CARD GUARD to announce strong results for Full Fiscal Year 2008 and Q4 2008

The rapidly growing acceptance of wireless healthcare services in the U.S. market provides Card Guard with an unprecedented opportunity to leverage its leading position in wireless monitoring and diagnosis. Card Guard has therefore decided to further sharpen its strategic focus and to concentrate all development, manufacturing and marketing resources of the Group on further accelerating growth, increasing market share and establishing the LifeWatch brand as the clear market leader in wireless services. The sale of medical devices will no longer remain a strategic priority for Card Guard. R&D resources will therefore be aligned to support the further growth in healthcare services, resulting in significant cost savings going forward.

In order to reflect the increased focus on healthcare services provided by LifeWatch in the U.S. market, the Board of Directors of Card Guard has decided to propose to the Annual Shareholder Meeting on May 26, 2009 to change the name and the corporate identity from Card Guard AG to LifeWatch AG. The new ticker symbol on SIX Swiss Exchange for LifeWatch AG will be LIFE.

Q4 2008 Highlights are as follows:

Consolidated revenues reached USD 24.84 million, reflecting growth of over 68% in comparison with Q4 2007 Gross profit increased by 88.8% in comparison with Q4 2007, reaching USD 13.53 million EBITDA of USD 5.26 million with a 21.2% margin, versus LBITDA in Q4 2007 EBIT of USD 4.02 million with a margin of 16.2%, versus LBIT in Q4 2007 Positive operational cash flow of USD 4.47 million, compared to USD 2.58 million in Q4 2007

10 new managed care contracts at LifeWatch Services, totalling 445 contracts, and covering over 278 million lives

New reimbursement codes (CPT code 93229) for ACT wireless monitoring services issued in November 2008

LifeWatch awarded a GSA (General Service Administration) Schedule Contract for procurement of ACT wireless monitoring services in U.S. government agencies Expansion of sales force by about 70% to facilitate expansion of ACT wireless monitoring services

The LifeStar™ ACT wireless monitoring service continued to serve as Card Guard’s growth engine, and generated USD 14.01 million in Q4 2008. For full fiscal year 2008, revenues from ACT wireless monitoring services amounted to USD 35.81 million, in comparison with full fiscal year 2007, which totalled USD 3.64 million. This increase means a near tenfold growth. Card Guard will continue its strong growth in the coming years, based on its expanding sales force, the newly established reimbursement code, the successful launch of its next generation LifeStar™ ACT III Platinum monitoring system and accelerating utilization of the ACT wireless monitoring service by more than 45% of the top cardiac centres in the U.S.

Q4 2008 Highlights of LifeStar ACT The next-generation LifeStar™ ACT III Platinum monitor was successfully launched in the U.S. at the end of Q3 2008. ACT III Platinum is a high-performance wireless system and features a 3-channel ECG and ST deviation analysis (measures ischemic changes) to deliver more sensitive and specific data. ACT III Platinum has an extended sensor memory of six hours, and a flash memory of up to 30 days of data to allow physicians a recall of any of the ECG data for further study. This next generation solution is expected to break into new niche areas of remote patient monitoring in 2009.

The successful expansion of the ACT wireless monitoring services in 2008 resulted in almost 32,000 patient enrolments, of which 3% were enrolled in LifeWatch’s specialized program for Atrial Fibrillation (AF), Syncope and Post Ablation Patient Care Programs. In 2008, LifeWatch created a federal business division in the U.S. that enables the company to offer its services to U.S. government agencies. As a result of this initiative, LifeWatch was awarded a national GSA (General Service Administration) Contract that facilitates a simplified procurement of ACT wireless monitoring services by a wide variety of U.S. government agencies. LifeWatch is the only IDTF (Independent Diagnostic Test Facility) company in the wireless cardiac industry with the GSA Schedule. Revenues from LifeWatch’s federal division grew from USD 460,000 in 2007 to USD 1.5 million in 2008.

As announced in the Q3 2008 Letter to Shareholders, the new national reimbursement rates that cover the LifeStar™ ACT wireless monitoring services in the U.S. became effective on January 1, 2009. The national CPT code (93229 – technical component) provides strong validation of the LifeStar ACT wireless monitoring service and creates a simplified and stable reimbursement environment for physicians, insurance payors and patients.

Monitoring Services Card Guard’s Monitoring Services achieved revenues of USD 23.24 million in Q4 2008, reflecting a strong increase of 81.2% over the corresponding quarter of 2007. These results are directly attributed to the growing demand for the LifeStar™ ACT wireless monitoring service, and clearly demonstrate its superior benefits of higher diagnostic yield and faster time to treatment.

