<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                             ---------------------


                                  FORM 10-QSB


QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31,1999


                        Commission File Number: 0-24635



                         HYPERTENSION DIAGNOSTICS, INC.
       (Exact name of small business issuer as specified in its charter)


             MINNESOTA                             41-1618036
     (State of incorporation)         (I.R.S. Employer Identification No.)


                          2915 WATERS ROAD, SUITE 108
                          EAGAN, MINNESOTA 55121-1562
                                 (651) 687-9999
     (Address of issuer's principal executive offices and telephone number)




Check 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 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 /   /


The number of shares of Common Stock outstanding as of April 30, 1999 was
5,107,235.

Transitional Small Business Disclosure Format:


          Yes /   /      No / X /

<PAGE>

                         HYPERTENSION DIAGNOSTICS, INC.

                              INDEX TO FORM 10-QSB
<TABLE>
<CAPTION>
                                                                                  Page No.
                                                                                  --------
<S>                                                                               <C>
PART I.   FINANCIAL INFORMATION:

     Item 1.     Financial Statements                                               3

          Balance Sheets - June 30, 1998 and March  31, 1999                        3


          Statements of Operations - Three Months and Nine Months Ended
             March 31, 1998 and 1999, respectively, and Period
             from July 19, 1988 (inception) to March 31, 1999                       4


          Statements of Cash Flows - Nine Months Ended
             March 31, 1998 and 1999 and Period from
             July 19, 1988 (inception) to March 31, 1999                            5

          Notes to Financial Statements                                             6

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

PART II.  OTHER INFORMATION:                                     


     Item 2.        Use of Proceeds                                                 12

     Item 6.        Exhibits and Reports on Form 8-K                                12

SIGNATURES                                                                          13

EXHIBIT INDEX                                                                       14
</TABLE>


                                       2

<PAGE>

                         PART I. FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
                         Hypertension Diagnostics, Inc.
                         (A Development Stage Company)
                                 Balance Sheets
<TABLE>
<CAPTION>
                                                                 June 30,        March 31,
                                                                   1998             1999
                                                              ---------------  ---------------
<S>                                                           <C>              <C>        
ASSETS                                                                           (Unaudited)
Current Assets:
   Cash and cash equivalents                                     $ 1,239,804      $ 8,514,071
   Accounts receivable                                               -                 45,111
   Interest receivable                                                 4,676           54,292
   Inventory                                                          39,054          332,870
   Prepaid expenses                                                   11,254           20,404
                                                              ---------------  ---------------
               Total Current Assets                                1,294,788        8,966,748

Property and Equipment:
   Leasehold improvements                                             13,377           17,202
   Furniture and equipment                                           136,737          408,278
   Less accumulated depreciation                                     (25,997)         (70,969)
                                                              ---------------  ---------------
                                                                     124,117          354,511
Patents, net of accumulated amortization of $12,524
   and $19,335 at June 30, 1998 and March 31, 1999,
   respectively                                                       32,881           26,070
Prepaid Offering Expenses                                            146,981          -
Others Assets                                                          6,740            6,782
                                                              ---------------  ---------------
               Total Assets                                      $ 1,605,507      $ 9,354,111
                                                              ---------------  ---------------
                                                              ---------------  ---------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Accounts payable                                                $ 188,100        $ 258,652
   Accrued compensation                                              -                 24,060
   Other accrued expenses                                            -                  3,284
                                                              ---------------  ---------------
               Total Current Liabilities                             188,100          285,996

Shareholders' Equity:
   Preferred Stock, $.01 par value:
      Authorized shares--5,000,000
      Issued and outstanding shares--none                            -                -
   Common Stock, $.01 par value:                               
      Authorized shares--25,000,000
      Issued and outstanding shares--2,517,735 and
         5,107,235 at June 30, 1998 and March 31, 1999,
         respectively                                                 25,177           51,092
   Additional paid-in capital                                      4,668,479       13,839,028
   Deficit accumulated during the development stage               (3,276,249)      (4,822,005)
                                                              ---------------  ---------------
               Total Shareholders' Equity                          1,417,407        9,068,115
                                                              ---------------  ---------------
               Total Liabilities and Shareholders' Equity        $ 1,605,507      $ 9,354,111
                                                              ---------------  ---------------
                                                              ---------------  ---------------
</TABLE>
SEE ACCOMPANYING NOTES.


