Table of Contents

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|                                   |           | 
|---------------------------------- | --------- | 
|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 January 31, 2011.                                        
|                                                                             |                                                                                          
|                                                                             | 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
 incorporation or organization) | (IRS
 Employer
 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 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 large accelerated filer, an accelerated filer, a
 non-accelerated filer or a smaller reporting company. See definition of
 accelerated filer, large accelerated filer a non-accelerated filer or a
 smaller reporting company 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 is a shell company (as defined in Rule 12b-2 of the
 Exchange Act).                                                                                                                                                                                                                                                                         
|Yes
 o     No
 x                                                                                                                                                                                                                                                                                                                                                                           

As of March 1, 2011, the
Company had outstanding 3,764,926 shares of Common Stock, $0.10 par value.

---

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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
 4.                        | Controls
 and Procedures                                                               | 16
|                                |                                                                                        |   
|PART II - OTHER INFORMATION     |                                                                                       
|                                |                                                                                       
|Item
 1.                        | Legal
 Proceedings                                                                     | 17
|Item
 1A.                       | Risk
 Factors                                                                          | 17
|Item
 2.                        | Unregistered
 Sales of Equity Securities and Use of Proceeds                           | 17
|Item
 3.                        | Defaults
 Upon Senior Securities                                                       | 17
|Item
 4.                        | Reserved                                                                               | 17
|Item
 5.                        | Other
 Information                                                                     | 17
|Item
 6.                        | Exhibits                                                                               | 17
|                                |                                                                                       
|SIGNATURES                      | 18                                                                                    

2

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Table of Contents

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements.

ANGEION CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
January 31, 2011 and October 31, 2010(In thousands except share and per share data)

|                                                                                                                                                                                   |  |                   |        |                   |   |        |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ----------------- | - | ------ | -
|                                                                                                                                                                                   |  | January 31,
 2011 |        | October 31,
 2010 |  
|                                                                                                                                                                                   |  | (Unaudited)       |        |                   |  
|ASSETS                                                                                                                                                                             |  |                   |        |                   |   |        |  
|Current
 Assets:                                                                                                                                                                   |  |                   |        |                   |   |        |  
|Cash and cash equivalents                                                                                                                                                          |  | $                 | 8,329  |                   | $ | 6,943  |  
|Short-term investments                                                                                                                                                             |  |                   | 1,721  |                   |   | 2,721  |  
|Accounts receivable, net of allowance for doubtful accounts of $90
 and $100, respectively                                                                                         |  |                   | 4,751  |                   |   | 5,221  |  
|Inventories, net of obsolescence reserve of $574 and $599,
 respectively                                                                                                           |  |                   | 3,767  |                   |   | 3,697  |  
|Prepaid expenses and other current assets                                                                                                                                          |  |                   | 175    |                   |   | 270    |  
|Total Current Assets                                                                                                                                                               |  |                   | 18,743 |                   |   | 18,852 |  
|                                                                                                                                                                                   |  |                   |        |                   |   |        |  
|Noncurrent investments                                                                                                                                                             |  |                   | 484    |                   |   | 722    |  
|Property and equipment, net of accumulated depreciation of $3,572 and
 $3,650, respectively                                                                                        |  |                   | 520    |                   |   | 528    |  
|Intangible assets, net                                                                                                                                                             |  |                   | 1,269  |                   |   | 1,279  |  
|Total
 Assets                                                                                                                                                                      |  | $                 | 21,016 |                   | $ | 21,381 |  
|                                                                                                                                                                                   |  |                   |        |                   |   |        |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                                               |  |                   |        |                   |   |        |  
|Current
 Liabilities:                                                                                                                                                              |  |                   |        |                   |   |        |  
|Accounts payable                                                                                                                                                                   |  | $                 | 1,868  |                   | $ | 1,951  |  
|Employee compensation                                                                                                                                                              |  |                   | 2,246  |                   |   | 2,115  |  
|Deferred income                                                                                                                                                                    |  |                   | 1,509  |                   |   | 1,522  |  
|Warranty reserve                                                                                                                                                                   |  |                   | 140    |                   |   | 175    |  
|Other current liabilities and accrued expenses                                                                                                                                     |  |                   | 320    |                   |   | 408    |  
|Total Current Liabilities                                                                                                                                                          |  |                   | 6,083  |                   |   | 6,171  |  
|                                                                                                                                                                                   |  |                   |        |                   |   |        |  
|Long-term
 Liabilities:                                                                                                                                                            |  |                   |        |                   |   |        |  
|Long-term deferred income and other                                                                                                                                                |  |                   | 825    |                   |   | 873    |  
|Total
 Liabilities                                                                                                                                                                 |  |                   | 6,908  |                   |   | 7,044  |  
|Commitments
 and Contingencies                                                                                                                                                     |  |                   |       |                   |   |       |  
|Shareholders
 Equity:                                                                                                                                                             |  |                   |        |                   |   |        |  
|Common Stock, $0.10 par value, authorized 25,000,000 shares,
 3,860,142 and 3,862,113 shares issued and 3,764,926 and 3,747,454 shares
 outstanding in 2011 and 2010, respectively |  |                   | 376    |                   |   | 375    |  
|Additional paid-in capital                                                                                                                                                         |  |                   | 20,579 |                   |   | 20,486 |  
|Accumulated deficit                                                                                                                                                                |  |                   | (6,855 | )                 |   | (6,531 | )
|Accumulated other comprehensive income                                                                                                                                             |  |                   | 8      |                   |   | 7      |  
|Total
 Shareholders Equity                                                                                                                                                        |  |                   | 14,108 |                   |   | 14,337 |  
|Total
 Liabilities and Shareholders Equity                                                                                                                                        |  | $                 | 21,016 |                   | $ | 21,381 |  

