<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[ X ]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended            SEPTEMBER 30, 1999
                               -------------------------------------------------

                                       OR

[   ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


                         Commission file number 0-19567
                                                -------

                              CARDIAC SCIENCE, INC.
      ---------------------------------------------------------------------
        (Exact name of Small Business Issuer as specified in its charter)

               DELAWARE                                      33-0465681
--------------------------------------------------------------------------------
    (State or other jurisdiction of                      (I.R.S. Employer
     incorporation or organization)                      Identification No.)

   1176 MAIN STREET, SUITE C, IRVINE, CALIFORNIA                92614
--------------------------------------------------------------------------------
     (Address of principal executive offices)

Issuer's telephone number, including area code:           (949)  587-0357


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.   Yes X    No
                                                               ---     ---

The number of shares of the Common Stock of the registrant outstanding as of
October 18, 1999 was 11,244,732.


                                                                             1
<PAGE>



                              CARDIAC SCIENCE, INC.

                              INDEX TO FORM 10-QSB

                          PART I. FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                                              PAGE NO.
                                                                                              --------
<S>                                                                                           <C>
Item 1.     Financial Statements:

            Consolidated Condensed Balance Sheets as of September 30, 1999 (Unaudited)
              and December 31, 1998                                                                3

            Consolidated Condensed Statements of Operations (Unaudited) for the
              Three and Nine months ended September 30, 1999 and 1998                              4

            Consolidated Condensed Statements of Cash Flows (Unaudited) for the
              Nine months ended September 30, 1999 and 1998                                        5

            Consolidated Condensed Notes to Financial Statements (Unaudited)                       6

Item 2.     Management's Discussion and Analysis or Plan of Operation                              9


                               PART II. OTHER INFORMATION

Item 1.     Legal Proceedings                                                                     13

Item 2.     Changes in Securities and Use of Proceeds                                             13

Item 3.     Defaults Upon Senior Securities                                                       13

Item 4.     Submission of Matters to a Vote of Security Holders                                   13

Item 5.     Other Information                                                                     13

Item 6.     Exhibits and Reports on Form 8-K                                                      13

Signatures                                                                                        14
</TABLE>

                                                                             2
<PAGE>



ITEM 1.  FINANCIAL STATEMENTS

                              CARDIAC SCIENCE, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                         (Unaudited)
                                                                                         September 30,      December 31,
                                                                                             1999              1998
                                                                                         -------------     ------------
<S>                                                                                      <C>               <C>
                                                         ASSETS
Current assets:
  Cash and cash equivalents                                                              $  4,818,475      $  1,247,602
  Common stock subscriptions receivable                                                     1,011,250
  Prepaid expenses                                                                             65,222            30,129
                                                                                         ------------      ------------
                                        Total current assets                                5,894,947         1,277,731


Equipment, net                                                                                259,275           117,710
Investment in unconsolidated affiliate                                                        115,000           115,000
Other assets                                                                                   65,632            45,266
                                                                                         ------------      ------------

                                                                                         $  6,334,854      $  1,555,707
                                                                                         ============      ============

                   LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Current portion of capital lease obligation                                            $     24,939      $      3,413
  Accounts payable and accrued expenses                                                     1,219,765         1,599,216
  Notes payable                                                                                31,247           225,000
                                                                                         ------------      ------------
                                        Total current liabilities                           1,275,951         1,827,629
                                                                                         ------------      ------------

Long term portion of capital lease obligation                                                 110,231            16,001
                                                                                         ------------      ------------

Stockholders' Equity (Deficit):
  Preferred Stock - $.001 par value; 1,000,000 shares authorized, none
    issued or outstanding                                                                         ---               ---
  Common stock - $ 0.001 par value; 20,000,000 shares authorized, 10,987,232
    issued and outstanding at September 30, 1999 and 7,014,738 at
    December 31, 1998                                                                          10,987             7,015
  Common stock subscribed                                                                   1,011,250           100,000
  Additional paid-in capital                                                               19,973,714        10,823,448
  Accumulated deficit                                                                     (16,047,279)      (11,218,386)
                                                                                         ------------      ------------
                                        Total stockholders' equity (deficit)                4,948,672          (287,923)
                                                                                         ------------      ------------
                                                                                         $  6,334,854      $  1,555,707
                                                                                         ============      ============
</TABLE>

    The accompanying notes are an integral part of the financial statements.


