<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


/X/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _______.

COMMISSION FILE NO. 0-22233

                          ENDOCARDIAL SOLUTIONS, INC.
                          ---------------------------
              (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE                                         41-1724963
--------                                         ----------
(STATE OR OTHER JURISDICTION OF                  (IRS EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION)                    NUMBER)

1350 ENERGY LANE                                 (651) 523-6900
SUITE 110                                        -------------
SAINT PAUL, MINNESOTA  55108                     (REGISTRANT'S TELEPHONE NUMBER
----------------------------                     INCLUDING AREA CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES
AND ZIP CODE)

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 TWELVE (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 THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.

<TABLE>
<CAPTION>
COMMON STOCK, $.01 PAR VALUE                          10,180,236
----------------------------
<S>                               <C>
(CLASS)                           (NUMBER OF SHARES OUTSTANDING AT OCTOBER 31, 1999)
</TABLE>

<PAGE>

                                      INDEX

                           ENDOCARDIAL SOLUTIONS, INC.

<TABLE>
<CAPTION>
                                                                                     PAGE NO.
<S>                                                                                  <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)

         Balance Sheets - September 30, 1999 and December 31, 1998                      3

         Statements of Operations - Three and nine month periods ended
         September 30, 1998 and September 30, 1999                                      4

         Statements of Cash Flows - Three and nine months ended
         September 30, 1998 and September 30, 1999                                      5

         Notes to Financial Statements                                                  6

Item 2.  Management's Discussion and Analysis
         of Financial Condition and Results of Operations                               7-10

Item 3.  Quantitative and Qualitative Disclosures about Market Risk                     10


PART II.  OTHER INFORMATION

Items 1, 3, 4 and 5 have been omitted since all items are inapplicable or
answers negative.

Item 2.  Changes in Securities and Use of Proceeds                                      11

Item 6.  Exhibits and Reports on Form 8-K                                               11
</TABLE>

                                           2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                          ENDOCARDIAL SOLUTIONS, INC.

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              September 30,    December 31,
                                                                   1999            1998
                                                              --------------   -------------
                                                               (Unaudited)        (Note)
<S>                                                           <C>              <C>
ASSETS
Current Assets:
  Cash and cash equivalents                                    $  3,505,359    $    654,529
  Short-term investments                                          7,057,071       8,060,303
  Accounts Receivable                                             3,237,168         475,750
  Inventories                                                     2,519,809       1,827,061
  Prepaid expenses and other current assets                          15,327         205,161
                                                               ------------    ------------
Total current assets                                             16,334,734      11,222,804

Furniture and equipment                                           5,017,359       3,942,741
Less accumulated depreciation                                    (2,202,357)     (1,668,305)
                                                               ------------    ------------
                                                                  2,815,002       2,274,436

Deposits                                                             81,709          81,709
Patents, net of accumulated amortization (1999 - $86,251;
  1998 - $74,440)                                                    30,831          42,642
                                                               ------------    ------------
Total assets                                                   $ 19,262,276    $ 13,621,591
                                                               ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                                             $  1,941,499    $    762,147
  Accrued salaries and expenses                                   1,261,287         706,724
  Current portion of capital lease obligations                      715,859         876,959
                                                               ------------    ------------
Total current liabilities                                         3,918,645       2,345,830

Capital lease obligations                                         1,090,266         812,339
Long-term debt                                                    3,500,000              --

Stockholders' equity:
  Undesignated Preferred Stock, par value $.01 per share:
    Authorized shares--10,000,000
    Issued and outstanding shares--none                                  --              --
  Common Stock, $.01 par value
    Authorized shares--September 30, 1999--40,000,000;
     December 31, 1998--40,000,000
    Issued and oustanding shares--September 30,
     1999--10,173,486; December 31, 1998--9,011,762                 101,735          90,118
  Additional paid-in capital                                     59,832,397      50,329,703
  Accumulated deficit                                           (49,157,568)    (39,863,607)
  Deferred compensation                                             (23,199)        (92,792)
                                                               ------------    ------------
Total stockholders' equity                                       10,753,365      10,463,422
                                                               ------------    ------------
Total liabilities and stockholders' equity                     $ 19,262,276    $ 13,621,591
                                                               ============    ============
</TABLE>

Note: The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

SEE ACCOMPANYING NOTES.

