Table of Contents





|                                                       |                                                                                          
|------------------------------------------------------ | -----------------------------------------------------------------------------------------
|UNITED
STATES                                         
|SECURITIES
AND EXCHANGE COMMISSION                    
|Washington, D.C. 20549                                
|                                                      
|                                                      
|FORM 10-Q                                             
|                                                      
|                                                       |                                                                                          
|x                                                      | QUARTERLY REPORT
 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|                                                       |                                                                                          
|                                                       | for the quarterly
 period ended April 30, 2010.                                          
|                                                       |                                                                                          
|                                                       | OR                                                                                       
|                                                       |                                                                                          
|o                                                      | TRANSITION REPORT
 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                       |                                                                                          
|                                                       | for the transition
 period from ___________________ to ____________________.             
|                                                       |                                                                                          
|Commission File Number
 001-13543                     
|                                                      
|                                                      
|ANGEION CORPORATION                                   
|(Exact name of registrant as specified in its charter)

| |                                 |  |                     | 
| | ------------------------------- |  | ------------------- | 
| | Minnesota                       |  | 41-1579150          | 
| | (State or other jurisdiction of |  | (IRS Employer       | 
| | incorporation or organization)  |  | Identification No.) | 

|                                                                                                                                                                                                                                                                                                                                                             
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|350
 Oak Grove Parkway, Saint Paul, Minnesota 55127-8599                                                                                                                                                                                                                                                                                                     
|(Address of principal executive offices)                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                             
|Registrants telephone
 number, including area code: (651) 484-4874                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                             
|Indicate
 by check mark whether the registrant (1) has filed all reports required to be
 filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
 the preceding 12 months (or for such shorter period that the registrant was
 required to file such reports), and (2) has been subject to such filing
 requirements for the past 90 days.
|Yes
 x     No
 o                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                             
|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 definition of accelerated filer and large accelerated filer in Rule
 12b-2 of the Exchange Act:                                                                                         

|                          |                     |                         |                            
|------------------------- | ------------------- | ----------------------- | ---------------------------
|Large Accelerated Filer o | Accelerated Filer o | Non-Accelerated Filer o | Smaller Reporting Company x

|                                                                                                                                                                                                                                                                                                                                                                                           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Indicate
 by check mark whether the registrant has submitted electronically and posted
 on its corporate Web site, if any, every Interactive Data File required to be
 submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
 chapter) during the preceding 12 months (or for such shorter period that the
 registrant was required to submit and post such files).
|Yes
 o     No
 o                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                           
|Indicate by check mark
 whether the registrant is a shell company (as defined in Rule 12b-2 of the
 Exchange Act).                                                                                                                                                                                                                                                                         
|Yes
 o     No
 x                                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                           
|As of June 1, 2010, the
 Company had outstanding 4,116,956 shares of Common Stock, $0.10 par value.                                                                                                                                                                                                                                                                                        







TABLE OF
CONTENTS

|                               |                                                                                        |    |   
|------------------------------ | -------------------------------------------------------------------------------------- | -- | --
|PART I  FINANCIAL INFORMATION |                                                                                        |   
|                               |                                                                                        |    |   
|Item 1.                        | Financial Statements                                                                   |    | 3 
|Item 2.                        | Managements Discussion and Analysis of Financial Condition and
 Results of Operations |    | 13
|Item 3.                        | Quantitative and Qualitative Disclosures about Market Risk                             |    | 16
|Item 4T.                       | Controls and Procedures                                                                |    | 17
|                               |                                                                                        |    |   
|PART II - OTHER INFORMATION    |                                                                                        |   
|                               |                                                                                        |    |   
|Item 1.                        | Legal Proceedings                                                                      |    | 18
|Item 1A.                       | Risk Factors                                                                           |    | 18
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds                            |    | 18
|Item 3.                        | Defaults Upon Senior Securities                                                        |    | 18
|Item 4.                        | Reserved                                                                               |    | 18
|Item 5.                        | Other Information                                                                      |    | 18
|Item 6.                        | Exhibits                                                                               |    | 18
|                               |                                                                                        |    |   
|SIGNATURES                     |                                                                                        | 19

2

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Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

ANGEION CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
April 30, 2010 and October 31, 2009(in thousands except share and per share data)

|                                                                                                                                                                                   |  |                 |        |                   |   |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------- | ------ | ----------------- | - | ------ | -
|                                                                                                                                                                                   |  | April 30,
 2010 |        | October 31,
 2009 |  
|                                                                                                                                                                                   |  | (unaudited)     |        |                   |  
|Assets                                                                                                                                                                             |  |                 |        |                   |   |        |  
|Current assets:                                                                                                                                                                    |  |                 |        |                   |   |        |  
|Cash and cash equivalents                                                                                                                                                          |  | $               | 9,628  |                   | $ | 11,219 |  
|Short-term investments                                                                                                                                                             |  |                 | 1,484  |                   |   |       |  
|Accounts receivable, net of allowance for
 doubtful accounts of $132 and $110, respectively                                                                                        |  |                 | 4,560  |                   |   | 4,510  |  
|Inventories, net of obsolescence reserve of
 $769 and $645, respectively.                                                                                                          |  |                 | 3,903  |                   |   | 4,371  |  
|Prepaid expenses and other current assets                                                                                                                                          |  |                 | 219    |                   |   | 243    |  
|Total current assets                                                                                                                                                               |  |                 | 19,794 |                   |   | 20,343 |  
|                                                                                                                                                                                   |  |                 |        |                   |   |        |  
|Noncurrent
 investments                                                                                                                                                            |  |                 | 240    |                   |   |       |  
|Property and
 equipment, net of accumulated depreciation of $3,482 and $3,305, respectively                                                                                        |  |                 | 590    |                   |   | 698    |  
|Intangible
 assets, net                                                                                                                                                            |  |                 | 1,251  |                   |   | 1,422  |  
|Total Assets                                                                                                                                                                       |  | $               | 21,875 |                   | $ | 22,463 |  
|                                                                                                                                                                                   |  |                 |        |                   |   |        |  
|Liabilities
 and Shareholders Equity                                                                                                                                              |  |                 |        |                   |   |        |  
|Current liabilities:                                                                                                                                                               |  |                 |        |                   |   |        |  
|Accounts payable                                                                                                                                                                   |  | $               | 1,936  |                   | $ | 1,771  |  
|Employee compensation                                                                                                                                                              |  |                 | 1,520  |                   |   | 1,375  |  
|Deferred income                                                                                                                                                                    |  |                 | 1,628  |                   |   | 1,579  |  
|Warranty reserve                                                                                                                                                                   |  |                 | 141    |                   |   | 143    |  
|Other current liabilities and accrued
 expenses                                                                                                                                    |  |                 | 405    |                   |   | 323    |  
|Total current liabilities                                                                                                                                                          |  |                 | 5,630  |                   |   | 5,191  |  
|                                                                                                                                                                                   |  |                 |        |                   |   |        |  
|Long-term liabilities:                                                                                                                                                             |  |                 |        |                   |   |        |  
|Long-term deferred income and other                                                                                                                                                |  |                 | 770    |                   |   | 718    |  
|Total Liabilities                                                                                                                                                                  |  |                 | 6,400  |                   |   | 5,909  |  
|                                                                                                                                                                                   |  |                 |        |                   |   |        |  
|Shareholders equity:                                                                                                                                                              |  |                 |        |                   |   |        |  
|Common stock, $0.10 par value, authorized
 25,000,000 shares, 4,358,932 and 4,380,817 shares issued and 4,128,488 and
 4,150,371 shares outstanding in 2010 and 2009, respectively |  |                 | 413    |                   |   | 415    |  
|Additional paid-in capital                                                                                                                                                         |  |                 | 22,129 |                   |   | 21,821 |  
|Accumulated deficit                                                                                                                                                                |  |                 | (7,067 | )                 |   | (5,682 | )
|Total shareholders equity                                                                                                                                                         |  |                 | 15,475 |                   |   | 16,554 |  
|Commitments and contingencies(Note 9)                                                                                                                                              |  |                 |       |                   |   |       |  
|Total Liabilities and Shareholders Equity                                                                                                                                         |  | $               | 21,875 |                   | $ | 22,463 |  

