<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 June 30, 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 July 31, 1998, there were 8,282,996 shares of Registrant's Common Stock
outstanding.
<PAGE>
 
                                 CARDIMA, INC.

                                     INDEX

PART I.  FINANCIAL INFORMATION.................................................3

 ITEM 1.  FINANCIAL STATEMENTS.................................................3
  Balance Sheets as of June 30, 1998 and December 31, 1997.....................3
  Statements of Operations for the three and six months ended 
    June 30, 1998 and 1997.....................................................4
  Statements of Cash Flows for the three and six months ended 
    June 30, 1998 and 1997.....................................................5
  Notes to financial statements................................................6

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

                                       2
<PAGE>
 
PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

                                 CARDIMA, INC.

                                BALANCE SHEETS
                      (In thousands except share amounts)
<TABLE>
<CAPTION>
                                                                                                       (1)
                                                                                        June 30,   December 31,
                                                                                          1998        1997
                                                                                       ----------- ----------- 
ASSETS                                                                                 (unaudited)
<S>                                                                                    <C>         <C>         
Current Assets:
   Cash and cash equivalents                                                            $  5,012    $  8,578
   Short-term investments                                                                     -        4,270
   Accounts receivable, net of allowances for doubtful accounts
    of $26 at June 30, 1998 and $40 at December 31, 1997                                     455         268
   Inventories                                                                             1,075         532
   Other current assets                                                                      233         261
                                                                                        --------    --------  
       Total current assets                                                                6,775      13,909

Property and equipment, net                                                                2,917       2,488
Restricted cash                                                                              170         192
Other assets                                                                                 724       1,085
                                                                                        --------    --------  
Total assets                                                                            $ 10,586    $ 17,674
                                                                                        ========    ======== 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                                     $  1,040    $    898
   Accrued compensation                                                                      768         753
   Other current liabilities                                                                  12          55
   Notes payable                                                                              -            7
   Capital lease obligation - current portion                                                717         587
                                                                                        --------    --------  
       Total current liabilities                                                           2,537       2,300

Deferred rent                                                                                 66          90
Capital lease obligation - noncurrent portion                                                856         840
Commitments
Stockholders' equity
   Common stock, $.001 par value; 25,000,000 shares authorized, 8,212,248 shares
    issued and outstanding at June 30, 1998, 8,103,875 at December 31, 1997; at       
    amount paid in                                                                        45,790      45,597
   Deferred compensation                                                                    (604)       (731)
   Accumulated deficit                                                                   (38,059)    (30,422)
                                                                                        --------    --------  
       Total stockholders' equity                                                          7,127      14,444
                                                                                        --------    --------  
Total liabilities and stockholders' equity                                              $ 10,586    $ 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  Six months ended
                                                                   June 30,           June 30,
                                                             -------------------  -----------------
                                                               1998      1997      1998       1997
                                                             -------    -------   -------   -------
<S>                                                          <C>        <C>       <C>       <C>

Net sales                                                    $   625    $   319   $ 1,126   $   536
Cost of goods sold                                               595        457     1,343       831
                                                             -------    -------   -------   -------  
   Gross profit                                                   30       (138)     (217)     (295)

Operating expenses:
   Research and development                                    1,908      1,059     3,571     1,869
   Selling, general and administrative                         1,980      1,646     4,027     2,976
                                                             -------    -------   -------   -------  
      Total operating expenses                                 3,888      2,705     7,598     4,845
                                                             -------    -------   -------   -------  
Operating loss                                                (3,858)    (2,843)   (7,815)   (5,140)

Interest  and other income                                       110        110       254       135
Interest expense                                                 (40)       (28)      (76)      (81)
                                                             -------    -------   -------   -------  

Net loss                                                     $(3,788)   $(2,761)  $(7,637)  $(5,086)
                                                             =======    =======   =======   =======  

Basic and diluted net loss per share                         $ (0.46)   $ (1.21)  $ (0.94)  $ (4.32)
                                                             =======    =======   =======   =======
Shares used in computing basic and diluted net loss per
 share                                                         8,186      2,280     8,160     1,178
                                                             =======    =======   =======   =======
</TABLE> 
                See accompanying notes to financial statements

                                       4
<PAGE>
 
                                 CARDIMA, INC.

