<HTML>
<HEAD>
<TITLE>sv8</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>As filed with the Securities and Exchange Commission on May&nbsp;7, 2010</B></DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><B>Registration 333-</B>
</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 3pt"></div>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>Form&nbsp;S-8</B>
</DIV>

<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><IMG src="v55757v5575700.gif" alt="(CARDIAC LOGO)"></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>CARDIAC SCIENCE CORPORATION</B>
</DIV>

<DIV align="center" style="font-size: 10pt">
<I>(Exact name of registrant as specified in its charter)</I></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">Delaware<BR>
<I>(State or other jurisdiction of incorporation or organization)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">94-3300396<BR>
<I>(I.R.S. Employer Identification Number)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>3303 Monte Villa Parkway<BR>
Bothell, Washington 98021</B><BR>
<I>(Address of principal executive offices, including zip code)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Restricted Stock Unit Award Notice and Award Agreement<BR>
between Cardiac Science Corporation and Todd T. Alberstone,<BR>
dated as of January&nbsp;11, 2010</B></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Michael K. Matysik<BR>
(Senior Vice President, Chief Financial Officer and Secretary)<BR>
Cardiac Science Corporation<BR>
3303 Monte Villa Parkway<BR>
Bothell, Washington 98021<BR>
(425)&nbsp;402-2000</B><BR>
<I>(Name, address and telephone number, including area code, of agent for service)</I>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B><I>Copy to:</I></B><BR>
<B>Eric A. DeJong<BR>
Perkins Coie <FONT style="font-variant: SMALL-CAPS">llp</font><BR>
1201 Third Avenue, Suite&nbsp;4800<BR>
Seattle, Washington 98101-3099<BR>
(206)&nbsp;359-8000</B></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of &#147;large
accelerated filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the
Exchange Act.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Large accelerated filer <FONT style="font-family: Wingdings">&#111;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Accelerated filer <FONT style="font-family: Wingdings">&#254;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Non-accelerated filer <FONT style="font-family: Wingdings">&#111;</FONT></FONT>
<FONT style="white-space: nowrap">(Do not check if a smaller reporting company)</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Smaller reporting company <FONT style="font-family: Wingdings">&#111;</FONT></FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>
<div align="center"><DIV style="font-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></div>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CALCULATION OF REGISTRATION FEE</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="19%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center">Title of Securities</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount To Be</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Proposed Maximum</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Proposed Maximum</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount of Registration</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center">To Be Registered</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Registered</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Offering Price Per Share (1)</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Aggregate Offering Price (1)</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Fee (1)</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock, par
value $0.001 per
share, issuable
pursuant to
Restricted Stock
Unit Award Notice
and Award
Agreement between
Cardiac Science
Corporation and
Todd T. Alberstone
effective January
11, 2010</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">50,000</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD align="center" valign="bottom" style="border-top: 2px solid #000000">$1.37</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD align="center" valign="bottom" style="border-top: 2px solid #000000">$68,500</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD align="center" valign="bottom" style="border-top: 2px solid #000000">$4.88</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 6pt; width: 18%; border-top: 0px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated solely for the purpose of calculating the registration fee pursuant to Rule
457(c) under the Securities Act. The proposed maximum offering price per share is estimated
to be $1.37, based on the average of the high sales price ($1.46) and the low
sales price ($1.28) per share of the Registrant&#146;s Common Stock as reported by the
Nasdaq Global Market on May&nbsp;6, 2010.</TD>
</TR>