                                                                             3
<PAGE>


                             CARDIAC SCIENCE, INC.

               CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                                 (Unaudited)

<TABLE>
<CAPTION>
                                                         Three months ended                         Nine months ended

                                                  September 30,         September 30,      September 30,       September 30,
                                                        1999                 1998                1999                1998
                                                                       (Restated see                           (Restated see
                                                                           Note 5)                                  Note 5)
                                                 -----------------    ----------------    ----------------    -----------------
<S>                                              <C>                  <C>                 <C>                 <C>
Operating expenses:
   Research and development                           $ 1,126,098          $  436,430         $ 2,795,408          $ 1,416,229
   Marketing expenses                                     252,871              82,460             932,792              204,454
   General and administrative                             342,917             264,083           1,092,542              872,483
                                                 -----------------    ----------------    ----------------    -----------------

Loss from continuing operations                        (1,721,886)           (782,973)         (4,820,742)          (2,493,166)
Interest (expense) net                                     (2,918)             (5,645)             (6,550)             (14,771)
                                                 -----------------    ----------------    ----------------    -----------------

Loss from continuing operations before
   provision for income taxes                          (1,724,804)           (788,618)         (4,827,292)          (2,507,937)
Provision for income taxes                                    ---                 ---               1,600                1,600
                                                 -----------------    ----------------    ---------------- -- -----------------

Net loss from continuing operations                    (1,724,804)           (788,618)         (4,828,892)          (2,509,537)

Loss from discontinued operations, net of
   income taxes                                               ---             (14,223)                ---              (88,310)
                                                 -----------------    ----------------    ---------------- -- -----------------
Net loss                                             $ (1,724,804)         $ (802,841)       $ (4,828,892)        $ (2,597,847)
                                                 =================    ================    ================    =================

Basic and diluted loss per share                        $   (0.18)          $   (0.14)          $   (0.52)           $   (0.49)
                                                 =================    ================    ================    =================

Number of shares used in the computation
  of loss per share                                     9,517,750           5,651,353           9,208,182            5,276,117
                                                 =================    ================    ================    =================
</TABLE>

    The accompanying notes are an integral part of the financial statements.

                                                                             4
<PAGE>


                              CARDIAC SCIENCE, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Nine months          Nine months ended
                                                                                      ended            September 30, 1998
                                                                                  September 30,       (Restated see Note 5)
                                                                                      1999
                                                                                -------------------   ----------------------
<S>                                                                             <C>                   <C>
Cash flows from operating activities:
Net loss                                                                             $ (4,828,892)            $ (2,597,847)
Adjustments to reconcile net loss to net
  cash used in operating activities from continuing operations:
    Loss from discontinued operations                                                         ---                   88,310
    Depreciation and amortization                                                          44,976                   21,769
    Compensation related to fair value of options granted to non-
       employees                                                                           14,100                      ---
     Expenses paid with common stock                                                      421,680                   50,000
    Changes in operating assets and liabilities, exclusive of
      Diagnostic Monitoring:
    Prepaid expenses                                                                      (35,092)                  82,206
    Increase in other assets                                                              (20,366)                     ---
    Accounts payable and accrued expenses                                                (681,091)                 569,610
                                                                               -------------------   ----------------------
Net cash used in operating activities from continuing operations                       (5,084,685)              (1,785,952)
                                                                               -------------------   ----------------------

Net cash provided by discontinued operations                                                  ---                   69,515
                                                                               -------------------   ----------------------