See
accompanying notes to consolidated financial statements.

3

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Table of Contents

ANGEION CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations(unaudited, in
thousands except per share amounts)

|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|------------------------------------------- |  | ----------------------------- | ----- | --------------------------- | - | ----- | - | ---- | ------ | - | - | ------ | -
|                                            |  | Three Months Ended
 April 30, |       | Six Months Ended
 April 30, |  
|                                            |  | 2010                          |       | 2009                        |   | 2010  |   | 2009 |       
|Revenues:                                   |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Equipment and supply sales                  |  | $                             | 5,961 |                             | $ | 5,395 |   | $    | 11,751 |   | $ | 10,965 |  
|Service revenues                            |  |                               | 893   |                             |   | 812   |   |      | 1,718  |   |   | 1,673  |  
|                                            |  |                               | 6,854 |                             |   | 6,207 |   |      | 13,469 |   |   | 12,638 |  
|Cost of
 revenues:                          |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Cost of equipment and supplies              |  |                               | 3,120 |                             |   | 2,811 |   |      | 6,271  |   |   | 5,859  |  
|Cost of service revenue                     |  |                               | 171   |                             |   | 91    |   |      | 268    |   |   | 172    |  
|                                            |  |                               | 3,291 |                             |   | 2,902 |   |      | 6,539  |   |   | 6,031  |  
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Gross
 margin                               |  |                               | 3,563 |                             |   | 3,305 |   |      | 6,930  |   |   | 6,607  |  
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Operating
 expenses:                        |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Selling and marketing                       |  |                               | 1,901 |                             |   | 1,615 |   |      | 3,843  |   |   | 3,413  |  
|General and administrative                  |  |                               | 1,051 |                             |   | 998   |   |      | 2,153  |   |   | 2,152  |  
|Research and development                    |  |                               | 1,060 |                             |   | 729   |   |      | 2,099  |   |   | 1,516  |  
|Amortization of intangibles                 |  |                               | 105   |                             |   | 182   |   |      | 210    |   |   | 364    |  
|                                            |  |                               | 4,117 |                             |   | 3,524 |   |      | 8,305  |   |   | 7,445  |  
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Operating
 loss                             |  |                               | (554  | )                           |   | (219  | ) |      | (1,375 | ) |   | (838   | )
|Interest income                             |  |                               | 3     |                             |   |      |   |      | 6      |   |   | 4      |  
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Loss
 before taxes                          |  |                               | (551  | )                           |   | (219  | ) |      | (1,369 | ) |   | (834   | )
|Provision for taxes                         |  |                               | 8     |                             |   | 6     |   |      | 16     |   |   | 13     |  
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Net loss                                    |  | $                             | (559  | )                           | $ | (225  | ) | $    | (1,385 | ) | $ | (847   | )
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Loss per
 share - basic                     |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Net loss per share                          |  | $                             | (0.13 | )                           | $ | (0.05 | ) | $    | (0.33  | ) | $ | (0.21  | )
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Loss per
 share - diluted                   |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Net loss per share                          |  | $                             | (0.13 | )                           | $ | (0.05 | ) | $    | (0.33  | ) | $ | (0.21  | )
|                                            |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Weighted
 average common shares outstanding |  |                               |       |                             |   |       |   |      |        |   |   |        |  
|Basic                                       |  |                               | 4,151 |                             |   | 4,120 |   |      | 4,152  |   |   | 4,110  |  
|Diluted                                     |  |                               | 4,151 |                             |   | 4,120 |   |      | 4,152  |   |   | 4,110  |  

See accompanying notes to
consolidated financial statements.

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Table of Contents

ANGEION CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows(unaudited, in
thousands)

