_______________________________________________

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                    FORM 10-Q


               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934.

                 For the quarterly period ended January 31, 2000


     Commission File Number 001-12567

                              POSSIS MEDICAL, INC.

                             9055 Evergreen Blvd NW

                        Minneapolis, Minnesota 55433-8003

                                 (612) 780-4555


     A Minnesota Corporation                   IRS Employer ID No. 41-0783184
                        _________________________________

     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 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 outstanding of the Registrant's Common Stock, $.40 par
value, as of March 7, 2000 was 16,672,487.


                        ________________________________

<PAGE>

                              POSSIS MEDICAL, INC.

                                      INDEX



PAGE


  PART I.       FINANCIAL INFORMATION

     ITEM 1.    Financial Statements

                Consolidated Balance Sheets, January 31, 2000
                and July 31, 1999.........................................    3

                Consolidated Statements of Operations for three
                months and six months ended January 31, 2000 and 1999.....    4

                Consolidated Statements of Cash Flows for
                six months ended January 31, 2000 and 1999................    5

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

     ITEM 2.    Management's Discussion and Analysis of Financial
                Condition and Results of Operations.......................    8

     ITEM 3.    Quantitative and Qualitative Disclosure on Market Risks...   13


  PART II.      OTHER INFORMATION

     ITEM 4.    Submission of Matters to a Vote of Security-Holders.......   14

     ITEM 6.    Exhibits and Reports on Form 8-K..........................   15

                SIGNATURES         .......................................   16

<PAGE>

                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

ASSETS                                        January 31, 2000    July 31, 1999
<S>                                              <C>              <C>
CURRENT ASSETS:
     Cash and cash equivalents.................  $4,895,308       $ 9,151,004
     Receivables:
       Trade (less allowances for doubtful
         accounts and returns:
         $609,000 and $489,000, respectively)..   3,098,410         3,063,311
     Inventories:
        Parts..................................   1,709,985         1,218,910
        Work-in-progress.......................   1,531,696         1,596,313
        Finished goods.........................   1,592,623         1,556,482
     Prepaid expenses and other assets.........     210,869           247,907
                Total current assets...........  13,038,891        16,833,927
PROPERTY:
     Leasehold improvements....................   1,308,594         1,274,814
     Machinery and equipment...................   4,435,376         4,143,032
     Assets-in-construction....................     373,512           258,114
                Total property.................   6,117,482         5,675,960
        Less accumulated depreciation..........   3,145,344         2,887,025
                Property - net.................   2,972,138         2,788,935
OTHER ASSETS:
     Goodwill..................................     161,922           197,922

TOTAL ASSETS................................... $16,172,951       $19,820,784

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
     Trade accounts payable.................... $ 1,874,204       $   879,173
     Accrued salaries, wages, and commissions..   1,206,573         1,605,680
     Current portion of long-term debt.........      92,250            92,490
     Other liabilities.........................   1,004,263           726,940
                 Total current liabilities.....   4,177,290         3,304,283

LONG-TERM DEBT.................................      97,524            99,728
OTHER LIABILITIES..............................         --            102,000

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
     Common stock - authorized, 100,000,000 shares
         of $.40 par value each; issued and
         outstanding, 15,077,377 shares and
         14,998,360 shares, respectively.......   6,030,951         5,999,344
     Additional paid-in capital................  61,037,205        60,608,623
     Unearned compensation ....................     (76,480)         (141,467)
     Retained deficit.......................... (55,093,539)      (50,151,727)
                 Total shareholders' equity....  11,898,137        16,314,773

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY..... $16,172,951       $19,820,784

<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>

                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   For Three Months Ended                For Six Months Ended

                                                               Jan. 31, 2000       Jan. 31, 1999     Jan. 31, 2000    Jan. 31, 1999
<S>                                                              <C>                 <C>               <C>              <C>
Product sales..............................................      $5,155,291          $2,762,908        $9,638,481       $4,622,468

Cost of sales and other expenses:
     Cost of medical products..............................       2,577,822           1,887,295        4,676,217         3,421,554
     Selling, general and administrative...................       3,640,864           2,436,784        7,452,418         4,491,624
     Research and development..............................       1,359,831           1,534,030        2,622,058         3,020,667
     Interest..............................................           2,290             173,969            4,606           351,025
         Total cost of sales and other expenses............       7,580,807           6,032,078       14,755,299        11,284,870

Operating loss.............................................      (2,425,516)         (3,269,170)      (5,116,818)       (6,662,402)

