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

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)

Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:

|X| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-12

CARDIMA INC.
----------------------------------------------
(Name of Registrant as Specified in Its Charter)
----------------------------------------------

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X| No fee required.

|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:

- ---------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- ---------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

- ---------------------------------------------------------------

(4) Proposed maximum aggregate value of transaction:

- ---------------------------------------------------------------

(5) Total fee paid:

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|_| Fee paid previously with preliminary materials:

|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

(1) Amount previously paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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TABLE OF CONTENTS

Page

Introduction..................................................................1

Outstanding Securities and Voting Rights......................................1

Questions and Answers About the Meeting and Voting............................2

Security Ownership of Certain Beneficial Owners and Management................6

Executive Officers and Key Employees..........................................7

Indebtedness of Executive Officers and Directors.............................10

Family Relationships.........................................................10

Legal Proceedings............................................................10

The Board of Directors and Corporate Governance..............................11

Executive Compensation and Related Matters...................................13

Section 16(a) Beneficial Ownership Reporting Compliance......................17

Report of the Compensation Committee on Executive Compensation...............18

Item 1: Election of Directors..............................................21

Item 2: Increase of Authorized Shares Issuable Pursuant to
1997 Employee Stock Purchase Plan ...........................................23

Item 3: Ratification of the Selection of
Independent Registered Public Accounting Firm................................24

Item 4: Authorization of One-For-Ten Reverse Stock Split.....................26

Form 10-K....................................................................31

Deadline for Future Proposals of Stockholders................................31

Other Matters Which May Come Before the Annual Meeting.......................31

Solicitation of Proxies......................................................31

Cardima Inc.

NOTICE OF ANNUAL MEETING

and

PROXY STATEMENT

2006

CARDIMA INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held July 27, 2006

To the Stockholders of Cardima, Inc.:

You are cordially invited to the 2006 Annual Meeting of Stockholders of Cardima,
Inc., which will be held at 47266 Benicia Street, Fremont, California, on
Thursday, July 27, 2006 beginning at 11:00am, local time. The Annual Meeting
will be held for the following purposes:

1. To elect six members to our Board of Directors, each to hold office until the
2007 Annual Meeting or until his successor is elected and qualified (Proposal
1);

2. To increase the number of authorized shares of Common Stock issuable pursuant
to the 1997 Employee Stock Purchase Plan, as amended, from 1,750,000 to
2,500,000 shares (Proposal 2);

3. To ratify the selection of Marc Lumer & Company as our independent registered
public accounting firm for the fiscal year ending December 31, 2006 (Proposal
3);

4. To authorize our Board of Directors, in its discretion, to amend our
Certificate of Incorporation to effect a one-for-ten reverse stock split of the
issued and outstanding shares of Common Stock of the Company (Proposal 4); and

5. To transact such other business as may properly come before the meeting or
any postponements or adjournments of the meeting.

BECAUSE OF THE SIGNIFICANCE OF THESE PROPOSALS TO THE COMPANY AND ITS
STOCKHOLDERS, IT IS VITAL THAT EVERY SHAREHOLDER VOTES AT THE ANNUAL MEETING IN
PERSON OR BY PROXY.

These proposals are fully set forth in the accompanying Proxy Statement, which
you are urged to read thoroughly. For the reasons set forth in the Proxy
Statement, your Board of Directors recommends a vote "FOR" each of the
proposals. The Company intends to mail the Annual Report, Proxy Statement and
Proxy enclosed with this notice on or about June 20, 2006, to all stockholders
entitled to vote at the Annual Meeting. If you were a stockholder of record of
our common stock on June 15, 2006, the record date for the Annual Meeting, you
are entitled to vote at the meeting and any postponements or adjournments of the
meeting. Stockholders are cordially invited to attend the Annual Meeting.
However, whether or not you plan to attend the meeting in person, your shares
should be represented and voted. After reading the enclosed Proxy Statement,
please sign, date, and return promptly the enclosed proxy in the accompanying
postpaid envelope we have provided for your convenience to ensure that your
shares will be represented. If you do attend the meeting and wish to vote your
shares personally, you may revoke your Proxy.

We hope that you will use this opportunity to take an active part in our affairs
by voting on the business to come before the Annual Meeting, either by executing
and returning the enclosed Proxy Card or by casting your vote in person at the
meeting.

By Order of the Board of Directors,

Gabriel B. Vegh
Chief Executive Officer and Acting Chief Financial Officer

Fremont, California
June 9, 2006

Stockholders unable to attend the annual meeting in person are requested to date
and sign the enclosed proxy card as promptly as possible. A stamped envelope is
enclosed for your convenience. If a stockholder receives more than one proxy
card because he or she owns shares registered in different names or addresses,
each proxy card should be completed and returned.

CARDIMA INC.
47266 Benicia Street
Fremont, California 94538-7330
(510) 354-0300

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS
July 27, 2006

INTRODUCTION

This Proxy Statement is furnished to the stockholders by the Board of Directors
of Cardima Inc., for solicitation of proxies for use at the 2006 Annual Meeting
of Stockholders to be held at 47266 Benicia Street, Fremont, California, on
Thursday, July 27, 2006, at 11:00am., local time, and at any and all
adjournments of the meeting.

The purpose of the Annual Meeting and the matters to be acted upon are set forth
in the following Proxy Statement. As of the date of this Proxy Statement, our
Board of Directors knows of no other business, which will be presented for
consideration at the Annual Meeting. A stockholder giving a proxy pursuant to
this solicitation may revoke it at any time before it is exercised by submitting
a duly executed proxy bearing a later date or by delivering to our Secretary a
written notice of revocation prior to the Annual Meeting, or by appearing at the
meeting and expressing a desire to vote his or her shares in person. Subject to
such revocation, all shares represented by a properly executed proxy received
prior to or at the Annual Meeting will be voted by the proxy holders whose names
are set forth in the accompanying proxy in accordance with the instructions on
the proxy. If no instruction is specified with respect to a matter to be acted
upon, the shares represented by the proxy will be voted "FOR" the election of
the nominees for director and "FOR" each other matter set forth in this Proxy
Statement. If any other business properly comes before the meeting, votes will
be cast in accordance with the proxies in respect of any such other business in
accordance with the judgment of the persons acting under the proxies.

It is anticipated that the mailing to stockholders of this Proxy Statement and
the enclosed proxy will commence on or about June 20, 2006.

OUTSTANDING SECURITIES AND VOTING RIGHTS

Only stockholders of record at the close of business on the record date of June
15, 2006 are entitled to notice of and to vote at the Annual Meeting. At that
date there were 101,694,503 outstanding shares of our common stock, par value
$.001 per share, our only outstanding voting securities. At the Annual Meeting,
each share of common stock will be entitled to one vote.

The representation, in person or by properly executed proxy, of the holders of a
majority of the voting power of the shares of stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum for the transaction of
business at the meeting. Stockholders are not entitled to cumulate their votes.
Abstentions and broker non-votes (shares held by a broker or nominee which are
represented at the Annual Meeting, but with respect to which such broker or
nominee is not empowered to vote on a particular proposal) are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. In the election of directors, holders of Common Stock are entitled
to elect 6 directors with the 6 candidates who receive the highest number of
affirmative votes being elected. Votes against a candidate and broker non-votes
have no legal effect. In matters other than the election of directors,
abstentions have the effect of votes against a proposal in tabulations of the
votes cast on proposals presented to stockholders, while broker non-votes do not
have any effect for purposes of determining whether a proposal has been
approved.

QUESTIONS AND ANSWERS ABOUT
ABOUT THE MEETING AND VOTING

1. WHAT IS A PROXY?

It is your legal designation of another person to vote the stock that you own.
That other person is called a proxy. If you designate someone as your proxy in a
written document, that document also is called a proxy or a proxy card. Mr.
Gabriel Vegh, our President and Chief Executive Officer has been designated as a
proxy for the 2006 Annual Meeting of Stockholders.

2. WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?

The record date for the 2006 Annual Meeting of Stockholders is June 15, 2006.
The record date is established by our Board of Directors as required by Delaware
law and our By-laws. Stockholders of record (registered stockholders and street
name holders) at the close of business on the record date are entitled to:

(a) receive notice of the meeting; and

(b) vote at the meeting and any adjournments or postponements of the meeting.

3. WHAT IS THE DIFFERENCE BETWEEN A REGISTERED STOCKHOLDER AND A STOCKHOLDER WHO
HOLDS STOCK IN STREET NAME?

If your shares of stock are registered in your name on the books and records of
our transfer agent, you are a registered stockholder.

If your shares of stock are held for you in the name of your broker or bank,
your shares are held in street name. The answer to Question 14 describes
brokers' discretionary voting authority and when your bank or broker is
permitted to vote your shares of stock without instructions from you.

4. WHAT ARE THE DIFFERENT METHODS THAT I CAN USE TO VOTE MY SHARES OF COMMON
STOCK OR SERIES A STOCK?

(a) In Writing:

All stockholders of record can vote by mailing in their completed proxy card (in
the case of registered stockholders) or their completed vote instruction form
(in the case of street name holders).

(b) In Person:

All stockholders may vote in person at the meeting (unless they are street name
holders without a legal proxy).

5. HOW CAN I REVOKE A PROXY?

You can revoke a proxy prior to the completion of voting at the meeting by:

(a) giving written notice to our Secretary;

(b) delivering a later-dated proxy; or

6. ARE VOTES CONFIDENTIAL? WHO COUNTS THE VOTES?

We will hold the votes of each stockholder in confidence from directors,
officers and employees except:

(a) as necessary to meet applicable legal requirements and to assert or defend
claims for or against us;

(b) in case of a contested proxy solicitation;

(c) if a stockholder makes a written comment on the proxy card or otherwise
communicates his or her vote to management; or

(d) to allow the independent inspectors of election to certify the results of
the vote.

7. WHAT ARE THE VOTING CHOICES WHEN VOTING ON DIRECTOR NOMINEES, AND WHAT VOTE
IS NEEDED TO ELECT DIRECTORS?

When voting on the election of director nominees to serve until the 2007 Annual
Meeting of Stockholders, stockholders may:

(a) vote in favor of all nominees;

(b) vote to withhold votes as to all nominees; or

Directors will be elected by a plurality of the votes cast.

Our Board recommends a vote "FOR" all of the nominees.

8. WHAT ARE THE VOTING CHOICES WHEN VOTING ON THE INCREASE IN THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK ISSUABLE PURSUANT TO THE 1997 EMPLOYEE STOCK
PURCHASE PLAN FROM 1,750,000 to 2,500,000 SHARES, AND WHAT VOTE IS NEEDED TO
APPROVE?

When voting on the approval of the increase the number of authorized shares of
Common Stock issuable pursuant to the 1997 Employee Stock Purchase Plan from
1,750,000 to 2,500,000 shares, stockholders may:

(a) vote in favor of the increase;

(b) vote against the increase; or

The increase will be approved if the votes cast "FOR" are a majority of the
votes present at the meeting. The Board recommends a vote "FOR" the plan.

9. WHAT ARE THE VOTING CHOICES WHEN VOTING ON THE RATIFICATION OF THE SELECTION
OF MARC LUMER & COMPANY, AND WHAT VOTE IS NEEDED TO RATIFY ITS SELECTION?

When voting on the ratification of the selection of Marc Lumer & Company as our
independent registered public accounting firm, stockholders may:

(a) vote in favor of the ratification;

(b) vote against the ratification; or

The selection of the independent registered public accounting firm will be
ratified if the votes cast "FOR" are a majority of the votes present at the
meeting. The Board recommends a vote "FOR" this proposal.

10. WHAT ARE THE VOTING CHOICES WHEN VOTING TO AUTHORIZE OUR BOARD OF DIRECTORS,
IN ITS DISCRETION, TO AMEND OUR CERTIFICATE OF INCORPORATION TO EFFECT A
ONE-FOR-TEN REVERSE STOCK SPLIT WITHOUT FURTHER APPROVAL FROM OUR STOCKHOLDERS?

When voting to authorize our Board of Directors to amend our Certificate of
Incorporation to effectuate a one-for-ten reverse stock split, stockholders may:

(a) vote in favor of authorizing our Board of Directors to effect a reverse
split;

(b) vote against authorizing our Board of Directors to effect a reverse split;
or

The Board will be authorized, in its discretion, to effect a reverse split if
the votes cast "FOR" are a majority of the votes present at the meeting. The
Board recommends a vote "FOR" this proposal.

11. WHAT IF A STOCKHOLDER DOES NOT SPECIFY A CHOICE FOR A MATTER WHEN RETURNING
A PROXY?

Stockholders should specify their choice for each matter on the enclosed proxy.
If no specific instructions are given, proxies, which are signed and returned
will be voted FOR the election of all director nominees, FOR the increase the
number of authorized shares of Common Stock issuable pursuant to the 1997
Employee Stock Purchase Plan from 1,750,000 to 2,500,000 shares, FOR the
proposal to ratify the selection of Marc Lumer & Company, and FOR authorizing
our Board of Directors, in its discretion, to amend our Certificate of
Incorporation to effect a one-for-ten reverse stock split of the issued and
outstanding shares of Common Stock of the Company.

12. WHO IS ENTITLED TO VOTE?

You may vote if you owned stock as of the close of business on June 15, 2006.
Each share of our common stock is entitled to one vote. As of May 25, 2006, we
had 101,694,503 shares of common stock outstanding.

13. WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?

It means that you have multiple accounts with brokers or our transfer agent.
Please vote all of these shares. We recommend that you contact your broker or
our transfer agent to consolidate as many accounts as possible under the same
name and address. Our transfer agent is American Stock Transfer & Trust Company,
59 Maiden Lane, New York, New York 10038, or you can reach American Stock
Transfer & Trust Company at (212) 936-5100.

14. WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?

If your shares are registered in your name, they will not be voted unless you
submit your proxy card, or vote in person at the meeting. If your shares are
held in street name, your bank, brokerage firm or other nominee, under some
circumstances, may vote your shares.

Brokerage firms, banks and other nominees may vote customers' un-voted shares on
"routine" matters. Generally, a broker may not vote a customer's un-voted shares
on non-routine matters without instructions from the customer and must instead
submit a "broker non-vote." A broker non-vote is counted toward the shares
needed for a quorum, but it is not counted in determining whether a matter has
been approved.

15. ARE ABSTENTIONS AND BROKER NON-VOTES COUNTED?

Broker non-votes will not be included in vote totals and will not affect the
outcome of the vote. In matters other than the elections of directors,
abstentions have the effect of votes against a proposal in tabulations of the
votes cast on proposals presented to stockholders.

16. HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?

To hold the meeting and conduct business, a majority of our outstanding voting
shares as of June 15, 2006 must be present at the meeting. On this date, a total
of * shares of our common stock were outstanding and entitled to vote. Shares
representing a majority, or * votes, must be present. This is called a quorum.

Votes are counted as present at the meeting if the stockholder either:

(a) Is present and votes in person at the meeting, or

(b) Has properly submitted a proxy card.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as to the shares of our common stock
beneficially owned as of May 31, 2006 by (i) each person known to us to be the
beneficial owner of more than 5% of our common stock; (ii) each director and
nominee for director; (iii) each executive officer; and (iv) all of our
directors and executive officers as a group. Unless otherwise indicated in the
footnotes following the table, the persons as to whom the information is given
had sole voting and investment power over the shares of common stock shown as
beneficially owned by them. Unless otherwise indicated, the address of each
person shown is c/o Cardima Inc., 47266 Benicia Street, Fremont, California
94538-7330.

Percent of
Number Total
of Shares
Name and Address Shares Outstanding (1) (2)
------------------------------------------------------------------------------- ----------- -------------------

Gabriel B. Vegh (3) (4) 1,710,443 1.68%
Phillip Radlick, Ph.D. (3) 385,559 *
Rodolfo C. Quijano, Ph.D., M.D. (3) 120,666 *
Jesse D. Erickson (3) 117,666 *
Lawrence J. Siskind (3) 116,666 *
Tina Sim -- *
Tony Shum -- *
John R. Cheney -- *
Victor J. Barajas (3) 675,228 *
Eric K.Y. Chan, Ph.D. (3) 567,886 *
Andrew K. Lee 4,500 *
Apix International, Ltd. 154,833,333 161%
All Current directors and executive officers as a group (11 persons) 3,698,611 3.63%

* Less than one percent.

(1) Beneficial ownership is determined in accordance with the rules of the SEC.
In determining the number of shares beneficially owned by a person, options or
warrants to purchase common stock held by that person that are currently
exercisable, or become exercisable within 60 days following May 31, 2006, are
deemed outstanding; however, such shares are not deemed outstanding for purposes
of computing the percentage ownership of any other person. We believe that all
of the persons named in this table have sole voting and investment power with
respect to all shares of common stock shown as beneficially owned by them,
subject to community property laws where applicable and except as indicated in
the other footnotes to this table.

(2) Based on 101,694,503 shares of common stock were issued and outstanding as
of May 31, 2006.

(3) The amounts shown include shares of common stock which may be acquired
currently or within 60 days of March 31, 2006 through the exercise of options,
as follows: Mr. Vegh, 1,581,302 shares; Dr. Radlick, 385,559 shares; Dr.
Quijano, 120,666 shares; Mr. Erickson, 116,666 shares; Mr. Siskind, 116,666
shares; Dr. Chan, 507,866 shares; and Mr. Barajas, 626,825 shares.

(4) Includes 126,141 shares of common stock held by Mr. Vegh and his spouse,
Kathleen G. Vegh, as tenants in common and 3,000 shares held in a retirement
account for the benefit of Mr. Vegh's spouse.

(5) Includes 3,455,550 shares of common stock subject to stock options
exercisable currently or within 60 days of May 31, 2006.

EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table sets forth the names, ages and titles of our executive
officers and directors as of May 31, 2006:

Director
Name of Director Age Principal Occupation Since
----------------------------------- ------- --------------------------------------------------- ------------

Gabriel B. Vegh 66 Chief Executive Officer, 1992
Acting Chief Financial Officer and
Chairman of our Board of Directors
Jesse D. Erickson 74 Retired Executive of Kaiser Aluminum and 2001
Retired Director and Chairman of the Investment
Committee of S.H. Cowell Foundation
Rodolfo C. Quijano, Ph.D., M.D. 70 Chief Technical Officer of 3F Therapeutics, Inc. 1999
Phillip Radlick, Ph.D. 68 Independent Consultant 1994
Lawrence J. Siskind 53 Partner, Harvey Siskind Jacobs LLP 2001
John R. Cheney 48 Director, Apix International Limited 2006
Tony K. Shum 37 Business Development Executive, HSBC 2006
Tina Sim 37 Independent Consultant 2006
Andrew K. Lee 35 Financial Consultant, Asia Peak Holdings Limited 2006

Mr. Gabriel B. Vegh, our founder, has been our Chief Executive Officer since
June 2000, Acting Chief Financial Officer since June 2005 and Chairman of our
Board of Directors since May 2001. Mr. Vegh has been one of our directors since
November 1992, and served as our President from June 2000 to May 2001. He was
our Executive Vice President from January 1995 until June 2000, and our Chief
Operating Officer from November 1994 through January 1995. Mr. Vegh was our
President from May 1993 through November 1994. Prior to joining us, from August
1985 until May 1993, Mr. Vegh was the Vice President, Operations of Target
Therapeutics, Inc., which is now a division of Boston Scientific Corporation.
From February 1983 until August 1985, Mr. Vegh was General Manager, Pilot
Operations of Advanced Cardiovascular Systems, Inc., which is now a division of
Boston Scientific Corporation. Mr. Vegh received a B.S. in Mechanical
Engineering from the New Jersey Institute of Technology.

Mr. Jesse D. Erickson has been one of our directors since May 2001. Mr. Erickson
was the President of the S. H. Cowell Foundation, a private charitable
foundation in San Francisco, from 1991 to 1998. He then served as director and
chairman of the investment committee of the S. H. Cowell Foundation until 2001
when he retired. Mr. Erickson worked for Kaiser Aluminum & Chemical Corporation
for 32 years, holding various executive positions including President of Kaiser
Aluminum International, Chief Administrative Officer and Sheet and Plate
Division Manager. He retired from Kaiser in 1989 as a Senior Vice President. Mr.
Erickson received a B.S. in Business and Chemical Engineering from the
Massachusetts Institute of Technology.

Dr. Rodolfo C. Quijano has been one of our directors since November 1999. Dr.
Quijano is a founder of VenPro, Inc. and served as its Chief Technical Officer
from 1997 to 2003, and has been Chief Technical Officer of 3F Therapeutics, Inc.
since 1998. Dr. Quijano serves on the Board of Directors of Orqis, Inc.
(formerly ForeFlow, Inc.), of which he is also the founder. Previously, Dr.
Quijano was the General Manager of Hepatix, AG, from 1993 to 1994 and from 1987
to 1993 was the Vice President of Research and Development, Regulatory Affairs
and Clinical Research for the Edwards Cardiovascular Surgery Division of Baxter
Healthcare. Dr. Quijano received a B.S. in Chemistry from the University of
Alabama and a Ph.D. from the University of Central America.

Dr. Phillip Radlick has been one of our directors since November 1994. Dr.
Radlick is currently an independent consultant in the healthcare industry. Dr.
Radlick served as President and Chief Executive Officer of Lipid Sciences, Inc.,
a publicly held biotechnology company, from June 2000 until October 2002. Dr.
Radlick was our President and Chief Executive Officer from November 1994 to June
2000. Prior to joining us, from November 1992 until October 1994, Dr. Radlick
was the President and Chief Executive Officer of Hepatix, Inc., a start-up
medical device company. From November 1986 until November 1992, Dr. Radlick was
the President of Edward's Cardiovascular Surgery Division, a division of Baxter
Healthcare responsible for the development, manufacture and sale of
cardiovascular products. Dr. Radlick received a B.S. in Chemistry and a Ph.D. in
Organic Chemistry from the University of California, Los Angeles.

Mr. Lawrence J. Siskind has been one of our directors since December 2001. Mr.
Siskind is currently a partner of Harvey Siskind Jacobs LLP, a law firm in San
Francisco, California where he specializes in litigation, registration and
transactional advice regarding domestic and international copyrights,
trademarks, trade secrets and unfair competition. Mr. Siskind was appointed by
President Reagan in 1987 to serve as the nation's first Special Counsel for
Immigration Related Unfair Employment Practices, returning to private practice
in 1989. In 1996, former California Governor Pete Wilson appointed Mr. Siskind
to serve as a charter member of the State Commission on Academic Content and
Performance Standards. In 1998, former Governor Wilson appointed Mr. Siskind to
his Advisory Council on Electronic Commerce. Mr. Siskind received a B.A. from
Harvard University and a J.D. from Harvard Law School.

Mr. John R. Cheney has been one of our directors since February 2006. Mr. Cheney
is a corporate consultant based in Hong Kong since January 2001. Mr. Cheney is
also a director and shareholder of Apix International Limited. Mr. Cheney was
previously the Chairman and CEO of a Hong Kong based telecommunications and
Internet Services Company. Prior to his business career, Mr. Cheney was a
corporate lawyer in private practice qualified in Hong Kong, Canada and Britain.

Mr. Tony K. Shum has been one of our directors since February 2006. Mr. Shum is
a Business Development Executive for the global banking group HSBC since
February 2006. From February 2001 to January 2006, Mr. Shum worked as a
consultant providing business strategy and analysis services in Asia Pacific and
Europe for businesses ranging from start-up ventures to multi-national
corporations. Also Mr. Shum worked for Walt Disney Television International
where he helped to establish its broadcast television business in the
Asia-Pacific region. Mr. Shum is a Chartered Accountant and worked for Deloitte
& Touche in Canada and Price Waterhouse in Hong Kong.

Ms. Tina Sim has been one of our directors since February 2006. Ms. Sim is
currently semi-retired. Ms. Sim is a Chartered Accountant and a CFA Charter
holder. From 1992 until 1995, Ms. Sim worked for Deloitte & Touche in Canada.
From 1997 to 1999, Ms. Sim worked for Deloitte Touche Tohmatsu in Hong Kong. Ms.
Sim's background includes advisory work on general accounting, tax and
regulatory matters and cross-border jurisdictional issues.

Mr. Andrew K. Lee has been one of our directors since April 2006. Mr. Lee has
served as the financial consultant to Asia Peak Holdings Limited since 2003. His
main responsibilities include identifying and evaluating investment
opportunities around the world and conducting risk assessment, asset valuation
and due diligence activities. From 2001 to 2003, Mr. Lee was a valuation manager
at Deloitte & Touche in San Francisco, where he specialized in advising
multinational corporations regarding the taxation of related party transactions
and conducting valuation of intangible assets. Prior to working at Deloitte &
Touche, Mr. Lee worked for Arthur Andersen as a senior associate in the Tax &
Advisory Group.

Executive Officers

In addition to Mr. Vegh, our Chief Executive Officer, whose information appears
above, set forth below are each of our other executive officers. There are no
family relationships among any of our directors or executive officers.

Mr. Victor Barajas (age 42) was appointed as Senior Vice President of Operations
in October 2001 and has been responsible for all operations and manufacturing
activity as our Vice President of Operations since August 1997. From September
1995 until August 1997, Mr. Barajas was our Director of Operations, from May
1994 until September 1995, Mr. Barajas was our Manager of Operations, and from
June 1993 until May 1994, Mr. Barajas was one of our senior engineers. Prior to
joining us, from 1990 until June 1993, Mr. Barajas was Process Development
Engineer and then Project Leader and Manager of the Engineering Department for
Target Therapeutics, Inc., which is now a division of Boston Scientific
Corporation. From 1988 until 1990, Mr. Barajas was employed by Critikon, Inc. as
a Research and Design/Manufacturing Engineer in the medical disposables area.
Mr. Barajas received his B.S. degree in Industrial Technology from San Jose
State University.

Mr. Eric Chan, Ph.D., F.E.S.C. (age 48) has been our Vice President of Product
Development since June 1998. Prior to joining us, from August 1991 to March
1993, Mr. Chan was the Director of Engineering and from April 1993 to May 1998,
Vice President of Engineering at Arrhythmia Research Technology, Inc. where he
coordinated and directed the development of computerized cardiac
electrophysiology and catheter lab systems, digital Holter and high-resolution
ECG systems. Mr. Chan received his B.S.E.E. from Purdue University, his M.S.E.
in Biomedical Engineering from the University of Texas at Austin, and his Ph.D.
in Biomedical Engineering from the University of Texas at Austin. Mr. Chan
completed the Global Bio-Executive Program at the University of California,
Berkeley, Haas School of Business, in 2005. Mr. Chan was elected a Fellow of the
European Society of Cardiology and a Senior Member of the Institute of
Electrical and Electronic Engineers in 2003.