|                                                                                 |  |                             |        |      |   |       |  
|-------------------------------------------------------------------------------- |  | --------------------------- | ------ | ---- | - | ----- | -
|                                                                                 |  | Six Months Ended
 April 30, |       
|                                                                                 |  | 2010                        |        | 2009 |  
|Cash Flows
 From Operating Activities:                                           |  |                             |        |      |   |       |  
|Net loss                                                                         |  | $                           | (1,385 | )    | $ | (847  | )
|Adjustments to reconcile net loss to net cash provided by operating
 activities: |  |                             |        |      |   |       |  
|Depreciation                                                                     |  |                             | 182    |      |   | 218   |  
|Amortization                                                                     |  |                             | 210    |      |   | 364   |  
|Stock-based compensation                                                         |  |                             | 424    |      |   | 365   |  
|Increase in inventory obsolescence reserve                                       |  |                             | 124    |      |   | 96    |  
|Increase (decrease) in allowance for doubtful accounts                           |  |                             | 22     |      |   | (107  | )
|Changes in operating assets and liabilities:                                     |  |                             |        |      |   |       |  
|Accounts receivable                                                              |  |                             | (72    | )    |   | 691   |  
|Inventories                                                                      |  |                             | 381    |      |   | 138   |  
|Prepaid expenses and other current assets                                        |  |                             | 24     |      |   | 3     |  
|Accounts payable                                                                 |  |                             | 165    |      |   | (162  | )
|Employee compensation                                                            |  |                             | 145    |      |   | (102  | )
|Deferred income                                                                  |  |                             | 87     |      |   | (108  | )
|Warranty reserve                                                                 |  |                             | (2     | )    |   | 1     |  
|Other current liabilities and accrued expenses                                   |  |                             | 70     |      |   | 17    |  
|Net cash provided by operating activities                                        |  |                             | 375    |      |   | 567   |  
|                                                                                 |  |                             |        |      |   |       |  
|Cash Flows
 From Investing Activities:                                           |  |                             |        |      |   |       |  
|Purchase of investments                                                          |  |                             | (1,724 | )    |   |      |  
|Purchase of property and equipment and intangible assets                         |  |                             | (124   | )    |   | (48   | )
|Net
 cash used in investing activities                                           |  |                             | (1,848 | )    |   | (48   | )
|                                                                                 |  |                             |        |      |   |       |  
|Cash Flows
 From Financing Activities:                                           |  |                             |        |      |   |       |  
|Proceeds from issuance of common stock under employee stock purchase
 plan       |  |                             | 10     |      |   | 11    |  
|Proceeds from the exercise of stock options                                      |  |                             | 7      |      |   | 63    |  
|Retirement of Common Stock                                                       |  |                             | (135   | )    |   |      |  
|Net cash (used in) provided by financing activities                              |  |                             | (118   | )    |   | 74    |  
|                                                                                 |  |                             |        |      |   |       |  
|Net
 (decrease) increase in cash and cash equivalents                            |  |                             | (1,591 | )    |   | 593   |  
|                                                                                 |  |                             |        |      |   |       |  
|Cash and
 cash equivalents at beginning of period                                |  |                             | 11,219 |      |   | 9,047 |  
|                                                                                 |  |                             |        |      |   |       |  
|Cash and
 cash equivalents at end of period                                      |  | $                           | 9,628  |      | $ | 9,640 |  

See accompanying notes to
consolidated financial statements.

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Table of Contents

ANGEION CORPORATION 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Unaudited)

|   |                                                  
|-- | -------------------------------------------------
|1. | Basis of Presentation and Description of Business

Angeion
Corporation (the Company), through its Medical Graphics Corporation
subsidiary, designs and markets non-invasive cardiorespiratory diagnostic
systems that are sold under the MedGraphics and New Leaf brand and trade names.
These cardiorespiratory diagnostic systems have a wide range of applications in
healthcare, wellness, and health and fitness.

The
consolidated balance sheet as of April 30, 2010, the consolidated statements of
operations for the three and six months ended April 30, 2010 and 2009, and
consolidated statements of cash flows for the six months ended April 30, 2010
and 2009, and the related information presented in these notes have been
prepared by management in accordance with U.S. generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X, without audit. Accordingly, they do not
include all of the information and notes required by U.S. generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation of
results have been included. The consolidated balance sheet at October 31, 2009
was derived from the audited consolidated financial statements as of that date.
Operating results for the three and six months ended April 30, 2010 are not
necessarily indicative of the results that may be expected for the year ending
October 31, 2010. For further information, refer to the consolidated financial
statements and notes thereto included in Angeion Corporations Annual Report on
Form 10-K for the year ended October 31, 2009.

Comprehensive
loss is a measure of all non-owner changes in shareholders equity and includes
items such as net loss, certain foreign currency translation items, minimum
pension liability adjustments and changes in the value of available-for-sale
securities. For the three and six months ended April 30, 2010 and 2009,
comprehensive loss for Angeion Corporation was equivalent to net loss as
reported.

Preparation
of the consolidated financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities made in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates. Estimates include accounts receivable, product warranty and
inventory reserves, and depreciable lives of property, equipment and intangible
assets.

The
Company determined there were no events subsequent to April 30, 2010, that
required recognition or disclosure in these consolidated financial statements,
except the increase to shares authorized for issuance as described in Note 3.

|   |                    
|-- | -------------------
|2. | Revenue Recognition

The
Company recognizes revenue when persuasive evidence of an arrangement exists,
transfer of title has occurred or services have been rendered, the selling
price is fixed or determinable and collectability is reasonably assured. The
Companys products are sold for cash or on unsecured credit terms requiring
payment based on the shipment date. Credit terms can vary between customers due
to many factors, but are generally, on average, 30-60 days. Revenue, net of
discounts, is generally recognized upon shipment or delivery to customers in
accordance with written sales terms. Standard sales terms do not include
customer acceptance conditions, future credits, rebates, price protection or
general rights of
return. The terms of sales to both domestic customers and international
distributors are identical, although adherence to these terms is more pervasive
with domestic customers than with international customers. In instances when a
customer order specifies final acceptance of the system, revenue is deferred until
all customer acceptance criteria have been met. Estimated warranty obligations
are recorded upon shipment.

6

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Table of Contents

Service
contract revenue is based on a stated contractual rate and is deferred and
recognized ratably over the service period, which is typically from one to four
years. Deferred income associated with service contracts and supplies was
$2,102,000 and $2,022,000 at April 30, 2010 and October 31, 2009, respectively.
Revenue from installation and training services provided to customers is deferred
until the service has been performed. The amount of deferred installation and
training revenue was $123,000 and $131,000 at April 30, 2010 and October 31,
2009, respectively.

When
a sale involves multiple deliverables, such as equipment, installation services
and training, the amount of the consideration from an arrangement is allocated
to each respective element based on the residual method and recognized as
revenue when revenue recognition criteria for each element is met. Consideration
allocated to delivered equipment is equal to the total arrangement
consideration less the fair value of installation and training. The fair value
of installation and training services is based on specific objective evidence,
including third-party invoices.

No
customer accounted for more than 10% of revenues for either the three or six
months ended April 30, 2010 and 2009.

Advance Payments from Customers

The
Company typically does not receive advance payments from its customers in
connection with the sale of its products. The Company occasionally enters into
an arrangement under which a customer agrees to purchase a large quantity of
product that is to be delivered over a period of time. Depending on the size of
these arrangements, the Company may negotiate an advance payment from these
customers. At April 30, 2010 advance payments from customers aggregated
$162,000, of which $81,000 was from a single customer, and at October 31, 2009,
advance payments from customers aggregated $144,000, of which $81,000 was from
a single customer. Revenue recognition for customer orders that include advance
payments is consistent with the Companys revenue recognition policy described
above.

|   |                                           
|-- | ------------------------------------------
|3. | Stock-Based Compensation and Stock Options

The
Angeion Corporation 2007 Stock Incentive Plan (the 2007 Plan) and the Angeion
Corporation 2002 Stock Option Plan (the 2002 Plan) both provide that
incentive stock options and nonqualified stock options to purchase shares of
common stock may be granted at prices determined by the Compensation Committee,
except that the purchase price of incentive stock options may not be less than
the fair market value of the stock at date of grant. Under the 2007 Plan, all
options expire no later than seven years from the grant date while under the
2002 Plan, all options expire no later than ten years from the grant date.
Options under both plans are subject to various vesting schedules. In addition,
the 2007 Plan allows the granting of restricted stock awards, stock
appreciation rights and performance stock.