Interest income............................................          75,684             116,034          175,006           277,096

Net loss...................................................     $(2,349,832)        $(3,153,136)     $(4,941,812)      $(6,385,306)

Weighted average number of common
     shares outstanding....................................      15,039,839          12,431,165       15,022,825        12,341,854

Basic and dilutive net loss per common share...............        $(.16)              $(.25)           $(.33)            $(.52)







<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>

<PAGE>


                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JANUARY 31, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                             2000       1999
<S>                                                    <C>          <C>
OPERATING ACTIVITIES:
Net loss ..............................................$(4,941,812) $(6,385,306)
Adjustments to reconcile net loss to net
  cash used in operating activities:
   (Gain) loss on asset disposal.......................     (5,972)      14,350
   Depreciation........................................    521,316      503,432
   Amortization .......................................     36,000      158,736
   Stock compensation to employees and stock
     options issued to non-employees...................    127,037      189,631
   Increase in receivables.............................    (35,099)    (625,445)
   (Increase) decrease in inventories..................   (700,378)     172,670
   Decrease in other assets............................     37,038      108,392
   Increase (decrease) in trade accounts payable.......    995,031     (932,238)
   Increase (decrease) in accrued and other
     liabilities.......................................   (198,903)     491,215
   Net cash used in operating activities............... (4,165,742)  (6,304,563)

INVESTING ACTIVITIES:
Additions to plant and equipment.......................   (466,740)    (290,352)
Proceeds from the disposal of assets...................      5,972        2,700
Net cash provided by investing activities  ............   (460,768)    (287,652)

FINANCING ACTIVITIES:
Proceeds from exercise of stock options and warrants...    373,258    1,083,951
Repayment of long-term debt............................     (2,444)      (9,444)
Proceeds from notes payable............................        --        21,074
Deferred debt issue costs..............................        --       (24,255)
Net cash provided by financing activities..............    370,814    1,071,326

DECREASE IN CASH AND CASH EQUIVALENTS ................. (4,255,696)  (5,520,889)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.......  9,151,004   13,841,793
CASH AND CASH EQUIVALENTS AT END OF PERIOD............. $4,895,308   $8,320,904

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid.......................................... $      669   $      484
Issuance of restricted stock...........................     32,250        8,375
Accrued payroll taxes related to restricted stock......     24,881       57,769
Inventory transferred to fixed assets..................     23,179       10,804
Conversion of subordinated debentures and accrued
   interest into common stock..........................        --     2,358,658
Deferred debt issue costs and original issue discount
   netted against conversion of subordinate debentures.        --       265,911
Issuance of stock to settle litigation.................        --       225,000
Cancellation of restricted stock.......................        --        79,063

<FN>
See notes to consolidated financial statements.
</FN>
</TABLE>

<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 generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring 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 notes
thereto included in the Company's 1999 Annual Report.


2.    INTERIM FINANCIAL STATEMENTS

     Operating  results for the three and six month  periods  ended  January 31,
2000 are not necessarily  indicative of the results that may be expected for the
year ending July 31, 2000.


3.   SEGMENT AND GEOGRAPHIC INFORMATION AND CONCENTRATION OF CREDIT RISK

     The  Company's   operations  are  in  one  business  segment,  the  design,
manufacture and  distribution of  cardiovascular  and vascular  medical devices.
Possis  Medical,  Inc.  evaluates  revenue  performance  based on the  worldwide
revenues   of  each  major   product   line  and   profitability   based  on  an
enterprise-wise  basis  due to  shared  infrastructures  to make  operating  and
strategic decisions.

     Total  revenues by United States and  non-United  States for the six months
ended January 31, 2000 and 1999 are as follows: 2000 1999

       United States............................    $9,469,896      $4,428,295
       Non-United States........................       168,585         194,173
       Total revenues...........................    $9,638,481      $4,622,468


4.    EARNINGS (LOSS) PER SHARE

     The  Company's  outstanding  stock  options  and  stock  warrants  were not
included in the  computation  of earnings  per share since the impact would have
been anti-dilutive because of the net loss.

<PAGE>

5.    SUBSEQUENT EVENT

     In March 2000, the Company  completed a $15 million  private  placement and
issued 1,594,049 shares of common stock to various investors.  In addition,  the
investors also received warrants to purchase 318,810 shares of common stock with
an exercise  price of $12.67 per share.  The  proceeds  will be used to grow the
U.S. direct sales organization,  expand and improve manufacturing operations and
for new product development.

