<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    ---------

                                    FORM 10-K
             X Annual report pursuant to Section 13 or 15(d) of the
            --
                         Securities Exchange Act of 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
                           COMMISSION FILE NO. 0-18602

                                ATS MEDICAL, INC.
             (Exact name of registrant as specified in its charter)

             MINNESOTA                                41-1595629
   (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)

           3905 ANNAPOLIS LANE
         MINNEAPOLIS, MINNESOTA                        55447
     (Address of principal executive offices)       (Zip Code)

Registrant's telephone number, including area code: (763) 553-7736

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 par value

         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
                                     ---    ---

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. ( )

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Act).

                                  Yes     No X
                                     ---    ---

         The aggregate market value of voting stock held by nonaffiliates of the
registrant as of June 28, 2002, was approximately $11,861,627 (based on the last
sale price of such stock as reported by the NASDAQ National Market).

         The number of shares outstanding of each of the registrant's classes of
common stock as of March 21, 2003, was:

         Common Stock, $.01 par value               22,324,990 shares

                       DOCUMENTS INCORPORATED BY REFERENCE

         Pursuant to General Instruction G, the responses to Items 5, 6, 7, 7A
and 8 of Part II of this report are incorporated by reference to certain
information contained in the registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 2002 and the responses to Items 10, 11, 12 and 13
of Part III of this report are incorporated herein by reference to certain
information contained in the registrant's definitive Proxy Statement for its
2003 Annual Meeting of Shareholders to be held on April 30, 2003.



<PAGE>




                                ATS MEDICAL, INC.
                                 2002 FORM 10-K

                                     PART I

ITEM 1. BUSINESS

OVERVIEW

ATS Medical, Inc. is a Minnesota corporation founded in June, 1987. We
manufacture and market a mechanical bileaflet heart valve with a unique open
pivot design. Our valve is used to treat heart valve failure caused by the
natural aging process, rheumatic heart disease, prosthetic valve failure and
congenital defects. Mechanical heart valves have been in use since the early
1960s. The worldwide market for mechanical heart valves was estimated to exceed
$400 million in 2002.

The ATS Open Pivot(R) mechanical heart valve ("ATS Open Pivot(R) MHV") is
designed to be an evolutionary improvement upon currently available mechanical
heart valves by incorporating a pivot consisting of protruding spheres upon
which the leaflets of the valve pivot to open and close. This unique open pivot
has been designed to eliminate the cavity associated with the pivot of other
bileaflet valves and to improve the ability of the blood to flow through the
valve without forming clots. We began selling the ATS Open Pivot(R) MHV in
international markets in 1992. In October 2000, we received FDA approval to sell
the ATS Open Pivot(R) MHV in the United States.

PROSTHETIC HEART VALVE MARKET

There are two types of replacement heart valves: tissue and mechanical. Tissue
valves are made from animal or cadaver tissue or in some cases the patient's own
tissue. Tissue valves do not present the same level of risk of blood clotting
around the valve as mechanical valves. Tissue valves, however, have limited
long-term durability due to calcification and deterioration. If a tissue valve
fails, a new valve must be implanted, requiring another open heart surgery.
Mechanical valves are made from durable materials such as metals and carbon. In
vitro testing of current pyrolytic carbon mechanical valves has yielded
estimated useful lives in excess of any patient's lifetime. Current mechanical
valves, however, require the use of anti-coagulants to prevent formation of
blood clots; tissue valves generally do not require anti-coagulant treatment.
Tissue valves are generally prescribed for patients who are less able to
tolerate anti-coagulants due to conditions such as gastrointestinal ulcers or
liver dysfunction, elderly patients, women in their childbearing years and very
active people.

Heart surgeons choose a particular type of mechanical valve based on a number of
factors. A principal factor in the choice of a valve is the potential for
forming blood clots, or thrombosis, resulting from areas in the valve where the
blood can stagnate. Blood clots can impair the performance of a valve and, if
the clot detaches and moves through the bloodstream (a thromboembolism), result
in an arterial blockage or stroke. Another principal factor in the choice of a
mechanical valve is the blood flow efficiency, or hemodynamics, of the valve. A
mechanical valve should allow blood to flow easily through the valve with
minimal pressure required to open the valve and minimal backflow of blood when
the valve closes. The valve also should not exert force on the blood that could
damage the fragile blood cells. Other factors that are important in a surgeon's
choice of a mechanical valve are the ease in implanting and monitoring the
valve's performance, the patient's quality of life and the physician's
familiarity with and confidence in the valve.

In addition to heart surgeons, administrators or business managers at hospitals
and clinics have become increasingly influential in the purchase decision-making
process in recent years. The increasing emphasis on medical cost containment in
most world markets has elevated the decision-making power of the administrator.
The administrator tends to focus on cost-effectiveness and, in some markets,
primarily on the cost of the valve.

We estimate that the total heart valve market in the U.S. in 2002 was
approximately $390 million. We estimate that approximately 77,500 heart valve
replacement surgeries were conducted in the United States in 2001.





                                       2

<PAGE>

THE ATS OPEN PIVOT(R) MHV

Our product is designed to improve upon existing mechanical heart valves by
combining a proprietary open pivot design and other innovative features with the
widely accepted biocompatibility and durability of pyrolytic carbon. The
standard ATS heart valve is available in seven sizes ranging from 19mm to 31mm
in diameter, with sewing cuffs for either aortic valve or mitral valve
replacement. In 1994, we introduced the Advanced Performance series of the ATS
heart valve in international markets. This valve is available in seven sizes
ranging from 16mm to 28mm in diameter. Our 16mm valve is currently the world's
smallest mechanical valve.

The major design features of the ATS Open Pivot(R) MHV are:

         OPEN PIVOT AREAS. The proprietary open pivot areas of the ATS heart
         valve feature spherical protrusions from the orifice that match
         spherical notches in the leaflets. The pivot areas protrude into the
         orifice and so are exposed to the washing action of the blood flowing
         through the heart valve. All other currently marketed bileaflet valves
         contain pivot cavities in the orifice wall into which protrusions from
         the semi-circular leaflets extend to allow the leaflets to open and
         close. The open pivot design also features angled inflow and outflow
         pivot stops.

         A THIN BUT DURABLE ORIFICE. The orifice of the ATS heart valve is
         manufactured using a mandrel which is coated with pyrolytic carbon. The
         mandrel is then removed, leaving a solid pyrolytic carbon orifice. Some
         competitive products use an orifice composed of a soft graphite
         substrate coated with pyrolytic carbon. By eliminating the graphite
         substrate, we have made the orifice wall thinner, resulting in a larger
         average inside diameter. The orifice is surrounded by a titanium
         stiffening ring and is rotatable.

         LOW PROFILE DESIGN. The ATS heart valve has a low profile design. The
         profile of a mechanical heart valve refers to the extension of the
         orifice and leaflets above and below the natural tissue anulus, or
         location of the natural heart valve. The inflow side of the orifice of
         the ATS heart valve is flat, unlike the most widely used cavity pivot
         valve which has upward protrusions on the orifice to house the cavity.

