UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





(Mark
One)


x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the quarterly period ended June 30, 2010




or




o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For
the transition period from ____ to ____




Commission
File Number 000-51774




ProUroCare Medical
Inc.


(Exact
name of registrant as specified in its charter)





Nevada
            20-1212923(State
      or other jurisdiction
              of
      incorporation or organization)
            (IRS
      Employer
              Identification
      No.)





6440
Flying Cloud Drive, Suite 101


Eden
Prairie, MN  55344


(Address
of principal executive offices and Zip Code)




(952)
476-9093




(Registrant’s
telephone number, including area code)




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




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


YES  o  NO o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.




Large
      accelerated filer o
            Accelerated
      filer oNon-accelerated
      filer o
            Smaller
      reporting company x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


YES o  NO x




The
registrant has 13,817,111 shares of common stock and 529,855 Units outstanding
as of August 12, 2010.







ProUroCare
Medical Inc.


Form
10-Q for the


Quarter
Ended June 30, 2010





Table
of Contents





Page No.PART
      I - FINANCIAL INFORMATION
                [1]ITEM
      1.
                FINANCIAL
      STATEMENTSConsolidated
      Balance Sheets
                [1]Consolidated
      Statements of Operations
                [2]Consolidated
      Statements of Cash Flows
                [3]Notes
      to Consolidated Financial Statements
                [6]ITEM
      2.
                MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
                [13]ITEM 4T.
                CONTROLS
      AND PROCEDURES
                [19]PART
      II - OTHER INFORMATION
                [20]ITEM
      1A. RISK FACTORS
                [20]ITEM
      5.
                OTHER
      INFORMATION
                [20]ITEM
      6.
                EXHIBITS
                [21]SIGNATURES
                [22]





PART
I. FINANCIAL INFORMATION




Item
1.  Financial Statements




ProUroCare
Medical Inc.


(A
Development Stage Company)


Consolidated
Balance Sheets





June 30,
                                2010
                                (Unaudited)
                              
                              
                              December 31,
                                2009AssetsCurrent
      assets:Cash
                              
                              $
                              771,016
                              
                              
                              $
                              1,000,874Other
      current assets
                              
                              
                              179,790
                              
                              
                              
                              58,200Total
      current assets
                              
                              
                              950,806
                              
                              
                              
                              1,059,074Equipment
      and furniture, net
                              
                              
                              15,508
                              
                              
                              
                              1,470Debt
      issuance costs, net
                              
                              
                              6,893
                              
                              
                              
                              27,383Deferred
      offering costs
                              
                              
                              63,850
                              
                              
                              
                              —$
                              1,037,057
                              
                              
                              $
                              1,087,927Liabilities
      and Shareholders’ DeficitCurrent
      liabilities:Notes
      payable, bank
                              
                              
                              1,300,025
                              
                              
                              
                              1,300,000Notes
      payable
                              
                              
                              985,422
                              
                              
                              
                              624,865Notes
      payable - related party
                              
                              
                              516,000
                              
                              
                              
                              —Accounts
      payable
                              
                              
                              843,538
                              
                              
                              
                              985,560Accrued
      license and development fees
                              
                              
                              —
                              
                              
                              
                              1,595,385Accrued
      expenses
                              
                              
                              1,049,204
                              
                              
                              
                              269,230Total
      current liabilities
                              
                              
                              4,694,189
                              
                              
                              
                              4,775,040Commitments
      and contingenciesLong-term
      note payable, bank
                              
                              
                              —
                              
                              
                              
                              100,025Long-term
      note payable
                              
                              
                              —
                              
                              
                              
                              300,000Long-term
      note payable - related party
                              
                              
                              —
                              
                              
                              
                              243,000Total
      liabilities
                              
                              
                              4,694,189
                              
                              
                              
                              5,418,065Shareholders’
      deficit:Common
      stock, $0.00001 par.  Authorized 50,000,000 shares; issued and
      outstanding 13,045,375 and 11,326,283 shares on June 30, 2010 and December
      31, 2009, respectively
                              
                              
                              130
                              
                              
                              
                              113Additional
      paid-in capital
                              
                              
                              27,190,587
                              
                              
                              
                              23,549,626Deficit
      accumulated during development stage
                              
                              
                              (30,847,849
                              )
                              
                              
                              (27,879,877
                              )Total
      shareholders’ deficit
                              
                              
                              (3,657,132
                              )
                              
                              
                              (4,330,138
                              )$
                              1,037,057
                              
                              
                              $
                              1,087,927





See
accompanying notes to consolidated financial statements.




Page
1


ProUroCare
Medical Inc.


(A
Development Stage Company)


Consolidated
Statements of Operations


(Unaudited)





Three Months Ended
                                    June 30
                                  
                                  
                                  Six Months Ended
                                    June 30
                                  
                                  
                                  Period from
                                    August 17, 1999
                                    (Inception) to2010
                                  
                                  
                                  2009
                                  
                                  
                                  2010
                                  
                                  
                                  2009
                                  
                                  
                                  June 30, 2010Operating
      expenses:Research
      and development
                                  
                                  $
                                  74,932
                                  
                                  
                                  $
                                  108,881
                                  
                                  
                                  $
                                  159,086
                                  
                                  
                                  $
                                  208,881
                                  
                                  
                                  $
                                  7,853,983General
      and administrative
                                  
                                  
                                  454,227
                                  
                                  
                                  
                                  286,110
                                  
                                  
                                  
                                  939,377
                                  
                                  
                                  
                                  711,627
                                  
                                  
                                  
                                  12,481,625Total
      operating expenses
                                  
                                  
                                  529,159
                                  
                                  
                                  
                                  394,991
                                  
                                  
                                  
                                  1,098,463
                                  
                                  
                                  
                                  920,508
                                  
                                  
                                  
                                  20,335,608Operating
      loss
                                  
                                  
                                  (529,159
                                  )
                                  
                                  
                                  (394,991
                                  )
                                  
                                  
                                  (1,098,463
                                  )
                                  
                                  
                                  (920,508
                                  )
                                  
                                  
                                  (20,335,608
                                  )Incentive
      for early warrant exercise
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (1,313,309
                                  )Incentive
      for early warrant exercise - related parties
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (43,555
                                  )Interest
      income
                                  
                                  
                                  740
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  2,035
                                  
                                  
                                  
                                  21
                                  
                                  
                                  
                                  20,488Interest
      expense
                                  
                                  
                                  (513,659
                                  )
                                  
                                  
                                  (40,949
                                  )
                                  
                                  
                                  (581,887
                                  )
                                  
                                  
                                  (804,183
                                  )
                                  
                                  
                                  (5,305,842
                                  )Interest
      expense - related parties
                                  
                                  
                                  (349,203
                                  )
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (369,231
                                  )
                                  
                                  
                                  (284,289
                                  )
                                  
                                  
                                  (2,028,454
                                  )Debt
      extinguishment expense
                                  
                                  
                                  (5,000
                                  )
                                  
                                  
                                  (83,236
                                  )
                                  
                                  
                                  (887,092
                                  )
                                  
                                  
                                  (129,176
                                  )
                                  
                                  
                                  (1,385,373
                                  )Debt
      extinguishment expense - related parties
                                  
                                  
                                  —
                                  
                                  
                                  
                                  (74,683
                                  )
                                  
                                  
                                  (33,334
                                  )
                                  
                                  
                                  (195,091
                                  )
                                  
                                  
                                  (456,196
                                  )Net
      loss
                                  
                                  $
                                  (1,396,281
                                  )
                                  
                                  $
                                  (593,859
                                  )
                                  
                                  $
                                  (2,967,972
                                  )
                                  
                                  $
                                  (2,333,226
                                  )
                                  
                                  $
                                  (30,847,849
                                  )Net
      loss per common share:Basic
      and diluted
                                  
                                  $
                                  (0.11
                                  )
                                  
                                  $
                                  (0.06
                                  )
                                  
                                  $
                                  (0.24
                                  )
                                  
                                  $
                                  (0.26
                                  )
                                  
                                  $
                                  (13.18
                                  )Weighted
      average number of shares outstanding:Basic
      and diluted
                                  
                                  
                                  12,909,867
                                  
                                  
                                  
                                  9,574,042
                                  
                                  
                                  
                                  12,267,166
                                  
                                  
                                  
                                  8,827,218
                                  
                                  
                                  
                                  2,341,325








See
accompanying notes to consolidated financial statements.