                                       3
<PAGE>

                          ENDOCARDIAL SOLUTIONS, INC.

                            STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                       For the                          For the
                                                  Three Months Ended                Nine Months Ended
                                            ------------------------------    ------------------------------
                                            September 30,    September 30,    September 30,    September 30,
                                                 1999             1998             1999             1998
                                            --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>
Revenue                                      $ 3,527,893      $   692,996      $ 6,540,328      $  1,128,402
Cost of goods sold                             1,984,997          797,644        4,838,741         2,408,162
                                             -----------      -----------      -----------      ------------
Gross profit                                   1,542,896         (104,648)       1,701,587        (1,279,760)

Operating expenses:
  Research and development                     1,408,565        1,698,316        4,115,566         9,118,647
  General and administrative                     501,956          466,258        1,506,229         1,280,438
  Sales and marketing                          2,201,893          317,332        5,349,202           892,048
                                             -----------      -----------      -----------      ------------
Operating loss                                (2,569,518)      (2,586,554)      (9,269,410)      (12,570,893)

Operating income (expense):
  Interest income                                151,121          188,460          350,722           685,622
  Interest expense                              (108,400)         (20,722)        (271,512)          (53,798)
                                             -----------      -----------      -----------      ------------
                                                  42,721          167,738           79,210           631,824
                                             -----------      -----------      -----------      ------------
Net loss for the period and accumulated
  deficit                                    $(2,526,797)     $(2,418,816)     $(9,190,200)     $(11,939,069)
                                             ===========      ===========      ===========      ============
Net loss per share - basic and diluted       $     (0.25)     $     (0.27)     $     (0.98)     $      (1.33)
                                             ===========      ===========      ===========      ============
Weighted average shares outstanding            9,984,319        9,000,958        9,352,775         8,983,150
                                             ===========      ===========      ===========      ============
</TABLE>

SEE ACCOMPANYING NOTES.

                                       4
<PAGE>

                          ENDOCARDIAL SOLUTIONS, INC.

                            STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                         For the Three Months Ended         For the Nine Months Ended
                                                       -------------------------------   -------------------------------
                                                       September 30,    September 30,    September 30,    September 30,
                                                            1999             1998             1999             1998
                                                       --------------   --------------   --------------   --------------
<S>                                                    <C>              <C>              <C>              <C>
OPERATING ACTIVITIES
Net loss                                                $(2,526,797)     $(2,418,816)     $(9,190,200)     $(11,939,069)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation and amortization                             217,439          159,334          581,892           435,641
  Amortization of deferred compensation                      23,199           54,129           69,593           162,387
  Value of warrants granted in connection with
    purchase of technology                                       --               --               --         2,085,602
  (Gain)/Loss on sale of assets                               6,399               --            6,399                --
  Changes in operating assets and liabilities:
    Accounts Receivable                                  (1,579,524)        (211,880)      (2,761,418)         (663,240)
    Inventory                                              (574,922)        (367,682)        (692,748)         (408,274)
    Prepaid expenses and other assets                       157,305             (559)         189,834           (73,299)
    Accounts payable                                        530,123          (40,747)       1,347,182           378,226
    Accrued salaries and expenses                           225,884          (51,811)         386,733           (73,474)
                                                        -----------      -----------      -----------      ------------
Net cash used in operating activities                    (3,520,894)      (2,878,032)     (10,062,733)      (10,095,500)

INVESTING ACTIVITIES
Purchases of short-term investments                      (4,050,894)      (6,205,941)      (8,001,768)      (15,222,989)
Maturities of short-term investments                        490,000        7,755,000        9,005,000        25,458,226
Purchases of furniture and equipment                        (82,086)        (145,508)        (305,218)         (621,864)
Patent expenditures                                              --           (7,894)              --           (21,211)
Proceeds from sale of assets                                    980               --              980                --
                                                        -----------      -----------      -----------      ------------
Net cash used in investing activities                    (3,642,000)       1,395,657          698,994         9,592,162

FINANCING ACTIVITIES
Proceeds from notes payable                                      --               --        3,500,000                --
Principal payments on notes payable and capital lease
  obligations                                              (197,304)        (110,899)        (695,982)         (328,041)
Proceeds from issuance of common stock                    9,397,723            9,555        9,410,551            63,416
                                                        -----------      -----------      -----------      ------------
Net cash provided by (used in) financing activities       9,200,419         (101,344)      12,214,569          (264,625)

