**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D. C. 20549**

**_________________**

**FORM      10-QSB**

**[X**
**Quarterly      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of      1934.**

**For      the quarterly period ended March 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: **
**000-22419**

**CARDIMA,      INC.**

**(Exact      name of registrant as specified in its charter)**

**Delaware**
**94-3177883**

**47266      Benicia Street, Fremont, CA**
**94538-7330**

**Registrant’s      telephone number, including area code: (510) 354-0300**

----

**CARDIMA,      INC**

**TABLE      OF CONTENTS**

**PART      I. Financial Information**

| **Description**        | **Page**                                                                                                                          |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------|
|                   |                                                                                                                              |   |
| Item                1. | Financial                Statements (unaudited)                                                                                   | 3 |
|                   | Condensed                Balance Sheets as of March 31, 2007 and December 31, 2006                                                | 3 |
|                   | Condensed                Statement of Operations for the Three Months Ended March 31, 2007                and 2006                | 4 |
|                   | Condensed                Statement of Cash Flows for the Three Months Ended March 31, 2007                and                2006 | 5 |
|                   | Notes                to Condensed Financial Statements                                                                            | 6 |
| Item                2. | Management’s                Discussion and Analysis and Results of Operations                                               | 14 |
| Item                3. | Controls                and Procedures                                                                                            | 17 |

**PART      II. Other Information**

| **Description**        | **Page**                                                                   |
|------------------------|----------------------------------------------------------------------------|
|                   |                                                                       |   |
| Item                1. | Legal                Proceedings                                           | 18 |
| Item                2. | Unregistered                Sales of Equity Securities and Use of Proceeds | 18 |
| Item                3. | Defaults                Upon Senior Securities                             | 18 |
| Item                4. | Submission                of Matters to a Vote of Security Holders         | 18 |
| Item                5. | Other                Information                                           | 18 |
| Item                6. | Exhibits                                                                   | 18 |
|                   |                                                                       |   |
| Signatures             | 19                                                                         |