Cash flows from investing activities:
    Purchase of equipment                                                                 (70,785)                 (32,620)
                                                                               -------------------   ----------------------
Net cash used by investing activities                                                     (70,785)                 (32,620)
                                                                               -------------------   ----------------------

Cash flows from financing activities:
    Payments on notes payable                                                            (193,753)                 (28,446)
    Proceeds from line of credit                                                              ---                  175,000
    Proceeds from notes payable                                                               ---                  100,000
    Proceeds from common stock subscribed                                                     ---                  100,000
    Proceeds from issuance of common stock                                              7,250,000                1,100,000
    Proceeds from exercise of common stock warrants                                     2,101,600                    2,000
    Costs of equity issuances                                                            (431,504)                (107,160)
                                                                               -------------------   ----------------------
Net cash provided by financing activities                                               8,726,343                1,341,394
                                                                               -------------------   ----------------------

Net increase (decrease) in cash and cash equivalents                                    3,570,873                 (407,663)

Cash and cash equivalents at beginning of period                                        1,247,602                  561,351
                                                                               -------------------   ----------------------
Cash and cash equivalents at end of period                                            $ 4,818,475              $   153,688
                                                                                      ===========              ===========
</TABLE>

     The accompanying notes are an integral part of the financial statements

                                                                             5
<PAGE>


                              CARDIAC SCIENCE, INC.

        CONSOLIDATED CONDENSED NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

                               SEPTEMBER 30, 1999

1.       ORGANIZATION AND CAPITALIZATION OF THE COMPANY

         Cardiac Science, Inc. (the "Company") was incorporated on May 20,
1991 to develop, manufacture and market software driven non-invasive
(non-surgical) fully automatic external cardioverter defibrillator devices
("AECD") (the "Products") to treat persons suffering from or at high risk of
life-threatening ventricular tachyarrhythmias. The Products, all of which are
still under development, are designed to continuously monitor, quickly detect
and then automatically, through transmission of electrical energy charges to
the patient's heart, terminate the ventricular tachyarrhythmia (abnormally
fast heart rate) and/or ventricular fibrillation (quivering of the heart
following tachyarrhythmia, which usually results in death) and convert the
patients heart back to a normal rhythm. The key benefit of the Company's AECD
technology is its ability to provide immediate defibrillation therapy without
human intervention for hospitalized patients at risk of cardiac arrest.

         On April 11, 1997, the Company acquired Innovative Physician
Services, Inc. (d.b.a. Diagnostic Monitoring).  The Company sold
substantially all of the assets of Diagnostic Monitoring on December 31, 1998
(see notes 4 and 5).

2.       CONTINUED EXISTENCE

         Additional capital is needed to fulfill the Company's current
marketing, research and product development goals. Through September 30,
1999, the Company incurred losses of approximately $16 million. Recovery of
the Company's assets is dependent upon future events, the outcome of which is
indeterminable. Additionally, successful completion of the Company's
development program and its transition to attain profitable operations is
dependent upon achieving a level of revenues adequate to support the
Company's cost structure. The Company anticipates that its current cash
balance and the cash received in October 1999 from common stock subscriptions
will be sufficient to meet the Company's cash requirements into April 2000.
Given the current applications of cash, the Company expects that additional
capital will be necessary to sustain growth and viability. In this respect,
the Company is considering a number of alternatives, including additional
equity financings and corporate partnerships. There can be no assurance that
any such transactions will be available at terms acceptable to the Company,
if at all, or that any financing transaction will not be dilutive to current
stockholders, or that the Company will have sufficient working capital to
fund future operations. If the Company is not able to raise additional funds,
it may be required to significantly curtail or cease its operating
activities. The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         In the opinion of the Company's management, the accompanying
consolidated condensed unaudited financial statements include all adjustments
(which consist only of normal recurring adjustments) necessary for a fair
presentation of its financial position at September 30, 1999 and results of
operations and cash flows for the periods presented. Although the Company
believes that the disclosures in these financial statements are adequate to make
the information presented not misleading, certain information and disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have

                                                                             6
<PAGE>

been condensed or omitted and should be read in conjunction with the
Company's audited financial statements included in the Company's 1998 Annual
Report on Form 10-KSB. Results of operations for the nine months ended
September 30, 1999 are not necessarily indicative of results for the full
year.