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 data)

|                                             |  |                                 |       |      |   |       |  
|-------------------------------------------- |  | ------------------------------- | ----- | ---- | - | ----- | -
|                                             |  | Three Months Ended
 January 31, |      
|                                             |  | 2011                            |       | 2010 |  
|Revenues                                     |  |                                 |       |      |   |       |  
|Equipment and supply sales                   |  | $                               | 6,144 |      | $ | 5,790 |  
|Service revenues                             |  |                                 | 909   |      |   | 825   |  
|                                             |  |                                 | 7,053 |      |   | 6,615 |  
|Cost of revenues                             |  |                                 |       |      |   |       |  
|Cost of equipment and supplies               |  |                                 | 2,922 |      |   | 3,151 |  
|Cost of service revenue                      |  |                                 | 150   |      |   | 97    |  
|                                             |  |                                 | 3,072 |      |   | 3,248 |  
|                                             |  |                                 |       |      |   |       |  
|Gross
 margin                                |  |                                 | 3,981 |      |   | 3,367 |  
|                                             |  |                                 |       |      |   |       |  
|Operating
 expenses:                         |  |                                 |       |      |   |       |  
|Selling and marketing                        |  |                                 | 2,047 |      |   | 1,942 |  
|General and administrative                   |  |                                 | 1,368 |      |   | 1,102 |  
|Research and development                     |  |                                 | 761   |      |   | 1,039 |  
|Amortization of intangibles                  |  |                                 | 105   |      |   | 105   |  
|                                             |  |                                 | 4,281 |      |   | 4,188 |  
|                                             |  |                                 |       |      |   |       |  
|Operating
 loss                              |  |                                 | (300  | )    |   | (821  | )
|Other expense                                |  |                                 | (22   | )    |   |      |  
|Interest income                              |  |                                 | 8     |      |   | 3     |  
|                                             |  |                                 |       |      |   |       |  
|Loss
 before taxes                           |  |                                 | (314  | )    |   | (818  | )
|Provision for taxes                          |  |                                 | 10    |      |   | 8     |  
|                                             |  |                                 |       |      |   |       |  
|Net loss                                     |  | $                               | (324  | )    | $ | (826  | )
|                                             |  |                                 |       |      |   |       |  
|Loss per
 share:                             |  |                                 |       |      |   |       |  
|Basic                                        |  | $                               | (0.09 | )    | $ | (0.20 | )
|Diluted                                      |  | $                               | (0.09 | )    | $ | (0.20 | )
|                                             |  |                                 |       |      |   |       |  
|Weighted
 average common shares outstanding: |  |                                 |       |      |   |       |  
|Basic                                        |  |                                 | 3,754 |      |   | 4,153 |  
|Diluted                                      |  |                                 | 3,754 |      |   | 4,153 |  

See accompanying notes to
consolidated financial statements.