INDEBTEDNESS OF EXECUTIVE OFFICERS
AND DIRECTORS

In December 1997, we entered into a $300,000 note receivable agreement with
Phillip Radlick, Ph.D., one of our Directors and then President and Chief
Executive Officer, to facilitate the purchase of a principal residence in the
Bay Area. The note bears interest at the minimum Applicable Federal Rate and was
due and payable in a single lump sum forty-eight months from the note date. In
August 2001, the Board of Directors amended Dr. Radlick's agreement to extend
this loan until the first of (i) the date that Dr. Radlick no longer serves as a
member of our Board of Directors, (ii) the date when Dr. Radlick sells such
residence and (iii) December 16, 2005. As security for the note, Dr. Radlick
granted us a security interest in his vested stock options. At December 31,
2005, the balance of the loan was approximately $357,085, including
approximately $78,585 of accrued interest. The loan balance is fully reserved as
of the end of December 31, 2005 due to no repayment having been made. No
interest was accrued after December 31, 2004.

In June 2000, we entered into a note receivable agreement with William Wheeler,
our President and Chief Operating Officer, to facilitate the purchase of a
principal residence in the Bay Area. The note calls for an initial payment by us
of $142,500 with an additional $5,000 per month up to a maximum of $300,000. The
note bears interest at the minimum Applicable Federal Rate was due and payable
in a single lump sum 60 months from the note date. The Board of Directors
amended Mr. Wheeler's agreement by granting Mr. Wheeler a $75,000 bonus in May
2001 in lieu of further additional monthly payments to him. As security for the
note, Mr. Wheeler granted us a security interest in his vested stock options. At
December 31, 2005, the balance of the loan was approximately $217,531, including
approximately $25,031 of accrued interest. The loan balance is fully reserved as
of the end of December 31, 2005 due to no repayment having been made. No
interest was accrued after December 31, 2004.

We have entered into indemnification agreements with our officers and directors
containing provisions which may require us, among other things, to indemnify our
officers and directors (other than liabilities arising from willful misconduct
of a culpable nature) and to advance their expenses incurred as a result of any
proceeding against them as to which they could be indemnified.

We believe that the foregoing transactions were in our best interests. It is our
current policy that all transactions by us with officers, directors, 5%
stockholders or their affiliates will be entered into only if such transactions
are approved by a majority of the disinterested directors (or the Audit
Committee of our Board of Directors as required under applicable laws and
listing standards), and are on terms no less favorable to us than could be
obtained from unaffiliated parties.

FAMILY RELATIONSHIPS

There are no family relationships among our executive officers and directors.

LEGAL PROCEEDINGS

The company is currently not a party to any material legal proceedings.
Notwithstanding the foregoing, we have entered into several agreements with
parties to act as its our financial advisors, finders or agents in connection
with actual and proposed equity financings, which provided that we pay cash fees
and issue warrants to purchase shares of our common stock to these parties in
connection with our financings. While the Company currently believes that the
ultimate outcome of these proceedings will not have a material adverse event on
our results of operations, litigation is subject to inherent uncertainties, and
unfavorable rulings could occur. Depending on the amount and timing, an
unfavorable outcome of some or all of these matters could have a material
adverse effect on the Company's cash flows, business, results of operations or
financial position. An estimate of potential loss from pending proceedings
cannot be made at this time.

THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Our Board of Directors is responsible for establishing broad corporate policies
and for overseeing our overall management. In addition to considering various
matters, which require Board approval, the Board provides advice and counsel to,
and ultimately monitors the performance of, our senior management.

We have established an Audit Committee, a Compensation Committee, and a
Nominating Committee. The Board, its committees and our management strive to
perform and fulfill their respective duties and obligations in a responsible and
ethical manner. The Board, the Audit Committee, the Compensation Committee, and
the Nominating Committee each perform annual self-evaluations. We have adopted a
comprehensive Code of Business Conduct and Ethics for all directors, officers
and employees. The Code of Business Conduct and Ethics is available at our
website, www.cardima.com.

During 2005, the Board of Directors met six times. To the extent that a nominee
was a member of the Board of Directors in 2005, each nominee for director
attended 100% of the Board of Directors meetings and the meetings of Board
committees on which he served. While we do not have a formal policy requiring
members of the Board to attend the Annual Meeting of Stockholders, we strongly
encourage all directors to attend.

Committees of the Board

Audit Committee. We have a separately designated standing Audit Committee of our
Board of Directors. The Audit Committee of the Board of Directors (1) selects
the independent registered public accounting firm to be retained to audit our
financial statements and (2) monitors the effectiveness of the audit effort, our
financial and accounting organization and our system of internal accounting
controls. Our Board of Directors has adopted a written charter for the Audit
Committee.

During the fiscal year ended December 31, 2005, our Audit Committee consisted of
three directors: Mr. Jesse D. Erickson (Chairperson), Dr. Rodolfo C. Quijano and
Mr. Lawrence J. Siskind, all of whom meet the independence requirements for
Audit Committee membership under Rule 10A-3 of the Securities Exchange Act of
1934. On May 26, 2006, we appointed the following directors to serve on our
Audit Committee: Ms. Tina Sim (Chairperson), Mr. Tony Shum and Mr. Andrew Lee,
all of whom meet the independence requirements for Audit Committee membership
under Rule 10A-3 of the Securities Exchange Act of 1934. Our Board of Directors
has determined that Ms. Tina Sim, Mr. Tony Shum and Mr. Andrew Lee all qualify
as an "audit committee financial expert" as defined by the rules of the
Securities and Exchange Commission.

The Audit Committee conducted four formal meetings and conferred on an informal
basis on numerous occasions in 2005.

Compensation Committee. The Compensation Committee of the Board of Directors (1)
administers and makes recommendations concerning our policies on salaries and
incentive compensation, stock option awards to employees and consultants and
otherwise determines compensation levels and (2) performs such other functions
regarding compensation as the Board of Directors may delegate. During the fiscal
year ended December 31, 2005, our Compensation Committee consisted of two
non-employee directors: Dr. Phillip Radlick and Mr. Jesse D. Erickson. No member
of the Compensation Committee or executive officer of the Company has a
relationship that would constitute an interlocking relationship with executive
officers or directors of any other entity. Dr. Phillip Radlick, a member of the
Compensation Committee during the fiscal year ended December 31, 2005, was our
President and Chief Executive Officer from November 1994 to June 2000. In
December 1997, we entered into a note receivable agreement with Dr. Radlick,
which was subsequently amended in August 2001. See "Certain Transactions" for
information concerning Dr. Radlick's note receivable agreement. On May 26, 2006,
we appointed Mr. John R. Cheney to serve on our Compensation Committee,
replacing Mr. Jesse D. Erickson.

The Compensation Committee conducted one formal meeting and conferred on an
informal basis on numerous occasions in 2005.

Nominating Committee. The Nominating Committee of the Board of Directors (1)
establishes criteria for membership on the Board of Directors and assists the
Board of Directors in identifying individuals qualified to become members of the
Board of Directors and (2) facilitates the annual review of the performance of
the Board of Directors and its committees. Our Board of Directors has adopted a
written charter for the Nominating Committee of the Board of Directors. During
the fiscal year ended December 31, 2005, the Nominating Committee consisted of
two directors: Mr. Lawrence J. Siskind and Dr. Phillip Radlick, both of whom are
"independent directors" within the meaning of Rule 4200 of the NASD. On May 26,
2006, we appointed the following directors to serve on our Nominating Committee:
Mr. John R. Cheney, Ms. Tina Sim, and Dr. Phillip Radlick, all of whom are
"independent directors" within the meaning of Rule 4200 of the NASD.

The Nominating Committee conducted one formal meeting and conferred on an
informal basis on numerous occasions in 2005.

Stockholder Nominations

Our Bylaws contain provisions, which address the process by which a stockholder
may nominate an individual to stand for election to the Board of Directors at
our Annual Meeting of Stockholders. To date, we have not received any
recommendations from stockholders requesting the considerations of a candidate
for inclusion among the slate of nominees in our proxy statement. The Nominating
Committee's current policy is to consider stockholder recommendations of
candidates for election to the Board of Directors, which comply with applicable
laws, listing standards and the stockholder nomination process set forth in our
Bylaws. The qualifications and standards the Nominating Committee will consider
in evaluating any recommendations for nomination, including stockholder
recommendations, to the Board of Directors include, but are not limited to:

o roles and contributions valuable to the business community,

o personal qualities of leadership, character and judgment, and whether the
candidate possesses a reputation in the community at large of integrity, trust,
respect, competence and adherence to high ethical standards,

o relevant knowledge and diversity of background and experience in areas such as
business, manufacturing, technology, medicine, finance and accounting,
marketing, international business and government,

o whether the candidate has the time required for preparation, participation and
attendance at meetings, and

o requirements relating to composition of the Board of Directors under
applicable law and listing standards.

The Nominating Committee's goal is to assemble a Board of Directors comprised of
individuals who have distinguished records of leadership and success and who
will make substantial contributions to the Board of Directors. Stockholder
recommendations requesting the consideration of a candidate for inclusion among
the slate of nominees in our proxy statement must be delivered to, or mailed and
received by our Secretary at our executive offices not less than 120 days prior
to the proposed date of our annual meeting of stockholders. If less than 100
days notice of the date of the annual meeting of stockholders is given or made
to stockholders, any stockholder recommendation must be received no later than
the 7th day following the day on which such notice of the date of the annual
meeting is mailed.

Director Compensation

Directors currently receive no cash fees for services provided in that capacity
but are reimbursed for reasonable expenses incurred in connection with
attendance at meetings of the Board of Directors. Our 1997 Directors' Stock
Option Plan (the "Directors' Plan") provides that each person who becomes a
non-employee director of the Company will be granted a non-statutory stock
option to purchase 20,000 shares of Common Stock on the date on which such
person first becomes our non-employee director. This initial grant becomes
exercisable as to 25% of the shares subject to the grant per year through the
fourth anniversary of the date of grant. In addition, the Directors' Plan
provides that on the date of each annual meeting of our stockholders at which
such director is re-elected, each such continuing non-employee director shall be
granted an additional option to purchase 52,000 shares of Common Stock if, on
such date, he or she shall have served on the Board of Directors for at least
three months during the current fiscal year, and such option will become
exercisable in full on the first anniversary of the date of grant.

On June 16, 2005, we granted each of Mr. Jesse D. Erickson, Dr. Rodolfo C.
Quijano, Mr. Lawrence J. Siskind and Dr. Phillip Radlick, options to purchase
52,000 shares of our Common Stock. These grants have an exercise price of $0.10
per share, were made under our 1997 Directors' Stock Option Plan and the options
would be fully vested on the first anniversary of the date of grant.

See "Summary Compensation Table" and "Option/SAR Grants in Last Fiscal Year" for
information concerning compensation relating to Mr. Vegh's services as Chairman
and Chief Executive Officer.

Our Amended and Restated 2003 Stock Option Plan provides that the vesting and
exercisability of all outstanding options shall be accelerated to twice the
number of vested shares of Common Stock underlying any such option immediately
prior to such acceleration, and the remaining unvested options following such
acceleration shall be assumed or substituted by the surviving entity in the
event of a change in control. In the event that such outstanding options are not
assumed or substituted, the exercisability of all outstanding options shall be
accelerated. Members of our Board of Directors and our officers currently hold
options granted under our Amended and Restated 2003 Stock Option Plan.

Our 1997 Directors' Stock Option Plan and our 1993 Stock Option Plan provide
that options shall become fully vested and exercisable as to all shares granted
under these plans in the event that a change in control of the Company occurs.
Members of our Board of Directors and our officers currently hold options
granted under both our 1997 Directors' Stock Option Plan and our 1993 Stock
Option Plan.

See "Employment Agreements and Change in Control Arrangements" for information
concerning change in control arrangements relating to Mr. Vegh's services as
Chairman and Chief Executive Officer.

EXECUTIVE COMPENSATION AND RELATED MATTERS

The table below sets forth certain information regarding the annual and
long-term compensation for services by the named executive officers to us in all
capacities for the fiscal years ended December 31, 2005, 2004, and 2003,
respectively.

Summary Compensation Table

Annual Long-Term
Compensation Compensation
Awards
-------------------------------------------- -------------------

Other Securities
Annual Underlying All Other
Name & Principal Position Year Salary (1) Bonus (2) Compensation Options/SARs (#) Compensation
- ---------------------------------------------- ------------ -------------- ---------------- ------------------------------------

Gabriel B. Vegh 2005 $ 256,361 $ - $ - 500,000 3,136 (5)

Chief Executive Officer and 2004 $ 274,997 $ - $ - 500,000 486 (5)

Chairman of the Board of Directors 2003 $ 285,574 $ 50,000 $ - 500,000 522 (5)

William K. Wheeler (3) 2005 $ 167,258 $ - $ - --- 516 (6)

President and 2004 $ 249,995 $ - $ - 250,000 390 (6)

Chief Operating Officer 2003 $ 259,610 $ 25,000 $ - 250,000 390 (6)

Victor J. Barajas 2005 $ 163,096 $ - $ - 300,000 206 (6)

Senior Vice President, Operations 2004 $ 183,997 $ - $ - 175,000 390 (6)

2003 $ 191,074 $ 30,000 $ - 175,000 390 (6)

Eric K.Y. Chan, Ph.D. 2005 $ 160,833 $ - $ - 250,000 305 (6)

Vice President, Product Development 2004 $ 180,003 $ - $ - 150,000 390 (6)

2003 $ 186,926 $ 25,000 $ - 150,000 390 (6)

Barry D. Michaels (4) 2005 $ 135,303 $ - $ 31,588 (7) --- 9,540 (8)

Interim Chief Financial Officer 2004 $ 308,232 $ - $ 49,836 (9) 100,000 13,591 (8)

2003 $ 143,052 $ 35,000 $ $25,867 (10) 100,000 $ -

(1) Includes amounts deferred under the Company's 401(k) plan.