         AN ADVANCED SEWING CUFF. The sewing cuff surrounding the orifice of the
         ATS heart valve is made of double velour polyester and includes a
         surgical felt ring for ease of sewing. The Advanced Performance series
         offers an alternative sewing cuff design that allows a valve with a
         larger inside diameter to be used in small anulus situations.

         PYROLYTIC CARBON. Pyrolytic carbon has been used in mechanical heart
         valves for over 25 years. The orifice of our heart valve is fabricated
         entirely from pyrolytic carbon, while the leaflets are fabricated by
         coating pyrolytic carbon on graphite substrates. Pyrolytic carbon used
         in other mechanical valves has been tested to function longer than any
         patient's lifetime. Pyrolytic carbon is believed to be superior to
         metal and plastics in terms of the human body's acceptance of the
         material, thus resulting in lower rates of thrombosis and
         thromboembolism than with other materials. Because of its durability
         and biocompatibility, pyrolytic carbon is used in virtually every
         mechanical heart valve in the market.

         TWO LEAFLETS. Bileaflet valves are used in substantially all mechanical
         heart valves being marketed today. The leaflets in the ATS heart valve
         have tungsten impregnated in the substrate to make them visible under
         x-ray.

The ATS Open Pivot(R) MHV is designed to provide the following primary advances
over currently available mechanical heart valves:

         REDUCED RATES OF THROMBOEMBOLIC COMPLICATIONS. The pivot cavities found
         in other bileaflet heart valves are areas of blood flow stagnation and
         possible blood clot formation. By eliminating the cavities in the
         orifice and placing the pivot areas within the normal blood flow, the
         improved washing action in the ATS heart valve is intended to lower the
         likelihood of blood clot formation and the resulting incidence of
         thromboembolism. The open pivot design as well as the angled inflow and
         outflow pivot stops also result in low levels of hemolysis (damage to
         blood cells), which may contribute to a low rate of thromboembolic
         complications.




                                       3
<PAGE>

         IMPROVED PATIENT QUALITY OF LIFE THROUGH LOWER NOISE LEVELS. Patients
         with other implanted mechanical heart valves complain of disturbances
         resulting from the clicking sound created as the valve closes. These
         disturbances range from irritability and insomnia to paranoia and
         depression. Spouses of patients with implanted mechanical valves also
         report disturbances resulting from the noise of the valve. Based on
         informal surveys, we believe that the ATS heart valve is quieter than
         our competitors' valves and below the threshold of hearing of most
         patients. We believe that the reduced noise level of our product
         further improves the quality of life of the patient.

         IMPROVED BLOOD FLOW EFFICIENCIES. We have made the orifice of our
         product both durable and thinner, thereby resulting in a larger inside
         diameter. The larger inside diameter of the ATS heart valve is intended
         to result in lower pressure gradients in our product. (The term
         "gradients" refers to the pressure difference between the inflow and
         outflow side of the valve needed to support the required blood flow
         through the valves.) The ATS heart valve is also designed to have less
         regurgitation (backflow of blood when the valve is closing and closed)
         due to the geometry of its angled inflow and outflow pivot stops which
         minimize the direct leakage paths. These design characteristics are
         intended to result in superior blood flow efficiencies which should
         reduce the workload on the heart.

         EASE OF IMPLANT. Our product has been designed for ease of use by the
         heart surgeon. The low profile of the ATS heart valve is intended to
         minimize implant complications. Leaflets that extend significantly
         below the natural tissue anulus in the mitral position may obstruct
         blood outflow or interfere with the septum or other parts of the heart.
         Protrusions on the inflow side of the anulus in the aortic position may
         snag sutures used to attach the mechanical valve to the heart. In
         addition, because the orifice can be rotated, the surgeon can optimize
         valve orientation by adjusting the position of the leaflets after the
         ATS heart valve has been sutured in the natural anatomical position in
         the patient's heart. Suturing the ATS heart valve into the heart is
         made easier by reducing the number of layers of polyester material in
         the aortic and mitral cuffs and by adding the surgical felt ring in the
         sewing cuff, thereby easing the passage of the suture needle through
         the sewing cuff. The packaging and accessories of the ATS heart valve
         also are designed to facilitate the implant procedure by including all
         of the required items pre-assembled in a sterilized dual barrier
         container.

         IMPROVED FOLLOW-UP DIAGNOSTIC CAPABILITY. Our product facilitates the
         follow-up diagnostic process by being more easily visible to x-rays.
         The titanium stiffening ring provides a clear image on x-rays when
         taken from any angle. The leaflets also have a higher density of
         tungsten impregnated in the substrate, making them more visible to
         x-rays.


CLINICAL RESULTS AND REGULATORY STATUS

On October 13, 2000, the FDA approved our pre-market approval or PMA application
to sell the ATS heart valve in the United States.

In May 1992, we began to sell the ATS heart valve in Switzerland, Germany,
Belgium and the United Kingdom. We received ISO 9001 certification in April 1994
and European Regulatory Approval ("CE") for the ATS heart valve in March 1995.
The ISO 9001 certification signifies that our procedures and manufacturing
facilities comply with international standards for quality assurance. The CE
mark denotes conformity with European standards for safety and allows certified
devices to be sold in all European Union countries. By the end of 1995, the ATS
heart valve was available in most European countries. We received approval to
begin commercial sales in Japan in June 1996 and in Australia in September 1998.
In May 2002, we received approval to begin commercial sales in China. We have
obtained regulatory approvals in other countries where required. As of December
31, 2002, the ATS heart valve was available for sale in approximately 40
countries worldwide, including in the United States.

In 1997, we introduced an aortic valved graft. The aortic valved graft consists
of an ATS heart valve connected to a collagen-impregnated vascular graft. It is
used in cases where the aortic valve and a portion of the ascending aorta must
be replaced. In June 2002, the FDA approved the ATS aortic valved graft for
sales in the United States.

In May 2002, we received full approval from the FDA of our carbon manufacturing
plant.





                                       4
<PAGE>

Research, development and engineering expenses totaled $2,425,374 in 2002,
$3,905,556 in 2001 and $1,911,815 in 2000.

MARKETING, SALES AND DISTRIBUTION

Our international marketing strategy combines the substantial cardiovascular
experience of our management team with a network of experienced cardiovascular
surgery representatives to sell the ATS heart valve internationally. We believe
that our distribution partners have provided a rapid and cost efficient means of
increasing market penetration and commercial acceptance of the ATS heart valve
in key international markets. We have been able to attract experienced
mechanical valve sales organizations and people familiar with local markets and
customs to serve as our representatives.

We market the ATS valve in the United States through a sales organization
divided into three regions and 21 sales territories. We focus our sales and
marketing efforts on developing awareness of our valve in the approximately 900
U.S. open heart centers.

Currently, we operate in one segment, the sale of a bileaflet mechanical heart
valve. At December 31, 2002, we had contracts with independent distributors
covering 46 countries outside the United States. Century Medical Inc., a
distributor of our products, accounted for more than 10% of our gross sales in
2002. In each of the last three years, we derived the following percentages of
our net sales from the geographic regions listed in the table below. See Note 11
under the Notes to Consolidated Financial Statements in Item 8 herein.


