<PAGE>   1

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)
[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 0-27212


                                 ENDOCARE, INC.
             (Exact name of Registrant as specified in its charter)


             DELAWARE                                      33-0618093
  (State or other jurisdiction of                  (I.R.S. Employer I.D. No.)
  incorporation or organization)


                     7 STUDEBAKER, IRVINE, CALIFORNIA 92618
               (Address of principal executive office) (Zip Code)

                                 (949) 595-4770
              (Registrant's telephone number, including area code)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]

The number of shares of the Registrant's Common Stock, par value $.001 per
share, outstanding on August 10, 1998 was 10,438,354.

<PAGE>   2

                                 ENDOCARE, INC.
                     FORM 10-Q, QUARTER ENDED JUNE 30, 1998
                                      INDEX

<TABLE>
<CAPTION>
                                                                                       Page
                                                                                       ----
<S>                                                                                     <C>
                   Part I. Financial Information

Item 1      Financial Statements (unaudited)

               Condensed Statements of Operations for the fiscal quarter
               and six months ended June 30, 1998 and 1997                                3

               Condensed Balance Sheets at June 30, 1998
               and December 31, 1997                                                      4

               Condensed Statements of Cash Flows for the six months
               ended June 30, 1998 and 1997                                               5

               Notes to Financial Statements                                              6

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

Item 3      Quantitative and Qualitative Disclosures About Market Risk                 None

                   Part II. Other Information

Item 1      Legal Proceedings                                                            10

Item 2      Changes in Securities                                                        11

Item 3      Defaults Upon Senior Securities                                              11

Item 4      Submission of Matters to a Vote of Security Holders                          11

Item 5      Other Information                                                            12

Item 6      Exhibits and Reports on Form 8-K                                             12

Signature Page                                                                           13
</TABLE>

                                       2

<PAGE>   3

                          ITEM 1. FINANCIAL STATEMENTS

                                 ENDOCARE, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED               SIX MONTHS ENDED
                                           JUNE 30,                        JUNE 30,
                                 ---------------------------     ---------------------------
                                     1998            1997           1998             1997
                                 -----------     -----------     -----------     -----------
<S>                              <C>             <C>             <C>             <C>        
Revenues:
   Net product sales             $   318,909     $   229,165     $   708,978     $   888,000
   Revenue from collaborative
    agreements                       330,840          20,832         351,672          41,664
                                 -----------     -----------     -----------     -----------

           Total revenues            649,749         249,997       1,060,650         929,664

Costs and expenses:
   Cost of sales                     223,763         151,132         504,305         581,044
   Research and development          495,622         423,345         833,784         713,790
   Selling, general and
    administrative                 1,244,769         812,135       2,131,947       1,509,917
                                 -----------     -----------     -----------     -----------
           Total costs and
            expenses               1,964,154       1,386,612       3,470,036       2,804,751
                                 -----------     -----------     -----------     -----------

Loss from operations              (1,314,405)     (1,136,615)     (2,409,386)     (1,875,087)
Other income (expense), net           85,417          76,789         119,637          75,807
                                 -----------     -----------     -----------     -----------

Net loss                         $(1,228,988)    $(1,059,826)    $(2,289,749)    $(1,799,280)
                                 ===========     ===========     ===========     ===========

Net loss per share of common
 stock - basic and diluted       $      (.12)    $      (.13)    $      (.25)    $      (.23)
                                 ===========     ===========     ===========     ===========

Weighted average shares of
   common stock outstanding        9,952,000       8,195,853       9,166,000       7,817,451
                                 ===========     ===========     ===========     ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>   4

                                 ENDOCARE, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                           June 30, 1998     December 31, 1997
                                                           (Unaudited)
                                                           ------------      -----------------
<S>                                                        <C>                  <C>         
                                    ASSETS

Current assets:
   Cash and cash equivalents                               $  8,949,780         $  3,896,316
   Accounts receivable, net                                     239,420              376,141
   Inventories                                                  935,016              925,592
   Other current assets                                          68,620               64,237
                                                           ------------         ------------

           Total current assets                              10,192,836            5,262,286

Property and equipment, net                                     254,977              238,192
Other assets                                                     44,010               42,566
                                                           ------------         ------------

           Total assets                                    $ 10,491,823         $  5,543,044
                                                           ============         ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                        $    777,438         $    745,771
   Accrued liabilities                                        1,105,885              697,674
   Deferred revenues                                             65,000               83,333
                                                           ------------         ------------

