<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   FORM 10-Q/A
                                        
[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934.
     For the quarterly period ended March 31, 1998

                                       or

[_]  Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934.
     For the transition period from _________________  to _____________________.

                        COMMISSION FILE NUMBER: 0-22419
                                                -------

                                 CARDIMA, INC.

            (Exact name of registrant as specified in its charter)


     DELAWARE                                            94-3177883
--------------------                               --------------------------
(State or Other Jurisdiction                           (I.R.S. Employer
 of Incorporation or Organization)                      Identification No.)


47266 BENICIA STREET, FREMONT, CA                        94538-7330
(Address of  Principal Executive Offices)                (Zip Code)

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

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) had been subject to such filing
requirements for the past 90 days.       X      Yes          No
                                    -----------      --------         

As of April 30, 1998, there were 8,174,414 shares of Registrant's Common Stock
outstanding.

                                       1
<PAGE>
 
                                 CARDIMA, INC.

                                     INDEX
<TABLE>
<S>                                                                                           <C>
PART I.  FINANCIAL INFORMATION................................................................ 3

 Item 1.  Financial Statements................................................................ 3
  Balance Sheets as of March 31, 1998 and December 31, 1997................................... 3
  Statements of Operations for the three months ended March 31, 1998 and 1997................. 4
  Statements of Cash Flows for the three months ended March 31, 1998 and 1997................. 5
  Notes to financial statements............................................................... 6

SIGNATURES.................................................................................... 9


</TABLE>

                                       2
<PAGE>
 
PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

                                 CARDIMA, INC.

                                BALANCE SHEETS
                      (In thousands except share amounts)
<TABLE> 
<CAPTION> 
                                                                                                       (1)
                                                                                        March 31,  December 31,
                                                                                          1998        1997
                                                                                       ----------- -----------
                                                                                       (unaudited)
<S>                                                                                     <C>         <C>  
ASSETS
Current Assets:
   Cash and cash equivalents                                                            $  8,118    $  8,578
   Short-term investments                                                                  1,236       4,270
   Accounts receivable, net of allowances for doubtful accounts
       of $42 at March 31, 1998 and $40 at December 31, 1997                                 351         268
   Inventories                                                                               599         532
   Other current assets                                                                      222         261
                                                                                        --------    --------

       Total current assets                                                               10,526      13,909

Property and equipment, net                                                                2,530       2,488
Restricted cash                                                                              170         192
Other assets                                                                               1,117       1,085
                                                                                        --------    --------

Total assets                                                                            $ 14,343    $ 17,674
                                                                                        ========    ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                     $    885    $    898
   Accrued compensation                                                                      944         753
   Other current liabilities                                                                  10          55
   Notes payable                                                                              -            7
   Capital lease obligation - current portion                                                609         587
                                                                                        --------    --------

       Total current liabilities                                                           2,448       2,300

Deferred rent                                                                                 78          90
Capital lease obligation - noncurrent portion                                              1,011         840
Commitments
Stockholders' equity
   Common stock, $.001 par value; 25,000,000 shares authorized, 8,170,729 shares issued
   and outstanding at March 31, 1998, 8,103,875 at December 31, 1997; at amount paid in   45,744      45,597
   Deferred compensation                                                                    (667)       (731)
   Accumulated deficit                                                                   (34,271)    (30,422)
                                                                                        --------    --------
       Total stockholders' equity                                                         10,806      14,444
                                                                                        --------    --------
Total liabilities and stockholders' equity                                              $ 14,343    $ 17,674
                                                                                        ========    ========

</TABLE> 

 (1) The information in this column was derived from the Company's audited
     financial statements as of December 31, 1997.

     See accompanying notes to financial statements.

                                       3

<PAGE>
 

                                 CARDIMA, INC.