<Table>
<Caption>
                                   SALES AS A PERCENTAGE OF TOTAL REVENUE
                                   --------------------------------------
                                         2002    2001    2000
                                         ----    ----    ----
<S>                                      <C>     <C>     <C>
Europe                                    26%     36%     46%
Asia Pacific                              42      34      34
North America                             19      19       4
Emerging Markets                          13      11      16
</Table>

Each of our independent distributors has the exclusive right to sell the ATS
heart valve within a defined territory. These distributors also market other
medical products, although they have agreed not to sell other mechanical heart
valves. Most of our distributor agreements establish quotas for sales of the ATS
heart valve in the distributor's territory. Under most of the distributor
agreements, we may, at our option, terminate the agreement upon the departure of
certain key employees of the distributor, if our company experiences a change in
control, or if key performance criteria are not met. We sell the ATS heart valve
to each distributor F.O.B. Minneapolis, Minnesota. Sales to international
distributors are denominated in U.S. dollars. We allow the return of unused
valves as long as the valve packaging has not been opened and the sterilization
date has not expired. Our sales, marketing and customer service personnel
provide professional sales, marketing and promotional support to our independent
distributors.

In December 2002, we formed ATS Medical France, a foreign subsidiary to sell our
valves directly to hospitals in France. In France, we will consign valves to
hospitals and invoice in euros when the valve is implanted.

RELATIONSHIP WITH SULZER CARBOMEDICS

Sulzer Carbomedics ("Carbomedics") developed the basic design from which the ATS
heart valve evolved. Carbomedics is the largest and most experienced
manufacturer of pyrolytic carbon components used in mechanical heart valves.
Carbomedics has also designed and patented numerous mechanical valves.
Carbomedics offered to license a patented and partially developed valve to us if
we would complete the development of the valve and agree to purchase carbon
components from Carbomedics. Since 1990, Carbomedics has been our sole source of
the carbon components used in our valve and the licensor of certain technology
relating to our product. In December 1999, we restructured our contractual
relationships with Carbomedics to lower our cost of carbon components and to
begin the technology transfer which will enable us to manufacture those
components ourselves.

We have three agreements with Carbomedics: a license agreement and a long-term
carbon supply agreement entered into in September 1990, and a carbon technology
agreement entered into in December 1999.




                                       5
<PAGE>


Under the terms of the license agreement with Carbomedics, we hold an exclusive,
royalty-free, worldwide license to an open pivot, bileaflet mechanical heart
valve design from which the ATS heart valve has evolved. The license agreement
does not include the right to manufacture the pyrolytic carbon components of the
ATS heart valve, except that if Carbomedics were unable to produce the
components, we would have the right and license to make the components or have
them made for us. After making certain design changes in the valve, we finalized
the design of the ATS heart valve and filed and received our own U.S. patent
covering the design of the ATS valve. The design modifications and the resulting
U.S. patent covering the new design are the exclusive property of ATS.

The supply agreement, as amended in June 2002, suspended our purchase
obligations for the remainder of 2002 (with the exception of approximately eight
weeks of work in process) along with 100% of our purchase obligations for 2003,
2004, 2005 and 2006. In January of 2007 the purchase obligations for 2003 will
resume, with the obligations for 2004 through 2006 to follow in each subsequent
year.

In December 1999, we entered into a carbon technology agreement with Carbomedics
under which we obtained an exclusive, worldwide right and license to use
Carbomedics' pyrolytic carbon technology to manufacture components for the ATS
heart valve, and a non-exclusive worldwide right and license to use the
technology to produce pyrolytic carbon components for other devices and
manufacturers, including, after 2008, for other heart valve manufacturers. Under
the agreement Carbomedics also agreed to assist us in designing, building,
equipping, qualifying and commencing operations in a pyrolytic carbon component
production facility in Minneapolis, Minnesota. In return, we have agreed to pay
Carbomedics a license fee totaling $41 million in eight installments over seven
years, contingent on attainment of specific milestones. Through December 31,
2001, we have made three of the installment payments totaling $13 million. We
amended the agreement in June 2002 with Carbomedics, to delay the timing of the
technology fee payments. The $5 million payment that was due in December 2002
will be paid in two equal installments in June and December of 2003. The
technology transfer fees due in subsequent years will be paid in semi-annual
installments beginning in June 2005 in amounts equal to a percentage of the
reduction in inventory occurring in the previous six months.

We were obligated under the carbon technology agreement to pay all of the costs
of establishing the new carbon production facility, including hourly fees and
out-of-pocket expenses of the Carbomedics employees assigned to assist us in
setting up the facility. We and Carbomedics have also mutually agreed not to
solicit or hire each other's employees (other than sales and marketing
employees) for two years after completion of the milestone payments or
termination of the agreement.

The carbon technology agreement may be terminated by either party upon a
material breach of the agreement by the other party, subject to certain waiting
periods during which the breaching party will have an opportunity to cure the
default. In addition, Carbomedics may terminate the agreement if we cease
business, make an assignment for the benefit of creditors, or enter into certain
insolvency, receivership or bankruptcy proceedings. We can terminate the
agreement at any time after the third anniversary if we determine to exit the
mechanical heart valve business.

MANUFACTURING

We assemble the ATS heart valve in a controlled clean room environment at our
facility in a suburb of Minneapolis, Minnesota. Our manufacturing operation
currently consists of fabricating the sewing cuff, assembling, inspecting,
testing and packaging all of the components into a finished valve, and then
sterilizing the valve prior to shipment to distributors.

We have established a facility for manufacturing pyrolytic carbon components
under the Carbomedics technology agreement. We have leased a 22,900 square-foot
area of a building which is currently equipped to produce 10,000 valve sets per
year. In May 2002, we received notice of approval of our carbon plant from the
U.S. Food and Drug Administration.

Under the terms of our agreement with Carbomedics, we may also elect to have
Carbomedics train our personnel how to machine graphite parts, and teach us how
to fabricate our own tooling. We have not yet determined whether we will develop
these capabilities internally or contract these steps out to third party
vendors. In the event we decide to go to third party vendors, then under the
agreement Carbomedics will provide the machining and tool fabrication know-how
to the vendor. Carbomedics will also qualify the vendor using their current
specifications. We currently





                                       6
<PAGE>

have in inventory enough carbon components to satisfy our projected requirements
for over three years. In addition, we are obligated to resume buying some valve
components from Carbomedics in 2007 under the amended supply agreement.

COMPETITION

The prosthetic heart valve market is highly competitive with St. Jude Medical,
Inc. as the mechanical valve market share leader. Other companies that sell
mechanical valves include Medtronic, Inc., Carbomedics, Edwards Lifesciences,
Sorin Biomedica sPa, Medical CV and Medical Carbon Research, Inc. St. Jude
Medical, Medtronic, Edward Lifesciences, Sorin Biomedica and CryoLife also sell
tissue valves. Many of our competitors have greater financial, manufacturing,
and marketing resources than we have.