(2) Amounts paid as bonuses for services rendered are reported for the year in
which they were earned even if they were paid in the following year. Prior to
2004, we reported bonus amounts in the year they were paid rather than the year
in which they were earned.

(3) Mr. Wheeler resigned in July 2005.

(4) Mr. Michaels joined the Company as Interim Chief Financial Officer in July
2003 and resigned in June 2005.

(5) Includes amounts paid for life insurance premiums and sport club discounts.
Prior to 2005, we reported life insurance premiums based on their taxable value
rather than the actual amounts paid.

(6) Includes amounts paid for life insurance premiums. Prior to 2005, we
reported life insurance premiums based on their taxable value rather than the
actual amounts paid.

(7) Includes $9,912 in housing expenses, $13,339 in travel expenses, and $8,337
in payroll tax reimbursements.

(8) Includes amounts reimbursed for medical, dental and vision insurance
premiums.

(9) Includes $$21,583 in housing expenses, $17,081 in travel expenses, and
$11,172 in payroll tax reimbursements.

(10) Includes $11,210 in housing expenses, $8,967 in travel expenses, and $5,690
in payroll tax reimbursements.

Option/SAR Grants in Fiscal Year Ended December 31, 2005

The following table summarizes stock option grants during fiscal year 2005 to
our Chief Executive Officer and our other Named Executive Officers.

Potential Realizable
Value at Assumed
Number of Percent of annual Rates of Stock
Shares Total Options Exercise or Price Appreciation
Underlying Granted to Base Price for Option Term (4)
Options Employees in per Share Expiration ---------------------
Granted (#)(1) Fiscal 2005 (2) ($/Sh) (3) Date 5% ($) 10% ($)
----------------------------------- -------------- -------------- ------------- ----------- ---------- --------

Gabriel B. Vegh 500,000 35.0% $ 0.06 11/10/15 $ 18,867 $ 47,812
William K. Wheeler --- ---% $ --- --- $ --- $ ---
Victor J. Barajas 300,000 21.0% $ 0.06 11/10/15 $ 11,320 $ 28,687
Eric K. Y. Chan, Ph.D. 250,000 17.5% $ 0.06 11/10/15 $ 9,433 $ 23,906
Barry D. Michaels --- ---% $ --- --- $ --- $ ---

(1) These options vest in equal monthly installments over a four-year period
commencing on the date of grant, except that no options are exercisable or
vested for the first 6 months after the date of grant.

(2) We granted stock options representing 1,431,000 shares of our Common Stock
to employees in the last fiscal year.

(3) The exercise price of each option was equal to 100% of the fair market value
of the Common Stock on the date of grant.

(4) The potential realizable value of each grant of options has been calculated,
pursuant to the regulations promulgated by the SEC, assuming that the market
price of the Common Stock appreciates in value from the date of grant to the end
of the option term at the annualized rates of 5% and 10%, respectively. These
values do not represent our estimate or projection of future Common Stock value.
There can be no assurance that any of the value reflected in the table will be
achieved.

Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

The following table sets forth certain information with respect to stock options
exercised by our Chief Executive Officer and our other Named Executive Officers
during the fiscal year ended December 31, 2005. In addition, the table sets
forth the number of shares covered by stock options as of the fiscal year ended
December 31, 2005 and the value of "in-the-money" stock options, which
represents the positive spread between the exercise price of a stock option and
the market price of the shares subject to such option at the end of the fiscal
year ended December 31, 2005.

Number of Value of
Unexercised Unexercised
Options/ In-the-Money
SARs at Fiscal Options/SARs
Shares Value Year End (#) at Fiscal Year End ($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable (1) Unexercisable (2)
------------------------------------- -------------- ------------ -------------------- ------------------

Gabriel B. Vegh 0 0 1,729,643 / 947,9 --- / ---
William K. Wheeler 0 0 957,000 /267,479 --- / ---
Victor J. Barajas 0 0 547,266 /482,006 --- / ---
Eric K. Y. Chan, Ph.D. 0 0 455,355 /384,885 --- / ---
Barry D. Michaels 0 0 --- / --- --- / ---

(1) Includes those options for which the fair market value of the
underlying securities at December 31, 2005 ($ 0.045 per share) is less than
the exercise price.

(2) Based on the $ 0.045 per share closing price of the Company's Common
Stock on the Nasdaq Over-the-Counter Bulletin Board on December 31, 2005,
less the exercise price of the options.

Equity Compensation Plan Information

The following table sets forth information as of the end of December 31, 2005
with respect to compensation plans under which our equity securities are
authorized for issuance.

Number of Securities Weighted-Average Number of Securities
to be Issued upon Exercise Price of Remaining Available
Exercise of Outstanding Outstanding options, for Future
Options, Restricted Restricted stock Issuance Under
Stock Units and Units and Equity Compensation
Plan Category (1) Performance Units A Performance Units B Compensation Plans
---------------------------------------------------- ----------------------- --------------------- ---------------------

Equity compensation plans approved by security
holders (2) 7,557,035 $ 0.92 5,900,531
Equity compensation plans not approved by security
holders (3) -- -- --

---------------------- --------------------- ---------------------

Total 7,557,035 $ 0.92 5,900,531

(1) The table does not include information for our employee benefit plans
and our subsidiaries intended to meet the qualification requirements of
Section 401(a) of the Internal Revenue Code and foreign employee benefit
plans which are similar to Section 401(a) plans.

(2) Consists of four plans: the 2003 Stock Option Plan, the 1993 Stock
Option Plan, the 1997 Director's Stock Option Plan and the 1997 Employee
Stock Purchase Plan.

(3) We do not have any equity compensation plan not approved by security
holders.

Employment Contracts and Change in Control Arrangements

Mr. Vegh is party to an employment agreement dated November 5, 2004, which
supersedes a prior agreement dated August 30, 2000. The agreement provides for a
salary of not less than $275,000 for Mr. Vegh's services as Chairman and Chief
Executive Officer and accelerated vesting of all of Mr. Vegh's options issued
prior to the date of the agreement in the event of a "Change in Control" of the
Company (as such term is defined in the agreement) and the acceleration of Mr.
Vegh's options granted after the date of the agreement by the same number of
months of completed months of vesting for such options. In addition, Mr. Vegh is
eligible for an annual bonus to be determined by the Board of Directors. In the
event Mr. Vegh is terminated for other than for "Cause" (as such term is defined
in the agreement), Mr. Vegh will receive his base salary and the Company's
standard benefits package for an additional 36 months, will receive a bonus for
each of the three Company fiscal years coinciding with or immediately following
his termination based upon the average bonus he received in the preceding three
years prior to his termination, will have his stock options vest on an
accelerated basis as described above, and will have ninety days from the date of
termination of his employment to exercise his vested options.

Mr. Barajas is party to an employment agreement dated November 5, 2004, which
supersedes a prior agreement dated August 30, 2000. The agreement provides for a
salary of not less than $184,000 for Mr. Barajas' services as Senior Vice
President, Operations, and accelerated vesting of all of Mr. Barajas' options
issued prior to the date of the agreement in the event of a "Change in Control"
of the Company (as such term is defined in the agreement) and the acceleration
of Mr. Barajas' options granted after the date of the agreement by the same
number of months of completed months of vesting for such options. In addition,
Mr. Barajas is eligible for an annual bonus to be determined by the Board of
Directors. In the event Mr. Barajas is terminated for other than for "Cause" (as
such term is defined in the agreement), Mr. Barajas will receive his base salary
and the Company's standard benefits package for an additional 12 months, will
receive a bonus for the Company fiscal year coinciding with or immediately
following his termination based upon the average bonus he received in the
preceding two years prior to his termination, will have his stock options vest
on an accelerated basis as described above, and will have ninety days from the
date of termination of his employment to exercise his vested options.

Dr. Chan is party to an employment agreement dated November 5, 2004, which
supersedes a prior agreement dated August 30, 2000. The agreement provides for a
salary of not less than $180,000 for Dr. Chan's services as Vice President,
Product Development, and accelerated vesting of all of Dr. Chan's options issued
prior to the date of the agreement in the event of a "Change in Control" of the
Company (as such term is defined in the agreement) and the acceleration of Dr.
Chan's options granted after the date of the agreement by the same number of
months of completed months of vesting for such options. In addition, Dr. Chan is
eligible for an annual bonus to be determined by the Board of Directors. In the
event Dr. Chan is terminated for other than for "Cause" (as such term is defined
in the agreement), Dr. Chan will receive his base salary and the Company's
standard benefits package for an additional 12 months, will receive a bonus for
the Company fiscal year coinciding with or immediately following his termination
based upon the average bonus he received in the preceding two years prior to his
termination, will have his stock options vest on an accelerated basis as
described above, and will have ninety days from the date of termination of his
employment to exercise his vested options.

Certain Relationships and Related Transactions

In December 1997, we entered into a $300,000 note receivable agreement with
Phillip Radlick, Ph.D., one of our Directors and then President and Chief
Executive Officer, to facilitate the purchase of a principal residence in the
Bay Area. The note bears interest at the minimum Applicable Federal Rate and was
due and payable in a single lump sum forty-eight months from the note date. In
August 2001, the Board of Directors amended Dr. Radlick's agreement to extend
this loan until the first of (i) the date that Dr. Radlick no longer serves as a
member of our Board of Directors, (ii) the date when Dr. Radlick sells such
residence and (iii) December 16, 2005. As security for the note, Dr. Radlick
granted us a security interest in his vested stock options. At December 31,
2005, the balance of the loan was approximately $357,085, including
approximately $78,585 of accrued interest. The loan balance was fully reserved
as of the end of December 31, 2005 due to no repayment having been made. No
interest was accrued after December 31, 2004.

In June 2000, we entered into a note receivable agreement with William Wheeler,
our President and Chief Operating Officer, to facilitate the purchase of a
principal residence in the Bay Area. The note calls for an initial payment by us
of $142,500 with an additional $5,000 per month up to a maximum of $300,000. The
note bears interest at the minimum Applicable Federal Rate was due and payable
in a single lump sum 60 months from the note date. The Board of Directors
amended Mr. Wheeler's agreement by granting Mr. Wheeler a $75,000 bonus in May
2001 in lieu of further additional monthly payments to him. As security for the
note, Mr. Wheeler granted us a security interest in his vested stock options. At
December 31, 2005, the balance of the loan was approximately $217,531, including
approximately $25,031 of accrued interest. The loan balance was fully reserved
as of the end of December 31, 2005 due to no repayment having been made. No
interest was accrued after December 31, 2004.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Under the Exchange Act, our directors, our executive officers, and any persons
holding more than 10% of our common stock are required to report their ownership
of the common stock and any changes in that ownership to the Commission.
Specific due dates for these reports have been established and we are required
to report in this Proxy Statement any failure to file by these dates during the
fiscal year ended December 31, 2005.

To our knowledge, based solely on our review of the copies of such reports
received or written representations from certain Reporting Persons that no other
reports were required, we believe that during our fiscal year ended December 31,
2005, all Reporting Persons timely filed all such reports other than (i) Jesse
D. Erickson who filed one late Form 4 in connection with an option granted under
the 1997 Directors' Stock Option Plan; (ii) Rodolfo C. Quijano, Ph.D. who filed
one late Form 4 in connection with an option granted under the 1997 Directors'
Stock Option Plan; (iii) Phillip Radlick, Ph.D. who filed one late Form 4 in
connection with an option granted under the 1997 Directors' Stock Option Plan;
(iv) Lawrence J. Siskind who filed one late Form 4 in connection with an option
granted under the 1997 Directors' Stock Option Plan; (v) Victor J. Barajas who
filed one late Form 4 in connection with an option grant under the Amended and
Restated 2003 Stock Option Plan, (vi) Eric K. Y. Chan, Ph.D. who filed one late
Form 4 in connection with an option grant under the Amended and Restated 2003
Stock Option Plan, (vii) Gabriel B. Vegh who filed one late Form 4 in connection
with an option grant under the Amended and Restated 2003 Stock Option Plan.

The following report shall not be deemed incorporated by reference by any
general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this report by
reference, and shall not otherwise be deemed filed under such Acts..

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The following is a report of the Compensation Committee of the Board of
Directors describing the compensation policies applicable to our executive
officers during the fiscal year ended December 31, 2005. The Compensation
Committee is responsible for establishing and monitoring our general
compensation policies and our compensation plans, as well as the specific
compensation levels for executive officers. Executive officers who are also
directors have not participated in deliberations or decisions involving their
own compensation.

General Compensation Policy

Under the supervision of the Board of Directors, our compensation policy is
designed to attract and retain qualified key executives critical to our growth
and long-term success. It is the objective of the Board of Directors to have a
portion of each executive's compensation contingent upon our performance as well
as upon the individual's personal performance. Accordingly, each executive
officer's compensation package is comprised of two elements: (1) base salary,
which reflects individual performance and expertise, and (2) long-term
stock-based incentive awards, which are designed to strengthen the mutual
interests of the executive officers and our stockholders. Additionally, some
executives are eligible for variable bonus awards payable in cash, which are
tied to the achievement of certain performance goals that the Board of Directors
establishes from time to time for us.