</TABLE>



<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">










<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPLANATORY NOTE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Cardiac Science Corporation has prepared this registration statement in accordance with the
requirements of Form S-8 under the Securities Act of 1933, as amended, to register for resale up
to 50,000 shares of the Company&#146;s common stock, $0.001 par value per share, issuable pursuant to
a Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement between the
Company and Todd T. Alberstone. The prospectus filed as Part&nbsp;I of this registration statement
has been prepared in accordance with Part&nbsp;I of Form S-3 (as directed in General Instruction C of
Form S-8).
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PROSPECTUS</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>50,000 Shares</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>CARDIAC SCIENCE CORPORATION</B>
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Common Stock</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This prospectus relates to 50,000 shares of the common stock, par value $0.001 per share, of
Cardiac Science Corporation (the &#147;Shares&#148;), which may be offered from time to time by the
selling stockholder identified on page 15 of this prospectus. The selling stockholder may offer
for sale or sell the Shares in varying amounts and at prices and on terms to be determined at
the time of sale. For general information about the distribution of the Shares offered, please
see &#147;Plan of Distribution&#148; beginning at page 15 of this prospectus. We will receive no part of
the proceeds from sales of the Shares. The selling stockholder will bear all sales commissions
and similar expenses. Any other expenses incurred by us in connection with this registration
and offering and not borne by the selling stockholder will be borne by us.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our common stock is traded on the Nasdaq Global Market under the symbol CSCX. On May&nbsp;6, 2010,
the last sales price of our common stock, as reported on the Nasdaq
Global Market, was $1.33
per share.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our business involves significant risks. See &#147;Risk Factors&#148; beginning at page 1 for a
discussion of some factors you should consider before buying shares of our common stock.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 0pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission (the &#147;SEC&#148;) nor any state securities
commission has approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The date of this prospectus is May&nbsp;7, 2010
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">OUR COMPANY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">RISK FACTORS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">USE OF PROCEEDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">SELLING STOCKHOLDER</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">PLAN OF DISTRIBUTION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">LEGAL MATTERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">EXPERTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">WHERE YOU CAN FIND MORE INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">INFORMATION INCORPORATED BY REFERENCE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v55757exv5w1.htm">EX-5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v55757exv10w1.htm">EX-10.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="v55757exv23w1.htm">EX-23.1</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV align="center"><DIV style="FONT-size: 3pt; margin-top: 16pt; width: 26%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>You should rely only on the information contained in or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information different from that
contained in this prospectus. This prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of these shares by any person in
any jurisdiction in which it is unlawful for that person to make such offer, solicitation or
sale. You should not assume that the information in this prospectus is accurate at any time
subsequent to the date of the prospectus.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-i-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>OUR COMPANY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In this prospectus, the terms &#147;Cardiac Science,&#148; &#147;the Company,&#148; &#147;we,&#148; &#147;us&#148; and &#147;our&#148; refer to
Cardiac Science Corporation and its majority-owned subsidiaries. We develop, manufacture, and
market a family of advanced diagnostic and therapeutic cardiology devices and systems, including
automated external defibrillators, electrocardiograph devices, cardiac stress testing treadmills
and systems, Holter monitoring systems, hospital defibrillators, cardiac rehabilitation
telemetry systems, vital signs monitors and cardiology data management systems that connect with
hospital information, electronic medical record, and other information systems. We sell a
variety of related products and consumables, and provide a portfolio of training, maintenance,
and support services. We are the successor to the cardiac businesses that established the
trusted Burdick<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP>, Quinton<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> and
Powerheart<SUP style="FONT-size: 85%; vertical-align: text-top">&#174;</SUP> brands and are headquartered in Bothell, Washington. With
customers in more than 100 countries worldwide, we have operations in North America, Europe, and
Asia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We were incorporated in Delaware on February&nbsp;24, 2005 as CSQ Holding Company to effect the
business combination of Quinton Cardiology Systems, Inc. (&#147;Quinton&#148;) and Cardiac Science, Inc.
(&#147;CSI&#148;) pursuant to a merger transaction. The merger was consummated on September&nbsp;1, 2005 at
which time the Company&#146;s name was changed to Cardiac Science Corporation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our principal executive offices are located at 3303 Monte Villa Parkway, Bothell,
Washington 98021 and our telephone number is (425)&nbsp;402-2000.
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We are subject to many laws and governmental regulations and any adverse regulatory action may
materially adversely affect our business operations and financial results.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our medical devices are subject to regulation by numerous government agencies, including the FDA
and comparable foreign agencies. To varying degrees, each of these agencies requires us to
comply with laws and regulations governing the development, testing, manufacturing, labeling,
marketing and distribution of our medical devices. We cannot guarantee that we will be able to
obtain marketing clearance from the FDA for our new products, or enhancements or modifications
to existing products, and if we do, such approval may:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>take a significant amount of time;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require the expenditure of substantial resources;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>involve stringent clinical and pre-clinical testing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>involve modifications, repairs or replacements of our products; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>result in limitations on the proposed uses of our products.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Both before and after a product is commercially released, we have ongoing responsibilities under
FDA regulations. If the FDA were to conclude that we are not in compliance with applicable laws
or regulations, or that any of our medical devices are ineffective or pose an unreasonable
health risk, the FDA could ban such medical devices, detain or seize adulterated or misbranded
medical devices, order a recall, repair, replacement, or refund of such devices and require us
to notify health professionals and others that the devices present unreasonable risks of
substantial harm to the public health. The FDA may also impose operating restrictions, enjoin
and restrain certain violations of applicable law pertaining to medical devices and assess civil
or criminal penalties against our officers, employees, or us. The FDA may also recommend
prosecution to the Department of Justice. Any adverse regulatory action, depending on its
magnitude, may restrict us from effectively marketing and selling our products.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Foreign governmental regulations have become increasingly stringent, and we may become subject
to more rigorous regulation by foreign governmental authorities in the future. Penalties for a
company&#146;s noncompliance with foreign governmental regulation could be severe, including
revocation or suspension of a company&#146;s
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">business license and criminal sanctions. Any domestic or foreign governmental law or regulation
imposed in the future may have a material adverse effect on us.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We face numerous challenges in implementing a field initiative to address the component issue
that led to our AED ship-hold in late June&nbsp;2009 and our business, financial position and results
of operations may be negatively impacted by the costs and other commitments needed to carry out
the initiative.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In late June&nbsp;2009, we voluntarily ceased shipments of certain of our AED products due to two
instances we became aware of involving the failure of our AEDs to deliver therapy, apparently as
a consequence of a malfunction of one of the components used in the manufacture of the affected
AED. On August&nbsp;10, 2009, we resumed production and shipments of the affected AED products after
implementing a more stringent process to test for defects in the component at issue. As a
result of a thorough review and analysis performed during the third quarter of 2009, we
determined that the component at issue has the potential to fail and that routine self-tests
performed by the AED may not detect a malfunctioning component. We also determined that
approximately 300,000 AEDs shipped between June&nbsp;2003 and June&nbsp;2009 are potentially impacted by
the component issue. Although we determined that the probability that an AED would fail to
deliver therapy as a result of a malfunction of the component issue was low, we decided to
implement a field corrective action to enhance the reliability of the affected AED units in the
field. We publicly announced our proposed corrective action to address this component issue in
November&nbsp;2009.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our proposed voluntary corrective action is subject to numerous risks and uncertainties,
including the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>since we have no experience designing and carrying out a field initiative or other
corrective action plan of the magnitude under contemplation, we are likely to encounter
challenges that could cause a delay in the implementation of the field initiative or
negatively impact its effectiveness;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the actual costs to implement the proposed field initiative could exceed the $18.5
million estimate taken as a charge in the third quarter of 2009 due to a variety of
factors, including the number of impacted devices, the customer and geographical segments
related to the impacted devices, the logistical processes we employ to carry out any
field upgrades involved in the initiative, the customer response rate in implementing any
field upgrades involved in the process and the level of required follow up with
customers, the extent to which we may rely on third parties to carry out the field
initiative and associated costs, and the length of time and other resources required to
complete the field initiative;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>implementation of the proposed field initiative, as well as attendant publicity, may
create a negative perception of our AED products in the market, leading to a decline in
sales that could materially adversely impact our financial position and results of
operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we will need to devote technical, management, logistics and other resources to the
implementation of the proposed field initiative, which could detract from our ability to
operate our core business and hinder our ability to carry out initiatives relating to new
products or product enhancements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>despite implementation of the field initiative, some devices may still fail at a time
when they are being used to deliver therapy, which could lead to product liability claims
against us that, if successful, could adversely impact our financial position and results
of operations or negatively impact the market&#146;s perception of our products; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the plan will require the expenditure of significant amounts of cash which, in
combination with expected operating losses in 2010, may negatively impact our liquidity
or at least constrain our ability to pursue strategic initiatives such as acquisitions,
new product development, or other growth initiatives.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Moreover, in February&nbsp;2010, we received a warning letter from the FDA noting, among other
things, that the proposed field corrective action is inadequate since it is intended to improve
the products&#146; ability to detect the potential component problem, but is not designed to prevent
component failure. The FDA letter also asserts other inadequacies, including our procedures
relating to the evaluation, investigation and follow up of complaints, procedures to verify the
effectiveness of corrective and preventative actions and procedures relating to certain
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-2-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">design requirements. In April&nbsp;2010, the FDA published additional information regarding this
corrective action, further clarifying the AED models impacted by the potential component defect
and provided further guidance to users of our affected AEDs. Additionally, the FDA noted that
our software update addresses &#147;some, but not all electrical component defects.&#148; We are in
ongoing discussions with the FDA regarding these issues. If we are unable to correct the
inadequacies asserted in the FDA&#146;s letter or otherwise satisfy the FDA&#146;s concerns, we may be
subject to regulatory action by the FDA, including seizure, injunction and/or civil monetary
penalties. Any such actions could significantly disrupt our ongoing business and operations and
have a material adverse effect on our financial position and operating results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We face numerous challenges in implementing a recall announced on February&nbsp;3, 2010, and our
business, financial position and results of operations may be negatively impacted by the costs
and other commitments needed to carry out the recall and correct the product issue.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On February&nbsp;3, 2010, we announced a worldwide voluntary recall after determining that
approximately 12,200 automated external defibrillators (AEDs) manufactured or serviced between
October&nbsp;19, 2009 and January&nbsp;15, 2010 may not be able to deliver therapy during a resuscitation
attempt, which may lead to serious adverse events or death. These AEDs were manufactured in a
way that makes them potentially susceptible to failure under certain conditions. In connection
with the corrective action, we intend to replace all affected AEDs at no charge to the customer.
We recorded a charge of $2.5&nbsp;million in the fourth quarter of 2009, reflecting our current
estimate of the expected costs relating to this action. Actual costs may vary based on a
variety of factors. Cash expenditures relating to replacement of the affected AEDs will occur
primarily in the first half of 2010.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This recall, and the estimated costs, are subject to numerous risks and uncertainties, including
the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may encounter challenges that could cause a delay in the implementation of the
recall or manufacture of replacement units;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the actual costs to implement the recall may exceed the $2.5&nbsp;million charge taken in
the fourth quarter of 2009 due to a variety of factors, including the number of impacted
devices, the customer and geographical segments related to the impacted devices, the
logistical processes we employ to carry out the recall, the customer response rate and
customer cooperation and the level of required follow up with customers, the extent to
which we may rely on third parties to assist and associated costs, and the length of time
and other resources required to complete the field initiative, among others;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>implementation of the recall, as well as attendant publicity, may create a negative
perception of our AED products in the market, leading to a decline in sales that could
materially adversely impact our financial position and results of operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we will need to devote technical, management, logistics and other resources to the
implementation of the recall, which could detract from our ability to operate our core
business and hinder our ability to carry out initiatives relating to new products or
product enhancements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>despite implementation of the recall, some devices may still fail at a time when they
are being used to deliver therapy, which could lead to product liability claims against
us that, if successful, could adversely impact our financial position and results of
operations or negatively impact the market&#146;s perception of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the recall will require the expenditure of significant amounts of cash which, in
combination with expected operating losses in 2010, may negatively impact our liquidity
or at least constrain our ability to pursue strategic initiatives such as acquisitions,
new product development, or other growth initiatives; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the FDA may require us to implement a more costly corrective action plan or recall, or
require us to stop shipments of our AEDs for a period of time, if it does not concur with
our proposed corrective action plan, including changes to our manufacturing process, in
which case our business could be subject to severe disruption and the cost involved could
have a material adverse effect on our liquidity.</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->-3-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our cash and cash equivalents may not be sufficient to fund future operations and we may not be
able to secure additional sources of financing or obtain financing on acceptable terms.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our cash
and cash equivalents as of March 31, 2010, totaled $21.0&nbsp;million. We expect to
incur operating losses in 2010 and to use cash in operations. Additionally, we have recently
initiated two voluntary corrective actions relating to our AED products, the costs of which have
been estimated at $21.0&nbsp;million, of which $13.5&nbsp;million remains as an accrued liability as of
March&nbsp;31, 2010. We expect to spend a significant portion of the remaining accrued costs
associated with these corrective actions during 2010 which will negatively impact our cash
position. We believe our existing cash and cash equivalents will be sufficient to fund our
anticipated operating losses, meet working capital requirements and fund anticipated capital
expenditures needs and other obligations, including the remaining estimated costs of the ongoing
corrective actions, through at least March&nbsp;31, 2010.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">However, we cannot be certain our cash and cash equivalents will be sufficient to meet our
operating needs in 2010 as we may be affected by economic, financial, competitive, legislative,
regulatory, business and other factors beyond our control. Accordingly, we may be required to
reduce costs, which could adversely impact our forecasts for revenue growth in future periods
which in turn could also adversely impact our forecasts for cash and cash equivalents throughout
the year. In addition, we may be forced to borrow from our available line of credit or may need
to seek additional or alternative sources of financing.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our previous $10.0&nbsp;million line of credit agreement with Silicon Valley Bank expired on March
31, 2010. On April&nbsp;27, 2010, we entered into a new line of credit agreement with Silicon Valley
Bank which provides up to $5.0&nbsp;million of revolving credit. This new agreement expires in April
2011. Our ability to borrow under this agreement is based largely on our &#147;eligible&#148; domestic
accounts receivable outstanding at the time of borrowing, and to a lesser extent on our
inventory holdings. Interest on borrowings, if any, will vary depending on whether we are
operating with positive or negative Adjusted EBITDA and will be based on the Wall Street Journal
Prime rate plus 1.0% to 1.75% or LIBOR plus 3.75% to 4.25%. We granted Silicon Valley Bank a
first priority security interest in substantially all of our current assets to secure our
obligations under the line of credit.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We may be required to implement other costly product recalls or corrective actions.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event that any of our products prove to be defective or deficient, we can voluntarily
recall or otherwise take corrective action, or the FDA could require us to redesign or implement
a recall of or take other action regarding, any of our products. Should we be required or
choose to implement any additional recalls or corrective actions in future periods, we could
incur substantial costs as well as face significant adverse publicity or regulatory
consequences, which could harm our business, including our ability to market our products in the
future. The financial impact of a recall could have a material adverse effect on our business,
financial position and results of operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Quality problems with our processes, goods and services could harm our reputation for producing
high quality products and erode our competitive advantage.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Quality is extremely important to us and our customers due to the serious and costly
consequences of product failure. Our quality certifications are critical to the marketing
success of our goods and services. If we fail to meet these standards our reputation could be
damaged, we could lose customers and our revenue could decline. Aside from specific customer
standards, our success depends generally on our ability to manufacture to exact tolerances,
precision engineered components, subassemblies and finished devices from multiple materials. If
our components fail to meet these standards or fail to adapt to evolving standards, our
reputation as a manufacturer of high quality components will be harmed, our competitive
advantage could be damaged, and we could lose customers and market share. For example, the
component issues that led to the field corrective action we announced in November, 2009 and the
recall we announced in February, 2010 may lead to reduced demand for our AED products.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Warranty and product liability claims could adversely impact our earnings and reputation.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The manufacturing, marketing and sale of medical devices expose us to the risk of warranty
claims, product liability claims or product recalls. We are, from time to time, subject to
warranty claims with regard to product performance, which expose us to unexpected repair and
replacement costs. In addition, component failures,
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-4-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">manufacturing flaws, design defects or inadequate disclosure of product-related risks or
product-related information with respect to products we manufacture or sell could result in an
unsafe condition or injury to, or death of, a patient. The occurrence of such a problem could
result in product liability claims, product recalls or a safety alert relating to one or more of
our products. Although we maintain product liability insurance, the coverage may not be
adequate or may not be available at affordable rates. Warranty claims, product liability claims
or product recalls in the future, regardless of their ultimate outcome, could have a material
adverse effect on our business and reputation and on our ability to attract and retain customers
for our products.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our business may be adversely affected by deteriorating economic conditions.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Economic conditions in both the United States and other countries in which we sell our products
have deteriorated significantly in recent years and may continue to deteriorate in the
foreseeable future. If economic conditions in the markets in which we operate continue to
deteriorate, it may result in declining demand for our products and services, longer sales
cycles, increased order cancellations and declining pricing due to customers&#146; reduced capital
budgets, difficulties encountered in securing financing needed to purchase our products, or
other factors. Moreover, such conditions may result in increased excess or obsolete inventories
and difficulties collecting customer receivables. All of these factors could materially
adversely affect our future operating results and financial condition.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>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.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the U.S. and abroad, we sell many of our products through distributors, strategic selling
alliances and other third party organizations. Generally, we have little or no control over
these sales processes, and in many cases our contracts are short-term or may be terminated on
little or no notice. If any of our key distributor agreements or selling alliance agreements
are cancelled or if we are unable to renew them as they expire, or if our distributors or
selling alliances fail to develop relationships with important target customers, our sales and
operating results may suffer materially.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On June&nbsp;15, 2009, we notified Nihon Kohden Corporation, our distributor of AEDs in Japan, that
our OEM Supply and Purchase Agreement dated effective as of January&nbsp;1, 2008 will terminate
effective June&nbsp;15, 2010. Under our agreement with Nihon Kohden, Nihon Kohden has had the
exclusive right in Japan to distribute a Nihon Kohden-branded version of our AED product (model
&#147;9231&#148;) designed for the Japanese market, as well as certain related consumables. Because Nihon
Kohden has decided to build and market its own AED products, we elected to terminate the
agreement in order to explore alternative means of distributing our AED products in Japan. In
2009, the percentage of our net sales from the Japanese market decreased from 19% in 2008 to 7%.
If our efforts to establish alternative distribution arrangements for our AED products in Japan
are unsuccessful, our operating results may be adversely affected. Moreover, the
introduction of Nihon Kohden&#146;s own AED products may further erode sales of our products in
Japan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>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.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We license and purchase technology from third parties for features in some of our products. We
anticipate that we will need to license and purchase additional technology to remain
competitive. We may not be able to renew existing licenses and purchase agreements or to
license and purchase other technologies on commercially reasonable terms or at all. If we are
unable to renew existing licenses and purchase agreements or to license or purchase new
technologies, we may not be able to offer competitive products, which could negatively impact
our revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our international business is subject to risks that could adversely affect our profitability and
operating results.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our international operations, which accounted for 33% of our revenues in 2009, are accompanied
by certain financial and other risks. In recent years, we have pursued growth opportunities
internationally and intend to continue pursuing such opportunities in the future, which could
expose us to greater risks associated with
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-5-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">international sales and operations. Our international operations are, and will continue to be,
subject to a number of risks and potential costs, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in foreign medical reimbursement programs and policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in foreign regulatory requirements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>local product preferences and product requirements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>longer-term receivables than are typical in the U.S.;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>fluctuations in foreign currency exchange rates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>less protection of intellectual property in some countries outside of the U.S.;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>trade protection measures and import and export licensing requirements;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>work force instability;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>political and economic instability;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>inherent control risks associated with operations based outside the U.S.; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>complex tax and cash management issues.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Also, like the U.S., economic conditions in the foreign countries in which we operate have
deteriorated significantly in recent years and may continue declining for the foreseeable
future. For example, in 2009, sales of our products in Japan accounted for 7% of our net sales,
down from 19% in 2008. This reduction in sales in Japan can be attributed in part to weak
economic conditions in that market. Economic conditions in Japan are expected to remain weak
for the foreseeable future. As a result, our sales in this market may decline, perhaps
significantly, during 2010 and beyond. We may also experience declining sales in other
international markets due to deteriorating economic conditions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our business is subject to intense competition, which may reduce the demand for our products.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The cardiac monitoring and defibrillation markets are highly competitive, and we expect
competition to intensify in the future. Some of our competitors are larger companies, such as
General Electric Company, Medtronic Emergency Response Systems, a unit of Medtronic, Inc., and
Philips Medical Systems, a unit of Koninklijke Philips Electronics N.V., who may have:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>greater financial and technical resources;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>greater variety of products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>greater product pricing, discounting and bundling flexibility;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>patent portfolios that may present an obstacle to our conduct of business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>stronger brand recognition and marketing resources; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>larger distribution and sales networks.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, the timing of the introduction of competing products into the market could affect
the market acceptance and market share of our products. If we are unable to develop competitive
products that obtain market acceptance, our revenues and financial results may suffer.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-6-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may be unable to increase sales of our cardiac monitoring products and services, which could
cause our stock price to decrease.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The market for cardiac monitoring products and services is generally mature and stable.
However, our 2009 revenues from products and services in this market decreased 15.3% from 2008.
Our ability to revitalize this line of products and services depends on our restructuring
efforts, the development and commercialization of competitive new products and service
offerings, and our success in increasing sales and gaining market share from our competitors.
Current economic conditions may provide particular challenges to our efforts to revitalize this
line. If we are unsuccessful in these efforts, our sales revenues from this line of products
and services may decrease, our financial results may suffer, and our stock price may decline.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our financial results could be impacted by the credit risk of our customers.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have exposure to the credit risks of some of our customers. Although we have programs in
place that are designed to monitor and mitigate the associated risk, there can be no assurance
that such programs will be effective in reducing our credit risks adequately. We monitor
individual payment capability in granting credit arrangements, seek to limit the total credit to
amounts we believe our customers can pay, and maintain reserves we believe are adequate to cover
exposure for potential losses. If there is a deterioration of a major customer&#146;s
creditworthiness or actual defaults are higher than expected, future resulting losses, if
incurred, could harm our business and have a material adverse effect on our operating results.
These risks may become more pronounced if economic conditions continue to deteriorate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our stock price is volatile, and you may not be able to sell your shares for a profit.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The trading price of our common stock is volatile. Our common stock price could be subject to
fluctuations in response to a number of factors, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual or anticipated variations in operating results;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in our business, operations, or prospects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>product issues necessitating recalls or other corrective actions and related
regulatory actions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in financial estimates or recommendations by securities analysts;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>conditions or trends in medical devices and diagnostic cardiology products markets;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements by us or our competitors of significant customer wins or losses, gains
or losses of distributors, technological innovations, new products or services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>announcements by us or our competitors of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>additions or departures of key personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sales of a large number of shares of our common stock;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse litigation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unfavorable legislative or regulatory decisions; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general market conditions.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the past, companies that have experienced volatility in the market price of their stock have
been the target of securities class action litigation. We may become the target of this type of
litigation in the future. Securities
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">
<P align="center" style="font-size: 10pt"><!-- Folio -->-7-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">litigation against us could result in substantial costs and divert management attention, which
could seriously harm our business.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We were not profitable in 2008 or 2009 and we may be unable to return to profitability in the
future, which could result in a decline in our stock price.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We had a net loss of $77.0&nbsp;million in 2009 due largely to a non cash charge of approximately
$42.2&nbsp;million related to a valuation allowance on our deferred tax assets as well as costs
totaling $21.0&nbsp;million related to two separate voluntary corrective actions which we announced
between November&nbsp;2009 and February&nbsp;2010. In 2008, we had a net loss $98.4&nbsp;million due to a pre
tax, non cash impairment charge related to goodwill of $107.7&nbsp;million. We had net income of
$8.5&nbsp;million in 2007. Although we expect to become profitable again in future periods, our
ability to return to profitability will depend on our ability to increase our revenues and
manage our expenses. In order to generate additional revenues, we will need to continue
developing and offering competitive products and services, maintain our sales and distribution
network and expand our customer base. Our ability to increase revenues may be impacted by
current economic conditions and other factors, such as the impact on customer demand from
product quality issues and related corrective actions that we have announced in the last several
months. Also, we will need to manage costs associated product development and marketing,
protecting our intellectual property, and handling product quality issues and related corrective
actions. We may be unable to accomplish some, or any, of these goals because of the risks
identified in this report or for other unforeseen reasons. If we are unable to attain
profitability in the future, our stock price could decline.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our business may be adversely affected by restructurings.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On January&nbsp;14, 2009, we announced a restructuring involving a 12% reduction in our staff, and
have had subsequent restructurings and reductions. The reductions primarily affected customer
service, product development and manufacturing. Implementation of past restructurings and
reductions, as well as any future restructurings or reductions, may adversely affect the
effectiveness of the functional areas impacted by the staff reductions, as well as adversely
impact our relationships with customers and suppliers. The costs of implementing past and
future restructurings and reductions may adversely affect our results of operations. Finally,
past or future restructuring may not result in all of the cost savings and operational and
strategic benefits that we anticipate.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our quarterly revenues and operating results are unpredictable and may vary significantly.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our quarterly revenues and operating results have varied in the past and our quarterly revenues
and operating results may continue to vary in the future due to a number of factors, many of
which are outside of our control. Factors contributing to these fluctuations may include:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of a ship-hold, recalls or other corrective actions, or regulatory actions
resulting from quality concerns relating to our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of acquisitions, divestitures, strategic alliances, and other significant
corporate events;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in our ability to obtain products and product components that are manufactured
for us by third parties;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>delays in the development or commercial introduction of new versions of products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability to attain and maintain production volumes and quality levels for our
products and product components;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of a ship-hold on any of our products due to quality control concerns;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->-8-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">