4

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

|                                                                                 |  |                                 |       |      |   |        |  
|-------------------------------------------------------------------------------- |  | ------------------------------- | ----- | ---- | - | ------ | -
|                                                                                 |  | Three Months Ended
 January 31, |      
|                                                                                 |  | 2011                            |       | 2010 |  
|Cash
 flows from operating activities:                                           |  |                                 |       |      |   |        |  
|Net loss                                                                         |  | $                               | (324  | )    | $ | (826   | )
|Adjustments to reconcile net loss to net cash provided by operating
 activities: |  |                                 |       |      |   |        |  
|Depreciation and amortization                                                    |  |                                 | 169   |      |   | 195    |  
|Stock-based compensation                                                         |  |                                 | 34    |      |   | 222    |  
|Decrease in allowance for doubtful accounts                                      |  |                                 | (10   | )    |   | 21     |  
|Increase in inventory obsolescence reserve                                       |  |                                 | (25   | )    |   | 79     |  
|Loss on disposal of equipment                                                    |  |                                 | 22    |      |   |       |  
|Change in operating assets and liabilities:                                      |  |                                 |       |      |   |        |  
|Accounts
 receivable                                                             |  |                                 | 480   |      |   | (145   | )
|Inventories                                                                      |  |                                 | (45   | )    |   | 238    |  
|Prepaid
 expenses and other current assets                                       |  |                                 | 95    |      |   | 111    |  
|Accounts
 payable                                                                |  |                                 | (83   | )    |   | (3     | )
|Employee
 compensation                                                           |  |                                 | 131   |      |   | (304   | )
|Deferred
 income                                                                 |  |                                 | (61   | )    |   | (211   | )
|Warranty
 reserve                                                                |  |                                 | (35   | )    |   | 2      |  
|Other
 current liabilities and accrued expenses                                  |  |                                 | (88   | )    |   | (23    | )
|Net cash provided by (used in) operating activities                              |  |                                 | 260   |      |   | (644   | )
|                                                                                 |  |                                 |       |      |   |        |  
|Cash
 flows from investing activities:                                           |  |                                 |       |      |   |        |  
|Purchase of investments                                                          |  |                                 | 1,239 |      |   |       |  
|Purchase of property and equipment and intangible assets                         |  |                                 | (173  | )    |   | (88    | )
|Net cash provided by (used in) investing activities                              |  |                                 | 1,066 |      |   | (88    | )
|                                                                                 |  |                                 |       |      |   |        |  
|Cash
 flows from financing activities:                                           |  |                                 |       |      |   |        |  
|Proceeds from issuance of common stock under employee stock purchase
 plan       |  |                                 | 12    |      |   | 10     |  
|Proceeds from the exercise of stock options                                      |  |                                 | 48    |      |   | 7      |  
|Net cash provided by financing activities                                        |  |                                 | 60    |      |   | 17     |  
|                                                                                 |  |                                 |       |      |   |        |  
|Net
 increase (decrease) in cash and cash equivalents                            |  |                                 | 1,386 |      |   | (715   | )
|                                                                                 |  |                                 |       |      |   |        |  
|Cash and
 cash equivalents at beginning of period                                |  |                                 | 6,943 |      |   | 11,219 |  
|                                                                                 |  |                                 |       |      |   |        |  
|Cash and
 cash equivalents at end of period                                      |  | $                               | 8,329 |      | $ | 10,504 |  

See accompanying notes to consolidated
financial statements.

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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 January 31, 2011, the consolidated
statements of operations for the three months ended January 31, 2011 and 2010, and consolidated statements of cash
flows for the three months ended January 31, 2011 and 2010, 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, 2010 was derived from
the audited consolidated financial statements as of that date. Operating
results for the three months ended January 31, 2011 are not necessarily indicative of the results
that may be expected for the year ending October 31, 2011. 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, 2010.

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 months ended January 31, 2011 comprehensive loss
for Angeion Corporation was $(323,000). For the three months ended January 31,
2010, 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 January 31, 2011, that
required recognition or disclosure in these consolidated financial statements.

|   |                                
|-- | -------------------------------
|2. | Recent Accounting Pronouncement

In
October 2009, the FASB issued Accounting Standards Update
(ASU) 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable
Revenue Arrangementsa consensus of the FASB Emerging Issues Task
Force (ASU 2009-13). ASU 2009-13 allows separate accounting for
multiple-deliverable arrangements for more circumstances than under previously
existing accounting principles generally accepted in the United States of
America and establishes a selling price hierarchy for determining the selling
price of a deliverable. In addition, it replaces the term fair value in the
revenue allocation guidance with selling price to clarify the allocation of
revenue is based on entity-specific assumptions rather than assumptions of a
market place participant, eliminates the use of the residual method for
allocation, and expands on-going disclosure
requirements. ASU 2009-13 is effective for fiscal years beginning on or after
June 15, 2010 and can be applied prospectively or retrospectively. The
Company adopted the updated accounting guidance for multiple-deliverable
revenue arrangements on a prospective basis for our fiscal 2011 year
beginning on November 1, 2010, and the adoption did not have a material impact
on our consolidated financial position or results of operations.

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|   |                    
|-- | -------------------
|3. | 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.

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 $2,172,000 and $2,232,000 at January 31, 2011
and October 31, 2010, 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
$113,000 and $125,000 at January 31, 2011 and October 31, 2010, respectively.