Increase (decrease) in cash and cash equivalents          2,037,525       (1,583,719)       2,850,830          (767,963)
Cash and cash equivalents at beginning of period          1,467,834        2,328,412          654,529         1,512,656
                                                        -----------      -----------      -----------      ------------
Cash and cash equivalents at end of period              $ 3,505,359      $   744,693      $ 3,505,359      $    744,693
                                                        ===========      ===========      ===========      ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
  FINANCING ACTIVITIES
Purchase of equipment and inventory through capital
  lease obligations                                     $    82,117      $   342,956      $   812,808      $    910,380
</TABLE>

SEE ACCOMPANYING NOTES.
                                       5
<PAGE>

                           ENDOCARDIAL SOLUTIONS, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.  BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Due to the Company's full market release in Europe in the third quarter 1998,
the Company is no longer considered to be in the development stage. Operating
results for the three and nine months ended September 30, 1999, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1999. These financial statements should be read in conjunction with
the audited financial statements and accompanying notes for the fiscal year
ended December 31, 1998, contained in the Company's 10-K.

2.  INVENTORIES

Inventories are carried at the lower of cost (first-in, first-out basis) or
market. The majority of inventory consists of purchased components. To determine
the technological feasibility of its software efforts, the Company utilizes the
working model approach available under SFAS No. 86 and believes that the working
model was achieved when the software was available for commercial use in June
1998.

3.  RECLASSIFICATIONS

Certain prior year items have been reclassified to conform to current year
presentations.

4.  STOCK OFFERING

In July 1999, the company received proceeds of $10,000,000 from a private
placement of 1,111,111 shares of its common stock at a price of $9.00 per share,
to accredited investors.

                                       6
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

GENERAL

Endocardial Solutions Inc. (the "Company"), was incorporated in May 1992. The
Company develops, manufactures and markets the EnSite 3000-Registered Trademark-
clinical workstation and EnSite-Registered Trademark- catheter for use by
electrophysiologists in diagnosing and mapping abnormal heart rhythms known
as arrhythmias. The EnSite 3000 clinical workstation and EnSite catheter
received FDA approval for right atrial use in the U.S. during the second
quarter 1999. Through a distribution agreement with Medtronic, Inc., the
products are available in full market release to electrophysiologists in
Europe and Canada.

RESULTS OF OPERATIONS

GENERAL. Net losses increased to $2,526,797, or $.25 per share, for the three
months ended September 30, 1999, from $2,418,816 or $.27 per share, for the same
period in 1998. The net loss for the nine months ended September 30, 1999 was
$9,190,200 or $.98 per share, compared to a net loss of $11,939,069 or $1.33 per
share, for the same period of 1998. The loss for the nine months ended September
30, 1998 included expenses of $3,585,602 for the acquisition of locator
technology that was purchased during the first quarter from Medtronic, Inc. The
Company expects losses to continue through at least 1999. The Company is
entering a period of growth in marketing expenses related to market
introduction, including increases in personnel costs.

REVENUE AND COST OF GOODS SOLD. The Company recorded revenue for the sixth
consecutive quarter. This was the second quarter of U.S. revenue and the second
quarter with a positive gross profit. Revenue for the three months ended
September 30, 1999 was $3,527,893, compared with revenues of $692,996 for the
same period of 1998. Revenue included sale of the Company's EnSite catheter and
EnSite 3000 clinical workstation, including the Company's proprietary software,
patient interface unit and other peripherals. Revenue for the nine months ended
September 30, 1999 was $6,540,328, compared to revenues of $1,128,402 for the
same period of 1998. The Company began recording revenues in the second quarter
1998. Cost of goods sold and unabsorbed manufacturing expenses were $1,984,997
and $797,644 for the quarter ended September 30, 1999 and 1998, respectively.
Gross profit was 43.7% for the three months ended September 30, 1999, compared
with -15.1% for the same period in 1998. Cost of goods sold and unabsorbed
manufacturing expenses were $4,838,741 and $2,408,162 for the nine months ended
September 30, 1999 and 1998, respectively. Gross profit was 26.0% for the nine
months ended September 30, 1999, compared with -113.4% for the same period in
1998. Manufacturing expenses include costs for unabsorbed overhead from the
production of inventory held for re-sale.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were
$1,408,565 for the three month period ended September 30, 1999, compared to
$1,698,316 during the same period in 1998, a decrease of $289,751. The expenses
for the nine months ended September 30, 1999 were $4,115,566, compared to
$9,118,647 during the same period in 1998, a decrease of $5,003,081. The
expenses for the nine months ended September 30, 1998 include $3,585,602 for the
acquisition of locator technology that was purchased during the first quarter
from Medtronic, Inc. The Company experienced a decrease of $1,417,479 in
research and development expenses after subtracting for the purchase of the
locator technology. The decrease is attributable to a reduction in clinical
trial expenses and software development costs. The Company believes research and
development expenditures will increase slightly for the remainder of 1999.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses were
$501,956 and $466,258 for the three months ended September 30, 1999 and 1998,
respectively. For the nine months ended September 30, 1999 general and
administrative expenses were $1,506,229, an increase of $225,791 from expenses
of $1,280,438 for the nine months ended September 30, 1998. The increase is due
to an increase in personnel costs.

