SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the Quarterly Period Ended October 31, 1999; or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from ____________ to _____________


Commission File Number:    0-28010

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

        Minnesota                                            41-1493458
(State or other jurisdiction of                             (IRS employer
incorporation or organization)                          identification number)

                           4382 Round Lake Road West
                          Arden Hills, Minnesota 55112
                    (Address of principal executive offices,
                                    zip code)

                                 (651) 639-1227
                    (Registrant's telephone number, including
                                   area code)



Indicate by mark whether the issuer (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 as 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 [ ]

As of November 30, 1999, the issuer had 5,499,596 shares of Common Stock
outstanding.



<PAGE>

                                  Medwave, Inc.

                                    Form 10-Q

                                      INDEX

                                                                           Page


PART I.  FINANCIAL INFORMATION

  Item 1. Financial Statements

          Balance Sheets - April 30, 1999 and October 31, 1999               2

          Statements of Operations - Three Months Ended October 31, 1999     3
             and 1998, Six Months Ended October 31, 1999 and 1998, and Period
             from June 27, 1984 (Inception) to October 31, 1999

          Statements of Cash Flows - Three Months Ended October 31, 1999     4
             and 1998, Six Months Ended October 31, 1999 and 1998,  and
             Period from June 27, 1984 (Inception) to October 31, 1999


          Notes to Financial Statements                                      5


  Item 2. Management's Discussion and Analysis of Financial Condition        5
             and Results of Operations

  Item 3. Quantitative and Qualitative Disclosures About Market Risk         8

PART II. OTHER INFORMATION

  Item 1. Legal Proceedings                                                  8

  Item 2. Changes in Securities                                              8

  Item 3. Defaults Upon Senior Securities                                    8

  Item 4. Submission of Matters To A Vote of Security Holders                9

  Item 5. Other Information                                                  9

  Item 6. Exhibits and Reports on Form 8-K                                   9


                                       1
<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  Financial Statements

                                  Medwave, Inc.
                          (A Development Stage Company)
                                 Balance Sheets
<TABLE>
<CAPTION>
                                                                                          April 30,           October 31,
                                                                                            1999                 1999
                                                                                       --------------------------------------
                                                                                         (see note 2)        (unaudited)
<S>                                                                                        <C>                    <C>
Assets
Current Assets:
      Cash and cash equivalents                                                            $ 1,175,756            $1,447,615
      Short term investments                                                                 2,785,672             1,996,296
      Accounts receivable                                                                       31,069                45,973
      Inventories                                                                              137,938               204,934
      Prepaid expenses                                                                          75,714                16,741
                                                                                       --------------------------------------
Total current assets                                                                         4,206,149             3,711,559

Investments                                                                                  1,838,918             1,198,593

Property and equipment:
      Research and development equipment                                                       237,136               231,085
      Office Equipment                                                                         111,745               111,745
      Manufacturing and engineering equipment                                                   65,259                86,893
      Sales and marketing equipment                                                             59,927                59,927
      Leasehold improvements                                                                    31,613                31,613
                                                                                       --------------------------------------
                                                                                               505,680               521,263
      Accumulated depreciation                                                                (435,274)             (406,278)
                                                                                       --------------------------------------
                                                                                                70,406               114,985

Patents, net                                                                                    28,019                15,320
                                                                                       ======================================
Total Assets                                                                               $ 6,143,492            $5,040,457
                                                                                       ======================================

Liabilities and shareholders' equity Current liabilities:
      Accounts payable                                                                     $   176,496            $  127,474
      Accrued payroll                                                                           64,040                54,130
                                                                                       --------------------------------------
Total current liabilities                                                                      240,536               181,604

Shareholders' equity:
      Common Stock, no par value:
                  Authorized shares--50,000,000
                  Issued and outstanding shares -- 5,436,596 at                             16,294,620            16,436,870
                     April 30, 1999 and 5,499,596 at Oct 31, 1999
      Unrealized gain/(loss) on investments                                                    (17,842)               (3,747)
      Deficit accumulated during the development stage                                     (10,373,822)          (11,574,270)
                                                                                       --------------------------------------
Total shareholders' equity                                                                   5,902,956             4,858,853
                                                                                       --------------------------------------

Total liabilities and shareholders' equity                                                 $ 6,143,492            $5,040,457
                                                                                       ======================================

The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       2
<PAGE>

                                  Medwave, Inc.
                          (A Development Stage Company)