When
a sales arrangement involves multiple deliverables, such as equipment,
installation services and training, the amount of the consideration from the
sale is allocated to each respective element based on selling price and is
recognized as revenue when revenue recognition criteria for each element is
met. Consideration allocated to delivered equipment that the Company has
concluded has value to the customer on a standalone basis is equal to the total
arrangement consideration less the selling price of installation and training.
The selling price 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 months
ended January 31, 2011 and 2010.

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 January 31, 2011, advance payments from customers aggregated
$31,000, while at October 31, 2010, advance payments from customers aggregated
$16,000. Revenue recognition for customer orders that include advance payments
is consistent with the Companys revenue recognition policy described above.

|   |                                           
|-- | ------------------------------------------
|4. | 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.

7

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Total
share-based compensation expense included in the Companys statement of
operations for the three months ended January 31, 2011 and 2010 was $35,000 and
$222,000, respectively, with decreases of $101,000 and $90,000 resulting from
full vesting of older option grants and employee and board turnover,
respectively.

Stock Options

A
summary of our option activity for the three-month period ended January 31,
2011 and 2010 follows:

|                                  |  |                            |         |                                    |   |        |  |                                    |         |   |   |      | 
|--------------------------------- |  | -------------------------- | ------- | ---------------------------------- | - | ------ |  | ---------------------------------- | ------- | - | - | ---- | 
|                                  |  | For the three months ended |        
|                                  |  | January 31, 2011           |         | January 31, 2010                   |  
|                                  |  | Shares                     |         | Weighted
 Average
 Exercise
 Price |   | Shares |  | Weighted
 Average
 Exercise
 Price |        
|Outstanding
 at beginning of year |  |                            | 600,573 |                                    | $ | 6.12   |  |                                    | 695,787 |   | $ | 6.13 | 
|Exercised                         |  |                            | (14,500 | )                                  |   | 3.32   |  |                                    | (3,000  | ) |   | 2.00 | 
|Expired or cancelled              |  |                            | (14,000 | )                                  |   | 6.23   |  |                                    | (20,300 | ) |   | 7.18 | 
|Outstanding
 at end of period     |  |                            | 572,073 |                                    | $ | 6.19   |  |                                    | 672,487 |   | $ | 6.12 | 

The
following table summarizes information concerning stock options outstanding as
of January 31, 2011:

|                 |       |                     |  |                                                  |  |                              |      |  |  |         | 
|---------------- | ----- | ------------------- |  | ------------------------------------------------ |  | ---------------------------- | ---- |  |  | ------- | 
|Exercise
 Prices |       | Number
 Outstanding |  | Weighted
 Average
 Remaining
 Contractual 
 Life |  | Number
 Subject to
 Exercise |     
|$                | 2.00  |                     |  | 8,650                                            |  |                              | 2.68 |  |  | 8,650   | 
|                 | 2.53  |                     |  | 52,000                                           |  |                              | 4.62 |  |  | 52,000  | 
|                 | 4.08  |                     |  | 500                                              |  |                              | 6.50 |  |  |        | 
|                 | 5.08  |                     |  | 79,500                                           |  |                              | 4.38 |  |  | 79,500  | 
|                 | 5.16  |                     |  | 39,084                                           |  |                              | 4.57 |  |  | 26,510  | 
|                 | 5.66  |                     |  | 46,668                                           |  |                              | 4.30 |  |  | 40,002  | 
|                 | 6.23  |                     |  | 62,500                                           |  |                              | 2.40 |  |  | 62,500  | 
|                 | 6.60  |                     |  | 71,065                                           |  |                              | 3.41 |  |  | 71,065  | 
|                 | 7.79  |                     |  | 74,500                                           |  |                              | 2.68 |  |  | 74,500  | 
|                 | 7.86  |                     |  | 137,606                                          |  |                              | 3.75 |  |  | 137,606 | 
|                 |       |                     |  |                                                  |  |                              |      |  |  |         | 
|                 | Total |                     |  | 572,073                                          |  |                              | 3.67 |  |  | 552,333 | 

The
total intrinsic value of options exercised during the three months ended
January 31, 2011 and 2010 was $22,000 and $5,000, respectively. The total
intrinsic value of options outstanding and exercisable at January 31, 2011 was
$250,000, which was calculated using the closing stock price as of January 31, 2011 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 $48,000 and $7,000 for the three months ended January 31, 2011 and 2010,
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 January 31, 2011 was $66,000, is expected to be
recognized over a weighted average period of 0.51 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 three month periods
ended January 31, 2011 and 2010.