We are aware of several companies that are developing new prosthetic heart
valves. Several companies are developing and testing new autologous (created
from the patient's own tissue) valves, potentially more durable tissue valves
and new bileaflet and trileaflet mechanical designs. Advancements also are being
made in surgical procedures such as mitral valve reconstruction, whereby the
natural mitral valve is repaired, delaying the need for a replacement valve.
Other companies are pursuing biocompatible coatings to be applied to mechanical
valves in an effort to reduce the incidence of thromboembolic events and to
treat tissue valves to forestall or eliminate calcific degeneration in these
valves.

Competition within the prosthetic heart valve market is based on, among other
things, clinical performance record, minimalization of complications, ease of
use for the surgeon, patient comfort and cost effectiveness. We believe that the
most important factors in a heart surgeon's selection of a particular prosthetic
valve are the perceived benefits of the valve and the heart surgeon's confidence
in the valve design. As a result, valves that have developed a favorable
clinical performance record have a significant marketing advantage over new
valves. In addition, negative publicity resulting from isolated incidents can
have a significant negative effect on a valve's overall acceptance. Our success
is dependent upon the surgeon's willingness to use a new prosthetic heart valve
as well as the future clinical performance of the ATS heart valve compared with
the more established competition.

We believe that mechanical heart valves are currently being marketed to
hospitals at prices that vary significantly from country to country due to
market conditions, currency valuations, distributor mark-ups and government
regulations. We believe that, after distributor mark-up, the ATS heart valve
sells at or above the current price of other valves in most markets. In many
markets, government agencies are imposing or proposing price controls or
restrictions on medical products. We work with our independent distributors to
price the ATS heart valve in each market to meet these limitations. In addition,
our primary competitors have the ability, due to their internal carbon
manufacturing facilities and economies of scale, to manufacture their valves at
a lower cost than we can currently manufacture the ATS heart valve. The market
leader has recently been using price as a method to compete in several markets.

PATENTS AND PROPRIETARY TECHNOLOGY

Our policy is to protect our proprietary position by obtaining U.S. and foreign
patents to protect technology, inventions and improvements important to the
development of our business. Under our agreements with Carbomedics, we have
obtained a royalty-free license to the Carbomedics patent on the basic design of
an open pivot bileaflet mechanical heart valve and, in December 1999, the right
to manufacture pyrolytic carbon components, subject to the payment of license
fees. See "Business--Relationship with Sulzer Carbomedics." The Carbomedics
patent expires in 2004. We subsequently made modifications to the basic design.
We were issued a U.S. patent covering our design improvements to the ATS heart
valve in October 1994. We also have filed patent applications in Japan, Belgium,
France, Germany, Netherlands, Spain, Switzerland and the United Kingdom relating
to the design improvements. Patents have been granted in all of these countries.
We cannot be certain that any patents will not be challenged or circumvented by
competitors.

We also rely on trade secrets and technical know-how in the manufacture and
marketing of the ATS heart valve. We typically require our employees,
consultants and contractors to execute confidentiality agreements with respect
to our proprietary information.

We claim trademark protection on ATS MedicalTM and ATS Open Pivot(R).




                                       7
<PAGE>

GOVERNMENT REGULATION

Our ATS heart valve is regulated in the United States as a medical device by the
FDA under the Federal Food, Drug and Cosmetic Act, or FD&C Act. Under the FD&C
Act, the FDA regulates the research, testing, manufacturing, safety, labeling,
storage, record keeping, advertising and distribution of medical devices. The
FDA classifies our ATS heart valve as a Class III device, which is subject to
the highest level of controls. Noncompliance with applicable regulations can
result in withdrawal of prior approvals, total or partial suspension of
production, fines, injunctions, recall of products, civil penalties and criminal
prosecution.

The FDA approved our PMA Application on October 13, 2000. The approval included
five mitral valve sizes (26, 28, 29, 31, and 33mm) and eleven aortic valve sizes
(18, 20, 21, 22, 23, 24, 25, 26, 27, 28, and 29mm). A PMA supplement for four
additional sizes (16 and 19mm aortic and 24 and 27mm mitral sizes) was approved
on May 10, 2001. A PMA supplement for our aortic valved graft was submitted on
September 21, 2001 and approval was received on June 7, 2002.

We also are subject to FDA regulations concerning manufacturing processes and
reporting obligations. These regulations require that manufacturing steps be
performed according to FDA standards and in accordance with documentation,
control and testing standards. The FDA monitors compliance with its good
manufacturing practices regulations by conducting periodic inspections. We are
required to provide information to the FDA on adverse incidents as well as
maintain a detailed record keeping system in accordance with FDA guidelines. We
expect that our carbon fabrication processes and new manufacturing facility will
be subject to domestic and international regulatory inspection and review.

The advertising of our product also is subject to both FDA and Federal Trade
Commission regulations. In addition, we will be subject to the "fraud and abuse"
laws and regulations promulgated by the U.S. Department of Health and Human
Services and the U.S. Health Care Finance Administration if we sell the ATS
heart valve to Medicare or Medicaid patients.

Regulation of heart valves varies widely in foreign countries. Foreign countries
vary from having no regulations to having a pre-market notice or pre-market
approval process. The European Union has adopted rules which require that
medical products receive the right to affix the CE mark, an international symbol
that denotes conformity with European standards for safety and allows certified
devices to be marketed in all European Union countries. As part of the CE
compliance, manufacturers are required to comply with the ISO 9000 series of
standards for quality operations. We received ISO 9001 certification in 1994 and
CE Mark approval in March 1995. We will continue to be subjected to various
audits and tests under the European Community directives. In June 1996, we
received approval to begin commercial sales in Japan through a Shonin regulatory
approval obtained by our distributor, Century Medical, Inc. In September 1998,
we received approval from the Therapeutic Goods Administration for commercial
sales in Australia. In June 2000, we received regulatory approval to distribute
the ATS heart valve in Canada. In January 2003, we receive approval to begin
commercial sales in China.

THIRD PARTY REIMBURSEMENT

In the United States, healthcare providers that purchase medical devices, such
as our product, generally rely on third-party payors, including Medicare,
Medicaid, private health insurance carriers and managed care organizations, to
reimburse all or part of the cost and fees associated with the procedures
performed using these devices. The commercial success of the ATS heart valve
will depend on the ability of health care providers to obtain adequate
reimbursement from third-party payors for the surgical procedures in which our
products are used. Third-party payors are increasingly challenging the pricing
of medical products and procedures. Even if a procedure is eligible for
reimbursement, the level of reimbursement may not be adequate. In addition,
third-party payors may deny reimbursement if they determine that the device used
in the treatment was not cost-effective or was used for a non-approved
indication.

In international markets, market acceptance of the ATS heart valve depends in
part upon the availability of reimbursement from healthcare payment systems.
Reimbursement and healthcare payment systems in international markets vary
significantly by country. The main types of healthcare payment systems in
international markets are government sponsored healthcare and private insurance.
Countries with governmental sponsored healthcare, such as




                                       8
<PAGE>

the United Kingdom, have a centralized, nationalized healthcare system. New
devices are brought into the system through negotiations between departments at
individual hospitals at the time of budgeting. In Japan, France and Germany, the
government sets an upper limit of reimbursement for various valve types. In most
foreign countries, there are also private insurance systems that may offer
payments for alternative devices.

