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 October 31, 2007

                                       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 0-944

                              POSSIS MEDICAL, INC.
                              --------------------
             (exact name of registrant as specified in its charter)

          Minnesota                                         41-0783184
          ---------                                         ----------
(State or other jurisdiction of                          (I.R.S. Employer
   incorporation organization)                          Identification No.)


9055 Evergreen Blvd NW      Minneapolis MN                      55433-8003
------------------------------------------                      -----------
(Address of principal executive offices)                        (Zip Code)

763-780-4555
(Registrant's telephone number, including area 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 12 months (or for such shorter period that the
registrant was required file such reports), and (2) has been subject to such
filing requirements for the past 90 days. X   Yes          No
                                        -----    ---------

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.

 Large accelerated filer     Accelerated filer  X    Non-accelerated filer
                        ---                    ---                         ---

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes     No X
                                               ---    ---

The number of shares outstanding of the Registrant's Common Stock, $.40 par
value, as of November 26, 2007, was 16,987,283.

                                       1
<PAGE>

                              POSSIS MEDICAL, INC.

                                      INDEX

<TABLE>
<CAPTION>
<S>           <C>                                                                                                           <C>


                                                                                                                         PAGE
                                                                                                                         ----


PART I.                       FINANCIAL INFORMATION

         ITEM 1.              Financial Statements.............................................................             3

                              Consolidated Balance Sheets, October 31, 2007 and July 31, 2007..................             3

                              Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the
                              three months ended October 31, 2007 and 2006.....................................             4

                              Consolidated Statements of Cash Flows for the three months ended
                              October 31, 2007 and 2006........................................................             5

                              Notes to Consolidated Financial Statements........................................            6

         ITEM 2.              Management's Discussion and Analysis of Financial
                              Condition and Results of Operations..............................................            12

         ITEM 3.              Quantitative and Qualitative Disclosures about Market Risk.......................            17

         ITEM 4.              Controls and Procedures...........................................................           17

PART II.                      OTHER INFORMATION

         ITEM 1.              Legal Proceedings...............................................................             18

         ITEM 1A.             Risk Factors....................................................................             18

         ITEM 2.              Unregistered Sales of Equity Securities and Use of Proceeds.....................             18

         ITEM 6.              Exhibits.........................................................................            19

                              SIGNATURES......................................................................             20
</TABLE>

                                       2
<PAGE>

PART 1    FINANCIAL INFORMATION

          ITEM 1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
<S>                                                                                       <C>              <C>

                              POSSIS MEDICAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

ASSETS                                                                                    October 31, 2007 July 31, 2007
                                                                                          ---------------- -------------

CURRENT ASSETS:
 Cash and cash equivalents................................................................$     5,635,132  $  2,664,607
 Marketable securities....................................................................     34,814,069    40,207,324
 Trade receivables (less allowance for doubtful accounts and returns of $1,128,000 and
  $1,131,000, respectively)...............................................................      8,207,271     8,647,569
 Inventories..............................................................................     11,072,844     9,351,888
 Prepaid expenses and other assets........................................................      3,087,085     2,955,583
 Deferred tax asset.......................................................................      2,010,000     2,010,000
                                                                                          ---------------- -------------
    Total current assets..................................................................     64,826,401    65,836,971
PROPERTY AND EQUIPMENT, net...............................................................      4,734,938     4,872,574
DEFERRED TAX ASSET........................................................................      9,748,117     9,518,000
INVESTMENT IN RAFAEL MEDICAL..............................................................      2,612,887     2,612,887
PREPAYMENT TO VENDOR......................................................................      1,590,000            --
OTHER ASSET...............................................................................      1,175,523     1,080,889
                                                                                          ---------------- -------------

TOTAL ASSETS..............................................................................$    84,687,866  $ 83,921,321
                                                                                          ================ =============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
 Trade accounts payable...................................................................$     2,664,649  $  2,558,413
 Accrued salaries, wages, and commissions.................................................      3,528,503     4,503,546
 Other liabilities........................................................................      2,707,416     2,369,801
                                                                                          ---------------- -------------
     Total current liabilities............................................................      8,900,568     9,431,760
OTHER LIABILITES                                                                                1,303,609     1,201,743

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
 Common stock-authorized, 100,000,000 shares of $0.40 par value each; issued and
  outstanding, 16,987,283 and 16,894,416 shares, respectively.............................      6,794,913     6,757,766
 Additional paid-in capital...............................................................     78,260,057    77,538,548
 Accumulated other comprehensive gain (loss)..............................................          3,000       (60,000)
 Retained deficit.........................................................................    (10,574,281)  (10,948,496)
                                                                                          ---------------- -------------
       Total shareholders' equity.........................................................     74,483,689    73,287,818
                                                                                          ---------------- -------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................................................$    84,687,866  $ 83,921,321
                                                                                          ================ =============
</TABLE>

                                       3
<PAGE>
                              POSSIS MEDICAL, INC.
    CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
                FOR THE THREE MONTHS ENDED OCTOBER 2007 AND 2006
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                                                                            <C>          <C>
                                                                                                   2007         2006
                                                                                               ------------ ------------
Product sales..................................................................................$18,869,371  $15,603,881
Cost of medical products.......................................................................  5,766,956    4,408,194
                                                                                               ------------ ------------
Gross Profit................................................................................... 13,102,415   11,195,687

Selling, general and administrative............................................................ 11,163,997    9,816,040
Research and development.......................................................................  2,322,211    2,414,679
                                                                                               ------------ ------------
    Other expenses ............................................................................ 13,936,208   12,230,719
                                                                                               ------------ ------------

Operating loss.................................................................................   (383,793)  (1,035,032)
    Interest income............................................................................    503,383      539,492
    Gain on sale of securities.................................................................     70,675       18,891
                                                                                               ------------ ------------

                                                                                                            ------------
Income (loss) before income taxes..............................................................    190,265     (476,649)
Provision (benefit) for income taxes...........................................................     86,050     (243,000)
                                                                                               ------------ ------------

Net income (loss)..............................................................................    104,215     (233,649)

Other comprehensive income, net of tax:
Unrealized gain on securities..................................................................     63,000      193,000
                                                                                               ------------ ------------
Comprehensive income (loss)....................................................................$   167,215  $   (40,649)
                                                                                               ============ ============

Weighted average number of common
    shares outstanding:
    Basic...................................................................................... 16,934,129   17,149,993
    Diluted.................................................................................... 17,709,437   17,149,993

Net income (loss) per common share:
    Basic......................................................................................$      0.01  $     (0.01)
                                                                                               ============ ============
    Diluted....................................................................................$      0.01  $     (0.01)
                                                                                               ============ ============
</TABLE>

See notes to consolidated financial statements.