Restricted Stock Awards

On
August 28, 2008, June 3, 2009 and December 15, 2010, the Board of Directors
authorized the issuance of 74,667, 180,668 and 25,000 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.

Unrecognized
compensation expense related to outstanding restricted stock awards as of
January 31, 2011 was $182,000. The Company expects to recognize this over a
weighted average period of 2.15 years.

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 95% (as increased effective
January 1, 2003) of the fair market value of one share of common stock at the
beginning or end of each stock purchase period or phase. 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, 2010, employees
purchased 2,972 shares at a price of $3.78 per share. As of January 31, 2011,
the Company has withheld approximately $1,000 from employees participating in
the phase that began on January 1, 2011. At January 31, 2011, 51,705 shares of
common stock were available for future purchase under the Stock Plan.

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The
following table presents the statement of operations classification of pre-tax
stock-based compensation expense recognized for the three and three months
ended January 31, 2011 and 2010:

|                                  |  |                             |    |      |   |     | 
|--------------------------------- |  | --------------------------- | -- | ---- | - | --- | 
|                                  |  | Three months ended July 31, |   
|                                  |  | 2011                        |    | 2010 |  
|Cost of
 revenues                 |  | $                           | 2  |      | $ | 15  | 
|Selling and
 marketing            |  |                             | 24 |      |   | 46  | 
|General and
 administrative       |  |                             | (1 | )    |   | 137 | 
|Research and
 development         |  |                             | 10 |      |   | 24  | 
|Stock-based
 compensation expense |  | $                           | 35 |      | $ | 222 | 

|   |            
|-- | -----------
|5. | Inventories

Inventories
consisted of the following at January 31, 2011 and October 31, 2010:

|                |  |      |       |      |   |       | 
|--------------- |  | ---- | ----- | ---- | - | ----- | 
|(In
 thousands) |  | 2011 |       | 2010 |  
|Raw
 materials  |  | $    | 983   |      | $ | 977   | 
|Work-in-Process |  |      | 386   |      |   | 233   | 
|Finished
 goods |  |      | 2,398 |      |   | 2,487 | 
|                |  | $    | 3,767 |      | $ | 3,697 | 

|   |                  
|-- | -----------------
|6. | Intangible Assets

Intangible
assets consisted of the following at January 31, 2011 and October 31, 2010:

|                                 |  |      |        |      |   |        |  
|-------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|(In thousands)                   |  | 2011 |        | 2010 |  
|Intangible
 assets:              |  |      |        |      |   |        |  
|Developed technology             |  | $    | 6,825  |      | $ | 6,820  |  
|Trademarks (unamortized)         |  |      | 62     |      |   | 62     |  
|Capitalized software in progress |  |      | 309    |      |   | 219    |  
|                                 |  |      | 7,196  |      |   | 7,101  |  
|                                 |  |      |        |      |   |        |  
|Accumulated
 Amortization        |  |      | (5,927 | )    |   | (5,822 | )
|                                 |  | $    | 1,269  |      | $ | 1,279  |  

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 $105,000 for each of the three months ended January
31, 2011 and 2010. Estimated amortization expense for each of the succeeding
fiscal years based on the intangible assets as of January 31, 2011 is as
follows:

|                                     |  |              |     | 
|------------------------------------ |  | ------------ | --- | 
|(In thousands)                       |  | Amortization |    
|Nine months
 ending October 31, 2011 |  | $            | 316 | 
|2012                                 |  |              | 420 | 
|                                     |  | $            | 736 | 

The
above table does not include estimated amortization expense for patents and
capitalized software of $471,000, included in developed technology, that are
not yet placed in service. During the three months ended January 31, 2011,
$90,000 of software development costs were capitalized as the project reached
technological feasibility. Upon completion of this development project, the
software is expected to be amortized over seven years.

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|   |                 
|-- | ----------------
|7. | 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 if 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 three and three months ended January 31, 2011 and 2010 were
as follows:

|                              |  |                                 |     |      |   |     |  
|----------------------------- |  | ------------------------------- | --- | ---- | - | --- | -
|                              |  | Three months ended
 January 31, |    
|(In
 thousands)               |  | 2011                            |     | 2010 |  
|Balance,
 beginning of period |  | $                               | 175 |      | $ | 143 |  
|Warranty provisions           |  |                                 | (2  | )    |   | 49  |  
|Warranty claims               |  |                                 | (33 | )    |   | (47 | )
|Balance, end
 of period       |  | $                               | 140 |      | $ | 145 |  

|   |                   
|-- | ------------------
|8. | Net Loss per Share

Basic
income (loss) per share is computed by dividing net income (loss) by the
weighted average shares outstanding during the reporting period. Diluted income
(loss) per share is computed similarly to basic income (loss) per share except
that in computing income per share the weighted average shares outstanding are
increased to include additional shares issuable from the assumed exercise of
stock options or warrants and vesting of restricted stock awards, if these
events are dilutive. The number of additional shares is calculated by assuming
that shares are issued from the exercise of outstanding stock options or warrants
and the vesting of outstanding restricted share grants and that the cash
proceeds from the exercise together with the assumed employment value
represented by the unamortized stock-based compensation were used to reacquire
shares of common stock at the average market price during the reporting period.