----

**PART      I.**
** **
**      ITEM 1. **
**Financial      Statements**

**CARDIMA,      INC.**

**BALANCE      SHEETS**

**(In      thousands, except per share amounts)**

|                                                                          |                                                                                                                                                                                                                                       |         | March                31, 2007 (Unaudited) |    |         | December                31, 2006 |    |
|-------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|-------------------------------------------|---------|--------------|----------------------------------|---------|
| **ASSETS**                                                                    |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |
| Current                assets:                                                |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |
|                                                                          | Cash                and cash equivalent                                                                                                                                                                                                    |  $      |  671                                 |    |  $      |  942                        |    |
|                                                                          | Accounts                receivable, net of allowances for doubtful accounts of $14                                                                                                                                                         |         | 142                                       |    |         | 415                              |    |
|                                                                          | Inventories                (Note 3)                                                                                                                                                                                                        |         | 513                                       |    |         | 324                              |    |
|                                                                          | Prepaid                expenses                                                                                                                                                                                                            |         | 42                                        |    |         | 123                              |    |
|                                                                          | Other                current assets                                                                                                                                                                                                        |         | 69                                        |    |         | 62                               |    |
| Total                current assets                                           |                                                                                                                                                                                                                                       |  1,437  |                                      |  $ |  1,866  |                             |
|                                                                          |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |    |
| Property                and equipment, net (Note 4)                           |                                                                                                                                                                                                                                       | 283          |                                      |    | 280          |                             |
| Other                assets                                                   |                                                                                                                                                                                                                                       | 71           |                                      |    | 71           |                             |
| TOTAL                ASSETS                                                   |  $                                                                                                                                                                                                                                    |  1,791  |                                      |  $ |  2,217  |                             |
|                                                                          |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |    |
| **LIABILITIES                AND STOCKHOLDERS' DEFICIENCY**                   |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |
| Current                liabilities:                                           |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |
|                                                                          | Accounts                payable                                                                                                                                                                                                            |  $      |  1,037                               |    |  $      |  971                        |    |
|                                                                          | Accrued                compensation                                                                                                                                                                                                        |         | 438                                       |    |         | 402                              |    |
|                                                                          | Loans                payable (Note 5)                                                                                                                                                                                                      |         | 9,510                                     |    |         | 8,160                            |    |
|                                                                          | Warrant                liabilities (Note 6)                                                                                                                                                                                                |         | 7,954                                     |    |         | 3,044                            |    |
|                                                                          | Notes                payable to related parties - current portion (Note 7)                                                                                                                                                                 |         | 8                                         |    |         | 8                                |    |
|                                                                          | Capital                lease - current portion (Note 9)                                                                                                                                                                                    |         | 21                                        |    |         | 21                               |    |
|                                                                          | Accrued                interest and fee (Note 8)                                                                                                                                                                                           |         | 2,525                                     |    |         | 2,308                            |    |
|                                                                          | Other                current liabilities                                                                                                                                                                                                   |         | 34                                        |    |         | 96                               |    |
| Total                current liabilities                                      |  $                                                                                                                                                                                                                                    |  21,527 |                                      |  $ |  15,010 |                             |
|                                                                          |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |    |
| Capital                lease - noncurrent portion (Note 9)                    |                                                                                                                                                                                                                                       | 17           |                                      |    | 22           |                             |
| Notes                payable to related parties - noncurrent portion (Note 7) |                                                                                                                                                                                                                                       | 62           |                                      |    | 62           |                             |
|                                                                          |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |    |
| Commitments                and contingencies (see note 9)                     |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |
| TOTAL                LIABILITIES                                              |  $                                                                                                                                                                                                                                    |  21,606 |                                      |  $ |  15,094 |                             |
|                                                                          |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |    |
| Stockholders'                deficiency:                                      |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |
|                                                                          | Common                stock, $0.001 par value, 300,000,000 shares authorized, 102,840,963                and                102,354,679 shares issued and outstanding at March 31, 2007 and December                31, 2006, respectively |         | 118,503                                   |    |         | 118,418                          |    |
|                                                                          | Preferred                stock, $0.001 par value, 5,000,000 shares authorized, none issued                and                outstanding at March 31, 2007 and December 31, 2006,                respectively                              |         | -                                         |    |         | -                                |    |
|                                                                          | Accumulated                deficit                                                                                                                                                                                                         |         | (138,318                                  | )  |         | (131,295                         | )  |
| Total                stockholders' deficiency                                 |                                                                                                                                                                                                                                       | (19,815      | )                                    |    | (12,877      | )                           |
| TOTAL                LIABILITIES AND STOCKHOLDERS' DEFICIENCY                 |  $                                                                                                                                                                                                                                    |  1,791  |                                      |  $ |  2,217  |                             |
|                                                                          |                                                                                                                                                                                                                                       |         |                                      |    |         |                             |

----

**CARDIMA,      INC.**

**STATEMENTS      OF OPERATIONS**

**(In      thousands, except per share amounts)**

**(Unaudited)**

|                                                                         |   |    | Three                Months Ended March 31, 2007 |    |    | Three                Months Ended March 31, 2006 |    |
|------------------------------------------------------------------------------|--------|---------|--------------------------------------------------|---------|---------|--------------------------------------------------|---------|
|                                                                         |   |    |                                             |    |    |                                             |    |
| Net                sales                                                     |   |  $ |  319                                        |    |  $ |  384                                        |    |
| Cost                of goods sold                                            |   |    | 424                                              |    |    | 498                                              |    |
| Gross                losses                                                  |   |    | (105                                             | )  |    | (114                                             | )  |
|                                                                         |   |    |                                             |    |    |                                             |    |
| Operating                expenses:                                           |   |    |                                             |    |    |                                             |    |
| Research                and development                                      |   |    | 903                                              |    |    | 416                                              |    |
| Selling,                general and administrative                           |   |    | 884                                              |    |    | 670                                              |    |
| Total                operating expenses                                      |   |    | 1,787                                            |    |    | 1,086                                            |    |
|                                                                         |   |    |                                             |    |    |                                             |    |
| Operating                loss                                                |   |    | (1,892                                           | )  |    | (1,200                                           | )  |
|                                                                         |   |    |                                             |    |    |                                             |    |
| Interest                expense                                              |   |    | (220                                             | )  |    | (2,151                                           | )  |
| Other                income /(expense)                                       |   |    | (4,911                                           | )       |    | (225                                             | )  |
| Net                loss                                                      |   |  $ |  (7,023                                     | )       |  $ |  (3,576                                     | )  |
|                                                                         |   |    |                                             |    |    |                                             |    |
| Basic                and diluted net loss per share                          |   |  $ |  (0.07                                      | )       |  $ |  (0.04                                      | )  |
|                                                                         |   |    |                                             |    |    |                                             |    |
| Shares                used in computing basic and diluted net loss per share |   |    | 102,673                                          |    |    | 101,638                                          |    |
|                                                                         |   |    |                                             |    |    |                                             |    |
|                                                                         |   |    |                                             |    |    |                                             |    |
|                                                                              |   |    |                                             |    |