                                       4
<PAGE>

                              POSSIS MEDICAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED OCTOBER 31, 2007 AND 2006
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                                                                          <C>           <C>
                                                                                                 2007          2006
                                                                                             ------------- -------------
OPERATING ACTIVITIES:
Net income (loss)                                                                            $    104,215  $   (233,649)
    Adjustments to reconcile net income to net cash..........................................
      provided by operating activities:......................................................
    Depreciation.............................................................................     811,634       674,170
    (Gain) loss on asset disposal............................................................      (5,446)       22,206
    Stock-based compensation expense.........................................................     842,195       931,689
    (Gain) loss on sale of marketable securities.............................................     (39,009)       31,601
    Deferred taxes...........................................................................         883      (373,000)
    Decrease in trade receivables............................................................     440,298       235,477
    Increase in inventories..................................................................  (2,039,328)     (439,716)
    Increase in prepaid expenses and other assets............................................  (1,816,136)     (962,714)
    Increase in trade accounts payable.......................................................      67,236       203,982
    Decrease in accrued and other liabilities................................................    (885,536)     (912,681)
                                                                                             ------------- -------------
      Net cash used in operating activities..................................................  (2,518,994)     (822,635)

INVESTING ACTIVITIES:
   Additions of property and equipment.......................................................    (316,955)     (301,917)
   Proceeds from sale of fixed assets........................................................       5,775
   Proceeds from sale of marketable securities...............................................  19,032,958    18,097,396
   Purchase of marketable securities......................................................... (13,498,694)  (18,191,865)
                                                                                             ------------- -------------
      Net cash provided by (used in) investing activities....................................   5,223,084      (396,386)

FINANCING ACTIVITIES:
   Proceeds from issuance of common stock and exercise of options............................     266,435        78,686
                                                                                             ------------- -------------
      Net cash provided by financing activities..............................................     266,435        78,686
                                                                                             ------------- -------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.............................................   2,970,525    (1,140,335)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.............................................   2,664,607     3,505,796
                                                                                             ------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD...................................................$  5,635,132  $  2,365,461
                                                                                             ============= =============

SUPPLEMENTAL CASH FLOW DISCLOSURE:
   Cash paid for income taxes................................................................$    163,156  $    254,850
   Issuance of restricted stock..............................................................     687,519       548,957

See notes to consolidated financial statements.
</TABLE>

                                       5
<PAGE>

                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements have been
     prepared in accordance with accounting principles generally accepted in the
     United States of America 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 of the information and footnotes required by
     accounting principles generally accepted in the United States of America
     for complete financial statements. In the opinion of management, all
     adjustments (consisting of normal recurring accruals) considered necessary
     for a fair presentation have been included. The accompanying consolidated
     financial statements and notes should be read in conjunction with the
     audited financial statements and accompanying notes thereto included in our
     Annual Report on Form 10-K for the year ended July 31, 2007.

     INTERIM FINANCIAL STATEMENTS

     Operating results for the three months ended October 31, 2007 are not
     necessarily indicative of the results that may be expected for the year
     ending July 31, 2008.

     INVESTMENT IN RAFAEL MEDICAL

     We hold an investment in Rafael Medical Technologies, Inc. (Rafael), a
     company developing an inferior vena cava (IVC) filter named SafeFlo(R). In
     December 2006, we invested $2.5 million in a series of preferred stock of
     Rafael that represents a 15 percent ownership interest and also executed a
     stock purchase agreement that provides us a right for a period of
     three-years to purchase the remaining capital stock of Rafael that is or
     may become outstanding. We have committed to provide up to an additional
     $1.5 million as requested by Rafael in secured debt financing during this
     three year period, none of which is outstanding at October 31, 2007. The
     preferred stock purchase agreement provides us with a number of rights as
     an investor. The total investment on the balance sheet of $2,612,000
     reflects $112,000 of transaction-related costs that were capitalized. As of
     October 31, 2007, management determined that there was no impairment in the
     value of its investment in Rafael which is accounted for under the cost
     method.

2.   NET INCOME (LOSS) PER COMMON SHARE

     Basic income (loss) per common share is computed by dividing net income for
     the period by the weighted average number of common shares outstanding
     during the period. Diluted income per share is computed using the treasury
     stock method by dividing net income by the weighted average number of
     common shares plus the dilutive effect of outstanding stock options, and
     shares issuable under the employee stock purchase plan (ESPP).

                                       6
<PAGE>

     The following table presents a reconciliation of the numerators and
     denominators of basic and diluted earnings per share:
<TABLE>
<CAPTION>
<S>                                                                                             <C>         <C>
                                                                                                   Three Months Ended
                                                                                                      October 31,
                                                                                                ------------------------
                                                                                                    2007        2006
                                                                                                ----------- ------------
 Numerator:
   Net income (loss)                                                                            $   104,215 $  (233,649)
                                                                                                =========== ============

 Denominator:
   Weighted average common shares outstanding
                                                                                                 16,934,129  17,149,993
   Effect of potentially dilutive securities:
         Stock options and other                                                                    775,308          --
                                                                                                ----------- ------------
 Weighted average common shares                                                                  17,709,437  17,149,993
                                                                                                =========== ============

 Basic earnings per share                                                                       $      0.01 $     (0.01)
 Diluted earnings per share                                                                     $      0.01 $     (0.01)
</TABLE>

     Potential dilutive securities include stock options, non-vested share
     awards, and shares issuable under our ESPP.

     The computation of dilutive shares outstanding excluded options to purchase
     1,299,000 and 1,781,000 shares of common stock for the three months ended
     October 31, 2007 and 2006, respectively. These amounts were excluded
     because the option exercise prices were greater than the weighted average
     closing market price of our common stock for the periods presented and,
     therefore, the effect would be antidilutive (i.e., including such options
     would result in higher earnings per share.) In addition, the computation of
     dilutive shares outstanding excluded options to purchase an additional
     366,000 shares of common stock for the three months ended October 31, 2006,
     due to the Company having a net loss during this period.