Total
share-based compensation expense included in the Companys statement of
operations for the three months ended April 30, 2010 and 2009 was $202,000 and
$183,000, respectively and the six months ended April 30, 2010 and 2009 was
$424,000 and $365,000, respectively.

7

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Table of Contents

Stock Options

A
summary of our option activity for the six-month period ended April 30, 2010
and 2009 follows:

|                                  |  |                          |         |                                    |   |        |  |                                    |         |   |   |      | 
|--------------------------------- |  | ------------------------ | ------- | ---------------------------------- | - | ------ |  | ---------------------------------- | ------- | - | - | ---- | 
|                                  |  | For the six months ended |        
|                                  |  | April 30, 2010           |         | April 30, 2009                     |  
|                                  |  | Shares                   |         | Weighted
 Average
 Exercise
 Price |   | Shares |  | Weighted
 Average
 Exercise
 Price |        
|Outstanding
 at beginning of year |  |                          | 695,787 |                                    | $ | 6.13   |  |                                    | 730,953 |   | $ | 5.96 | 
|Exercised                         |  |                          | (3,000  | )                                  |   | 2.00   |  |                                    | (25,000 | ) |   | 2.53 | 
|Expired or cancelled              |  |                          | (25,382 | )                                  |   | 7.22   |  |                                    |        |   |   |     | 
|Outstanding
 at end of period     |  |                          | 667,405 |                                    | $ | 6.11   |  |                                    | 705,953 |   | $ | 6.08 | 

On
May 25, 2010, the stockholders of the Company approved an amendment to the 2007
Plan to increase by 100,000 the shares authorized for issuance under the Plan.
The total shares authorized for issuance under the Plan is now increased to
750,000.

The
following table summarizes information concerning stock options outstanding as
of April 30, 2010:

|                 |       |                     |  |                                                 |  |                              |      |  |  |         | 
|---------------- | ----- | ------------------- |  | ----------------------------------------------- |  | ---------------------------- | ---- |  |  | ------- | 
|Exercise
 Prices |       | Number
 Outstanding |  | Weighted
 Average
 Remaining
 Contractual
 Life |  | Number
 Subject to
 Exercise |     
|$                | 2.00  |                     |  | 8,650                                           |  |                              | 3.44 |  |  | 8,650   | 
|                 | 2.53  |                     |  | 62,000                                          |  |                              | 4.63 |  |  | 62,000  | 
|                 | 5.08  |                     |  | 84,000                                          |  |                              | 4.90 |  |  | 84,000  | 
|                 | 5.16  |                     |  | 48,084                                          |  |                              | 5.33 |  |  | 16,263  | 
|                 | 5.66  |                     |  | 90,000                                          |  |                              | 5.05 |  |  | 30,003  | 
|                 | 6.23  |                     |  | 76,500                                          |  |                              | 3.31 |  |  | 76,500  | 
|                 | 6.60  |                     |  | 71,295                                          |  |                              | 4.16 |  |  | 55,508  | 
|                 | 7.08  |                     |  | 10,000                                          |  |                              | 4.92 |  |  | 6,667   | 
|                 | 7.79  |                     |  | 74,500                                          |  |                              | 3.44 |  |  | 74,500  | 
|                 | 7.81  |                     |  | 2,000                                           |  |                              | 4.52 |  |  | 1,334   | 
|                 | 7.86  |                     |  | 140,376                                         |  |                              | 4.50 |  |  | 96,290  | 
|                 |       |                     |  |                                                 |  |                              |      |  |  |         | 
|                 | Total |                     |  | 667,405                                         |  |                              | 4.40 |  |  | 511,715 | 

The
total intrinsic value of options exercised during the three months ended April
30, 2010 and 2009 was $0 and $15,000, respectively. The total intrinsic value
of options exercised during the six months ended April 30, 2010 and 2009 was
$5,400 and $15,000, respectively. The total intrinsic value of options
outstanding and exercisable at April 30, 2010 was $167,080, which was
calculated using the closing stock price as of April 30, 2010 less the exercise
price of in-the-money options. The Company issues new shares when stock options
are exercised. Cash received from the exercise of stock options was $7,000 and
$63,000 for the six months ended April 30, 2010 and 2009, respectively and
there was no related tax benefit realized due to the Companys current tax loss
position. Unrecognized compensation expense related to outstanding stock
options as of April 30, 2010 was $363,000, is expected to be
recognized over a weighted average period of 0.89 years, and will be adjusted for any
future changes in estimated forfeitures.

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Valuation Assumptions

The
Company uses the Black-Scholes option-pricing model (Black-Scholes model) to
determine the fair value of stock options as of the grant date. The fair value
of stock options under the Black-Scholes model requires management to make
assumptions regarding projected employee stock option exercise behaviors,
risk-free interest rates, volatility of the Companys stock price and expected
dividends. The Company did not grant any options during the six months ended
April 30, 2010 or 2009.

Restricted Stock Awards

On
August 28, 2008 and June 3, 2009, the Board of Directors authorized the
issuance of 74,667 and 108,668 restricted shares, respectively, of the
Companys common stock. Restricted stock awards are awards of common stock that
are subject to restrictions on transfer and to a risk of forfeiture if the
awardee leaves the Company before the restrictions lapse. The holder of a
restricted stock award is generally entitled at all times on and after the date
of issuance of the restricted shares to exercise the rights of a shareholder of
the Company, including the right to vote the shares. The value of stock awards
was established by the market price on the date of grant. The restricted stock
awards vest over a three-year period and are included in common stock issued as
of the grant date. The Company did not grant any restricted stock awards during
the six months ended April 30, 2010 and 2009.

Unrecognized
compensation expense related to outstanding restricted stock awards as of April
30, 2010 was $501,000. The Company expects to recognize this over a weighted
average period of 1.86 years.