The summary below describes in more detail the factors, which the Board of
Directors considers in establishing each of the three primary components of the
compensation package provided to the executive officers.

Base Salary

The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies which
compete with us for business and executive talent, and the incentives necessary
to attract and retain qualified management. Base salary may be adjusted each
year to take into account the individual's performance and to maintain a
competitive salary structure. Our performance does not play a significant role
in the determination of base salary.

Cash-Based Incentive Compensation

Cash bonuses are awarded on a discretionary basis to executive officers on the
basis of their success in achieving designated individual goals and our success
in achieving specific Company-wide goals, such as customer satisfaction, revenue
growth and earnings growth.

Long-Term Incentive Compensation

We have utilized our stock option plan to provide executives and other key
employees with incentives to maximize long-term stockholder values. Awards under
this plan by the Board of Directors take the form of stock options designed to
give the recipient a significant equity stake in us and thereby closely align
his or her interests with those of our stockholders. Factors considered in
making such awards include the individual's position in our organization, his or
her performance and responsibilities and internal comparability considerations.

To date, each option grant allows the executive officer to acquire shares of
Common Stock at a fixed price per share (the fair market value on the date of
grant) over a specified period of time (up to 10 years). The options typically
vest in periodic installments over a four-year period, contingent upon the
executive officer's continued employment with us. Accordingly, the option will
provide a return to the executive officer only if he or she remains in our
service, and then only if the market price of our Common Stock appreciates over
the option term.

Compensation of the Chief Executive Officer

Gabriel B. Vegh has served as our Chief Executive Officer since June 2000. His
base salary for fiscal 2005 was $275,000. Additional compensation paid to Mr.
Vegh included a stock option grant based on his performance to objectives as set
by the Board of Directors.

The factors discussed above in "Base Salary," "Cash-Based Incentive
Compensation," and "Long-Term Incentive Compensation" were applied by the
Compensation Committee in establishing the amount of Mr. Vegh's salary, stock
option grant and bonus. Mr. Vegh did not participate in any decisions related to
his compensation. Significant factors the Compensation Committee considered in
establishing Mr. Vegh's compensation included his individual performance, the
achievement of specific objectives, and the compensation of chief executive
officers of other companies in the medical device industry, taking into account
relative company size and stage of development. The Compensation Committee felt
that Mr. Vegh's performance and effort contributed to our progress over the last
year and exercised its judgment in awarding the salary and bonus shown in the
Summary Compensation Table.

Deductibility of Executive Compensation

The Compensation Committee has considered the impact of Section 162(m) of the
Internal Revenue Code adopted under the Omnibus Budget Reconciliation Act of
1993, which section disallows a deduction for any publicly held corporation for
individual compensation exceeding $1 million in any taxable year for the CEO and
four other most highly compensated executive officers, respectively, unless such
compensation meets the requirements for the "performance-based" exception to
Section 162(m). As the cash compensation paid by us to each of our executive
officers is expected to be below $1 million and the Committee believes that
options granted under our 1993 Stock Option Plan and our 2003 Stock Option Plan
to such officers will meet the requirements for qualifying as performance-based,
the Committee believes that Section 162(m) will not affect the tax deductions
available to us with respect to the compensation of our executive officers. It
is the Committee's policy to qualify, to the extent reasonable, its executive
officers' compensation for deductibility under applicable tax law. However,
Cardima may from time to time pay compensation to its executive officers that
may not be deductible.

Compensation Committee

Jesse D. Erickson
Phillip Radlick, Ph.D.

AUDIT COMMITTEE REPORT TO STOCKHOLDERS

The Audit Committee of the Board of Directors operates under a written charter
adopted by the Board of Directors. The members of the Audit Committee are Mr.
Jesse D. Erickson, Dr. Rodolfo C. Quijano and Mr. Lawrence J. Siskind. All
members of the Audit Committee meet the independence standards of the NASD
listing requirements. In accordance with its written charter, the Audit
Committee assists the Board of Directors in fulfilling its responsibility for
oversight of our quality and integrity of our accounting, auditing and financial
reporting practices.

Our management is responsible for the financial statements and reporting
process, including the system of internal controls. Our independent registered
public accounting firm are responsible for performing an audit of our financial
statements and expressing an opinion as to their conformity with generally
accepted accounting principles. The Audit Committee oversees and reviews these
processes and has reviewed and discussed the financial statements with
management and our independent registered public accounting firm. The members of
the Audit Committee are not, however, our employees, and are not providing any
expert assurance or professional certification regarding our financial
statements.

In discharging its oversight responsibility as to the audit process, the Audit
Committee obtained from the independent registered public accounting firm a
formal written statement describing all relationships between the independent
registered public accounting firm and us that might bear on the auditors'
independence consistent with Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees." The Audit Committee discussed
with the independent registered public accounting firm any relationships that
may impact their objectivity and independence and satisfied itself as to that
firm's independence.

The Audit Committee discussed and reviewed with the independent registered
public accounting firm all communications required by generally accepted
accounting standards, including those described in Statement on Auditing
Standards No. 61, as amended, "Communication with Audit Committees." In
addition, the Audit Committee, with and without management present, discussed
and reviewed the results of the independent registered public accounting firm's
examination of the financial statements. The Audit Committee also discussed with
our management and our independent registered public accounting firm the
processes used to support certifications by our Chief Executive Officer and
Chief Financial Officer that are required by the SEC and the Sarbanes-Oxley Act
of 2002 to be filed with and accompany our periodic filings with the SEC.

Based upon Audit Committee's discussion with management and the independent
registered public accounting firm and the Audit Committee's review of the
representation of management and the report of the independent registered public
accounting firm to the Audit Committee, the Audit Committee recommended to the
Board of Directors include the audited consolidated financial statements in its
Annual Report on Form 10-K for the year ended December 31, 2005 for filing with
the SEC. The Audit Committee also recommended the selection, subject to
stockholder approval, of the independent registered public accounting firm and
the Board of Directors concurred in such recommendation.

Audit Committee

Jesse D. Erickson
Rodolfo C. Quijano, Ph.D., M.D.
Lawrence J. Siskind

PROPOSAL 1: ELECTION OF DIRECTORS

Pursuant to our Bylaws, the holders of our common stock, may elect our 6
directors. All nominees have advised us that they are able and willing to serve
as directors. However, if any nominee is unable to or for good cause will not
serve, the persons named in the accompanying proxy will vote for any other
person nominated by our Board of Directors.

Except as set forth below, no arrangement or understanding exists between any
nominee and any other person or persons pursuant to which any nominee was or is
to be selected as a director or nominee.

The Board of Directors Recommends a Vote "FOR" the Election of the Nominees
Listed Below.

The following table sets forth the names and ages of the nominees of our Board
of Directors.

Director
Name of Director Age Principal Occupation Since
- ----------------------------------- ------- --------------------------------------------------- ------------

Gabriel B. Vegh 66 Chief Executive Officer, 1992
Acting Chief Financial Officer and
Chairman of our Board of Directors
Phillip Radlick, Ph.D. 68 Independent Consultant 1994
John R. Cheney 48 Director, Apix International Limited 2006
Tony K. Shum 37 Business Development Executive, HSBC 2006
Tina Sim 37 Independent Consultant 2006
Andrew K. Lee 35 Financial Consultant, Asia Peak Holdings Limited 2006

The principal occupations for the past five years (and, in some instances, for
prior years) of each of our directors are as follows:

corporations. Also Mr. Shum worked for Walt Disney Television International
where he helped to establish its broadcast television business in the
Asia-Pacific region. Mr. Shum is a Chartered Accountant and worked for Deloitte
& Touche in Canada and Price Waterhouse in Hong Kong.

PROPOSAL 2: APPROVAL OF THE INCREASE IN AUTHORIZED SHARES ISSUABLE UNDER OUR
1997 EMPLOYEE STOCK PURCHASE PLAN

In March 1997, the Board of Directors adopted the 1997 Employee Stock Purchase
Plan, as amended, and has reserved 1,750,000 shares of common stock for issuance
under the purchase plan. The purchase plan is intended to provide an opportunity
for eligible employees of the Company and its designated subsidiaries to acquire
common stock on a favorable basis. The purchase plan is implemented by a series
of offering periods of twelve months duration, with two consecutive purchase
periods of six months in duration. New offering periods commence on or about
February 1 and August 1 of each year (or at such other time or times as may be
determined by the Board of Directors). Through periodic payroll deductions,
which may not exceed $25,000 per offering period or 10% of any employee's
compensation, eligible employees may purchase common stock at a price equal to
the lower of: (i) 85% of the fair market value of the common stock on the
offering date; or (ii) 85% of the fair market value of the common stock on the
purchase date. As of December 31, 2005, 1,503,204 shares of common stock have
been issued under the purchase plan. In 2005, 2004, and 2003, a total of
286,045, 264,364, and 253,591 shares were issued under the plan, respectively.

The Board recommends a vote FOR the proposal to increase the authorized shares
issuable under our 1997 Employee Stock Purchase Plan from 1,750,000 to
2,500,000.

PROPOSAL 3: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

The Board of Directors is seeking stockholder ratification of the selection of
Marc Lumer & Company by the Audit Committee of the Board of Directors to serve
as our independent registered public accounting firm for the fiscal year ending
December 31, 2006. Marc Lumer & Company served as our independent registered
public accounting firm with respect to the audit of our financial statements for
the fiscal year ended December 31, 2005.

Stockholder ratification of the selection of Marc Lumer & Company as our
independent registered public accounting firm is not required by our Bylaws or
otherwise. However, the Board is submitting the selection of Marc Lumer &
Company to our stockholders for ratification as a matter of good corporate
practice. If our stockholders fail to ratify the selection, the Audit Committee
will reconsider whether or not to retain the firm. Even if the selection is
ratified, the Audit Committee in their discretion may direct the appointment of
a different independent accounting firm at any time during the year if they
determine that such a change would be in our best interests and the best
interests of our stockholders.

Our former independent accountant, BDO Seidman LLP (the "Former Accountant"),
resigned as the independent registered public accounting firm for Cardima on
October 17, 2005.

The reports of the Former Accountant on the financial statements of the Company
for each of the two most recent fiscal years, did not contain an adverse opinion
or disclaimer of opinion and was not qualified or modified as to uncertainty,
audit scope or accounting principles for the two most recent fiscal years,
except that the Former Accountant's opinion in its report on the Company's
financial statements for each of the last two fiscal years expressed substantial
doubt with respect to the Company's ability to continue as a going concern.

During the Company's two most recent fiscal years and the subsequent interim
period through the date of resignation, there were no reportable events as the
term is described in Item 304(a)(1)(iv) of Regulation S-B.

During the Company's two most recent fiscal years and the subsequent interim
period through the date of resignation, there were no disagreements with the
Former Accountant on any matters of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which, if not
resolved to the satisfaction of the Former Accountant would have caused it to
make reference to the subject matter of the disagreements in connection with its
reports on these financial statements for those periods.

The Company did not consult with Marc Lumer & Company regarding the application
of accounting principles to a specific transaction, either completed or
proposed, or the type of audit opinion that might be rendered on the Company's
financial statements, and no written or oral advice was provided by Marc Lumer &
Company that was a factor considered by the Company in reaching a decision as to
the accounting, auditing or financial reporting issues.

The following table sets forth the aggregate fees billed or to be billed to us
by Marc Lumer & Company for the fiscal year ended December 31, 2005:

2005
----------
Audit Fees (1) $ 25,987
Audit-Related Fees (2) --
Tax Fees (3) --
All Other Fees --
----------
Total $ 25,987
==========

(1) Audit Fees consist of fees billed for professional services rendered for
the audit of the Company's consolidated annual financial statements and
review of the interim consolidated financial statements included in
quarterly reports, as well as services normally provided by our principal
accounting firm in connection with statutory and regulatory filings or
engagements, including registration statements.

(2) Audit-Related Fees consist of fees billed for assurance and related
services that are reasonably related to the performance of the audit or
review of the Company's consolidated financial statements and are not
reported under "Audit Fees."

(3) Tax Fees consist of fees billed for professional services rendered for tax
compliance, tax advice and tax planning (domestic and international). These
services include assistance regarding federal, state and international tax
compliance, acquisitions and international tax planning. None is provided
by our principal accounting firm.

Pre-Approval Policies and Procedures

All services performed by Marc Lumer & Company were pre-approved by the Audit
Committee in accordance with its pre-approval policy. Our Audit Committee
approves the terms and fees of all audit and permissible non-audit services by
our independent registered public accounting firm in advance of the provision of
any such services.

The Board recommends a vote FOR the ratification of the selection of Marc Lumer
& Company as independent auditors.

PROPOSAL 4: TO AUTHORIZE OUR BOARD OF DIRECTORS, IN ITS DISCRETION, TO AMEND OUR
CERTIFICATE OF INCORPORATION TO EFFECT A ONE-FOR-TEN REVERSE STOCK SPLIT WITHOUT
FURTHER APPROVAL FROM OUR STOCKHOLDERS

Our Board of Directors is seeking approval of an amendment to our certificate of
incorporation to give the Board authorization to effect a 1-for-10 reverse split
of our issued and outstanding common stock, without further approval of our
stockholders, upon a determination by our Board that such a reverse stock split
is in the best interests of our company and our stockholders at any time before
our next annual meeting of stockholders. If the proposed 1-for-10 reverse stock
split is approved at the annual meeting and the Board of Directors elects to
effect the proposed reverse stock split, each stockholder would receive one new
share of common stock for every ten shares of common stock previously held.
Immediately after the reverse stock split, the aggregate value of the
stockholder's stock would be unchanged, but he or she would hold one-tenth as
many shares, with each share having ten times its pre-split value.