Page
2


ProUroCare
Medical Inc.


(A
Development Stage Company)


Consolidated
Statements of Cash Flows


(Unaudited)





Six Months Ended
                    June 30
                  
                  
                  Period from August 17,
                    1999 (Inception) to2010
                  
                  
                  2009
                  
                  
                  June 30, 2010Cash
      flows from operating activities:Net
      loss
                  
                  $
                  (2,967,972
                  )
                  
                  $
                  (2,333,226
                  )
                  
                  $
                  (30,847,849
                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
                  
                  
                  276
                  
                  
                  
                  62
                  
                  
                  
                  21,259Gain
      on sale of furniture and equipment
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (2,200
                  )Stock-based
      compensation
                  
                  
                  62,903
                  
                  
                  
                  158,233
                  
                  
                  
                  2,308,123Common
      stock issued for services rendered
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  222,046Common
      stock issued to related parties for interest
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  1,322Common
      stock issued for debt guarantees
                  
                  
                  9,533
                  
                  
                  
                  —
                  
                  
                  
                  116,200Common
      stock issued for debt issuance cost
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  6,667Common
      stock issued for debt extinguishment
                  
                  
                  33,333
                  
                  
                  
                  33,333
                  
                  
                  
                  66,666Units
      issued for debt extinguishment
                  
                  
                  870,981
                  
                  
                  
                  —
                  
                  
                  
                  870,981Units
      issued for interest expense
                  
                  
                  8,700
                  
                  
                  
                  —
                  
                  
                  
                  8,700Notes
      payable issued for intangibles expensed as research and
      development
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  150,000Warrants
      issued for services
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  567,036Warrants
      issued for debt guarantees
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  355,197Warrants
      issued for debt extinguishment
                  
                  
                  —
                  
                  
                  
                  607
                  
                  
                  
                  360,007Warrants
      issued for debt extinguishment-related parties
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  26,828Warrants
      issued for debt issuance cost
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  12,834Warrants
      issued for early warrant exercise incentive
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  1,356,864Amortization
      of note payable-original issue discount
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  152,247Amortization
      of note payable-related parties original issue discount
                  
                  
                  —
                  
                  
                  
                  2,720
                  
                  
                  
                  142,964Amortization
      of convertible debt-original issue discount
                  
                  
                  —
                  
                  
                  
                  507,902
                  
                  
                  
                  1,146,587Amortization
      of convertible debt-related parties original issue
discount
                  
                  
                  —
                  
                  
                  
                  444,328
                  
                  
                  
                  1,194,132Amortization
      of debt issuance costs
                  
                  
                  243,856
                  
                  
                  
                  309,529
                  
                  
                  
                  2,392,750Bargain
      conversion option added to note payable-related parties for debt
      extinguishment
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  48,214Write-off
      debt issuance cost for debt extinguishment
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  42,797Write-off
      of deferred offering cost
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  59,696License
      rights expensed as research and development, paid by issuance of common
      stock to CS Medical Technologies, LLC
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  475,000License
      rights expensed as research and development, paid by issuance of common
      stock to Profile, LLC
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  1,713,600Changes
      in operating assets and liabilities:Other
      current assets
                  
                  
                  (121,590
                  )
                  
                  
                  4,814
                  
                  
                  
                  (122,473
                  )Accounts
      payable
                  
                  
                  (205,595
                  )
                  
                  
                  (144,493
                  )
                  
                  
                  672,230Accrued
      development expense
                  
                  
                  (30,000
                  )
                  
                  
                  —
                  
                  
                  
                  2,065,385Accrued
      expenses
                  
                  
                  712,120
                  
                  
                  
                  (911,880
                  )
                  
                  
                  1,563,557Net
      cash used in operating activities
                  
                  
                  (1,383,455
                  )
                  
                  
                  (1,928,071
                  )
                  
                  
                  (12,852,633
                  )Cash
      flows from investing activities:Purchases
      of equipment and furniture
                  
                  
                  (14,314
                  )
                  
                  
                  (561
                  )
                  
                  
                  (36,767
                  )Deposit
      into a restricted cash account
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  (44,214
                  )Withdrawal
      from a restricted cash account
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  44,214Net
      cash used in investing activities
                  
                  
                  (14,314
                  )
                  
                  
                  (561
                  )
                  
                  
                  (36,767
                  )


Page
3


ProUroCare
Medical Inc.


(A
Development Stage Company)


Consolidated
Statements of Cash Flows (continued)


(Unaudited)





Six Months Ended
                  June 30
                
                
                Period from August
                  17, 1999 (Inception) to2010
                
                
                2009
                
                
                June 30, 2010Cash
      flows from financing activities:Proceeds
      of note payable, bank
                
                
                —
                
                
                
                100,000
                
                
                
                600,000Payments
      of note payable, bank
                
                
                (100,000
                )
                
                
                (400,000
                )
                
                
                (1,000,000
                )Proceeds
      of notes payable
                
                
                693,345
                
                
                
                —
                
                
                
                1,033,845Payments
      of notes payable
                
                
                (32,788
                )
                
                
                (87,864
                )
                
                
                (1,494,211
                )Proceeds
      of notes payable - related parties
                
                
                273,000
                
                
                
                67,638
                
                
                
                926,738Payments
      of notes payable - related parties
                
                
                —
                
                
                
                (34,000
                )
                
                
                (282,800
                )Proceeds
      from long-term notes payable and bank debt
                
                
                —
                
                
                
                —
                
                
                
                4,207,362Proceeds
      from long-term notes payable, related parties
                
                
                —
                
                
                
                —
                
                
                
                1,363,500Payments
      on long-term bank debt
                
                
                —
                
                
                
                —
                
                
                
                (600,000
                )Proceeds
      from warrants
                
                
                —
                
                
                
                —
                
                
                
                104,500Proceeds
      from exercise of warrants
                
                
                334,631
                
                
                
                —
                
                
                
                2,048,227Payments
      for debt issuance costs
                
                
                —
                
                
                
                (600
                )
                
                
                (766,227
                )Payment
      for rescission of common stock
                
                
                —
                
                
                
                —
                
                
                
                (100,000
                )Payments
      for offering expenses
                
                
                (277
                )
                
                
                (363,662
                )
                
                
                (514,100
                )Cost
      of reverse merger
                
                
                —
                
                
                
                —
                
                
                
                (162,556
                )Net
      proceeds from issuance of common stock
                
                
                —
                
                
                
                2,613,600
                
                
                
                8,296,138Net
      cash provided by financing activities
                
                
                1,167,911
                
                
                
                1,895,112
                
                
                
                13,660,416Net
      increase (decrease) in cash
                
                
                (229,858
                )
                
                
                (33,520
                )
                
                
                771,016Cash,
      beginning of the period
                
                
                1,000,874
                
                
                
                48,114
                
                
                
                —Cash,
      end of the period
                
                $
                771,016
                
                
                $
                14,594
                
                
                $
                771,016Supplemental
      cash flow information:Cash
      paid for interest
                
                $
                36,228
                
                
                $
                71,883
                
                
                $
                875,280Non-cash
      investing and financing activities:Deferred
      offering costs included in accounts payable
                
                
                63,573
                
                
                
                (200,508
                )
                
                
                573,520Deferred
      offering costs included in accrued expenses
                
                
                —
                
                
                
                (70,000
                )
                
                
                —Debt
      issuance costs included in accounts payable
                
                
                —
                
                
                
                —
                
                
                
                114,156Warrants
      issued pursuant to notes payable
                
                
                —
                
                
                
                3,327
                
                
                
                467,191Common
      stock issued pursuant to notes payable
                
                
                223,336
                
                
                
                —
                
                
                
                223,336Warrants
      issued for debt issuance costs
                
                
                —
                
                
                
                —
                
                
                
                298,021Prepaid
      expenses financed by note payable
                
                
                —
                
                
                
                81,345
                
                
                
                246,871Convertible
      debt issued in lieu of cash for accrued expenses
                
                
                —
                
                
                
                —
                
                
                
                31,413Common
      stock issued in lieu of cash for accrued expenses
                
                
                66,666
                
                
                
                20,250
                
                
                
                325,719Common
      stock issued in lieu of cash for accrued development cost
                
                
                1,565,385
                
                
                
                500,000
                
                
                
                2,065,385Common
      stock issued for debt issuance cost
                
                
                —
                
                
                
                72,734
                
                
                
                301,230


Page
4


ProUroCare
Medical Inc.