4.       INVESTMENT IN UNCONSOLIDATED AFFILIATE

         On December 31, 1998, the Company acquired a 7.7% voting interest in
Biosensor as partial consideration for the sale of substantially all of the
assets of Diagnostic Monitoring. The Company accounts for this investment
using the equity method of accounting in accordance with Accounting
Principles Board Opinion No. 18.

5.       DISCONTINUED OPERATIONS

         On December 31, 1998, the Company completed the sale of
substantially all of Diagnostic Monitoring's assets to Biosensor, a Minnesota
corporation, pursuant to an Agreement for Purchase and Sale of Assets dated
December 31, 1998. The Company received, in consideration for the sale,
1,440,000 shares of common stock of Biosensor valued at $115,000. In
addition, Biosensor assumed certain liabilities amounting to approximately
$107,000.

         The Company has restated its prior financial statements to present
the operating results of Diagnostic Monitoring as a discontinued operation.
Included in the loss from discontinued operations is amortization of goodwill
of $49,284 for the nine months ended September 30, 1998. Operating results
from discontinued operations are as follows:

<TABLE>
<CAPTION>
                                                            For the three         For the nine
                                                            months ended          months ended
                                                            September 30,         September 30,
                                                                1998                  1998
                                                          ------------------    -----------------
<S>                                                       <C>                   <C>

Sales                                                            $  318,940          $ 1,121,296
Cost of sales                                                       211,569              728,582
                                                           -----------------    -----------------
Gross profit                                                        107,371              392,714

Operating expenses:
    Research and development                                          1,459               18,850
    Selling                                                          71,864              304,681
    General and administrative                                       48,271              156,693
                                                           -----------------    -----------------
Loss from discontinued operations                                   (14,223)             (87,510)
Interest income (expense), net                                          ---                  ---
                                                           -----------------    -----------------
Loss from discontinued operations before
    provision for income taxes                                      (14,223)             (87,510)
Provision for income taxes                                              ---                  800
                                                           -----------------    -----------------
Net loss from discontinued operations                           $  (14,223)          $  (88,310)
                                                           =================    =================
</TABLE>

6.       PRIVATE PLACEMENTS

         For the quarter ending September 30, 1999, the Company sold 887,500
shares of common stock and

                                                                             7
<PAGE>

three-year warrants to purchase 133,125 shares of common stock at $5.00 per
share, for an aggregate purchase price of $3,550,000 to foreign investors in
an offshore transaction pursuant to Regulation S promulgated under the
Securities Act of 1933. The Company also received subscriptions from various
foreign investors for an additional 245,000 shares of common stock and
three-year warrants to purchase 36,750 shares of common stock at $5.00 per
share, for an aggregate purchase price of $980,000. The funds for these
subscribed shares were received on October 4, 1999. In connection with these
financings, the Company is obligated to pay a finder a fee equal to 7.5
percent of the gross proceeds of the sale, payable in cash or common stock
accrued at September 30, 1999. The finder will also receive three-year
warrants to purchase 113,250 shares of common stock at $5.00 per share.

         During the three-month period ending September 30, 1999 the Company
received $2,101,250 for the exercise of warrants to purchase 857,500 shares of
common stock. The Company also received a notice to exercise warrants for 12,500
shares of common stock. The proceeds of this warrant exercise of $31,250 were
received on October 4, 1999.

         On September 15, 1999, the Company issued 52,500 shares of common stock
to a consultant in consideration for $203,438 of services rendered.