3.   STOCK-BASED COMPENSATION

     We have a stock-based compensation plan under which we grant stock options
     and restricted stock (non-vested share awards) and also have an Employee
     Stock Purchase Plan (ESPP). All stock options issued prior to July 31, 2005
     have a ten-year term. All stock options issued subsequent to July 31, 2005
     have a five-year term. Although outstanding stock options issued to
     employees generally vest over a four-year period, on occasion we have
     issued options that vest based upon achieving corporate objectives or stock
     price performance. Outstanding stock options issued to directors vest over
     the following periods, depending on the basis for issuance: a) six months -
     stock options in lieu of compensation for services rendered as directors,
     b) four years - annual grants of stock options and c) stock price
     performance with a five-year cliff period - service award options.
     Directors also receive an annual non-vested share award that vests upon
     continued service (time-based) of one year. Our ESPP permits employees to
     purchase stock at 85 percent of the market price of our common stock at the
     end of each quarterly purchase period.

     Total stock-based compensation expense included in our statement of income
     for the three months ended October 31, 2007 and 2006, was $842,000, net of
     tax and $932,000, net of tax, respectively.

                                       7
<PAGE>

The following table summarizes the stock option transactions for the three
months ended October 31, 2007:
<TABLE>
<CAPTION>
<S>                    <C> <C>                              <C>        <C>                                  <C>
                                                                                                 Weighted-
                                                                        Weighted-Average    Average Remaining
                                                                        Exercise Price Per    Contractual Term
                                                         Options              Share             (in years)
Outstanding on July 31, 2007                                3,324,000  $             11.12
      Granted                                                 304,000  $             10.34
      Exercised                                               (25,000) $              7.82
Forfeited/Canceled                                            (98,000) $             14.42
                                                   =================== ===================
Outstanding on October 31, 2007                             3,505,000  $             10.98                  4.32
                                                   =================== =================== =====================
Exercisable on October 31, 2007                             2,408,000  $             10.94                  4.08
                                                   =================== =================== =====================
</TABLE>

Note: At October 31, 2007, shares associated with our ESPP were not
significant and were excluded from the table above.

The aggregate intrinsic value of options (the amount by which the market
price of the stock on date of exercise exceeded the market price of the stock on
the date of grant) exercised during the three months ended October 31, 2007 and
2006, was $14,000 and $0, respectively.

We estimated the fair values using the Actuarial Binomial option-pricing
model, modified for dividends and using the following assumptions:
<TABLE>
<CAPTION>
<S>           <C>                                                                                   <C>            <C>
                                                                                                Three Months Ended
                                                                                                    October 31,
                                                                                           -----------------------------
                                                                                              2007(1)        2006(1)
                                                                                           -------------- --------------
Risk-free rate(2)..........................................................................         4.72%          4.89%
Expected dividend yield....................................................................            0%             0%
Expected stock price volatility(3).........................................................        54.73%         56.16%
Expected life of stock options(4)..........................................................    4.16 years     4.15 years
Fair value per option...................................................................... $4.82 - $6.48  $4.17 - $4.72
</TABLE>

1.   Forfeitures are estimated based on historical experience.
2.   Based on the U.S. Treasury interest rates whose term is consistent with the
     expected life of our stock options.
3.   We used an outside valuation advisor to assist us in projecting expected
     stock price volatility. Historical market price data was used.
4.   We estimate the expected life of stock options based upon historical
     experience.

Net cash proceeds from the exercise of stock options were $189,000 and $0
the three months ended October 31, 2007 and 2006, respectively.

The actual income tax benefit realized from stock option exercises was
$26,000 and $0 for the three months ended October 31, 2007 and 2006,
respectively.

Non-Vested Share Awards

The fair value of non-vested market-based and time-based share awards is
determined based on generally accepted valuation techniques and the closing
market price of our stock on the date of grant. A summary of the status of our
non-vested market-based and time-based share awards as of October 31, 2007 and
changes during the three-month period ended October 31, 2007, is as follows:

                                       8
<PAGE>
<TABLE>
<CAPTION>
<S>                 <C> <C>                                         <C>         <C>

Market-Based and Time-Based Share Awards                        Shares          Fair Value
----------------------------------------                        ------          ----------
Outstanding at July 31, 2007                                        3,174       $      13.47
Granted                                                            67,470              10.19
Vested                                                            (11,337)             10.19
Forfeited/Canceled                                                 (5,544)             10.19
                                                             --------------    --------------
Outstanding at October 31, 2007                                    53,763       $      14.31
                                                             ==============    ==============
</TABLE>

As of October 31, 2007, there was $480,000 of unrecognized compensation
expense related to non-vested time-based share awards that is expected to be
recognized over the life of the awards.

4.   ACCOUNTING PRONOUNCEMENTS

     In March 2006, the FASB issued FASB No. 157, "Fair Value Measurements."
     This Statement defines fair value, establishes a framework for measuring
     fair value in generally accepted accounting principles (GAAP), and expands
     disclosures about fair value measurements. This Statement applies under
     other accounting pronouncements that require or permit fair value
     measurements, the FASB having previously concluded in those accounting
     pronouncements that fair value is the relevant measurement attribute.
     Accordingly, this Statement does not require any new fair value
     measurements. However, for some entities, the application of this Statement
     will change current practice. This Statement is effective for financial
     statements issued for fiscal years beginning after November 15, 2007, and
     interim periods within those fiscal years. Earlier application is
     encouraged, provided that the reporting entity has not yet issued financial
     statements for that fiscal year, including financial statements for an
     interim period within that fiscal year. Adoption is not expected to have a
     material impact on our consolidated earnings, financial position or cash
     flows.