The
Company had options and unvested restricted stock awards outstanding at January
31, 2011 and 2010 to purchase 667,289 and 887,598 shares, respectively, of its
common stock.

Shares
used in the loss per share computations are as follows:

|                                                              |  |                                 |       |      |  |       | 
|------------------------------------------------------------- |  | ------------------------------- | ----- | ---- |  | ----- | 
|                                                              |  | Three months Ended
 January 31, |      
|                                                              |  | 2011                            |       | 2010 | 
|Weighted
 average common shares outstanding  basic           |  |                                 | 3,754 |      |  | 4,153 | 
|Dilutive effect of stock options and
 restricted stock awards |  |                                 |      |      |  |      | 
|Weighted
 average common shares outstanding  diluted         |  |                                 | 3,754 |      |  | 4,153 | 

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As
a result of the net loss in the three months ended January 31, 2011 and 2010,
the outstanding stock options and unvested restricted stock shares were
considered antidilutive and, therefore, were excluded from diluted loss per
share of those periods.

|   |             
|-- | ------------
|9. | Income Taxes

The
Company has recorded a provision for taxes from operations of $10,000 and
$8,000 for the three months ended January 31, 2011 and 2010, respectively.

At
October 31, 2010, the reserve for uncertain tax positions was $39,000 and has
not changed during the first quarter of fiscal 2011. 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 $14,000 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. For United States federal tax, the
Company is no longer subject to examinations by the authorities for fiscal
years ending prior to November 1, 2008. The expiration dates of the statute of
limitations related the various state income tax returns that the Company files
vary by state. 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.

The
Company had a federal net operating loss carry forward at October 31, 2010 of
approximately $16.3 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 2011 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 January 31, 2011, 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 $0.9 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.

|    |           
|--- | ----------
|10. | 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.

12

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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.

Total
revenues for the fiscal first quarter of 2011 were $7.1 million, an increase of
6.6% from $6.6 million in 2010. Operating expenses for the fiscal first quarter
of 2011 were $4.3 million, an increase of 2.2% from the same period in 2010.
Net loss for the three months ended January 31, 2011 was ($324,000), or ($0.09)
per basic and diluted share, compared to a net loss of ($826,000), or ($0.20)
per basic and diluted share, for the same period in 2010.

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
 January 31, |      
|                            |  | 2011                            |       | 2010 | 
|Revenues                    |  |                                 | 100.0 | %    |  | 100.0 | % 
|Cost of revenues            |  |                                 | 43.6  |      |  | 49.1  |   
|Gross margin                |  |                                 | 56.4  |      |  | 50.9  |   
|                            |  |                                 |       |      |  |       |   
|Operating expenses:         |  |                                 |       |      |  |       |   
|Selling and marketing       |  |                                 | 29.0  |      |  | 29.4  |   
|General and administrative  |  |                                 | 19.4  |      |  | 16.6  |   
|Research and development    |  |                                 | 10.8  |      |  | 15.7  |   
|Amortization of intangibles |  |                                 | 1.5   |      |  | 1.6   |   
|                            |  |                                 | 60.7  |      |  | 63.3  |   
|Operating loss              |  |                                 | (4.3  | )    |  | (12.4 | ) 
|Other expense               |  |                                 | (0.3  | )    |  |      |   
|Interest income             |  |                                 | 0.1   |      |  | 0.0   |   
|Loss before taxes           |  |                                 | (4.5  | )    |  | (12.4 | ) 
|Provision for taxes         |  |                                 | 0.1   |      |  | 0.1   |   
|Net Loss                    |  |                                 | (4.6  | %)   |  | (12.5 | %)

The
following paragraphs discuss the Companys performance for the three-month
periods ending January 31, 2011 and 2010:

Seasonality

The
Company experiences some seasonality in its revenues, with the first and fourth
quarter of its fiscal year historically being its lowest and highest revenue quarters,
respectively. The Company experiences variability in the each quarter due to a
number of factors, including customer budget cycles, product introductions,
Company sales incentive programs, general economic conditions and the timing of
customer orders.