</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the demand for our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>varying sales cycles that can take up to a year or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the mix of products we sell, which could affect our revenue levels as well
as our gross margins;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unpredictable budgeting cycles of our customers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>delays in obtaining regulatory clearance for new versions of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increased product and price competition;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of regulatory changes on the availability of third-party reimbursement to
customers of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the loss of key personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the loss of key distributors or distribution companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>seasonality in the sales of our products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of longer buying cycles; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of employee turnover.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Historically, our quarterly financial results have often been impacted by the receipt of a large
number of customer orders in the last weeks of a quarter. If these orders are delayed to the
following quarter or canceled, our sales could fall short of our targets and our stock price
could decline. Due to the factors summarized above, we believe that period-to-period
comparisons of our operating results are not a good indication of future performance and should
not be relied upon to predict future operating results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we are unsuccessful in developing and commercializing new versions of our products, our
operating results will suffer.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">To be successful, we must develop and commercialize new versions of our products for both
domestic and international markets. Our products must keep pace with rapid industry change,
comply with rapidly evolving industry standards and government regulations and compete
effectively with new product introductions of our competitors. Because our products are
technologically complex, developing new products requires extensive design, development and
testing at the technological, product and manufacturing stages. To successfully develop and
commercialize new versions of our products, we need to:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>accurately assess and provide compelling solutions to customer needs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>develop products that are functional and easy to use;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>quickly and cost-effectively obtain regulatory clearance or approval;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>price competitively;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>manufacture and deliver on time;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>control costs associated with manufacturing, installation, warranty and maintenance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>manage customer acceptance and payment;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>limit demands by our customers for retrofits;
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->-9-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>access new interface standards needed for product connectivity;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>anticipate and meet demands of our international customers for products featuring
local language capabilities; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>anticipate and compete effectively with our competitors&#146; efforts.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our failure to accomplish any of these items, or others involved in developing and
commercializing new products, could delay or prevent the release of new products. These
difficulties and delays could cause our development expenses to increase and harm our financial
and operating results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>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.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If our suppliers reduce, delay or discontinue production of component parts for our products, we
will be forced to seek replacement parts from alternative sources. We purchase many of the
components and raw materials used in manufacturing our products from numerous suppliers in
various countries. Generally we have been able to obtain adequate supplies of such raw
materials and components. In some cases, for reasons of quality assurance, cost effectiveness
or availability, we procure certain components and raw materials only from a sole supplier.
While we work closely with our suppliers to try to ensure continuity of supply while maintaining
high quality and reliability, we cannot guarantee that our supplies will be uninterrupted. In
addition, due to the stringent regulations and requirements of the FDA regarding the manufacture
of our products, we may not be able to quickly establish additional or replacement sources for
certain components or materials. A reduction or interruption in supply, and an inability to
develop alternative sources for such supply, could result in significant delays or cancellations
of product shipments and the need to modify our products to utilize available components. This
could result in reduced revenues, higher costs or both.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Inadequate levels of reimbursement from governmental or other third-party payers for procedures
using our products may cause revenues to decrease.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Healthcare costs have risen significantly over the past decade. Federal, state and local
governments have adopted a number of healthcare policies intended to curb rising healthcare
costs. There have been and may continue to be proposals by legislators, regulators and
third-party payers to keep these costs down. Certain proposals, if passed, could impose
limitations on the prices we will be able to charge for our products, or the amounts of
reimbursement available for our products from governmental agencies or third-party payers.
These limitations could have a material adverse effect on our financial position and results of
operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the U.S., healthcare providers that purchase certain of our products often rely on
governmental and other third-party payers, such as federal Medicare, state Medicaid, and private
health insurance plans to pay for all or a portion of the cost of the procedures that utilize
those products. The availability of this reimbursement affects customers&#146; decisions to purchase
capital equipment. Denial of coverage or reductions in levels of reimbursement for procedures
performed using our products by governmental or other third-party payers would cause our
revenues to decrease.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>If we do not maintain or grow revenues from our support services or consumables, our operating
and financial results may be negatively impacted.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A significant portion of our revenues is generated from post-sale support services we provide
for our products and from the sale of ancillary cardiology products and consumables related to
our products, such as patented electrodes, pads, cables, leads, and thermal chart paper. As
hospitals expand their in-house capabilities to service diagnostic equipment and systems, they
may be able to service our products without additional support from us. In addition, our
customers may express an increasing preference for ancillary cardiology products and consumables
that are manufactured or provided by other vendors. Any of these events could result in a
decline in our revenues and adversely affect our financial and operating results.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-10-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>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.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our customers typically order products on a purchase order basis, and we do not generally have
long-term purchase contracts. In limited circumstances, customer orders may be cancelled,
changed or delayed on short notice. Lack of significant order backlog makes it difficult for us
to forecast future sales with certainty. Long and varying sales cycles with our customers make
it difficult to accurately forecast component and product requirements. These factors expose us
to a number of risks:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if we overestimate our requirements we may be obligated to purchase more components or
third-party products than is required;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we may also experience shortages of product components from time to time, which also
could delay the manufacturing of our products; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>over or under production can lead to higher expense, lower than anticipated revenues,
and reduced margins.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>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.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The selling price of our products and our market share are subject to market conditions. Major
shifts in industry market share have occurred in connection with product problems, physician
advisories and safety alerts, reflecting the importance of product quality in the medical device
industry. Many healthcare industry companies, including medical device companies, are
consolidating to create new companies with greater market power. As the healthcare industry
consolidates, competition to provide goods and services to industry participants will become
more intense. These industry participants may try to use their market power to negotiate price
concessions or reductions for medical devices that incorporate components produced by us. We
may experience decreasing prices for the goods and services we offer due to pricing pressure
experienced by our customers from managed care organizations and other third-party payers;
increased market power of our customers as the medical device industry consolidates; and
increased competition among medical engineering and manufacturing services providers. If the
prices for our goods and services decrease and we are unable to reduce our expenses, we may lose
market share and our results of operations will be adversely affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>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.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our success is dependent in large part on the continued employment and performance of key
executive, managerial, sales and technical personnel and our ability to attract and retain
additional highly qualified personnel. We compete for key personnel with other companies,
academic institutions, government entities and other organizations. Our ability to maintain and
expand our business may be impaired if we are unable to retain our key personnel, hire or retain
other qualified personnel in the future, or if our key personnel decide to join a competitor or
otherwise compete with us.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Failure to adequately protect our intellectual property rights may cause our expenses to
increase and our business to suffer.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Our success depends in part on obtaining, maintaining, and enforcing our patents, trademarks and
other proprietary rights, and our ability to avoid infringing the proprietary rights of others.
We take precautionary steps to protect our technological advantages and intellectual property
rights and rely, in part, on patent, trade secret, copyright, know-how, trademark laws, license
agreements and contractual provisions to establish our intellectual
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-11-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">property rights and protect our products. We require our new employees, consultants, and
corporate partners to execute confidentiality agreements at the commencement of their employment
or consulting relationship with us.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">However, these agreements may be breached or, in the event of unauthorized use or disclosure,
they may not provide adequate remedies. While we intend to defend against any threats to our
intellectual property, there can be no assurance that these patents, trade secrets or other
agreements will adequately protect our intellectual property.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In addition, the validity and breadth of claims covered in medical technology patents involve
complex legal and factual questions and are often highly uncertain. There can also be no
assurance that pending patent applications owned by us will result in patents to be issued to
us, that patents issued to or licensed by us in the past or in the future will not be challenged
or circumvented by competitors or that such patents will be found to be valid or sufficiently
broad to protect our technology or to provide us with any competitive advantage. Third parties
could also obtain patents that may require us to negotiate licenses to conduct our business, and
there can be no assurance that the required licenses would be available on reasonable terms or
at all. In some cases, we rely upon trade secrets instead of patents to protect our proprietary
technology. Others may independently develop or otherwise acquire substantially equivalent
know-how, or gain access to and disclose our proprietary technology. If we are not able to
adequately protect our intellectual property and other proprietary rights, our product offerings
may lose their competitive edge, which would negatively impact our revenues.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Additionally, third parties may assert intellectual property claims and related claims against
the Company, whether through civil litigation, administrative proceedings, or otherwise, in the
United States or abroad, which may result in a narrowing or invalidation of our intellectual
property rights or freedom to operate, significant damage awards and costs of litigation or
other legal proceedings, injunctive relief against us, the necessity of costly or
disadvantageous licenses, and may be disruptive to our business operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our technology may become obsolete, which would negatively impact our ability to sell our
products.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The medical equipment and healthcare industries are characterized by extensive research and
rapid technological change. The development by others of new or improved products, processes,
or technologies may make our products obsolete or less competitive. Accordingly, we plan to
devote continued resources, to the extent available, to further develop and enhance existing
products and to develop new products. If these efforts are not successful, we may not be able
to meet our financial goals and our stock price may suffer.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our reliance on a principal manufacturing facility may impair our ability to respond to natural
disasters or other unforeseen catastrophic events.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We manufacture substantially all of our products in one principal manufacturing facility,
located in a single building in Deerfield, Wisconsin. Despite precautions taken by us, a
natural disaster or other unanticipated catastrophic events at this building could significantly
impair our ability to manufacture our products and operate our business. Our facility and
certain manufacturing equipment located in that facility would be difficult to replace and could
require substantial replacement lead-time. Catastrophic events may also destroy any inventory
of product or components located in our facility. While we carry insurance for natural
disasters and business interruption, the occurrence of such an event could result in losses that
exceed the amount of this insurance coverage, which would impair our financial results.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may make future acquisitions, which involve numerous risks that could impact our business and
results of operations.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As part of our growth strategy, we intend to selectively acquire other businesses, product
lines, assets, or technologies, which are complementary to our product offerings. Successful
execution of our acquisition strategy depends upon our ability to identify, negotiate, complete
and integrate suitable acquisitions. Acquisitions involve numerous risks, including:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in integrating the operations, technologies, and products of the acquired
companies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the risk of diverting management&#146;s attention from normal daily operations of the
business;
</TD>
</TR>
</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->-12-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>potential difficulties in completing projects associated with in-process research and
development;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks of entering markets in which we have no, or limited, direct prior experience and
where competitors in such markets have stronger market positions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>initial dependence on unfamiliar supply chains or relatively small supply partners;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>insufficient revenues to offset increased expenses associated with acquisitions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the risk that acquired lines of business may reduce or replace the sales of existing
products; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the potential loss of key employees of the acquired companies.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Future acquisitions may not be successful and, if we are unable to effectively manage the risks
described above, our business, operating results or financial condition may be negatively
affected.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may need additional capital to continue our acquisition growth strategy.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Successful continued execution of our acquisition strategy may also depend upon our ability to
obtain satisfactory debt or equity financing. We likely would require additional debt or equity
financing to make any further significant acquisitions. Such financing may not be available on
terms that are acceptable to us or at all, particularly in light of current adverse conditions
in the capital markets. If we are required to incur additional indebtedness to fund
acquisitions in the future, our cash flow may be negatively affected by additional debt
servicing requirements and the terms of such indebtedness may impose covenants and restrictions
that provide us less flexibility in how we operate our business. Fluctuations in our stock
price may make it difficult to make acquisitions using our stock as consideration. Moreover,
use of our stock to fund acquisitions may have a significant dilutive effect on existing
shareholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our internal research and product development activities are complemented by acquisitions,
investments and alliances. We cannot guarantee that any previous or future acquisitions,
investments or alliances will be successful for the purpose of complementing our internal
research and product development activities.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A component of our growth strategy is to enter into strategic alliances in order to complement
and expand our current product and service offerings and distribution. The rapid pace of
technological development in the medical industry and the specialized expertise required in
different areas of medicine make it difficult for one company alone to develop a broad portfolio
of technological solutions. In addition to internally generated growth through our research and
development efforts, historically we have relied, and expect to continue to rely, upon
acquisitions, investments and alliances to provide us access to new technologies both in areas
served by our existing businesses as well as in new areas. We may make future investments where
we believe that we can stimulate the development of, or acquire, new technologies and products
to further our strategic objectives and strengthen our existing businesses. Investments and
alliances in and with medical technology companies are inherently risky, and we cannot guarantee
that any of our previous or future acquisitions, investments or alliances will be successful or
will not materially adversely affect our consolidated earnings, financial condition or cash
flows.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Future issuances of our common stock could dilute existing stockholders and cause our stock
price to decline.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of December&nbsp;31, 2009 we have reserved 5,054,144 shares of common stock for issuance under our
stock-based compensation plans and arrangements, including pursuant to options that are
outstanding or may be granted in the future. Future stock awards under our plans and the
issuance of stock upon exercise of options would have a dilutive effect on our stockholders and
may adversely affect the market price of our common stock.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our charter documents and Delaware law contain provisions that could make it more difficult for
a third party to acquire us.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Certain provisions of our certificate of incorporation and bylaws could make it harder for a
third party to acquire us without the consent of our board of directors. Our certificate of
incorporation authorizes the issuance of
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->-13-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">preferred stock with the designations, rights, and preferences as may be determined from time to
time by our board of directors, without any further vote or action by our stockholders. In
addition, our board of directors is divided into three classes with staggered terms, which makes
it difficult for stockholders to change the control of our board. Lastly, Section&nbsp;203 of the
Delaware General Corporation Law limits business combination transactions with interested
stockholders that have not been previously approved by the issuer&#146;s board of directors. Our
board of directors could choose not to negotiate with an acquirer that it did not feel was in
our strategic interest. If the acquirer was discouraged from offering to acquire us or
prevented from successfully completing a hostile acquisition by the anti-takeover measures
described above, our stockholders could lose the opportunity to sell their shares at a favorable
price.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Realization of our deferred tax assets is uncertain.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">During 2009, we evaluated our ability to realize our net deferred tax assets, primarily our net
operating losses and tax credit carryforwards and determined that the realization of these
deferred tax assets is uncertain as of the year ended December&nbsp;31, 2009. We assessed both
positive and negative evidence as well as objective and subjective evidence, including but not
limited to such factors as past performance, recent history of operating results on a GAAP
basis, recent history of generating taxable income, history of recovering net operating loss
carryforwards for tax purposes, and expectations of future taxable income as well as current
conditions and issues facing our industry and its customers. Based on our evaluation, we
determined it was not more likely than not that we would be able to realize all or a portion of
its deferred tax assets and as such, we recorded a valuation allowance against deferred tax
assets resulting in a non cash charge to income tax expense of approximately $42.2&nbsp;million. Our
ability to realize these deferred tax assets in the future is dependent upon our ability to
generate taxable income. If in future periods we generate taxable income, then the valuation
allowance may be released in part, or in total, when it becomes more likely than not that the
deferred tax assets will be realized.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Changes in tax laws and unanticipated tax liabilities could adversely affect our effective
income tax rate and profitability.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">President Obama&#146;s administration has announced several proposals to reform U.S. tax laws that
would, among other things, defer tax deductions for interest expense allocable to non-U.S.
income until non-U.S. earnings are repatriated to the United States and further limit foreign
tax credits. Proposals also include treating as Subpart F income subject to current taxation
certain excessive returns from transfers of intangible assets by a U.S. person to a related
controlled foreign corporation. These proposals, if passed, would be effective for tax years
beginning after December&nbsp;31, 2010. It is unclear whether these proposed tax reforms will be
enacted into law, or, if enacted, what the scope of the reforms will be. If any of these or
similar proposals are enacted into law, they may have a material adverse impact on our business,
financial position and results of operations<B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Our future financial results could be adversely impacted by asset impairments.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are required not to amortize goodwill and other intangible assets determined to have
indefinite lives, and have established a method of testing these assets for impairment on an
annual or on an interim basis if certain events occur or circumstances change that would reduce
the fair value of a reporting unit below its carrying value or if the fair value of intangible
assets with indefinite lives falls below their carrying value. We also need to evaluate
intangible assets determined to have finite lives for recoverability whenever events or changes
in circumstances indicate that their carrying amounts may not be recoverable. These events or
circumstances could include a significant change in the business climate, legal factors,
operating performance indicators, competition, sale or disposition of a significant portion of
the business, or other factors such as a decline in our market value below its book value for an
extended period of time. A significant decline in our stock price could require us to evaluate
intangible assets for recoverability during the quarter in which the decline occurred. In the
case of intangible assets with indefinite lives, we will need to evaluate whether events or
circumstances continue to support an indefinite useful life. We will need to evaluate the
estimated lives of all intangible assets on an annual basis, including those with indefinite
lives, to determine if events and circumstances continue to support an indefinite useful life or
the remaining useful life, as applicable, or if a revision in the remaining period of
amortization is required. The amount of any such annual or interim impairment charge could be
significant, and could have a material adverse effect on our reported financial results for the
period in which the charge is taken.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->-14-<!-- /Folio -->
</DIV>