(A
Development Stage Company)


Consolidated
Statements of Cash Flows (continued)


(Unaudited)





Six Months Ended
                  June 30
                
                
                Period from August
                  17, 1999 (Inception) to2010
                
                
                2009
                
                
                June 30, 2010Warrants
      issued in lieu of cash for accrued expenses
                
                
                —
                
                
                
                —
                
                
                
                1,250Conversion
      of notes payable, related parties into convertible
    debentures
                
                
                —
                
                
                
                —
                
                
                
                200,000Common
      stock issued in lieu of cash for accounts payable
                
                
                —
                
                
                
                —
                
                
                
                122,291Common
      stock issued in lieu of cash for notes payable-related
    parties
                
                
                —
                
                
                
                —
                
                
                
                10,300Convertible
      debt issued as debt issuance costs related to guarantee of long-term debt
      (recorded as a beneficial conversion in additional paid-in capital)
      applied to accounts payable
                
                
                —
                
                
                
                —
                
                
                
                733,334Issuance
      of note payable for redemption of common stock
                
                
                —
                
                
                
                —
                
                
                
                650,000Conversion
      of accounts payable to note payable
                
                
                —
                
                
                
                12,293
                
                
                
                253,906Conversion
      of accrued expenses to note payable
                
                
                —
                
                
                
                13,569
                
                
                
                13,569Deposits
      applied to note payable and accrued interest
                
                
                —
                
                
                
                —
                
                
                
                142,696Deposits
      applied to accounts payable
                
                
                —
                
                
                
                —
                
                
                
                45,782Assumption
      of liabilities in the Profile, LLC transaction
                
                
                —
                
                
                
                —
                
                
                
                25,000Proceeds
      from sale of furniture and equipment
                
                
                —
                
                
                
                —
                
                
                
                2,200Deposits
      applied to accrued expenses
                
                
                —
                
                
                
                —
                
                
                
                1,076Deferred
      offering costs offset against gross proceeds of offering
                
                
                —
                
                
                
                823,078
                
                
                
                823,078Conversion
      of convertible debt to units
                
                
                —
                
                
                
                1,638,750
                
                
                
                1,638,750Conversion
      of convertible debt-related parties to units
                
                
                —
                
                
                
                1,323,334
                
                
                
                1,323,334Conversion
      of convertible debt-related parties to common stock
                
                
                —
                
                
                
                281,000
                
                
                
                281,000Conversion
      of notes payable to units
                
                
                600,000
                
                
                
                —
                
                
                
                600,000Conversion
      of accrued expenses to units
                
                
                88,846
                
                
                
                331,261
                
                
                
                420,107Note
      payable-related party tendered for warrant exercise
                
                
                —
                
                
                
                —
                
                
                
                26,000Warrant
      exercise cost paid  in lieu of cash for services
      rendered-related party
                
                
                —
                
                
                
                —
                
                
                
                11,250








See
accompanying notes to consolidated financial statements.




Page
5


ProUroCare
Medical Inc.


(A
Development Stage Company)


Notes
to Consolidated Financial Statements




June
30, 2010 and 2009 and the period from


August
17, 1999 (Inception) to June 30, 2010





(Unaudited)





(1)  Description
of Business and Summary of Significant Accounting Policies.




(a)      Description
of Business, Development Stage Activities




ProUroCare
Medical Inc. (“ProUroCare,” the “Company,” “we” or “us”) is a development stage
company engaged in the business of developing for market innovative products for
the detection and characterization of male urological prostate
disease.  The primary focus of the Company is currently its prostate
mechanical imaging (“PMI”) system, designed for use as an aid to the physician
in documenting abnormalities in the prostate that have been previously detected
by a digital rectal exam.  The Company’s developmental activities,
conducted by its wholly-owned operating subsidiary ProUroCare Inc. (“PUC”) and
in conjunction with its development partner, Artann Laboratories, Inc.
(“Artann”), have included acquiring several technology licenses, purchasing
intellectual property, entering into product development agreements, conducting
clinical studies and making application to the Food and Drug Administration
(“FDA”) for market clearance of the PMI system where it is currently under
review.




(b)      Basis
of Presentation




The
accompanying unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
(“GAAP”) and pursuant to the rules and regulations of the Securities and
Exchange Commission (the “SEC”) for interim financial information. Accordingly,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been omitted pursuant to such
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information not misleading. Operating results for the
three and six months ended June 30, 2010 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2010 or any other
period. The accompanying financial statements and related notes should be read
in conjunction with the audited financial statements of the Company, and notes
thereto, contained in our Annual Report on Form 10-K for the year ended December
31, 2009.




The
accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, PUC.  Significant
intercompany accounts and transactions have been eliminated in
consolidation.  Certain comparative figures have been reclassified to
conform to the financial statement presentation adopted in the current year,
including the reclassification of transactions with related
parties.  The financial information furnished reflects, in the opinion
of management, all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the results of the interim periods
presented.




Page
6


(c)      Net
Loss Per Common Share




Basic and
diluted loss per common share is computed by dividing net loss by the
weighted-average number of common shares outstanding for the reporting period.
Dilutive common-equivalent shares have not been included in the computation of
diluted net loss per share because their inclusion would be antidilutive.
Antidilutive common equivalent shares issuable based on future exercise of stock
options or warrants could potentially dilute basic loss per common share in
subsequent years. All options and warrants outstanding were anti-dilutive for
the three and six months ended June 30, 2010 and 2009 and the period from August
17, 1999 (Inception) to June 30, 2010 due to the Company’s net losses. 8,625,350
and 8,236,533 shares of common stock issuable under stock options and warrants
were excluded from the computation of diluted net loss per common share for each
of the three and six months ended June 30, 2010 and 2009,
respectively.




(d)      Stock-Based
Compensation




The
Company’s policy is to grant stock options at fair value at the date of grant
and to record stock-based employee compensation expense at fair
value.  The Company recognizes the expense related to the fair value
of the award on a straight-line basis over the vesting period.  From
time to time, the Company issues options to consultants.  The fair
value of options issued to non-employees (typically consultants) is measured on
the earlier of the date the performance is complete or the date the consultant
is committed to perform.  In the event that the measurement date
occurs after an interim reporting date, the options are measured at their
then-current fair value at each interim reporting date.  The fair
value of options so determined is expensed on a straight-line basis over the
associated performance period.




The
Company uses the Black-Scholes pricing model to estimate the fair value of
options.  The Black-Scholes option-pricing model was developed for use
in estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. In addition, option pricing models require the input
of highly subjective assumptions. Because the Company’s employee and consultant
stock options have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can materially
affect the fair value estimate, the existing models may not necessarily provide
a reliable single measure of the fair value of the Company’s stock
options.




