_______________________________________________

                       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 October 31, 1999


     Commission File Number 001-12567


                              POSSIS MEDICAL, INC.

                            9055 Evergreen Boulevard

                        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 December 6, 1999 was 15,015,304.


                        ________________________________

<PAGE>

                              POSSIS MEDICAL, INC.

                                      INDEX



                                                                      PAGE


PART I.   FINANCIAL INFORMATION

  ITEM 1. Financial Statements

          Consolidated Balance Sheets, October 31, 1999
          and July 31, 1999.............................................    3

          Consolidated Statements of Operations and Comprehensive
          Loss for the three months ended October 31, 1999 and 1998         4

          Consolidated Statements of Cash Flows for the
          three months ended October 31, 1999 and 1998 .................    5

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

  ITEM 2. Management's Discussion and Analysis of Financial
          Condition and Results of Operations...........................    7-11

  ITEM 3. Quantitative and Qualitative Disclosure about
          Market Risks .................................................   11-12



PART II.  OTHER INFORMATION


  ITEM 6. Exhibits and Reports on Form 8-K...............................  13

          SIGNATURES.....................................................  14

<PAGE>

        POSSIS MEDICAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
 <TABLE>
<CAPTION>
                                           October 31, 1999       July 31, 1999
<S>                                         <C>                   <C>
ASSETS
CURRENT ASSETS:
 Cash and cash equivalents.................  $  6,508,239          $  9,151,004
 Receivables:
   Trade (less allowance for doubtful
   accounts and returns: $575,000 and
   $489,000, respectively).................     3,088,748             3,063,311
 Inventories:
   Parts...................................     1,363,377             1,218,910
   Work-in-process.........................     1,664,227             1,596,313
   Finished goods..........................     1,507,184             1,556,482
 Prepaid expenses and other assets.........       252,097               247,907
         Total current assets..............    14,383,872            16,833,927

PROPERTY:
 Leasehold improvements....................     1,303,451             1,274,814
 Machinery and equipment...................     4,260,871             4,143,032
 Assets in construction....................       275,992               258,114
                                                5,840,314             5,675,960
 Less accumulated depreciation.............     3,009,566             2,887,025
         Property - net....................     2,830,748             2,788,935

OTHER ASSETS:
 Goodwill:.................................       179,922               197,922

TOTAL ASSETS...............................   $17,394,542           $19,820,784


LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
 Trade accounts payable....................   $   675,089           $   879,173
 Accrued salaries, wages, and commissions..     1,605,184             1,605,680
 Current portion of long-term debt.........        92,153                92,490
 Other liabilities.........................     1,031,711               616,840
Total current liabilities..................     3,404,137             3,304,283

LONG-TERM DEBT.............................        98,855                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, 15,014,654 and
   14,998,360 shares, respectively.........     6,005,862             5,999,344
 Additional paid-in capital................    60,734,578            60,608,623
 Unearned compensation.....................      (105,184)             (141,467)
 Retained deficit..........................   (52,743,706)          (50,151,727)
 Total shareholders'equity.................    13,891,550            16,314,773
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.   $17,394,542           $19,820,784

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

<PAGE>




                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
              FOR THE THREE MONTHS ENDED OCTOBER 31, 1999 AND 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                          1999          1998
<S>                                                   <C>            <C>
Product sales........................................ $4,483,189     $1,859,560

Cost of sales and other expenses:
     Cost of medical products........................  2,098,395      1,534,259
Selling, general and administrative..................  3,811,554      2,054,840
Research and development.............................  1,262,225      1,486,637
Interest.............................................      2,316        177,055
         Total cost of sales and other expenses......  7,174,490      5,252,791
Operating loss....................................... (2,691,301)    (3,393,231)
Interest income......................................     99,322        161,062
Net loss and comprehensive loss......................$(2,591,979)   $(3,232,169)

Weighted average number of common shares outstanding. 15,005,810     12,252,543
Basic and dilutive net loss per common share:
     Net loss........................................      $(.17)         $(.26)


<FN>
See notes to consolidated financial statements.