<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>This prospectus 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 &#147;believe,&#148; &#147;expect,&#148;
&#147;intend,&#148; &#147;anticipate&#148;, &#147;will,&#148; &#147;may,&#148; 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&#146;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 &#147;Risk Factors&#148; on page 1 of this prospectus and
those discussed elsewhere in this prospectus. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of this prospectus. 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 prospectus 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.</I>
</DIV>

<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The proceeds from the sale of the common stock offered in this prospectus are solely for the
account of the selling stockholder. We will not receive any of the
proceeds from any sale of shares by the selling stockholder.
</DIV>

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING STOCKHOLDER</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Todd T. Alberstone, the selling stockholder, was appointed Vice President and General Counsel of
the Company in January&nbsp;2010. In connection with Mr.&nbsp;Alberstone&#146;s appointment, he received a
restricted stock unit award for 50,000 shares of our common stock (less than 1% of our
outstanding common stock) that will vest in four equal annual increments beginning on January
11, 2011, subject to his continuous employment with the Company. Accordingly, the Shares will
not contractually be eligible for sale or transfer pursuant to the Registration Statement of
which this prospectus is a part until the restricted stock units have vested and the Shares are
issued to Mr.&nbsp;Alberstone. The vesting of the restricted stock units will accelerate under
certain circumstances pursuant to the terms of Mr.&nbsp;Alberstone&#146;s award agreement. Other than the
restricted stock unit award, currently Mr.&nbsp;Alberstone does not beneficially own any shares of
our common stock. Beneficial ownership is determined in accordance with the rules and
regulations of the SEC.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Some or all of the Shares may be sold pursuant to this prospectus. Mr.&nbsp;Alberstone may or may
not have a present intention of selling the Shares or may offer or sell fewer than the total
number of the Shares. We do not have any knowledge with respect to the present intent of Mr.
Alberstone. Assuming the sale of all the Shares offered by this prospectus and no other
purchases or sales of our common stock, Mr.&nbsp;Alberstone will not beneficially own any shares of
our common stock after the completion of the offering.
</DIV>

<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The selling stockholder may sell all or a portion of the Shares offered by this prospectus from
time to time in ordinary broker transactions on the Nasdaq Global Market at the prices
prevailing at the time of such sale. The selling stockholder may also make private sales
directly through a broker or brokers. The selling stockholder will be responsible for payment
of any and all commissions to brokers, which will be negotiated on an individual basis. We will
pay all expenses incident to the sale of the Shares to the public other than brokerage
commissions and other expenses incurred by the selling stockholder, which will be paid by the
selling stockholder. In connection with any sale, the selling stockholder and any brokers
participating in such sales may be deemed to be underwriters within the meaning of the
Securities Act of 1933, as amended (the &#147;Securities Act&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">There is no assurance that the selling stockholder will sell any or all of the Shares of common
stock offered by them under this prospectus.
</DIV>






<P align="center" style="font-size: 10pt"><!-- Folio -->-15-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are being represented by Perkins Coie LLP, Seattle, Washington, who will pass upon the
validity of the Shares being offered by this prospectus.
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The consolidated financial statements of Cardiac Science Corporation as of December&nbsp;31, 2009 and
2008, and for each of the years in the three-year period ended December&nbsp;31, 2009, the related
financial statement schedule II, and management&#146;s assessment of the effectiveness of internal
control over financial reporting as of December&nbsp;31, 2009 have been incorporated by reference
herein in reliance upon the report of KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as experts in accounting
and auditing. The audit report covering the December&nbsp;31, 2009 financial statements refers to a
change in the accounting for minority interests as required by Statement of Financial Account
Standards No.&nbsp;160, &#147;Noncontrolling Interests in Consolidated Financial Statements &#150; an amendment
of ARB No.&nbsp;51&#148; (included in FASB ASC Topic 810, &#147;Consolidation&#148;), effective January&nbsp;1, 2009.
</DIV>

<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We have filed with the SEC a Registration Statement on Form S-8, of which this prospectus is a
part, under the Securities Act, with respect to the shares of common stock offered by this
prospectus. The prospectus does not contain all of the information included in the Registration
Statement. Statements contained in this prospectus concerning the provisions of any document
are not necessarily complete. You should refer to the copies of those documents filed as
exhibits to the Registration Statement or otherwise filed by us with the SEC for a more complete
understanding of the matter involved. Each statement concerning those documents is qualified in
its entirety by such reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We are also subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the &#147;Exchange Act&#148;). In accordance with the Exchange Act we file reports, proxy
statements and other information with the SEC. The Registration Statement, including the
attached exhibits and schedules, may be inspected and copied at the public reference facilities
maintained by the SEC, Public Reference Room, 100 F Street, N.E., Washington, DC 20549. Please
call the SEC at 1-800-SEC-0330 for further information about public reference rooms. The SEC
maintains a Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. Copies of the
Registration Statement and the reports, proxy and information statements and other information
that we file with the SEC may be obtained from the SEC&#146;s Internet address at http://www.sec.gov.
</DIV>

<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INFORMATION INCORPORATED BY REFERENCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The SEC allows us to &#147;incorporate by reference&#148; the information we file with the SEC, which
means that we can disclose important information to you by referring to those documents. The
information incorporated by reference is an important part of this prospectus. We incorporate
by reference the documents listed below and any documents filed in the future with the SEC under
Section&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering is completed:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our annual report on Form 10-K for the year ended December&nbsp;31, 2009, as filed with the
SEC on March&nbsp;16, 2010 pursuant to the Exchange Act;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarterly period ended March&nbsp;31, 2010, as
filed with the SEC on May&nbsp;7, 2010 pursuant to the Exchange Act;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Reports on Form 8-K filed on April&nbsp;30, 2010, February&nbsp;17, 2010 and
February&nbsp;4, 2010 (only with respect to the information included in Item&nbsp;8.01); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the description of our common stock contained in our Registration Statement on Form
S-4 filed on July&nbsp;28, 2005, as updated by our Form 8-K filed on September&nbsp;1, 2005
pursuant to Exchange Act Rule&nbsp;12g-3(f), including any amendments or reports filed for the
purpose of updating such description.</TD>
</TR>





</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->-16-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You may request a copy of these filings, at no cost, by written or oral request to the address
below. However, we will not provide copies of the exhibits to these filings unless we
specifically incorporated the exhibits by reference in this prospectus.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Michael K. Matysik<BR>
Senior Vice President, Chief Financial Officer and Secretary<BR>
Cardiac Science Corporation<BR>
3303 Monte Villa Parkway<BR>
Bothell, Washington 98021<BR>
(425)&nbsp;402-2000
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any information contained in this prospectus shall be deemed to be modified, replaced,
superseded or supplemented to the extent that any document filed in the future with the SEC and
incorporated by reference in this prospectus modifies, replaces, supersedes or supplements that
information. In addition, any information contained in a document incorporated by reference in
this prospectus shall be deemed to be modified, replaced, superseded or supplemented for
purposes of this prospectus to the extent that information contained in this prospectus or in
any subsequently filed document that is also incorporated by reference in this prospectus
modifies, replaces, supersedes or supplements that information. Any information so modified,
replaced, superseded or supplemented shall not be deemed, except as so modified, replaced,
superseded or supplemented, to constitute a part of this prospectus.
</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->-17-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II<BR>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The following documents filed with the SEC are hereby incorporated by reference in this
Registration Statement:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(a)&nbsp;our Annual Report on Form 10-K for the year ended December&nbsp;31, 2009, as filed with the SEC
on March&nbsp;16, 2010 pursuant to the Exchange Act;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(b)&nbsp;our Quarterly Report on Form 10-Q for the quarterly period ended March&nbsp;31, 2010, as filed
with the SEC on May&nbsp;7, 2010 pursuant to the Exchange Act;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(c)&nbsp;our Current Reports on Form 8-K filed on April&nbsp;30, 2010, February&nbsp;17, 2010 and February&nbsp;4,
2010 (only with respect to the information included in Item&nbsp;8.01); and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(d)&nbsp;the description of our common stock contained in our Registration Statement on Form S-4
filed on July&nbsp;28, 2005, as updated by our Form 8-K filed on September&nbsp;1, 2005 pursuant to
Exchange Act Rule&nbsp;12g-3(f), including any amendments or reports filed for the purpose of
updating such description.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">All documents filed by the Company pursuant to Sections&nbsp;13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date hereof, and prior to the filing of a post-effective amendment which
indicates that the securities offered hereby have been sold or which deregisters the securities
covered hereby then remaining unsold, shall also be deemed to be incorporated by reference into
this Registration Statement and to be a part hereof commencing on the respective dates on which
such documents are filed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Any information contained in this Registration Statement shall be deemed to be modified,
replaced, superseded or supplemented to the extent that any document filed in the future with
the SEC and incorporated by reference in this Registration Statement modifies, replaces,
supersedes or supplements that information. In addition, any information contained in a
document incorporated by reference in this Registration Statement shall be deemed to be
modified, replaced, superseded or supplemented for purposes of this Registration Statement to
the extent that information contained in this Registration Statement or in any subsequently
filed document that is also incorporated by reference in this Registration Statement modifies,
replaces, supersedes or supplements that information. Any information so modified, replaced,
superseded or supplemented shall not be deemed, except as so modified, replaced, superseded or
supplemented, to constitute a part of this Registration Statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. DESCRIPTION OF SECURITIES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. INTERESTS OF NAMED EXPERTS AND COUNSEL</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">None.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. INDEMNIFICATION OF DIRECTORS AND OFFICERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;145 of the Delaware General Corporation Law (&#147;DGCL&#148;) provides that a corporation has the
power to indemnify its officers, directors, employees and agents (or persons serving in such
positions in another entity at the request of the corporation) against the expenses, including
attorneys&#146; fees, judgments, fines or settlement amounts actually and reasonably incurred by them
in connection with the defense of any action by reason of being or having been directors or
officers, if such person shall have acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation (and, with respect to any criminal
action, had no reasonable cause to believe the person&#146;s conduct was unlawful), except that, if
such action shall be by or in the right of the corporation, no such indemnification shall be
provided as to any claim, issue or matter as to which such person shall have been judged to have
been liable to the corporation unless and to the extent that the Court of Chancery of the State
of Delaware, or another court in which the suit was brought, shall determine upon application
that, in view of all of the circumstances of the case, such person is fairly and
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->II-1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">reasonably entitled to indemnity. The Company&#146;s Amended and Restated Bylaws provide that it
will indemnify and hold harmless each person who was or is made a party to any proceeding by
reason of the fact that such person is or was a director or executive officer of the Company
against all liability and loss suffered and expenses reasonably incurred by such person in
connection therewith to the fullest extent permitted by the DGCL.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As permitted by Section&nbsp;102 of the DGCL, the Company&#146;s Amended and Restated Certificate of
Incorporation provides that no director shall be personally liable to the Company or its
stockholders for monetary damages for any breach of fiduciary duty as a director, except for
liability (i)&nbsp;for breaches of the director&#146;s duty of loyalty to the Company or its stockholders,
(ii)&nbsp;for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii)&nbsp;for the unlawful payment of dividends or unlawful stock
purchases or redemptions under Section&nbsp;174 of the DGCL, or (iv)&nbsp;for any transaction from which
the director derived an improper personal benefit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Section&nbsp;145 of the DGCL also provides that a corporation has the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or agent of the
corporation (or who was serving at the request of the corporation in such position at another
entity) against any liability asserted against such person and incurred by such person in any
such capacity, or arising out of such person&#146;s status as such, whether or not the corporation
would have the power to indemnify such person against such liability under the DGCL. All of the
directors and officers of the Company are covered by insurance policies maintained and held in
effect by the Company against liabilities for actions taken in such capacities, including
liabilities under the Securities Act, subject to certain exclusions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the terms of indemnification agreements entered into with its directors and certain
of its executive officers, the Company has agreed to indemnify such individuals against any and
all costs, expenses, liabilities and losses (including, without limitation, attorneys&#146; fees
reasonably incurred, judgments, fines or penalties and amounts paid or to be paid in settlement
and any reasonable cost and fees incurred in enforcing his rights to indemnification or
contribution) incurred or suffered by such officer in connection therewith, to the fullest
extent permitted or authorized by the Company&#146;s Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws or, if greater, by the laws of the State of
Delaware.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Insofar as indemnification for liabilities arising under the Securities Act may be permitted to
our directors, officers or controlling persons pursuant to the foregoing provisions, we have
been informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. EXEMPTION FROM REGISTRATION CLAIMED</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The issuances of the Shares of common stock being offered in the Form S-8 resale prospectus were
deemed exempt from registration under the Securities Act in reliance upon Section&nbsp;4(2) of the
Securities Act as such shares were issued pursuant to a private transaction. The recipient of
the Shares in the transaction has represented that the shares will be acquired for investment
only and not with a view to or for sale in connection with any distribution thereof and
appropriate legends will be affixed to the share certificates (and other instruments issued, as
applicable) in the transaction. The recipient of the shares had adequate access, through his
relationship with the Company, to information about the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. EXHIBITS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restricted Stock Unit Award Notice and Award Agreement between Cardiac Science
Corporation and Todd T. Alberstone, dated as of January&nbsp;11, 2010</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Perkins Coie LLP (included in opinion filed as Exhibit&nbsp;5.1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (see signature page)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. UNDERTAKINGS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">A. The undersigned Registrant hereby undertakes:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;To include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;To reflect in the prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20&nbsp;percent
change in the maximum aggregate offering price set forth in the &#147;Calculation of Registration
Fee&#148; table in the effective registration statement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such information in
the registration statement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><I>provided</I>, <I>however</I>, that paragraphs (1)(i) and (1)(ii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the SEC by the Registrant pursuant to Section&nbsp;13 or Section
15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of the Registrant&#146;s annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit
plan&#146;s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->II-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">against such liabilities (other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of such
issue.
</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->II-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, as amended, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bothell, State of Washington, on the 7<SUP style="FONT-size: 85%; vertical-align: text-top">th</SUP>
day of May, 2010.
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">CARDIAC SCIENCE CORPORATION<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ MICHAEL K. MATYSIK
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">Michael K. Matysik&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">Senior Vice President,
Chief Financial Officer and Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>POWER OF ATTORNEY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Each person whose individual signature appears below hereby authorizes David L. Marver and
Michael K. Matysik, or either of them, as attorneys-in-fact with full power of substitution, to
execute in the name and on the behalf of each person, individually and in each capacity stated
below, and to file, any and all post-effective amendments to this Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act, this Registration Statement has been signed
by the following persons in the capacities indicated below on this 7<SUP style="FONT-size: 85%; vertical-align: text-top">th</SUP> day of May,
2010.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="left" style="border-bottom: 0px solid #000000" colspan="2">Signature</TD>