           Total current liabilities                          1,948,323            1,526,778

Other liabilities
                                                                     --               83,339

Shareholders' equity:
   Common stock, $.001 par value                                 10,438                8,378
   Additional paid-in capital                                16,254,119            9,355,857
   Accumulated deficit                                       (7,721,057)          (5,431,308)
                                                           ------------         ------------

           Total shareholders' equity                         8,543,500            3,932,927
                                                           ------------         ------------

                Total liabilities and shareholders'
                 equity                                    $ 10,491,823         $  5,543,044
                                                           ============         ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>   5

                                 ENDOCARE, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                          SIX MONTHS ENDED JUNE 30,
                                         ---------------------------
                                            1998            1997
                                         -----------     ----------- 
<S>                                      <C>             <C>         
Cash flows from operating activities:
   Net loss                              $(2,289,749)    $(1,799,280)
   Adjustments to reconcile net loss
     to net cash used in operating
     activities:
      Depreciation and amortization           73,233          49,105
      Amortization of warrant value           39,522          38,713
      Other                                       --          70,663
   Changes in operating assets
     and liabilities:
      Accounts receivable                    136,721         397,011
      Inventories                             (9,424)       (559,647)
      Accounts payable                        31,667          49,311
      Accrued liabilities                    408,211          94,001
      Deferred revenue                      (101,672)        (41,664)
      Other                                   (5,827)        (21,861)
                                         -----------     ----------- 
Net cash used in operating activities     (1,717,318)     (1,723,648)
                                         -----------     ----------- 
Cash flows from investing activities:
   Purchases of property and equipment       (90,018)       (201,549)
                                         -----------     ----------- 
Net cash used in investing activities        (90,018)       (201,549)
                                         -----------     ----------- 
Cash flows from financing activities:
   Issuance of common stock                6,860,800       7,050,480
                                         -----------     ----------- 
Net cash provided by financing
   activities                              6,860,800       7,050,480
                                         -----------     ----------- 
Net increase in cash and cash
  equivalents                              5,053,464       5,125,283
Cash and cash equivalents, beginning
  of period                                3,896,316         476,854
                                         -----------     ----------- 
Cash and cash equivalents, end of
  period                                 $ 8,949,780     $ 5,602,137
                                         ===========     =========== 
Non-Cash Transactions:
   Conversion of note payable to
     common stock                        $        --     $   850,250
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>   6

                                 ENDOCARE, INC.
                          NOTES TO FINANCIAL STATEMENTS

1. Organization and Operations of the Company

   Endocare, Inc. (the "Company" or "Endocare") designs, manufactures, and
   markets an array of innovative, temperature-based surgical devices and
   technologies primarily to treat prostate diseases, including prostate cancer
   and prostate enlargement.

   Since its formation in 1990, Endocare operated first as a research and
   development department, then later as a division of Medstone International,
   Inc. ("Medstone"). Effective January 1, 1996, Endocare became a totally
   independent, publicly-owned corporation. At the beginning of 1996, Endocare
   issued 5,616,528 shares of Endocare common stock to Medstone in exchange for
   $500,000 cash and the accounts receivable, inventory, and other net assets of
   the Endocare Division. On February 6, 1996, Medstone distributed to existing
   Medstone shareholders a stock dividend of one share of Endocare common stock
   for each share of Medstone common stock outstanding on December 29, 1995.

2. Basis of Presentation

   The accompanying unaudited financial statements have been prepared by
   Endocare in accordance with Securities and Exchange Commission rules and
   regulations. In the opinion of Company management, the unaudited financial
   statements include all entries and adjustments necessary for a fair
   presentation.

   Effective January 1, 1998, the Company adopted Statement of Financial
   Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130),
   and intends to adopt Statement of Financial Accounting Standards No. 131,
   "Disclosures about Segments of an Enterprise and Related Information" (SFAS
   131) in 1998. Both standards may require financial statement disclosure, but
   will not have a material effect on the Company's financial position or
   results of operations. SFAS 130 establishes standards for the reporting and
   display of comprehensive income. No additional financial statement disclosure
   was required as a result of implementing SFAS 130 in the Company's interim
   1998 financial statements. SFAS 131 changes the way companies report segment
   information and requires segments to be determined and reported based on how
   management measures performance and makes decisions about allocating
   resources. SFAS 131 will first be reflected in the Company's 1998 Annual
   Report.

   These financial statements should be read in conjunction with the audited
   financial statements and other information included in the Company's Form
   10-K for the year ended December 31, 1997. Financial results for this interim
   period are not necessarily indicative of results to be expected for the full
   year 1998.