                                       7
<PAGE>

SALES AND MARKETING EXPENSES. Sales and marketing expenses increased to
$2,201,893 during the three months ended September 30, 1999, from $317,332
during the same period in 1998, an increase of $1,884,561. For the nine months
ended September 30, 1999 sales and marketing expenses increased to $5,349,202,
from $892,048 during the same period in 1998, an increase of $4,457,154. The
increase is primarily attributable to increases in personnel and costs
associated with building and training the U.S. sales and clinical team. In
addition, travel expenses and other costs associated with product introduction
increased. The Company also experienced an increase in expenses attributable the
European market release and market research activities as compared with the same
period in 1998. The Company expects continued increases in sales and marketing
expenses as the Company continues its U.S. product launch.

INTEREST INCOME. Interest income was $151,121 and $188,460 for the three
months ended September 30, 1999 and 1998, respectively. Interest income was
$350,722 and $685,622 for the nine months ended September 30, 1999 and 1998,
respectively. The decrease was due to a reduction in the cash, cash
equivalents and short-term investments.

LIQUIDITY AND CAPITAL RESOURCES.

On March 24, 1997, the Company received net proceeds of approximately
$18,833,000 from an initial public offering of 2,250,000 shares of its common
stock and approximately $6,278,000 from a concurrent private placement to
Medtronic, Inc. of 750,000 shares of its common stock. The Company's common
stock is listed on the NASDAQ National Market under the symbol "ECSI."

The Company's operations since inception have been funded by net proceeds from
the sales of common and preferred stock totaling approximately $59,934,132
through September 30, 1999. As of September 30, 1999 and December 31, 1998, the
Company had cash, cash equivalents and short-term investments of approximately
$10,562,430 and $8,714,832, respectively.

The Company announced a financing agreement with Medtronic, Inc. during the
first quarter 1999. Under the agreement, the Company will receive $7 million
from Medtronic Asset Management, which is repayable by 2001 or, if earlier, at
the close of a significant round of debt or equity financing. During the first
quarter 1999, $3.5 million was received as part of this financing agreement. The
Company anticipates receiving the additional $3.5 million during the fourth
quarter 1999.

In July 1999, the Company received proceeds of $10,000,000 from a private
placement of 1,111,111 shares of its common stock to accredited investors. The
placement was priced at $9.00 per share. In August 1999, these shares were
registered pursuant to the Securities Act of 1933.

The Company believes that its existing cash, cash equivalents, short-term
investments and bank financing will be sufficient to fund the operations of the
Company through 2000. The Company's future liquidity and capital requirements
will depend on numerous factors, including the timing of regulatory actions
regarding the Company's products, the results of clinical trials and
competition, the extent to which the Company's EnSite System gains market
acceptance, the costs and timing of expansion of sales, marketing and
manufacturing activities and the ability of the Company to obtain bank
financing.

YEAR 2000

Many currently installed computer systems and software are coded to accept only
two-digit entries in the date code fields. These date code field will need to
accept four-digit entries to distinguish 21st century dates. This problem could
result in system failures or miscalculations causing disruptions of business
operations (including, among other things, a temporary inability to process
transactions, send invoices or engage in other similar business activities). As
a result, many companies' computer systems and software will need to be upgraded
or replaced in order to comply with Year 2000 requirements. The potential global
impact of the Year 2000 problem is not known, and if not corrected in a timely
manner, could affect the Company and the US and world economy generally.