     In February 2007, the FASB issued FASB No. 159, "The Fair Value Option for
     Financial Assets and Liabilities". This Statement permits entities to
     choose to measure many financial instruments and certain other items at
     fair value. The objective is to improve financial reporting by providing
     entities with the opportunity to mitigate volatility in reported earnings
     caused by measuring related assets and liabilities differently without
     having to apply complex hedge accounting provisions. This Statement is
     expected to expand the use of fair value measurement, which is consistent
     with the Board's long-term measurement objectives for accounting for
     financial instruments. This Statement is effective for financial statements
     issued for fiscal years beginning after November 15, 2007, and interim
     periods within those fiscal years. Earlier application is encouraged,
     provided that the reporting entity has not yet issued financial statements
     for that fiscal year, including financial statements for an interim period
     within that fiscal year. Adoption is not expected to have a material impact
     on our consolidated earnings, financial position or cash flows.

5.   MARKETABLE SECURITIES

     During the quarters ended October 31, 2007 and 2006, we primarily invested
     excess cash and cash equivalents in a professionally managed portfolio of
     marketable securities. All securities in this portfolio are classified as
     available-for-sale and consist primarily of U.S. government securities and
     corporate bonds. These investments are reported at fair value. The
     unrealized gain, net of taxes, on these investments, of approximately
     $63,000 and $193,000 for the three months ended October 31, 2007 and 2006,
     is included within other comprehensive income. The net unrealized gain
     included in shareholders' equity as of October 31, 2007, was $3,000, net of
     tax. The net unrealized loss included in shareholders' equity as of October
     31, 2006 was $60,000, net of tax.

6.   INVENTORIES

     Inventories are stated at the lower of cost (on the first-in, first-out
      basis) or market. Inventory balances were as follows:
<TABLE>
<CAPTION>
<S>                                                    <C>                      <C>

                                                          October 31, 2007              July 31, 2007
                                                       ---------------------    ------------------------

             Finished goods.........................   $          5,528,267     $           4,206,290
             Work-in-process........................              2,510,827                 2,544,172
             Raw materials..........................              3,033,750                 2,601,426
                                                       ---------------------    ------------------------
                                                       $        11,072,844      $           9,351,888
                                                       =====================    ========================
</TABLE>

                                       9
<PAGE>

AngioJet System Ultra Consoles/drive units of $4,285,000 and $3,095,000
respectively are included in Finished Goods as of October 31, 2007 and July 31,
2007. The increase as of October 31, 2007, is due to the introduction of the new
Ultra Console in January 2007 which replaces the first generation drive unit.

7.   PROPERTY AND EQUIPMENT

     Property is carried at cost and depreciated using the straight-line method
     over the estimated useful lives of the various assets. Property and
     equipment balances and corresponding lives were as follows:
<TABLE>
<CAPTION>
<S>                                                    <C>                      <C>                        <C>

                                                         October 31, 2007         July 31, 2007              Life
                                                       ---------------------    ------------------    -------------------
         Leasehold improvements........................$         3,013,415      $     2,928,531            5-10 years
         Equipment..................................            12,535,862           12,437,219            3-10 years
         Assets in construction......................              628,746              468,623              N/A
                                                       ---------------------    ------------------
                                                                16,178,023           15,834,373
         Less accumulated depreciation...............          (11,443,085)         (10,961,799)
                                                       ---------------------    ------------------

         Property and equipment - net...............   $         4,734,938      $     4,872,574
                                                       =====================    ==================
</TABLE>

8.   PREPAYMENT TO VENDOR

     In October 2007 we made a payment of $2,653,000 to an inventory vendor to
     purchase inventory that will be utilized when the inventory is shipped to
     us. At October 31, 2007, the estimated amount of the inventory prepayment
     to be utilized beyond twelve months is $1,590,000.

9.   INCOME TAXES

     The Company adopted the provisions of FASB Interpretation 48, Accounting
     for Uncertainty in Income Taxes (FIN 48), on August 1, 2007. Previously,
     the Company had accounted for tax contingencies in accordance with
     Statement of Financial Accounting Standards 5, Accounting for
     Contingencies. As required by FIN 48, which clarifies Statement 109,
     Accounting for Income Taxes, the Company recognizes the financial statement
     benefit of a tax position only after determining that the relevant tax
     authority would more likely than not sustain the position. For tax
     positions meeting the more likely than not threshold, the amount recognized
     in the financial statements is the largest benefit that has a greater than
     50 percent likelihood of being realized upon ultimate settlement with the
     relevant tax authority. At the adoption date, the Company applied FIN 48 to
     all tax positions for which the statute of limitations remained open.

     The Company has computed the net impact of the adoption of FIN 48 to
     increase retained earnings by $270,000. The total gross amount of
     unrecognized tax benefits as of August 1, 2007 and October 31, 2007 was
     approximately $1,955,000. If recognized, approximately $427,000 of the
     unrecognized tax benefits would affect the effective tax rate.

     It is the Company's practice to recognize penalties and/or interest related
     to income tax matters in income tax expense. As of August 1, 2007, the
     Company had $16,000 of accrued interest and penalties included in the
     $1,955,000 of unrecognized tax benefits.

     The Company is subject to income taxes in the U.S. federal jurisdiction,
     foreign jurisdictions and various states jurisdictions. Tax regulations
     within each jurisdiction are subject to the interpretation of the related
     tax laws and regulations and require significant judgment to apply. With
     few exceptions, the Company is no longer subject to U.S. federal, foreign,
     state or local income tax examinations by tax authorities for the years
     before 2003. The Company is not currently under examination by any taxing
     jurisdiction.

     During the first quarter of 2007, our total liability for unrecognized tax
     benefits did not materially change. The Company does not anticipate that
     total unrecognized tax benefits will significantly change within the next
     12 months.

                                       10
<PAGE>

10.  SEGMENT AND GEOGRAPHIC INFORMATION

     Our operations are in one business segment: the design, manufacture and
     distribution of endovascular medical devices. We evaluate revenue
     performance based on the worldwide revenues of each major product line and
     profitability based on an enterprise-wide basis due to shared
     infrastructures to make operating and strategic decisions.

     Total revenues from sales in the United States and outside the United
     States are as follows:
<TABLE>
<CAPTION>
<S>                                          <C>                   <C>

                                                     Three Months Ended
                                                         October 31,
                                             ----------------------------------------
                                                    2007                 2006
                                             -------------------   ------------------

           United States...................  $        18,337,322   $       15,181,046
           Non-United States..............               532,049              422,835
                                             -------------------   ------------------
           Total Revenues.................   $        18,869,371   $       15,603,881
                                             ===================   ==================
</TABLE>

11.  COMMON STOCK

     During the three months ended October 31, 2007, stock options for the
     purchase of 24,200 shares of our common stock were exercised at prices
     between $3.94 and $13.93 per share resulting in proceeds of $189,000.
     During the three months ended October 31, 2006, there were no stock options
     exercised.