         On July 7, 1999, the Company issued 138,900 shares of common stock to a
finder in consideration for $277,800 of services rendered. These services were
in connection with a private placement completed in May 1999.


                                                                             8
<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

GENERAL

         The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto set forth elsewhere in
this Quarterly Report on Form 10-QSB.

         We are engaged in the development of non-invasive fully-automatic
external cardioverter defibrillation devices for the treatment of ventricular
tachyarrhythmias that lead to cardiac arrest. We commenced operations in May
1991. Until our acquisition of Diagnostic Monitoring in April 1997, our
operations consisted primarily of research and development activities and
clinical FDA testing. Diagnostic Monitoring manufactured PC-based Holter
Electrocardiogram systems and Ambulatory Holter recorders and distributed
these products in over 40 countries. We sold substantially all of the assets
of Diagnostic Monitoring on December 31, 1998 (see note 5 of the consolidated
financial statements).

         Cardiac arrest is the single largest cause of death in the United
States and Europe. Our mission is to increase the survival rate of cardiac
arrest victims and create a new standard of care through the development and
commercialization of our proprietary automatic defibrillation technology.

         We have three products under development that utilize our
proprietary technology. Our initial product, the Powerheart, is a bedside
defibrillator-monitor designed for in-hospital use. The Powerheart attaches
prophylactically to at risk cardiac patients for the purpose of providing
fully-automatic detection and treatment of life-threatening tachyarrhythmias
(abnormal rhythms of the heart), such as ventricular tachycardia (dangerously
rapid heart rate) and ventricular fibrillation (quivering of the heart), that
lead to cardiac arrest. The second product under development, the RHYTHMx ECD
module, is designed for integration into bedside patient monitoring systems.
Functionally, the RHYTHMx ECD module extends patient monitoring systems
beyond diagnostics to provide patients who suffer life-threatening
tachyarrhythmias with the added protection of automatic therapy delivery
without human intervention. We believe the Powerheart and RHYTHMx ECD will be
ideally suited for hospitalized patients temporarily at risk (periods ranging
from days to months) of suffering cardiac arrest. The third product under
development is a fully-automatic public access defibrillator that can be used
by first responders and other non-technical individuals outside of the
hospital environment.

         In December 1998, we entered into a five-year exclusive distribution
and licensing agreement with the world leader in external defibrillation,
Medtronic Physio-Control, a subsidiary of Medtronic, Inc. Medtronic
Physio-Control will market the Powerheart in the U.S., Canada and selected
European countries, and also has been licensed to integrate the AECD
Technology into Medtronic's LIFEPAK-Registered Trademark- line of in-hospital
external defibrillators. We have signed distribution agreements to date
covering 24 other international markets giving Cardiac Science representation
in 35 countries.

         We have received 510(k) clearance from the U.S. Food and Drug
Administration for the clinical version of the Powerheart and have also
received FDA 510(k) clearance for its proprietary AECD Technology platform,
which we plan to integrate into third-party manufactured bedside monitoring
and defibrillator systems.

         We have been issued one patent, and have one additional patent under
exclusive license. We are in the process of filing additional patents
relating to our proprietary technology.

                                                                             9
<PAGE>

RESULTS OF OPERATIONS

         Research and development expenses increased to $1,126,098 and
$2,795,408, respectively, for the three and nine months ended September 30,
1999, from $436,430 and $1,416,229, respectively, for the three and nine
months ended September 30, 1998. These increases were due to engineering and
pre-production costs associated with the commercialization of the Powerheart.
Included in these costs were increases in personnel costs and related
fringes, and costs associated with independent engineering contractors.

         Marketing expenses increased to $252,871 and $932,792, respectively,
for the three and nine months ended September 30, 1999, from $82,460 and
$204,454, respectively for the three and nine months ended September 30,
1998. The increases were a result of pre-marketing expenses related to the
Powerheart including costs associated with the development of marketing
literature and the addition of personnel and related fringes.