We have pursued reimbursement for our ATS heart valve internationally through
our independent distributors. While the healthcare financing issues in these
countries are substantial, we have been able to sell the ATS heart valve to
private clinics and nationalized hospitals in each of the countries served by
our distributors.

PRODUCT LIABILITY AND INSURANCE

Cardiovascular device companies are subject to an inherent risk of product
liability and other liability claims in the event that the use of their products
results in personal injury. A mechanical heart valve is a life-sustaining
device, and the failure of any mechanical heart valve usually results in the
death of the patient. We have not received any reports of mechanical failure of
our valves implanted to date. Any product liability claim could subject us to
costly litigation, damages and adverse publicity.

We currently maintain product liability insurance policy with an annual coverage
limit of $25 million in the aggregate. A $5 million product liability insurance
policy is required by the supply agreement with Carbomedics. We are financially
responsible for any uninsured claims or claims which exceed the insurance policy
limits. Product liability insurance is expensive for mechanical valves. If
insurance becomes completely unavailable, we must either develop a
self-insurance program or sell without insurance, which would require the
consent of Carbomedics. The development of a self-insurance program would
require significant capital.

Carbomedics has made no warranty on our valve components. We have agreed to hold
Carbomedics harmless and indemnify Carbomedics in the event claims are made or
damages are assessed against Carbomedics as a result of our valve.

EMPLOYEES

As of January 1, 2003, we had 41 full-time and 5 part-time employees, of whom 9
were engaged in regulatory affairs and quality assurance, 15 in production and
12 in administrative and purchasing and 10 in sales and marketing activities.

ITEM 2. PROPERTIES

We lease approximately 56,000 square feet of space in two buildings in a suburb
of Minneapolis, Minnesota. The lease covering approximately 33,000 square feet
expires on December 31, 2003 and it is used for administrative, production and
engineering purposes. The lease on the other 23,000 square feet expires July 31,
2008 and is used for carbon manufacturing. We believe that these facilities are
adequate for our current needs.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.



                                       9
<PAGE>


                      EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers are as follows:

<Table>
<Caption>
Name                                        Age       Position
----                                        ---       --------
<S>                                         <C>       <C>
Michael D. Dale                              43       Chief Executive Officer, President and Director
Richard A. Curtis                            38       Vice President, Marketing and Business Development
</Table>

MICHAEL D. DALE has served as our Chief Executive Officer, President and a
Director of the Company since October 2002. From 2000 to 2002, Mr. Dale was
President of Worldwide Sales and Marketing at Endocardial Solutions, a company
that develops, markets and distributes an advanced cardiac mapping system. Mr.
Dale joined Endocardial Solutions in December 1998 as Vice President Worldwide
Sales. From 1996 to 1998, Mr. Dale was Vice President of Global Sales for
Cyberonics, Inc., a medical device company, and additionally was managing
director of Cyberonics Europe S.A. From 1988 to 1996, Mr. Dale served in several
capacities at St. Jude Medical, most recently as the Business Unit Director for
St. Jude Europe. Mr. Dale is on the Board of Directors of Medamicus, Inc., a
medical products company that designs, develops, manufactures and markets
percutaneous delivery solutions.

RICHARD A. CURTIS has served as our Vice President of Marketing and Business
Development since December 2002. Prior to joining the Company, Mr. Curtis was
Vice President of Corporate Development at Cardinal Health, Inc., a provider of
healthcare products and services, from September 2001 to November 2002. From
1999 to 2001, Mr. Curtis was Vice President of Business Development for
Hill-Rom, Inc., a provider of patient care environment and therapy solutions,
and from 1997 to 1999, he was a Director of Corporate Development at Hillenbrand
Industries, a health care and funeral services provider.





                                       10
<PAGE>


                                     PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

The information contained under the heading "Common Stock Information" on page
17 of the Company's Annual Report to Shareholder's for the year ended December
31, 2002 (the "Annual Report to Shareholders") is incorporated herein by
reference.


ITEM 6. SELECTED FINANCIAL DATA

The information contained under the heading "Financial Highlights" on page 1 of
the Annual Report to Shareholders is incorporated herein by reference.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The information contained under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 10 to 16 of
the Annual Report to Shareholders is incorporated herein by reference.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information contained under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Quantitative and
Qualitative Disclosures About Market Risk" on page 16 of the Annual Report to
Shareholders is incorporated herein by reference.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information contained under the headings "Report of Independent Auditors,"
"Consolidated Statements of Financial Position," "Consolidated Statements of
Operations," "Consolidated Statement of Changes in Shareholders' Equity,"
"Consolidated Statements of Cash Flows," and "Notes to Consolidated Financial
Statements" on pages 17 to 28 of the Annual Report to Shareholders is
incorporated herein by reference.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.




                                       11
<PAGE>



                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

See Part I of this Report for certain information regarding the Company's
executive officers. Pursuant to General Instruction G(3), reference is made to
information contained under the headings "Election of Directors" and "Section
16(a) Beneficial Ownership Reporting Compliance" in the Company's definitive
proxy statement for its 2003 Annual Meeting of Shareholders to be filed with the
Securities and Exchange Commission on or before April 30, 2003, which
information is incorporated herein.

ITEM 11. EXECUTIVE COMPENSATION

Pursuant to General Instruction G(3), reference is made to information contained
under the headings "Executive Compensation" and "Compensation of Directors" in
the Company's definitive proxy statement for its 2003 Annual Meeting of
Shareholders to be filed with the Securities and Exchange Commission on or
before April 30, 2003, which information is incorporated herein, excluding the
"Report of the Compensation Committee Concerning Executive Compensation."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Pursuant to General Instruction G(3), reference is made to information contained
under the headings "Security Ownership of Certain Beneficial Owners and
Management", "Equity Compensation Plan Information" and "Election of Directors"
in the Company's definitive proxy statement for its 2003 Annual Meeting of
Shareholders to be filed with the Securities and Exchange Commission on or
before April 30, 2003, which information is incorporated herein.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

ITEM 14. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including
our Chief Executive Officer and our Controller, we evaluated the effectiveness
of the design and operation of our disclosure controls and procedures (as
defined in Rule 13a-14(c) under the Exchange Act) as of a date (the "Evaluation
Date") within 90 days prior to the filing date of this report. Based upon that
evaluation, the Chief Executive Officer and Controller concluded that, as of the
Evaluation Date, our disclosure controls and procedures were effective in timely
alerting them to the material information relating to us required to be included
in our periodic SEC filings.

(b) Changes in Internal Control

There were no significant changes made in our internal controls during the
period covered by this report or, to our knowledge, in other factors that could
significantly affect these controls subsequent to the date of their evaluation.





                                       12
<PAGE>


                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) 1. FINANCIAL STATEMENTS

Report of Independent Auditors.