    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 0px solid #000000">Title</TD>
</TR>
<Tr style="font-size: 6pt"><td>&nbsp;</td></tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">/s/ RUEDIGER NAUMANN-ETIENNE
</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">Ruediger Naumann-Etienne</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">/s/ RONALD A. ANDREWS, JR.
</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">Ronald A. Andrews, Jr.</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">/s/ W. ROBERT BERG
</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">W. Robert Berg</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">/s/ CHRISTOPHER J. DAVIS
</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">Christopher J. Davis</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">/s/ DAVID L. MARVER
</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, President and Chief Executive Officer</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">David L. Marver</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1" style="border-bottom: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">/s/ TIMOTHY C. MICKELSON
</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>
<TR valign="bottom">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" colspan="1"><DIV style="margin-left:0px; text-indent:-0px">Timothy C. Mickelson</DIV></TD>

    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INDEX TO EXHIBITS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description of Document</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restricted Stock Unit Award Notice and Award Agreement between Cardiac Science
Corporation and Todd T. Alberstone, dated as of January&nbsp;11, 2010</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Perkins Coie LLP (included in opinion filed as Exhibit&nbsp;5.1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (see signature page)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
[{"type": "S-8", "sequence": "1", "filename": "v55757sv8.htm", "description": "FORM S-8", "secsgml_size_bytes": 162122}]
{"company-data": {"conformed-name": "Cardiac Science CORP", "cik": "0001323115", "assigned-sic": "3841", "irs-number": "943300396", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-166631", "film-number": "10812200"}, "business-address": {"street1": "3303 MONTE VILLA PARKWAY", "city": "BOTHELL", "state": "WA", "zip": "98021", "phone": "425-402-2206"}, "mail-address": {"street1": "3303 MONTE VILLA PARKWAY", "city": "BOTHELL", "state": "WA", "zip": "98021"}, "former-company": {"former-conformed-name": "CSQ Holding CO", "date-changed": "20050407"}}
sv8
Table of Contents
As filed with the Securities and Exchange Commission on May 7, 2010
Registration 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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 Number)
3303 Monte Villa Parkway
Bothell, Washington 98021
(Address of principal executive offices, including zip code)
Restricted Stock Unit Award Notice and Award Agreement
between Cardiac Science Corporation and Todd T. Alberstone,
dated as of January 11, 2010
Michael K. Matysik
(Senior Vice President, Chief Financial Officer and Secretary)
Cardiac Science Corporation
3303 Monte Villa Parkway
Bothell, Washington 98021
(425) 402-2000
(Name, address and telephone number, including area code, of agent for service)
Copy to:
Eric A. DeJong
Perkins Coie
llp
1201 Third Avenue, Suite 4800
Seattle, Washington 98101-3099
(206) 359-8000
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer
o
Accelerated filer
þ
Non-accelerated filer
o
(Do not check if a smaller reporting company)
Smaller reporting company
o
CALCULATION OF REGISTRATION FEE
Title of Securities
Amount To Be
Proposed Maximum
Proposed Maximum
Amount of Registration
To Be Registered
Registered
Offering Price Per Share (1)
Aggregate Offering Price (1)
Fee (1)
Common Stock, par
value $0.001 per
share, issuable
pursuant to
Restricted Stock
Unit Award Notice
and Award
Agreement between
Cardiac Science
Corporation and
Todd T. Alberstone
effective January
11, 2010
50,000
$1.37
$68,500
$4.88
(1)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule
457(c) under the Securities Act. The proposed maximum offering price per share is estimated
to be $1.37, based on the average of the high sales price ($1.46) and the low
sales price ($1.28) per share of the Registrant's Common Stock as reported by the
Nasdaq Global Market on May 6, 2010.
Table of Contents
EXPLANATORY NOTE
Cardiac Science Corporation has prepared this registration statement in accordance with the
requirements of Form S-8 under the Securities Act of 1933, as amended, to register for resale up
to 50,000 shares of the Company's common stock, $0.001 par value per share, issuable pursuant to
a Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement between the
Company and Todd T. Alberstone. The prospectus filed as Part I of this registration statement
has been prepared in accordance with Part I of Form S-3 (as directed in General Instruction C of
Form S-8).
Table of Contents
PROSPECTUS
50,000 Shares
CARDIAC SCIENCE CORPORATION
Common Stock
This prospectus relates to 50,000 shares of the common stock, par value $0.001 per share, of
Cardiac Science Corporation (the "Shares"), which may be offered from time to time by the
selling stockholder identified on page 15 of this prospectus. The selling stockholder may offer
for sale or sell the Shares in varying amounts and at prices and on terms to be determined at
the time of sale. For general information about the distribution of the Shares offered, please
see "Plan of Distribution" beginning at page 15 of this prospectus. We will receive no part of
the proceeds from sales of the Shares. The selling stockholder will bear all sales commissions
and similar expenses. Any other expenses incurred by us in connection with this registration
and offering and not borne by the selling stockholder will be borne by us.
Our common stock is traded on the Nasdaq Global Market under the symbol CSCX. On May 6, 2010,
the last sales price of our common stock, as reported on the Nasdaq
Global Market, was $1.33
per share.
Our business involves significant risks. See "Risk Factors" beginning at page 1 for a
discussion of some factors you should consider before buying shares of our common stock.
Neither the Securities and Exchange Commission (the "SEC") nor any state securities
commission has approved or disapproved of these securities or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is May 7, 2010
TABLE OF CONTENTS
OUR COMPANY
1
RISK FACTORS
1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
15
USE OF PROCEEDS
15
SELLING STOCKHOLDER
15
PLAN OF DISTRIBUTION
15
LEGAL MATTERS
16
EXPERTS
16
WHERE YOU CAN FIND MORE INFORMATION
16
INFORMATION INCORPORATED BY REFERENCE
16
EX-5.1
EX-10.1
EX-23.1
You should rely only on the information contained in or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with information different from that
contained in this prospectus. This prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, nor shall there be any sale of these shares by any person in
any jurisdiction in which it is unlawful for that person to make such offer, solicitation or
sale. You should not assume that the information in this prospectus is accurate at any time
subsequent to the date of the prospectus.
-i-
Table of Contents
OUR COMPANY
In this prospectus, the terms "Cardiac Science," "the Company," "we," "us" and "our" refer to
Cardiac Science Corporation and its majority-owned subsidiaries. We develop, manufacture, and
market a family of advanced diagnostic and therapeutic cardiology devices and systems, including
automated external defibrillators, electrocardiograph devices, cardiac stress testing treadmills
and systems, Holter monitoring systems, hospital defibrillators, cardiac rehabilitation
telemetry systems, vital signs monitors and cardiology data management systems that connect with
hospital information, electronic medical record, and other information systems. We sell a
variety of related products and consumables, and provide a portfolio of training, maintenance,
and support services. We are the successor to the cardiac businesses that established the
trusted Burdick
®
, Quinton
®
and
Powerheart
®
brands and are headquartered in Bothell, Washington. With
customers in more than 100 countries worldwide, we have operations in North America, Europe, and
Asia.
We were incorporated in Delaware on February 24, 2005 as CSQ Holding Company to effect the
business combination of Quinton Cardiology Systems, Inc. ("Quinton") and Cardiac Science, Inc.
("CSI") pursuant to a merger transaction. The merger was consummated on September 1, 2005 at
which time the Company's name was changed to Cardiac Science Corporation.
Our principal executive offices are located at 3303 Monte Villa Parkway, Bothell,
Washington 98021 and our telephone number is (425) 402-2000.
RISK FACTORS
We are subject to many laws and governmental regulations and any adverse regulatory action may
materially adversely affect our business operations and financial results.
Our medical devices are subject to regulation by numerous government agencies, including the FDA
and comparable foreign agencies. To varying degrees, each of these agencies requires us to
comply with laws and regulations governing the development, testing, manufacturing, labeling,
marketing and distribution of our medical devices. We cannot guarantee that we will be able to
obtain marketing clearance from the FDA for our new products, or enhancements or modifications
to existing products, and if we do, such approval may:
•
take a significant amount of time;
•
require the expenditure of substantial resources;
•
involve stringent clinical and pre-clinical testing;
•
involve modifications, repairs or replacements of our products; and
•
result in limitations on the proposed uses of our products.
Both before and after a product is commercially released, we have ongoing responsibilities under
FDA regulations. If the FDA were to conclude that we are not in compliance with applicable laws
or regulations, or that any of our medical devices are ineffective or pose an unreasonable
health risk, the FDA could ban such medical devices, detain or seize adulterated or misbranded
medical devices, order a recall, repair, replacement, or refund of such devices and require us
to notify health professionals and others that the devices present unreasonable risks of
substantial harm to the public health. The FDA may also impose operating restrictions, enjoin
and restrain certain violations of applicable law pertaining to medical devices and assess civil
or criminal penalties against our officers, employees, or us. The FDA may also recommend
prosecution to the Department of Justice. Any adverse regulatory action, depending on its
magnitude, may restrict us from effectively marketing and selling our products.
Foreign governmental regulations have become increasingly stringent, and we may become subject
to more rigorous regulation by foreign governmental authorities in the future. Penalties for a
company's noncompliance with foreign governmental regulation could be severe, including
revocation or suspension of a company's
Table of Contents
business license and criminal sanctions. Any domestic or foreign governmental law or regulation
imposed in the future may have a material adverse effect on us.
We face numerous challenges in implementing a field initiative to address the component issue
that led to our AED ship-hold in late June 2009 and our business, financial position and results
of operations may be negatively impacted by the costs and other commitments needed to carry out
the initiative.
In late June 2009, we voluntarily ceased shipments of certain of our AED products due to two
instances we became aware of involving the failure of our AEDs to deliver therapy, apparently as
a consequence of a malfunction of one of the components used in the manufacture of the affected
AED. On August 10, 2009, we resumed production and shipments of the affected AED products after
implementing a more stringent process to test for defects in the component at issue. As a
result of a thorough review and analysis performed during the third quarter of 2009, we
determined that the component at issue has the potential to fail and that routine self-tests
performed by the AED may not detect a malfunctioning component. We also determined that
approximately 300,000 AEDs shipped between June 2003 and June 2009 are potentially impacted by
the component issue. Although we determined that the probability that an AED would fail to
deliver therapy as a result of a malfunction of the component issue was low, we decided to
implement a field corrective action to enhance the reliability of the affected AED units in the
field. We publicly announced our proposed corrective action to address this component issue in
November 2009.
Our proposed voluntary corrective action is subject to numerous risks and uncertainties,
including the following:
•
since we have no experience designing and carrying out a field initiative or other
corrective action plan of the magnitude under contemplation, we are likely to encounter
challenges that could cause a delay in the implementation of the field initiative or
negatively impact its effectiveness;
•
the actual costs to implement the proposed field initiative could exceed the $18.5
million estimate taken as a charge in the third quarter of 2009 due to a variety of
factors, including the number of impacted devices, the customer and geographical segments
related to the impacted devices, the logistical processes we employ to carry out any
field upgrades involved in the initiative, the customer response rate in implementing any
field upgrades involved in the process and the level of required follow up with
customers, the extent to which we may rely on third parties to carry out the field
initiative and associated costs, and the length of time and other resources required to
complete the field initiative;
•
implementation of the proposed field initiative, as well as attendant publicity, may
create a negative perception of our AED products in the market, leading to a decline in
sales that could materially adversely impact our financial position and results of
operations;
•
we will need to devote technical, management, logistics and other resources to the
implementation of the proposed field initiative, which could detract from our ability to
operate our core business and hinder our ability to carry out initiatives relating to new
products or product enhancements;
•
despite implementation of the field initiative, some devices may still fail at a time
when they are being used to deliver therapy, which could lead to product liability claims
against us that, if successful, could adversely impact our financial position and results
of operations or negatively impact the market's perception of our products; and
•
the plan will require the expenditure of significant amounts of cash which, in
combination with expected operating losses in 2010, may negatively impact our liquidity
or at least constrain our ability to pursue strategic initiatives such as acquisitions,
new product development, or other growth initiatives.
Moreover, in February 2010, we received a warning letter from the FDA noting, among other
things, that the proposed field corrective action is inadequate since it is intended to improve
the products' ability to detect the potential component problem, but is not designed to prevent
component failure. The FDA letter also asserts other inadequacies, including our procedures
relating to the evaluation, investigation and follow up of complaints, procedures to verify the
effectiveness of corrective and preventative actions and procedures relating to certain
-2-
Table of Contents
design requirements. In April 2010, the FDA published additional information regarding this
corrective action, further clarifying the AED models impacted by the potential component defect
and provided further guidance to users of our affected AEDs. Additionally, the FDA noted that
our software update addresses "some, but not all electrical component defects." We are in
ongoing discussions with the FDA regarding these issues. If we are unable to correct the
inadequacies asserted in the FDA's letter or otherwise satisfy the FDA's concerns, we may be
subject to regulatory action by the FDA, including seizure, injunction and/or civil monetary
penalties. Any such actions could significantly disrupt our ongoing business and operations and
have a material adverse effect on our financial position and operating results.
We face numerous challenges in implementing a recall announced on February 3, 2010, and our
business, financial position and results of operations may be negatively impacted by the costs
and other commitments needed to carry out the recall and correct the product issue.
On February 3, 2010, we announced a worldwide voluntary recall after determining that
approximately 12,200 automated external defibrillators (AEDs) manufactured or serviced between
October 19, 2009 and January 15, 2010 may not be able to deliver therapy during a resuscitation
attempt, which may lead to serious adverse events or death. These AEDs were manufactured in a
way that makes them potentially susceptible to failure under certain conditions. In connection
with the corrective action, we intend to replace all affected AEDs at no charge to the customer.
We recorded a charge of $2.5 million in the fourth quarter of 2009, reflecting our current
estimate of the expected costs relating to this action. Actual costs may vary based on a
variety of factors. Cash expenditures relating to replacement of the affected AEDs will occur
primarily in the first half of 2010.
This recall, and the estimated costs, are subject to numerous risks and uncertainties, including
the following:
•
we may encounter challenges that could cause a delay in the implementation of the
recall or manufacture of replacement units;
•
the actual costs to implement the recall may exceed the $2.5 million charge taken in
the fourth quarter of 2009 due to a variety of factors, including the number of impacted
devices, the customer and geographical segments related to the impacted devices, the
logistical processes we employ to carry out the recall, the customer response rate and
customer cooperation and the level of required follow up with customers, the extent to
which we may rely on third parties to assist and associated costs, and the length of time
and other resources required to complete the field initiative, among others;
•
implementation of the recall, as well as attendant publicity, may create a negative
perception of our AED products in the market, leading to a decline in sales that could
materially adversely impact our financial position and results of operations;
•
we will need to devote technical, management, logistics and other resources to the
implementation of the recall, which could detract from our ability to operate our core
business and hinder our ability to carry out initiatives relating to new products or
product enhancements;
•
despite implementation of the recall, some devices may still fail at a time when they
are being used to deliver therapy, which could lead to product liability claims against
us that, if successful, could adversely impact our financial position and results of
operations or negatively impact the market's perception of our products;
•
the recall will require the expenditure of significant amounts of cash which, in
combination with expected operating losses in 2010, may negatively impact our liquidity