----

**CARDIMA,      INC.**

**STATEMENTS      OF CASH FLOWS**

**(In      thousands)**

**(Unaudited)**

|                                                                                                                                            |    |   Three                Months Ended March 31, |
|-------------------------------------------------------------------------------------------------------------------------------------------------|---------|---------------------------------------------------------|
|                                                                                                                                            |    | 2007                                                    |   |   | 2006 |   |
| **CASH                FLOWS FROM OPERATING ACTIVITIES:**                                                                                        |    |                                                    |   |   |   |   |
| Net                loss                                                                                                                         |  $ |  (7,023)                                           |   |  $ |  (3,576 | )  |
| Adjustments                to reconcile net loss to net cash used in operating activities provided                by                operations: |    |                                                    |   |   |   |   |
| Depreciation                and amortization                                                                                                    |    | 21                                                      |   |   | 35 |   |
| Non-cash                stock-based compensation                                                                                                |    | 66                                                      |   |   | 119 |   |
| Derivative                valuation                                                                                                             |    | 4,910                                                   |   |   | 1,646 |   |
| Excess                and obsolete inventory                                                                                                    |    | 51                                                      |   |   | 85 |   |
| Changes                in operating assets and liabilities:                                                                                     |    |                                                    |   |   |   |   |
| Accounts                receivable                                                                                                              |    | 273                                                     |   |   | (2 | )  |
| Inventories                                                                                                                                     |    | (240                                                    | )  |   | 56 |   |
| Prepaid                and other assets                                                                                                         |    | 74                                                      |   |   | 65 |   |
| Accounts                payable, accrued compensation and other liabilities                                                                     |    | 40                                                      |   |   | (3 | )  |
| Accrued                interest and fees                                                                                                        |    | 217                                                     |   |   | 729 |   |
| Net                cash used in operating activities                                                                                            |    | (1,611                                                  | )  |   | (846 | )  |
|                                                                                                                                            |    |                                                    |   |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**                                                                                         |    |                                                    |   |   |   |   |
| Purchase                of property and equipment                                                                                               |    | (24                                                     | ) |   | (5 | )  |
| Net                cash used in investing activities                                                                                            |    | (24                                                     | )  |   | (5 | )  |
|                                                                                                                                            |    |                                                    |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                                                                                         |    |                                                    |   |   |   |   |
| Principal                payments under capital leases and credit facility                                                                      |    | (5                                                      | )  |   | (5 | )  |
| Net                proceeds from loan financing                                                                                                 |    | 1,350                                                   |   |   | 960 |   |
| Net                proceeds from sale of common stock                                                                                           |    | 19                                                      |   |   | 2 |   |
| Net                cash provided by financing activities                                                                                        |    | 1,364                                                   |   |   | 957 |   |
| Change                in cash and cash equivalents                                                                                              |    | (271                                                    | )  |   | 106 |   |
| Beginning                cash and cash equivalents                                                                                              |    | 942                                                     |   |   | 124 |   |
| Ending                cash and equivalents                                                                                                      |  $ |  671                                               |   |  $ |  230 |   |
|                                                                                                                                            |    |                                                    |   |   |   |   |
| **SUPPLEMENTAL                DISCLOSURE OF CASH FLOWS INFORMATION**                                                                            |    |                                                    |   |   |   |   |
| Cash                paid for interest                                                                                                           |  $ |  5                                                 |   |  $ |  1 |   |
| **SUPPLEMENTAL                SCHEDULE OF NON-CASH INVESTING AND FINANCING                ACTIVITIES**                                          |    |                                                    |   |   |   |   |
| Warrants                issued for loan financing                                                                                               |  $ |  -                                                 |   |  $ |  1,422 |   |
|                                                                                                                                            |    |                                                    |   |   |   |   |
| .                                                                                                                                               |    |                                                    |   |   |