<PAGE>

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

Results of Operations

Three and Six Month Periods Ended January 31, 2000 and 1999

     Total  product  sales for the three and six months  ended  January 31, 2000
were $5,155,000 and $9,638,000, respectively. This was an increase of $2,392,000
and  $5,016,000,  respectively,  as compared to the same periods in the previous
year.  The main factor in the revenue  increase was the March 1999 U.S. Food and
Drug  Administration  ("FDA")  clearance  to  commence  U.S.  marketing  of  the
AngioJet(R) Rheolytic(TM)  Thrombectomy System, with labeling claims for removal
of blood clots in  symptomatic  native  coronary  arteries and  coronary  bypass
grafts.  The Company  recorded a net loss for the quarter ended January 31, 2000
of  $2,350,000,  or $.16  per  diluted  share.  This  compared  to a net loss of
$3,153,000,  or $.25 per diluted share,  for the quarter ended January 31, 1999.
The net loss for the six months ending  January 31, 2000 and 1999 was $4,942,000
and $6,385,000,  respectively.  This resulted in a net loss per diluted share of
$.33 and $.52, respectively.


Revenue - AngioJet System

     AngioJet System revenue for the three and six months ended January 31, 2000
was $4,922,000 and  $9,024,000,  respectively.  This was an increase of 120% and
166%,  respectively,  over  the  same  year-ago  periods.  Foreign  sales of the
AngioJet  System for the three and six month periods ended January 31, 2000 were
$91,000  and  $169,000,  respectively.  This  compared  to foreign  sales of the
AngioJet System of $165,000 and $194,000 for the same periods the previous year.


     As of January 31, 2000, the Company had a total of 394 domestic drive units
in the  field,  compared  to 208 drive  units at the end of the same  prior year
period,  and 342 units as of end of the first quarter.  During the three and six
month periods ended January 31, 2000, the Company sold  approximately  3,900 and
7,100 catheters and pump sets versus  approximately  2,100 and 3,600 in the same
year-ago  periods.  This was an 86% and 97% increase in unit catheter sales from
the same year-ago periods.  The average catheter  utilization rate per installed
domestic drive unit was 9.9 in the second quarter,  compared to a rate of 9.3 in
the same prior year period,  and to a rate of 9.4 in the first quarter of fiscal
2000.  The Company  sold 41 and 73 drive  units  during the three and six months
ended January 31, 2000. This compared to 39 and 55 drive units in the same prior
year-ago periods.

     Currently  the Company  lists its AngioJet  System  drive unit,  considered
capital equipment,  at $35,000 to U.S. hospitals.  The Company employs a variety
of flexible drive unit acquisition programs including outright purchase, rental,
lease and fee-per-procedure.  The purchasing cycle for the AngioJet System drive
unit varies from  purchasing  the drive unit with no evaluation to an evaluation
period of up to six months, depending on the customer's budget cycle.

<PAGE>

     The Company  expects the U.S.  AngioJet  System sales will continue to grow
primarily  through  the  addition  of sales  people,  obtaining  additional  FDA
approved  product  uses,  the  publication  of  clinical  performance  and  cost
effectiveness  data, and the introduction of additional  catheter  designs.  The
current  sales  increases  are believed to be generated  primarily  from the FDA
coronary  approval  received in March 1999.  Additional  sales growth is planned
upon FDA approval for AngioJet System use in peripheral arteries.  In July 1997,
the Company submitted a 510(k)  application to the FDA seeking clearance for the
AngioJet System to be used in peripheral arteries.  The Company has responded to
issues raised by the FDA and expects approval for peripheral  AngioJet System in
the first half of calendar 2000. In October 1999, the Company  received full FDA
approval for its  Investigational  Device  Exemption  (IDE)  application for the
clinical  trial  of  the  AngioJet  System  in the  treatment  of  severe  acute
cerebrovascular  stroke.  The first  patient is  expected  to be enrolled in the
first half of  calendar  2000.  Due to the start of the  cerebrovascular  stroke
clinical trial, the Company has stopped enrolling patients in the clinical trial
of the AngioJet System for use in the treatment of stroke caused by the blockage
of the carotid arteries,  the main vessels supplying blood to the brain. A total
of five patients were enrolled in the carotid stroke clinical trial (ReACT). The
Company  believes  that the  treatment  of  blood  clots  in  coronary  vessels,
peripheral arteries, veins and neuro vessels are significant worldwide marketing
opportunities for the AngioJet System.