The
following table presents the statement of operations classification of pre-tax
stock-based compensation expense recognized for the three and six months ended
April 30, 2010 and 2009:

|                                  |  |                             |     |                           |   |      |  |      |     |  |   |     | 
|--------------------------------- |  | --------------------------- | --- | ------------------------- | - | ---- |  | ---- | --- |  | - | --- | 
|                                  |  | Three months ended April 30 |     | Six months ended April 30 |  
|                                  |  | 2010                        |     | 2009                      |   | 2010 |  | 2009 |    
|Cost of
 revenues                 |  | $                           | 16  |                           | $ | 13   |  | $    | 31  |  | $ | 26  | 
|Selling and
 marketing            |  |                             | 42  |                           |   | 43   |  |      | 88  |  |   | 86  | 
|General and
 administrative       |  |                             | 122 |                           |   | 115  |  |      | 259 |  |   | 229 | 
|Research and
 development         |  |                             | 22  |                           |   | 12   |  |      | 46  |  |   | 24  | 
|Stock-based
 compensation expense |  | $                           | 202 |                           | $ | 183  |  | $    | 424 |  | $ | 365 | 

Employee Stock Purchase Plan

The
Angeion Corporation 2003 Employee Stock Purchase Plan (Stock Plan) allows
participating employees to purchase shares of the Companys common stock at a
discount through payroll deductions. The Stock Plan is available to all
employees subject to certain eligibility requirements. Terms of the Stock Plan
provide that participating employees may purchase the Companys common stock on
a voluntary after tax basis. Employees may purchase the Companys common stock
at a price that is no less than the lower of 85% of the fair market value of
one share of common stock at the beginning or end of each stock purchase period
or phase. The Company increased the price at which common stock may be
purchased to 95% of the market value effective January 1, 2007. The Stock Plan
is carried out in six-month phases, with phases beginning on January 1 and July
1 of each calendar year. For the phase that ended on December 31, 2009,
employees purchased 3,695 shares at a price of $2.80 per share. As of April 30,
2010, the Company has withheld approximately $7,000 from employees participating
in the phase that began on January 1, 2010. At April 30, 2010, 56,655 shares of
common stock were available for future purchase under the Stock Plan.

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|   |                                                                               
|-- | ------------------------------------------------------------------------------
|4. | Inventories                                                                   
|   |                                                                               
|   | Inventories consisted of the following at April 30, 2010 and October 31,
2009:

|                |  |      |       |      |   |       | 
|--------------- |  | ---- | ----- | ---- | - | ----- | 
|(In
 thousands) |  | 2010 |       | 2009 |  
|Raw
 materials  |  | $    | 962   |      | $ | 1,602 | 
|Work-in-Process |  |      | 123   |      |   | 163   | 
|Finished
 goods |  |      | 2,818 |      |   | 2,606 | 
|                |  | $    | 3,903 |      | $ | 4,371 | 

|   |                                                                                     
|-- | ------------------------------------------------------------------------------------
|5. | Intangible Assets                                                                   
|   |                                                                                     
|   | Intangible assets consisted of the following at April 30, 2010 and
October 31, 2009:

|                          |  |      |        |      |   |        |  
|------------------------- |  | ---- | ------ | ---- | - | ------ | -
|(In
 thousands)           |  | 2010 |        | 2009 |  
|Intangible
 assets:       |  |      |        |      |   |        |  
|Developed
 technology     |  | $    | 6,800  |      | $ | 6,764  |  
|Trademarks
 (unamortized) |  |      | 62     |      |   | 59     |  
|                          |  | $    | 6,862  |      | $ | 6,823  |  
|                          |  |      |        |      |   |        |  
|Amortization              |  |      | (5,611 | )    |   | (5,401 | )
|                          |  | $    | 1,251  |      | $ | 1,422  |  

The
intangible assets are being amortized using the straight-line method over the
estimated useful lives of the assets that range from seven to ten years.
Amortization expense was $210,000 and $364,000 for the six months ended April
30, 2010 and 2009, respectively. Estimated amortization expense for each of the
succeeding fiscal years based on the intangible assets as of April 30, 2010 is
as follows:

|                                    |  |  |  |  |              |       | 
|----------------------------------- |  |  |  |  | ------------ | ----- | 
|(In thousands)                      |  |  |  |  | Amortization |      
|Six months
 ending October 31, 2010 |  |  |  |  | $            | 210   | 
|2011                                |  |  |  |  |              | 421   | 
|2012                                |  |  |  |  |              | 420   | 
|                                    |  |  |  |  | $            | 1,051 | 

The above
table does not include estimated amortization expense for patents of $138,000,
included in developed technology, that are not yet placed in service.

|   |                 
|-- | ----------------
|6. | Warranty Reserve

Sales of
the Companys equipment are subject to a warranty obligation. Equipment
warranties typically extend for a period of twelve months from the date of
installation. Standard warranty terms are included in customer contracts. Under
the terms of these warranties, the Company is obligated to repair or replace
any components or assemblies that it deems defective in workmanship or
materials. The Company reserves the right to reject warranty claims where it
determines that failure is due to normal wear, customer modifications, improper
maintenance or misuse. The Company maintains a warranty reserve that reflects
the estimated expenses that it will incur to honor the warranties on its
products. The Company adjusts the warranty reserve based on the number and type
of equipment that is subject to warranty, adjusted for the remaining months of
warranty coverage. The warranty reserve adjustment reflects the Companys
historical warranty experience based on type of equipment. Warranty provisions and
claims for the six months ended April 30, 2010 and 2009 were as follows:

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Table of Contents

|                              |  |      |      |      |   |      |  
|----------------------------- |  | ---- | ---- | ---- | - | ---- | -
|(In
 thousands)               |  | 2010 |      | 2009 |  
|Balance,
 beginning of period |  | $    | 143  |      | $ | 157  |  
|Warranty
 provisions          |  |      | 118  |      |   | 120  |  
|Warranty
 claims              |  |      | (120 | )    |   | (119 | )
|Balance, end
 of period       |  | $    | 141  |      | $ | 158  |  

|   |                  
|-- | -----------------
|7. | NetLoss per Share

Basic
loss per share is computed by dividing net loss by the weighted average shares
outstanding during the reporting period. Diluted loss per share is computed
similarly to basic loss per share except that in computing income per share the
weighted average shares outstanding are increased to include additional shares
from the assumed exercise of stock options or warrants, if dilutive. The number
of additional shares is calculated by assuming that outstanding stock options
or warrants were exercised and that the proceeds from the exercise were used to
acquire shares of common stock at the average market price during the reporting
period.

As
a result of the net loss in the first and second quarters of both 2010 and
2009, the outstanding stock options and unvested restricted stock shares were
considered antidilutive and, therefore, were excluded from diluted loss per
share.

|   |             
|-- | ------------
|8. | Income Taxes

The
Company has recorded a provision for taxes from operations of $8,000 and $6,000
for the three months ended April 30, 2010 and 2009, respectively. For the
six-month periods ended April 30, 2010 and 2009, the provision for taxes from
operations was $16,000 and $13,000, respectively.