Stock-based
compensation expense related to stock options was $(5,682), $62,903 and
$2,185,548 for the three and six months ended June 30, 2010 and the period from
August 17, 1999 (Inception) to June 30, 2010, respectively, or $0.00, $0.00 and
$0.93 on a per share basis.  Stock-based compensation expense related
to stock options was $9,527 and $158,233 for the three and six months ended June
30, 2009, respectively.  The Company estimates the amount of future
stock-based compensation expense related to currently outstanding options to be
approximately $79,000, $45,000 and $5,000 for the years ending December 31,
2010, 2011 and 2012, respectively.




No stock
options were granted during the three months ended June 30, 2010 or June 30,
2009. In determining the compensation expense of the options granted during the
six months ended June 30, 2010 and 2009, the fair value of each option grant has
been estimated on the date of grant using the Black-Scholes pricing model and
the weighted-average assumptions used in these calculations are summarized as
follows:




Three Months Ended June 30
                    
                    
                    Six Months Ended June 302010
                    
                    
                    2009
                    
                    
                    2010
                    
                    
                    2009Risk-free
      Interest Rate
                    
                    
                    n/a
                    
                    
                    
                    n/a
                    
                    
                    
                    1.82
                    %
                    
                    
                    2.98
                    %Expected
      Life of Options Granted
                    
                    
                    n/a
                    
                    
                    
                    n/a
                    
                    
                    4.02
      years
                    
                    
                    3.85
      yearsExpected
      Volatility
                    
                    
                    n/a
                    
                    
                    
                    n/a
                    
                    
                    
                    131.2
                    %
                    
                    
                    130.6
                    %Expected
      Dividend Yield
                    
                    
                    n/a
                    
                    
                    
                    n/a
                    
                    
                    
                    0
                    
                    
                    
                    0


Page
7




The
expected life of the options is determined using a simplified method, computed
as the average of the option vesting periods and the contractual term of the
option.  For performance-based options that vest upon the occurrence
of an event, the Company uses an estimate of when the event will occur as the
vesting period used in the Black-Scholes calculation for each option
grant.  Expected volatility is based on a simple average of weekly
price data since the date of the Merger.  Based on the lack of history
to calculate a forfeiture rate, the Company has not adjusted the calculated
value of the options.  The risk-free rates for the expected terms of
the stock options and awards are based on the U.S. Treasury yield curve in
effect at the time of grant.




(e)      Warrants




The
Company’s policy is to record warrants issued to non-employees as consideration
for goods or services received at their fair value on the issue date and expense
them as an operating expense depending on the nature of the goods or services
received.




On June
11, 2010, the Company closed an $885,000 private offering of promissory notes
pursuant to which warrants were accrued as interest expense (see Notes 4 and
5(c)).  In determining the interest expense of the options granted
during the three and six months ended June 30, 2010, the fair value of each
option grant has been estimated on the private offer closing date using the
Black-Scholes pricing model using a risk-free interest rate of 1.24%, an
expected warrant life of 3.04 years, an expected volatility rate of 129.5% and
an expected dividend yield of 0.




Excluding
warrants issued as a component of units issued upon the conversion of a loan
into equity securities (see Note 4), no other warrants were granted during the
three and six months ended June 30, 2010.  Excluding warrants issued
as a component of the units sold in the 2009 Public Offering, no warrants were
granted during the six months ended June 30, 2009.  Stock-based
consideration related to warrants issued to non-employees for goods and services
received was $122,575 for the period from August 17, 1999 (Inception) to June
30, 2010 or $0.05 on a per share basis.




(f)    
  Debt Issuance Costs




The
Company’s loans have been made pursuant to loan arrangements or guarantees that
include the provision of compensation to the lenders or guarantors in the form
of Company common stock.  The value of the common stock compensation
is recorded as debt issuance cost and amortized over the term of the
loans.




Debt
issuance costs are summarized as follows:




June 30,
                          2010
                        
                        
                        December 31,
                          2009Debt
      issuance costs, gross
                        
                        $
                        103,650
                        
                        
                        $
                        203,662Less
      amortization
                        
                        
                        (96,757
                        )
                        
                        
                        (176,279
                        )Debt
      issuance costs, net
                        
                        $
                        6,893
                        
                        
                        $
                        27,383





Amortization
expense related to debt issuance costs was $166,013, $243,856 and $2,392,750 for
the three and six months ended June 30, 2010 and the period from August 17, 1999
(inception) to June 30, 2010, respectively. Amortization expense related to debt
issuance costs was $40,329 and $309,529 for the three and six months ended June
30, 2009.




(g)      Deferred
Offering Costs




The legal
fees related to the Company’s 2010 Warrant Tender Offer (see Note 8(a)) were
recorded as a deferred offering cost asset as of June 30, 2010.  The
deferred costs related to the public offering were recorded as a cost of the
offering upon its August 2, 2010 closing.




Page
8


(h)     Going
Concern




The
Company has incurred operating losses, accumulated deficit and negative cash
flows from operations since inception. As of June 30, 2010, the Company had an
accumulated deficit of approximately $30.8 million. These factors, among others,
raise substantial doubt about the Company’s ability to continue as a going
concern. The accompanying unaudited consolidated financial statements do not
include any adjustments related to recoverability and classification of asset
carrying amounts or the amount and classification of liabilities that might
result should the Company be unable to continue as a going concern.




Note
2.  Accrued Expenses.




Accrued
expenses are summarized as follows:




June 30,
                    2010
                  
                  
                  December 31,
                    2009Accrued
      interest expense payable inwarrants
                  
                  $
                  651,042
                  
                  
                  $
                  —Accrued
      loan guarantee consideration and interest payable in common
      stock
                  
                  
                  219,424
                  
                  
                  
                  20,014Accrued
      interest payable in cash
                  
                  
                  74,209
                  
                  
                  
                  137,340Accrued
      audit fees
                  
                  
                  36,000
                  
                  
                  
                  14,000Accrued
      directors’ fees
                  
                  
                  36,416
                  
                  
                  
                  —Uninvoiced
      expenses
                  
                  
                  21,001
                  
                  
                  
                  22,210Accrued
      debt extinguishment payable in common stock
                  
                  
                  11,112
                  
                  
                  
                  66,666Other
                  
                  
                  —
                  
                  
                  
                  9,000$
                  1,049,204
                  
                  
                  $
                  269,230




Note
3.  Notes Payable – Bank.




The
maturity dates of the Company’s $1.3 million of Crown Bank promissory notes were
extended on March 26 and April 28 with no changes to other existing note
terms.  Principal reductions of $50,000 made on each of April 28, 2010
and May 28, 2010.  On June 28, 2010, the maturity date of the $100,000
Crown Bank promissory note was further extended to November 28, 2010 and the
remaining $1.1 million Crown Bank promissory note was revised to be a $900,000
note that matures on March 28, 2011 following a $200,000 principal reduction
payment made by the Company on July 6, 2010.




Pursuant
to guaranties received relating to the Company’s extensions of the Crown Bank
promissory notes on March 26 and April 28, 2010, the Company agreed to continue
to provide 23,333 shares of its common stock per month to the guarantors through
June 28, 2010.  It was determined that the modifications to the
maturity dates of the notes were not substantial modifications of the terms of
the notes, as the present value of the cash flows under the new convertible
promissory notes was less than 10 percent different from the present value of
the cash flows under the original notes. The $136,500 value of the shares was
expensed as interest expense during the three months ended June 30,
2010.




Pursuant
to guaranties received relating to the Company’sJune 28, 2010 renewal of
the Crown Bank promissory notes, the Company agreed to continue to provide
22,222 shares of its common stock per month to the guarantors through November
28, 2010 and 20,000 shares of its common stock per month from November 28, 2010
through March 28, 2011, with a minimum of six months of consideration to be
paid.  It was determined that the modifications to the maturity dates
of the notes were substantial modifications of the terms of the notes,
as the present value of the cash flows under the new convertible promissory
notes was greater than 10 percent different from the present value of the cash
flows under the original notes. The shares, valued at $1.93 per share on the
loan renewal date, will be recorded as debt extinguishment expense over the term
of the loan.