Consolidated Statements of Financial Position at December 31, 2002 and 2001.

Consolidated Statements of Operations for the years ended December 31, 2002,
2001 and 2000.

Consolidated Statement of Changes in Shareholders' Equity for the years ended
December 31, 2002, 2001 and 2000.

Consolidated Statements of Cash Flows for the years ended December 31, 2002,
2001 and 2000.

Notes to Consolidated Financial Statements.

(a) 2. FINANCIAL STATEMENT SCHEDULES

Please see Schedule II - Valuation and Qualifying Accounts and Reserves on page
20.

All other schedules have been omitted because of absence of conditions under
which they are required or because the required information is included in the
financial statements or notes thereto.

(a) 3. LISTING OF EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER                           DESCRIPTION
<S>      <C>
3.1      Restated Articles of Incorporation, as amended to date (Incorporated by
         reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K
         for the year ended December 31, 1993 (the "1993 Form 10-K")).

3.2      Bylaws of the Company, as amended to date (Incorporated by reference to
         Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year
         ended December 31, 1996 (the "1996 Form 10-K")).

4.1      Specimen certificate for shares of Common Stock of the Company
         (Incorporated by reference to Exhibit 4.1 to the Company's Annual
         Report on Form 10-K for the year ended December 31, 1997 (the "1997
         Form 10-K")).

10.1**   1987 Stock Option and Stock Award Plan, as restated and amended to date
         (Incorporated by reference to Exhibit 10.1 to the Company's Quarterly
         Report on Form 10-Q for the quarter ended June 30, 1997).

10.2**   ATS Medical Inc. 2000 Stock Incentive Plan (Incorporated by reference
         to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended
         September 30, 2000).

10.3**   Agreement between the Company and Manuel A. Villafana dated September
         11, 2001 (Incorporated by reference to Exhibit 10.3 to the Company's
         Form 10-K for the year ended December 31, 2001 (the "2001 Form 10-K")).
</Table>





                                       13
<PAGE>


<Table>
<S>      <C>
10.4     Lease Agreement between the Company and Crow Plymouth Land Limited
         Partnership dated December 22, 1987 (Incorporated by reference to
         Exhibit 10(d) to the Company's Registration Statement on Form S-18,
         File No. 33-34785-C (the "Form S-18")).

10.5     Amendment No. 1 to Lease Agreement between the Company and Crow
         Plymouth Land Limited Partnership, dated January 5, 1989 (Incorporated
         by reference to Exhibit 10(e) to the Form S-18).

10.6     Amendment No. 2 to Lease Agreement between the Company and Crow
         Plymouth Land Limited Partnership, dated January 1989 (Incorporated by
         reference to Exhibit 10(f) to the Form S-18).

10.7     Amendment No. 3 to Lease Agreement between the Company and Crow
         Plymouth Land Limited Partnership, dated June 14, 1989 (Incorporated by
         reference to Exhibit 10(g) to the Form S-18).

10.8     Amendment No. 4 to Lease Agreement between the Company and Plymouth
         Business Center Limited Partnership, dated February 10, 1992
         (Incorporated by reference to Exhibit 10.8 to the 1996 Form 10-K).

10.9*    Development Agreement dated September 24, 1990, with CarboMedics, Inc.
         (confidential treatment granted) (Incorporated by reference to Exhibit
         10.9 to the 1996 Form 10-K).

10.10*   O.E.M. Supply Contract dated September 24, 1990, with CarboMedics, Inc.
         (confidential treatment granted) (Incorporated by reference to Exhibit
         10.10 to the 1996 Form 10-K).

10.11*   License Agreement dated September 24, 1990, with CarboMedics, Inc.
         (confidential treatment granted) (Incorporated by reference to Exhibit
         10.11 to the 1996 Form 10-K).

10.12**  Employment Agreement between the Company and Michael D. Dale dated
         September 18, 2002.

10.13    Helix BioCore, Inc. Self-Insurance Trust Agreement dated February 28,
         1991 (Incorporated by reference to Exhibit 10.13 to the 1996 Form
         10-K).

10.14*   Amendment 1 to License Agreement dated December 16, 1993, with
         CarboMedics, Inc. (confidential treatment granted) (Incorporated by
         reference to Exhibit 10.17 to the 1993 Form 10-K).

10.15*   Amendment 4 to O.E.M. Supply Contract dated December 16, 1993, with
         CarboMedics, Inc. (confidential treatment granted) (Incorporated by
         reference to Exhibit 10.18 to the 1993 Form 10-K).

10.16*   Amendment 5 to O.E.M. Supply Contract dated September 1, 1994, with
         CarboMedics, Inc. (confidential treatment granted) (Incorporated by
         reference to Exhibit 10.19 to the 1994 Form 10-K).

10.17    Letter Agreement between the Company and Sulzer Carbomedics, Inc.,
         dated June 27, 2002 (Incorporated by reference to Exhibit 10.1 to the
         Company's Form 10-Q for the quarter ended June 20, 2002).

10.18    Line of Credit dated August 11, 1994, between the Company and First
         Bank National Association (Incorporated by reference to Exhibit 10.1 to
         the Company's Form 10-Q for the quarter ended September 30, 1994).

10.19    Form of International Distributor Agreement (Incorporated by reference
         to Exhibit 10.22 to the 1994 Form 10-K).

10.20**  Form of Agreement between ATS Medical, Inc. and each officer dated June
         30, 1995, concerning severance benefits upon a change in control
         (Incorporated by reference to Exhibit 10.23 to the
</Table>




                                       14
<PAGE>


<Table>
<S>      <C>
         Company's Annual Report on Form 10-K for the year ended December 31,
         1995 (the "1995 Form 10-K")).

10.21**  ATS Medical, Inc. Change in Control Severance Pay Plan (Incorporated by
         reference to Exhibit 10.24 to the 1995 Form 10-K).

10.22    Amendment No. 5 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated May 30, 1996 (Incorporated by reference to
         Exhibit 10.22 to the 1996 Form 10-K).

10.23**  Letter Agreement dated November 1, 2002, extending the agreement dated
         September 11, 2001 between the Company and Manuel A. Villafana.

10.24    Amendment No. 6 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated November 25, 1997 (Incorporated by reference to
         Exhibit 10.23 to the 1997 Form 10-K).

10.25    1998 Employee Stock Purchase Plan (Incorporated by reference to Exhibit
         4 to the Company's Registration Statement on Form S-8, File No.
         333-57527).

10.26**  1998 Management Incentive Compensation Plan (Incorporated by reference
         to Exhibit 10.25 to the 1998 Form 10-K).

10.27*   Carbon Agreement by and between Sulzer Carbomedics, Inc. and ATS
         Medical, Inc., dated December 29, 1999 (confidential treatment granted)
         (Incorporated by reference to Exhibit 99.1 to the Current Report on
         Form 8-K filed on January 13, 2000 (the "January 2000 Form 8-K").

10.28*   Amendment 7 to OEM Supply Contract by and between Sulzer Carbomedics,
         Inc. and ATS Medical, Inc., dated December 29, 1999 (confidential
         treatment granted) (Incorporated by reference to Exhibit 99.2 to the
         January 2000 Form 8-K).