                                       3

<PAGE>

                         Hypertension Diagnostics, Inc.
                         (A Development Stage Company)

                            Statements of Operations
                                  (Unaudited)



<TABLE>
<CAPTION>
                                                     Three Months Ended                 Nine Months Ended        July 19, 1988
                                                           March 31                          March 31            (inception) to
                                                  ----------------------------  ------------------------------      March 31,
                                                      1998           1999           1998            1999              1999
                                                  -------------  -------------  -------------  --------------- ----------------
<S>                                               <C>            <C>            <C>            <C>             <C>
Revenue:
   Equipment sales                                 $     -          $  37,750    $    -            $  133,248       $  133,248


Cost and Expenses:
   Cost of equipment sales
   Research and development                              -             14,308         -                43,400           43,400
                                                        64,504        165,480        255,787          530,231        2,089,530
   Selling, general and administrative                 296,481        486,881        623,383        1,424,475        3,296,918
                                                  -------------  -------------  -------------  --------------- ----------------
               Total Cost and Expenses                 360,985        666,669        879,170        1,998,106        5,429,848
                                                  -------------  -------------  -------------  --------------- ----------------
Operating Loss                                        (360,985)      (628,919)      (879,170)      (1,864,858)      (5,296,600)

Other Income (Expense):
   Interest income                                      19,362        105,402         45,700          319,102          521,626
   Interest expense                                      -              -             -               -                (47,031)
                                                  -------------  -------------  -------------  --------------- ----------------
                                                        19,362        105,402         45,700          319,102          474,595
                                                  -------------  -------------  -------------  --------------- ----------------

          Net Loss and Deficit Accumulated
             During the Development Stage          $  (341,623)    $ (523,517)    $ (833,470)    $ (1,545,756)    $ (4,822,005)
                                                  -------------  -------------  -------------  --------------- ----------------
                                                  -------------  -------------  -------------  --------------- ----------------



Basic and Dilutive Net Loss per Share                $    (.15)      $   (.10)      $   (.41)        $   (.31)       $   (4.19)
Weighted Average Shares Outstanding                  2,279,928      5,107,235      2,050,407        4,926,185        1,149,798
</TABLE>

SEE ACCOMPANYING NOTES.


                                       4

<PAGE>

                         Hypertension Diagnostics, Inc.
                         (A Development Stage Company)

                            Statements of Cash Flows
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                        Period from
                                                                            Nine Months Ended          July 19, 1988
                                                                                 March 31             (inception) to
                                                                     --------------------------------     March 31,
                                                                          1998            1999              1999
                                                                     --------------- ---------------- ----------------
<S>                                                                  <C>             <C>              <C>
OPERATING ACTIVITIES:
Net loss                                                                $  (833,470)    $ (1,545,756)    $ (4,822,005)
Adjustments to reconcile net loss to net
   cash used in operating activities:
      Value of stock options granted in lieu
         of cash compensation                                                87,333           -               483,453
      Depreciation                                                            6,723           44,972          107,438
      Amortization                                                            1,868            6,969           20,333
      Write-off of property and equipment                                   -               -                  42,702
      Change in operating assets and liabilities:
            Accounts receivable                                             -                (45,111)         (45,111)
            Interest receivable                                                 300          (49,616)         (54,292)
            Inventory                                                       -               (293,816)        (332,870)
            Prepaid expenses                                                (31,287)         137,831          (20,404)
            Other assets                                                    (36,640)            (200)          (6,730)
            Accounts payable                                                 40,179           70,552          258,652
            Accrued compensation                                            -                 24,060           24,060
            Other accrued expenses                                          -                  3,284            3,458
                                                                     --------------- ---------------- ----------------
               Net cash used in operating activities                       (764,994)      (1,646,831)      (4,341,316)

INVESTING ACTIVITIES:
Purchase of property and equipment                                                                     
                                                                            (87,487)        (275,366)        (504,651)
Payment of patent costs                                                     -               -                 (46,455)
                                                                     --------------- ---------------- ----------------
               Net cash used in investing activities                        (87,487)        (275,366)        (551,106)