----

**CARDIMA,      INC.**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**
** **

**(Unaudited)**

*Basis      of Presentation*

*Stock      Options Expensed*

----

*Net      Income (Loss) Per Common Share*

|                                      | **March                31,** |   | **December                31,** |   |
|-------------------------------------------|------------------------------|--------|---------------------------------|--------|
|                                      | **2007**                     |   | **2006**                        |   |
|                                      |                         |   |                            |   |
| Warrants                                  | 73,817,607                   |   | 75,793,526                      |   |
| Stock                Options              | 4,467,643                    |   | 5,108,628                       |   |
| Total                Warrants and Options | 78,285,250                   |   | 80,902,154                      |   |
|                                      |                         |   |                            |   |

*Recent      Accounting Pronouncements*

----

** **

|                          |    | March                31, 2007 |    | December                31, 2006 |
|-------------------------------|---------|-------------------------------|---------|----------------------------------|
|                          |    |                          |    |                             |
| Raw                Materials  |  $ |  173                     |  $ |  139                        |
| Work-In-Process               |    | 128                           |    | 86                               |
| Finished                Goods |    | 212                           |    | 99                               |
|                          |  $ |  513                     |  $ |  324                        |
|                          |    |                          |    |                             |

----

|                                                          |    | March                31, 2007 |    | December                31, 2006 |    |
|---------------------------------------------------------------|---------|-------------------------------|---------|----------------------------------|---------|
|                                                          |    |                          |    |                             |    |
| Equipment                                                     |  $ |  1,912                   | $  |  1,888                      |    |
| Leasehold                improvements                         |    | 259                           |    | 259                              |    |
|                                                          |    | 2,171                         | $  |  2,147                      |    |
| Less                accumulated depreciation and amortization |    | (1,888                        | )  | (1,867                           | )  |
|                                                          |  $ |  283                     | $  |  280                        |    |
|                                                          |    |                          |    |                             |    |
| Idle                Equipment                                 |  $ |  1,290                   | $  | $                1,290           |    |
| Less                accumulated depreciation and amortization |    | (1,290                        | )  | (1,290                           | )  |
|                                                          |  $ |  -                       | $  |  -                          |    |

----

| ·   | Additional                loan facility - Apix has granted the Company an additional loan facility                in the amount of $5,625,000. Advances pursuant to the additional                facility                shall be made on a bi-weekly basis the Company’s discretion in                denominations of $225,000 per advance; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | New                maturity date - the maturity date of the New Facility and Prior Facilities                is the earlier of (a) December 31, 2007 or (b) the date that Apix                makes a                demand for payment; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Facility                fee adjustment - the aggregate facility fee for the Prior Facilities                and                the New Facility shall be $500,000 (the “Facility Fee”) which is payable                through the issuance of five million shares of our preferred stock                with                the following minimum preferences: (a) 28 votes per share at any                general                or extraordinary meeting of the common shares of the company convened                by                the Company or its shareholders for a total of 140 million votes                at any                such meeting; and (b) convertible into common shares of the Company                at any                time at the sole and absolute discretion of the holder on the basis                of two                (2) common shares for each preferred share tendered for conversion                for a                total of ten (10) million common shares in the event all preferred                shares                are tendered for conversion; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Exit                fees - the aggregate exit fees for the Prior Facilities and the New                Facility shall be $2,800,000 plus $80,000 for each advance made which                shall be due and payable on the earliest to occur of: (1) the maturity                date, (2) generally the sale of the company or substantially all                of its                assets, a reorganization or a new loan facility in excess of $1,000,000,                or (3) an event of default; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Price                adjustment to existing warrant and new warrants - pursuant to the                Prior                Facilities, the Company agreed to issue to Apix warrants to purchase                118,800,000 shares of the Company's common stock at an exercise price                of                $0.06 per share (the “Existing Warrants”). Pursuant to the New Facility,                the exercise price of the Existing Warrants has been adjusted to                $0.04 per                share. In addition, the Company has agreed to issue to Apix additional                warrants to purchase 20,000,000 shares of the Company’s common stock at an                exercise price of $0.03 per share (the “New Warrants”). All warrants have                a term of ten years; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Conversion                price adjustment - the loan principal and exit fees are convertible                into                shares of the Company’s common stock at a conversion price of $0.04 per                share; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Registration                rights - the Company agrees to register a percentage of the shares                underlying the loan principal, facility fees, and warrants on a                registration statement at its best efforts. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                              | Total                         | Value                at |   | Value                as of       | Value                as of    |
|-----------------------------------|-------------------------------|-------------------------|--------|----------------------------------|-------------------------------|
|                              | Warrant                Shares | Inception               |   | December                31, 2006 | March                31, 2007 |
|                              |                          |                    |   |                             |                          |
| August                2005 Loan   | 30,000,000                    | $3,000,000              |   | $                1,476,000       | $                3,858,000    |
| February                2006 Loan | 31,800,000                    | $1,421,740              |   | $                1,567,740       | $                4,096,000    |
|                              |                          |                    |   | $                3,043,740       | $                7,954,000    |
|                              |                          |                    |   |                             |                          |