     During the three months ended October 31, 2007 and 2006, we issued 6,741
     and 9,401 shares in connection with our employee stock purchase plan.

     On August 8, 2007, we issued 67,470 shares of restricted stock to
     management and executives as part of the fiscal 2007 management incentive
     program. The fair market value of the restricted stock was $688,000. The
     restricted stock vests over four years or vesting accelerates with respect
     to one-fourth of the shares if the stock price closes at $12.23, $14.67,
     $17.63 and $20.38 for twenty consecutive trading days. The stock price
     closed at greater than $12.23 for twenty consecutive trading days on
     October 9, 2007. The first one-fourth of the restricted stock vested at
     this time at a price $14.29. Accordingly, $225,000 was expensed in the
     three months ended October 31, 2007 as compensation expense. We cancelled
     5,544 shares of restricted stock during the quarter ended October 31, 2007
     due to the management and executives electing to receive fewer shares in
     lieu of paying the withholding taxes.

     On August 15, 2006, we issued 63,390 shares of restricted stock to
     executives and key management as part of the fiscal 2006 management
     incentive program. The fair market value of the restricted stock was
     $549,000. The restricted stock vests over four years or earlier if the
     stock price closes at $11.26 or greater for twenty consecutive trading
     days. In December 2006 the full fiscal management restricted stock
     incentive vested and was expensed in the fiscal 2007 second quarter In the
     three months ended October 31, 2006, $70,700 was expensed as compensation
     expense.

     During the three months ended October 31, 2007 and 2006, there were no
     stock repurchases.

12.  ACCRUED WARRANTY COSTS

     We estimate the amount of warranty claims on sold product that may be
     incurred based on current and historical data. The actual warranty expense
     could differ from the estimates made by the Company based on product
     performance. The following table presents the changes in our product
     warranty liability:
<TABLE>
<CAPTION>

<S>                                           <C> <C>                                <C>
               Accrued warranty costs at July 31, 2007............................   $           142,500
               Payments made for warranty costs...................................              (144,300)
               Accrual for product costs..........................................               124,300
                                                                                     -------------------
               Accrued warranty costs at October 31, 2007.........................   $           122,500
                                                                                     ===================
</TABLE>

                                       11
<PAGE>

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

Forward Looking Statements

We make a number of forward-looking statements in this Management's Discussion
and elsewhere in this 10-Q that are based on our current expectations and on
assumptions that may not prove correct. The realization of these forward-looking
statements is subject to various risks and uncertainties that are identified in
our Form 10-K for the year ended July 31, 2007 under Item 1A Risk Factors and
are summarized below under in Part II, Item 1A of this Form 10-Q. You should
read these factors when assessing these forward looking statements.

Accounting Policies

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires us to make estimates
and assumptions in certain circumstances that affect amounts reported in the
accompanying consolidated financial statements and related footnotes. In
preparing these financial statements, we have made our best estimates and
applied our best judgment of certain amounts included in the financial
statements, giving due consideration to materiality. Our most critical
accounting policies are those described below. Application of these accounting
policies involves the exercise of judgment and use of assumptions as to future
uncertainties and, as a result, actual results could differ from these
estimates.

         Revenue Recognition

         Revenues associated with AngioJet drive units and the Ultra Consoles
         maintained at customer locations are recognized when we receive a
         valid purchase order from the customer. In addition, title and risk of
         loss on those drive units and consoles is transferred to the customer.
         Revenue is not recognized for AngioJet drive units and Ultra Consoles
         that are maintained at customer locations as evaluation drive units
         and consoles. We do not lease AngioJet drive units and Ultra Consoles.
         Revenues associated with products that are shipped to customers from
         our facilities are recognized, and title and risk of loss are
         transferred to the customer, when a valid purchase order is received
         and the products are received at the customer's location. Revenue
         recognition for drive unit and Ultra Console extended warranties are
         amortized on a straight-line basis over the life of the warranty
         period, generally twelve months.

         Allowance for Returns

         We record an allowance for returns that reduces the amount of product
         sales and of trade receivables. We estimate the appropriate allowance
         at the time the account receivable is recorded by estimating the
         likelihood of returns. The estimate is based upon our historical
         product return experience, customer complaint rates, information
         received from our customers and other assumptions that we believe are
         reasonable under the circumstances. We review, on a quarterly basis,
         the actual returns for the previous quarter and evaluate the adequacy
         of the allowance for future returns. Although we believe the amount of
         the allowance for returns is appropriate, actual returns incurred could
         differ from our original estimate, requiring adjustments to the
         allowance that effect the results during the period of adjustment.

         Allowance for Doubtful Accounts

         Substantially all of our trade receivables are due from health care
         facilities located in the United States. We provide for an allowance
         for uncollectible or "doubtful" accounts based upon the age of our
         outstanding receivables and the payment history and creditworthiness of
         each customer. We evaluate the adequacy of the allowance for doubtful
         accounts on a quarterly basis. Although we believe the amount of the
         allowance for doubtful accounts is appropriate, nonpayment of accounts
         could differ from our original estimate, requiring adjustments to the
         allowance.

                                       12
<PAGE>

         Inventories

         We value inventories at the lower of cost or market. In order to
         determine the market value of inventory, on a quarterly basis, we
         assess the inventory on hand to estimate future usage and sales and
         provide for additions to an obsolescence reserve for inventory that is
         deemed obsolete or that is carried at a value in excess of estimated
         market value. Although we believe the amount of the reserve for
         inventory obsolescence is appropriate, the amount of our inventory that
         becomes obsolete may differ from our original estimate, requiring
         adjustments to the reserve.


Our Business

Possis Medical, Inc., develops, manufactures, and markets pioneering medical
devices for mechanical thrombectomy in native coronary arteries and coronary
bypass grafts, leg arteries, upper- and lower- extremity peripheral veins and in
kidney dialysis access grafts. Our primary product, the AngioJet(R) RheolyticTM
Thrombectomy System (AngioJet System) uses miniaturized waterjet technology,
which enables interventional cardiologists, interventional radiologists,
vascular surgeons, and other specialists to rapidly, safely and effectively
remove blood clots throughout the body.

