**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-QSB**

 

| **ý**                                                                                                                                                                                                                             |   | **Quarterly  report under Section 13 or 15(d) of the Securities Exchange Act of 1934.** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                   |   |                                                                                    |
| **For the quarterly period ended April 30,  2003**                                                                                                                                                                                     |
|                                                                                                                                                                                                                                   |   |                                                                                    |
| **OR**                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                   |   |                                                                                    |
| **o**                                                                                                                                                                                                                                  |   | **Transition  report under Section 13 or 15(d) of the Exchange Act.**                   |
|                                                                                                                                                                                                                                   |   |                                                                                    |
| **For the transition period  from                to                .** |

 

**Commission file number 001-13543**

 

**Angeion Corporation**

(Exact name of small business issuer asspecified in its charter)

 

| **Minnesota**                                                   |   | **41-1579150**                        |
|-----------------------------------------------------------------|--------|---------------------------------------|
| (State or other jurisdiction of  incorporation or organization) |   | (I.R.S. Employer  Identification No.) |

 

**350 Oak Grove Parkway, Saint Paul, Minnesota55127-8599**

(Address of principal executive offices)

 

**(651) 484-4874**

(Issuer’s telephone number, including areacode)

 

Check whether the registrant filed all documents and reports requiredto be filed by Section 12, 13 or 15(d) of the Exchange Act of 1934 afterdistribution of securities under a plan confirmed by a court:

Yes                    ý                     No                 o

 

Check whether the issuer (1) filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (orfor such shorter period that the issuer was required to file such reports), and(2) has been subject to such filing requirements for the past 90 days.

Yes                    ý                     No                 o

 

The Company had 3,594,433 shares of common stock, $0.10 par value,outstanding as of June 2, 2003.

 

 

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**ANGEION CORPORATION AND SUBSIDIARIES**

 

**Consolidated Balance Sheets**

**April 30, 2003 and October 31, 2002**

(in thousands except share and per share data)

 
|                                                                                                  |   | **Successor Company** |       |
|-------------------------------------------------------------------------------------------------------|--------|-----------------------|------------|
|                                                                                                  |   | **April 30,  2003**   |       | **October 31,  2002** |   |
|                                                                                                  |   | **(unaudited)**       |       |   |   |
| **Assets**                                                                                            |   |                  |       |   |   |
| **Current assets:**                                                                                   |   |                  |       |   |   |
| Cash and cash equivalents                                                                             |   | $                     | 4,019      |   | $ | 4,434 |   |
| Accounts receivable, net of allowance for doubtful accounts of $372  and $312, respectively           |   | 2,998                 |       | 2,687 |   |
| Inventories                                                                                           |   | 3,108                 |       | 3,470 |   |
| Prepaid expenses and other current assets                                                             |   | 377                   |       | 123 |   |
| Total current assets                                                                                  |   | 10,502                |       | 10,714 |   |
|                                                                                                  |   |                  |       |   |   |
| Property and equipment, net                                                                           |   | 1,863                 |       | 2,164 |   |
| Intangible assets, net                                                                                |   | 7,838                 |       | 8,250 |   |
|                                                                                                  |   | **$**                 | **20,203** |   | **$** | **21,128** |   |
|                                                                                                  |   |                  |       |   |   |
| **Liabilities  and Shareholders’ Equity**                                                        |   |                  |       |   |   |
| **Current liabilities:**                                                                              |   |                  |       |   |   |
| Accounts payable                                                                                      |   | $                     | 962        |   | $ | 964 |   |
| Employee compensation                                                                                 |   | 858                   |       | 439 |   |
| Deferred income                                                                                       |   | 1,015                 |       | 811 |   |
| Warranty reserve                                                                                      |   | 125                   |       | 111 |   |
| Other liabilities and accrued expenses                                                                |   | 594                   |       | 897 |   |
| Total current liabilities                                                                             |   | 3,554                 |       | 3,222 |   |
|                                                                                                  |   |                  |       |   |   |
| **Shareholders’ equity:**                                                                        |   |                  |       |   |   |
| Common stock, $0.10 par value, authorized 25,000,000 shares, issued  and outstanding 3,594,433 shares |   | 359                   |       | 359 |   |
| Additional paid-in capital                                                                            |   | 17,547                |       | 17,547 |   |
| Accumulated deficit                                                                                   |   | (1,257                | )          | — |   |
| Total shareholders’ equity                                                                       |   | 16,649                |       | 17,906 |   |
|                                                                                                  |   | **$**                 | **20,203** |   | **$** | **21,128** |   |

 

See accompanying notes to consolidated financial statements

 

2

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**ANGEION CORPORATION AND SUBSIDIARIES**

 

