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			&lt;font style="display: inline;font-weight:bold;"&gt;(1)&lt;/font&gt;&lt;font style="display: inline;font-weight:bold;;font-size:12pt;font-family:Times New Roman;text-indent:0pt;margin-left:0pt;width:36pt"&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;font-weight:bold;"&gt;Basis of Presentation and Description of Business&lt;/font&gt;
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			&lt;font style="display: inline;"&gt;MGC Diagnostics Corporation (the &amp;#x201C;Company&amp;#x201D;), through its Medical Graphics Corporation&lt;/font&gt;&lt;font style="display: inline;"&gt; subsidiary, designs and markets non-invasive cardiorespiratory diagnostic systems that are sold under the MGC Diagnostics and MedGraphics brand and trade names.&amp;nbsp;&amp;nbsp;These cardiorespiratory diagnostic systems have a wide range of applications within cardiorespiratory healthcare.&lt;/font&gt;
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			&lt;font style="display: inline;"&gt;The consolidated balance sheet as of &lt;/font&gt;&lt;font style="display: inline;"&gt;July 31, 2013&lt;/font&gt;&lt;font style="display: inline;"&gt;, the consolidated statements of comprehensive income (loss) for the &lt;/font&gt;&lt;font style="display: inline;"&gt;three&lt;/font&gt;&lt;font style="display: inline;"&gt;- and &lt;/font&gt;&lt;font style="display: inline;"&gt;nine&lt;/font&gt;&lt;font style="display: inline;"&gt;-month periods ended &lt;/font&gt;&lt;font style="display: inline;"&gt;July 31, 2013 and 2012&lt;/font&gt;&lt;font style="display: inline;"&gt;, the consolidated statements of cash flows for the &lt;/font&gt;&lt;font style="display: inline;"&gt;nine&lt;/font&gt;&lt;font style="display: inline;"&gt; months ended &lt;/font&gt;&lt;font style="display: inline;"&gt;July&lt;/font&gt;&lt;font style="display: inline;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;31&lt;/font&gt;&lt;font style="display: inline;"&gt;, &amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;2013&lt;/font&gt;&lt;font style="display: inline;"&gt; and &lt;/font&gt;&lt;font style="display: inline;"&gt;2012&lt;/font&gt;&lt;font style="display: inline;"&gt; and the related information presented in these notes have been prepared by management in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X, without audit.&amp;nbsp;&amp;nbsp;Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements.&amp;nbsp;&amp;nbsp;In the opinion of management, all adjustments considered necessary for a fair presentation of results have been included.&amp;nbsp;&amp;nbsp;The consolidated balance sheet at &lt;/font&gt;&lt;font style="display: inline;"&gt;October&lt;/font&gt;&lt;font style="display: inline;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;31&lt;/font&gt;&lt;font style="display: inline;"&gt;, &amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;2012&lt;/font&gt;&lt;font style="display: inline;"&gt; was derived from the audited consolidated financial statements as of that date.&amp;nbsp;&amp;nbsp;Operating results for the &lt;/font&gt;&lt;font style="display: inline;"&gt;three&lt;/font&gt;&lt;font style="display: inline;"&gt; and &lt;/font&gt;&lt;font style="display: inline;"&gt;nine&lt;/font&gt;&lt;font style="display: inline;"&gt; months ended &lt;/font&gt;&lt;font style="display: inline;"&gt;July&lt;/font&gt;&lt;font style="display: inline;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;31&lt;/font&gt;&lt;font style="display: inline;"&gt;, &amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;2013&lt;/font&gt;&lt;font style="display: inline;"&gt; are not necessarily indicative of the results that may be expected for the year ending &lt;/font&gt;&lt;font style="display: inline;"&gt;October&lt;/font&gt;&lt;font style="display: inline;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;31&lt;/font&gt;&lt;font style="display: inline;"&gt;, &amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;2013&lt;/font&gt;&lt;font style="display: inline;"&gt;.&amp;nbsp;&amp;nbsp;For further information, refer to the consolidated financial statements and notes thereto included in MGC Diagnostics Corporation&amp;#x2019;s Annual Report on Form 10-K for the year ended at &lt;/font&gt;&lt;font style="display: inline;"&gt;October&lt;/font&gt;&lt;font style="display: inline;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;31&lt;/font&gt;&lt;font style="display: inline;"&gt;, &amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;2012&lt;/font&gt;&lt;font style="display: inline;"&gt;.&lt;/font&gt;
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			&lt;font style="display: inline;"&gt;Preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities made in the consolidated financial statements and accompanying notes.&amp;nbsp;&amp;nbsp;Actual results could differ from those estimates.&amp;nbsp;&amp;nbsp;Estimates include accounts receivable, product warranty and inventory reserves, and depreciable lives of property, equipment and intangible assets (including internal software development costs).&lt;/font&gt;
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			&lt;font style="display: inline;"&gt;The Company determined there were no events subsequent to &lt;/font&gt;&lt;font style="display: inline;"&gt;July&lt;/font&gt;&lt;font style="display: inline;"&gt;&amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;31&lt;/font&gt;&lt;font style="display: inline;"&gt;, &amp;nbsp;&lt;/font&gt;&lt;font style="display: inline;"&gt;2013&lt;/font&gt;&lt;font style="display: inline;"&gt;, that required recognition or disclosure in these consolidated financial statements.&lt;/font&gt;
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			&lt;font style="display: inline;"&gt;Certain amounts&lt;/font&gt;&lt;font style="display: inline;"&gt; have been reclassified in prior period details presented to conform with current period classifications&lt;/font&gt;&lt;font style="display: inline;"&gt;.&amp;nbsp;&amp;nbsp;The reclassifications had no impact on total assets, shareholders&amp;#x2019; equity or comprehensive income (loss).&lt;/font&gt;
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