         General and administrative expenses increased to $342,917 and
$1,092,542, respectively, for the three and nine months ended September 30,
1999, from $264,083 and $872,483 for the three and nine months ended
September 30, 1998. The increases in expenses for the quarter and nine months
ended September 30, 1999 as compared to the same periods in 1998 included
personnel costs and related fringes, consulting and professional fees.

         Interest expense, net, decreased to $2,918 and $6,550 for the three
month and year to date period ended September 30, 1999 as compared to $5,645
and $14,771, respectively, for the same periods in the prior year due to the
reduction of the bank line of credit and investment of the proceeds from
private placements.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 1999, we had cash and cash equivalents of
$4,818,475 and working capital of $4,618,996 as compared to cash and cash
equivalents of $1,247,602 and negative working capital of $549,898 at
December 31, 1998. From inception, our sources of funding for operations were
derived from equity placements aggregating approximately $21 million. We have
incurred losses of $16,047,279 since inception, and we expect to incur
substantial additional operating losses as a result of expenditures related
to marketing and sales efforts, research and product development activities
and costs associated with the development of a commercial model and
pre-production costs for the Powerheart. The timing and amounts of these
expenditures will depend upon many factors, some of which are beyond our
control, such as the requirements for and time required to obtain approval of
510(k) applications or other regulatory approvals, the progress of research
and development programs, and market acceptance of our products.

         We have raised approximately $10.3 million in a series of private
equity placements for the nine month period ending September 30, 1999. In
connection with these private placements we paid certain fees and expenses.
Additional capital will be needed to fulfill our marketing, research and
product development goals. Successful completion of our development program
for our products and transition to attain profitable operations is dependent
upon achieving a level of revenues adequate to support the required cost
structure.

         We anticipate that the current cash balance and the October 1999
collection of subscriptions will be sufficient to meet our cash requirements
into April 2000. Given the current applications of cash, we expect that
additional capital will be necessary to sustain growth and viability. In this
respect, we are considering a number of alternatives, including additional
equity financings and corporate partnerships. We cannot assure you that any such
transactions will be available on terms acceptable to us, if at all, or that any
financing transaction will not be dilutive to current stockholders, or that we
will have sufficient working capital to fund future operations. If we are not
able to raise additional funds, we may be required to significantly curtail or

                                                                            10
<PAGE>


cease our operating activities. The accompanying financial statements have
been prepared assuming that we will continue as a going concern.

YEAR 2000 ISSUE

         In the next three months, many companies will face potentially
serious information systems (computer) problems because many software
applications and operational programs written in the past may not properly
recognize calendar dates beginning in the Year 2000. This problem could force
computers to either shut down or provide incorrect information and could
result in an inability to process transactions or engage in normal business
activities. Based on a recent assessment, we believe that the software we use
will not be impacted by the Year 2000 issue. We believe that our existing
information systems equipment, primarily composed of personal computers, are
Year 2000 compliant. In addition, our initial product, the Powerheart, and
our proprietary technology are not expected to encounter any problems with
the Year 2000 issue. We have received confirmation from our major vendors
that they are Year 2000 compliant. Costs spent to date on the Year 2000 issue
are minimal and we do not expect to incur additional costs which would be
considered material. If we determine that a particular vendor will be
impacted by this problem, we may attempt to identify additional or
replacement vendors, which could delay accessibility of the products and/or
services provided by such vendors. Such a delay or failure to identify an
additional or replacement vendor could have a material adverse effect on our
business, operating results and financial condition.

FORWARD LOOKING STATEMENTS

         Except for the historical information contained herein, the matters
discussed herein are forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The forward looking
statements contained in this Quarterly Report on Form 10-QSB are subject to
various risks, uncertainties and other factors that could cause actual
results to differ materially from the results anticipated in such forward
looking statements. Included among the important risks, uncertainties and
other factors are those hereinafter discussed, the accuracy of which is
necessarily subject to risks and uncertainties.