**Consolidated Statements of Operations**

**(unaudited, in thousands except per share amounts)**

 
|                                           |   | **Successor  Company**            |       | **Predecessor  Company**        |       | **Successor  Company** |       | **Predecessor  Company** |       |
|------------------------------------------------|--------|-----------------------------------|------------|---------------------------------|------------|------------------------|------------|--------------------------|------------|
|                                           |   | **Three Months Ended  April 30,** |       | **Six Months Ended  April 30,** |       |
|                                           |   | **2003**                          |       | **2002**                        |       | **2003**               |       | **2002**                 |       |
| **Revenues**                                   |   |                              | ** ** |                            | ** ** |                   | ** ** |                     | ** ** |
| Equipment and supply sales                     |   | $                                 | 3,780      |                            |       | $                      | 3,276      |                     | $          | 7,721 |   |   | $ | 6,999 |   |
| Service revenue                                |   | 739                               |       |                            | 752        |                   | 1,468      |                     |       | 1,452 |   |
|                                           |   | 4,519                             |       |                            | 4,028      |                   | 9,189      |                     |       | 8,451 |   |
| **Cost of goods sold**                         |   |                              |       |                            |       |                   |       |                     |       |   |   |
| Cost of equipment and supplies                 |   | 2,340                             |       |                            | 2,308      |                   | 4,882      |                     |       | 4,710 |   |
| Cost of service revenue                        |   | 185                               |       |                            | 117        |                   | 372        |                     |       | 221 |   |
|                                           |   | 2,525                             |       |                            | 2,425      |                   | 5,254      |                     |       | 4,931 |   |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Gross margin**                               |   | 1,994                             |       |                            | 1,603      |                   | 3,935      |                     |       | 3,520 |   |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Operating expenses:**                        |   |                              |       |                            |       |                   |       |                     |       |   |   |
| Selling and marketing                          |   | 1,282                             |       |                            | 1,164      |                   | 2,772      |                     |       | 2,636 |   |
| General and administrative                     |   | 735                               |       |                            | 569        |                   | 1,283      |                     |       | 1,228 |   |
| Research and development                       |   | 401                               |       |                            | 308        |                   | 743        |                     |       | 700 |   |
| Amortization of intangibles                    |   | 217                               |       |                            | 180        |                   | 412        |                     |       | 415 |   |
|                                           |   | 2,635                             |       |                            | 2,221      |                   | 5,210      |                     |       | 4,979 |   |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Operating loss**                             |   | (641                              | )          |                            | (618       | )                      | (1,275     | )                        |       | (1,459 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Other income (expense):**                    |   |                              |       |                            |       |                   |       |                     |       |   |   |
| Interest income                                |   | 8                                 |       |                            | 4          |                   | 18         |                     |       | 10 |   |
| Interest expense                               |   | —                            |       |                            | (510       | )                      | —     |                     |       | (1,020 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Loss before taxes**                          |   | (633                              | )          |                            | (1,124     | )                      | (1,257     | )                        |       | (2,469 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| Tax benefit                                    |   | —                            |       |                            | (92        | )                      | —     |                     |       | (92 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Loss from continuing operations**            |   | (633                              | )          |                            | (1,032     | )                      | (1,257     | )                        |       | (2,377 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Loss from discontinued operations**          |   | —                            |       |                            | —     |                   | —     |                     |       | (678 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Net loss**                                   |   | $                                 | (633       | )                               |       | $                      | (1,032     | )                        | $          | (1,257 | ) |   | $ | (3,055 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Net loss per share - basic and diluted**     |   |                              |       |                            |       |                   |       |                     |       |   |   |
| Continuing operations                          |   | $                                 | (0.18      | )                               |       | $                      | (0.29      | )                        | $          | (0.35 | ) |   | $ | (0.66 | ) |
| Discontinued operations                        |   | —                            |       |                            | —     |                   | —     |                     |       | (0.19 | ) |
| Net loss                                       |   | $                                 | (0.18      | )                               |       | $                      | (0.29      | )                        | $          | (0.35 | ) |   | $ | (0.85 | ) |
|                                           |   |                              |       |                            |       |                   |       |                     |       |   |   |
| **Weighted average common shares outstanding** |   |                              |       |                            |       |                   |       |                     |       |   |   |
| Basic and diluted                              |   | 3,594                             |       |                            | 3,595      |                   | 3,594      |                     |       | 3,582 |   |

 

See accompanying notes to consolidatedfinancial statements

 

3

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**ANGEION CORPORATION AND SUBSIDIARIES**

 

**Consolidated Statements of Cash Flows**

**(unaudited, in thousands)**

 
|                                                                                             |   | **Successor  Company**          |      | **Predecessor  Company** |   |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------|-----------|--------------------------|--------|
|                                                                                             |   | **Six Months Ended  April 30,** |      |
|                                                                                             |   | **2003**                        |      | **2002**                 |   |
| **Cash Flows From Operating Activities:**                                                        |   |                            |      |                     |   |
| Net loss                                                                                         |   | $                               | (1,257    | )                        |   | $ | (3,055 | ) |
| Adjustments to reconcile net loss to net cash flows provided by (used  in) operating activities: |   |                            |      |                     |   |   |
| Loss from discontinued operations                                                                |   | —                          |      |                     | 678    |   |
| Depreciation and amortization                                                                    |   | 730                             |      |                     | 730    |   |
| Changes in operating assets and liabilities:                                                     |   |                            |      |                     |   |   |
| Accounts receivable                                                                              |   | (311                            | )         |                     | 419    |   |
| Inventories                                                                                      |   | 362                             |      |                     | 378    |   |
| Prepaid expenses and other current assets                                                        |   | (254                            | )         |                     | 727    |   |
| Accounts payable                                                                                 |   | (2                              | )         |                     | 88     |   |
| Employee compensation                                                                            |   | 419                             |      |                     | (69    | ) |
| Deferred income                                                                                  |   | 204                             |      |                     | (1     | ) |
| Warranty reserve                                                                                 |   | 14                              |      |                     | (60    | ) |
| Other liabilities and accrued expenses                                                           |   | (303                            | )         |                     | 591    |   |
| Net cash provided by (used in) continuing operations                                             |   | (398                            | )         |                     | 426    |   |
| Net cash used in discontinued operations                                                         |   | —                          |      |                     | (254   | ) |
| Net cash provided by (used in) operating activities                                              |   | (398                            | )         |                     | 172    |   |
|                                                                                             |   |                            |      |                     |   |   |
| **Cash Flows From Investing Activities:**                                                        |   |                            |      |                     |   |   |
| Purchase of property and equipment                                                               |   | (17                             | )         |                     | (71    | ) |
| Investment in proprietary software                                                               |   | —                          |      |                     | (333   | ) |
| Investment in perpetual license                                                                  |   | —                          |      |                     | (50    | ) |
| Net cash used in continuing operations                                                           |   | (17                             | )         |                     | (454   | ) |
| Net cash provided by discontinued operations                                                     |   | —                          |      |                     | 11     |   |
| Net cash used in investing activities                                                            |   | (17                             | )         |                     | (443   | ) |
|                                                                                             |   |                            |      |                     |   |   |
| **Cash Flows From Financing Activities:**                                                        |   |                            |      |                     |   |   |
| Proceeds from stock transactions                                                                 |   | —                          |      |                     | 21     |   |
| Net cash provided by financing activities                                                        |   | —                          |      |                     | 21     |   |
|                                                                                             |   |                            |      |                     |   |   |
| **Net decrease in cash and cash equivalents**                                                    |   | (415                            | )         |                     | (250   | ) |
|                                                                                             |   |                            |      |                     |   |   |
| **Cash and cash equivalents at beginning of period**                                             |   | 4,434                           |      |                     | 2,019  |   |
|                                                                                             |   |                            |      |                     |   |   |
| **Cash and cash equivalents at end of period**                                                   |   | **$**                           | **4,019** | ** **               |   | **$** | **1,769** | ** ** |

 

See accompanying notes to consolidatedfinancial statements

 

4

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**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

April 30, 2003

(Unaudited)

 

**1.****                                      Basisof Presentation**

 