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Revenue

Total
revenue for the three months ended January 31, 2011, increased by 6.6%,
compared to the same period in 2010. Domestic revenue for the three months
ended January 31, 2011 increased by 8.3% and international revenue increased by
2.3% from prior year period levels, with increases in international revenues
primarily from the strong performance in Canada and the Far East region.

Gross Margin

Gross
margin percentage for the three months ended January 31, 2011 increased to
56.4% from 50.9% of revenue in the same period in 2010. The percentage
increased as a result of manufacturing efficiencies resulting from the higher
sales volume and reduced provisions for obsolete inventory of $138,000, due to
improved materials management in recent quarters. We expect that the effect of
manufacturing efficiencies at the higher sales levels will continue in the
remaining fiscal 2011 quarters.

Selling and Marketing

Selling
and marketing expenses increased to $2.0 million for the three months ended
January 31, 2011 from $1.9 million for the comparable period of 2010. Expenses
were increased for personnel key additions and transfers from research and
development roles by $60,000 and $80,000, respectively. These increases were offset
in part by reduced expenses for demonstration and marketing materials costs.

General and Administrative

For
the three months ended January 31, 2011, general and administrative expenses
included a one-time charge of $418,000 related to the separation of our former
chief executive officer. The general and administrative costs without this
charge were reduced by $152,000 in the 2011 fiscal first quarter compared to
the 2010 first fiscal quarter, due primarily to $72,000 in decreased
compensation related costs resulting from administrative staff changes in
fiscal 2010 and 2011 and $100,000 in reduced stock based compensation related
to employee and board of director changes occurring in the second half of
fiscal 2010. Certain of these cost reductions are not expected to be ongoing as
efforts to fully form the senior team are completed during fiscal 2011.

Research and Development

Research and development expenses for the three
months ended January 31, 2011 were $0.8 million compared to $1.0 million for the same periods in 2010. Expense reductions in
the three months ended January 31, 2011 compared to the same period in 2010 were primarily for roles transferred to selling
and marketing and the effects of the product development expense cycle. In the 2010 fiscal first quarter, the Company
expensed all expenditures related to its ongoing research and development project to migrate the MedGraphics and New
Leaf products operating software platform to next-generation technologies, given the planning and development nature of these
expenditures. Staff personnel and consulting time related to planning and development expenses were reduced by $91,000 in the
2011 fiscal first quarter. In addition, approximately $90,000 of incurred costs were capitalized in fiscal 2011 as software
in progress, since these projects have achieved technological feasibility. As we have discussed previously, while
this capitalized cost spending affects our cash flow and to a lesser extent our bottom line, we believe that both of these
investments provide the foundation for a future product pipeline of new integrated patient care and consumer health programs
that will deliver sustained growth. The majority of these software projects will be ongoing until late fiscal 2011, with a
portion continuing into fiscal 2012, when we expect the benefits of this effort will become available for use in our product
offerings.

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Amortization of Intangibles

Amortization
of developed technology was $105,000 for each of the three months ended January
31, 2011 and 2010 as a portion of the Companys developed technology was fully
amortized as of October 31, 2009.

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 month periods ended
January 31, 2011 and 2010, the Company did not use any tax benefits related to
pre-emergence bankruptcy NOLs. See note 9 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 Medical Graphics Corporation wholly
owned subsidiary.

The
Company had cash, cash equivalents and investments of $10.5 million and working
capital of $12.7 million as of January 31, 2011.

During
the first quarter of fiscal 2011, the Company reported a net loss of $324,000.
However, cash flows from operating activities for the three months were
$260,000, primarily due to reductions in accounts receivable of $480,000,
decrease of $83,000 in accounts payable and the add-back of non-cash expenses
totaling $203,000 for depreciation, amortization and stock-based compensation
expense.

For
the three months ended January 31, 2011, the Company used $173,000 of cash for
the purchase of property and equipment and intangible assets and received
$1,239,000 from the sale of maturing investment grade debt instruments
described above.

The
Company received cash from financing activities of $60,000 during the three
months ended January 31, 2011, which primarily consisted of proceeds from the
exercise of stock options and the issuance of shares under the Employee Stock
Purchase Plan.

The
Company believes that its liquidity and capital resource needs for fiscal 2011
and the next twelve months will be met through its cash flows resulting from
operations, as well as current cash, cash equivalents and investments. In
addition, as previously discussed, 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 any negotiations of this
sort, 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.