The Board of Directors reserves the right, even after stockholder approval, to
forego or postpone the filing of the amendment if it determines such action is
not in our best interests or the best interest of our stockholders. If the
amendment is adopted and filed with the Delaware Secretary of State, there will
be no change in the number of authorized shares of our common stock.

Reasons for Board Recommendation

If the Board of Directors determines that a reverse stock split is in our best
interests or in the best interests of our stockholders, we would like the
authority to proceed with a reverse stock split without further authorization of
our stockholders. Also our Board of Directors has determined that it would be
advisable to obtain the approval of our stockholders to effect a reverse stock
split that would reduce the number of shares of our outstanding common stock
should it become necessary to increase the trading price of our common stock on
the Over-the-Counter Bulletin Board on a per share basis, or for other reasons
as may develop. We believe that if we are successful in maintaining a higher
stock price, our common stock may generate greater interest among professional
investors and institutions. If we are successful in generating interest among
such entities, we anticipate that our shares of common stock would have greater
liquidity and a stronger investor base. The company share price may increase
sufficiently without a need for such a reverse split.

If the Board of Directors determines that a reverse stock split is in our best
interests or in the best interests of our stockholders, we would like the
authority to proceed with a reverse stock split without further authorization of
our stockholders. Such a requirement may become desirable with minimal time to
respond. Obtaining stockholder approval of a reverse stock split at the annual
meeting of stockholders will enable us to avoid the additional time and expense
of holding a special meeting of stockholders should our Board of Directors
determine that it is in our best interest to implement a reverse stock split. As
a result, our Board of Directors will be able to determine the most appropriate
time, if ever, to effectuate a reverse stock split. Finally, notwithstanding
approval of the reverse stock split proposal by our stockholders, our Board of
Directors may elect to delay or even abandon entirely a reverse stock split if
it determines such action is not in the best interests of our company or our
stockholders.

Potential Disadvantages to the Reverse Stock Split

Reduced Market Capitalization. As noted above, the principal purpose of the
reverse stock split would be to help increase the market price of our common
stock. We cannot assure you that the reverse stock split will accomplish this
objective. While we expect that the reduction in our outstanding shares of
common stock will increase the market price of our common stock, we cannot
assure you that the reverse stock split will increase the market price of our
common stock by a multiple equal to the number of pre-split shares in the
reverse split ratio determined by the Board of Directors, which will be ten, or
result in any permanent increase in the market price, which can be dependent
upon many factors, including our business and financial performance and
prospects. Should the market price decline after the reverse stock split, the
percentage decline may be greater, due to the smaller number of shares
outstanding, than it would have been prior to the reverse stock split. In some
cases the stock price of companies that have effected reverse stock splits has
subsequently declined back to pre-reverse split levels. Accordingly, we cannot

assure you that the market price of our common stock immediately after the
effective date of the proposed reverse stock split will be maintained for any
period of time or that the ratio of post- and pre-split shares will remain the
same after the reverse stock split is effected, or that the reverse stock split
will not have an adverse effect on our stock price due to the reduced number of
shares outstanding after the reverse stock split. A reverse stock split is often
viewed negatively by the market and, consequently, can lead to a decrease in our
overall market capitalization. If the per share price does not increase
proportionately as a result of the reverse stock split, then our overall market
capitalization will be reduced.

Increased Transaction Costs. The number of shares held by each individual
stockholder will be reduced if the reverse stock split is implemented. This will
increase the number of stockholders who hold less than a "round lot," or 100
shares. Typically, the transaction costs to stockholders selling "odd lots" are
higher on a per share basis. Consequently, the reverse stock split could
increase the transaction costs to existing stockholders in the event they wish
to sell all or a portion of their position.

Liquidity. Although the Board believes that the decrease in the number of shares
of our common stock outstanding as a consequence of the reverse stock split and
the anticipated increase in the market price of our common stock could encourage
interest in our common stock and possibly promote greater liquidity for our
stockholders, such liquidity could also be adversely affected by the reduced
number of shares outstanding after the reverse stock split.

Authorized Shares; Future Financings. The authorized number of shares of Common
Stock would not be impacted by the reverse stock split. However, upon
effectiveness of such a reverse stock split, the number of authorized shares of
common stock that are not issued or outstanding, as of May 25, 2006, would
increase from approximately 198,305,497 shares to approximately 289,830,550
shares. As a result, we will have an increased number of authorized but unissued
shares of common stock. Authorized but unissued shares will be available for
issuance, and we may issue such shares in financings or otherwise. If we issue
additional shares, the ownership interests of our current stockholders may be
diluted. Each of the shareholders may be diluted to the extent that any of the
authorized but unissued shares are subsequently issued.

Effect on Fractional Shares

A reverse stock split would result in some stockholders owning a fractional
share of common stock. For example, a 1-for-10 reverse stock split were to be
implemented, the shares owned by a stockholder with 112 shares would be
converted into 11.2 shares. To avoid such a result, stockholders that would
otherwise be entitled to receive a fractional share of our common stock as a
consequence of the reverse stock split will receive, instead, at the discretion
of our Board of Directors, either (i) a cash payment from us in U.S. dollars
equal to the value of that fractional share, determined on the basis of the
average closing sales price of our common stock on the Nasdaq Over-The-Counter
Bulletin Board for the 20 trading days immediately preceding the effective date
of the reverse stock split (as adjusted for that reverse stock split) or (ii) a
cash payment from the transfer agent in an amount equal to such stockholder's
pro rata share of the total proceeds from the sale, by the transfer agent on
behalf of those holders who would otherwise be entitled to receive a fractional
share, of an aggregate of all fractional shares in the open market at the then
prevailing prices. No transaction costs will be assessed in connection with the
sale of the aggregated shares. You will not be entitled to receive interest for
the period between the effective time of the reverse stock split and the date
you receive your payment for cashed-out shares.

If any stockholder owns, in total, fewer than the number of our shares to be
converted into one share as a result of the reverse stock split, that
stockholder's shares would be converted into a fractional share of stock and
that stockholder would receive only cash in place of the fractional share. For
example, a 1-for-10 reverse stock split is implemented then stockholders with
fewer than ten shares would receive only cash. As a result, the interest of such
stockholders in our company would be terminated and such stockholders would have
no right to share in our assets or future growth. Based on this example, each
stockholder that owns ten shares or more of our common stock prior to the
reverse stock split will continue to own one or more shares after the reverse
stock split and would continue to share in our assets and future growth as a
stockholder, and any stockholder that owns fewer than ten shares would receive
only cash in place of the fractional share resulting from the reverse stock
split.

Effect of Reverse Stock Split on Options

The number of shares subject to outstanding options to purchase shares of our
common stock also would automatically be reduced in the same ratio as the
reduction in the outstanding shares. Correspondingly, the per share exercise
price of those options will be increased in direct proportion to the reverse
stock split ratio, so that the aggregate dollar amount payable for the purchase
of the shares subject to the options will remain unchanged. For example, a
1-for-10 reverse stock split is implemented and that an optionee holds options
to purchase 1,000 shares at an exercise price of $0.66 per share. On the
effectiveness of the 1-for-10 reverse stock split, the number of shares subject
to that option would be reduced to 100 shares and the exercise price would be
proportionately increased to $6.60 per share.

Effect of Reverse Stock Split on Warrants

The agreements governing the outstanding warrants to purchase shares of our
common stock include provisions requiring adjustments to both the number of
shares issuable upon exercise of such warrants, and the exercise prices of such
warrants, in the event of a reverse stock split. For example, assume that a
1-for-10 reverse stock split is implemented and a warrant holder holds a warrant
to purchase 10,000 shares of our common stock at an exercise price of $.75 per
share. On the effectiveness of the reverse stock split, the number of shares
subject to that warrant would be reduced to 1,000 shares and the exercise price
would be proportionately increased to $7.50 per share.

Implementation and Effect of the Reverse Stock Split

If approved by our stockholders at the annual meeting, and if a majority of our
Board of Directors determines that effecting a reverse stock split is in our
best interests and the best interests of our stockholders, our Board of
Directors will, in its sole discretion, determine the method of dealing with
fractional shares. Following such determinations, the Board of Directors will
effect the reverse stock split by directing management to file the certificate
of amendment with the Delaware Secretary of State at such time as the Board has
determined is the appropriate effective time for the reverse stock split. The
reverse stock split will become effective at the time specified in the
certificate of amendment after the filing of the amendment with the Delaware
Secretary of State, which we refer to as the effective time. At the effective
time, the other amendments approved by our stockholders will be deemed
abandoned.

We estimate that, following the reverse stock split, we would have approximately
the same number of stockholders and, except for the effect of cash payments for
fractional shares as described above, the completion of the reverse stock split
would not affect any stockholder's proportionate equity interest in our company.
By way of example, a stockholder who owns a number of shares that prior to the
reverse stock split represented one-half of a percent of the outstanding shares
of the company would continue to own one-half of a percent of our outstanding
shares after the reverse stock split. The reverse stock split also will not
affect the number of shares of common stock that our Board of Directors is
authorized to issue under our amended and restated certificate of incorporation,
which will remain unchanged at 300,000,000 shares. However, it will have the
effect of increasing the number of shares available for future issuance because
of the reduction in the number of shares that will be outstanding after giving
effect to the reverse stock split.

Exchange of Stock Certificates and Payment for Fractional Shares

Exchange of Stock Certificates. Promptly after such an effective time, you would
be notified that the reverse stock split has been effected. Our stock transfer
agent, American Stock Transfer & Trust Company of New York, whom we refer to as
the exchange agent, would implement the exchange of stock certificates
representing outstanding shares of common stock. You would be asked to surrender
to the exchange agent certificates representing your pre-split shares in
exchange for certificates representing your post-split shares in accordance with
the procedures to be set forth in a letter of transmittal which we would send to
you. You would not receive a new stock certificate representing your post-split
shares until you surrender your outstanding certificate(s) representing your
pre-split shares, together with the properly completed and executed letter of
transmittal to the exchange agent. We would not issue scrip or fractional
shares, or certificates for fractional shares, in connection with the reverse
stock split. Should you be entitled to receive fractional shares because you
hold a number of shares not evenly divisible by the relevant reverse split
number selected by our Board of Directors (which will be ten), you will be
entitled, upon surrender to the exchange agent of certificates representing such
shares, to a cash payment, without interest, in lieu of such fractional shares.
The ownership of a fractional share would not give you any voting, dividend or
other rights, except the right to receive payment for the fractional share as
described above. IF THIS REVERSE SPLIT WERE TO BE EFFECTED, PLEASE DO NOT
DESTROY ANY STOCK CERTIFICATE OR SUBMIT ANY OF YOUR CERTIFICATES UNTIL YOU ARE
REQUESTED TO DO SO.

Effect of Failure to Exchange Stock Certificates. Upon the filing of the
amendment to our certificate of incorporation with the Delaware Secretary of
State, each certificate representing shares of our common stock outstanding
prior to the that time would, until surrendered and exchanged as described
above, be deemed, for all corporate purposes, to evidence ownership of the whole
number of shares of our common stock, and the right to receive, from us or the
transfer agent, the amount of cash for any fractional shares, into which the
shares of our common stock evidenced by such certificate have been converted by
the reverse stock split. However, a holder of such un-exchanged certificates
would not be entitled to receive any dividends or other distributions payable by
us after the effective date, until the old certificates have been surrendered.
Such dividends and distributions, if any, would be accumulated, and at the time
of surrender of the old certificates, all such unpaid dividends or distributions
will be paid without interest.

No Appraisal Rights

Under the Delaware General Corporation Law and our certificate of incorporation
and bylaws, you are not entitled to appraisal rights with respect to the reverse
stock split.

Federal Income Tax Consequences

The following description of the material federal income tax consequences of the
reverse stock split is based on the Internal Revenue Code, applicable Treasury
Regulations promulgated under the Code, judicial authority and current
administrative rulings and practices as in effect on the date of this proxy
statement. Changes to the laws could alter the tax consequences described below,
possibly with retroactive effect. We have not sought and will not seek an
opinion of counsel or a ruling from the Internal Revenue Service regarding the
federal income tax consequences of any of the proposed reverse stock splits.
This discussion is for general information only and does not discuss the tax
consequences that may apply to special classes of taxpayers (e.g., non-resident
aliens, broker/dealers or insurance companies). The state and local tax
consequences of the reverse stock split may vary significantly as to each
stockholder, depending upon the jurisdiction in which such stockholder resides.
We urge stockholders to consult their own tax advisors to determine the
particular consequences to them.

In general, the federal income tax consequences of the reverse stock split will
vary among stockholders depending upon whether they receive cash for fractional
shares or solely a reduced number of shares of our common stock in exchange for
their old shares of our common stock. We believe that because the reverse stock
split is not part of a plan to increase periodically a stockholder's
proportionate interest in our assets or earnings and profits, the reverse stock
split will likely have the following federal income tax effects:

(i) Except as explained in (v) below, no income gain or loss will be recognized
by a shareholder on the surrender of the old shares or receipt of the
certificate representing post-split new shares.