                            Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                                                           Period from
                                                                                                          June 27, 1984
                                             Three months ended October 31 Six months ended October 31     (Inception)
                                             ----------------------------  ---------------------------          to
                                                    1999       1998            1999         1998         October 31, 1999
                                             ----------------------------  ---------------------------   ----------------
<S>                                                <C>          <C>           <C>          <C>               <C>
Revenue:
      Net Sales                                    $80,016      $162,134      $120,199     $362,456          $1,295,683

Operating expenses:
      Cost of sales and product development        112,660       130,700       166,139      304,267           1,337,071
      Research and development                     290,383       329,495       589,060      600,164           7,440,011
      Sales and marketing                          152,950       210,713       287,901      429,360           3,500,241
      General and administrative                   180,785       126,327       380,592      227,042           2,975,805
                                             ----------------------------  -------------------------   -----------------
Operating loss                                    (656,762)     (635,101)   (1,303,493)  (1,198,377)        (13,957,445)

Other income:
      Interest income                               36,748       110,577       103,045      188,256           1,509,929
      Other income                                                                                            1,500,000
                                             ----------------------------  -------------------------   -----------------
Net Loss                                         ($620,014)    ($524,524)  ($1,200,448) ($1,010,121)       ($10,947,516)
                                             ============================  =========================   =================

Net loss per share - basic and diluted              ($0.11)       ($0.10)       ($0.22)      ($0.19)             ($4.07)
                                             ============================  =========================   =================
Weighted average number of common and
 common equivalent shares outstanding            5,468,166     5,390,176     5,452,300    5,385,609           2,692,787
                                             ============================  =========================   =================


The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       3

<PAGE>

                                  Medwave, Inc.
                          (A Development Stage Company)
                            Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                                      Period from
                                                                                                                    June 27, 1984
                                                     Three months ended October 31   Six months ended October 31      (Inception)
                                                    ------------------------------------------------------------          to
                                                           1999        1998           1999           1998         October 31, 1999
                                                    ------------------------------------------------------------  -----------------
<S>                                                  <C>           <C>            <C>             <C>                <C>
Operating activities
Net loss                                             $  (620,014)  $ (524,542)    $(1,200,448)    $(1,010,121)       $ (10,947,515)
Adjustments to reconcile net loss to
   net cash provided (used) in operating activities:
      Depreciation                                        12,160       16,160          23,067          35,532              643,802
      Amortization                                         6,350        6,350          12,700          12,700              120,698
      Loss on sale of equipment                              ---          ---             ---             ---                7,375
      Issuance of Common Stock for consulting
      services                                               ---          ---             ---             ---                3,413
      Changes in operating assets and liabilities:
         Accounts receivable                             (23,090)        (934)        (14,904)       (116,761)             (45,973)
         Inventories                                     (54,148)     (42,583)        (66,996)          5,229             (204,934)
         Prepaid expenses                                 27,563       12,200          58,973          42,763              (16,741)
         Accounts payable and accrued expenses           (11,580)      35,132         (49,022)         56,205              127,474
         Accrued payroll and related taxes                 5,446          762          (9,909)         (3,062)              54,131
         Deferred income                                     ---    1,500,000             ---        1,500,000                 ---
                                                    --------------------------------------------------------------   --------------
Net cash used in operating activities                   (657,313)   1,002,545      (1,246,539)        522,485          (10,258,270)

Investing activities
Patent expenditures                                          ---          ---             ---             ---             (136,017)
Purchase of investments                                 (388,464)  (1,989,837)       (868,964)     (2,232,797)         (37,963,053)
Sales and maturity of investments                        775,405      562,908       2,312,758         823,281           34,766,261
Purchase of property and equipment                       (59,701)         ---         (67,646)         (3,306)            (787,021)
Proceeds from sale of equipment                              ---          ---             ---           3,463               21,663
                                                    --------------------------------------------------------------   --------------
Net cash provided (used) in investing activities         327,290   (1,426,929)      1,376,198      (1,409,359)          (4,098,117)

Financing activities
Net proceeds from issuance of
Convertible Preferred Stock                                  ---          ---             ---             ---             4,848,258
Net proceeds from issuance of Common Stock               142,250        7,000         142,250          11,500            10,955,794
                                                    --------------------------------------------------------------   --------------
Net cash provided by financing activities                142,250        7,000         142,250          11,500            15,804,052
                                                    --------------------------------------------------------------   --------------

(Decrease) increase in cash and cash equivalents        (187,773)    (417,384)        271,909        (875,374)            1,447,615
Cash and cash equivalents at beginning of period       1,635,438    1,468,707       1,175,756       1,926,697                   ---
                                                    --------------------------------------------------------------   --------------
Cash and cash equivalents at end of period           $ 1,447,615   $1,051,323     $ 1,447,615     $ 1,051,323        $    1,447,615
                                                    ==============================================================   ==============