Page
9


Note
4.  Notes Payable.




On March
26, 2010, the Company converted its $600,000 loan from an individual lender and
$97,546 of accrued interest thereon into 381,173 equity units, with each unit
consisting of one share of the Company’s common stock and one warrant to
purchase one share of Company’s common stock.  The immediately
exercisable warrants had a three-year term, an exercise price of $1.83 per share
and a cashless exercise provision.  The lender immediately elected to
exercise the warrants, and the Company issued 102,154 shares of stock to the
lender pursuant to the cashless exercise.  The Company recognized debt
extinguishment expense of $870,981 during the three and six months ended June
30, 2010, respectively, representing the excess fair value of the securities
issued over the carrying value of the debt and interest.  Upon loan
conversion to equity, the Company issued to the individual lender 66,666 shares
of common stock as consideration pursuant to the original terms of the
loan.




On June
11, 2010, the Company closed on the sale of $885,000 of unsecured promissory
notes (the “Notes”) in a private placement.  During the first 30 days
of the Note term, each Note bore interest payable in warrants to purchase shares
of the Company’s common stock.  For every $13,000 original principal
amount of Notes, warrant interest accrued at a rate of 333.333 shares of common
stock per day, up to a maximum of 10,000 warrants per $13,000 of original
principal amount of Notes.  Following the initial 30 days of the Note
term, each Note will bear interest at a 6% annual rate, payable in cash at
maturity.  The Notes will mature on December 1, 2010.  The
Company may prepay, in whole or in part, the unpaid principal of the Notes at
any time prior to the maturity date.




Note
5.  Shareholders’ Equity (Deficit).




(a)  Common
Stock




Between
February 3, 2010 and May 12, 2010, holders of 259,870 warrants to purchase the
Company’s common stock exercised their warrants resulting in proceeds to the
Company of $334,631.




On March
15, 2010, the Company issued 769,231 shares of common stock to Artann pursuant
to a development agreement.  The $1,565,385 value of the shares was
recorded as research and development expense during the year ended December 31,
2009.




On March
26, 2010, the Company converted its $600,000 loan from an individual lender and
$97,546 of accrued interest thereon into 381,173 shares of the Company’s common
stock and 381,173 warrants to purchase the Company’s common stock (see Note 4).
The lender immediately elected to exercise the warrants, and the Company issued
102,154 shares of stock to the lender pursuant to the cashless
exercise.




Between
May 28, 2010 and June 25, 2010, the 139,998 shares of the Company’s common stock
were issued in payment of consideration to loan guarantors.




(b)  Stock
Options




On March
1, 2010, the Company issued non-qualified options to purchase 10,374 shares of
the Company’s common stock to each of two directors upon their election to the
Board of Directors.  The options were valued at $1.97 per share, and
will vest over a two-year period.  The options are exercisable for a
seven-year period at $2.41 per share.




Page
10


(c)  Warrants




On June
11, 2010, the Company closed an $885,000 private offering of promissory notes
(see Note 4).  As of June 30, 2010, 431,154 warrants were accrued for
issuance for interest pursuant to the promissory note agreements. The warrants
have an exercise price of $1.30 per share, a three-year term and are immediately
exercisable.  The Company may elect to redeem the warrants at any time
after the last sales price of the Company’s common stock equals or exceeds $4.00
for 10 consecutive trading days. The Company must provide 30 days prior written
notice of its decision to redeem the warrants, at $0.01 per warrant, during
which time holders may choose to exercise the warrants according to their terms
rather than submitting them for redemption. The warrants were valued at $1.51
per share using the Black-Sholes pricing model on June 11, 2010 (the measurement
date).  The $651,042 value of the accrued warrants was recorded as
interest expense during the three months ended June 30, 2010.




Note
6.  Income Taxes.




The
Company applies the policy of classifying interest in interest expense and
penalties in general and administrative expense.  The Company had
recorded no accrued interest or penalties.




The
Company had no significant unrecognized tax benefits as of June 30, 2010 and
December 31, 2009 and, likewise, no significant unrecognized tax benefits that,
if recognized, would affect the effective tax rate.  The Company had
no positions for which it deemed that it is reasonably possible that the total
amounts of the unrecognized tax benefit will significantly increase or
decrease.  Any interest or penalties are expensed as general and
administrative expense as incurred.




The
Company has generated net operating loss carryforwards of approximately $8.5
million which, if not used, will begin to expire in 2021.  Federal and
state tax laws impose significant restrictions on the utilization of net
operating loss carryforwards in the event of a change in ownership of the
Company that constitutes an “ownership change,” as defined by Section 382 of the
Internal Revenue Code of 1986, as amended (the “Code”).  The Company
has analyzed its equity ownership changes and believes that such an ownership
change occurred upon the completion of its 2009 public offering.  The
Company’s use of its net operating loss carryforwards of approximately $5.3
million and built-in loss incurred prior to the closing of the 2009 public
offering will be limited as a result of this change; however, the amount of
limitation will not be known until a full Section 382 study is
completed.




The net
operating loss carryforwards are subject to examination until they
expire.  The tax years that remain subject to examination by major tax
jurisdictions currently are:




Federal
2006 - 2008


State of
Minnesota 2006 - 2008




Note
7.  Related Parties.




The
Company considers its directors, executives and beneficial shareholders of more
than five percent of its common stock to be related parties.  During
the six months ended June 30, 2010, the following significant transactions were
made between the Company and those parties that were related parties at the time
of each transaction:




Pursuant
to the guaranties received relating to the Company’s March 19, 2009 renewal
of its $1,200,000 Crown Bank promissory note, the Company accrued for issuance
66,666 shares of common stock during the six months ended June 30, 2010 as
consideration to each of James Davis and William Reiling, both five percent
shareholders at the time of the note renewal.  The 66,666 shares
accrued were valued at $33,333 based on the fair market value on the date of the
guarantees received.




Pursuant
to a September 21, 2009 $243,000 loan from Mr. Davis to the Company, the Company
accrued for issuance 20,510 shares of common stock as consideration and
interest during the six months ended June 30, 2010.  The shares
were valued at $1.43 per share on the date of the loan.




On March
1, 2010, the Company’s Board of Directors awarded $12,000 to director David
Koenig in recognition of his years of service as corporate
secretary.  In addition, Mr. Koenig was engaged by the Board as a paid
consultant to the Company to assist management with corporate
financing.  In this role, Mr. Koenig will be paid $4,000 per month for
up to 12 months.




Page
11


On July
1, 2010, the Company issued 22,762 shares of stock in lieu of cash to pay
$36,416 of accrued directors’ fees.




Note
8.  Subsequent Events




(a)  Warrant
Tender Offer




On July
2, 2010, the Company commenced a tender offer to holders of certain outstanding
warrants to provide additional consideration for the exercise of such warrants
(the “2010 Warrant Tender Offer”).  The warrants subject to the tender
offer were 1,752,760 publicly traded warrants and 2,752,947 unregistered
warrants to purchase common stock that were issued on January 12, 2009 and will
expire on January 7, 2014.  Also subject to the tender offer were
1,244,829 publicly traded warrants to purchase common stock that were issued on
November 12, 2009 and will expire on November 12, 2012.





The
Company offered to holders of the subject warrants the opportunity to exercise
their existing warrants and receive, in addition to the shares of common stock
purchased upon exercise, new, three-year replacement warrants.  The
replacement warrants have an exercise price of $1.30 per share and will be
redeemable at the Company’s discretion at any time after the last sales price of
its common stock equals or exceeds $4.00 for ten consecutive trading
days.  The Company must provide 30 days’ prior written notice of a
decision to redeem either the existing or replacement
warrants.  Warrants not exercised during this 30-day period will be
redeemed at $0.01 per warrant.