The consolidated balance sheet as of April 30, 2003, the consolidated statements of operations forthe three and six months ended April 30, 2003 and 2002 and the consolidated statements of cash flows for the sixmonths ended April 30, 2003 and 2002, and the related information presented inthese notes have been prepared by management in accordance with accountingprinciples generally accepted in the United States of America for interimfinancial information and with the instructions to Form 10-QSB and Rule 10-01 ofRegulation S-X, without audit. Accordingly, they do not include all of the information and notesrequired by accounting principles generally accepted in the United States ofAmerica for complete financial statements. In the opinion of management, all adjustments considered necessary for afair presentation of results have been included.  The consolidated balance sheet at October 31, 2002 was derivedfrom the audited consolidated financial statements as of that date.  Operating results for the three and sixmonths ended April 30, 2003 are notnecessarily indicative of the results that may be expected for the year endingOctober 31, 2003.  For furtherinformation, refer to the consolidated financial statements and notes theretoincluded in Angeion Corporation’s Annual Report on Form 10-KSB for thetransition period ended October 31, 2002.

 

During March 2000, Angeion Corporation discontinued its historicalbusiness, the research, development, manufacturing and marketing of implantablecardioverter defibrillators (“ICD”). Consequently, the accompanying consolidated statements of operationspresent all activities of the ICD business as discontinued operations.  Although the last sales of ICD products weremade during the second quarter of 2000, the Company continues to pursue thelicense or transfer of its ICD technology.

 

Comprehensive income is a measure of all non-owner changes inshareholders’ equity and includes such items as net income, certain foreigncurrency translation items, minimum pension liability adjustments and changesin the value of available-for-sale securities. For the three and six months ended April 30, 2003 and 2002, comprehensive loss for AngeionCorporation was equivalent to net loss as reported.

 

**2.****                                      Reorganization**

 

***Reorganization UnderChapter 11.*** On June 17, 2002, the Company filed a voluntary petition for reliefunder Chapter 11 of the United States Bankruptcy Code in the United StatesBankruptcy Court for the District of Minnesota, Third Division (the “Court”)under case number 02-32260.  The filingwas done jointly with the holders of the Company’s 7 1/2% Senior ConvertibleNotes due April 2003 (“Notes”) and included a jointly submitted Plan ofReorganization (the “Plan”).  Thetransaction was implemented as a Chapter 11 Bankruptcy filing for the purposeof enabling the Company and the noteholders to accomplish the restructuring ina controlled manner and to enable the Company to retain a net operating losscarry forward of approximately $128 million out of the $133 million pre-bankruptcynet operating loss carry forward. During the bankruptcy period, the Company continued to operate asdebtor-in-possession.  Asdebtor-in-possession, the Company operated as an ongoing business, but couldnot engage in transactions outside the ordinary course of business withoutapproval of the Bankruptcy Court.  TheCompany’s subsidiary, Medical Graphics Corporation, was not part of the Chapter11 filing and continued to transact business as usual during the bankruptcyperiod.

 

On October 24,2002, the Court entered an order confirming the Joint Modified Plan ofReorganization dated September 4, 2002. The Plan became effective October 25, 2002, the next business day.

 

5

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As of June 17,2002, the date the petition was filed with the Court, there were 3,594,627shares of the Company’s common stock issued and outstanding (the “Old CommonStock”).  As a result of the Plan, allof the Company’s Old Common Stock was canceled and all options and warrants topurchase the Company’s Old Common Stock existing as of the petition date werecanceled.  To effectuate the Plan, theCompany issued a total of 3,594,433 shares of its common stock (i) uponconversion of the Notes and other obligations to equity and (ii) in replacementof the Old Common Stock (the “Replacement Common Stock”).  The difference between the 3,594,433 sharesactually issued under the Plan and the 3,594,627 shares outstanding as of June17, 2002 reflects a reduction of 194 shares representing fractional shares thatwere not issued under the Plan.

 

Under thePlan, each holder of the Company’s Notes and each holder of certain otherunsecured claims received such holder’s pro rata share of 95% of theReplacement Common Stock.  Each holderof the Company’s Old Common Stock received a pro rata share of 5% of theReplacement Common Stock and one common stock purchase warrant for each shareof Replacement Common Stock (the “New Warrants”).  For each 20 shares of Old Common Stock owned prior to the Planconfirmation date, shareholders received one share of Replacement Common Stockand one New Warrant to purchase one share of Replacement Common Stock at $7.79per share.  The New Warrants expire onOctober 31, 2007, and are subject to redemption at the Company’s option for$.01 per Warrant at any time after January 1, 2004, provided that the closingprice of the common stock exceeds $9.73 (subject to adjustment) for tenconsecutive trading days after January 1, 2004 and during the term of theWarrants.

 

**3.****                                      AccountingPolicies**

 

***Basis ofPresentation.*** The consolidated financial statements contained in this report reflectthe accounting principles set forth in Statement of Position 90-7, *“FinancialReporting by Entities in Reorganization Under the Bankruptcy Code”*(“SOP 90-7”).  This statement providesguidance for financial reporting by entities that have filed voluntarypetitions for relief under and have reorganized in accordance with thebankruptcy code.  In accordance withfresh-start reporting, the reorganization value of the entity is to bedetermined and allocated to the entity’s assets in conformity with purchaseaccounting guidelines.  All assets andliabilities are to be recorded at their respective fair values.  Adopting fresh-start reporting results in anew reporting entity with no beginning retained earnings or deficit.  SOP 90-7 further states that fresh-startfinancial statements prepared by entities emerging from bankruptcy will not becomparable with those prepared before their plans were confirmed because theyare, in effect, those of a new entity. Among other things, a black line is to be drawn in the financialstatements to distinguish between the pre-reorganization entity (“PredecessorCompany”) and the post-reorganization entity (“Successor Company”).  Consequently, after giving effect toreorganization and fresh-start adjustments, the financial statements of aSuccessor Company are deemed not comparable to those of a Predecessor Company.  For financial reporting purposes, theresults of the Predecessor Company and the Successor Company cannot becombined.