The
Company adopted the provisions of ASC 740-10, Income Taxes Related to Accounting For
Uncertainties in Income Taxes, on November 1, 2007. At October 31,
2009, the reserve was $35,200 and has not changed during the first two quarters
of fiscal 2010. The entire amount of the reserve related to uncertainties
regarding income tax nexus with various states in which the Company operates.
Included in the reserve is $10,300 of estimated interest and penalties. The
total amount of the reserve has increased the Companys effective tax rate, and
would therefore decrease the effective tax rate if removed.

Estimated
interest and penalties related to potential underpayment of income taxes are
classified as a component of tax expense in the consolidated statement of
operations. The Company does not expect the amount of reserves for uncertain
tax positions to change significantly in the next twelve months. Similarly, the
Company does not anticipate that the total reserve for uncertain tax positions
will significantly change due to the settlement of audits and the expiration of
statutes of limitations within the next twelve months.

The
Company files a consolidated federal income tax return in the United States
Federal jurisdiction and files various combined and separate tax returns in
several state and local jurisdictions. With limited exceptions, the Company is
no longer subject to United States federal, state and local tax examinations by
tax authorities for fiscal years ending prior to November 1, 2005. There is no
statute of limitations for assessments related to jurisdictions where the
Company may have a nexus but has chosen not to file an income tax return.

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Table of Contents

The
Company had a federal net operating loss carry forward at October 31, 2009 of
approximately $17.8 million. This amount is the remaining utilizable carry
forward following the application of
a limit due to an ownership change under Internal Revenue Code Section 382 that
occurred during the fourth quarter of fiscal year 2006. This carry forward is
available to offset a portion of taxes payable in future years. If not used,
this carry forward will expire in the years 2010 through 2025. The Company also
has $109,000 of alternative minimum tax credit carry forwards that do not have
expiration dates. Even though the Company has substantial federal net operating
loss carry forwards, any income may still be subject to U.S. and State
alternative minimum taxes.

The
Company has recorded a full valuation allowance against its net deferred tax
asset based on its belief that it was more likely than not that the asset would
not be realized in the future. Although this determination was made in a prior
fiscal year, it is still applicable as of April 30, 2010, and the Company will
continue to assess the need for a full valuation allowance in future quarters.
Any reduction of the valuation allowance related to post-bankruptcy net
operating losses and other deferred tax assets would (i) first affect earnings
as a reduction in the provision for taxes and (ii) thereafter, the remaining
$0.8 million would increase additional paid-in capital as these deferred tax
assets represent employee stock-based compensation tax deductions included in
the Companys net operating losses.

|   |           
|-- | ----------
|9. | Litigation

From
time to time, the Company is also subject to claims and lawsuits that have been
filed in the ordinary course of business. From time to time, the Company
initiates lawsuits against others to enforce patents or to seek collection of
debts in the ordinary course of business. There is no material pending or
outstanding litigation at the current time.

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Table of Contents

Item 2. Managements Discussion
and Analysis of Financial Condition and Results of Operations

Overview

The
Company, through its Medical Graphics Corporation subsidiary, designs and
markets non-invasive cardiorespiratory diagnostic systems that are sold under
the MedGraphics and New Leaf brand and trade names. These cardiorespiratory
diagnostic systems have a wide range of applications in healthcare, wellness
and health and fitness. Revenues consist of equipment and supply sales as well
as service revenues. Equipment and supply sales reflect sales of non-invasive
cardiorespiratory diagnostic equipment and aftermarket sales of peripherals and
supplies. Service revenues consist of revenues from extended service contracts,
non-warranty service visits and additional training.

During
the first quarter of 2010, Angeion strengthened its marketing and sales teams
by adding two new experienced professionals with backgrounds in the medical
device market. The Company also initiated a sales and marketing program to
establish a network of independent sales representatives and distributors that
will market both MedGraphics supplies such as filters and low-cost MedGraphics
equipment such as table-top and hand-held spirometers. Angeion also is in the
process of establishing an online web store to offer MedGraphics and New Leaf
products over the internet.

Total
revenues for the second quarter of 2010 were $6.9 million, an increase of 10.4%
from $6.2 million in 2009. Operating expenses for the second quarter of 2010
were $4.1 million, an increase of 16.8% from the same period in 2009. Net loss
for the three months ended April 30, 2010 was $559,000, or $0.13 per share,
compared to a net loss of $225,000, or $0.05 per share, for the same period in
2009.

Total
revenues for the six months ended April 30, 2010 were $13.5 million, an
increase of 6.6% from $12.6 million in 2009. Operating expenses for the six
months ended April 30, 2010 were $8.3 million, an increase of 11.6% from the
same period in 2009. Net loss for the six months ended April 30, 2010 was
$1,385,000, or $0.33 per share, compared to a net loss of $0.8 million, or
$0.21 per share, for the same period in 2009.

Results of Operations

The
following table contains selected information from the Companys consolidated
statements of operations, expressed as a percentage of revenues:

|                            |  |                              |       |                            |  |       |    |      |       |    |  |       |   
|--------------------------- |  | ---------------------------- | ----- | -------------------------- |  | ----- | -- | ---- | ----- | -- |  | ----- | --
|                            |  | Three Months Ended April 30, |       | Six Months Ended April 30, | 
|                            |  | 2010                         |       | 2009                       |  | 2010  |    | 2009 |      
|Revenues                    |  |                              | 100.0 | %                          |  | 100.0 | %  |      | 100.0 | %  |  | 100.0 | % 
|Cost of
 revenues           |  |                              | 48.0  |                            |  | 46.8  |    |      | 48.5  |    |  | 47.7  |   
|Gross margin                |  |                              | 52.0  |                            |  | 53.2  |    |      | 51.5  |    |  | 52.3  |   
|                            |  |                              |       |                            |  |       |    |      |       |    |  |       |   
|Operating
 expenses:        |  |                              |       |                            |  |       |    |      |       |    |  |       |   
|Selling and marketing       |  |                              | 27.7  |                            |  | 26.0  |    |      | 28.5  |    |  | 27.0  |   
|General and administrative  |  |                              | 15.3  |                            |  | 16.1  |    |      | 16.0  |    |  | 17.0  |   
|Research and development    |  |                              | 15.5  |                            |  | 11.8  |    |      | 15.6  |    |  | 12.0  |   
|Amortization of intangibles |  |                              | 1.6   |                            |  | 2.9   |    |      | 1.6   |    |  | 2.9   |   
|                            |  |                              | 60.1  |                            |  | 56.8  |    |      | 61.7  |    |  | 58.9  |   
|Operating
 loss             |  |                              | (8.1  | )                          |  | (3.6  | )  |      | (10.2 | )  |  | (6.6  | ) 
|Interest income             |  |                              | 0.0   |                            |  | 0.0   |    |      | 0.0   |    |  | 0.0   |   
|Loss before
 taxes          |  |                              | (8.1  | )                          |  | (3.6  | )  |      | (10.2 | )  |  | (6.6  | ) 
|Provision for taxes         |  |                              | 0.1   |                            |  | 0.0   |    |      | 0.1   |    |  | 0.1   |   
|Net loss                    |  |                              | (8.2  | %)                         |  | (3.6  | %) |      | (10.3 | %) |  | (6.7  | %)