|   |                         | Warrant                Granted | FMV    | Strike                Price | Remaining                Life ( in years) | Interest                Rate | Volatility | Change                in Value |
|--------|------------------------------|--------------------------------|--------|-----------------------------|-------------------------------------------|------------------------------|------------|--------------------------------|
|   |                         |                           |   |                        |                                      |                         |       |                           |
|   | Q1                2007       | Aug-05                         | $0.13  | $0.06                       | 8.42                                      | 4.50%                        | 160%       | $2,382,000                     |
|   |                         | Feb-06                         | $0.13  | $0.06                       | 8.92                                      | 4.50%                        | 160%       | $2,528,100                     |
|   | Q1                2007 Total |                           |   |                        |                                      |                         |       | $4,910,100                     |
|   |                         |                           |   |                        |                                      |                         |       |                           |

** **

----

*Commitments*

|   | Fiscal                Year                                 |    | Operating                Leases |    | Capital                Leases |
|--------|------------------------------------------------------------|---------|---------------------------------|---------|-------------------------------|
|   | 2007                                                       |  $ |  267                       |  $ |  21                      |
|   | 2008                                                       |    | 265                             |    | 22                            |
|   | 2009                                                       |    | 272                             |    | -                             |
|   | 2010                                                       |    | 115                             |    | -                             |
|   | Total                minimum lease payments                |  $ |  919                       |  $ |  43                      |
|   | Less                amounts representing interest          |    | N/A                             |    | 3                             |
|   | Present                value of net minimum lease payments |  $ |  919                       |  $ |  40                      |

*Contingencies*

----

|                           | Three                Months Ended March 31, |
|--------------------------------|---------------------------------------------|
|                           | 2007                                        |   | 2006 |
|                           |                                        |   |   |   |   |
| United                States   | $                250                        | 79% |   | $                173 | 45% |
| Europe                         | 68                                          | 21% |   | 83 | 22% |
| Asia                -- Japan   | 0                                           | 0% |   | 125 | 32% |
| Others                         | 1                                           | 0% |   | 3 | 1% |
| Total                Net Sales | $                319                        |   |   | $                384 |   |

----

**ITEM      2. Management’s Discussion and Analysis and Results of      Operations**

***Cautionary      Statement Regarding Forward-Looking Statements***

*The      information in this discussion may contain forward-looking statements      within the meaning of Section 27A of the Securities Act of 1933, as      amended, and Section 21E of the Securities Exchange Act of 1934, as      amended. These forward-looking statements involve risks and uncertainties,      including statements regarding our capital needs, business strategy and      expectations. Any statements that are not of historical fact may be deemed      to be forward-looking statements. These forward-looking statements involve      substantial risks and uncertainties. In some cases you can identify      forward-looking statements by terminology such as “may,” “will,” “should,”“expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,”“potential,” or “continue”, the negative of the terms or other comparable      terminology. Forward-looking statements in this Report may also include      references to anticipated sales volume and product margins, efforts aimed at      establishing new or improving existing relationships with customers, other      business development activities, anticipated financial performance, business      prospects and similar matters. Actual events or results may differ      materially from the anticipated results or other expectations expressed in      the      forward-looking statements. In evaluating these statements, you should consider      various factors, including the risks included from time to time in other reports      or registration statements filed with the United States Securities and Exchange      Commission. These factors may cause our actual results to differ materially      from any forward-looking statements. We disclaim any obligation to publicly      update these statements, or disclose any difference between actual results      and      those reflected in these statements.*