 

***Stock BasedCompensation.*** In December 2002, the FASB issued SFAS No. 148, *Accounting for Stock-Based Compensation– Transition and Disclosure.* SFAS No. 148 provides alternative methods of transition for a voluntarychange to the fair value based method of accounting for stock-based employeecompensation.  In addition, SFAS No. 148amends the disclosure requirements of SFAS No. 123 to require prominent disclosuresin both annual and interim financial statements about the method of accountingfor stock-based employee compensation and the effect of the method used onreported results.  The Company does notplan to change its method of accounting for stock-based employeecompensation.  The Company is requiredto provide the interim disclosures effective with this quarter ended April 30,2003.  These Notes to ConsolidatedFinancial Statements do not contain pro forma disclosures because the Companydid not grant any options during the three and six months ended April 30, 2003and there are no options outstanding at April 30, 2003.

 

6

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***Fresh-StartReporting.***  Theeffective date of the Company’s emergence from bankruptcy was October 25,2002.  For accounting purposes, theCompany adopted fresh-start reporting in accordance with SOP 90-7 as of October31, 2002.  In accordance withfresh-start reporting, all assets and liabilities were recorded at theirrespective fair values.  An independentthird-party appraiser determined the fair values of substantially all of theCompany’s tangible and intangible assets.

 

All financialinformation prior to October 31, 2002 is presented as pertaining to thePredecessor Company while all financial information presented as of and afterOctober 31, 2002 is presented as pertaining to the Successor Company.  Accordingly, the Consolidated FinancialStatements present information pertaining to both the Predecessor Company andthe Successor Company.  Tabularpresentations in these Notes to Consolidated Financial Statements may includedata pertaining to both the Predecessor Company and the Successor Company.  Accordingly, a black line has been drawn inthe financial statements to distinguish between the Predecessor Company andSuccessor Company.

 

***Fiscal Year Change.***  On November 13, 2002, the Company’s Board of Directors changed theCompany’s fiscal year from December 31 to October 31 to coincide with customerbuying patterns of the Medical Graphic’s medical equipment business and the NewLeaf health and fitness product business. The change also enables the Company to report its results in the futureon a comparable basis as a result of the fresh start reporting that wasrequired in conjunction with the Company’s emergence from Chapter 11bankruptcy.

 

**4.****                                      Intangible Assets**

 

As discussedin Note 3, “Accounting Policies,” the Company adopted fresh-start reporting asdescribed in SOP 90-7 under which the Company’s assets are to be recorded attheir respective fair values.  Anindependent third-party appraiser determined the fair values of the Company’sintangible assets as of October 31, 2002. Accordingly, all intangible assets have been valued at fair value as ofthe date of fresh-start reporting, October 31, 2002.  Intangible assets as of April 30, 2003 consisted of thefollowing:

 
| **(In thousands)**             |   | **Gross  Carrying  Amount** |   | **Accumulated  Amortization** |   | **Intangible  Assets, net** |   |
|--------------------------------|--------|-----------------------------|--------|-------------------------------|--------|-----------------------------|--------|
|                           |   |                        |   |                          |   |                        |   |
| Amortized developed technology |   | $                           | 7,250  |                          | $      | 412                         |   | $ | 6,838 |   |
|                           |   |                        |   |                          |   |                        |   |
| Unamortized trade name         |   | 1,000                       |   | —                        |   | 1,000                       |   |
|                           |   | $                           | 8,250  |                          | $      | 412                         |   | $ | 7,838 |   |

 

Amortizationexpense was $412,000 and $415,000 for the six months ended April 30, 2003 and2002, respectively.  Amortizationexpense was $636,000 for the ten-month transition period ended October 31,2002.  Intangible assets for thePredecessor Company were amortized using the straight-line method over theestimated useful lives of the assets that ranged from three to twelveyears.  The revalued intangible assetsfor the Successor Company are being amortized using the straight-line methodover the estimated useful lives of the assets that range from seven to tenyears.  Estimated amortization expensefor the remainder of fiscal year 2003 and for each of the succeeding years basedon the intangible assets as of April 30, 2003 is as follows:

 

7

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| **(In thousands)**                 |   | **Amortization** |   |
|------------------------------------|--------|------------------|--------|
| Six months ending October 31, 2003 |   | $                | 412    |   |
| 2004                               |   | 824              |   |
| 2005                               |   | 824              |   |
| 2006                               |   | 824              |   |
| 2007                               |   | 824              |   |
| Thereafter                         |   | 3,130            |   |
|                               |   | $                | 6,838  |   |

 

On January 1,2002, new accounting rules for business combinations and accounting forgoodwill and other intangibles (SFAS Nos. 141 and 142) became effective for theCompany.  Accordingly, goodwill, tradename and assembled workforce are no longer being amortized against earnings.  The following table discloses reported netloss and the adjusted net loss that would have been reported assuming that SFASNo. 142 were to have been effective for all reported periods.

 
|                                             |   | **Three  Months Ended  April 30,** |   | **Six Months  Ended  April 30,** |   |
|--------------------------------------------------|--------|------------------------------------|--------|----------------------------------|--------|
| **(In thousands, except for per share amounts)** |   | **2003**                           |   | **2002**                         |   | **2003** |   | **2002** |   |
| **Net loss, as reported**                        |   | $                                  | (633   | )                                | $      | (1,032 | ) | $ | (1,257 | ) | $ | (3,055 | ) |
| Add back amortization:                           |   |                               |   |                             |   |   |   |   |   |
| Goodwill                                         |   | —                             |   | —                           |   | — |   | 6 |   |
| Trade name                                       |   | —                             |   | —                           |   | — |   | 50 |   |
| Assembled workforce                              |   | —                             |   | —                           |   | — |   | 53 |   |
| **Net loss, as adjusted**                        |   | $                                  | (633   | )                                | $      | (1,032 | ) | $ | (1,257 | ) | $ | (2,946 | ) |
|                                             |   |                               |   |                             |   |   |   |   |   |
| Earnings per share, basic and diluted:           |   | $                                  | (0.18  | )                                | $      | (0.29 | ) | $ | (0.35 | ) | $ | (0.85 | ) |
| **Net loss per share, as reported**              |   |                               |   |                             |   |   |   |   |   |
| Add back amortization:                           |   |                               |   |                             |   |   |   |   |   |
| Goodwill                                         |   | —                             |   | —                           |   | — |   | — |   |
| Trade name                                       |   | —                             |   | —                           |   | — |   | 0.01 |   |
| Assembled workforce                              |   | —                             |   | —                           |   | — |   | 0.02 |   |
| **Net loss per share, as adjusted**              |   | $                                  | (0.18  | )                                | $      | (0.29 | ) | $ | (0.35 | ) | $ | (0.82 | ) |

 

8

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**5.****                                      Warranty Reserve**