The original proprietary AngioJet System consists of the first generation 3000
drive unit (capital equipment), a disposable pump set that delivers pressurized
saline to a catheter, and a variety of disposable catheters that are
specifically designed for particular clinical indications. In December 2006 we
received approval from the FDA for the new AngioJet Ultra Thrombectomy System.
The AngioJet Ultra System consists of the next-generation Ultra Console (capital
equipment) and a combined single disposable Thrombectomy Set (catheter and pump)
that delivers pressurized saline. Thrombectomy Set models are specifically
designed to treat particular clinical indications. The new Ultra System is
simpler and faster to setup, is compatible with a broad range of catheters, is
sleeker and lighter, and significantly easier to maneuver than the first
generation drive unit. AngioJet coronary catheters are Class III medical devices
marketed in the U.S. under an approved pre-market approval (PMA). The AngioJet
AV-Access and peripheral arterial catheters are Class II devices that are
marketed in the U.S. under 510(k) clearance.

We expect U.S. AngioJet Systems sales to grow primarily through obtaining
additional FDA approved product uses, introduction of new catheter models for
existing indications, introduction of Ultra System and other AngioJet
System-related products, more face-time selling to existing accounts,
peer-to-peer selling, and the publication of clinical performance and
cost-effectiveness data.

The new combined disposable Thrombectomy Sets that are used with the Ultra
Console can not be used with the prior generation 3000 Drive Unit. In addition,
the first generation separate pump and catheters that are used with the 3000
Drive Unit can not be used with the new Ultra Console. We believe that the new
Ultra Console will replace the 3000 Drive Unit over the next several years.

To further expand the range of products we offer, in May 2006 we began selling
the SafeSeal(TM) Hemostasis Patch, which is designed to control bleeding from
the puncture made to perform endovascular procedures. In October 2006, we
started selling a manual aspiration device, the Fetch(TM) Aspiration Catheter,
as an alternative for the aspiration of small, fresh blood clots.

Results of Operations

Three Month Periods Ended October 31, 2007 and 2006

Operating Expenses

The following table compares dollars (in thousands) and percentage changes in
the Statements of Income between 2007 and 2006.

                                       13
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                   <C>      <C>       <C>       <C>
                                                                                          For the Three Months Ended
                                                                                                             Increase
                                                                                          October 31        (Decrease)
                                                                                        2007     2006    Dollars Percent

Product Sales                                                                         $18,869  $15,604   $3,265    20.9%

Operating expenses
   Cost of medical products                                                             5,767    4,408    1,359    30.8%
   Selling, general & admin                                                            11,164    9,816    1,348    13.7%
   Research & Development                                                               2,322    2,415      (93)   (3.9%)
   Total                                                                               19,253   16,639    2,614    15.7%

Operating loss                                                                           (384)  (1,035)     651   (62.9%)

   Other income                                                                           574      558       16     2.9%

Income (loss) before income taxes                                                         190     (477)     667  (139.8%)

Income tax (provision) benefit                                                            (86)     243     (329) (135.4%)

Net income (loss)                                                                     $   104  $  (234)  $  338  (144.4%)

Fully diluted shares                                                                   17,709   17,150
Fully diluted EPS                                                                        0.01    (0.01)
</TABLE>

The following tables show the Statement of Income as a percentage of
product sales for the three months ended October 31, 2007 and 2006.
<TABLE>
<CAPTION>
<S>                                                                                     <C>      <C>
                                                                                        2007     2006
                                                                                      --------- --------
Product Sales                                                                           100.0%   100.0%
Operating expenses
   Cost of medical products                                                              30.6%    28.2%
   Selling, general & admin                                                              59.2%    62.9%
   Research & Development                                                                12.3%    15.5%
   Total                                                                                102.0%   106.6%

Operating loss                                                                           (2.0%)   (6.6%)
Other income                                                                              3.0%     3.6%
Income (loss) before income taxes                                                         1.0%    (3.1%)
Income tax (provision) benefit                                                           (0.5%)    1.6%
Net income (loss)                                                                         0.6%    (1.5%)
</TABLE>

Revenue

U.S. product sales for the three months ended October 31, 2007 increased 21
percent to $18,869,000 from $15,604,000 for the same period one year ago. The
revenue increase during fiscal 2008 is attributed primarily to the introduction
of the new AngioJet Ultra System (Console and Disposable Thrombectomy Sets).
This revenue increase is due to selling additional consoles/drive units and
disposable catheter units versus the same period last year. AngioJet Ultra
Console and first generation drive unit customer placements and revenues are
detailed below. Disposable catheter revenue increased 9 percent compared to last
year. Coronary, AV, and peripheral disposable catheter sales all increased from
the prior year, but peripheral revenue represented more than half of the
year-over-year disposable growth. The overall revenue increase was also
partially due to the increase of the SafeSeal Hemostasis Patch and Fetch
Aspiration Catheter in the three months ended 10-31-07 versus the same period a
year ago. Fiscal 2008 revenue was negatively impacted somewhat due to a trade-in
program designed to facilitate customer conversion to the new Ultra System
Console from the first generation drive unit. Customers who upgrade to an Ultra
System Console within one year of the first generation drive unit purchase are
eligible for this trade-in program and receive a credit towards the purchase of
an Ultra Console.

                                       14
<PAGE>

Our fiscal 2008 allowance for sales returns increased due to the introduction of
the AngioJet Ultra Thrombectomy System. First generation disposable catheter and
pumps can not be used with the new Ultra System. Conversely, Ultra System
disposable thrombectomy sets are not usable with the first generation AngioJet
System. Customers who either purchased the Ultra Console or received an Ultra
Console under an evaluation program could return their first generation
catheters and pump sets for credit. As a result, our allowance for sales returns
increased to 2.6 percent of gross revenue for the three months ended October 31,
2007 compared to approximately 1.0 percent for the year-ago quarter.