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Table of Contents

The
following paragraphs discuss the Companys performance for the three and
six-month periods ending April 30, 2010 and 2009:

Revenue

Total
revenue for the three and six months ended April 30, 2010, increased by 10.4%
and 6.6%, respectively, compared to the same periods in 2009. Domestic revenue
increased by 3.9% and international revenue increased by 44.3% from prior year
period levels, with increases in international revenues primarily from the
strong performance in Europe and Asia-Pacific regions.

The
increase in revenue of $0.9 million for the six-month period ended April 30,
2010 was primarily due to international performance offset by reduced first
quarter sales due to the general economic conditions.

Gross Margin

Gross
margin percentage for the three and six-months ended April 30, 2010 decreased
to 52.0% and 51.5% of revenue, respectively, compared to 53.2% and 52.3%,
respectively, for the same periods in 2009. Gross margin percentage for the
three-month period decreased as a result of cost increases during the 2010
period, as well as changed sales mix. The decrease in gross margin percentage
for the six-month period was negatively impacted by the same factors as the second
quarter, but also included increased inventory reserves in the first quarter of
fiscal 2010.

Selling and Marketing

Selling
and marketing expenses increased to $1.9 million and $3.8 million,
respectively, for the three and six-month periods ended April 30, 2010 from
$1.6 million and $3.4 million for the same periods in 2009. Expenses for the
three and six-month periods ended April 30, 2010 and 2009 increased from
personnel additions by $88,000 and $163,000, respectively, and incentive programs,
which drove the increased revenues by $188,000 and $185,000, respectively, as
the Company invested to improve its market position, while we emerge from the
prior year recessionary economic environment. Stock-based compensation expenses
increased by $9,000 and $20,000 for the three and six months ended April 30,
2010, respectively, compared to the prior year periods.

Demonstration
equipment expenses for the six months ended April 30, 2010 were up $57,000
compared to the same period in 2009 due to the periodic write-off of aging
equipment, all of which occurred in the first three months of the period.

General and
Administrative

For the
three months ended April 30, 2010, general and administrative expenses
increased by $53,000, or 5.3%, compared to the same period in 2009, primarily
from increased accrued incentives ($75,000) and stock-based compensation costs
($7,000).

For the six
months ended April 30, 2010, general and administrative expenses remained flat
compared to the same periods in 2009, with increased accrued incentives
($10,000) and stock-based compensation ($30,000) offset by reduced consulting
expenses ($58,000) compared to the prior period.

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Table of Contents

Research and Development

Research
and development expenses for the three and six months ended April 30, 2010 were
$1.1 and $2.1 million, respectively, compared to $0.7 and $1.5 million,
respectively, for the same periods in 2009.

Payroll,
benefits and accrued incentive costs increased $74,000 as part of the Companys
investment in the development of new product initiatives in the three months
ended April 30, 2010 compared to the same period in 2009. Also, project
expenses associated with new product development increased by $214,000 for the
same period as the Company furthers its commitment to research and development.

For the six
months ended April 30, 2010, payroll, benefit costs and accrued incentives
increased by $100,000 and project expenses increased $408,000 for the reasons
stated above.

Amortization of
Intangibles

Amortization
of developed technology was $105,000 and $210,000, respectively, for the three
and six months ended April 30, 2010, reduced from $182,000 and $363,000,
respectively, for the comparable periods in 2009 as a portion of the Companys
developed technology was fully amortized as of October 31, 2009.

Interest Income

Interest
income for the three and six-month periods ended April 30, 2010
increased to $3,000 and $6,000,
respectively, compared to the same periods in 2009. Since the start of the
economic recession, interest income decreased principally as a result of the
significantly lower market interest rates as the Company moved its invested
cash and cash equivalents into investments where the main goal is preservation
of capital. The Company is exploring alternatives to increase its interest
income while maintaining the highest degree of safety in its investments and
has begun to purchase short and medium term bank certificates of deposit and
United State Treasury Bills to improve its interest return, while avoiding the
investment risk of other forms of available investments.

Provision for Income
Taxes

The
Company is required to present the provision for taxes as if it were fully
taxable in accordance with Financial Accountings Standards Board (FASB)
Accounting Standards Codification 852-740. In prior years, the Company utilized
its pre-emergence bankruptcy NOLs in the calculation of its income taxes
payable but is still required to pay U.S. and State alternative minimum taxes
(AMT) in certain jurisdictions, even though it has substantial federal and
state NOL carry forwards available. During the three and six month periods
ended ended April 30, 2010 and 2009, the Company did not use any tax benefits
related to pre-emergence bankruptcy NOLs. See note 8 to the consolidated
financial statements, Income Taxes, in this Form 10-Q for additional
discussion of the accounting for income taxes.

Liquidity and Capital
Resources

The
Company has financed its liquidity needs over the last several years through
revenue generated by the operations of its wholly owned subsidiary, Medical
Graphics Corporation.

The
Company had cash, cash equivalents and investments of $11.4 million and working
capital of $14.2 million as of April 30, 2010. During the first half of fiscal
2010, the Company reported a net loss of $1,385,000. However, cash flows from
operating activities were $375,000, primarily due to reductions in inventory of
$381,000, increases of $397,000 in accounts payable, accrued employee
compensation and deferred
income and the add-back of non-cash expenses totaling $816,000 for
depreciation, amortization and stock-based compensation expense.

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For
the six months ended April 30, 2009, the Company used $128,000 in cash for the
purchase of property and equipment and intangible assets and $1,724,000 to
purchase low-risk debt instruments.

The
Company used cash in financing activities of $118,000 during the six months
ended April 30, 2010, which primarily consisted of the $135,000 used to
repurchase Company shares under the Stock Repurchase Program begun in March
2010, offset by proceeds from the exercise of stock options and the issuance of
shares under the Employee Stock Purchase Plan. The Company intends to
repurchase up to $1,000,000 worth of its outstanding shares in the open market
or in privately negotiated transactions, from time to time, over a nine month
period of time.