 

Sales of the Company’s equipment are subject to a warranty.  Equipment warranties typically extend for aperiod of twelve months from the date of installation.  Standard warranty terms are included incustomer contracts.  Under the terms ofthese warranties, the Company is obligated to repair or replace any componentsor assemblies that it deems defective in workmanship or materials.  The Company reserves the right to rejectwarranty claims where it determines that failure is due to normal wear,customer modifications, improper maintenance or misuse.  The Company adjusts the warranty reservebased on the number and type of equipment that is subject to warranty, adjustedfor the remaining months of warranty coverage. The warranty reserve adjustment reflects the Company’s historicalwarranty experience based on type of equipment.  Warranty expenses are evaluated and adjusted periodically.  Warranty provisions and expenses for the sixmonths ended April 30, 2003 were as follows:

 
| **(In thousands)**        |   | **Warranty  Reserve** |   |
|---------------------------|--------|-----------------------|--------|
| Balance  October 31, 2002 |   | $                     | 111    |   |
| Warranty  provisions      |   | 119                   |   |
| Warranty  expenses        |   | (105                  | )      |
| Balance April  30, 2003   |   | $                     | 125    |   |

 

**6.****                                      Reclassifications**

 

Certain amounts in Angeion’s financial statements for the three and sixmonths ended April 30, 2002have been reclassified to conform to the 2003 presentation.  These reclassifications had no effect on netloss or shareholders’ equity.

 

**7.****                                      NetLoss Per Share**

 

Basic loss pershare is computed by dividing net loss by the weighted average sharesoutstanding during the reporting period. Diluted loss per share is computed similar to basic loss per shareexcept that the weighted average shares outstanding are increased to includeadditional shares from the assumed exercise of stock options and warrants, ifdilutive.  The number of additionalshares is calculated by assuming that outstanding stock options or warrantswere exercised and that the proceeds from such exercise were used to acquireshares of common stock at the average market price during the reporting period.  There were no dilutive common sharesoutstanding for the three and six months ended April 30, 2003 and 2002.  The Company had 179,537 warrants outstandingat April 30, 2003 that were considered antidilutive and therefore notconsidered to have been exercised.

 

**8.****                                      OtherInformation**

 

In June 2002, Company’s former joint venture partner, ELAMedical, notified the Company that someof the ICD’s formerly manufactured by Angeion were experiencing prematurebattery depletion.  The Company advisedthe attending physicians of the patients with these ICD’s of the problems andprovided the physicians with a recommended procedure to determine what actionis required.  As part of the May 1999agreement between the Company and ELA in which the Company withdrew from a jointventure with ELA, ELA is responsible for the warranty coverage, technicalservice, and regulatory compliance service for these ICDs.  The Company remains responsible for thirdparty claims relating to these ICDs made on behalf of a patient (i.e. product liabilityclaims).  The Company believes that ifany such claims are made, it has adequate product liability insurance to coverthem, subject to deductibles.

 

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**Item 2.****           Management’s Discussionand Analysis or Plan of Operation**

 

**Forward-Looking Statements**

 

Statementsincluded in this Quarterly Report on Form 10-QSB that are not historical orcurrent facts are “forward-looking statements” made pursuant to the safe harborprovisions of the Private Securities Litigation Reform Act of 1995.  The words “believe,” “expect,” “will,”“can,” “estimate,” “anticipate,” and similar expressions are intended toidentify forward-looking statements. Forward-looking statements are subject to certain risks anduncertainties that could cause actual results to differ materially includingthe following: (i) the Company’s ability to successfully operate its MedicalGraphics business including its ability to develop, improve and update itscardiorespiratory diagnostic products, (ii) the Company’s ability tosuccessfully introduce its New Leaf products including its New Leaf Weight LossProgram, (iii) the Company’s ability to successfully defend itself from productliability claims related to its Medical Graphics and New Leaf products orclaims associated with its prior cardiac stimulation products, (iv) theCompany’s ability to protect its intellectual property, (v) the Company’sdependence on third party vendors and (vi) the Company’s ability to comply with Nasdaq listing requirements,including maintenance of the $1.00 per share bid price as well as other factorsnot now anticipated.  Additionalinformation with respect to the risks and uncertainties faced by the Companymay be found in, and the prior discussion is qualified in its entirety by, theother risk factors that are described from time to time in Angeion’s Securitiesand Exchange Commission reports, including but not limited to the TransitionReport on Form 10-KSB for the ten-month period ended October 31, 2002, andsubsequently filed reports. In addition, from time to time, the Company throughits management may make oral forward-looking statements.  The Company undertakes no obligation toupdate any forward-looking statement.

 

**Overview**

 

AngeionCorporation is a medical products company that reported revenue of $13.4million for the ten months ended October 31, 2002 and $16.7 million for theyear ended December 31, 2001.  Domesticproduct sales and service revenues accounted for 83.4% of revenue for the tenmonths ended October 31, 2002 while international product sales accounted forthe remaining 16.6%.

 

Angeion,through its Medical Graphics Corporation subsidiary, develops, manufactures andmarkets non-invasive cardiorespiratory diagnostic equipment and relatedsoftware for the management and improvement of cardiorespiratory health underthe MedGraphics trade name.  The primaryMedGraphics products include pulmonary function and cardiorespiratory exercisetesting equipment.  The Company alsodevelops, manufactures and markets health and fitness products and servicesdesigned to assist consumers with weight management, fitness improvement andcardiac rehabilitation.  These newproducts and services are sold under the New Leaf brand name to consumersthrough various delivery sites such as health and fitness clubs, weightmanagement and cardiac rehabilitation centers.

 

The ten-monthtransition period that ended October 31, 2002 was a difficult period for theCompany, but also represented a period of significant change.  Through the Chapter 11 Bankruptcy, all ofthe Company’s Senior Convertible Notes due April 2003 were converted intocommon stock.  In addition, the Companyreceived $2.9 million in cash under an agreement that granted a perpetual,non-exclusive license to use the Company’s cardiac stimulation technology toBiotronik.  As a result of theseactions, the Company emerged from bankruptcy on October 25, 2002 with a strongbalance sheet, no debt and over $4.4 million in cash.  For the first time in several years, management is now completelyfocused on running the cardiorespiratory diagnostic business as well as its newhealth and fitness products and services as opposed to the wind-down of its ICDbusiness and all the financial issues associated with the debt that was incurredin April 1998.