FINANCING ACTIVITIES:
Proceeds from notes payable                                                 -               -                 315,500
Payments of notes payable                                                   -               -                 (49,000)
Issuance of common stock                                                  1,222,948        9,196,464       13,140,293
Redemption of common stock                                                  -               -                    (300)
                                                                     --------------- ---------------- ----------------
               Net cash provided by financing activities                  1,222,948        9,196,464       13,406,493
                                                                     --------------- ---------------- ----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                   370,467        7,274,267        8,514,071
               Cash and cash equivalents at beginning of period           1,198,778        1,239,804          -
                                                                     --------------- ---------------- ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                              $ 1,569,245      $ 8,514,071      $ 8,514,071
                                                                     --------------- ---------------- ----------------
                                                                     --------------- ---------------- ----------------

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Conversion of note payable and accrued interest into
   common stock                                                          $  -            $  -             $   266,674
Cash paid for interest                                                      -               -                  12,526
</TABLE>

SEE ACCOMPANYING NOTES.


                                       5

<PAGE>

                         HYPERTENSION DIAGNOSTICS, INC.
                          (A Development Stage Company)
                         Notes to Financial Statements
                                   (Unaudited)

                                 March 31, 1999


1.   Interim Financial Information


     The accompanying unaudited financial statements have been prepared in
     accordance with the instructions to Form 10-QSB and do not include all the
     information and notes required by generally accepted accounting principles
     for complete financial statements. In the opinion of management, these
     unaudited financial statements reflect all adjustments, consisting only of
     normal and recurring adjustments necessary for a fair presentation of the
     financial statements. The results of operations for the three months and
     nine months ended March 31, 1999, respectively, are not necessarily
     indicative of the results that may be expected for the full year ending
     June 30, 1999. The June 30, 1998 balance sheet was derived from audited
     financial statements. For further information, refer to the financial
     statements and notes included in the Company's Annual Report on Form 10-KSB
     for the fiscal year ended June 30, 1998. The policies described in that
     report are used for preparing quarterly reports.

2.   Shareholders' Equity


     In July and August 1998, the Company raised $9,188,464 (net of underwriting
     discounts and offering expenses), through an initial public offering of
     2,587,500 units (which includes 337,500 additional units to cover
     over-allotments) at $4.125 per unit. Each unit consists of one share of
     Common Stock and one redeemable Class A Warrant which entitles the holder
     to purchase one share at an exercise price of $5.50 per Warrant, subject to
     adjustment. The Class A Warrants are subject to redemption by the Company
     for $.01 per Warrant at any time commencing 90 days after the Effective
     Date (July 23, 1998), provided that the closing bid price of the Common
     Stock exceeds $6.50 (subject to adjustment) for 14 consecutive trading
     days.

                                       6

<PAGE>

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

FORWARD-LOOKING DISCLOSURE

     This report contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934. In addition, forward-looking
statements may be made orally in the future by or on behalf of the Company. When
used in this report, the words "believe," "expect," "anticipate," "will" and
similar expressions are intended to identify such forward-looking statements.

     The Company wishes to caution readers not to place undo reliance on any
forward-looking statements and to recognize that the statements are not
predictions of actual future results. Actual results could differ materially
from those anticipated in the forward-looking statements due to the risks and
uncertainties set forth in the Company's 1998 Annual Report on Form 10-KSB under
the caption "Risk Factors," as well as others not now anticipated. These risks
and uncertainties include, without limitation, the Company's ability to receive
regulatory approval for its Model DO-2020 product; the availability of
third-party reimbursements; market acceptance of the Company's products; timely
development of the central data management facility; the ability of third
parties to manufacture the Company's products on a commercial scale and in
compliance with regulatory requirements; the availability of integral components
for the Company's products; the Company's ability to develop distribution
channels; increased competition; changes in government regulation; health care
reform; exposure to potential product liability; and the Company's ability to
protect its proprietary technology.

DEVELOPMENT STAGE RESULTS OF OPERATIONS

     The Company is a development stage company and is not presently 
generating any significant revenues. There can be no assurance that the 
Company will ever be able to generate significant revenues, attain or 
maintain profitable operations or successfully implement its business plan or 
its current development opportunities.  As of March 31, 1999, the Company had 
a deficit accumulated during the development stage of $(4,822,005), 
attributable primarily to research and development and general and 
administrative expenses.  Until it is able to generate significant revenues 
from its activities, the Company expects to continue to incur operating 
losses.