10.29*   Amendment 2 to License Agreement by and between Sulzer Carbomedics,
         Inc. and ATS Medical, Inc., dated December 29, 1999 (confidential
         treatment granted) (Incorporated by reference to Exhibit 99.3 to the
         January 2000 Form 8-K).

10.30    Amendment No. 7 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated May 18, 2000 (Incorporated by reference to
         Exhibit 10.2 to the Company's Form 10-Q for the quarter ended June 30,
         2000).

10.31    Lease Agreement between the Company and St. Paul Properties, Inc.,
         dated April 29, 2000 (Incorporated by reference to Exhibit 10.1 to the
         Company's Form 10-Q for the quarter ended June 30, 2000).

10.32    Amendment No. 8 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated December 14, 2000 (Incorporated by reference to
         Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year
         ended December 31, 2000 (the "2000 Form 10-K")).

10.33*   Amendment 8 to OEM Supply Contract by and between Sulzer Carbomedics,
         Inc. and ATS Medical, Inc., dated November 3, 2000 (confidential
         treatment granted) (Incorporated by reference to Exhibit 10.33 to the
         2000 Form 10-K).

10.34    Form of U.S. Distribution Agreement.

13       Portions of 2002 Annual Report to Shareholders.

21       List of Subsidiaries.

23       Consent of Ernst & Young LLP.
</Table>




                                       15
<PAGE>


<Table>
<S>      <C>
24       Power of Attorney.

99.1     Cautionary Statements.

99.2     Certification of the Chief Executive Officer pursuant to 18 U.S.C.
         Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
         Act of 2002.

99.3     Certification of the Controller pursuant to 18 U.S.C. Section 1350 as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</Table>


*Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended,
confidential portions of this exhibit have been redacted.

**Represents a management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 15(c) of Form 10-K.

(b) Reports on Form 8-K

None.

(c) Exhibits

See Exhibit Index and Exhibits attached as a separate section of this report.

(d) Financial Statement Schedule

See Item 15(a)(2) above.




                                       16
<PAGE>


                                   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.

Dated:  March 26, 2003                       ATS MEDICAL, INC.


                                             By  /s/ Michael D. Dale
                                               ------------------------------
                                               Michael D. Dale
                                               Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

<Table>
<Caption>
SIGNATURE                                   TITLE

<S>                                 <C>                                <C>      <C>
Manuel A. Villafana*                Chairman and Director              )
                                                                       )
Michael D. Dale*                    Chief Executive Officer,           )
                                    President and Director             )
                                    (principal executive officer)      )        By: /s/ Deborah K. Chapman
                                                                                    -------------------------
                                                                       )                Deborah K. Chapman
Deborah K. Chapman*                 Controller                         )                Pro se and
                                    (principal financial and           )                Attorney-in-fact
                                    accounting officer)                )
                                                                       )        Dated:  March 26, 2003
David L. Boehnen*                   Director                           )
                                                                       )
A. Jay Graf*                        Director                           )
                                                                       )
Eric W. Siverston*                  Director                           )
</Table>



*By Power of Attorney filed with this report as Exhibit 24 hereto.





                                       17
<PAGE>


                                 CERTIFICATIONS

I, Michael D. Dale, certify that:

         1. I have reviewed this annual report on Form 10-K of ATS Medical,
Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

         6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  March 26, 2003

                                              /s/   Michael D. Dale
                                              ---------------------------
                                              Name: Michael D. Dale
                                              Title: Chief Executive Officer





                                       18
<PAGE>


                                 CERTIFICATIONS

I, Deborah K. Chapman, certify that:

         1. I have reviewed this annual report on Form 10-K of ATS Medical,
Inc.;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c)       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

         6. The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  March 26, 2003

                                        /s/   Deborah K. Chapman
                                        -----------------------------------
                                        Name: Deborah K. Chapman
                                        Title: Controller





                                       19
<PAGE>


                                ATS MEDICAL, INC.
          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

<Table>
<Caption>
              COL. A                     COL. B                   COL. C                    COL. D             COL. E

                                                                Additions
                                                           (1)             (2)
<S>                                    <C>              <C>             <C>              <C>                  <C>
                                       Balance at       Charged         Charged to                            Balance at
                                       Beginning        to Costs          Other          Deductions-            End of
            Description                 Of Year          and             Accounts-        Describe               Year
                                                        Expenses         Describe
</Table>

<Table>
<Caption>
<S>                                      <C>              <C>                        <C>    <C>                 <C>
Allowance for Doubtful Accounts

Year ended December 31, 2002:
 Deducted from asset accounts:
 Allowance for doubtful accounts         $    400,000     $     20,000               --               --        $    420,000

Year ended December 31, 2001:
 Deducted from asset accounts:
 Allowance for doubtful accounts         $    425,000     $    198,000               --     $    223,000(1)     $    400,000

Year ended December 31, 2000:
 Deducted from asset accounts:
 Allowance for doubtful accounts         $    205,000     $    220,000               --               --        $    425,000



Reserve for Obsolete Inventory

Year ended December 31, 2002:
 Deducted from asset accounts:
 Reserve for Obsolete Inventory          $    200,000               --               --               --        $    200,000

Year ended December 31, 2001:
 Deducted from asset accounts:
 Reserve for Obsolete Inventory          $    200,000               --               --               --        $    200,000

Year ended December 31, 2000:
 Deducted from asset accounts:
 Reserve for Obsolete Inventory          $    200,000               --               --               --        $    200,000
</Table>


(1) Uncollectible accounts written off.




                                       20
<PAGE>




                                  EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
NUMBER                    DESCRIPTION

<S>      <C>
3.1      Restated Articles of Incorporation, as amended to date (Incorporated by
         reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K
         for the year ended December 31, 1993 (the "1993 Form 10-K")).

3.2      Bylaws of the Company, as amended to date (Incorporated by reference to
         Exhibit 3.2 to the Company's Annual Report on Form 10-K for the year
         ended December 31, 1996 (the "1996 Form 10-K")).

4.1      Specimen certificate for shares of Common Stock of the Company
         (Incorporated by reference to Exhibit 4.1 to the Company's Annual
         Report on Form 10-K for the year ended December 31, 1997 (the "1997
         Form 10-K")).

10.1**   1987 Stock Option and Stock Award Plan, as restated and amended to date
         (Incorporated by reference to Exhibit 10.1 to the Company's Quarterly
         Report on Form 10-Q for the quarter ended June 30, 1997).

10.2**   ATS Medical Inc. 2000 Stock Incentive Plan (Incorporated by reference
         to Exhibit 10.1 to the Company's Form 10-Q for the quarter ended
         September 30, 2000).

10.3**   Agreement between the Company and Manuel A. Villafana dated September
         11, 2001 (Incorporated by reference to Exhibit 10.3 to the Company's
         Form 10-K for the year ended December 31, 2001 (the "2001 Form 10-K")).