3. Use of Estimates

   The preparation of financial statements in conformity with generally accepted
   accounting principles requires management to make estimates and assumptions
   that affect the reported amounts of assets and liabilities at the date of the
   financial statements and the reported amounts of revenue and expenses during
   the reporting period. Actual results could differ from those estimates.

4.  Supplemental Financial Statement Data

<TABLE>
<CAPTION>
                                       June 30,    December 31,
                                         1998         1997
                                      ----------    --------
<S>                                   <C>           <C>     
           Inventories:
             Raw materials            $  541,085    $628,466
             Work in process              90,446      56,306
             Finished goods              303,485     240,820
                                      ----------    --------
                Total inventories     $  935,016    $925,592
                                      ==========    ========
          
</TABLE>

                                       6

<PAGE>   7

5. Net Loss Per Share

   The Company adopted Statement of Financial Accounting Standards No. 128,
   "Earnings Per Share" (SFAS 128) in the fourth quarter of 1997. SFAS 128
   simplifies the computation of earnings per share ("EPS") previously required
   in Accounting Principles Board (APB) Opinion No. 15, "Earnings Per Share," by
   replacing primary and fully diluted EPS with basic and diluted EPS. Under
   SFAS 128, basic EPS is calculated by dividing net earnings (loss) by the
   weighted-average common shares outstanding during the period. Diluted EPS
   reflects the potential dilution to basic EPS that could occur upon conversion
   or exercise of securities, options, or other such items, to common shares
   using the treasury stock method based upon the weighted-average fair value of
   the Company's common shares during the period. SFAS 128 was adopted by the
   Company in its year-end 1997 Annual Report, and the adoption of SFAS 128 did
   not result in a restatement of the Company's loss per share as previously
   reported for fiscal 1997 or 1996. In accordance with SFAS 128, the income
   (numerator), shares (denominator) and per share amount for the three months
   ended June 30, 1998 and 1997 are $(1,228,988), 9,952,000 and $(0.12) and
   $(1,059,826), 8,195,853, and $(0.13), respectively. The income (numerator),
   shares (denominator) and per share amount for the six months ended June 30,
   1998 and 1997 are $(2,289,749), 9,166,000 and $(0.25) and $(1,799,280),
   7,817,451 and $(.23), respectively. Dilutive options were 850,000 and 820,000
   for the three months ended June 30, 1998 and 1997, respectively, and 855,000
   and 827,000 for the six months ended June 30, 1998 and 1997, respectively. As
   the Company has been in a net loss position for the periods presented,
   dilutive options were not used to compute diluted loss per share as the
   effect was antidilutive. Consequently, diluted EPS are not presented as they
   equal basic EPS.

6. Bank Line of Credit

   In March 1998, Endocare entered into a one-year $1,000,000 line of credit
   with a bank which bears interest at prime plus 1%. The line of credit is
   secured by the Company's assets, excluding intellectual property, and is
   subject to certain financial and other covenants.

7. Common Stock

   In January 1997, Endocare sold 2,218,714 shares of common stock at a price of
   $3.50 per share in a private placement, with Oppenheimer & Co., Inc.
   ("Oppenheimer") acting as placement agent. After expenses, the net
   contribution to the Company's capital was approximately $7,050,000. In
   addition, under a borrowing facility with four partnerships managed by
   Technology Funding, Inc., the partnerships converted $750,000 principal
   amount and accrued interest into 320,000 shares of Endocare common stock.
   Also, 12,000 additional shares of common stock were issued to the
   Partnerships as an inducement to convert at that time.

   In April 1998, Endocare sold 2,000,000 shares of common stock at a price of
   $3.50 per share in a direct private placement. After estimated legal,
   accounting, filing fees and other associated expenses of approximately
   $150,000, the net contribution to the Company's capital was approximately
   $6,850,000.

                                       7

<PAGE>   8

ITEM 2.

                                 ENDOCARE, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following should be read in conjunction with the unaudited financial
statements and notes thereto included in Part I--Item 1, the audited financial
statements, and notes thereto, and Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the Annual Report on
Form 10-K for the fiscal year ended December 31, 1997.

General

Endocare designs, manufactures, and markets an array of innovative,
temperature-based surgical devices and technologies to treat prostate diseases,
including prostate cancer and prostate enlargement. In late 1995, Endocare began
marketing two new disposable product families, the Uroloop and Vaporbar
electrosurgical cutting elements. In May 1996, the Company introduced its new
CRYOcare cryosurgical system for the treatment of prostate cancer. In November
1996, Endocare signed a distribution agreement with Boston Scientific
Corporation granting that company exclusive world-wide marketing rights for
CRYOcare systems for urological applications.