     The Company has developed proprietary cardiovascular profiling technology
that analyzes non-invasively derived arterial pulse pressure waveform data as a
means of providing parameters that are useful in assessing the cardiovascular
system. The Company has developed two models of the HDI/PULSEWAVE-TM-
CardioVascular Profiling Instrument: (1) the CR-2000 which is currently in use
by physician scientists for research purposes only; and (2) the DO-2020 which is
intended to assist physicians and other health care professionals in screening,
diagnosing and monitoring the treatment of patients with cardiovascular disease.
The Company has not yet received permission to market the DO-2020 from the Food
and Drug Administration ("FDA"). Although FDA clearance on the Model DO-2020 is
taking longer than the Company had originally anticipated, the Company continues
to believe that a FDA 510(k) clearance is the appropriate route to follow and
that the process will be completed within the fiscal year ending June 30, 2000.

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999

     For the three months ended March 31, 1999, the Company recorded revenue of
$37,750 relating to sales of the HDI/PULSEWAVE-TM- CR-2000 Research 
CardioVascular Profiling Instrument.

     Total cost and expenses for the three months ended March 31, 1998 were
$360,985 compared to $666,669 for the three months ended March 31, 1999.
Approximately 18% of the $360,985 and 25% of the $666,669 total cost and
expenses were related to research and development expenses. A further breakdown
of research and development expenses is as follows:


                                       7

<PAGE>

<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                                March 31
                                                                            ------------------
                                                                  1998                              1999
                                                            ----------------                  ---------------
<S>                                                         <C>                               <C>
Design and development of prototype devices and other
      enhancements and improvements ......................   $       35,393                    $      55,632
Design and development of a Central Data Management
      Facility (CDMF) ....................................         -                                 109,848
Recognized compensation cost for value of stock options
      granted in lieu of cash compensation ...............           29,111                         -
                                                            ----------------                  ---------------
            Total research and development expenses ......   $       64,504                    $     165,480
                                                            ----------------                  ---------------
                                                            ----------------                  ---------------
</TABLE>


     For the three months ended March 31, 1999, approximately 66% of the total
research and development expenses related to the design and development of a
CDMF. When completed, the CDMF will be capable of handling multiple simultaneous
transmissions by the DO-2020 integrated with the Company's tracking, billing and
production systems and capable of storing and retrieving several hundred
thousand patient records.

     The following is a summary of the major categories included in selling,
general and administrative expenses:

<TABLE>
<CAPTION>
                                                                                     Three Months Ended
                                                                                         March 31
                                                                                     ------------------
                                                                           1998                              1999
                                                                     ----------------                  ---------------
<S>                                                                  <C>                               <C>
Wages, related expenses and benefits .............................          $ 98,778                        $ 157,192
Outside consultants ..............................................            68,779                           44,701
Rent-building and utilities ......................................            21,132                           21,717
Insurance-general and health .....................................            11,117                           17,671
Selling, marketing and promotion, including applicable wages .....            28,130                          112,569
Depreciation and amortization ....................................             6,493                           21,195
Other-general and administrative .................................            62,052                          111,836
                                                                     ----------------                  ---------------
            Total selling, general and administrative expenses ...         $ 296,481                        $ 486,881
                                                                     ----------------                  ---------------
                                                                     ----------------                  ---------------
</TABLE>


     The Company's number of employees increased from five in the three months
ended March 31, 1998 to thirteen in the three months ended March 31, 1999. In
September 1997, the Company hired its President, Greg H. Guettler. In April
1999, the Company hired Dennis L. Sellke to serve as its Chief Executive
Officer.

     Interest income was $19,362 and $105,402 for the three months ended March
31, 1998 and 1999, respectively. From December 1997 through March 1998, the
Company raised $1,220,720 (net of expenses) through a private placement of
Common Stock at $3.00 per share.

     Net loss was $(341,623) and $(523,517) for the three months ended March 31,
1998 and 1999, respectively. For the three months ended March 31, 1998, basic
and dilutive net loss per share was 


                                       8
<PAGE>

$(.15), based on weighted average shares outstanding of 2,279,928. For the three
months ended March 31, 1999, basic and dilutive net loss per share was $(.10),
based on weighted average shares outstanding of 5,107,235.