The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       4

<PAGE>

                                  Medwave, Inc.
                          (A Development Stage Company)

                          Notes To Financial Statements

                                October 31, 1999


1.    Organization and Description of Business

      Medwave, Inc. (the Company), a development stage company, is engaged
      exclusively in the development, manufacturing and marketing of a
      proprietary, non-invasive system that continually monitors arterial blood
      pressure of adults, and in the development of related technology and
      products. Utilizing the Company's proprietary technology, the Vasotrac(R)
      system monitors blood pressure continually, providing new readings
      approximately every 15 heartbeats. In 1997, the Company began development
      of a hand-held blood pressure measurement device. This hand-held device is
      based upon the technology used in the Vasotrac(R) system.


2.    Basis of Presentation

      The financial information presented as of October 31, 1999 has been
      prepared from the books and records without audit. Financial information
      as of April 30, 1999 is based on audited financial statements of the
      Company but does not include all disclosures required by generally
      accepted accounting principles. In the opinion of management, all
      adjustments consisting only of normal recurring adjustments necessary for
      a fair presentation of the financial information for the periods
      indicated, have been included. For further information regarding the
      Company's accounting policies, refer to the financial statements and
      related notes included in the Company's Annual Report on Form 10-K for the
      fiscal year ended April 30, 1999.


ITEM 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operation

The following discussion should be read in conjunction with, and is qualified
by, the Company's financial statements set forth in Item 1 of this Form 10-Q.

General

The Company, which was formed in 1984, is a development stage company that
currently employs seventeen full-time employees and two part-time employees.
Since its inception, the Company has been engaged exclusively in the development
of a non-invasive, blood pressure measurement and monitoring system. Utilizing
proprietary technology, the Company's Vasotrac(R) system monitors blood
pressure, providing new readings approximately every fifteen heartbeats. The
Company believes that continual blood pressure readings and non-invasive
features of the Vasotrac(R) system make it the most advanced approach to blood
pressure monitoring. In 1997, the Company began development of a hand-held blood
pressure measurement device. This hand-held unit is based on the technology used
in the Vasotrac(R) system.

The Company has incurred an accumulated deficit of $(11,574,270) from its
inception through October 31, 1999. Additional losses from development, testing,
regulatory compliance, sales, and other expenses are expected to be incurred by
the Company at least until it emerges from the development stage.

The Company's success is dependent upon the successful development and marketing
of the Vasotrac(R) system and/or related technology. However, there can be no
assurance that the Vasotrac(R) system or related products will be successfully
marketed or sold in sufficient quantities and at margins necessary to achieve or
maintain profitability.

                                       5
<PAGE>
The Company recognized in 1997 that it had to enhance its distribution channel.
The Company attempted to add dealer partners; however, due to long sales cycles,
product user interface issues, and poor sales and marketing direction, success
of the Vasotrac(R) was dependent on either an individual sales representative or
a dealer partner to self promote and position the Vasotrac(R) product. Most of
the Company's original distribution agreements have expired or have been
terminated.

The Company released its enhanced Vasotrac(R) 205A during the American Society
of Anesthesiologists Meeting in Dallas, Texas, in October, 1999. The Vasotrac(R)
205A sets up quickly and is designed to be easier to use than the earlier
version of the Vasotrac(R) which the 205A replaces. Response from the physicians
attending the meeting was favorable. In addition, the Company conducted numerous
meetings with potential business partners during this meeting. The purpose of
these meetings was to discuss both distribution and OEM arrangements. As a
result, numerous meetings have occurred since, and the Company is intent on
partnering with distribution companies who have nationwide coverage and a focus
on critical care, operating room and cardiology market segments in the hospital
market. The structure of the Company's sales organization will be one of
creating three regional Business Units, with full business responsibility for
managing the business processes in their assigned geography. In addition, the
Business Units will partner with distribution company(ies) in an effort to drive
Vasotrac(R) sales, support customers, and provide business direction. The
Company will have the Business Units focus only on the hospital market segments
for the majority of calendar year 2000. The Company will also attempt to enter
specific international markets during calendar year 2000; however, success of
this will be dependent on several factors including, but not necessarily limited
to, international distribution partnerships, local country regulatory
requirements, and Company focus.

A critical success factor for the Company is the Company's ability to develop
comprehensive education tools for distribution partners, employees and
end-users. As with any medical sensor, proper sensor placement is critical to
successful performance. However, the Company believes with development of
educational material focused on blood-pressure monitoring in general, and on how
blood-pressure monitoring is best accomplished using the Vasotrac(R) system, it
will assist in establishing market acceptance for the Vasotrac(R) system.