The following table shows the worldwide Ultra Consoles and the first generation
drive units placed with customers as of October 31, 2007, July 31, 2007, and
October 31, 2006:
<TABLE>
<CAPTION>
<S>                                             <C>                           <C>                           <C>

                                          October 31, 2007               July 31, 2007                October 31, 2006
                                    ----------------------------- ----------------------------- -----------------------------
Ultra Console                                     389                           244                            -
First generation drive unit                     1,853                         1,900                         1,871
                                    ----------------------------- ----------------------------- -----------------------------
          Total                                 2,242                         2,144                         1,871
                                    ============================= ============================= =============================
</TABLE>

The following table shows the worldwide Ultra Consoles and first generation
drive units sold for the three months ended October 31, 2007 and 2006:

                                                Three Months Ended
                                    --------------------- ---------------------
                                      October 31, 2007      October 31, 2006
                                    --------------------- ---------------------
Ultra Console                                61                    -
First generation drive unit                  16                    35
                                    --------------------- ---------------------
         Total                               77                    35
                                    ===================== =====================


During the three month period ended October 31, 2007, our worldwide catheter
sales increased approximately 8 percent to 12,600 catheters versus 11,700
catheters the same period last year. Catheter average selling prices were
essentially unchanged compared to the prior year period.

International product sales were $532,000 and $423,000 for the three months
ended October 31, 2007 and 2006. The increase in sales is primarily due to the
introduction of the Fetch manual aspiration catheter and SpiroFlex catheter
sales in the European market. The AngioJet Ultra Thrombectomy System has not
been introduced in international markets at this point.

Cost of Medical Products/Gross Profit Margin

Cost of medical products increased $1,359,000 to $5,767,000 in the three months
ended October 31, 2007 over the same period in the previous year. The increase
was primarily due to an increase in product unit sales including AngioJet
Console sales, Fetch and SafeSeal combined with slightly higher product costs on
the new Ultra System product line.

Our gross profit increased by $1,359,000 to $13,102,000, or 69.4 percent of
product sales, for the three months ended October 31, 2007, from $11,196,000 or
71.7 percent of product sales in the same period last year. The increase in
gross profit was primarily due to the increase in sales volume offset by a shift
in overall sales mix to lower-margin Ultra System Consoles from higher margin
disposables, combined with slightly higher product costs on the new Ultra System
line.

Selling, General and Administrative Expense

Selling, general and administrative expense increased $1,348,000 to $11,164,000
or 59.2 percent of sales for the three months ended October 31, 2007, from
$9,816,000 or 62.9 percent of sales in the comparable period in the prior year.
Sales force additions and commissions on higher sales levels combined with
additional marketing expenses to support new product launches contributed to the
increase.

Research and Development Expense

Research and development expense decreased $93,000 to $2,322,000 or 12.3 percent
of sales, in the three months ended October 31, 2007, from $2,415,000 or 15.5
percent of sales in the same period in the prior year. The decrease in the
fiscal 2007 three month periods was due to the completion of the Ultra Console
System (including the console and disposable Thrombectomy Sets) research
projects. Current research and development projects include distal occlusion
guidewires and other AngioJet-related projects.

                                       15
<PAGE>

Interest Income

Interest income decreased $36,000 in the three months ended October 31, 2007 to
$503,000 from $539,000 in the comparable period in the prior year. The decreased
interest income in fiscal 2008 is attributable to the decrease in the marketable
securities balance and declining interest rates. The majority of excess cash is
invested in a portfolio of marketable securities. Future levels of interest
income in fiscal 2008 are dependent on investment balances and fluctuating
interest rates.

Gain On Sale of Securities

Gain on sales of securities was $71,000 and $19,000 for the three months ended
October 31, 2007 and 2006, respectively. The gains in fiscal 2008 and 2007 were
due to interest rate decreases that increased the fair market value of the
investments in marketable securities. Future gain (loss) on sale of securities
is dependent on interest rate fluctuations.

Provision For Income Taxes

The effective income tax rate differed from the U.S. federal statutory rate for
each of the three months ended October 31, 2007 and 2006 as follows:
<TABLE>
<CAPTION>
<S>                           <C>                                    <C>              <C>

                                                                          Three Months Ended
                                                                             October 31,
                                                                             -----------
                                                                         2007           2006
                                                                         ----           ----
Tax (benefit) expense on (loss) income from continuing operations
computed at statutory rate of 34%                                    $     65,000     $(162,000)
Research and development tax credits                                      (20,000)      (25,000)
FASB 123(R) compensation expense                                           50,000       132,000
Other                                                                      (8,950)     (188,000)
                                                                     ------------     ---------
Total income (benefit) expense                                       $     86,050     $(243,000)
                                                                     ============     =========
Percent of income (loss) before income taxes                                   45%           51%
</TABLE>


Approximately 24 percent and 43 percent of stock-based compensation expense for
the three months ended October 31, 2007 and 2006 was related to incentive stock
options for which we receive no tax benefit on exercised, significantly
impacting our effective tax rate.

We continue to maintain a valuation allowance of $1,258,000 against our deferred
tax asset because we believe it is more likely than not that this amount of the
deferred tax asset will not be realizable due to the expiration of research and
development tax credits.

Net Income

We recorded net income for the three months ended October 31, 2007 of $104,000,
or $0.01 per diluted share. This compared to a net loss of $234,000, or $0.01
per diluted share for the three months ended October 31, 2006.

Liquidity and Capital Resources

Our cash, cash equivalents and marketable securities totaled $40,449,000 at
October 31, 2007 versus $42,872,000 at July 31, 2007.

During the three months ended October 31, 2007, we used $2,519,000 of cash in
operating activities, which resulted primarily from an increase in inventory of
$2,039,000, an increase in prepaid expenses and other assets of $1,816,000
combined with a decrease in accrued and other liabilities of $886,000. These
uses of cash from operations were partially offset by depreciation of $812,000,
stock-based compensation expense of $842,000 and the reduction of accounts
receivables of $440,000. We depreciate company-owned first generation drive
units and Ultra Consoles at customer locations, as well as property and
equipment. Inventory increased to support the market launch of new products
including the Ultra System. The increases in prepaid expenses and other assets
were due to advance payments to a third party manufacturer of the Ultra Consoles
and the timing of insurance premium payments. The decreases in accrued
liabilities were due to the timing of payments and included the payment of
fiscal 2007 corporate incentives in August 2007. The accounts receivable
decrease is due to the collection of the sales during the last month of the
fiscal 2007.