</FN>
</TABLE>

<PAGE>

                      POSSIS MEDICAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED OCTOBER 31, 1999 AND 1998
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                   1999                1998
<S>                                            <C>                 <C>
OPERATING ACTIVITIES:
Net loss ...................................   $(2,591,979)        $(3,232,169)
Adjustments to reconcile net loss to net
  cash used in operating activities:
     Gain on asset disposal.................           --               (1,820)
Depreciation................................       254,572             227,102
Amortization................................        18,000              80,157
Stock compensation..........................        68,533             127,103
     Stock options issued to non-employees..        14,500                 --
     Increase in receivables................       (25,437)            (65,355)
     Increase in inventories................      (270,683)           (246,756)
     (Increase) decrease in other assets....        (4,190)             74,962
Decrease in trade accounts payable..........      (204,084)           (885,241)
Increase in accrued and other liabilities...       227,156             326,095
Net cash used in operating activities.......    (2,513,612)         (3,595,922)

INVESTING ACTIVITIES:
Additions to plant and equipment............      (188,785)           (166,352)
Proceeds from the disposal of assets........           --                2,800
Net cash used by investing activities.......      (188,785)           (163,552)

FINANCING ACTIVITIES:
Proceeds from notes payables................           --               21,074
Repayment of long-term debt.................        (1,210)             (4,899)
Proceeds from issuance of stock and
   exercise of options......................        60,842              44,687
Deferred debt issues costs..................           --              (24,255)
Net cash provided by financing activities...        59,632              36,607

DECREASE IN CASH AND CASH EQUIVALENTS.......    (2,642,765)         (3,722,867)
CASH AND CASH EQUIVALENTS AT BEGINNING
   OF QUARTER...............................     9,151,004          13,841,793
CASH AND CASH EQUIVALENTS AT END OF QUARTER.   $ 6,508,239         $10,118,926

SUPPLEMENTAL CASH FLOW DISCLOSURE:
Interest paid...............................   $       347         $        87
Issuance of restricted stock................        32,250                 --

Accrued payroll taxes related to
   restricted stock........................         24,881              35,768
Issuance of stock to settle litigation.....            --              225,000

<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
accompanying notes thereto included in the Company's 1999 Annual Report.


2.    INTERIM FINANCIAL STATEMENTS

     Operating results for the three month period ended October 31, 1999 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 three months
ended October 31, 1999 and 1998 are as follows:
                                                1999             1998

      United States......................   $ 4,406,084      $ 1,830,620
      Non-United States..................        77,105           28,940
      Total revenues.....................   $ 4,483,189      $ 1,859,560


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>


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

Results of Operations

Quarters Ended October 31, 1999 and 1998

     Total  product  sales for the quarter  ended  October  31,  1999  increased
$2,623,000,  or 141%, to $4,483,000  compared to $1,860,000 in the first quarter
of 1998.  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) RheolyticTM 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 of  $2,592,000,or  $.17 per  diluted  share,
compared  to a net  loss  of  $3,232,000,  or $.26  per  diluted  share,  in the
prior-year fiscal first quarter.

Revenue - AngioJet

     AngioJet  revenue for the first quarter  ended  October 31, 1999  increased
121% to $4,103,000  compared to  $1,860,000  in the first quarter of 1998.  U.S.
AngioJet revenue was 98% of the total revenue for each period.

     As of October 31, 1999, the Company had a total of 342 domestic drive units
in the field,  compared to 203 drive units at the end of the prior year  period,
and 300 units at the end of fiscal 1999.  Approximately 3,200 catheters and pump
sets were sold  worldwide  in the  quarter,  compared  to 1,500 sets sold in the
prior year first quarter, a 113% year-over-year  increase.  The average catheter
utilization rate per installed domestic drive unit was 9.4 in the first quarter,
compared to a rate of 7.5 in the prior year period, and to a rate of 10.8 in the
fourth  quarter of fiscal  1999.  The Company sold 32 drive units in the quarter
compared to 16 units in the like quarter a year ago.

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

     The Company  expects that U.S.  AngioJet System sales will continue to grow
primarily  through the  addition of sales  people,  the  completion  of clinical
trials designed to yield  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
leg arteries and bypass  grafts.  In July 1997,  the Company  submitted a 510(k)
application to the FDA seeking  clearance for the AngioJet  System to be used in
leg arteries and bypass  grafts.  The Company is currently  responding 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 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 this clinical  trial by
the end of January 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 and bypass grafts,  veins and neuro vessels are  significant  worldwide
marketing opportunities for the AngioJet System.

<PAGE>

     Foreign sales of the AngioJet  System during the three months ended October
31, 1999 and 1998 were $77,000 and $29,000, respectively. In Japan, the coronary
AngioJet  System  clinical  study  enrollment  was completed in April 1998 and a
regulatory filing was done in November 1999 with the Japanese Ministry of Health
and Welfare.  Japanese  approval  for  coronary  use of the  AngioJet  System is
expected by the end of calendar 2000.