 

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The Companyemerged from its Chapter 11 proceeding and adopted fresh start reporting as ofOctober 31, 2002.  In accordance withfresh-start reporting, all assets and liabilities were recorded at theirrespective fair values.  An independentthird-party appraiser determined the fair values of substantially all of theCompany’s tangible and intangible assets. As a result of that appraisal, the Company (i) increased the net bookvalue of property and equipment from $899,000 to $2,164,000, (ii) decreased thenet book value of intangible assets from $10.1 million to $8.3 million, (iii)eliminated the $1.9 million value of goodwill, (iv) increased the value ofinventory by $59,000, and (v) decreased the value of deferred income by$224,000.

 

The foregoingrevaluation adjustments affect the Successor Company operating results in thefollowing manner.  For fiscal year 2003,they (i) increase depreciation expense by $37,000, (ii) increase amortizationof intangibles by $50,000, (iii) decrease gross margins by $59,000 as currentinventory is sold and (iv) decrease gross margins by $224,000 as deferredservice contracts are recognized as income.

 

The Company’sfinancial statements after October 31, 2002 reflect a new reporting entity, theSuccessor Company, and are not directly comparable to the financial statementsof prior periods.  The principalcomparative differences between the three and six month periods ended April 30,2003 and 2002 relate to the impact of the changes in indebtedness and therevaluation of the Company’s assets and liabilities to reflect thereorganization value on October 31, 2002. The changes primarily affect depreciation and amortization expense,gross margins and interest expense in the Company’s results of operations afterOctober 31, 2002.  However, for purposesof comparative analysis, the following discussion of the operating results ofthe Company compares the operating results of the Successor Company with theoperating results of the Predecessor Company for the three and six months endedApril 30, 2003 and 2002, respectively. The operations comprised of revenues, selling and marketing expenses,general and administrative expenses and research and development expenses ofthe Predecessor and Successor Companies were substantially similar and thecomparison of those items is meaningful to understanding the business.

 

**Results of Operations**

 

AngeionCorporation recorded a net loss of $633,000 for the three months ended April30, 2003 compared to a net loss of $1.0 million for the same period in2002.  The net loss for 2002 included a$92,000 recovery of income taxes as well as $510,000 of interest expense.  For the six months ended April 30, theCompany recorded net losses of $1.3 million and $3.1 million for 2003 and 2002,respectively.  The net loss for 2002included a $92,000 recovery of income taxes, $1.0 million of interest expenseand a loss of $678,000 from discontinued operations.

 

**Revenues**

 

Revenuesconsist of product sales and service revenues. Product sales reflect sales of Medical Graphic’s non-invasivecardiorespiratory diagnostic equipment, sales of New Leaf health and fitnessproducts and services, and aftermarket sales of peripherals and supplies.  Service revenues reflect contract revenuesfrom extended service contracts, non-warranty service visits and training.

 

Second quarterrevenue increased by 12.2% to $4.5 million from $4.0 million for the threemonths ended April 30, 2003 and 2002, respectively.  Domestic product revenue increased by 28.4% to $2.9 million in2003 compared to $2.3 million in 2002. Internationally, product revenue decreased 14.4% to $852,000 in 2003from $995,000 in 2002.  Service revenuedecreased by 1.7% to $739,000 in 2003 from $752,000 in 2002.

 

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Total revenueincreased by 8.7% to $9.2 million compared to $8.5 million for the six monthsended April 30, 2003 and 2002, respectively. Domestic product revenue increased by 19.2% to $6.2 million in 2003compared to $5.2 million in 2002. International product revenue decreased by 14.9% to $1.6 million in 2003compared to $1.8 million in 2002.  Yearto date service revenue of $1.5 million for 2003 is comparable to 2002.

 

The revenuetrends noted during the first quarter of 2003 have continued into the secondquarter.  Although domestic customerinterest in placing new equipment orders continues to improve, the Companybelieves that these customers are also continuing to exercise caution in makingcapital expenditures due to the overall uncertainty of the United Stateseconomy.  Internationally, customerequipment orders continue to be sluggish. Despite a weakening U.S. Dollar compared to the Euro, European customersare delaying capital expenditures unless there is a clear immediate need.  Latin America continues to suffer from veryweak economies and devaluating currencies. In addition, the Company has experienced some delays in receiving neworders from customers in the Pacific Rim due to the business disruptions causedby the SARS outbreak.  Service revenuereflects an increase in service contracts being written due to on-goingemphasis of the sale of extended service contracts that has been offset by adecrease in non-warranty service revenue. The Company continues to develop its New Leaf Personal Exercise productsthat are currently targeting weight-loss consumers through fitness clubs andother delivery sites

 

**Gross Margin**

 

Gross marginpercentage increased to 44.1% of revenue for the three months ended April 30,2003 compared to 39.8% for the same period in 2002.  For the six months ended April 30, gross margin percentageincreased to 42.8% in 2003 from 41.7% in 2002. Although overall gross margins have increased in 2003 compared to 2002due to improved manufacturing efficiencies, gross margin percentages for 2003have been negatively affected by the fresh start accounting rules that requiredthe Company to write up its inventory to fair market value at October 31, 2002,rather than carrying the inventory at the lower of cost or market.  As a result, the Company increased thecarrying value of its inventory by $59,000 at October 31, 2002.  In addition, the Company was required torecord the direct and incremental cost of fulfilling its obligations associatedwith customer service contracts existing at October 31, 2002.  Consequently, deferred income was reduced by$224,000 at October 31, 2002.

 

As theCompany’s inventory and deferred income turn during fiscal year 2003, the freshstart adjustments for inventory and deferred income will affect the Company’sgross margin negatively.  The impact ofthe October 31, 2002 fresh-start accounting adjustments resulted in decreasesof $134,000 and $75,000 in gross margin for the first and second quarters of2003, respectively.  As a result, thecorresponding gross margin percentages were negatively affected by 2.8% duringthe first quarter and 1.7% during the second quarter.  Consequently, without these adjustments, the underlying firstquarter 2003 gross margin rate would have been 44.4% while second quarter 2003would have been 45.8%.  Gross marginswill continue to be negatively affected by the October 31, 2002 fresh startaccounting adjustments by a total of $74,000 for the remainder of 2003.  The fresh start accounting adjustments had noimpact, however, on the Company’s cash flow.