Endocare currently is developing additional, innovative therapies for prostate
enlargement. The Company does not expect to be profitable in the near future
because of increased operating expenses from expanded research and development
efforts and support of clinical trials for products currently under development.

Since its formation in 1990, Endocare operated first as a research and
development department, then later as a division of Medstone International, Inc.
Effective January 1, 1996, Endocare was spun out and began operating as an
independent corporation.

Results of Operations

Product revenue for the three months ended June 30, 1998 increased 39% to
$319,000 compared to $229,000 in 1997. This increase was due primarily to an
incremental sale of a CRYOcare system for general surgery.

Product revenue for the six months ended June 30, 1998 decreased 20% to $709,000
compared to $888,000 in 1997. The decrease was attributed to a large initial
purchase by Boston Scientific Corporation of CRYOcare systems in the first
quarter of 1997. Such systems were used by Boston Scientific Corporation to
launch its market development efforts for CRYOcare systems for urological
applications.

Revenue from collaborative agreements for the three months ended June 30, 1998
increased to $331,000 compared to $21,000 in 1997. The increase was due to
additional licensing fees and the respective quarters' amortization of a
lump-sum payment from Boston Scientific Corporation based upon the distribution
agreement.

Revenue from collaborative agreements for the six months ended June 30, 1998
increased to $352,000 compared to $42,000 in 1997. The increase was due to the
reason described above.

Gross margin on product sales was 30% for the three months ended June 30, 1998,
compared to 34% in 1997. The decline in gross margin resulted primarily from
additional infrastructure and personnel costs associated with the Company's new
manufacturing facility in Irvine, California.

Gross margin on product sales for the six months ended June 30, 1998 was 29%
compared to 35% for the same period in 1997. The decrease is attributable to the
reasons described above.

Research and development expense increased 17% to $496,000 for the three months
ended June 30, 1998 compared to $423,000 for the corresponding period in 1997.
The increase reflects the investment the Company has made in the form of
additional personnel and related infrastructure to support general product
improvement and new product development efforts.


                                       8
<PAGE>   9

Research and development expense for the six months ended June 30, 1998
increased 17% to $834,000 compared to $714,000 for the same period in 1997. The
increase is attributable to the reasons described above.

Selling, general and administrative expense increased 53% to $1,245,000 for the
three months ended June 30, 1998, compared to $812,000 for the same period in
1997. The 1998 amount included costs for additional sales, marketing and
administrative personnel and related infrastructure.

Selling, general and administrative expense for the six months ended June 30,
1998 increased 41% to $2,132,000 compared to $1,510,000 in the same period in
1997. The increase is attributable to the reasons described above and costs
associated with Endocare's larger corporate facility which the Company moved
into in March 1997.

Other income (expense), net for the three months ended June 30, 1998 increased
to $85,000 compared to $77,000 in 1997. The increase is due to increased
interest income on a higher balance of cash and cash equivalents.

Other income (expense), net for the six months ended June 30, 1998 increased to
$120,000 compared to $76,000 in 1997. The increase is due to increased interest
income on a higher balance of cash and cash equivalents. Additionally, the six
months ended June 30, 1997 included $58,000 of interest expense and other
charges associated with conversion of notes payable to common stock.

Net loss for the three months ended June 30, 1998 was $1,229,000, or 12 cents
per share on 9,952,000 weighted average shares outstanding, compared to a net
loss of $1,060,000 or 13 cents per share on 8,196,000 weighted average shares
outstanding for the same period in 1997. The increase in net loss resulted from
higher research and development costs and higher selling, general and
administrative expenses.

Net loss for the six months ended June 30, 1998 was $2,290,000 or 25 cents per
share on 9,166,000 weighted average shares outstanding, compared to a net loss
of $1,799,000 or 23 cents per share on 7,817,000 weighted average shares
outstanding for the same period in 1997. The increase is attributable to the
reasons described above.

Liquidity and Capital Resources

At June 30, 1998, Endocare's cash and cash equivalents balance was $8,950,000,
compared to $3,896,000 at December 31, 1997. The increase in cash and cash
equivalents resulted from a cash infusion of $7,000,000 in April, 1998 from the
sale of 2,000,000 shares of common stock in a direct private placement.