The Company has re-submitted its hand-held blood-pressure monitor to the U.S.
Food and Drug Administration for 510(K) clearance. The Company believes that
this product will have a place in the "professional market" where clinical
professionals can use the hand-held unit in obtaining spot blood-pressure
readings on patients with improved accuracy and comfort. The first phase of
market release will be targeted to the hospital market; it is anticipated that
this will be possible in the spring of 2000. Second phase release will be
outside the hospital environment. The Company will search for the appropriate
distribution partners for this environment; it is anticipated that this will be
different from the hospital based distribution partner(s).

The Company is in the process of performing feasibility studies regarding other
development projects which will use the core technology of the Vasotrac(R) and
hand-held products.

The Company's goal moving forward, will be to emerge as a recognized alternative
for non-invasive blood-pressure monitoring. In order to accomplish this, the
Company will be expected to offer solutions not presently available in
monitoring a patient's blood-pressure non-invasively.

For the Company to emerge from the development stage, its success will also
depend on its ability to hire additional employees for key operating positions.
Competition for such employees is intense and there can be no assurance that the
Company will be successful in hiring such employees on acceptable terms or when
required, or in maintaining the services of its present employees. The Company
preliminarily estimates that these employees will increase employee-related
expenses in excess of $500,000 during the next twelve months. However, such
requirements are subject to change and are highly dependent on the development
process for the products, including the manufacturing scale-up process, market
acceptance, and the Company's distribution methods.


                                       6
<PAGE>

Cash and cash equivalents, and short and long-term investments are being used
primarily to finance continued clinical testing of the Vasotrac(R) system, for
manufacturing and marketing, to conduct additional research and product
development efforts that may be necessary, and to provide working capital. Over
the next twelve months, the Company expects to spend in excess of $1,200,000 for
research and development. Specifically, the funds are expected to be used to
develop an improved sensor and to sustain engineering support for manufacturing
and for the continued development of hand-held unit. No significant amount of
equipment is expected to be required. Company believes that the cash, cash
equivalents, and short and long-term investments will allow the Company to meet
its cash requirements for approximately one and one-half years from October 31,
1999. If the development and marketing process for the Vasotrac System does not
proceed as expected because significant product design changes are required to
achieve market acceptance or unexpected difficulties are encountered in
attaining cost-effective manufacturability, the Company may require additional
capital at an earlier date. Such capital may be sought through bank borrowing,
equipment financing, equity financing, and other methods. The Company's
financing needs are subject to change depending on, among other things, market
conditions and opportunities, equipment or other asset-based financing that may
be available, and cash flow from operations. Any material favorable or
unfavorable deviation from its anticipated expense could significantly affect
the timing and amount of additional financing that may be required. However,
additional financing may not be available when needed or, if available, may not
be on terms that are favorable to the Company or its security holders. In
addition, any such financing could result in substantial dilution to then
existing security holders.


Results of Operations

The results of operations compares the three months and six months ended October
31, 1999 and 1998, respectively. The analysis of liquidity and capital resources
compares October 31, 1999 to April 30, 1999.

Operating revenue was $80,000 and $162,000 for the quarter ended October 31,
1999 and 1998, respectively. Operating revenue was $120,000 and $362,500 for the
six months ended October 31, 1999 and 1998, respectively. The operating revenue
decrease was attributed to the Company's focus on the development of its
enhanced Vasotrac(R), as previously described.

Cost of sales and product development was $113,000 and $130,500 for the quarter
ended October 31, 1999 and 1998, respectively. Cost of sales and product
development was $166,000 and $304,000 for the six months ended October 31, 1999
and 1998, respectively. The cost of sales and product development decrease was
attributed to a decrease in the number of units sold.

The Company incurred $290,000 and $329,500 for research and development expenses
for the quarter ended October 31, 1999 and 1998 respectively. The Company
incurred $589,500 and $600,000 for research and development expenses for the six
months ended October 31, 1999 and 1998, respectively. The research and
development expense decrease was primarily attributed to the completion of the
Multi-Center study in January 1999.

The Company incurred $153,000 and $210,500 for sales and marketing expenses for
the quarter ended October 31, 1999 and 1998, respectively. The Company incurred
$288,000 and $429,500 for sales and marketing expenses for the six months ended
October 31, 1999 and 1998 respectively. The sales and marketing expense decrease
was attributable to the decrease in the number of sales representatives employed
by the Company as the Company focused on the development of the enhanced
Vasotrac(R).