Revenue- Vascular Grafts

     Vascular  graft  sales were  $233,000  and  $614,000  for the three and six
months ended  January 31, 2000.  This  compared to $69,000 for each of the three
and six months  ended  January 31, 1999.  All of the  vascular  graft sales were
Perma-Seal(R)  Dialysis Access Grafts.  In September 1998, the Company  received
FDA marketing approval for its Perma-Seal Dialysis Access Graft, and in December
1998, the Company entered into an exclusive  worldwide  supply and  distribution
agreement  with Horizon  Medical  Products,  Inc. The first  shipment under this
agreement was made in January 1999.

     In April 1998, the Company  received  Humanitarian  Device  Exemption (HDE)
approval from the FDA,  allowing U.S.  marketing of the  Perma-Flow(R)  Coronary
Bypass  Graft for  patients  who  require  coronary  bypass  survey but who have
inadequate  blood vessels of their own for use in the surgery.  In March 1999, a
distribution  agreement  with the  Company's  independent  distributor  expired.
Currently the Company is seeking a new distributor.

     In February  1999,  the Company  received  510(k)  approval from the FDA to
market three expanded  polytetrafluoroethylene  (ePTFE) synthetic grafts.  ePTFE
synthetic  grafts are the most  commonly  used  synthetic  grafts in  peripheral
vessel bypass procedures.  These products are planned to be marketed and sold by
a marketing partner or independent distributor.

     A goal of the  Company  is to  maximize  the  value of these  products  and
technologies  for  its  shareholders.  Its  strategy  is  to  seek  partners  to
distribute the products and possibly fund the graft product development program.
In  addition,  the  Company  will  continue to pursue the  possible  sale of the
vascular  graft  products  and  technologies.  While the  Company  works  toward
completing these activities, it has placed vascular graft product development on
hold.

     The  Company is  planning  for  continued  growth in product  sales for the
remainder of fiscal 2000 and beyond and  believes  that most of this growth will
come from AngioJet System sales in the U.S. marketplace.

<PAGE>

Cost of Medical Products

     Cost of medical  products  increased  $690,000 and  $1,255,000  in the 2000
three and six month periods, respectively, over the same periods in the previous
year.  The increase is primarily due to the  significant  growth in the AngioJet
System product sales and a favorable mix of coronary  catheters sold,  partially
offset by higher  scale-up  costs.  Medical  product gross  margins  improved by
$1,702,000 and $3,761,000 for the three and six months,  respectively,  over the
same periods in the previous year. This resulted in gross margins of 50% and 51%
for the three and six months ended  January 31, 2000.  This  compares to 32% and
26% gross margins for the three and six month periods  ending  January 31, 1999.
The Company believes that manufacturing costs per unit will be reduced and gross
margins will continue to improve as product sales and related production volumes
continue to grow and as identified product and process improvements are made.


Selling, General and Administrative Expense

     Selling,  general and administrative  expenses for the three and six months
ended  January 31,  2000  increased  $1,204,000  and  $2,961,000,  respectively,
compared to the same year-ago  periods.  The primary factors are increased sales
and  marketing  expenses  related to the  establishment  of a U.S.  direct sales
organization  to sell the AngioJet  System and expenses of marketing the product
in the United States.  Based upon early physician interest and with the AngioJet
System  receiving  FDA approval for coronary use, the Company has grown the U.S.
sales and  marketing  organization  from 35  employees  in January  1999,  to 57
employees in January 2000. The Company plans to further increase the direct U.S.
sales force to meet the growing demand for the Company's  AngioJet  System.  The
Company plans on increasing its sales and marketing expenditures going forward.


Research and Development Expense

     Research  and  development  expenses,  in the  three and six  months  ended
January 31, 2000 decreased 11% and 13%, respectively, from last year, due mainly
to a shutdown of graft  product  development.  The  reduction  in graft  product
development  was offset by an increase in  development  of new  AngioJet  System
applications.  The Company  believes that research and development  expenses for
AngioJet  System  applications  will increase as it completes the development of
its  current  products  and  invests  in  development  of  new  AngioJet  System
thrombectomy   applications  and  new  high-pressure  waterjet  technology-based
products.