10.4     Lease Agreement between the Company and Crow Plymouth Land Limited
         Partnership dated December 22, 1987 (Incorporated by reference to
         Exhibit 10(d) to the Company's Registration Statement on Form S-18,
         File No. 33-34785-C (the "Form S-18")).

10.5     Amendment No. 1 to Lease Agreement between the Company and Crow
         Plymouth Land Limited Partnership, dated January 5, 1989 (Incorporated
         by reference to Exhibit 10(e) to the Form S-18).

10.6     Amendment No. 2 to Lease Agreement between the Company and Crow
         Plymouth Land Limited Partnership, dated January 1989 (Incorporated by
         reference to Exhibit 10(f) to the Form S-18).

10.7     Amendment No. 3 to Lease Agreement between the Company and Crow
         Plymouth Land Limited Partnership, dated June 14, 1989 (Incorporated by
         reference to Exhibit 10(g) to the Form S-18).

10.8     Amendment No. 4 to Lease Agreement between the Company and Plymouth
         Business Center Limited Partnership, dated February 10, 1992
         (Incorporated by reference to Exhibit 10.8 to the 1996 Form 10-K).

10.9*    Development Agreement dated September 24, 1990, with CarboMedics, Inc.
         (confidential treatment granted) (Incorporated by reference to Exhibit
         10.9 to the 1996 Form 10-K).

10.10*   O.E.M. Supply Contract dated September 24, 1990, with CarboMedics, Inc.
         (confidential treatment granted) (Incorporated by reference to Exhibit
         10.10 to the 1996 Form 10-K).

10.11*   License Agreement dated September 24, 1990, with CarboMedics, Inc.
         (confidential treatment granted) (Incorporated by reference to Exhibit
         10.11 to the 1996 Form 10-K).
</Table>



                                       21
<PAGE>


<Table>
<S>      <C>
10.12**  Employment Agreement between the Company and Michael D. Dale dated
         September 18, 2002.

10.13    Helix BioCore, Inc. Self-Insurance Trust Agreement dated February 28,
         1991 (Incorporated by reference to Exhibit 10.13 to the 1996 Form
         10-K).

10.14*   Amendment 1 to License Agreement dated December 16, 1993, with
         CarboMedics, Inc. (confidential treatment granted) (Incorporated by
         reference to Exhibit 10.17 to the 1993 Form 10-K).

10.15*   Amendment 4 to O.E.M. Supply Contract dated December 16, 1993, with
         CarboMedics, Inc. (confidential treatment granted) (Incorporated by
         reference to Exhibit 10.18 to the 1993 Form 10-K).

10.16*   Amendment 5 to O.E.M. Supply Contract dated September 1, 1994, with
         CarboMedics, Inc. (confidential treatment granted) (Incorporated by
         reference to Exhibit 10.19 to the 1994 Form 10-K).

10.17    Letter Agreement between the Company and Sulzer Carbomedics, Inc.,
         dated June 27, 2002 (Incorporated by reference to Exhibit 10.1 to the
         Company's Form 10-Q for the quarter ended June 20, 2002).

10.18    Line of Credit dated August 11, 1994, between the Company and First
         Bank National Association (Incorporated by reference to Exhibit 10.1 to
         the Company's Form 10-Q for the quarter ended September 30, 1994).

10.19    Form of International Distributor Agreement (Incorporated by reference
         to Exhibit 10.22 to the 1994 Form 10-K).

10.20**  Form of Agreement between ATS Medical, Inc. and each officer dated June
         30, 1995, concerning severance benefits upon a change in control
         (Incorporated by reference to Exhibit 10.23 to the Company's Annual
         Report on Form 10-K for the year ended December 31, 1995 (the "1995
         Form 10-K")).

10.21**  ATS Medical, Inc. Change in Control Severance Pay Plan (Incorporated by
         reference to Exhibit 10.24 to the 1995 Form 10-K).

10.22    Amendment No. 5 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated May 30, 1996 (Incorporated by reference to
         Exhibit 10.22 to the 1996 Form 10-K).

10.23**  Letter Agreement dated November 1, 2002, extending the agreement dated
         September 11, 2001 between the Company and Manuel A. Villafana.

10.24    Amendment No. 6 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated November 25, 1997 (Incorporated by reference to
         Exhibit 10.23 to the 1997 Form 10-K).

10.25    1998 Employee Stock Purchase Plan (Incorporated by reference to Exhibit
         4 to the Company's Registration Statement on Form S-8, File No.
         333-57527).

10.26**  1998 Management Incentive Compensation Plan (Incorporated by reference
         to Exhibit 10.25 to the 1998 Form 10-K).

10.27*   Carbon Agreement by and between Sulzer Carbomedics, Inc. and ATS
         Medical, Inc., dated December 29, 1999 (confidential treatment granted)
         (Incorporated by reference to Exhibit 99.1 to the Current Report on
         Form 8-K filed on January 13, 2000 (the "January 2000 Form 8-K").
</Table>




                                       22
<PAGE>


<Table>
<S>      <C>
10.28*   Amendment 7 to OEM Supply Contract by and between Sulzer Carbomedics,
         Inc. and ATS Medical, Inc., dated December 29, 1999 (confidential
         treatment granted) (Incorporated by reference to Exhibit 99.2 to the
         January 2000 Form 8-K).

10.29*   Amendment 2 to License Agreement by and between Sulzer Carbomedics,
         Inc. and ATS Medical, Inc., dated December 29, 1999 (confidential
         treatment granted) (Incorporated by reference to Exhibit 99.3 to the
         January 2000 Form 8-K).

10.30    Amendment No. 7 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated May 18, 2000 (Incorporated by reference to
         Exhibit 10.2 to the Company's Form 10-Q for the quarter ended June 30,
         2000).

10.31    Lease Agreement between the Company and St. Paul Properties, Inc.,
         dated April 29, 2000 (Incorporated by reference to Exhibit 10.1 to the
         Company's Form 10-Q for the quarter ended June 30, 2000).

10.32    Amendment No. 8 to Lease Agreement between the Company and St. Paul
         Properties, Inc., dated December 14, 2000 (Incorporated by reference to
         Exhibit 10.32 to the Company's Annual Report on Form 10-K for the year
         ended December 31, 2000 (the "2000 Form 10-K")).

10.33*   Amendment 8 to OEM Supply Contract by and between Sulzer Carbomedics,
         Inc. and ATS Medical, Inc., dated November 3, 2000 (confidential
         treatment granted) (Incorporated by reference to Exhibit 10.33 to the
         2000 Form 10-K).

10.34    Form of U.S. Distribution Agreement.

13       Portions of 2002 Annual Report to Shareholders.

21       List of Subsidiaries

23       Consent of Ernst & Young LLP.

24       Power of Attorney.

99.1     Cautionary Statements.

99.2     Certification of the Chief Executive Officer pursuant to 18 U.S.C.
         Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
         Act of 2002.

99.3     Certification of the Controller pursuant to 18 U.S.C. Section 1350 as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</Table>


*Pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended,
confidential portions of this exhibit have been redacted.

**Represents a management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 15(c) of Form 10-K.



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