 

**Selling and Marketing**

 

Second quarterselling and marketing expenses increased 10.1% to $1.3 million for the threemonths ended April 30, 2003 compared to $1.2 million in 2002.  For the six months ended April 30, sellingand marketing expenses increased 5.2% to $2.8 million in 2003 from $2.6 millionin 2002.  The year-to-year increases forboth the three and six months ended April 30 are due primarily to increased

 

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commissions associated withincreased revenue.  Moreover, theCompany has continued to focus on selling and marketing its New Leaf personalexercise products.

 

**General and Administrative**

 

General andadministrative expenses increased 29.2% to $735,000 for the three months endedApril 30, 2003 compared to $569,000 in 2002. For the six months ended April 30, general and administrative expensesincreased 4.5% to $1.3 million in 2003 from $1.2 million in 2002.  The second quarter 2003 increase isprimarily due to increased personnel expenses. The increase in personnel expenses was somewhat offset by a decrease inprofessional fees related to the conversion of debt to equity that wereincurred during the three months ended January 31, 2002 and not incurred duringthe same period of 2003.

 

**Research and Development**

 

Research anddevelopment expenses increased 30.2% to $401,000 for the three months endedApril 30, 2003 compared to $308,000 in 2002. For the six months ended April 30, research and development expensesincreased 6.1% to $743,000 in 2003 from $700,000 in 2002.  The Company’s research and development costsare focused on developing additional cardiorespiratory diagnosticproducts.  The increase in research anddevelopment expenses for the three and six months ended April 30, 2003 is duethe Company’s discontinuance of capitalizing a portion of its softwaredevelopment costs, which is slightly offset by lower personnel costs during thesecond quarter.  The Company’s previousfocus on the conversion and consolidation of software platforms wassubstantially completed in October 2002. Costs of $113,000 and $210,000 were capitalized as part of the Company’sproprietary software for the three and six months ended April 30, 2002 whilenone were capitalized during the six months ended April 30, 2003.  Costs of $221,000 were capitalized as partof the Company’s proprietary software for the six months ended October 31, 2002

 

**Amortization of Intangibles**

 

Amortizationof intangibles increased to $217,000 from $180,000 for the three months endedApril 30, 2003 and 2002, respectively. Amortization expenses resulting from fresh start accounting are somewhathigher than those that were incurred prior to the revaluation of intangibleassets at October 31, 2002. Amortization expense for the first six months of 2003 was lower than thesame period of 2002, which included the months of November and December 2001,due to the Company’s January 1, 2002 adoption of SFAS Statement No. 142, *Goodwill andOther Intangible Assets*, wherein goodwill and trade name are nolonger amortized.

 

**Other Income (Expense)**

 

Interestincome for the three months ended April 30, 2003 increased to $8,000 from$4,000 in 2002.  For the six monthsended April 30, interest income increased to $18,000 in 2003 from $10,000 in2002.  The increase in interest incomereflects an increase in excess cash balances available for short-terminvestment.

 

There was nointerest expense for the three or six months ended April 30, 2003 compared to$510,000 and $1.0 million for 2002. Under the Joint Plan of Reorganization, all of the Company’s SeniorConvertible Notes due April 2003 were converted into common stock of theCompany upon emergence from bankruptcy.

 

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**Liquidity and Capital Resources**

 

The Companyhas financed its liquidity needs over the last several years through revenuegenerated by the operations of its wholly owned subsidiary, Medical GraphicsCorporation, through revenue from license agreements for patented ICDtechnology and through the use of cash balances.

 

The Companyhad cash of $4.0 million and working capital of $6.9 million as of April 30,2003 compared to cash of $4.4 million and working capital of $7.5 million atOctober 31, 2002.  During the six monthsended April 30, 2003, the Company used $398,000 in cash for all operatingactivities, primarily as a result of its net loss of $1.3 million, which wasoffset by $730,000 of depreciation and amortization.  In addition, the Company used cash for increases of $311,000 and$254,000 in accounts receivable and prepaid expenses and other current assets,respectively, as well as a decrease of $303,000 in other liabilities andaccrued expenses.  These uses of cashwere partially offset with cash generated by a $362,000 decrease in inventoriesas well as increases of $419,000 and $204,000 in accrued employee compensationand deferred income, respectively.

 

During the sixmonths ended April 30, 2003, the Company used $17,000 in cash for investingactivities to purchase property and equipment.

 

The Companyhas no material commitments for capital expenditures for the remainder offiscal year 2003.

 

As a result ofthe Company’s October 25, 2002 emergence from bankruptcy and the resultingconversion of debt to equity and its cash of $4.0 million, the Company believesthat its liquidity and capital resource needs for the next twelve months willbe met through its current cash and cash equivalents, cash flows from operationsand working capital.

 

**Other Commitments**

 

The Companyhas made various financial commitments in the ordinary course of conducting itsbusiness operations.  The followingtable summarizes all significant commitments:

 
| **(Amounts in thousands)  Description**                   |   | **Six months  ending  October 31,  2003** |   | **2004** |   | **2005** |   | **2006** |   | **2007 &  Thereafter** |   |
|-----------------------------------------------------------|--------|-------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------------------------|--------|
| Continuing operations:                                    |   |                                      |   |     |   |     |   |     |   |                       |   |
| Minimum lease payments                                    |   | $                                         | 163    |     | $      | 215      |   | $        | 8      |                       | $      | 6 |   | $ | 4 |   |
| Minimum royalty payments for sales of  AeroSport products |   | 50                                        |   | 100      |   | 100      |   | 100      |   | —                     |   |
| Discontinued operations:                                  |   |                                      |   |     |   |     |   |     |   |                       |   |
| Minimum lease payments                                    |   | 39                                        |   | —   |   | —   |   | —   |   | —                     |   |
| Sublease income                                           |   | (24                                       | )      | —   |   | —   |   | —   |   | —                     |   |
|                                                      |   | $                                         | 228    |     | $      | 315      |   | $        | 108    |                       | $      | 106 |   | $ | 4 |   |

 

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**Item 3. Controls and Procedures**

 

**(a)****                                  Evaluationof Disclosure Controls and Procedures**

 

The Company’s Chief ExecutiveOfficer, Richard E. Jahnke, and Chief Financial Officer, Dale H. Johnson, haveevaluated the effectiveness of the Company’s disclosure controls and procedureswithin 90 days prior to the filing of this report.  Based upon this review, these officers believe that the Company’sdisclosure controls and procedures are effective in ensuring that materialinformation related to the Company is made known to them by others within theCompany.

