



4,933



4,462



5,269



5,125



5,347



5,096



6,849Impairment of goodwill






























107,671Litigation and related expenses


1,688



2,029



91



















Licensing income and litigation settlement






(6,000
)






















Total operating expenses


20,290



15,497



19,857



20,555



21,177



22,190



22,133



131,747Operating income (loss)


(410
)


6,269



2,286



4,072



3,021



3,773



3,986



(105,744
)Other Income (Expense):Interest income (expense), net


22



74



103



203



115



163



156



55Other income (expense), net


125



327



406



(59
)


211



(125
)


20



529Total other income


147



401



509



144



326



38



176



584Income (loss) before income tax benefit (expense) and minority
    interests


(263
)


6,670



2,795



4,216



3,347



3,811



4,162



(105,160
)Income tax benefit (expense)


75



(2,155
)


(1,023
)


(1,821
)


(1,240
)


(1,407
)


(1,598
)


152Income (loss) before minority interests


(188
)


4,515



1,772



2,395



2,107



2,404



2,564



(105,008
)Minority interests


22



15



(13
)


(28
)


(53
)


(118
)


(86
)


(194
)Net income (loss)

$
(166
)

$
4,530


$
1,759


$
2,367


$
2,054


$
2,286


$
2,478


$
(105,202
)Net income (loss) per share  basic

$
(0.01
)

$
0.20


$
0.08


$
0.10


$
0.09


$
0.10


$
0.11


$
(4.58
)Net income (loss) per share  diluted

$
(0.01
)

$
0.19


$
0.08


$
0.10


$
0.09


$
0.10


$
0.11


$
(4.58
)  82




---



##### Table of Contents



SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS
    (In Thousands)    ExpensesBeginning


and





End ofof Period


Adjustments


Write-offs


Period(In thousands)Year Ended December 31, 2008

$
500


$
972


$
(286
)

$
1,186Year Ended December 31, 2007


907



236



(643
)


500Year Ended December 31, 2006


3,455



216



(2,764
)


907  83




---



##### 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   84




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    Item 11.
    Executive
    Compensation    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     85




---



##### Table of Contents



Exhibits.
  88-91.
 86




---



##### Table of Contents



SIGNATURES    Cardiac Science
    Corporation
  By:
    /s/  Michael
    K. Matysik         Signature

Title

Date/s/  JOHN
    R. HINSONJohn
    R. Hinson

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

March 16, 2009/s/  MICHAEL
    K. MATYSIKMichael
    K. Matysik

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

March 16, 2009/s/  RUEDIGER
    NAUMANN-ETIENNERuediger
    Naumann-Etienne

Chairman of the Board

March 16, 2009/s/  W.
    ROBERT BERGW.
    Robert Berg

Director

March 16, 2009/s/  JUE-HSIEN
    CHERNJue-Hsien
    Chern

Director

March 16, 2009/s/  RAYMOND
    W. COHENRaymond
    W. Cohen

Director

March 16, 2009/s/  TIMOTHY
    C. MICKELSONTimothy
    C. Mickelson

Director

March 16, 2009/s/  CHRISTOPHER
    J. DAVISChristopher
    J. Davis

Director

March 16, 2009  87




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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

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(10)4
.3

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)4
.4

Form of Warrant(10)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.(11)10
.1*

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

Quinton Cardiology Systems, Inc. 1998 Amended and Restated
    Equity Incentive Plan(4)10
.3*

Quinton Cardiology Systems, Inc. 2002 Stock Incentive Plan(4)10
.4*

Quinton Cardiology Systems, Inc. 2002 Employee Stock Purchase
    Plan(4)10
.5*

Cardiac Science Corporation Stock Option Grant Program for
    Nonemployee Directors(17)10
.6*

Cardiac Science, Inc. 1997 Stock Option/Stock Issuance Plan, as
    amended(9)10
.7*

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
.8*

Amended and Restated Employment Agreement dated as of
    September 20, 2006 between Cardiac Science Corporation and
    Kurt Lemvigh(15)10
.9*

Amended and Restated Employment Agreement dated as of
    September 20, 2006 between Cardiac Science Corporation and
    Feroze Motafram10
.10*

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
.11*

Amended and Restated Employment Agreement dated as of
    September 20, 2006 between Cardiac Science Corporation and
    Michael K. Matysik(15)10
.12*

Form of Stock Option Grant Notice and Stock Option Agreement for
    grants made pursuant to the Quinton Cardiology Systems, Inc.
    2002 Stock Incentive Plan(14)10
.13*

Form of Indemnification Agreement(12)10
.14*

Equity Grant Program for Nonemployee Directors under the Cardiac
    Science Corporation 2002 Stock Incentive Plan10
.15*

Cardiac Science Corporation Management Incentive Plan
    (MIP)  200910
.16*

Form of 1997 Stock Option/Stock Issuance Plan Grant Notice and
    Option Agreement (13)10
.17*

Form of Cardiac Science Corporation Stock Option Grant Notice
    under 2002 Stock Incentive Plan for Non-Employee Directors(17)10
.18*

Form of 2009 Compensation Incentive Plan for Kurt Lemvigh10
.19*

Form of Restricted Stock Unit Agreement under the Cardiac
    Science Corporation 2002 Stock Incentive Plan 88




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##### Table of Contents



ExhibitNumber

Description10
.20

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(16)10
.21

OEM Agreement between Quinton Inc. and Mortara Instrument, Inc.
    dated August 1, 2000(4)10
.22

Addendum No. 1 to the OEM Agreement between Mortara
    Instrument, Inc. and Quinton Inc. dated August 1, 2001(4)10
.23

OEM Agreement between Quinton Inc. and Mortara Instrument, Inc.
    dated October 17, 2000(4)10
.24

OEM Agreement between Quinton Inc. and Mortara Instrument, Inc.
    dated October 1, 2001(5)10
.25

Lease Agreement between Carl Ruedebusch LLC and Burdick, Inc.
    regarding premises at Deerfield Industrial Park in Deerfield,
    Wisconsin dated as of November 26, 200810
.26

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
.27++

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

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
.29

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
.30

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
.33+

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
.32++

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

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
.34

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
.35

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
.36++

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
.37++

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
.38+

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
.39

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
.40

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
.41++

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
.42++

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) 89




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##### Table of Contents



ExhibitNumber

Description10
.43++

OEM Supply and Purchase Agreement between Cardiac Science
    Corporation and Nihon Kohden Corporation entered into
    March 31, 200521
.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 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 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.+
    
    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). 90




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##### Table of Contents



(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. 91