Working capital has been used as Endocare's operations have increased in 1998.
Net accounts receivable decreased to $239,000 at June 30, 1998, compared to
$376,000 at December 31, 1997. Inventory increased to $935,000 at June 30, 1998,
compared to $926,000 at the beginning of the year. Additions to property and
equipment during the first six months of 1998 were approximately $90,000.
Working capital was provided as accounts payable and other current liabilities
increased to $1,948,000 from $1,527,000 at December 31, 1997.

At June 30, 1998, Endocare's net working capital was $8,245,000 and the ratio of
current assets to current liabilities was 5 to 1.

In March 1998, Endocare entered into a one-year $1,000,000 line of credit with a
bank which bears interest at prime plus 1%. The line of credit is secured by the
Company's assets, excluding intellectual property, and is subject to certain
financial and other covenants.

In April 1998, Endocare sold 2,000,000 shares of common stock at a price of
$3.50 per share in a direct private placement. After estimated legal,
accounting, filing fees and other associated expenses of approximately $150,000,
the net contribution to the Company's capital was approximately $6,850,000.

With the April 1998 cash infusion of approximately $7,000,000 from the sale of
its common stock, the Company believes that its existing cash resources,
anticipated cash flow from future operations, and its $1,000,000 bank line of
credit, will provide sufficient resources to meet present and reasonably
foreseeable working capital requirements and other cash needs for the next
twelve months. Insofar as the Company elects to undertake or accelerate
significant research and development projects for new products or pursue
corporate acquisitions, it may require additional outside financing prior to
such time.


                                       9
<PAGE>   10

Other Matters

Many existing software programs use only two digits to identify the year in the
date field. If such programs are not corrected, date data concerning the Year
2000 could cause many computer applications to fail, lock-up or generate
erroneous results. The Company is currently assessing the cost to remediate its
Year 2000 issues. Although the actual cost to remediate its Year 2000 issues is
not yet fully known, based upon information to date, it is not expected that the
remediation will have a material impact on the Company's financial condition or
operating results.

This Form 10Q contains forward looking statements. The Company's business and
results of operations are subject to risk and uncertainties including, but not
limited to, those discussed in the Company's Annual Report on Form 10-K and Form
S-3, filed with the Securities and Exchange Commission. Such risk factors
include, but are not limited to, limited operating history of the Company with a
history of losses; fluctuations in the Company's order levels; uncertainty
regarding market acceptance of the Company's new products; uncertainty of
product development and the associated risks related to clinical trials; the
Company's dependence on Boston Scientific Corporation as a distribution partner;
the rapid pace of technological change in the Company's industry; the Company's
limited sales, marketing and manufacturing experience; and, uncertainty relating
to third party reimbursement. The actual results that the Company achieves may
differ materially from any forward looking statements due to such risks and
uncertainties.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

        On November 27, 1996, Cryomedical Sciences, Inc. ("CMS") filed a
        complaint in the Circuit Court for Montgomery County, Maryland against
        the Company and Dr. Chang, the Company's then Vice President of Research
        and Development and former employee of CMS. The suit alleges that Dr.
        Chang breached his employment contract with CMS, that the Company
        tortiously interfered with the employment contract and the prospective
        business relations of CMS, misappropriated trade secrets and
        confidential information, and competed unfairly with and conspired
        against CMS. CMS is seeking injunctive relief and damages of at least
        $10,000,000 and punitive damages of $20,000,000. On September 23, 1997,
        the court granted Dr. Chang's motion (which the Company joined) to
        modify an earlier injunction prohibiting Dr Chang from performing
        services for the Company, based on the language contained in an
        employment agreement between Dr. Chang and CMS that ostensibly prohibits
        Dr. Chang from working for a CMS competitor. Under the modification
        obtained by Dr. Chang and the Company, Dr. Chang is entitled to provide
        consulting services to the Company in the area of stent technology,
        subject to certain restrictions and to periodic review of Dr. Chang's
        activities by a neutral third party. The Company is subject to the terms
        of this modified injunction, insofar as necessary to enforce the
        restrictions on Dr. Chang's activities. No other injunctive or other
        relief has been granted to CMS. On October 17, 1997, the Company filed a
        comprehensive motion for summary judgment seeking dismissal of all
        claims against it brought by CMS, on a variety of legal and undisputed
        factual grounds. Shortly thereafter, on November 4, 1997, the parties
        filed a request that the court stay all proceedings pending efforts to
        resolve the case through mediation. The parties are currently
        negotiating the terms of a settlement of the litigation. The Company
        continues to deny all allegations of wrongdoing in the complaint and
        intends to defend the litigation vigorously in the event that the
        settlement negotiations do not result in a negotiated solution of the
        case. However, the costs of defending the lawsuit could be material, and
        there can be no assurance that damages, which could have a material
        adverse effect on the Company, will not be assessed.