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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 patterns of
medical reimbursement that may result from national healthcare reform; (4) our
ability to successfully operate our business, including successfully converting
our increasing research and development expenditures into new and improved
cardiorespiratory diagnostic products and services and selling these products
and services under the MedGraphics and New Leaf brand names into existing and
new markets; (5) our ability to complete our software development initiatives
and migrate our MedGraphics and New Leaf platforms to a next generation
technology; (6) 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; (7) 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; (8) our ability to expand our international revenue through our
distribution partners and our Milan, Italy representative branch office; (9)
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; (10) our ability to defend our existing
intellectual property and obtain protection for intellectual property we
develop in the future; (11) our ability to develop and maintain an effective
system of internal controls and procedures and disclosure controls and procedures;
(12) our dependence on third-party vendors and (13) the ability of new members
of our senior management to make a successful transition into their new roles
and for all members of senior management to ultimately develop and implement a
strategic plan. 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, 2010.

Item 3.
Quantitative and Qualitative Disclosures About
Market Risk

None.

Item 4.
Controls and Procedures.

(a) Evaluation of Disclosure Controls and
Procedures

Management,
with the participation of the Companys chief executive officer, Philip I.
Smith, and interim chief financial officer, Larry R. Degen, 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 changes in internal control over financial reporting that occurred
during the first fiscal quarter of 2011 that have materially affected, or are
reasonably likely to materially affect, the registrants internal control over
financial reporting.

16

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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, 2010. 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.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Reserved

Item 5. Other Information.

Establishment of 2011 Cash Incentive Plan



On March 16, 2011, the Compensation Committee
of the Company approved the establishment of the Company’s management cash incentive for 2011 (the “2011 Incentive
Plan”) and set the incentive pay opportunities under the 2011 Incentive Plan for the Company’s executive officers:
President and Chief Executive Officer Philip I. Smith; Executive Vice President Terrance J. Kapsen, and Interim Chief Financial
Officer Larry R. Degen.



Under the 2011 Incentive Plan, the Compensation
Committee established target annual performance goals for the Company’s executive officers.  The 2011 annual performance
goals with respect to each of these three officers are related to revenues, earnings before interest and taxes (“EBIT”),
and attainment of personal goals.  In the case of Mr. Smith, payouts will be based 35% on revenues, 35% on EBIT, and 30% on
the attainment of personal goals that were developed by the Compensation Committee and Mr. Smith.  If Mr. Smith achieves target
at revenue and EBIT and attains the personal goals, he would receive an incentive plan cash payment equal to 50% of his base salary. 
In the case of Mr. Kapsen and Mr. Degen, the payouts will be based 25% on revenues, 25% on EBIT, and 50% on the attainment of personal
goals.  If Mr. Kapsen and Mr. Degen achieve target at revenue and EBIT and attain their respective personal goals, they would
receive incentive plan cash payments equal to 25% of their base salaries.  Under the 2011 Incentive Plan, the Company must
achieve threshold in each of revenue and EBIT before any incentive payments are earned by these officers.  In addition, if the Company exceeds either or both of the
revenue and EBIT targets, the percentage of payout for each of the revenue and EBIT components can increase from 35% to 43.75% in the case of Mr. Smith and from 25% to 31.25%
in the case of Mr. Kapsen and Mr. Degen, so that their percentage payouts may exceed 100%.



The Board of Directors has retained discretion
under the 2011 Incentive Plan to pay incentive plan cash payments in amount higher or lower than those that would otherwise due
under the plan.  In addition, all incentive payments are subject to “clawback” to the extent required by federal
law.



Philip I. Smith Performance Shares



The Compensation Committee also finalized the
terms of the 2011 vesting of Mr. Smith’s performance shares.  Under these terms, Mr. Smith is eligible to attain vesting
of 10,000 shares in fiscal 2011 depending upon his attainment of target in revenue (3,333 shares), EBIT (3,333 shares) and personal
goals (3,334 shares.)  The metrics under the performance shares are the same as those under 2011 Incentive Plan.  If
Mr. Smith achieves threshold with respect to either revenue or EBIT, 20% of his performance shares will vest, with the percentage
of shares vesting increasing linearly until target is achieved.  These three performance areas are not interdependent. 
Accordingly, Mr. Smith may earn a portion of his performance shares in one area, but not in the others.

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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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)                           |                     
|                |  |                                        |                      | 
|March 17,
 2011 |  |                                        |                      | 
|                |  | By:                                    | /s/ Philip
 I. Smith | 
|                |  | Philip I.
 Smith                       |                     
|                |  | President
 and Chief Executive Officer |                     
|                |  |                                        |                      | 
|March 17,
 2011 |  |                                        |                      | 
|                |  | By:                                    | /s/ Larry R.
 Degen  | 
|                |  | Larry R.
 Degen                        |                     
|                |  | Interim
 Chief Financial Officer       |                     

18

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