                           STATEMENTS OF OPERATIONS
                   (In thousands, except per share amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                             Three months ended
                                                                   March 31,
                                                             --------- ---------
                                                               1998      1997
                                                             --------- ---------
<S>                                                          <C>       <C>
Net sales                                                     $    501    $  217
Cost of goods sold                                                 748       374
                                                              --------  --------
                                                                        
   Gross profit                                                   (247)     (157)
                                                                        
Operating expenses:                                                     
   Research and development                                      1,663       810
   Selling, general and administrative                           2,047     1,330
                                                              --------  --------
                                                                        
      Total operating expenses                                   3,710     2,140
                                                              --------  --------
                                                                        
Operating loss                                                  (3,957)   (2,297)
                                                                        
Interest and other income                                          144        25
Interest expense                                                   (36)      (53)
                                                              --------  --------

Net loss                                                      $ (3,849) $ (2,325)
                                                              ========  ========

Basic and diluted net loss per share                          $  (0.47) $ (31.00)
                                                              ========  ========

Shares used in computing basic and diluted net loss per share    8,137        75
                                                              ========  ========
</TABLE> 

                See accompanying notes to financial statements

                                       4

<PAGE>
 
                                 CARDIMA, INC.

                           STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                      Three Months ended
                                                                           March 31,
                                                                      --------------------
                                                                        1998        1997
                                                                      --------    --------
<S>                                                                   <C>         <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                            ($3,849)    ($2,325)

  Adjustments to reconcile net loss to net cash provided by operations:
    Depreciation and amortization                                         192         146
    Amortization of deferred compensation                                  64          38
    Loss on disposal of assets                                              5           2
  Changes in operating assets and liabilities:
    Accounts receivable                                                   (83)       (113)
    Inventories                                                           (67)       (136)
    Other current assets                                                   39        (136)
    Restricted cash                                                        22          20
    Notes receivable                                                       (5)         -
    Other assets                                                          (44)       (180)
    Accounts payable                                                      (13)       (735)
    Accrued compensation                                                  191          84
    Other current liabilities                                             (45)          8
    Deferred rent                                                         (12)        (12)
                                                                      -------     -------
      Net cash used in operating activities                            (3,605)     (3,339)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of short-term investments                                    (507)         -
  Maturities and sales of short-term investments                        3,541          -
  Capital expenditures                                                   (192)       (243)
                                                                      -------     -------
    Net cash used in investing activities                               2,842        (243)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments under capital leases                                (160)        (83)
  Proceeds from issuance of bridge loans                                   -        1,610
  Net proceeds from issuance of preferred stock                            -       10,158
  Payments under notes payable                                             (7)         -
  Net proceeds from sale of common stock                                  147          -
  Proceeds from sale/leaseback of capital equipment                       323          -
                                                                      -------     -------
    Net cash provided by financing activities                             303      11,685
                                                                      -------     -------

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                     (460)      8,103

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                          8,578       2,992
                                                                      -------     -------

CASH AND CASH EQUIVALENTS, END OF PERIOD                               $8,118     $11,095
                                                                      =======     =======

</TABLE> 
                                       5
<PAGE>
 
                                 CARDIMA, INC.

                         NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1998
                                  (Unaudited)

1.   BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared by the
Company according to the rules and regulations of the Securities and Exchange
Commission for interim financial information and in accordance with the
instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they
do not include all of the financial information and footnotes required by
generally accepted accounting principles for complete financial statements.  In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.

The operating results for the three-month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1998.  The accompanying financial statements should be read
in conjunction with the audited financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997.

2.   BALANCE SHEET COMPONENTS

Certain balance sheet components are as follows (in thousands):

 
<TABLE>
<CAPTION>
                                                        March 31,                     December 31,
                                                           1998                          1997/1/
                                                 --------------------           --------------------
<S>                                                 <C>                            <C>
Inventories:
       Raw materials                                     $   225                        $   209
       Work-in-process                                       128                            119
       Finished goods                                        246                            204
                                                 --------------------           -------------------- 
                                                         $   599                        $   532
                                                 ====================           ====================
 
Property and equipment:
       Equipment                                           3,929                          3,715
       Leasehold improvements                                 99                             99
                                                 --------------------           -------------------- 
                                                         $ 4,028                        $ 3,814
       Less accumulated depreciation                      (1,498)                        (1,326)
                                                 --------------------           --------------------
                                                         $ 2,530                        $ 2,488
                                                 ====================           ====================
</TABLE>
-----------------------
/1/ The information in this column was derived from the Company's audited
    financial statements as of December 31, 1997.