 

**(b)****                                 ****Changes in Internal Controls**

 

There were nosignificant changes in the Company’s internal controls or in other factors thatcould significantly affect these controls during the quarter covered by thisreport or from the end of the reporting period to the date of this Form 10-QSB.

 

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**PART II - OTHER INFORMATION**

 

**Item 1. Legal Proceedings**

 

The Company issubject to certain claims and lawsuits that have been filed in the ordinarycourse of business.  Management is ofthe opinion that ultimate settlement of these matters will not have a materialimpact on its financial statements.

 

**Item 2. Changes in Securities**

 

None

 

**Item 3. Defaults Upon Senior Securities**

 

None

 

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

 

None

 

**Item 5. Other Information**

 

**None**

 

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

 

(a)                                  ExhibitsList

 

99.1                           Certificatepursuant to 18 U.S.C. § 1350

 

(b)                                 Reportson Form 8-K

 

No reports onForm 8-K were filed during the three months ended April 30, 2003.

 

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**SIGNATURES**

 

In accordance with the requirements of the Exchange Act, the registrantcaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 

 
|   |         |   |   |   |   | Angeion Corporation                   |   |
|--------|--------------|--------|--------|--------|--------|---------------------------------------|--------|
|   |         |   |   |   |   | (Registrant)                          |
|   |         |   |   |   |   |                                  |
|   |         |   |   |   |   |                                  |
| Date:  | June 5, 2003 |   |   |   |   | /s/ Richard E. Jahnke                 |   |
|   |         |   |   |   |   | Richard E. Jahnke                     |
|   |         |   |   |   |   | President and Chief Executive Officer |
|   |         |   |   |   |   | (Principal Executive Officer)         |
|   |         |   |   |   |   |                                  |
|   |         |   |   |   |   |                                  |
| Date:  | June 5, 2003 |   |   |   |   | /s/ Dale H. Johnson                   |   |
|   |         |   |   |   |   | Dale H. Johnson                       |
|   |         |   |   |   |   | Chief Financial Officer               |
|   |         |   |   |   |   | (Chief Accounting Officer)            |
|        |              |        |        |        |        |                                       |        |  |

 

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**CERTIFICATIONS**

 

I,Richard E. Jahnke, certify that:

 

1.                                       I have reviewed this quarterly report on Form10-QSB of Angeion Corporation;

 

2.                                       Based on my knowledge, this quarterly reportdoes not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of the circumstancesunder which such statements were made, not misleading with respect to theperiod covered by this quarterly report;

 

3.                                       Based on my knowledge, the financialstatements, and other financial information included in this quarterly report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this quarterly report;

 

4.                                       The registrant’s other certifying officersand I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for theregistrant and we have:

 

a)                                      designed such disclosure controls andprocedures to ensure that material information relating to the registrant, includingits consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this quarterly report isbeing prepared;

 

b)                                     evaluated the effectiveness of theregistrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this quarterly report (the “Evaluation Date”); and

 

c)                                      presented in this quarterly report ourconclusions about the effectiveness of the disclosure controls and proceduresbased on our evaluation as of the Evaluation Date;

 

5.                                       The registrant’s other certifying officersand I have disclosed, based on our most recent evaluation, to the registrant’sauditors and the audit committee of registrant’s board of directors (or personsperforming the equivalent function):

 

a)                                      all significant deficiencies in the design oroperation of internal controls which could adversely affect the registrant’sability to record, process, summarize and report financial data and haveidentified for the registrant’s auditors any material weaknesses in internalcontrols; and

 

b)                                     any fraud, whether or not material, thatinvolves management or other employees who have a significant role in theregistrant’s internal controls; and

 

6.                                       The registrant’s other certifying officersand I have indicated in this quarterly report whether or not there weresignificant changes in internal controls or in other factors that couldsignificantly affect internal controls subsequent to the date of our mostrecent evaluation, including any corrective actions with regard to significantdeficiencies and material weaknesses.

 
| Date:  | June 5, 2003 |   |   |   | /s/ Richard E. Jahnke                 |   |
|--------|--------------|--------|--------|--------|---------------------------------------|--------|
|   |         |   |   |   | Richard E. Jahnke                     |
|   |         |   |   |   | President and Chief Executive Officer |

 

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I,Dale H. Johnson, certify that:

 

1.                                       I have reviewed this quarterly report on Form10-QSB of Angeion Corporation;

 

2.                                       Based on my knowledge, this quarterly reportdoes not contain any untrue statement of a material fact or omit to state amaterial fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading withrespect to the period covered by this quarterly report;

 

3.                                       Based on my knowledge, the financialstatements, and other financial information included in this quarterly report,fairly present in all material respects the financial condition, results ofoperations and cash flows of the registrant as of, and for, the periodspresented in this quarterly report;

 

4.                                       The registrant’s other certifying officersand I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for theregistrant and we have:

 

a)                                      designed such disclosure controls andprocedures to ensure that material information relating to the registrant,including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this quarterly reportis being prepared;

 

b)                                     evaluated the effectiveness of theregistrant’s disclosure controls and procedures as of a date within 90 daysprior to the filing date of this quarterly report (the “Evaluation Date”); and

 

c)                                      presented in this quarterly report ourconclusions about the effectiveness of the disclosure controls and proceduresbased on our evaluation as of the Evaluation Date;

 

5.                                       The registrant’s other certifying officersand I have disclosed, based on our most recent evaluation, to the registrant’sauditors and the audit committee of registrant’s board of directors (or personsperforming the equivalent function):

 

a)                                      all significant deficiencies in the design oroperation of internal controls which could adversely affect the registrant’sability to record, process, summarize and report financial data and haveidentified for the registrant’s auditors any material weaknesses in internalcontrols; and

 

b)                                     any fraud, whether or not material, thatinvolves management or other employees who have a significant role in theregistrant’s internal controls; and

 

6.                                       Theregistrant’s other certifying officers and I have indicated in this quarterlyreport whether or not there were significant changes in internal controls or inother factors that could significantly affect internal controls subsequent tothe date of our most recent evaluation, including any corrective actions withregard to significant deficiencies and material weaknesses.

 
| Date:  | June 5, 2003 |   |   |   | /s/ Dale H. Johnson     |   |
|--------|--------------|--------|--------|--------|-------------------------|--------|
|   |         |   |   |   | Dale H. Johnson         |
|   |         |   |   |   | Chief Financial Officer |

 

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