or at least constrain our ability to pursue strategic initiatives such as acquisitions,
new product development, or other growth initiatives; and
•
the FDA may require us to implement a more costly corrective action plan or recall, or
require us to stop shipments of our AEDs for a period of time, if it does not concur with
our proposed corrective action plan, including changes to our manufacturing process, in
which case our business could be subject to severe disruption and the cost involved could
have a material adverse effect on our liquidity.
-3-
Table of Contents
Our cash and cash equivalents may not be sufficient to fund future operations and we may not be
able to secure additional sources of financing or obtain financing on acceptable terms.
Our cash
and cash equivalents as of March 31, 2010, totaled $21.0 million. We expect to
incur operating losses in 2010 and to use cash in operations. Additionally, we have recently
initiated two voluntary corrective actions relating to our AED products, the costs of which have
been estimated at $21.0 million, of which $13.5 million remains as an accrued liability as of
March 31, 2010. We expect to spend a significant portion of the remaining accrued costs
associated with these corrective actions during 2010 which will negatively impact our cash
position. We believe our existing cash and cash equivalents will be sufficient to fund our
anticipated operating losses, meet working capital requirements and fund anticipated capital
expenditures needs and other obligations, including the remaining estimated costs of the ongoing
corrective actions, through at least March 31, 2010.
However, we cannot be certain our cash and cash equivalents will be sufficient to meet our
operating needs in 2010 as we may be affected by economic, financial, competitive, legislative,
regulatory, business and other factors beyond our control. Accordingly, we may be required to
reduce costs, which could adversely impact our forecasts for revenue growth in future periods
which in turn could also adversely impact our forecasts for cash and cash equivalents throughout
the year. In addition, we may be forced to borrow from our available line of credit or may need
to seek additional or alternative sources of financing.
Our previous $10.0 million line of credit agreement with Silicon Valley Bank expired on March
31, 2010. On April 27, 2010, we entered into a new line of credit agreement with Silicon Valley
Bank which provides up to $5.0 million of revolving credit. This new agreement expires in April
2011. Our ability to borrow under this agreement is based largely on our "eligible" domestic
accounts receivable outstanding at the time of borrowing, and to a lesser extent on our
inventory holdings. Interest on borrowings, if any, will vary depending on whether we are
operating with positive or negative Adjusted EBITDA and will be based on the Wall Street Journal
Prime rate plus 1.0% to 1.75% or LIBOR plus 3.75% to 4.25%. We granted Silicon Valley Bank a
first priority security interest in substantially all of our current assets to secure our
obligations under the line of credit.
We may be required to implement other costly product recalls or corrective actions.
In the event that any of our products prove to be defective or deficient, we can voluntarily
recall or otherwise take corrective action, or the FDA could require us to redesign or implement
a recall of or take other action regarding, any of our products. Should we be required or
choose to implement any additional recalls or corrective actions in future periods, we could
incur substantial costs as well as face significant adverse publicity or regulatory
consequences, which could harm our business, including our ability to market our products in the
future. The financial impact of a recall could have a material adverse effect on our business,
financial position and results of operations.
Quality problems with our processes, goods and services could harm our reputation for producing
high quality products and erode our competitive advantage.
Quality is extremely important to us and our customers due to the serious and costly
consequences of product failure. Our quality certifications are critical to the marketing
success of our goods and services. If we fail to meet these standards our reputation could be
damaged, we could lose customers and our revenue could decline. Aside from specific customer
standards, our success depends generally on our ability to manufacture to exact tolerances,
precision engineered components, subassemblies and finished devices from multiple materials. If
our components fail to meet these standards or fail to adapt to evolving standards, our
reputation as a manufacturer of high quality components will be harmed, our competitive
advantage could be damaged, and we could lose customers and market share. For example, the
component issues that led to the field corrective action we announced in November, 2009 and the
recall we announced in February, 2010 may lead to reduced demand for our AED products.
Warranty and product liability claims could adversely impact our earnings and reputation.
The manufacturing, marketing and sale of medical devices expose us to the risk of warranty
claims, product liability claims or product recalls. We are, from time to time, subject to
warranty claims with regard to product performance, which expose us to unexpected repair and
replacement costs. In addition, component failures,
-4-
Table of Contents
manufacturing flaws, design defects or inadequate disclosure of product-related risks or
product-related information with respect to products we manufacture or sell could result in an
unsafe condition or injury to, or death of, a patient. The occurrence of such a problem could
result in product liability claims, product recalls or a safety alert relating to one or more of
our products. Although we maintain product liability insurance, the coverage may not be
adequate or may not be available at affordable rates. Warranty claims, product liability claims
or product recalls in the future, regardless of their ultimate outcome, could have a material
adverse effect on our business and reputation and on our ability to attract and retain customers
for our products.
Our business may be adversely affected by deteriorating economic conditions.
Economic conditions in both the United States and other countries in which we sell our products
have deteriorated significantly in recent years and may continue to deteriorate in the
foreseeable future. If economic conditions in the markets in which we operate continue to
deteriorate, it may result in declining demand for our products and services, longer sales
cycles, increased order cancellations and declining pricing due to customers' reduced capital
budgets, difficulties encountered in securing financing needed to purchase our products, or
other factors. Moreover, such conditions may result in increased excess or obsolete inventories
and difficulties collecting customer receivables. All of these factors could materially
adversely affect our future operating results and financial condition.
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.
In the U.S. and abroad, we sell many of our products through distributors, strategic selling
alliances and other third party organizations. Generally, we have little or no control over
these sales processes, and in many cases our contracts are short-term or may be terminated on
little or no notice. If any of our key distributor agreements or selling alliance agreements
are cancelled or if we are unable to renew them as they expire, or if our distributors or
selling alliances fail to develop relationships with important target customers, our sales and
operating results may suffer materially.
On June 15, 2009, we notified Nihon Kohden Corporation, our distributor of AEDs in Japan, that
our OEM Supply and Purchase Agreement dated effective as of January 1, 2008 will terminate
effective June 15, 2010. Under our agreement with Nihon Kohden, Nihon Kohden has had the
exclusive right in Japan to distribute a Nihon Kohden-branded version of our AED product (model
"9231") designed for the Japanese market, as well as certain related consumables. Because Nihon
Kohden has decided to build and market its own AED products, we elected to terminate the
agreement in order to explore alternative means of distributing our AED products in Japan. In
2009, the percentage of our net sales from the Japanese market decreased from 19% in 2008 to 7%.
If our efforts to establish alternative distribution arrangements for our AED products in Japan
are unsuccessful, our operating results may be adversely affected. Moreover, the
introduction of Nihon Kohden's own AED products may further erode sales of our products in
Japan.
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.
We license and purchase technology from third parties for features in some of our products. We
anticipate that we will need to license and purchase additional technology to remain
competitive. We may not be able to renew existing licenses and purchase agreements or to
license and purchase other technologies on commercially reasonable terms or at all. If we are
unable to renew existing licenses and purchase agreements or to license or purchase new
technologies, we may not be able to offer competitive products, which could negatively impact
our revenues.
Our international business is subject to risks that could adversely affect our profitability and
operating results.
Our international operations, which accounted for 33% of our revenues in 2009, are accompanied
by certain financial and other risks. In recent years, we have pursued growth opportunities
internationally and intend to continue pursuing such opportunities in the future, which could
expose us to greater risks associated with
-5-
Table of Contents
international sales and operations. Our international operations are, and will continue to be,
subject to a number of risks and potential costs, including:
•
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.
Also, like the U.S., economic conditions in the foreign countries in which we operate have
deteriorated significantly in recent years and may continue declining for the foreseeable
future. For example, in 2009, sales of our products in Japan accounted for 7% of our net sales,
down from 19% in 2008. This reduction in sales in Japan can be attributed in part to weak
economic conditions in that market. Economic conditions in Japan are expected to remain weak
for the foreseeable future. As a result, our sales in this market may decline, perhaps
significantly, during 2010 and beyond. We may also experience declining sales in other
international markets due to deteriorating economic conditions.
Our business is subject to intense competition, which may reduce the demand for our products.
The cardiac monitoring and defibrillation markets are highly competitive, and we expect
competition to intensify in the future. Some of our competitors are larger companies, such as
General Electric Company, Medtronic Emergency Response Systems, a unit of Medtronic, Inc., and
Philips Medical Systems, a unit of Koninklijke Philips Electronics N.V., who may have:
•
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.
In addition, the timing of the introduction of competing products into the market could affect
the market acceptance and market share of our products. If we are unable to develop competitive
products that obtain market acceptance, our revenues and financial results may suffer.
-6-
Table of Contents
We may be unable to increase sales of our cardiac monitoring products and services, which could
cause our stock price to decrease.
The market for cardiac monitoring products and services is generally mature and stable.
However, our 2009 revenues from products and services in this market decreased 15.3% from 2008.
Our ability to revitalize this line of products and services depends on our restructuring
efforts, the development and commercialization of competitive new products and service
offerings, and our success in increasing sales and gaining market share from our competitors.
Current economic conditions may provide particular challenges to our efforts to revitalize this
line. If we are unsuccessful in these efforts, our sales revenues from this line of products
and services may decrease, our financial results may suffer, and our stock price may decline.
Our financial results could be impacted by the credit risk of our customers.
We have exposure to the credit risks of some of our customers. Although we have programs in
place that are designed to monitor and mitigate the associated risk, there can be no assurance
that such programs will be effective in reducing our credit risks adequately. We monitor
individual payment capability in granting credit arrangements, seek to limit the total credit to
amounts we believe our customers can pay, and maintain reserves we believe are adequate to cover
exposure for potential losses. If there is a deterioration of a major customer's
creditworthiness or actual defaults are higher than expected, future resulting losses, if
incurred, could harm our business and have a material adverse effect on our operating results.
These risks may become more pronounced if economic conditions continue to deteriorate.
Our stock price is volatile, and you may not be able to sell your shares for a profit.
The trading price of our common stock is volatile. Our common stock price could be subject to
fluctuations in response to a number of factors, including:
•
actual or anticipated variations in operating results;
•
changes in our business, operations, or prospects;
•
product issues necessitating recalls or other corrective actions and related
regulatory actions;
•
changes in financial estimates or recommendations by securities analysts;
•
conditions or trends in medical devices and diagnostic cardiology products markets;
•
announcements by us or our competitors of significant customer wins or losses, gains
or losses of distributors, technological innovations, new products or services;
•
announcements by us or our competitors of significant acquisitions, strategic
partnerships, joint ventures or capital commitments;
•
additions or departures of key personnel;
•
sales of a large number of shares of our common stock;
•
adverse litigation;
•
unfavorable legislative or regulatory decisions; and
•
general market conditions.
In the past, companies that have experienced volatility in the market price of their stock have
been the target of securities class action litigation. We may become the target of this type of
litigation in the future. Securities
-7-
Table of Contents
litigation against us could result in substantial costs and divert management attention, which
could seriously harm our business.
We were not profitable in 2008 or 2009 and we may be unable to return to profitability in the
future, which could result in a decline in our stock price.
We had a net loss of $77.0 million in 2009 due largely to a non cash charge of approximately
$42.2 million related to a valuation allowance on our deferred tax assets as well as costs
totaling $21.0 million related to two separate voluntary corrective actions which we announced
between November 2009 and February 2010. In 2008, we had a net loss $98.4 million due to a pre
tax, non cash impairment charge related to goodwill of $107.7 million. We had net income of
$8.5 million in 2007. Although we expect to become profitable again in future periods, our
ability to return to profitability will depend on our ability to increase our revenues and
manage our expenses. In order to generate additional revenues, we will need to continue
developing and offering competitive products and services, maintain our sales and distribution
network and expand our customer base. Our ability to increase revenues may be impacted by
current economic conditions and other factors, such as the impact on customer demand from
product quality issues and related corrective actions that we have announced in the last several
months. Also, we will need to manage costs associated product development and marketing,
protecting our intellectual property, and handling product quality issues and related corrective
actions. We may be unable to accomplish some, or any, of these goals because of the risks
identified in this report or for other unforeseen reasons. If we are unable to attain
profitability in the future, our stock price could decline.
Our business may be adversely affected by restructurings.
On January 14, 2009, we announced a restructuring involving a 12% reduction in our staff, and
have had subsequent restructurings and reductions. The reductions primarily affected customer
service, product development and manufacturing. Implementation of past restructurings and
reductions, as well as any future restructurings or reductions, may adversely affect the
effectiveness of the functional areas impacted by the staff reductions, as well as adversely
impact our relationships with customers and suppliers. The costs of implementing past and
future restructurings and reductions may adversely affect our results of operations. Finally,
past or future restructuring may not result in all of the cost savings and operational and
strategic benefits that we anticipate.
Our quarterly revenues and operating results are unpredictable and may vary significantly.
Our quarterly revenues and operating results have varied in the past and our quarterly revenues
and operating results may continue to vary in the future due to a number of factors, many of
which are outside of our control. Factors contributing to these fluctuations may include:
•
effects of domestic and foreign economic conditions on our industry and/or customers,
which conditions have significantly deteriorated in the last year and are expected to
continue to decline for the foreseeable future;
•
the impact of a ship-hold, recalls or other corrective actions, or regulatory actions
resulting from quality concerns relating to our products;
•
the impact of acquisitions, divestitures, strategic alliances, and other significant
corporate events;
•
changes in our ability to obtain products and product components that are manufactured
for us by third parties;
•
delays in the development or commercial introduction of new versions of products;
•
the ability to attain and maintain production volumes and quality levels for our
products and product components;
•
the impact of a ship-hold on any of our products due to quality control concerns;
-8-
Table of Contents
•
changes in the demand for our products;
•
varying sales cycles that can take up to a year or more;
•
changes in the mix of products we sell, which could affect our revenue levels as well
as our gross margins;
•
unpredictable budgeting cycles of our customers;
•
delays in obtaining regulatory clearance for new versions of our products;
•
increased product and price competition;
•
the impact of regulatory changes on the availability of third-party reimbursement to
customers of our products;
•
the loss of key personnel;
•
the loss of key distributors or distribution companies;
•
seasonality in the sales of our products;
•
the impact of longer buying cycles; and
•
the impact of employee turnover.
Historically, our quarterly financial results have often been impacted by the receipt of a large
number of customer orders in the last weeks of a quarter. If these orders are delayed to the
following quarter or canceled, our sales could fall short of our targets and our stock price
could decline. Due to the factors summarized above, we believe that period-to-period