The Company incurred $181,000 and $126,500 for general and administrative
expenses for the quarter ended October 31, 1999 and 1998, respectively. The
Company incurred $380,500 and $227,000 for the six months ended October 31, 1999
and 1998 respectively. The increase in general and administrative expenses was
primarily attributable to fees paid to the Company's investment banking firm
retained to explore strategic alternatives for the Company and its shareholders
and fees for a search team in the Company's hiring of a new president.

                                       7
<PAGE>

Interest income was $36,500 and $110,500 for the quarter ended October 31, 1999
and October 31, 1998, respectively. Interest income was $103,000 and $188,000
for the six months ended October 31, 1999 and 1998 respectively. The decrease
reflects lower cash, cash equivalents, and short and long-term investments as
the Company uses its investment accounts to fund operations.

Liquidity and Capital Resources

The Company's cash, cash equivalents, and short- and long-term investments were
$4,642,500 and $5,800,500 at October 31, 1999 and April 30, 1999, respectively.

With the cash and cash equivalents, and short and long-term investments, the
Company believes that sufficient liquidity is available to satisfy its working
capital needs for approximately one and one-half years from October 31, 1999.
The Company has no significant capital expenditure commitments.

Year 2000 Update

The Company has instituted a Year 2000 compliance project to address the issue
of computer programs and embedded computer chips being unable to distinguish
between the year 1900 and the year 2000. In the spring of 1998, the Company
conducted a review of its Information Technology ("IT") systems and non-IT
systems to identify the impact of the Year 2000 issue. The review concluded that
the Company's software and internal operations will not require Year 2000
modifications. The total cost associated with testing for Year 2000 compliance
is not expected to be material to the Company's financial position.

In connection with this review, the Company also asked critically important
vendors, suppliers, and financial institutions whose incomplete or untimely
resolution of the Year 2000 problem could potentially have a significant impact
on the Company's operations to assess their Year 2000 readiness. The Company has
been informed that these vendors, suppliers, and financial institutions will be
substantially Year 2000 compliant by late 1999.

In the reasonable worst case scenario, the Company's suppliers and customers
would experience delays in filling orders, making payments or other Year 2000
problems that may adversely affect the Company. Contingency plans are being
prepared, where necessary, to minimize any significant exposures from the
failure of third parties to be Year 2000 compliant. These plans include
development of back-up procedures, identification of alternate suppliers, and an
assessment of the need for increases in inventory levels.

The Company does not expect the Year 2000 problem or the cost of the compliance
program to have a material impact on the results of operations, financial
condition, or cash flows. However, there can be no absolute assurance that third
parties will convert their systems in a timely manner and in a way that is
compatible with the Company's systems.

ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk
   Not applicable.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
   Not applicable.

ITEM 2.  CHANGES IN SECURITIES
   Not applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
   Not applicable.

                                       8

<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Not applicable

ITEM 5.  OTHER INFORMATION

Statements made in this report that are stated as expectations, plans,
anticipations, prospects or future estimates or which otherwise look forward in
time are considered "forward-looking statements" and involve a variety of risks
and uncertainties, known and unknown, which are likely to affect the actual
results. The following factors, among others, as well as factors discussed in
the Company's other filings with the SEC, have affected, and in the future,
could affect the Company's actual results: resistance to the acceptance of new
medical products, the market acceptance of the Vasotrac(R) system or other
products of the Company, hospital budgeting cycles, the possibility of adverse
or negative commentary from clinical researchers or other users of the Company's
products, the Company's success in creating effective distribution channels for
its products, the Company's ability to scale up its manufacturing process, and
delays in product development or enhancement or regulatory approval.
Consequently, no forward-looking statement can be guaranteed and actual results
may vary materially.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (A)      EXHIBITS:
                  See Exhibit Index on Page Following Signatures

         (B)      REPORTS ON FORM 8K:
                  No reports on Form 8-K were filed by the Company during
                  the quarter ended October 31, 1999



                                   SIGNATURES

In accordance with the requirements 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.

Date:     December 15, 1999              Medwave, Inc.

                                         /s/ Timothy O'Malley
                                    By:  Timothy O'Malley
                                         President and Chief Executive Officer

                                         /s/ Mark T. Bakko
                                         Mark T. Bakko
                                         Chief Financial Officer

                                       9

<PAGE>


                                  EXHIBIT INDEX


                                  MEDWAVE, INC.

                                    FORM 10-Q

                                FOR QUARTER ENDED
                                OCTOBER 31, 1999




Exhibit No.                Description

10.1                       Letter  agreement of  employment  with Timothy
                           O'Malley  dated  September 9, 1999 and amendment
                           dated September 16, 1999.



                                       10