On August
2, 2010, the Company closed the tender offer. A total of 1,007,529 warrants were
tendered by warrant holders and accepted by the Company pursuant to the 2010
Warrant Tender Offer. All tendered warrants were retired effective as of the
expiration of the offer period. The Company issued 1,007,529 shares of common
stock and 1,007,529 replacement warrants.   Holders of 809,217
warrants paid for their warrant exercise by the cancellation of $1,051,982 of
amounts due them pursuant to promissory notes from the
Company.  Warrants to purchase 198,312 shares of common stock were
exercised for cash, resulting in gross proceeds to the Company of approximately
$257,741.  Cash proceeds from the offering are to be used to obtain
market clearance of the ProUroScan System, fund manufacturing and market
scale-up activities, expand our intellectual property rights, form a scientific
advisory panel and conduct clinical studies and for other general corporate
purposes.




(b)  Issuance
of Stock and Warrants




On July
1, 2010, the Company issued 22,762 shares of stock in lieu of cash to pay
$36,416 of accrued directors’ fees.




On July
12, 2010, the Company issued 44,444 shares of its common stock valued at $70,556
to each of Mr. Davis and Mr. Reiling in consideration for their guarantees of
the Company’s Crown Bank loan through June 28, 2010.  Also on July 12,
2010, the Company issued 65,555 shares of its common stock valued at $1.93 per
share to each of Mr. Davis and Mr. Reiling, representing the six months minimum
consideration for their guarantees of the Company’s Crown Bank loan pursuant to
loan guarantee agreements dated June 28, 2010 (see Note 3).  The share
value will be recorded as a debt issuance cost asset and amortized as debt
extinguishment expense over the term of the guarantees.  Finally, also
on July 12, 2010, the Company issued 31,302 shares of its common stock to Mr.
Davis representing accrued loan consideration and interest due on a $243,000
loan from Mr. Davis to the Company pursuant to a loan agreement dated September
21, 2009.





On July
12, 2010, warrants to acquire 680,770 shares of common stock were issued to the
holders of $885,000 of the Company’s promissory note upon reaching the maximum
30-day period for which warrants were to be earned (see Note
4).


Page
12




Item
2.  Management’s Discussion and Analysis of Financial Condition and
Results of Operation.




The
accompanying Management’s Discussion and Analysis of Financial Condition and
Results of Operation should be read in conjunction with our unaudited
consolidated financial statements, and notes thereto, filed with our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2010.




Disclosure
Regarding Forward-Looking Statements




Certain
statements contained in this Quarterly Report on Form 10-Q may be deemed to be
forward-looking statements as defined by the Private Securities Litigation
Reform Act of 1995, and the Company intends that such forward-looking statements
be subject to the safe-harbor created thereby. Such forward-looking statements
relate to, among other things: general economic or industry conditions,
nationally and in the physician, urology and medical device communities in which
we intend to do business; our ability to raise capital to fund our 2010 and 2011
working capital needs and launch our products into the marketplace; our ability
to pursue additional development of our existing and proposed products on a
timely basis or at all; legislation or regulatory requirements, including our
securing of all U.S. Food and Drug Administration (“FDA”) and other regulatory
approvals on a timely basis, or at all, prior to being able to market and sell
our products in the United States; competition from larger and more well
established medical device companies and other competitors; the development of
products that may be superior to the products offered by us; securing and
protecting our intellectual property and assets, and enforcing breaches of the
same; the quality or composition of our products and the strength and
reliability of our contract vendors and partners; changes in accounting
principles, policies or guidelines; financial or political instability; acts of
war or terrorism; and other economic, competitive, governmental, regulatory and
technical factors affecting our operations, proposed products and prices. We
caution that these statements are qualified by important factors that could
cause actual results to differ materially from those reflected by the
forward-looking statements contained herein.




Overview




ProUroCare
Medical Inc. (“ProUroCare,” the “Company,” “we” or “us,” which terms include
reference to our wholly owned subsidiary, ProUroCare Inc. (“PUC”)) is an
emerging medical device company that is in the process of obtaining FDA
clearance for its first product, an innovative prostate imaging system known as
the ProUroScanTM System.  The ProUroScan System is an imaging system
designed for use as an aid to the physician in documenting abnormalities in the
prostate that have been previously detected by a digital rectal exam (“DRE”). As
an adjunct to DRE, the ProUroScan System will be used following an abnormal DRE
to generate a real-time image of the prostate.  The final composite
image is saved as a permanent electronic record and can be conveniently
retrieved to view previous test results.




We own
patents and exclusively license patents and patent applications and know-how
related to the creation in real-time of two- and three-dimensional images of
soft tissue using special software to process data acquired by probes that
incorporate arrays of sensitive mechanical force sensors.  The
ProUroScan System is our first embodiment of this technology, to be used to
image the prostate.  We believe that this technology can be applied to
other soft tissue organs in the future.




The
ProUroScan System was developed over the past several years under agreements
with our development partner, Artann Laboratories, Inc. (“Artann”), a scientific
technology company focused on early-stage technology development. During 2008
and 2009, our research and development activities conducted through Artann were
primarily directed toward completion of the final configuration of the
ProUroScan System and conducting clinical trials. This work culminated in the
preparation and submission to the FDA of a 510(k) application in November
2009.




The
ProUroScan System is not currently marketed or sold and has not yet been cleared
for marketing by the FDA. Our goal is to have the ProUroScan System regulated by
the FDA as a Class II device.  A Class II device is one in which
general and specific controls exist to ensure that the device is safe and
effective.  In a 510(k) application, applicants must demonstrate that
the proposed device is substantially equivalent to an existing approved product,
or “predicate device.”  Products that employ new or novel
technologies, and for which through the 510(k) review process are found to have
no comparable predicate device, may be cleared for marketing under Section
513(f) of the Food, Drug, and Cosmetic Act ("FDCA").  This path,
referred to as a “de
novo” application, is intended to allow new or novel technology devices
to be cleared for marketing when an appropriate predicate device does not
exist.




Page
13




In
November 2009, a 510(k) application for market clearance was filed with the FDA
that incorporated a basic imaging and documentation claim.  From that
submission, the FDA determined that the ProUroScan System is not substantially
equivalent (“NSE”) to a device currently being marketed.  As required
by Section 513(f)(2) of the FDCA, a submission was made on May 21, 2010 to
request 510(k) clearance under the de novo process.  This
request asked the FDA to define mechanical imaging systems as devices that are
intended to produce an elasticity image of the prostate as an aid in documenting
abnormalities of the prostate that are initially identified by digital rectal
examination and to be used by physicians as a documentation tool.




The de novo submission also
recommended that the classification regulation state that a “mechanical imaging
system” device consists of a trans-rectal probe with pressure sensor arrays and
a motion tracking system that provides real time images of the
prostate.  These proprietary components are unique to the ProUroScan
system.




Once
cleared, the ProUroScan may serve as a predicate for future filings and expanded
indications for use.  The time allowed for review of the de novo application is
defined by statue under Section 513(f)(2) of the FDCA.




Under the
terms of its contract with us, Artann is responsible for submitting and
obtaining the initial regulatory clearance for the ProUroScan System for the
basic imaging and documentation claim.  Once cleared and upon
ProUroCare’s first commercial sale of a ProUroScan System, Artann will transfer
the 510(k) to ProUroCare.




Prior to
entering the market through a commercialization partner, we plan to produce a
small number of systems and place them with highly-regarded urologists across
the United States.  These key opinion leaders will expand our base of
clinical reference while evaluating physician training and in-service
programs.  We expect to market the system in cooperation with a
yet-to-be-determined medical device company that has an established worldwide
presence in the urology market.  We are actively engaged in
discussions with several such companies and intend to identify the
final marketing partner during 2010.  During the course of 2010, as we
move into production and begin marketing our products, we expect to add internal
resources in the areas ofsales and marketing,
engineering and quality control.