Revenue - Vascular Grafts

     Vascular graft sales were $380,000 and $0 for the quarter ended October 31,
1999 and 1998,  respectively.  All of the vascular  graft sales were  Perma-Seal
Dialysis  Access Grafts.  In September  1998 the Company  received FDA marketing
approval for its Perma-Seal  Dialysis Access Graft. In December 1998 the Company
entered into an  exclusive  worldwide  supply and  distribution  agreement  with
Horizon Medical  Products,  Inc. for its Perma-Seal  Dialysis Access Graft.  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 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 its  vascular  graft
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,  including  enrollment into the Perma-Flow  Coronary Bypass Graft clinical
trial.

<PAGE>

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


Cost of Medical Products

     Cost of medical  products  increased  37% or $564,000  compared to the same
period a year ago. The increase is primarily  due to the  significant  growth in
the AngioJet  System product sales.  Medical  product gross margins  improved by
$2,059,000  compared  to the same  period a year  ago.  This  resulted  in gross
margins  of 53% and 17% for the  quarters  ended  October  31,  1999  and  1998,
respectively.  The improvement in gross margins was driven by volume  increases,
and a  favorable  mix of  coronary  catheters  sold,  partially  offset  by some
manufacturing inefficiencies.  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 months ended
October 31, 1999 increased  $1,757,000,  compared to the same period a year ago.
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 36 employees in October 1998, to 53 employees in October 1999.  The Company
plans to  further  increase  the  direct  U.S.  sales  force  and its  sales and
marketing  expenditures  to meet the growing  demand for the Company's  AngioJet
System.

Research and Development Expense

     Research and development  expenses decreased 15% 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 waterjet technology-based products.

Interest Income and Expense

     Interest income has decreased  $62,000 in the most recent period due to the
use of the Company's cash reserves to fund the Company's  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 quarter ended October
31,  1999.  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 quarter ended October 31, 1998.

<PAGE>

     Interest expense decreased $175,000 in the most recent 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
unless asset based financing is obtained.  If asset based financing is obtained,
interest expense will approximate last year's expense.


Liquidity and Capital Resources

     The Company's cash and cash equivalents  totaled  $6,508,000 at October 31,
1999 versus $9,151,000 at July 31, 1999.

     Net cash  usage  for the three  months  ended  October  31,  1999  averaged
$881,000 per month.  The  $2,514,000  cash used in operations in the most recent
three month period was due to the net loss of $2,592,000, a $271,000 increase in
inventory  and  $204,000  decrease  in  accounts  payable,  partially  offset by
depreciation,  stock  compensation  and an  increase in accrued  liabilities  of
$550,000.

     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 grow as the  Company
completes the development of its current  products and invests in development of
new AngioJet System thrombectomy  applications and new 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  anticipated
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.

     The Company has  retained  the  investment  banking  firm of Gerard  Klauer
Mattison and Co. to lead a private  placement,  the proceeds from which would be
used to accelerate research and development on new products, to conduct clinical
trials, and for general corporate purposes.  Market conditions  permitting,  the
Company hopes to complete an offering within the next three months.  There is no
guarantee that the Company will secure financing,  or reach an agreement to sell
its common stock, at terms acceptable to the Company.


Year 2000 ("Y2K")

     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

<PAGE>

     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  expects no  significant
problems with applications software.

     The  Company  evaluated  its  suppliers  of  utility,   telecommunications,
payroll,  banking,  and  employee  benefits  services.  It does not  expect  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.

     Although the Company does not at this time expect a  significant  effect on
its  consolidated  financial  position,  results  of  operations  and cash flows
related to Y2K, internal  preparations are ongoing and there can be no assurance
that the systems of other companies or the systems of the Company itself will be
converted on a timely basis and will not have a corresponding  adverse effect on
the Company.

<PAGE>

     While it is  impossible  to evaluate  every  aspect of Y2K  compliance,  we
believe  that  either of two  events  would be our most  likely  Y2K worst  case
scenario.  The  first  would be from one or more of our sole or  limited  source
suppliers  to  fail  to be Y2K  compliant  or to have  its  business  negatively
impacted by Y2K issues of others. The second would be delays in receiving orders
or payments from customers due to Y2K problems they experience or their concerns
relating to Y2K. At the present  time,  it is not possible to determine  whether
any of these events is likely to occur,  or to quantify any  potential  negative
impact  they  may  have  on our  future  results  of  operations  and  financial
condition.


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  April  30,  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.  The
market risk on such investments is minimal.

     The product sales for the Company's foreign  subsidiary are in U.S. Dollars
("USD").  At the end of October  1999,  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 October  31,  1999,  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 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 below.

 Exhibit      Form       Date Filed                  Description


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

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

<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 14, 1999               BY:      /s/
                                           ROBERT G. DUTCHER
                                           President and Chief Executive Officer



DATE:  December 14, 1999               BY:      /s/
                                           RUSSEL E. CARLSON
                                           Vice President of Finance and
                                           Chief Financial Officer