***Overview***

----

| ·   | Additional                loan facility - Apix has granted the Company an additional loan facility                in the amount of $5,625,000. Advances pursuant to the additional                facility                shall be made on a bi-weekly basis the Company’s discretion in                denominations of $225,000 per advance; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | New                maturity date - the maturity date of the New Facility and Prior Facilities                is the earlier of (a) December 31, 2007 or (b) the date that Apix                makes a                demand for payment; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Facility                fee adjustment - the aggregate facility fee for the Prior Facilities                and                the New Facility shall be $500,000 (the “Facility Fee”) which is payable                through the issuance of five million shares of our preferred stock                with                the following minimum preferences: (a) 28 votes per share at any                general                or extraordinary meeting of the common shares of the company convened                by                the Company or its shareholders for a total of 140 million votes                at any                such meeting; and (b) convertible into common shares of the Company                at any                time at the sole and absolute discretion of the holder on the basis                of two                (2) common shares for each preferred share tendered for conversion                for a                total of ten (10) million common shares in the event all preferred                shares                are tendered for conversion; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Exit                fees - the aggregate exit fees for the Prior Facilities and the New                Facility shall be $2,800,000 plus $80,000 for each advance made which                shall be due and payable on the earliest to occur of: (1) the maturity                date, (2) generally the sale of the company or substantially all                of its                assets, a reorganization or a new loan facility in excess of $1,000,000,                or (3) an event of default; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Price                adjustment to existing warrant and new warrants - pursuant to the                Prior                Facilities, the Company agreed to issue to Apix warrants to purchase                118,800,000 shares of the Company's common stock at an exercise price                of                $0.06 per share (the “Existing Warrants”). Pursuant to the New Facility,                the exercise price of the Existing Warrants has been adjusted to                $0.04 per                share. In addition, the Company has agreed to issue to Apix additional                warrants to purchase 20,000,000 shares of the Company’s common stock at an                exercise price of $0.03 per share (the “New Warrants”). All warrants have                a term of ten years; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Conversion                price adjustment - the loan principal and exit fees are convertible                into                shares of the Company’s common stock at a conversion price of $0.04 per                share; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Registration                rights - the Company agrees to register a percentage of the shares                underlying the loan principal, facility fees, and warrants on a                registration statement at its best efforts. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Results      Of Operations - Three Months Ended March 31, 2007 and 2006***
*** ***

*Net      Sales*

*Cost      of Goods Sold*

*Net      Loss*

----

*Research      and Development Expenses*

*Selling,      Marketing, General and Administrative Expenses*

*Interest      Expense*

*Other      Expense *

***Liquidity      and Capital Resources***

----

**ITEM      3. Controls and Procedures **

***Evaluation      of Disclosure Controls and Procedures***

| ·   | Period-end                review of allowances for excess and obsolete inventory was not performed                accurately. The Company will re-impose the review                function; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Management                failed to recognize departures from GAAP and has not utilized the                resources at its disposal to review unusual or infrequent transactions                for                appropriate accounting reporting and disclosure. Specifically, the                Company                did not have the requisite accounting skills in the area of accounting                for                convertible debt financing arrangements and associated derivatives.                The                Company will regularly review material unusual or infrequent transactions                with its existing financial                consultant. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Changes      in Internal Controls***

***Limitations      on the Effectiveness of Controls***

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**PART      II.**
**OTHER      INFORMATION**

**ITEM      1.**
**Legal      Proceedings**

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

**ITEM      3.**
**Defaults      Upon Senior Securities**

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

** **

**ITEM      5.**
**      Other Information**

**ITEM      6.**
**      Exhibits**

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**CARDIMA,      INC.**

**SIGNATURE**

| DATE:  | May                21, 2007 | CARDIMA,                INC.                                                                                                                  |
|--------|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|   |                        | /s/                Gabriel B. Vegh                                                                                                            |
|   |                        | Gabriel                B. Vegh                                                                                                                |
|   |                        | Chairman,                Chief Executive Officer and Acting Chief Financial Officer(Principal                Executive and Financial Officer) |

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