NINE MONTHS ENDED MARCH 31, 1998 COMPARED TO NINE  MONTHS ENDED MARCH 31, 1999

     Total cost and expenses for the nine months ended March 31, 1998 were
$879,170 compared to $1,998,106 for the nine months ended March 31, 1999.
Approximately 29% of the $879,170 and 27% of the $1,998,106 total cost and
expenses were related to research and development expenses. A further breakdown
of research and development expenses is as follows:

<TABLE>
<CAPTION>
                                                                              Nine Months Ended
                                                                                   March 31
                                                                              ------------------
                                                                   1998                              1999
                                                              ----------------                  ---------------
<S>                                                           <C>                               <C>
Design and development of prototype devices and other
      enhancements and improvement .........................        $ 168,454                        $ 213,187
Design and development of a Central Data Management
      Facility (CDMF) ......................................            -                              317,044
Recognized compensation cost for value of stock options
      granted in lieu of cash compensation .................           87,333                            -
                                                              ----------------                  ---------------
            Total research and development expenses ........        $ 255,787                        $ 530,231
                                                              ----------------                  ---------------
                                                              ----------------                  ---------------
</TABLE>




     For the nine months ended March 31, 1999, approximately 60% of the total
research and development expenses related to the design and development of a
CDMF.

     The following is a summary of the major categories included in selling,
general and administrative expenses:


<TABLE>
<CAPTION>
                                                                                     Nine Months Ended
                                                                                          March 31
                                                                                     ------------------
                                                                          1998                               1999
                                                                     ----------------                  -----------------
<S>                                                                  <C>                               <C>
Wages, related expenses and benefits ..............................        $ 262,096                          $ 461,273
Outside consultants ...............................................          110,221                            174,229
Rent-building and utilities .......................................           32,038                             65,040
Insurance-general and health ......................................           22,561                             53,281
Selling, marketing and promotion, including applicable wages ......           32,927                            241,051
Depreciation and amortization .....................................            8,591                             51,941
Other-general and administrative ..................................          154,949                            377,660
                                                                     ----------------                  -----------------
            Total selling, general and administrative expenses ....        $ 623,383                        $ 1,424,475
                                                                     ----------------                  -----------------
                                                                     ----------------                  -----------------
</TABLE>



     The Company's number of employees increased from five in the nine months
ended March 31, 1998 to thirteen in the nine months ended March 31, 1999.
Effective November 1997, the Company leased approximately 6,900 square feet of
commercial office and light assembly space in Eagan, Minnesota.

     The increase in outside consultants expense from $110,221 for the nine
months ended March 31, 1998 to $174,229 for the nine months ended March 31, 1999
was mainly attributable to additional work 

                                       9
<PAGE>

relating to the Company's FDA 510(k) application and efforts concerning an
approach for obtaining physician reimbursement from insurance coverage and third
party payers.

     Selling, marketing and promotion expense increased from $32,927 for the
nine months ended March 31, 1998 to $241,051 for the nine months ended March 31,
1999. This category includes wages and commissions paid by the Company relating
to its sales and marketing efforts as well as travel expense. In this regard,
the Company added the following individuals: Director of Sales (during March
1998), Director of Marketing (during May 1998) and Mid-Atlantic regional sales
manager (during March 1999).

     Interest income was $45,700 and $319,102 for the nine months ended March
31, 1998 and 1999, respectively. In July and August 1998, the Company raised
$9,188,464 (net of underwriting discounts and offering expenses) through an
initial public offering of 2,587,500 units (which included 337,500 additional
units to cover over-allotments) at $4.125 per unit.

     Net loss was $(833,470) and $(1,545,756) for the nine months ended March
31, 1998 and 1999, respectively. For the nine months ended March 31, 1998, basic
and dilutive net loss per share was $(.41), based on weighted average shares
outstanding of 2,050,407. For the nine months ended March 31, 1999, basic and
dilutive net loss per share was $(.31), based on weighted average shares
outstanding of 4,926,185. 

LIQUIDITY AND CAPITAL RESOURCES

     Cash and cash equivalents had a net increase of $370,467 for the nine
months ended March 31, 1998. The significant elements of this change were as
follows: NET CASH USED IN OPERATING ACTIVITIES - net loss, as adjusted for
non-cash items, of $(737,546); NET CASH PROVIDED BY FINANCING
ACTIVITIES - issuance of Common Stock - $1,222,948. For the nine months ended
March 31, 1999, cash and cash equivalents had a net increase of $7,274,267. The
significant elements of this change were as follows: NET CASH USED IN OPERATING
ACTIVITIES - net loss, as adjusted for non-cash items, of $(1,493,815); increase
in inventory - $293,816; decrease in prepaid expenses - $137,831; increase in
accounts payable - $70,552; NET CASH USED IN INVESTING ACTIVITIES - purchase of
property and equipment - $275,366; NET CASH PROVIDED BY FINANCING ACTIVITIES -
issuance of Common Stock - $9,196,464.