The
Company believes that its liquidity and capital resource needs for fiscal 2010
and the next twelve months will be met through its current cash, cash
equivalents and investments, as well as cash flows resulting from operations.
In addition, as previously announced, the Company has developed a
market-focused approach to strategically leverage the strength of its
MedGraphics brand and worldwide selling and distribution capability.
Specifically, the Company has held discussions with various potential strategic
product and technology partners. If the Company is successful in concluding
these negotiations, it may use some of its cash and capital resources in the
acquisition of new technologies or businesses. Although the Company is
continuing to look at a number of these opportunities, it currently has no
agreements or understandings with any of these third parties.

Forward Looking Statements.

The
discussion above contains forward-looking statements about Angeions future
financial results and business prospects that by their nature involve
substantial risks and uncertainties. You can identify these statements by the
use of words such as anticipate, believe, estimate, expect, project,
intend, plan, will, target, and other words and terms of similar
meaning in connection with any discussion of future operating or financial
performance or business plans or prospects. Our actual results may differ
materially depending on a variety of factors including: (1) national and
worldwide economic and capital market conditions; (2) continuing
cost-containment efforts in our hospital, clinics, and office market; (3) any
changes in the pattern of medical reimbursement that may result from national
health care reform; (4) our ability to successfully operate our business,
including successfully converting our increasing research and development
expenditures, including our software development initiatives, into new and
improved cardiorespiratory diagnostic products and services and successfully
selling these products under the MedGraphics and New Leaf Fitness brand names
into existing and new markets; (5) our ability to maintain our cost structure
at a level that is appropriate to our near to mid-term revenue expectations and
that will enable us to increase revenues and profitability as opportunities
develop; (6) our ability to achieve constant margins for our products and
consistent and predictable operating expenses in light of variable revenues
from our clinical research customers; (7) our ability to expand our worldwide
international revenue through our distribution partners; (8) our ability to
successfully defend ourselves from product liability claims related to our
cardiorespiratory diagnostic products and claims associated with our prior
cardiac stimulation products; (9) our ability to defend our existing
intellectual property and to obtain protection for intellectual property we
develop in the future; (10) our ability to develop and maintain an effective
system of internal controls and procedures and disclosure controls and procedures;
and (11) our dependence on third-party vendors. Additional information with
respect to the risks and uncertainties faced by the Company may be found in,
and the above discussion is qualified in its entirety by, the other risk
factors that are described from time to time in the Companys Securities and
Exchange Commission reports, including the Annual Report on Form 10-K for the
year ended October 31, 2009.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk

None.

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Table of Contents

Item 4T. Controls and Procedures.

(a) Evaluation of Disclosure Controls and
Procedures

Management,
with the participation of the Companys chief executive officer, Rodney A.
Young, and chief financial officer, William J. Kullback, has evaluated the
effectiveness of the design and operation of the disclosure controls and
procedures, as defined in Rules 13a-15(e) under the Securities Exchange Act of
1934, as of the end of the period covered by this report. Management has
concluded that the Companys disclosure controls and procedures are effective
to ensure that information required to be disclosed in the reports that the
Company files under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC
and that the disclosure controls are also effective to ensure that information
required to be disclosed in the Companys Exchange Act reports is accumulated
and communicated to management, including the chief executive officer and principal
accounting officer, to allow timely decisions regarding required disclosure.

(b) Changes in Internal Controls

There
have been no significant changes in internal control over financial reporting
that occurred during the second fiscal quarter of 2010 that have materially
affected, or are reasonably likely to materially affect, the registrants
internal control over financial reporting.

17

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Table of Contents

PART
II  OTHER INFORMATION

Item 1. Legal Proceedings.

From
time to time, the Company is also subject to claims and lawsuits that have been
filed in the ordinary course of business. From time to time, the Company
initiates lawsuits against others to enforce patents or to seek collection of
debts in the ordinary course of business. There is no material pending or
outstanding litigation at the current time.

Item 1A. Risk Factors

We
described the most significant risk factors applicable to the Company in Part
I, Item 1A Risk Factors of our Annual Report on Form 10-K for the year ended
October 31, 2009. We believe there have been no material changes from the risk
factors disclosed in that Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds.

In
the three months ended April 30, 2010, the Company repurchased shares of its
Common Stock within a Stock Repurchase Program that began in March 2010, as
follows.

|                                         |  |                                        |        |                                   |   |                                                                                 |  |                                                                                         |        |  |   |         | 
|---------------------------------------- |  | -------------------------------------- | ------ | --------------------------------- | - | ------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------- | ------ |  | - | ------- | 
|Issuer Purchases of Equity Securities(1)
|Period                                   |  | (a) Total Number
 of Shares
 Purchased |        | (b) Average Price
 Paid per Share |   | (c) Total Number
 of Shares
 Purchased as
 Part of Publicly
 Announced
 Program |  | (d) Approximate
 Dollar Value of
 Shares that May
 Yet Be Purchased
 Under the
 Program |       
|March 1-31,
 2010                        |  |                                        | 378    |                                   | $ | 4.57                                                                            |  |                                                                                         | 378    |  |   |        | 
|April 1-30,
 2010                        |  |                                        | 28,200 |                                   | $ | 4.72                                                                            |  |                                                                                         | 28,200 |  |   |        | 
|Total                                    |  |                                        | 28,578 |                                   | $ | 4.72                                                                            |  |                                                                                         | 28,578 |  | $ | 865,054 | 

(1)On
March 16, 2010, the Company announced that its Board of Directors had
authorized a stock repurchase program under which Angeion may repurchase up to
$1,000,000 of its outstanding shares of common stock in the open market or in
privately negotiated transactions, over a nine month period of time.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Reserved

Item 5. Other Information.

None.

Item 6. Exhibits.

|    |                                                                         
|--- | ------------------------------------------------------------------------
|31. | Certifications
 pursuant to Rules 13a-14 and 15d-14 of the Exchange Act.
|   
|32. | Certifications
 pursuant to 18 U.S.C. § 1350.                           

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Table of Contents

SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

|               |                                        |                          | 
|-------------- | -------------------------------------- | ------------------------ | 
|               | ANGEION
 CORPORATION                   |                         
|               | (Registrant)                           |                         
|               |                                        |                          | 
|               |                                        |                          | 
|June 14,
 2010 |                                        |                          | 
|               | By:                                    | /s/ Rodney
 A. Young     | 
|               | Rodney A.
 Young                       |                         
|               | President
 and Chief Executive Officer
|               |                                        |                          | 
|June 14,
 2010 |                                        |                          | 
|               | By:                                    | /s/ William
 J. Kullback | 
|               | William J.
 Kullback                  
|               | Chief
 Financial Officer              

19

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