<PAGE>

Interest Income and Expense

     Interest income decreased $40,000 and $102,000 in the most recent three and
six month periods,  respectively,  over the prior year periods due to the use of
the Company's  cash reserves to fund Company  operations.  The gross proceeds of
$7,000,000 received from the private placement offering in May and June 1999 had
a modest  impact on interest  income for the three and six months ended  January
31,  2000.  The  $12,000,000  gross  proceeds  received  from the issuance of 5%
convertible  debentures  received  in July 1998 had a modest  impact on interest
income for the three and six months ended  January 31,  1999.  In March 2000 the
Company  received  $15  million in a private  placement  offering  of its common
stock.  The Company expects interest income to increase for the remainder of the
fiscal year due to the private placement offering proceeds.

     Interest  expense  decreased in the most recent three and six month periods
period due to the 5% convertible  subordinated  debentures  being converted into
the Company's  common stock in March 1999. The Company expects  interest expense
to stay at low levels through the remainder of the fiscal year.


Liquidity and Capital Resources

     The Company's cash and cash equivalents  totaled  $4,895,000 at January 31,
2000 versus $9,151,000 at July 31, 1999.

     Net cash usage for the six months ended January 31, 2000 averaged  $709,000
per month.  The $4,166,000  cash used in operations in the most recent six month
period was due to the net loss of $4,942,000,  a $700,000  increase in inventory
and  $199,000  decrease  in accrued  liabilities,  partially  offset by non-cash
expenses of  depreciation,  amortization,  stock  compensation  to employees and
stock options issued to non-employees  of $684,000,  and an increase in accounts
payable of $995,000.

     The Company believes that product sales of the AngioJet  System,  primarily
in the U.S.,  will yield  meaningful  sales growth going forward.  Concurrently,
sales and marketing  expenditures are planned to increase with the sales growth.
Research and  development  expenditures  are expected to increase as the Company
completes the development of its current  products and invests in development of
new AngioJet System  thrombectomy  applications and new  high-pressure  waterjet
technology-based  products.  Possis  expects  to  report a loss for the  current
fiscal  year,  which is expected to be less than the fiscal 1999 loss.  A modest
profit is expected  for fiscal  2001.  In  addition,  the Company  expects  that
increasing  working capital  investments in trade receivables and inventory will
be required to support growing product sales.

     In March 2000,  the  Company  received  gross  proceeds of $15 million in a
private  placement  offering of its common  stock.  The proceeds will be used to
grow  the  Company's  U.S.  direct  sales   organization,   expand  and  improve
manufacturing  operations  and for new product  development.  The Company has no
plans to raise additional outside capital in fiscal 2000.

<PAGE>

Year 2000

     No  material  Y2K-related  failures  occurred  with  either  the  Company's
products or internal  systems as a result of the date change from  December  31,
1999 to January 1, 2000.

     The Company established a team in May 1998 to assess the possible exposures
related  to the Y2K  issue.  The areas  investigated  include:  product  issues,
business computer systems and software,  production equipment,  vendor readiness
and contingency plans. Products currently sold by the Company are Y2K compliant.
The Company has responded to all inquiries regarding Y2K compliance by customers
and vendors.  The Company has noted an increase in requests from customers since
January 1999. The Company has taken steps to attach  stickers to all drive units
indicating Y2K compliance.

     The  Company  uses  commercial  software  to manage  the  primary  business
functions of production,  finance and payroll. These systems have been certified
by the vendors as Y2K compliant on the software  releases  currently  installed.
The Company has service  contracts with these vendors so any additional  changes
needed are obtained in service packs. The Company's  network operating system is
certified as Y2K  compliant and has been tested by the Company.  Production  and
quality control equipment do not use dates to control operations.

     Certain  personal  computers  were  not  Y2K  compliant.  The  Company  has
completed the  replacement of these computers as planned  spending  necessary to
maintain current technology.

     The Company  uses  Microsoft  software to operate its  workstations  and to
provide  office  productivity  functions.  The  Company  installed  software  to
automatically   distribute  software  updates.  It  has  upgraded  the  personal
productivity  software to Y2K  compliant  versions,  as provided by the software
manufacturers. It has installed commercial software to check hardware, software,
and data files for potential Y2K  problems.  The Company has had no  significant
problems with applications software.

     The  Company  evaluated  its  suppliers  of  utility,   telecommunications,
payroll,   banking,  and  employee  benefits  services.  It  did  not  have  any
disruptions in these services.  The Company  replaced its voice mail system with
one that is Y2K compliant; the replacement was needed for other business reasons
so was not budgeted as a specific Y2K expense.