     In July 1998, the Company completed its initial public offering (IPO) in
which it sold 2,250,000 units at $4.125 per unit, each unit consisting of one
share of Common Stock and one redeemable Class A Warrant. In August 1998, the
underwriter exercised in full an overallotment option to purchase an additional
337,500 units. Total net proceeds from the IPO were $9,188,464. As of March 31,
1999, the Company has cash and cash equivalents of $8,514,071, and anticipates
that these funds should allow it to pursue the different elements of the
Company's business development strategy for at least the next two years. The
Company's business plan and financing needs are subject to change depending on,
among other things, market conditions, timing of the receipt of clearance from
the FDA to market the Model DO-2020, business opportunities and cash flow from
operations. Pending application of the net proceeds, such proceeds will be
invested in short-term, high quality, interest-bearing instruments.

     Although not assured, in addition to the net proceeds from the IPO, the
Company may derive over a period of time up to $14,231,250 from the exercise of
the Class A Warrants included in the units. Each Class A Warrant entitles the
holder to purchase one share at an exercise price of $5.50 per Warrant, subject
to adjustment. The Class A Warrants are subject to redemption by the Company for
$.01 per Warrant at any time commencing October 21, 1998, provided that the
closing bid price of the shares exceeds $6.50 (subject to adjustment) for 14
consecutive trading days. The amounts, if any, that the Company derives from the
exercise of such Class A Warrants will be used in connection with the Company's
development opportunities, business plan activities and/or working capital
requirements.

                                       10
<PAGE>

YEAR 2000 COMPLIANCE

     The Company has considered the potential impact of the Year 2000 for its
internal information systems, external integration problems and the two models
of its HDI/PULSEWAVE-TM- CardioVascular Profiling Instrument (the "Product"). 
The Company believes that its internal information systems and current Product 
are Year 2000 compliant and that its CDMF will be so prior to the Year 2000. The
Company's Product has been, and the CDMF is being, designed and developed to be
Year 2000 compliant. In addition, the Product has been tested to ensure that its
performance and functionality are not affected by the Year 2000 compliance
issues. There can be no assurance, however, that the Company will not experience
unexpected costs and delays in achieving Year 2000 compliance, which could
result in a material adverse effect on the Company's future results of
operations.

                                       11
<PAGE>

                           PART II. OTHER INFORMATION.

     ITEM 2.   USE OF PROCEEDS

     The following table sets forth the Company's use of proceeds from its
initial public offering, from the closing of the offering until March 31, 1999:

  Temporary investments (U.S. Government obligations/notes
    and U.S. Government money market fund; other short-term high
    quality, interest-bearing instruments)                           $8,514,071
  Central Data Management Facilty (CDMF)                                317,044
  Purchase of property and equipment                                    275,000
  Sales and marketing                                                    82,349
                                                                   -------------
              TOTAL NET PROCEEDS                                     $9,188,464
                                                                   -------------
                                                                   -------------



     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a)  The following Exhibits are furnished pursuant to Item 601 of Regulation
     S-B:

EXHIBIT NO.    DESCRIPTION

    27         Financial Data Schedule for the quarter ended March 31, 1999.

  99.1         Press Release dated April 19, 1999.

  99.2         Press Release dated April 28, 1999.

  99.3         Press Release dated May 14, 1999.

----------------------------

(b)  Reports on Form 8-K.

     No reports on Form 8-K were filed during the quarter ended March 31, 1999.

                                       12

<PAGE>

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
                                        HYPERTENSION DIAGNOSTICS, INC.

                                        By /s/ James S. Murphy
                                           -----------------------------------
                                        James S. Murphy
                                        Vice President-Finance and
                                        Chief Financial Officer
                                        (principal accounting officer)

Date:  May 14, 1999
       ------------

                                       13
<PAGE>

                                 EXHIBIT INDEX


EXHIBIT NO.    DESCRIPTION

    27         Financial Data Schedule for the quarter ended March 31, 1999.

  99.1         Press Release dated April 19, 1999

  99.2         Release dated April 28, 1999.

  99.3         Press Release dated May 14, 1999.

                                       14