comparisons of our operating results are not a good indication of future performance and should
not be relied upon to predict future operating results.
If we are unsuccessful in developing and commercializing new versions of our products, our
operating results will suffer.
To be successful, we must develop and commercialize new versions of our products for both
domestic and international markets. Our products must keep pace with rapid industry change,
comply with rapidly evolving industry standards and government regulations and compete
effectively with new product introductions of our competitors. Because our products are
technologically complex, developing new products requires extensive design, development and
testing at the technological, product and manufacturing stages. To successfully develop and
commercialize new versions of our products, we need to:
•
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;
-9-
Table of Contents
•
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.
Our failure to accomplish any of these items, or others involved in developing and
commercializing new products, could delay or prevent the release of new products. These
difficulties and delays could cause our development expenses to increase and harm our financial
and operating results.
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.
If our suppliers reduce, delay or discontinue production of component parts for our products, we
will be forced to seek replacement parts from alternative sources. We purchase many of the
components and raw materials used in manufacturing our products from numerous suppliers in
various countries. Generally we have been able to obtain adequate supplies of such raw
materials and components. In some cases, for reasons of quality assurance, cost effectiveness
or availability, we procure certain components and raw materials only from a sole supplier.
While we work closely with our suppliers to try to ensure continuity of supply while maintaining
high quality and reliability, we cannot guarantee that our supplies will be uninterrupted. In
addition, due to the stringent regulations and requirements of the FDA regarding the manufacture
of our products, we may not be able to quickly establish additional or replacement sources for
certain components or materials. A reduction or interruption in supply, and an inability to
develop alternative sources for such supply, could result in significant delays or cancellations
of product shipments and the need to modify our products to utilize available components. This
could result in reduced revenues, higher costs or both.
Inadequate levels of reimbursement from governmental or other third-party payers for procedures
using our products may cause revenues to decrease.
Healthcare costs have risen significantly over the past decade. Federal, state and local
governments have adopted a number of healthcare policies intended to curb rising healthcare
costs. There have been and may continue to be proposals by legislators, regulators and
third-party payers to keep these costs down. Certain proposals, if passed, could impose
limitations on the prices we will be able to charge for our products, or the amounts of
reimbursement available for our products from governmental agencies or third-party payers.
These limitations could have a material adverse effect on our financial position and results of
operations.
In the U.S., healthcare providers that purchase certain of our products often rely on
governmental and other third-party payers, such as federal Medicare, state Medicaid, and private
health insurance plans to pay for all or a portion of the cost of the procedures that utilize
those products. The availability of this reimbursement affects customers' decisions to purchase
capital equipment. Denial of coverage or reductions in levels of reimbursement for procedures
performed using our products by governmental or other third-party payers would cause our
revenues to decrease.
If we do not maintain or grow revenues from our support services or consumables, our operating
and financial results may be negatively impacted.
A significant portion of our revenues is generated from post-sale support services we provide
for our products and from the sale of ancillary cardiology products and consumables related to
our products, such as patented electrodes, pads, cables, leads, and thermal chart paper. As
hospitals expand their in-house capabilities to service diagnostic equipment and systems, they
may be able to service our products without additional support from us. In addition, our
customers may express an increasing preference for ancillary cardiology products and consumables
that are manufactured or provided by other vendors. Any of these events could result in a
decline in our revenues and adversely affect our financial and operating results.
-10-
Table of Contents
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.
Our customers typically order products on a purchase order basis, and we do not generally have
long-term purchase contracts. In limited circumstances, customer orders may be cancelled,
changed or delayed on short notice. Lack of significant order backlog makes it difficult for us
to forecast future sales with certainty. Long and varying sales cycles with our customers make
it difficult to accurately forecast component and product requirements. These factors expose us
to a number of risks:
•
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.
The selling price of our products and our market share are subject to market conditions. Major
shifts in industry market share have occurred in connection with product problems, physician
advisories and safety alerts, reflecting the importance of product quality in the medical device
industry. Many healthcare industry companies, including medical device companies, are
consolidating to create new companies with greater market power. As the healthcare industry
consolidates, competition to provide goods and services to industry participants will become
more intense. These industry participants may try to use their market power to negotiate price
concessions or reductions for medical devices that incorporate components produced by us. We
may experience decreasing prices for the goods and services we offer due to pricing pressure
experienced by our customers from managed care organizations and other third-party payers;
increased market power of our customers as the medical device industry consolidates; and
increased competition among medical engineering and manufacturing services providers. If the
prices for our goods and services decrease and we are unable to reduce our expenses, we may lose
market share and our results of operations will be adversely affected.
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.
Our success is dependent in large part on the continued employment and performance of key
executive, managerial, sales and technical personnel and our ability to attract and retain
additional highly qualified personnel. We compete for key personnel with other companies,
academic institutions, government entities and other organizations. Our ability to maintain and
expand our business may be impaired if we are unable to retain our key personnel, hire or retain
other qualified personnel in the future, or if our key personnel decide to join a competitor or
otherwise compete with us.
Failure to adequately protect our intellectual property rights may cause our expenses to
increase and our business to suffer.
Our success depends in part on obtaining, maintaining, and enforcing our patents, trademarks and
other proprietary rights, and our ability to avoid infringing the proprietary rights of others.
We take precautionary steps to protect our technological advantages and intellectual property
rights and rely, in part, on patent, trade secret, copyright, know-how, trademark laws, license
agreements and contractual provisions to establish our intellectual
-11-
Table of Contents
property rights and protect our products. We require our new employees, consultants, and
corporate partners to execute confidentiality agreements at the commencement of their employment
or consulting relationship with us.
However, these agreements may be breached or, in the event of unauthorized use or disclosure,
they may not provide adequate remedies. While we intend to defend against any threats to our
intellectual property, there can be no assurance that these patents, trade secrets or other
agreements will adequately protect our intellectual property.
In addition, the validity and breadth of claims covered in medical technology patents involve
complex legal and factual questions and are often highly uncertain. There can also be no
assurance that pending patent applications owned by us will result in patents to be issued to
us, that patents issued to or licensed by us in the past or in the future will not be challenged
or circumvented by competitors or that such patents will be found to be valid or sufficiently
broad to protect our technology or to provide us with any competitive advantage. Third parties
could also obtain patents that may require us to negotiate licenses to conduct our business, and
there can be no assurance that the required licenses would be available on reasonable terms or
at all. In some cases, we rely upon trade secrets instead of patents to protect our proprietary
technology. Others may independently develop or otherwise acquire substantially equivalent
know-how, or gain access to and disclose our proprietary technology. If we are not able to
adequately protect our intellectual property and other proprietary rights, our product offerings
may lose their competitive edge, which would negatively impact our revenues.
Additionally, third parties may assert intellectual property claims and related claims against
the Company, whether through civil litigation, administrative proceedings, or otherwise, in the
United States or abroad, which may result in a narrowing or invalidation of our intellectual
property rights or freedom to operate, significant damage awards and costs of litigation or
other legal proceedings, injunctive relief against us, the necessity of costly or
disadvantageous licenses, and may be disruptive to our business operations.
Our technology may become obsolete, which would negatively impact our ability to sell our
products.
The medical equipment and healthcare industries are characterized by extensive research and
rapid technological change. The development by others of new or improved products, processes,
or technologies may make our products obsolete or less competitive. Accordingly, we plan to
devote continued resources, to the extent available, to further develop and enhance existing
products and to develop new products. If these efforts are not successful, we may not be able
to meet our financial goals and our stock price may suffer.
Our reliance on a principal manufacturing facility may impair our ability to respond to natural
disasters or other unforeseen catastrophic events.
We manufacture substantially all of our products in one principal manufacturing facility,
located in a single building in Deerfield, Wisconsin. Despite precautions taken by us, a
natural disaster or other unanticipated catastrophic events at this building could significantly
impair our ability to manufacture our products and operate our business. Our facility and
certain manufacturing equipment located in that facility would be difficult to replace and could
require substantial replacement lead-time. Catastrophic events may also destroy any inventory
of product or components located in our facility. While we carry insurance for natural
disasters and business interruption, the occurrence of such an event could result in losses that
exceed the amount of this insurance coverage, which would impair our financial results.
We may make future acquisitions, which involve numerous risks that could impact our business and
results of operations.
As part of our growth strategy, we intend to selectively acquire other businesses, product
lines, assets, or technologies, which are complementary to our product offerings. Successful
execution of our acquisition strategy depends upon our ability to identify, negotiate, complete
and integrate suitable acquisitions. Acquisitions involve numerous risks, including:
•
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;
-12-
Table of Contents
•
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.
Future acquisitions may not be successful and, if we are unable to effectively manage the risks
described above, our business, operating results or financial condition may be negatively
affected.
We may need additional capital to continue our acquisition growth strategy.
Successful continued execution of our acquisition strategy may also depend upon our ability to
obtain satisfactory debt or equity financing. We likely would require additional debt or equity
financing to make any further significant acquisitions. Such financing may not be available on
terms that are acceptable to us or at all, particularly in light of current adverse conditions
in the capital markets. If we are required to incur additional indebtedness to fund
acquisitions in the future, our cash flow may be negatively affected by additional debt
servicing requirements and the terms of such indebtedness may impose covenants and restrictions
that provide us less flexibility in how we operate our business. Fluctuations in our stock
price may make it difficult to make acquisitions using our stock as consideration. Moreover,
use of our stock to fund acquisitions may have a significant dilutive effect on existing
shareholders.
Our internal research and product development activities are complemented by acquisitions,
investments and alliances. We cannot guarantee that any previous or future acquisitions,
investments or alliances will be successful for the purpose of complementing our internal
research and product development activities.
A component of our growth strategy is to enter into strategic alliances in order to complement
and expand our current product and service offerings and distribution. The rapid pace of
technological development in the medical industry and the specialized expertise required in
different areas of medicine make it difficult for one company alone to develop a broad portfolio
of technological solutions. In addition to internally generated growth through our research and
development efforts, historically we have relied, and expect to continue to rely, upon
acquisitions, investments and alliances to provide us access to new technologies both in areas
served by our existing businesses as well as in new areas. We may make future investments where
we believe that we can stimulate the development of, or acquire, new technologies and products
to further our strategic objectives and strengthen our existing businesses. Investments and
alliances in and with medical technology companies are inherently risky, and we cannot guarantee
that any of our previous or future acquisitions, investments or alliances will be successful or
will not materially adversely affect our consolidated earnings, financial condition or cash
flows.
Future issuances of our common stock could dilute existing stockholders and cause our stock
price to decline.
As of December 31, 2009 we have reserved 5,054,144 shares of common stock for issuance under our
stock-based compensation plans and arrangements, including pursuant to options that are
outstanding or may be granted in the future. Future stock awards under our plans and the
issuance of stock upon exercise of options would have a dilutive effect on our stockholders and
may adversely affect the market price of our common stock.
Our charter documents and Delaware law contain provisions that could make it more difficult for
a third party to acquire us.
Certain provisions of our certificate of incorporation and bylaws could make it harder for a
third party to acquire us without the consent of our board of directors. Our certificate of
incorporation authorizes the issuance of
-13-
Table of Contents
preferred stock with the designations, rights, and preferences as may be determined from time to
time by our board of directors, without any further vote or action by our stockholders. In
addition, our board of directors is divided into three classes with staggered terms, which makes
it difficult for stockholders to change the control of our board. Lastly, Section 203 of the
Delaware General Corporation Law limits business combination transactions with interested
stockholders that have not been previously approved by the issuer's board of directors. Our
board of directors could choose not to negotiate with an acquirer that it did not feel was in
our strategic interest. If the acquirer was discouraged from offering to acquire us or
prevented from successfully completing a hostile acquisition by the anti-takeover measures
described above, our stockholders could lose the opportunity to sell their shares at a favorable
price.
Realization of our deferred tax assets is uncertain.
During 2009, we evaluated our ability to realize our net deferred tax assets, primarily our net
operating losses and tax credit carryforwards and determined that the realization of these
deferred tax assets is uncertain as of the year ended December 31, 2009. We assessed both
positive and negative evidence as well as objective and subjective evidence, including but not
limited to such factors as past performance, recent history of operating results on a GAAP
basis, recent history of generating taxable income, history of recovering net operating loss
carryforwards for tax purposes, and expectations of future taxable income as well as current
conditions and issues facing our industry and its customers. Based on our evaluation, we
determined it was not more likely than not that we would be able to realize all or a portion of
its deferred tax assets and as such, we recorded a valuation allowance against deferred tax
assets resulting in a non cash charge to income tax expense of approximately $42.2 million. Our
ability to realize these deferred tax assets in the future is dependent upon our ability to
generate taxable income. If in future periods we generate taxable income, then the valuation
allowance may be released in part, or in total, when it becomes more likely than not that the
deferred tax assets will be realized.
Changes in tax laws and unanticipated tax liabilities could adversely affect our effective
income tax rate and profitability.
President Obama's administration has announced several proposals to reform U.S. tax laws that
would, among other things, defer tax deductions for interest expense allocable to non-U.S.
income until non-U.S. earnings are repatriated to the United States and further limit foreign
tax credits. Proposals also include treating as Subpart F income subject to current taxation
certain excessive returns from transfers of intangible assets by a U.S. person to a related
controlled foreign corporation. These proposals, if passed, would be effective for tax years
beginning after December 31, 2010. It is unclear whether these proposed tax reforms will be
enacted into law, or, if enacted, what the scope of the reforms will be. If any of these or
similar proposals are enacted into law, they may have a material adverse impact on our business,
financial position and results of operations
.
Our future financial results could be adversely impacted by asset impairments.
We are required not to amortize goodwill and other intangible assets determined to have