     Company vendors have responded to questionnaires  and follow-up phone calls
regarding  their Y2K readiness.  The Company  continues to monitor key suppliers
and has incorporated Y2K readiness into its supplier  certification process. The
Company's  contingency  planning  includes  monitoring  of suppliers  and market
conditions  to ensure a  constant  supply  of  materials.  As the  result of the
continuing evaluation, The Company made advanced purchases of selected materials
to  cover a  possible  6 week  disruption  related  to Y2K.  The  effect  on the
financial  statements is expected to be negligible  since the carrying  costs on
the additional  $260,000 of materials is essentially  offset by discounts on the
quantity purchases. All materials are for current production,  therefore will be
used within the forecast period.

     The Company budgeted and spent approximately  $50,000 for expenses directly
related to Y2K identification and remediation.  The Company purchased directors'
and officers' liability insurance related to the Y2K issue.

<PAGE>

Forward-Looking Statements

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations,  including the discussion  regarding Year 2000  compliance,  contain
certain  "forward-looking  statements"  as  defined  in the  Private  Securities
Litigation  Reform Act of 1995.  Such  statements  relating to future events and
financial  performance,  including the  submission of  applications  to the FDA,
anticipated  FDA  approvals,  the timing of FDA  approvals,  revenue and expense
levels, profitability and future capital requirements, and the timing and method
of raising additional capital, are forward-looking statements that involve risks
and uncertainties, including the Company's ability to meet its timetable for FDA
submissions, the review time and process at the FDA, results of clinical trials,
changes  in  the  Company's  marketing  strategies,  the  Company's  ability  to
establish  product  distribution  channels,  changes in  manufacturing  methods,
market  acceptance  of the  AngioJet  System,  changes  in the levels of capital
expenditures  by hospitals,  the levels of sales of the Company's  products that
can be achieved,  ability to raise additional  capital and other risks set forth
in the cautionary  statements  included in Exhibit 99 to the Company's report on
Form  10-Q  dated  June  14,  1999,  filed  with  the  Securities  and  Exchange
Commission.


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The  Company  invests  its  excess  cash  in  money  market  mutual  funds,
commercial paper and other liquid, short maturity and low-risk investments.

     The product sales for the Company's foreign  subsidiary are in U.S. Dollars
("USD").  At the end of January  2000,  the amount of  currency  held in foreign
exchange was approximately  $1,000 USD. The market risk on the Company's foreign
subsidiary operations is minimal.

     At January  31,  2000,  all of the  Company's  outstanding  long-term  debt
carries  interest at a fixed rate.  There is no material market risk relating to
the Company's long-term debt.

<PAGE>

Part II.  OTHER INFORMATION

ITEM 4.       Submission of Matters to a Vote of Security Holders

     a. The 1999 annual meeting of shareholders of Possis Medical, Inc. was held
on December 15, 1999.

     b. By the following vote,  management's  nominees were elected as directors
of the  Corporation  for one year or until  their  successors  are  elected  and
qualified:

                                               FOR                AGAINST

         Dean Belbas                       12,782,220             970,188
         Robert G. Dutcher                 12,823,962             928,446
         William C. Mattison, Jr.          13,029,414             722,994
         Seymour J. Mansfield              12,819,314             933,094
         Whitney A. McFarlin               12,941,490             810,918
         Donald C. Wegmiller               12,809,650             942,758
         Rodney A. Young                   12,941,066             811,342

     c. By a vote of 5,586,082 in the  affirmative,  1,035,274 in the  negative,
167,605 abstaining and 6,963,447 being counted as broker non-votes, the proposal
to  approve  adoption  of the  Corporation's  1999 Stock  Compensation  Plan was
ratified.

     d. By a vote of 13,553,861 in the affirmative,  122,268 in the negative and
76,279  abstaining,  the  appointment  of Deloitte & Touche LLP as the Company's
certified public accountants was ratified.

<PAGE>

 ITEM 6.          Exhibits and Reports on Form 8-K

     (a)  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 on the following pages.

   Exhibit   Form      Date Filed                Description

     3.1     10-K   Fiscal year ended     Articles of incorporation as
                    July 31, 1994         amended and restated to date.

     3.2     10-K   Fiscal year ended     Bylaws as amended and
                    July 31, 1999         restated to date.

     27                                   Financial data schedule.


     (b) Reports on Form 8-K

     Possis Medical,  Inc. filed no reports on Form 8-K during the quarter ended
January 31, 2000.

<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:  March 15, 2000       BY:   /s/
                            ROBERT G. DUTCHER
                            President and Chief Executive Officer


DATE:  March 15, 2000       BY:     /s/
                            RUSSEL E. CARLSON
                            Vice President, Finance and Chief Financial Officer