         Few of the forward looking statements in this Quarterly Report on
Form 10-QSB deal with matters that are within our unilateral control. There
is substantial regulation of the manufacture and sale of medical products,
including many of our products, by governmental agencies in the United States
and foreign countries. These government agencies often have considerable
discretion in determining whether and when to approve the marketing of our
products that have not yet received such approval.

         The availability of equity and debt financing to our company is
affected by, among other things, domestic and world economic conditions and
the competition for funds. Potential investors and lenders will be influenced
by their evaluations of our products and comparisons with alternative
investment opportunities.

         Many of the our competitors have greater financial resources and
technical capabilities than we do, which may enable such competitors to
design and produce superior products or to market their products in a manner
that achieves commercial success even in the face of technical superiority on
the part of our products.

         Our patents may not offer effective protection against competitors.
Competitors may be able to design around our patents or employ technologies not
covered by such patents. In addition, our patents may be challenged, and even if
such patents are upheld, the diversion of financial and human resources
associated with patent litigation could adversely affect our company. We may be
found to be violating the patents of others and forced to obtain a license under
such patents or modify the design of its products.

                                                                            11
<PAGE>

         Rapid technological developments are expected to continue in the
industries in which we intend to compete. We may not be able to develop,
manufacture and market products which meet changing user requirements or
which successfully anticipate or respond to technological changes in a
cost-effective and timely manner.

                                                                            12
<PAGE>


                              CARDIAC SCIENCE, INC.

                           PART II. OTHER INFORMATION

Item 1.         LEGAL PROCEEDINGS

                None.

Item 2.         CHANGES IN SECURITIES AND USE OF PROCEEDS

                For the quarter ending September 30, 1999, we sold 887,500
                shares of our common stock and three-year warrants to purchase
                133,125 shares of common stock at $5.00 per share, for an
                aggregate purchase price of $3,550,000 to foreign investors in
                an offshore transaction pursuant to Regulation S promulgated
                under the Securities Act of 1933. In connection with the
                offering, we are obligated to pay a finder a fee equal to 7.5
                percent of the gross proceeds of the sale, payable in cash or
                common stock.

                For the period of August 27, 1999 through September 13, 1999, we
                sold an aggregate of 857,500 shares of common stock through the
                exercise of warrants for an aggregate purchase price of
                $2,101,250. These shares were sold to foreign investors in an
                offshore transaction pursuant to Regulation S promulgated under
                the Securities Act of 1933.

                On September 15, 1999, we sold 52,500 shares of common stock to
                Zevex, Inc., our contract manufacturer, in consideration for
                $203,438 of services rendered. The shares were sold pursuant to
                Section 4(2) of the Securities Act of 1933.

                On July 7, 1999, we sold 138,900 shares of common stock to a
                finder in consideration for $277,800 of services rendered. The
                shares were issued pursuant to Regulation S promulgated under
                the Securities Act of 1933.

Item 3.         DEFAULTS UPON SENIOR SECURITIES

                None.

Item 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                None

Item 5.         OTHER INFORMATION

                None.

Item 6.         EXHIBITS AND REPORTS ON FORM 8-K

                a)       Exhibits:

                                  10.1   Facility lease dated September 9, 1999
                                          for 16931 Millikan Avenue, Irvine, CA

                                                                            13
<PAGE>


                                  27.1   Financial Data Schedule.

b) Reports on Form 8-K:

         None.

                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized.

                                          CARDIAC SCIENCE, INC.
                                          ---------------------

         Date: October 20, 1999            /s/  Brett L. Scott
               ------------------         --------------------------
                                           Brett L. Scott
                                           (Authorized Officer and Principal
                                           Financial Officer)


                                                                            14
<PAGE>

                                Index to Exhibits

                    10.1     Facility lease dated September 9, 1999 for 16931
                               Millikan Avenue, Irvine, CA


                    27.1     Financial Data Schedule.

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