In January 2009, a clinical study (white paper) was completed by the three esteemed electrophysiologists Harry A. Kopelman (Atlanta Cardiovascular Research Institute), James A. Reiffel (Columbia Presbyterian Medical Center Campus) and Alan H. Kadish (Northwestern Medical Faculty Foundation) all of which concluded that the LifeStar™ ACT wireless system provided great values to physicians, payors and patients through its ability for earlier detection of arrhythmias, and the potential reduction of unnecessary hospital admissions and emergency room visits. The authors also saw its value for use as a therapeutic modality to:

a) Identify Atrial Fibrillation severity b) Adjust medication c) Reduce the likelihood of stroke and other adverse cardiovascular conditions.

This study is a precursor to a larger randomized study that LifeWatch is undertaking.

Sales of Systems Sales of Systems in Q4 2008 reached USD 1.6 million, down from revenues of USD 1.95 million achieved in the corresponding quarter of 2007. This decline in systems sales is a result of the weakening purchasing power of hospitals and clinics that has stemmed from the current economic downturn. Many of these customers are delaying the purchase of equipment. Furthermore, hospitals are continuing to outsource their telemedicine programs to monitoring companies such as LifeWatch. As a result, Card Guard has prudently realigned its strategy in sales and marketing initiatives from 'sales of systems' to 'sales of services' to reflect this growing market trend.

Strong Monitoring Services Industry in U.S. – Card Guard’s most important market The U.S. market is the most important market for Card Guard, as LifeStar™ ACT wireless monitoring services are growing at a very strong pace. For fiscal year 2008, the consolidated revenues that were achieved from the following markets are:

U.S. – USD 81.76 million compared with USD 52.99 million in fiscal year 2007 Other markets – USD 2.57 million compared with USD 1.85 million in fiscal year 2007

Strong Gross Profit, EBIT and EBITDA The positive trends seen throughout fiscal year 2008 culminated in strong Gross Profit, EBIT and EBITDA margins. Gross profit for fiscal year 2008 totalled USD 45.38 million, representing a gross margin of 53.8%, compared with fiscal year 2007 results, showing a gross profit of USD 24.89 million and a gross margin of 45.4%. EBITDA totalled USD 15.3 million for fiscal year 2008, with a double digit margin of 18.1%. For comparison purposes, fiscal year 2007 corresponding index of LBITDA was USD 4.25 million. Card Guard achieved an EBIT of USD 10.97 million for fiscal year 2008, reflecting an EBIT margin of 13.0%, in comparison with LBIT of USD 11.71 million reported in fiscal year 2007.

For the past five consecutive quarters, Card Guard reported results with growth trends and improved results from operation, due to the considerable increase of ACT revenues, in addition to rigorous cost controls throughout the organization.

Operating Expenses

For fiscal year 2008, the breakdown of fiscal year 2008 operating expenses were as follows:

Research & Development expenses, net, in the amount of USD 4.88 million (5.8% from fiscal year 2008 total revenues, compared to 8% of revenue in fiscal year 2007) Sales and Marketing expenses totalled USD 16.12 million (19.1% from fiscal year 2008 total revenues, compared to 22.6% rate in fiscal year 2007) General and Administration expenses were USD 14.36 million (17% from fiscal year 2008 total revenues, compared to 23.3% rate in fiscal year 2007) Card Guard’s careful management of resources resulted in a lower operating expenses from all departments as a percentage of revenue in fiscal year 2008 than those reported in fiscal year 2007.

Net Income Improvements In fiscal year 2008 net income increased to USD 4.72 million, compared to USD 10.81 million in losses, which were reported in fiscal year 2007.

With regards to income taxes, the tax expense represents the net changes in the deferred tax assets (mainly due to utilization of NOL by one of our US subsidiaries). In 2008 we had no cash payment in connection with income taxes. The company is in the process of revising its tax structure together with its tax advisors in order to optimize it. The management believes that the 2009 annual effective tax rate will be significantly lower than the 2008 effective tax rate. However, during the quarters of 2009 there might be fluctuations in the said tax rate. Earnings per share for fiscal year 2008 were USD 0.38 (basic and fully diluted) compared to USD 0.94 loss per share reported in fiscal year 2007 (basic and fully diluted).

Stronger Cash flows and Increasing Liquidity

Card Guard realized a significant improvement in its cash flows throughout fiscal year 2008, resulting in net cash provided by operating activities in the amount of USD 9.89 million for fiscal year 2008. This compares to net cash of USD 2.42 million used in operating activities throughout fiscal year 2007. As of December 31, 2008, Card Guard has increased its balance of cash, cash equivalents, marketable securities and structures to USD 24.04 million (out of which cash and cash equivalents amounted USD 22.0 million). As of December 31, 2007 the balance of cash, cash equivalents, marketable securities and structures was USD 15.64 million.

The LifeStarTM ACT wireless monitoring service is expected to further drive Card Guard’s revenues in the coming years. For fiscal year 2009, the Company is confident in achieving growth of at least 50% in revenues with ongoing strong profitability.

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