                                       8
<PAGE>

The Company has formed a project team consisting of representatives from its
information technology, finance, manufacturing, product development and quality
department to address internal and external Year 2000 issues. The Company's
internal financial, manufacturing and other operational computer systems have
been upgraded to address Year 2000 issues. Management believes that the new
software substantially addresses Year 2000 issues. The Company believes it has
completed it Year 2000 compliance program for all of its significant internal
financial and manufacturing systems. The Company may be required, however, to
make minor modification to some of its existing hardware and software packages
in order for its computer system to function properly in the year 2000 and
thereafter.

The Company's product development processes will contain steps to include Year
2000 compliance verification for all current and future products. The Company
has tested the EnSite 3000 System and determined it to be Year 2000 compliant.

In addition, the Company has received assurances from its major suppliers that
they are addressing the Year 2000 issue and that product purchased by the
Company from such suppliers will function properly in the year 2000. These
actions are intended to help mitigate the possible external impact of the Year
2000 problem. Even assuming that all material third parties confirm that they
are or expect to be Year 2000 compliant by December 31, 1999, it is not possible
to state with certainty that such parties will be so compliant. It is impossible
to fully assess the potential consequences in the event service interruptions
from suppliers occur or in the event that there are disruptions in
infrastructure areas as utilities, communication, transportation, banking and
government.

The amount of remediation work required to address Year 2000 problems is not
expected to be extensive and the total estimated cost for resolving the
Company's Year 2000 issues is minimal and not expected to have a material effect
on the Company's financial position, results of operations, or cash flows. The
Company expects the remainder of the Year 2000 compliance program to be
substantially complete by third quarter 1999.

Based on the Company's assessment to date, the Company believes it will not
experience any material disruption as a result of Year 2000 problems in its
financial, internal manufacturing processes or the EnSite 3000-TM- System.
However, there can be no guarantee that the systems of other companies on which
the Company relies will be converted in a timely manner, or that a failure to
convert by another company, or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the Company. The
Company has not yet developed a contingency plan to provide for continuity of
processing in such event of various problem scenarios, but it will assess the
need to develop such a plan based on the outcome of its validation phase of its
Year 2000 compliance program and the results of surveying it major suppliers.
Assuming no major disruption in service from utility companies or other critical
third-party providers, the Company believes that it will be able to manage its
total Year 2000 transition without any material effect on the Company's results
of operations or financial condition. There can be no assurance, however, that
unexpected difficulties will not arise and, if so, that the Company will be able
to timely develop and implement a contingency plan.

CAUTIONARY STATEMENT

Except for the historical information contained herein, this Quarterly Report on
Form 10-Q contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. When used in this Form 10-Q and in future
filings by the Company with the Securities and Exchange Commission, in the
Company's press releases and in oral statements made with the approval of an
authorized executive officer, the word or phrases "believes," "anticipates,"
"expects," "intends," "will likely result," "estimates," "projects" or similar
expressions are intended to identify such forward-looking statements, but are
not the exclusive means of identifying such statements. These forward-looking
statements involve risks and uncertainties that may cause the Company's actual
results to differ materially from the results discussed in the forward-looking
statements. Factors that might cause such differences include, but are not
limited to, the following:

                                       9
<PAGE>

risks associated with the successful development and commercialization of a
new technology: limited clinical testing experience; uncertainty of obtaining
Food and Drug Administration and international regulatory clearances;
uncertainty of availability of treatments employing the Company's diagnostic
system (the "EnSite System"); uncertainty of market acceptance of the EnSite
System; training requirements for electrophysiologists; the uncertainty of
the ability to diagnose and treat atrial fibrillation; the expectation of
future losses; significant competition and rapid technological change in the
tachycardia diagnostic market; risks associated with the Company's dependence
on patents and proprietary technology; risks associated with the Company's
limited manufacturing experience and dependence on suppliers; and the
uncertainty of third-party reimbursement for diagnostic medical procedures
employing the EnSite System. These factors are discussed in the cautionary
statements included in Exhibit 99 to this Form 10-Q for the quarter ended
September 30, 1999. Other forward-looking statements are found in the
Company's discussion of Year 2000 compliance issues. The Company cautions
investors and others to review the statements set forth in Management's
Discussion and Analysis of Financial Condition and Results of Operations,
Exhibit 99 and in the Company's other reports filed with the Securities and
Exchange Commission and that other factors may prove to be important in
affecting the Company's business and results of operations.

ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company had approximately $7 million of cash and investments on September
30, 1999. Substantially all of the investments were U.S. government or
investment grade, fixed income securities from domestic issuers. Because of the
credit risk criteria of the Company's investment policies, the primary market
risk associated with these investments is interest rate risk. The Company does
not use derivative financial instruments to manage interest rate risk or to
speculate on futures changes in interest rates. A rise in interest rates could
negatively affect the fair value of the Company's investments; however, because
management considers it unlikely that the Company would need or choose to
substantially liquidate the Company's investments, management believes that such
an increase in interest rates would not have a material impact on the Company's
future earnings or cash flows. Even though the Company distributes products
abroad, the Company does not conduct sales in foreign currencies. Therefore,
management does believe that Company is exposed to any material foreign currency
exchange rate risk.

                                       10
<PAGE>

PART II.  OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

On July 9, 1999, the Company completed the sale of 1,111,111 share of its
common stock through a private placement to accredited investors at a price
of $9.00 per share, for proceeds of $10 million. In August 1999, these shares
were registered pursuant to the Securities Act of 1933. Proceeds from the
sale of shares will be used for sales and marketing and other general
corporate purposes.

In August 1999, the Board of Directors of the Company adopted a Stockholder
Rights Plan and declared a dividend of one Right on each outstanding share of
Common Stock. The dividend was paid to the shareholders of record on September
15, 1999, and the Rights will expire ten years later unless redeemed or
exchanged at an earlier date. Each Right entitles shareholders of the Company to
buy one one-hundredth of a share of Series A Junior Participating Preferred
Stock of the Company at a price of $60.00 per one-hundredth of a Preferred
Share. The Rights will become exercisable following the public announcement that
a person or group has acquired, without approval of the Board of Directors of
the Company, beneficial ownership of 20% or more (25% in the case of Medtronic,
Inc. and its affiliates) of the Company's outstanding Common Stock (an
"Acquiring Person"), or at the close of business ten days after the commencement
of, or a public announcement of the intent to commence, a tender or exchange
offer that would result in a person or group becoming an Acquiring Person. In
the event any person or group becomes an Acquiring Person, without approval of
the Board of Directors, each holder of Rights other than the Acquiring Person
will have the right to purchase the Company's Common Stock at a 50% discount
from the current market price. After any one of these events, the Company may
also exchange all or any portion of the outstanding Rights, other than Rights
held by such Acquiring Person, for shares of the Company's Common Stock at an
exchange ratio of one share of Common Stock per Right, subject to the provisions
of the Rights Plan. The Board of Directors of the Company may redeem the rights
for $0.01 per Right at any time prior to the date a person or group becomes an
Acquiring Person. In addition, the exercise price and the value of stock that
may be acquired for that price are subject to adjustment for stock splits, stock
dividends and certain other events. Until a Right is exercised, the holder
thereof will have no rights as a shareholder of the Company, including the right
to vote or to receive dividends.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

<TABLE>
<CAPTION>

Exhibit           Description
-------           ------------
<S>               <C>
4                 Rights Agreement dated as of August 25, 1999 between the
                  Company and Norwest Bank Minnesota, National Association, as
                  Rights Agent (incorporated by reference to Exhibit 1 to the
                  Company's registration statement on Form 8-A dated
                  August 25, 1999).

27                Financial Data Schedule (EDGAR filing only)

99                Cautionary Statement
</TABLE>

(b)      Reports

The Company filed a report on Form 8-K on September 15,
1999, relating to the adoption of its Stockholder Rights Plan.

                                       11
<PAGE>

                                   SIGNATURES

Pursuant to 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.

                           ENDOCARDIAL SOLUTIONS, INC.

Dated:   November 15, 1999          By: /s/ James W. Bullock
                                        --------------------
                                    James W. Bullock
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)

Dated:   November 15, 1999          By: /s/ Leota L. Pearson
                                        --------------------
                                    Leota L. Pearson
                                    Vice President Finance and
                                    Chief Financial Officcer
                                    (Principal Financial and Accounting Officer)

                                       12