                                       6
<PAGE>
 
                   NOTES TO FINANCIAL STATEMENTS (continued)
                                  (Unaudited)

3.   INITIAL PUBLIC OFFERING

In June 1997, the Company completed an initial public offering of 2,275,000
shares of Common Stock at an initial price to the public of $7.00 per share,
resulting in net proceeds to the Company (after deducting underwriting discounts
and commissions and offering expenses) of approximately $13.6 million.

4.   NET LOSS PER SHARE

In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings Per Share," ("SFAS 128").  SFAS 128 replaced the calculation of
primary and fully diluted earnings per share with basic and diluted earnings per
share.  Unlike primary earnings per share, basic earnings per share excludes any
dilutive effect of options, warrants and convertible securities.  Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share.  All earnings per share amounts for all periods have been
restated to conform to the SFAS 128 requirements.  Effective February 3, 1998,
Staff Accounting Bulletin No. 98 ("SAB 98") was issued and amends the existing
SEC staff guidance primarily to give effect to SFAS 128.  Topic 4.D of SAB 98
essentially eliminates the cheap stock (convertible preferred stock, redeemable
convertible preferred stock, common stock and common equivalent shares issued by
the Company at prices below the initial public offering price during the twelve-
month period prior to the offering) calculation from an initial public offering.

The Company has excluded all convertible debt, convertible preferred stock,
warrants and employee stock options from the computation of basic and diluted
earnings per share because all such securities are anti-dilutive for all periods
presented.

The following table sets forth the computation of basic and diluted earnings per
share (in thousands except for per share data):

<TABLE>
<CAPTION>
                                                                        Three Months Ended March 31,
                                                                           1998                   1997
                                                                   -----------------      -----------------
<S>                                                                <C>                      <C>     
Net loss                                                                      $3,849                $ 2,325
                                                                   =================      =================
   Weighted average shares outstanding........................                 8,137                     75
                                                                   -----------------      -----------------
Shares used to compute basic and diluted net loss per share...                 8,137                     75
                                                                   -----------------      -----------------
Basic and diluted net loss per share..........................                $(0.47)               $(31.00)
                                                                   =================      =================
</TABLE>

Pro forma net loss per share for 1998 and 1997 has been computed as described
above and also gives effect, pursuant to SEC staff policy, to the conversion of
convertible preferred shares not included above that were converted upon
completion of the Company's initial public offering in June 1997 (using the "if
converted" method) from the original date of issuance.

                                       7
<PAGE>
 
Pro forma basic and diluted net loss per share information is as follows (in
thousands except for per share data):

<TABLE>
<CAPTION>
                                                                                    Three Months Ended
                                                                                      March 31, 1997
                                                                                    ------------------  
 <S>                                                                                <C>                     
Net loss.......................................................................           $2,325
                                                                                    ==================
Shares used in computing basic and diluted net loss per share..................               75
Adjusted to reflect assumed conversion of preferred stock from the date of       
 issuance......................................................................            3,370
                                                                                    ------------------
Shares used in computing pro forma basic and diluted loss per share............            3,445
                                                                                    ==================
Pro forma basic and diluted net loss per share.................................           $(0.67)
                                                                                    ==================
</TABLE>

                                       8
<PAGE>
 
                                 CARDIMA, INC.

                                   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.


DATE:   October 26, 1998                        CARDIMA, INC.



                                                /s/ Phillip C. Radlick, Ph.D.
                                                -------------------------------
                                                PHILLIP C. RADLICK, Ph.D.
                                                President, Chief Executive
                                                Officer and Director



                                                /s/   Ronald E. Bourquin
                                                -------------------------------
                                                RONALD E. BOURQUIN
                                                Vice President and Chief
                                                Financial Officer

                                      9