During
this pre-revenue stage, in addition to work performed by Artann, we have
conducted our development and clinical activities primarily through the use of
contracted resources that specialize in developing regulatory strategies,
managing the clinical trial process and counseling on FDA matters.  We
have found that using consultants and contractors to perform these functions
during our development stage has allowed us to engage specialized talent and
capabilities as needed by the business while providing the flexibility to engage
them as our financial resources have permitted.  For manufacturing, we
have identified a highly qualified company, Logic (Minneapolis, MN), to produce
the first commercial ProUroScan Systems.  Logic is currently working
with Artann to transfer the technology into production.




An
important initiative for the remainder of 2010 will be to convene our scientific
advisory board (“SAB”) and place ProUroScan systems in the SAB members’
facilities to begin additional patient studies.  We believe that the
insights gained from the participation of these influential physicians will
prove invaluable to our success.




In
addition to the research and development work, we incur ongoing expenses that
are directly related to being a public company, including professional audit and
legal fees, public and investor relations, financial printing, press releases
and transfer agent fees.  We also incur costs associated with the
prosecution and maintenance of our intellectual property.  We
currently rent approximately 1,000 square feet of office space on a
month-to-month basis at a cost of $1,000 per month. Other expenses incurred
include executive officer compensation, travel, insurance, telephone, supplies
and other miscellaneous expenses.




Page
14


Results
of Operations





The
following discussion of the financial condition and results of operations should
be read in conjunction with the financial statements included herewith. This
discussion should not be construed to imply that the results discussed herein
will necessarily continue into the future, or that any conclusion reached herein
will necessarily be indicative of actual operating results in the
future.





Three
months ended June 30, 2010 compared to the three months ended June 30,
2009:





Operating
Expenses/Operating Loss.  Our operating
expenses (and our operating loss) for the three months ended June 30, 2010 were
$529,159, an increase of $134,168, or thirty-four percent, compared to $394,991
last year.  This increase resulted from consulting fees for new
regulatory, reimbursement, finance and manufacturing activities totaling $80,000
and from $29,000 of new public relations efforts.  The 2009 operating
loss for the period was benefited by a $25,000 reversal of a contingency upon
the settlement of a legal dispute.





Net
Interest Expense.Net interest
expense for the three months ended June 30, 2010 was $862,122, an increase of
$821,913 compared to $40,949 last year.  The increased interest
expense resulted primarily from the recording of the Black-Scholes pricing model
valuation of warrants accrued for issuance pursuant to our June 11, 2010 private
placement of $885,000 debt.  Under the debt terms, 431,154 warrants
valued at $651,000 were accrued through June 30, 2010.  See Notes 4
and 5(c) to our unaudited consolidated financial statements for June 30, 2010
and 2009 and the period from August 17, 1999 (Inception) to June 30, 2010
included in this Quarterly Report for a more complete description of the debt
and warrants.  Interest expense during the three months ended June 30,
2010 also included $181,000 of interest expense to be paid in our common stock
related to lenders and loan guarantors as consideration for providing the loans
and guarantees.





Debt
Extinguishment Expense.  Our debt extinguishment expense arises
primarily from bank fees and the issuance of stock or warrants pursuant to the
provisions of short-term loans from lenders in certain refinancing transactions.
Our debt extinguishment expense for the three months ended June 30, 2010 was
$5,000, a decrease of 97 percent, compared to $157,919 last year.  The
expense incurred in the prior year period related to the expensing of stock
issued as consideration to debt guarantors of a $1.2 million bank loan and to an
individual lender of a $281,000 loan.





Six
months ended June 30, 2010 compared to the six months ended June 30,
2009:





Operating
Expenses/Operating Loss.  Our operating
expenses (and our operating loss) for the six months ended June 30, 2010 were
$1,098,463, an increase of $177,955, or 19 percent, compared to $920,508 last
year.  This increase resulted from consulting fees for new regulatory,
reimbursement, finance and manufacturing activities totaling $184,000 and from
$53,000 of new public relations efforts.  In addition, the 2009
operating loss for the period was benefited by a $25,000 reversal of a
contingency upon the settlement of a legal dispute.  Offsetting these
new expenses were reduced stock-based compensation of $95,000, or 60 percent,
compared to last year, as a result of a grant of immediately vesting stock
options to directors and officers valued at $139,000 last year.





Net
Interest Expense.Net interest
expense for the six months ended June 30, 2010 was $949,083, a decrease of 13
percent compared to $1,088,451 last year.  Included in the expense for
the six months ended June 30, 2009 was the approximately $980,000 write-off of
unamortized original issue discount and debt issuance costs related to our 2006,
2007 and 2008 private debt placements and the 2008 unit put arrangement, upon
the closing of our 2009 public offering and the subsequent automatic conversion
of approximately $3.3 million of debt and accrued interest into
equity.  Included in the interest expense for the six months ended
June 30, 2010 was the recording of the Black-Scholes pricing model valuation of
warrants accrued for issuance pursuant to our June 11, 2010 private placement of
$885,000 debt.  Under the debt terms, 431,154 warrants valued at
$651,000 were accrued through June 30, 2010.  See “Liquidity and Capital
Resources- Recent
Financing Activity” below for a more complete description of the debt and
warrants.  Also included in the current year period was $229,000 of
interest expense to be paid in our common stock to lenders and loan guarantors
as consideration for providing the loans and guarantees.  Other
interest expense decreased from $95,000 to $71,000 from 2009 to 2010, reflecting
the retirement of a $600,000 promissory note in March of 2010 and a modest
reduction in other outstanding debt.


Page
15





Debt
Extinguishment Expense.  Our debt extinguishment expense arises
primarily from the issuance of stock or warrants issued pursuant to the
provision of guaranties of loans in certain refinancing
transactions.  Our debt extinguishment expense for the six months
ended June 30, 2010 was $920,426, an increase of 184 percent, compared to
$324,267 last year.   The increase is primarily due to the
conversion of a $600,000 loan from the Phillips W. Smith Family Trust (the
“Smith Trust”) and $97,546 of accrued interest thereon into 381,173 equity
units, with each unit consisting of one share of the Company’s common stock and
one warrant to purchase one share of Company’s common stock.  We
recognized debt extinguishment expense of $870,981 in this conversion,
representing the excess fair value of the securities issued over the carrying
value of the debt and interest at the time of the conversion.  The
expense incurred in the prior year period related to the expensing of stock
issued as consideration to debt guarantors of a $1.2 million bank loan and to an
individual lender of a $281,000 loan.





Balance
Sheet Changes




During
the six months ended June 30, 2010, the following transactions resulted in
material changes to our balance sheet:




On March
15, 2010, we issued 769,231 shares of common stock to Artann pursuant to a
development agreement.  The $1,565,385 value of the shares had been
recorded as an accrued development fee as of December 31, 2009.




On March
26, 2010, we converted our $600,000 loan from the Smith Trust and $97,546 of
accrued interest thereon into 381,173 shares of our common stock and 381,173
warrants to purchase our common stock.  As a result, notes payable and
accrued expenses were reduced accordingly.




On June
11, 2010, we closed on the sale of $885,000 of unsecured promissory notes in a
private placement.  During the first 30 days of the note term, each
note bore interest payable in warrants to purchase shares of our common
stock.  For every $13,000 original principal amount of notes, warrant
interest accrued at a rate of 333.333 shares of common stock per day, up to a
maximum of 10,000 warrants per $13,000 of original principal amount of
Notes.  As of June 30, 2010, we have accrued for issuance 431,154
warrants valued at $651,042.




During
April and May, 2010 we repaid $100,000 of our Crown Bank promissory
notes.




As of
June 30, 2010, all of our notes payable were scheduled to mature within one
year.  Amounts classified as long-term as of December 31, 2009 were
therefore reclassified to short-term as of June 30, 2010.