        The Company, in the normal course of business, is subject to various
        other legal matters. While the results of litigation and claims cannot
        be predicted with certainty, the Company believes that the final outcome
        of these other matters will not have a material adverse effect on the
        Company's results of operations or financial condition.


Item 2. Changes in Securities

        Stock Options

        During the period from April 1, 1998 through June 30, 1998, the Company
        granted stock options to 4 individuals covering an aggregate of 172,500
        shares of its common stock. All such options were granted at exercise
        prices equaling fair market value on the date of grant, vest over a four
        year period, and are exercisable over a ten year period. No
        consideration was paid for any of such options. Such grants were exempt
        from the registration requirement of the Securities Act as not involving
        the sale of a security.




                                       10
<PAGE>   11
Item 3. Defaults Upon Senior Securities

        None.

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

        The Company's Annual Meeting of Stockholders was held on June 4, 1998.
        Proposal 1, submitted to a vote of security holders at the meeting was
        the election of Directors. The following Directors, being all the
        Directors of the Company, were elected at the meeting, with the number
        of votes cast for or against each Director or withheld from each
        Director being set forth after his respective name:

<TABLE>
<CAPTION>
                         NAME            VOTES FOR       VOTES AGAINST      ABSTENTIONS
                                                          OR WITHHELD
<S>                                      <C>                   <C>            <C>   
                  Paul W. Mikus          8,705,943             0              62,136
                  Peter F. Bernardoni    8,705,943             0              62,136
                  Robert F. Byrnes       8,705,943             0              62,136
                  Benjamin Gerson,       8,705,943             0              62,136
                  M.D.
</TABLE>

        There were no broker non-votes recorded.

        Proposal 2, submitted to a vote of security holders at the meeting, was
        to approve the amendment of the Company's 1995 Stock Plan. Votes cast
        were as follows:

                 FOR      AGAINST     ABSTAIN       BROKER NON-VOTES

              4,690,075   604,287      36,209          3,437,508

        The proposal was approved.

        Proposal 3, submitted to a vote of security holders at the meeting, was
        to approve the amendment of the Company's 1995 Director Option Plan.
        Votes cast were as follows:

                 FOR      AGAINST     ABSTAIN       BROKER NON-VOTES

              4,880,784   410,493      39,294          3,437,508

        The proposal was approved.

        Proposal 4, submitted to a vote of security holders at the meeting, was
        to ratify the appointment of KPMG Peat Marwick LLP as the Company's
        independent auditors for fiscal year 1998. Votes cast were as follows:

                 FOR      AGAINST     ABSTAIN       BROKER NON-VOTES

              8,562,904    39,706     165,469              0

        The proposal was approved.

Item 5. Other Information

        None.


                                       11
<PAGE>   12

Item 6. Exhibits and Reports on Form 8-K

        (a)     Exhibits

                Exhibit 27   Financial Data Schedule

        (b)     Reports on Form 8-K

                On April 23, 1998, the Company filed a Form 8-K with the
                Securities and Exchange Commission dated April 15, 1998
                reporting the receipt of private placement funding commitments
                to purchase an aggregate of 2,000,000 shares of common stock at
                $3.50 per share for a total aggregate gross proceeds of
                $7,000,000 to the Company. The Form 8-K also reported the
                Company entering into a one year, $1,000,000 revolving bank line
                of credit. The line bears interest at a rate of prime plus one
                percent and is secured by all the Company's assets other than
                intellectual property rights.

                                       12
<PAGE>   13

                                   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.

                                      ENDOCARE, INC.

Date:  August 12, 1998                By: /s/ Paul W. Mikus
                                          --------------------------------------
                                          Paul W. Mikus
                                          Chief Executive Officer and President
                                          (Duly Authorized Officer )


                                      By: /s/ William R. Hughes
                                          --------------------------------------
                                          William R. Hughes
                                          Senior Vice President and
                                          Chief Financial Officer
                                          (Principal Financial and 
                                           Accounting Officer)


                                       13
<PAGE>   14

                                 EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit
Number         Description
------         -----------
<C>            <S>
  27           Financial Data Schedule
</TABLE>