                                       16
<PAGE>

Cash provided in investing activities was $5,223,000 including the net proceeds
from the sale of marketable securities of $5,534,000. The cash provided by
investing activities was partially offset by the purchase of $317,000 of
property and equipment.

Net cash provided by financing activities was $266,000, which resulted from cash
received in connection with the exercise of stock options. There were no
repurchases of our common stock during the first quarter of fiscal 2008.

We contract with a third-party to manufacture our Ultra Console and have
committed to purchases of the Ultra Console from that third party manufacturer
in the amount of $16,588,000 over the next 25 months. Except with respect to
these commitments, there have been no changes in our capital or contractual
commitments. We expect our cash on hand and funds from operations to be
sufficient to cover both short-term and long-term operating requirements of our
business and the repurchase of our common stock as authorized by our Board of
Directors.

Off-Balance Sheet Obligations

We do not have any material off-balance-sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We invest our excess cash in a professionally managed, institutional fixed
income portfolio of short duration. The market risk on a diversified portfolio
of relatively short duration is minimal, while enhancing returns above money
market levels.

Our foreign product sales are in U.S. Dollars ("USD") except for product sales
in Germany, which are in euro's. The German product sales were minimal during
the first quarter. We have a foreign bank account in which the German product
sales receipts are deposited and immediately transferred to the operating bank
account in the United States. The balance in the German bank account was zero as
of October 31, 2007.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures
------------------------------------------------

Under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act. Based upon that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that, as of the end of the period covered by this report, our disclosure
controls and procedures were effective in ensuring that information required to
be disclosed by us in the reports we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in applicable rules and forms and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, in a manner that allows timely decisions regarding required
disclosure.

Changes in internal control over financial reporting
----------------------------------------------------

During the fiscal quarter ended October 31, 2007, there has been no change in
our internal control over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act) that has materially affected, or is likely to materially
affect, our internal control over financial reporting.

                                       17
<PAGE>

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We were served with a shareholder lawsuit filed with the Minnesota Federal
District Court on June 3, 2005, alleging that Possis Medical, Inc. and named
individual officers violated federal securities laws. The Complaint seeks class
action status and unspecified damages. The suit was dismissed with prejudice by
order of the Court on February 1, 2007. Plaintiffs have filed an appeal from the
Court's order and the appeal is still pending. We continue to believe that the
allegations of the lawsuit are without merit and are contesting the lawsuit
vigorously.

ITEM 1A.  RISK FACTORS

We identify a number of risks that affect our operations in our annual report on
Form 10-K under Item 1A. There have been no material changes in those risks,
which are summarized below, since the filing of our Form 10-K. You should read
the Form 10-K for a complete description of the risks of our business. Among the
risks we have identified are:

     o    our dependence on a single product line--the AngioJet Rheolytic
          System;
     o    the effects of adverse clinical studies;
     o    the effects of extensive regulation of our product development,
          product manufacturing and product sales;
     o    our dependence on our current manufacturing facility;
     o    our dependence upon a contract manufacturer for our AngioJet Ultra
          console;
     o    unanticipated costs or other difficulties and uncertainties associated
          with lengthy and costly new product development and regulatory
          clearance processes;
     o    the existence of larger entities in our industry which may develop new
          competitive products such as inexpensive aspiration devices, combined
          aspiration/occlusion products and compounds with which we would have
          difficulty competing or that may make our products obsolete;
     o    the effect of changes in the health care industry generally, such as
          restrictions imposed on sales time at interventional labs,
          consolidation of industry participants, cost containment and trends
          toward managed care;
     o    the cost and effectiveness of our intellectual property protection;
     o    the effects of changes in reimbursement;
     o    our ability to retain key personnel and motivate skilled employees,
          especially for sales positions;
     o    the possibility of medical product liability issues;
     o    the protections we have adopted may cause takeover offers to be
          decided by the Board rather than our shareholders;
     o    possible sudden restrictions in supply of key materials; and
     o    investments in third-party device companies and/or products may not
          provide the anticipated returns.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) In December 2006, our Board of Directors authorized the repurchase of up to
an additional $15,000,000 of our common stock in open-market transactions
through December 2008. During the three months ended October 31, 2007, no shares
of our common stock were repurchased pursuant to this program.

                                       18
<PAGE>

ITEM 6. EXHIBITS

Exhibits

Certain of the following exhibits are incorporated by reference from prior
filings. The form with which each exhibit was filed and the date of filing are
indicated below.

         Exhibit                             Description
     ----------------- ---------------------------------------------------------

           31.1        Certification of the Chief Executive Officer pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002.
           31.2        Certification of the Chief Financial Officer pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002.
           32.1        Certification of the Chief Executive Officer pursuant to
                       Section 906 of the Sarbanes-Oxley Act of 2002.
           32.2        Certification of the Chief Financial Officer pursuant to
                       Section 906 of the Sarbanes-Oxley Act of 2002.

                                       19
<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.



                                     POSSIS MEDICAL, INC.



DATE:  December 7, 2007              By:  /s/ Robert G. Dutcher
                                          --------------------------------------
                                          ROBERT G. DUTCHER
                                          Chairman, President and Chief
                                          Executive Officer





DATE:  December 7, 2007              By:  /s/ Jules L. Fisher
                                          --------------------------------------
                                          JULES L. FISHER
                                          Vice President of Finance and Chief
                                          Financial Officer

                                       20
<PAGE>

                                  EXHIBIT INDEX

Certain of the following exhibits are incorporated by reference from prior
filings. The form with which each exhibit was filed and the date of filing are
indicated below.

         Exhibit                             Description
     ----------------- ---------------------------------------------------------

           31.1        Certification of the Chief Executive Officer pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002.
           31.2        Certification of the Chief Financial Officer pursuant to
                       Section 302 of the Sarbanes-Oxley Act of 2002.
           32.1        Certification of the Chief Executive Officer pursuant to
                       Section 906 of the Sarbanes-Oxley Act of 2002.
           32.2        Certification of the Chief Financial Officer pursuant to
                       Section 906 of the Sarbanes-Oxley Act of 2002.

                                       21