(ii) Except as explained in (v) below, the tax basis of the new shares will
equal the tax basis of the old shares exchanged therefore.

(iii) Except as explained in (v) below, the holding period of the new shares
will include the holding period of the old shares if such old shares were held
as capital assets.

(iv) The conversion of the old shares into the new shares will produce no
taxable income or gain or loss to the Company.

(v) The federal income tax treatment of the receipt of the one additional share
in lieu of any fractional interests by a shareholder is not clear and may result
in tax liability not material in amount in view of the low value of such
fractional interest.

The Company's opinion is not binding upon the Internal Revenue Service or the
courts, and there can be no assurance that the Internal Revenue Service or the
courts will accept the positions expressed above.

The state and local tax consequences of the reverse stock split may vary
significantly as to each shareholder, depending upon the state in which he or
she resides. Shareholders are urged to consult their own tax advisors with
respect to the federal, state and local tax consequences of the reverse stock
split.

The Board recommends a vote FOR authorizing our Board of Directors, in its
discretion, to amend our certificate of incorporation to effect a one-for-ten
reverse stock split.

FORM 10-K

UPON WRITTEN REQUEST OF ANY PERSON ENTITLED TO VOTE AT THE MEETING, ADDRESSED TO
US, ATTENTION: CHIEF EXECUTIVE OFFICER, CARDIMA INC. 47266 BENICIA STREET,
FREMONT, CALIFORNIA 94538-7330, WE WILL PROVIDE WITHOUT CHARGE, A COPY OF OUR
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.

COMMUNICATIONS WITH STOCKHOLDERS

Anyone who has a concern about our conduct, including accounting, internal
accounting controls or audit matters, may communicate directly with our Chief
Executive Officer, our non-management directors or the audit committee. Such
communications may be confidential or anonymous, and may be submitted in writing
addressed care of Mr. Gabriel Vegh, Chief Executive Officer, Cardima Inc., 47266
Benicia Street, Fremont, California 94538-7330. All such concerns will be
forwarded to the appropriate directors for their review, and will be
simultaneously reviewed and addressed by the proper executive officers in the
same way that other concerns are addressed by us.

DEADLINE FOR FUTURE PROPOSALS OF STOCKHOLDERS

Proposals that a stockholder desires to have included in our proxy materials for
our 2007 Annual Meeting of Stockholders must comply with the applicable rules
and regulations of the Commission, including that any such proposal must be
received by our Secretary at our principal office no later than February 20,
2007. It is suggested that such proposals be sent by Certified Mail, Return
Receipt Requested. In general, for business to be brought before an annual
meeting by a stockholder, written notice of the stockholder proposal or
nomination must be received by our Secretary not more than 180 days prior to the
anniversary of the preceding year's annual meeting. With respect to stockholder
proposals, the stockholder's notice to our Secretary must contain a brief
description of the business to be brought before the meeting and the reasons for
conducting such business at the meeting, as well as other information set forth
in our By-laws or required by law. With respect to the nomination of a candidate
for the Board of Directors by a stockholder, the stockholder's notice to our
Secretary must contain certain information set forth in our By-laws about both
the nominee and the stockholder making the nominations. If a stockholder desires
to have a proposal included in our proxy materials for our 2007 Annual Meeting
of Stockholders and desires to have such proposal brought before the same annual
meeting, the stockholder must comply with both sets of procedures described in
this paragraph. Any required written notices should be sent to Cardima Inc.,
47266 Benicia Street, Fremont, California 94538-7330 Attn: Chief Executive
Officer.

OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING

We know of no other matters to be presented at the Annual Meeting, but if any
other matters should properly come before the meeting, it is intended that the
persons named in the accompanying form of proxy will vote the same in accordance
with their best judgment and their discretion, and authority to do so is
included in the proxy.

SOLICITATION OF PROXIES

The expense of this solicitation of proxies will be borne by us. Solicitations
will be made only by use of the mail except that, if deemed desirable, our
officers and regular employees may solicit proxies by telephone, telegraph or
personal calls. We may retain an independent proxy solicitor to aid in the
solicitation. For these potential services, we will pay any such independent
proxy solicitor a fee of no more than $10,000 and reimburse it for certain
out-of-pocket disbursements and expenses. Brokerage houses, custodians, nominees
and fiduciaries will be requested to forward the proxy soliciting material to
the beneficial owners of the stock held of record by such persons and we will
reimburse them for their reasonable expenses incurred in this effort.

BY ORDER OF THE BOARD OF DIRECTORS

Mr. Gabriel Vegh

Chief Executive Officer and Acting Chief Financial Officer

Exhibit 1

CARDIMA INC.

AMENDED 1997 EMPLOYEE STOCK PURCHASE PLAN

CARDIMA, INC.

AMENDED AND RESTATED 1997 EMPLOYEE STOCK PURCHASE PLAN

The following constitute the provisions of the amended and restated 1997
Employee Stock Purchase Plan of Cardima, Inc.

1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company. It is the intention of the Company to have the Plan qualify as an
"Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of
1986, as amended. The provisions of the Plan shall, accordingly, be construed so
as to extend and limit participation in a manner consistent with the
requirements of that section of the Code.

2. Definitions.

(a) "Board" shall mean the Board of Directors of the Company.

(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(d) "Company" shall mean Cardima, Inc., a Delaware corporation.

(e) "Compensation" shall mean all regular straight time gross earnings and
shall not include overtime, shift premiums, payments for incentive compensation,
incentive payments, bonuses, commissions and other compensation.

(f) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.

(g) "Contributions" shall mean all amounts credited to the account of a
participant pursuant to the Plan.

(h) "Designated Subsidiaries" shall mean the Subsidiaries which have been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.

(i) "Employee" shall mean any person, including an Officer, who is
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries. (j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.

(k) "Purchase Date" shall mean the last day of each Purchase Period of the
Plan.

(l) "Offering Date" shall mean the first business day of each Offering
Period of the Plan.

(m) "Offering Period" shall mean a period of twelve (12) months commencing
on February 1 and August 1 of each year, except for the first Offering Period as
set forth in Section 4(a).

(n) "Officer" shall mean a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

(o) "Plan" shall mean this Employee Stock Purchase Plan.

(p) "Purchase Period" shall mean a period of six (6) months within an
Offering Period, except for the first Purchase Period as set forth in Section
4(b).

(q) "Subsidiary" shall mean a corporation, domestic or foreign, of which not
less than 50% of the voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or acquired
by the Company or a Subsidiary.

3. Eligibility.

(a) Any person who is an Employee as of the Offering Date of a given
Offering Period shall be eligible to participate in such Offering Period under
the Plan, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code.

(b) Any provisions of the Plan to the contrary notwithstanding, no Employee
shall be granted an option under the Plan (i) if, immediately after the grant,

such Employee (or any other person whose stock would be attributed to such
Employee pursuant to Section 424(d) of the Code) would own stock and/or hold
outstanding options to purchase stock possessing five percent (5%) or more of
the total combined voting power or value of all classes of stock of the Company
or of any subsidiary of the Company, or (ii) if such option would permit his or
her rights to purchase stock under all employee stock purchase plans (described
in Section 423 of the Code) of the Company and its Subsidiaries to accrue at a
rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair market value
of such stock (determined at the time such option is granted) for each calendar
year in which such option is outstanding at any time.

4. Offering Periods and purchasing periods

(a) Offering Periods. The Plan shall be implemented by a series of Offering
Periods of twelve (12) months duration, with new Offering Periods commencing on
or about February 1 and August 1 of each year (or at such other time or times as
may be determined by the Board of Directors). The first Offering Period shall
commence on the beginning of the effective date of the Registration Statement on
Form S-1 for the initial public offering of the Company's Common Stock (the "IPO
Date") and continue until July 31, 1998. The Plan shall continue until
terminated in accordance with Section 19 hereof. The Board of Directors of the
Company shall have the power to change the duration and/or the frequency of
Offering Periods with respect to future offerings without shareholder approval
if such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period to be affected. Eligible employees may
not participate in more than one Offering Period at a time.

(b) Purchase Periods. Each Offering Period shall consist of two (2)
consecutive purchase periods of six (6) months duration. The last day of each
Purchase Period shall be the "Purchase Date" for such Purchase Period. A
Purchase Period commencing on February 1 shall end on the next July 31. A
Purchase Period commencing on August 1 shall end on the next January 31. The
first Purchase Period shall commence on the IPO Date and shall end on January
31, 1998. The Board of Directors of the Company shall have the power to change
the duration and/or frequency of Purchase Periods with respect to future
purchases without shareholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Purchase Period
to be affected.

5. Participation.

(a) An eligible Employee may become a participant in the Plan by completing
a subscription agreement on the form provided by the Company and filing it with
the Company's payroll office prior to the applicable Offering Date, unless a
later time for filing the subscription agreement is set by the Board for all
eligible Employees with respect to a given offering. The subscription agreement
shall set forth the percentage of the participant's Compensation (which shall be
not less than 1% and not more than 10%) to be paid as Contributions pursuant to
the Plan.

(b) Payroll deductions shall commence on the first payroll following the
Offering Date and shall end on the last payroll paid on or prior to the last
Purchase Period of the Offering Period to which the subscription agreement is
applicable, unless sooner terminated by the participant as provided in Section
10.

6. Method of Payment of Contributions.

(a) The participant shall elect to have payroll deductions made on each
payday during the Offering Period in an amount not less than one percent (1%)
and not more than ten percent (10%) of such participant's Compensation on each
such payday. All payroll deductions made by a participant shall be credited to
his or her account under the Plan. A participant may not make any additional
payments into such account.

(b) A participant may discontinue his or her
participation in the Plan as provided in Section 10, or, on one occasion only
during the Offering Period, may decrease the rate of his or her Contributions
during the Offering Period by completing and filing with the Company a new
subscription agreement. The change in rate shall be effective as of the
beginning of the next calendar month following the date of filing of the new
subscription agreement, if the agreement is filed at least ten (10) business
days prior to such date and, if not, as of the beginning of the next succeeding
calendar month.

(c) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 3(b) herein, a participant's payroll
deductions may be decreased to 0% at such time during any Offering Period which
is scheduled to end during the current calendar year that the aggregate of all
payroll deductions accumulated with respect to such Offering Period and any
other Offering Period ending within the same calendar year equal $21,250.
Payroll deductions shall re-commence at the rate provided in such participant's
subscription Agreement at the beginning of the first Offering Period which is
scheduled to end in the following calendar year, unless terminated by the
participant as provided in Section 10.

7. Grant of Option.

(a) On the Offering Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase on
each Purchase Date a number of shares of the Company's Common Stock determined

by dividing such Employee's Contributions accumulated prior to such Purchase
Date and retained in the participant's account as of the Purchase Date by the
lower of (i) eighty-five percent (85%) of the fair market value of a share of
the Company's Common Stock on the Offering Date, or (ii) eighty-five percent
(85%) of the fair market value of a share of the Company's Common Stock on the
Purchase Date; provided however, that the maximum number of shares an Employee
may purchase during each Offering Period shall be determined at the Offering
Date by dividing $25,000 by the fair market value of a share of the Company's
Common Stock on the Offering Date, and provided further that such purchase shall
be subject to the limitations set forth in Sections 3(b) and 13. The fair market
value of a share of the Company's Common Stock shall be determined as provided
in Section 7(b).

(b) The option price per share of the shares offered in a given Offering
Period shall be the lower of: (i) 85% of the fair market value of a share of the
Common Stock of the Company on the Offering Date; or (ii) 85% of the fair market
value of a share of the Common Stock of the Company on the Purchase Date. The
fair market value of the Company's Common Stock on a given date shall be
determined by the Board in its discretion based on the closing price of the
Common Stock for such date (or, in the event that the Common Stock is not traded
on such date, on the immediately preceding trading date), as reported by the
National Association of Securities Dealers Automated Quotation (Nasdaq) National
Market or, if such price is not reported, the mean of the bid and asked prices
per share of the Common Stock as reported by Nasdaq or, in the event the Common
Stock is listed on a stock exchange, the fair market value per share shall be
the closing price on such exchange on such date (or, in the event that the
Common Stock is not traded on such date, on the immediately preceding trading
date), as reported in The Wall Street Journal. For purposes of the Offering Date
under the first Offering Period under the Plan, the fair market value of a share
of the Common Stock of the Company shall be the Price to Public as set forth in
the final prospectus filed with the Securities and Exchange Commission pursuant
to Rule 424 under the Securities Act of 1933, as amended.

8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in paragraph 10, his or her option for the purchase of shares will be
exercised automatically on each Purchase Date of an Offering Period, and the
maximum number of full shares subject to the option will be purchased at the
applicable option price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the participant on the Purchase Date. No fractional
shares shall be purchased. Any payroll deductions accumulated in a participant's
account which are not sufficient to purchase a full share shall be retained in
the participant's account for the subsequent Purchase Period or Offering Period,
subject to earlier withdrawal by the participant as provided in Section 10. Any
other monies left over in a participant's account after a Purchase Date shall be
returned to the Participant. During his or her lifetime, a participant's option
to purchase shares hereunder is exercisable only by him or her.

9. Delivery. As promptly as practicable after each Purchase Date of each
Offering Period, the Company shall arrange the delivery to each participant, as
appropriate, of a certificate representing the shares purchased upon exercise of
his or her option or the deposit of such number of shares with the broker
selected by the Company for administration of Plan stock purchases, as
determined by the Company.