indefinite lives, and have established a method of testing these assets for impairment on an
annual or on an interim basis if certain events occur or circumstances change that would reduce
the fair value of a reporting unit below its carrying value or if the fair value of intangible
assets with indefinite lives falls below their carrying value. We also need to evaluate
intangible assets determined to have finite lives for recoverability whenever events or changes
in circumstances indicate that their carrying amounts may not be recoverable. These events or
circumstances could include a significant change in the business climate, legal factors,
operating performance indicators, competition, sale or disposition of a significant portion of
the business, or other factors such as a decline in our market value below its book value for an
extended period of time. A significant decline in our stock price could require us to evaluate
intangible assets for recoverability during the quarter in which the decline occurred. In the
case of intangible assets with indefinite lives, we will need to evaluate whether events or
circumstances continue to support an indefinite useful life. We will need to evaluate the
estimated lives of all intangible assets on an annual basis, including those with indefinite
lives, to determine if events and circumstances continue to support an indefinite useful life or
the remaining useful life, as applicable, or if a revision in the remaining period of
amortization is required. The amount of any such annual or interim impairment charge could be
significant, and could have a material adverse effect on our reported financial results for the
period in which the charge is taken.
-14-
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus 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 page 1 of this prospectus and
those discussed elsewhere in this prospectus. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of this prospectus. 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 prospectus 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.
USE OF PROCEEDS
The proceeds from the sale of the common stock offered in this prospectus are solely for the
account of the selling stockholder. We will not receive any of the
proceeds from any sale of shares by the selling stockholder.
SELLING STOCKHOLDER
Todd T. Alberstone, the selling stockholder, was appointed Vice President and General Counsel of
the Company in January 2010. In connection with Mr. Alberstone's appointment, he received a
restricted stock unit award for 50,000 shares of our common stock (less than 1% of our
outstanding common stock) that will vest in four equal annual increments beginning on January
11, 2011, subject to his continuous employment with the Company. Accordingly, the Shares will
not contractually be eligible for sale or transfer pursuant to the Registration Statement of
which this prospectus is a part until the restricted stock units have vested and the Shares are
issued to Mr. Alberstone. The vesting of the restricted stock units will accelerate under
certain circumstances pursuant to the terms of Mr. Alberstone's award agreement. Other than the
restricted stock unit award, currently Mr. Alberstone does not beneficially own any shares of
our common stock. Beneficial ownership is determined in accordance with the rules and
regulations of the SEC.
Some or all of the Shares may be sold pursuant to this prospectus. Mr. Alberstone may or may
not have a present intention of selling the Shares or may offer or sell fewer than the total
number of the Shares. We do not have any knowledge with respect to the present intent of Mr.
Alberstone. Assuming the sale of all the Shares offered by this prospectus and no other
purchases or sales of our common stock, Mr. Alberstone will not beneficially own any shares of
our common stock after the completion of the offering.
PLAN OF DISTRIBUTION
The selling stockholder may sell all or a portion of the Shares offered by this prospectus from
time to time in ordinary broker transactions on the Nasdaq Global Market at the prices
prevailing at the time of such sale. The selling stockholder may also make private sales
directly through a broker or brokers. The selling stockholder will be responsible for payment
of any and all commissions to brokers, which will be negotiated on an individual basis. We will
pay all expenses incident to the sale of the Shares to the public other than brokerage
commissions and other expenses incurred by the selling stockholder, which will be paid by the
selling stockholder. In connection with any sale, the selling stockholder and any brokers
participating in such sales may be deemed to be underwriters within the meaning of the
Securities Act of 1933, as amended (the "Securities Act").
There is no assurance that the selling stockholder will sell any or all of the Shares of common
stock offered by them under this prospectus.
-15-
Table of Contents
LEGAL MATTERS
We are being represented by Perkins Coie LLP, Seattle, Washington, who will pass upon the
validity of the Shares being offered by this prospectus.
EXPERTS
The consolidated financial statements of Cardiac Science Corporation as of December 31, 2009 and
2008, and for each of the years in the three-year period ended December 31, 2009, the related
financial statement schedule II, and management's assessment of the effectiveness of internal
control over financial reporting as of December 31, 2009 have been incorporated by reference
herein in reliance upon the report of KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as experts in accounting
and auditing. The audit report covering the December 31, 2009 financial statements refers to a
change in the accounting for minority interests as required by Statement of Financial Account
Standards No. 160, "Noncontrolling Interests in Consolidated Financial Statements – an amendment
of ARB No. 51" (included in FASB ASC Topic 810, "Consolidation"), effective January 1, 2009.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a Registration Statement on Form S-8, of which this prospectus is a
part, under the Securities Act, with respect to the shares of common stock offered by this
prospectus. The prospectus does not contain all of the information included in the Registration
Statement. Statements contained in this prospectus concerning the provisions of any document
are not necessarily complete. You should refer to the copies of those documents filed as
exhibits to the Registration Statement or otherwise filed by us with the SEC for a more complete
understanding of the matter involved. Each statement concerning those documents is qualified in
its entirety by such reference.
We are also subject to the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). In accordance with the Exchange Act we file reports, proxy
statements and other information with the SEC. The Registration Statement, including the
attached exhibits and schedules, may be inspected and copied at the public reference facilities
maintained by the SEC, Public Reference Room, 100 F Street, N.E., Washington, DC 20549. Please
call the SEC at 1-800-SEC-0330 for further information about public reference rooms. The SEC
maintains a Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. Copies of the
Registration Statement and the reports, proxy and information statements and other information
that we file with the SEC may be obtained from the SEC's Internet address at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file with the SEC, which
means that we can disclose important information to you by referring to those documents. The
information incorporated by reference is an important part of this prospectus. We incorporate
by reference the documents listed below and any documents filed in the future with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering is completed:
•
our annual report on Form 10-K for the year ended December 31, 2009, as filed with the
SEC on March 16, 2010 pursuant to the Exchange Act;
•
our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010, as
filed with the SEC on May 7, 2010 pursuant to the Exchange Act;
•
our Current Reports on Form 8-K filed on April 30, 2010, February 17, 2010 and
February 4, 2010 (only with respect to the information included in Item 8.01); and
•
the description of our common stock contained in our Registration Statement on Form
S-4 filed on July 28, 2005, as updated by our Form 8-K filed on September 1, 2005
pursuant to Exchange Act Rule 12g-3(f), including any amendments or reports filed for the
purpose of updating such description.
-16-
Table of Contents
You may request a copy of these filings, at no cost, by written or oral request to the address
below. However, we will not provide copies of the exhibits to these filings unless we
specifically incorporated the exhibits by reference in this prospectus.
Michael K. Matysik
Senior Vice President, Chief Financial Officer and Secretary
Cardiac Science Corporation
3303 Monte Villa Parkway
Bothell, Washington 98021
(425) 402-2000
Any information contained in this prospectus shall be deemed to be modified, replaced,
superseded or supplemented to the extent that any document filed in the future with the SEC and
incorporated by reference in this prospectus modifies, replaces, supersedes or supplements that
information. In addition, any information contained in a document incorporated by reference in
this prospectus shall be deemed to be modified, replaced, superseded or supplemented for
purposes of this prospectus to the extent that information contained in this prospectus or in
any subsequently filed document that is also incorporated by reference in this prospectus
modifies, replaces, supersedes or supplements that information. Any information so modified,
replaced, superseded or supplemented shall not be deemed, except as so modified, replaced,
superseded or supplemented, to constitute a part of this prospectus.
-17-
Table of Contents
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC are hereby incorporated by reference in this
Registration Statement:
(a) our Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the SEC
on March 16, 2010 pursuant to the Exchange Act;
(b) our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010, as filed
with the SEC on May 7, 2010 pursuant to the Exchange Act;
(c) our Current Reports on Form 8-K filed on April 30, 2010, February 17, 2010 and February 4,
2010 (only with respect to the information included in Item 8.01); and
(d) the description of our common stock contained in our Registration Statement on Form S-4
filed on July 28, 2005, as updated by our Form 8-K filed on September 1, 2005 pursuant to
Exchange Act Rule 12g-3(f), including any amendments or reports filed for the purpose of
updating such description.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the date hereof, and prior to the filing of a post-effective amendment which
indicates that the securities offered hereby have been sold or which deregisters the securities
covered hereby then remaining unsold, shall also be deemed to be incorporated by reference into
this Registration Statement and to be a part hereof commencing on the respective dates on which
such documents are filed.
Any information contained in this Registration Statement shall be deemed to be modified,
replaced, superseded or supplemented to the extent that any document filed in the future with
the SEC and incorporated by reference in this Registration Statement modifies, replaces,
supersedes or supplements that information. In addition, any information contained in a
document incorporated by reference in this Registration Statement shall be deemed to be
modified, replaced, superseded or supplemented for purposes of this Registration Statement to
the extent that information contained in this Registration Statement or in any subsequently
filed document that is also incorporated by reference in this Registration Statement modifies,
replaces, supersedes or supplements that information. Any information so modified, replaced,
superseded or supplemented shall not be deemed, except as so modified, replaced, superseded or
supplemented, to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
Not applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
None.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") provides that a corporation has the
power to indemnify its officers, directors, employees and agents (or persons serving in such
positions in another entity at the request of the corporation) against the expenses, including
attorneys' fees, judgments, fines or settlement amounts actually and reasonably incurred by them
in connection with the defense of any action by reason of being or having been directors or
officers, if such person shall have acted in good faith and in a manner reasonably believed to
be in or not opposed to the best interests of the corporation (and, with respect to any criminal
action, had no reasonable cause to believe the person's conduct was unlawful), except that, if
such action shall be by or in the right of the corporation, no such indemnification shall be
provided as to any claim, issue or matter as to which such person shall have been judged to have
been liable to the corporation unless and to the extent that the Court of Chancery of the State
of Delaware, or another court in which the suit was brought, shall determine upon application
that, in view of all of the circumstances of the case, such person is fairly and
II-1
Table of Contents
reasonably entitled to indemnity. The Company's Amended and Restated Bylaws provide that it
will indemnify and hold harmless each person who was or is made a party to any proceeding by
reason of the fact that such person is or was a director or executive officer of the Company
against all liability and loss suffered and expenses reasonably incurred by such person in
connection therewith to the fullest extent permitted by the DGCL.
As permitted by Section 102 of the DGCL, the Company's Amended and Restated Certificate of
Incorporation provides that no director shall be personally liable to the Company or its
stockholders for monetary damages for any breach of fiduciary duty as a director, except for
liability (i) for breaches of the director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) for the unlawful payment of dividends or unlawful stock
purchases or redemptions under Section 174 of the DGCL, or (iv) for any transaction from which
the director derived an improper personal benefit.
Section 145 of the DGCL also provides that a corporation has the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or agent of the
corporation (or who was serving at the request of the corporation in such position at another
entity) against any liability asserted against such person and incurred by such person in any
such capacity, or arising out of such person's status as such, whether or not the corporation
would have the power to indemnify such person against such liability under the DGCL. All of the
directors and officers of the Company are covered by insurance policies maintained and held in
effect by the Company against liabilities for actions taken in such capacities, including
liabilities under the Securities Act, subject to certain exclusions.
Pursuant to the terms of indemnification agreements entered into with its directors and certain
of its executive officers, the Company has agreed to indemnify such individuals against any and
all costs, expenses, liabilities and losses (including, without limitation, attorneys' fees
reasonably incurred, judgments, fines or penalties and amounts paid or to be paid in settlement
and any reasonable cost and fees incurred in enforcing his rights to indemnification or
contribution) incurred or suffered by such officer in connection therewith, to the fullest
extent permitted or authorized by the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws or, if greater, by the laws of the State of
Delaware.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to
our directors, officers or controlling persons pursuant to the foregoing provisions, we have
been informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
The issuances of the Shares of common stock being offered in the Form S-8 resale prospectus were
deemed exempt from registration under the Securities Act in reliance upon Section 4(2) of the
Securities Act as such shares were issued pursuant to a private transaction. The recipient of
the Shares in the transaction has represented that the shares will be acquired for investment
only and not with a view to or for sale in connection with any distribution thereof and
appropriate legends will be affixed to the share certificates (and other instruments issued, as
applicable) in the transaction. The recipient of the shares had adequate access, through his
relationship with the Company, to information about the Company.
Item 8. EXHIBITS
Exhibit
Number
Description of Document
5.1
Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered
10.1
Restricted Stock Unit Award Notice and Award Agreement between Cardiac Science
Corporation and Todd T. Alberstone, dated as of January 11, 2010
II-2
Table of Contents
Exhibit
Number
Description of Document
23.1
Consent of KPMG LLP
23.2
Consent of Perkins Coie LLP (included in opinion filed as Exhibit 5.1)
24.1
Power of Attorney (see signature page)
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such information in
the registration statement;
provided
,
however
, that paragraphs (1)(i) and (1)(ii) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is contained in
reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act, each filing of the Registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that, in the opinion of the SEC, such
indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
II-3
Table of Contents
against such liabilities (other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final adjudication of such
issue.
II-4
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act, as amended, the Registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bothell, State of Washington, on the 7
th
day of May, 2010.
CARDIAC SCIENCE CORPORATION
By:
/s/ MICHAEL K. MATYSIK
Name:
Michael K. Matysik
Title:
Senior Vice President,
Chief Financial Officer and Secretary
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes David L. Marver and
Michael K. Matysik, or either of them, as attorneys-in-fact with full power of substitution, to
execute in the name and on the behalf of each person, individually and in each capacity stated
below, and to file, any and all post-effective amendments to this Registration Statement.
Pursuant to the requirements of the Securities Act, this Registration Statement has been signed
by the following persons in the capacities indicated below on this 7
th
day of May,
2010.
Signature
Title
/s/ RUEDIGER NAUMANN-ETIENNE
Chairman
Ruediger Naumann-Etienne
/s/ RONALD A. ANDREWS, JR.
Director
Ronald A. Andrews, Jr.
/s/ W. ROBERT BERG
Director
W. Robert Berg
/s/ CHRISTOPHER J. DAVIS
Director
Christopher J. Davis
/s/ DAVID L. MARVER
Director, President and Chief Executive Officer
David L. Marver
/s/ TIMOTHY C. MICKELSON
Director
Timothy C. Mickelson
Table of Contents
INDEX TO EXHIBITS
Exhibit
Number
Description of Document
5.1
Opinion of Perkins Coie LLP regarding legality of the Common Stock being registered
10.1
Restricted Stock Unit Award Notice and Award Agreement between Cardiac Science
Corporation and Todd T. Alberstone, dated as of January 11, 2010
23.1
Consent of KPMG LLP
23.2
Consent of Perkins Coie LLP (included in opinion filed as Exhibit 5.1)
24.1
Power of Attorney (see signature page)