                           STATEMENTS OF CASH FLOWS
                                (In thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                        Six Months ended
                                                                           June 30,
                                                                      --------------------
                                                                        1998       1997
                                                                      --------    --------
<S>                                                                   <C>         <C> 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                            $(7,637)    $(5,086)

  Adjustments to reconcile net loss to net cash provided by 
   operations:
    Depreciation and amortization                                         415         277
    Amortization of deferred compensation                                 127         101
    Loss on disposal of assets                                             12          -
  Changes in operating assets and liabilities:
    Accounts receivable                                                  (187)        (93)
    Inventories                                                          (543)       (209)
    Other current assets                                                   28         (70)
    Restricted cash                                                        22          20
    Other assets                                                          (17)        475
    Accounts payable                                                      142        (525)
    Accrued compensation                                                   15          60
    Other current liabilities                                             (43)         41
    Deferred rent                                                         (24)        (25)
                                                                      -------     ------- 
      Net cash used in operating activities                            (7,690)     (5,034)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of short-term investments                                    (517)          -
  Maturities and sales of short-term investments                        4,787           -
  Capital expenditures                                                   (342)       (717)
                                                                      -------     ------- 
    Net cash used in investing activities                               3,928        (717)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments under capital leases                                (332)       (210)
  Net proceeds from issuance of preferred stock                             -      13,442
  Payments under notes payable                                             (7)     (1,674)
  Net proceeds from sale of common stock                                  194      13,765
  Proceeds from sale/leaseback of capital equipment                       341           -
                                                                      -------     ------- 
    Net cash provided by financing activities                             196      25,323
                                                                      -------     ------- 

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                   (3,566)     19,572

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                          8,578         907
                                                                      -------     ------- 

CASH AND CASH EQUIVALENTS, END OF PERIOD                              $ 5,012     $20,479
                                                                      =======     =======
</TABLE> 

                                       5
<PAGE>
 
                                 CARDIMA, INC.

                         NOTES TO FINANCIAL STATEMENTS
                                 JUNE 30, 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 and six month periods ended June 30,
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>
                                                June 30,                   December 31,
                                                  1998                        1997/1/
                                           -----------------            -----------------
<S>                                           <C>                          <C>
Inventories:
      Raw materials                             $   218                      $   209
       Work-in-process                              403                          119
       Finished goods                               454                          204
                                                -------                      -------
                                                $ 1,075                      $   532
                                                =======                      =======
Property and equipment:              
       Equipment                                  4,512                        3,715
       Leasehold improvements                        99                           99
                                                -------                      -------
                                                $ 4,611                      $ 3,814
       Less accumulated depreciation             (1,694)                      (1,326)
                                                -------                      -------
                                                $ 2,917                      $ 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.   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 June 30,                Six Months Ended June 30,
                                                     1998                 1997                 1998                 1997
                                                --------------       --------------       --------------       --------------
<S>                                             <C>                  <C>                  <C>                  <C>
Net loss                                               $(3,788)             $(2,761)             $(7,637)             $(5,086)
                                                       =======              =======              =======              =======
   Weighted average shares outstanding....               8,186                2,280                8,160                1,178
                                                       -------              -------              -------              -------
Shares used to compute basic and diluted
 net loss per share.......................               8,186                2,280                8,160                1,178
                                                       =======              =======              =======              =======
Basic and diluted net loss per share......             $ (0.46)             $ (1.21)             $ (0.94)             $ (4.32)
                                                       =======              =======              =======              =======
</TABLE>

Pro forma net loss per share for 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 for the three and six
month periods ended June 30, 1997 is as follows (in thousands except for per
share data):

<TABLE>
<CAPTION>
                                                            Three Months Ended            Six Months Ended
                                                               June 30, 1997                June 30, 1997
                                                          ----------------------       ----------------------
<S>                                                       <C>                          <C>
Net loss................................................         $(2,761)                     $(5,086)
                                                                 =======                      =======
Shares used in computing basic and diluted net loss per          
 share..................................................           2,280                        1,178
Adjusted to reflect assumed conversion of preferred              
 stock from the date of issuance through June 1997......           4,153                        3,761
                                                                 -------                      -------
Shares used in computing pro forma basic and diluted             
 loss per share.........................................           6,433                        4,939
                                                                 =======                      =======
Pro forma basic and diluted net loss per share..........         $ (0.43)                     $ (1.03)
                                                                 =======                      =======
</TABLE>

4.   LINE OF CREDIT

In June 1998, the Company secured a $3.0 million line of credit which may be
used for general working capital purposes.  The payment of the line of credit is
interest only for the first six months, interest and principal for months seven
through thirty-six and a balloon payment at the end of the term, if fully
utilized.  As of June 30, 1998, $3.0 million of borrowing capacity remained
available to the Company under this line of credit.

                                       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, Chief Financial Officer and 
                               Secretary

                                      9