10. Voluntary Withdrawal; Termination of Employment.

(a) A participant may withdraw all but not less than all the Contributions
credited to his or her account under the Plan at any time at least ten (10)
business days prior to each Purchase Date by giving written notice to the
Company. All of the participant's Contributions credited to his or her account
will be paid to him or her promptly after receipt of his or her notice of
withdrawal and his or her option for the current period will be automatically
terminated, and no further Contributions for the purchase of shares will be made
during the Offering Period.

(b) Upon termination of the participant's Continuous Status as an Employee
prior to the Purchase Date of an Offering Period for any reason, including
retirement or death, the Contributions credited to his or her account will be
returned to him or her or, in the case of his or her death, to the person or
persons entitled thereto under Section 14, and his or her option will be
automatically terminated.

(c) In the event an Employee fails to remain in Continuous Status as an
Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option terminated.

(d) A participant's withdrawal from an offering will not have any effect
upon his or her eligibility to participate in a succeeding offering or in any
similar plan which may hereafter be adopted by the Company.

11. Automatic Withdrawal. If the fair market value of the shares on the
first Purchase Date of an Offering Period is less than the fair market value of

the shares on the Offering Date for such Offering Period, then every participant
shall automatically (i) be withdrawn from such Offering Period at the close of
such Purchase Date and after the acquisition of shares for such Purchase Period,
and (ii) be enrolled in the Offering Period commencing on the first business day
subsequent to such Purchase Period.

12. Interest. No interest shall accrue on the Contributions of a participant
in the Plan.

13. Stock.

(a) The maximum number of shares of the Company's Common Stock which shall
be made available for sale under the Plan shall be 2,500,000 shares (on a
post-split basis), subject to adjustment upon changes in capitalization of the
Company as provided in Section 18. If the total number of shares which would
otherwise be subject to options granted pursuant to Section 7(a) on the Offering
Date of an Offering Period exceeds the number of shares then available under the
Plan (after deduction of all shares for which options have been exercised or are
then outstanding), the Company shall make a pro rata allocation of the shares
remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each Employee affected thereby and shall similarly
reduce the rate of Contributions, if necessary.

(b) The participant will have no interest or voting right in shares covered
by his or her option until such option has been exercised.

(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.

14. Administration. The Board, or a committee named by the Board, shall
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and interpret the Plan, and
to make all other determinations necessary or advisable for the administration
of the Plan. The composition of the committee shall be in accordance with the
requirements to obtain or retain any available exemption from the operation of
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder.

15. Designation of Beneficiary.

(a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to the end of a
Purchase Period but prior to delivery to him or her of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the Purchase Date of an Offering Period. If
a participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.

(b) Such designation of beneficiary may be changed by the participant (and
his or her spouse, if any) at any time by written notice. In the event of the
death of a participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant's death, the
Company shall deliver such shares and/or cash to the executor or administrator
of the estate of the participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or
more dependents or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

16. Transferability. Neither Contributions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.

17. Use of Funds. All Contributions received or held by the Company under
the Plan may be used by the Company for any corporate purpose, and the Company
shall not be obligated to segregate such Contributions.

18. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees
promptly following the Purchase Date, which statements will set forth the
amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.

19. Adjustments Upon Changes in Capitalization; Corporate Transactions.

(a) Adjustment. Subject to any required action by the shareholders of the
Company, the number of shares of Common Stock covered by each option under the
Plan which has not yet been exercised and the number of shares of Common Stock
which have been authorized for issuance under the Plan but have not yet been

placed under option (collectively, the "Reserves"), as well as the price per
share of Common Stock covered by each option under the Plan which has not yet
been exercised, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the
Common Stock, or any other increase or decrease in the number of shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration". Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no issue
by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock
subject to an option.

(b) Corporate Transactions. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period will terminate immediately prior
to the consummation of such proposed action, unless otherwise provided by the
Board. In the event of a proposed sale of all or substantially all of the assets
of the Company, or the merger of the Company with or into another corporation,
each option under the Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its sole
discretion and in lieu of such assumption or substitution, to shorten the
Offering Period then in progress by setting a new Purchase Date (the "New
Purchase Date"). If the Board shortens the Offering Period then in progress in
lieu of assumption or substitution in the event of a merger or sale of assets,
the Board shall notify each participant in writing, at least ten (10) days prior
to the New Purchase Date, that the Purchase Date for his or her option has been
changed to the New Purchase Date and that his or her option will be exercised
automatically on the New Purchase Date, unless prior to such date he or she has
withdrawn from the Offering Period as provided in Section 10. For purposes of
this paragraph, an option granted under the Plan shall be deemed to be assumed
if, following the sale of assets or merger, the option confers the right to
purchase, for each share of option stock subject to the option immediately prior
to the sale of assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger by holders of
Common Stock for each share of Common Stock held on the effective date of the
transaction (and if such holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if such consideration received
in the sale of assets or merger was not solely common stock of the successor
corporation or its parent (as defined in Section 424(e) of the Code), the Board
may, with the consent of the successor corporation and the participant, provide
for the consideration to be received upon exercise of the option to be solely
common stock of the successor corporation or its parent equal in fair market
value to the per share consideration received by holders of Common Stock and the
sale of assets or merger.

The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the price
per share of Common Stock covered by each outstanding option, in the event that
the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated with or merged into
any other corporation.

20. Amendment or Termination.

(a) The Board of Directors of the Company may at any time terminate or amend
the Plan. Except as provided in Section 19, no such termination may affect
options previously granted, nor may an amendment make any change in any option
theretofore granted which adversely affects the rights of any participant. In
addition, to the extent necessary to comply with Rule 16b-3 under the Exchange
Act, or under Section 423 of the Code (or any successor rule or provision or any
applicable law or regulation), the Company shall obtain shareholder approval in
such a manner and to such a degree as so required.

(b) Without shareholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.

21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.

22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. As a condition to the
exercise of an option, the Company may require the person exercising such option
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned applicable provisions of
law.

23. Term of Plan; Effective Date. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the shareholders of the Company. It shall continue in effect for a term of
twenty (20) years unless sooner terminated under Section 20.

24. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall
contain, and the shares issued upon exercise thereof shall be subject to, such
additional conditions and restrictions as may be required by Rule 16b-3 to
qualify for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.

CARDIMA, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT

New Election ______
Change of Election ______

1. I, ________________________, hereby elect to participate in the CARDIMA, INC.
1997 Employee Stock Purchase Plan (the "Plan") for the Offering Period
______________, 19__ to _______________, 19__, and subscribe to purchase shares
of the Company's Common Stock in accordance with this Subscription Agreement and
the Plan.

2. I elect to have Contributions in the amount of ____% of my Compensation, as
those terms are defined in the Plan, applied to this purchase. I understand that
this amount must not be less than 1% and not more than 10% of my Compensation
during the Offering Period. (Please note that no fractional percentages are
permitted).

3. I hereby authorize payroll deductions from each paycheck during the Offering
Period at the rate stated in Item 2 of this Subscription Agreement. I understand
that all payroll deductions made by me shall be credited to my account under the
Plan and that I may not make any additional payments into such account. I
understand that all payments made by me shall be accumulated for the purchase of
shares of Common Stock at the applicable purchase price determined in accordance
with the Plan. I further understand that, except as otherwise set forth in the
Plan, shares will be purchased for me automatically on the Purchase Date of each
Offering Period unless I otherwise withdraw from the Plan by giving written
notice to the Company for such purpose.

4. I understand that I may discontinue at any time prior to the Purchase Date my
participation in the Plan as provided in Section 10 of the Plan. I also
understand that I can decrease the rate of my Contributions to not less than 1%
of my Compensation on one occasion only during any Offering Period by completing
and filing a new Subscription Agreement with such decrease taking effect as of
the beginning of the calendar month following the date of filing of the new
Subscription Agreement, if filed at least ten (10) business days prior to the
beginning of such month. Further, I may change the rate of deductions for future
Offering Periods by filing a new Subscription Agreement, and any such change
will be effective as of the beginning of the next Offering Period. In addition,
I acknowledge that, unless I discontinue my participation in the Plan as
provided in Section 10 of the Plan, my election will continue to be effective
for each successive Offering Period.

5. I have received a copy of the Company's most recent description of the Plan
and a copy of the complete "CARDIMA, INC. 1997 Employee Stock Purchase Plan." I
understand that my participation in the Plan is in all respects subject to the
terms of the Plan.

6. Shares purchased for me under the Plan should be issued in the name(s) of
(name of employee or employee and spouse only):_________________________________
________________________________________________________________________________

7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:

NAME: (Please print) _____________________________________
(First) (Middle) (Last)

________________ _________________________________________
(Relationship) (Address)

___________________________________________

8. I understand that if I dispose of any shares received by me pursuant to the
Plan within 2 years after the Offering Date (the first day of the Offering
Period during which I purchased such shares) or within 1 year after the Purchase
Date, I will be treated for federal income tax purposes as having received
ordinary compensation income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares on the Purchase Date over
the price which I paid for the shares, regardless of whether I disposed of the
shares at a price less than their fair market value at the Purchase Date. The
remainder of the gain or loss, if any, recognized on such disposition will be
treated as capital gain or loss.

I hereby agree to notify the Company in writing within 30 days after the date of
any such disposition, and I will make adequate provision for federal, state or
other tax withholding obligations, if any, which arise upon the disposition of
the Common Stock. The Company may, but will not be obligated to, withhold from
my compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the Company
any tax deductions or benefits attributable to the sale or early disposition of
Common Stock by me.

9. If I dispose of such shares at any time after expiration of the 2-year and
1-year holding periods, I understand that I will be treated for federal income
tax purposes as having received compensation income only to the extent of an
amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for
the shares under the option, or (2) 15% of the fair market value of the shares
on the Offering Date. The remainder of the gain or loss, if any, recognized on
such disposition will be treated as capital gain or loss.

I understand that this tax summary is only a summary and is subject to change. I
further understand that I should consult a tax advisor concerning the tax
implications of the purchase and sale of stock under the Plan. 10. I hereby
agree to be bound by the terms of the Plan. The effectiveness of this
Subscription Agreement is dependent upon my eligibility to participate in the
Plan.

SIGNATURE:

SOCIAL SECURITY #:
-------

DATE:

SPOUSE'S SIGNATURE
(necessary if beneficiary is not spouse):

___________________________________
(Signature)

___________________________________
(Print name)

CARDIMA, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL

I, __________________________, hereby elect to withdraw my participation in the
CARDIMA, INC. 1997 Employee Stock Purchase Plan (the "Plan") for the Offering
Period _________. This withdrawal covers all Contributions credited to my
account and is effective on the date designated below.

I understand that all Contributions credited to my account will be paid to me
within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.

The undersigned further understands and agrees that he or she shall be eligible
to participate in succeeding offering periods only by delivering to the Company
a new Subscription Agreement.

Dated:____________________________
Signature of Employee

Social Security Number

ANNUAL MEETING OF STOCKHOLDERS OF

CARDIMA INC.

July 27, 2006

-- FOLD AND DETACH HERE AND READ THE REVERSE SIDE --

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

CARDIMA INC.

The undersigned appoints Mr. Gabriel B. Vegh, as proxy, with the power to
appoint his substitute, and authorizes him to represent and to vote, as
designated on the reverse side hereof, all shares of Common Stock of Cardima
Inc., held of record by the undersigned at the close of business on June 15,
2006, at the Annual Meeting of Stockholders to be held at 11:00 a.m. on July 27,
2006, at 47266 Benicia Street, Fremont, California 94538, and at any adjournment
thereof. Any and all proxies heretofore given are hereby revoked.

(Continued, and to be marked, dated and signed, on the other side)

-- FOLD AND DETACH HERE AND READ THE REVERSE SIDE --

PROXY

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE
VOTED "FOR" THE PROPOSALS. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.

1. ELECTION OF DIRECTORS:

FOR WITHHOLD AUTHORITY

(To withhold authority to vote for any individual nominee, |_| |_|
strike a line through that nominee's name in the list below)

Nominees are: Gabriel Vegh, Phillip Radlick, Ph.D., John R. Cheney, Tony K.
Shum, Tina Sim and Andrew K. Lee

2. PROPOSAL TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FOR AGAINST ABSTAIN
ISSUABLE PURSUANT TO THE 1997 EMPLOYEE STOCK PURCHASE PLAN FROM 1,750,000 |_| |_| |_|
TO 2,500,000 SHARES.

3. PROPOSAL TO RATIFY APPOINTMENT OF MARC LUMER & COMPANY AS INDEPENDENT FOR AGAINST ABSTAIN
|_| |_| |_|

4. PROPOSAL TO AUTHORIZE OUR BOARD OF DIRECTORS, IN ITS DISCRETION, TO AMEND
OUR CERTIFICATE OF INCORPORATION TO EFFECT A ONE-FOR-TEN REVERSE STOCK FOR AGAINST ABSTAIN
SPLIT OF THE ISSUED AND OUTSTANDING SHATES OF COMMON STOCK OF THE COMPANY |_| |_| |_|
WITHOUT FURTHER APPROVAL FROM OUR STOCKHOLDERS.

5. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE ON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING

COMPANY ID:
PROXY NUMBER:
ACCOUNT
NUMBER:

Signature: ________________ Signature: ________________ Date: ____________

NOTE: Please sign exactly as name appears hereon. When shares are held by joint
owners, both should sign. When signing as an attorney, executor, administrator,
trustee or guardian, please give title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized persons.