Liquidity
and Capital Resources




Assets;
Property Acquisitions and Dispositions




Our
primary assets are our intellectual property rights, including patents, patent
applications and our license and commercialization and development agreements
with Artann, which are the foundation for our proposed product offerings. These
assets secure $1.0 million of senior bank notes and $643,000 of subordinated
notes, and as a result, are not available to secure additional senior debt
financing.




Sources
and Uses of Cash




Net cash
used in operating activities was $1.4 million during the six months ended June
30, 2010 compared to $1.9 million in 2009.  In addition to operating
expenses, other uses of cash during the six months ended June 30, 2010 included
payments that reduced accounts payable by $200,000 and an $86,000 prepayment of
the production of probe sensors to be used in future clinical
work.  Uses of cash during the six months ended June 30, 2009 included
payments to Artann totaling $1.1 million for licensing fees and milestone
achievements pursuant to our licensing and development agreements.




Net cash
provided by financing activities was $1.2 million during the six months ended
June 30, 2010, resulting from the $885,000 proceeds of a private debt offering
and proceeds of $335,000 from the exercise of warrants by certain warrant
holders, offset by a $100,000 repayment of bank debt.  Net cash
provided by financing activities was $1.9 million during the first six months of
2009, resulting from the $2.3 million net proceeds from our 2009 public offering
offset by a $300,000 repayment of bank debt.




Page
16




Recent
Financing Activity




On June
11, 2010, we closed on the sale of $885,000 of unsecured promissory notes (the
“Notes”) in a private placement.  During the first 30 days of the Note
term, 10,000 warrants were accrued as interest for each $13,000 of Note
principal amount outstanding. The warrants have an exercise price of $1.30 per
share, a three-year term and are immediately exercisable.  The Company
may elect to redeem the warrants at any time after the last sales price of the
Company’s common stock equals or exceeds $4.00 for 10 consecutive trading
days.  Following the initial 30 days of the Note term, each Note will
bear interest at a 6% annual rate, payable in cash at maturity.  The
Notes will mature on December 1, 2010.  The Company may prepay, in
whole or in part, the unpaid principal of the Notes at any time prior to the
maturity date.




On June
28, 2010, we renewed a total of $1.0 million of our $1.2 million secured debt
with Crown Bank, and on July 6, 2010 we repaid the remaining
$200,000.  Of the $1.0 million debt, $100,000 matures on November 30,
2010 and $900,000 matures on March 28, 2011.




On July
2, 2010, the Company commenced a tender offer to holders of certain outstanding
warrants to provide additional consideration for the exercise of such warrants
(the “2010 Warrant Tender Offer”).  The warrants subject to the tender
offer were 1,752,760 publicly traded warrants and 2,752,947 unregistered
warrants to purchase common stock, all of which were issued on January 12, 2009
and will expire on January 7, 2014.  Also subject to the tender offer
were 1,244,829 publicly traded warrants to purchase common stock that were
issued on November 12, 2009 and will expire on November 12, 2012.  The
Company offered to holders of the subject warrants the opportunity to exercise
their existing warrants and receive, in addition to the shares of common stock
purchased upon exercise, new, three-year replacement warrants.  The
replacement warrants have an exercise price of $1.30 per share and will be
redeemable at the Company’s discretion at any time after the last sales price of
its common stock equals or exceeds $4.00 for ten consecutive trading
days.  The Company must provide 30 days’ prior written notice of a
decision to redeem either the existing or replacement
warrants.  Warrants not exercised during this 30-day period will be
redeemed at $0.01 per warrant.





On August
2, 2010, we closed the 2010 Warrant Tender Offer, and a total of approximately
1.0 million warrants were tendered by warrant holders and accepted by us. All
tendered warrants were retired effective as of the expiration of the offer
period.  Holders of approximately 809,000 warrants paid for their
warrant exercise by the cancellation of $1.1 million of amounts due them
pursuant to promissory notes from ProUroCare.  Warrants to purchase
approximately 192,000 shares of common stock were exercised for cash, resulting
in gross proceeds to the Company of approximately $258,000.




Cash
Requirements




Timing of
the market launch of the ProUroScan system is dependent upon the timing of FDA
market clearance and the amount of funding available to fund manufacturing and
market scale-up activities.  Prior to receiving market clearance, we
are conserving cash by spending only on essential expenses to obtain FDA
clearance, prepare for initial manufacturing, assemble and launch our SAB and
some limited investor and public relations activities.  The cash
requirements outlined below assume that FDA clearance is obtained in the late
third or early fourth quarter of 2010, followed by a formal commercial launch in
early 2011.




We expect
our cash needs for our operating expenses (excluding payments due to Artann
explained below) will be approximately $1.2 million through the remainder of
2010.  Of this amount, we anticipate on-going general and
administrative expenses, including the cost of existing personnel, rent, legal,
audit and other costs of being a public company, will be approximately
$435,000.  We estimate the cost of contracting for on-going product
engineering and development work to build three ProUroScan systems will cost
approximately $145,000.   We also plan to spend $50,000 on new
patent applications and additional embodiments of existing
patents   Costs associated with the SAB, the placement of systems
and conduct of clinical studies at key institutions will be approximately
$230,000. Contracted regulatory expense related to the FDA approval process is
expected to be approximately $45,000.  Scheduled payments of
short-term debt and liabilities during the remainder of 2010 total
$275,000.




Page
17




Pursuant
to the terms of the Artann development agreement, upon receipt of FDA regulatory
clearance we are required to make a cash payment of $750,000 and provide up to a
$600,000 equity payment to Artann.  The equity payment, originally set
at $1,000,000, is subject to a $100,000 reduction per month which began on April
23, 2010 and will continue until FDA clearance is received.  We are
currently in discussions with Artann that may lead to a rescheduling of some of
the payments under the current licensing agreement.




Under the
terms of our secured promissory notes with Crown Bank, we are required to repay
a note for $100,000 in November 2010.  A second note with a $900,000
principal balance matures in March 2011.  We anticipate that we will
be able to renew a significant portion of that note if required.  We
have a third note for $100,000 that matures in January 2011 and a $300,000
promissory note with an investor that matures in March 2011.  These
notes are all held or guaranteed by shareholders that have been instrumental in
financing our funding needs over the past few years.




We intend
to initiate production and launch the ProUroScan system into the market within
three to four months following receipt of FDA market clearance, assuming the
availability of adequate funding. We expect to hire personnel in engineering,
manufacturing, quality/clinical, sales, marketing, and administration to support
these efforts. Over the course of the next twelve months, assuming the receipt
of FDA clearance in the fall of 2010, we expect our total financing needs will
be in the range of $6.5 million to $8.0 million.




Current
Financing Plans




Following
the August 2 closing of our tender offer, we had approximately$550,000 of cash
on hand.  In addition, on that date we had a total of 6,431,306
redeemable warrants outstanding, each with an exercise price of $1.30 per
share.  Of these, we currently have the right to redeem 3,590,894
warrants at any time.  Upon our exercise of our right to redeem the
warrants, holders of the warrants will have a period of 30 days to exercise
their warrants. We could realize up to approximately $4.7 million depending on
the number of shares actually exercised. We expect to exercise our redemption
rights on these warrants in 2010 to meet our financing needs outlined
above.  In addition, we will gain the ability to redeem the remaining
2,840,412 warrants if the last sale price of our common stock were to equal or
exceed $4.00 per share for a period of 10 consecutive trading
days.  If we then exercised our redemption right on these warrants, an
additional $3.7 million could be raised depending on the number of shares
actually exercised pursuant to such redemption.  There can be no
assurance that we will be able to redeem the warrants, or how much would be
realized if such redemption were made.




We plan
to identify a distribution partner in 2010 to help market our products and to
move to a formal agreement following receipt of FDA approval.  We
expect such a distribution partner may provide financial support in the form of
loans, licensing fees, equity investment or a combination of
these.  In addition to financial support, a successful collaboration
with such a partner would allow us to gain access to downstream marketing,
manufacturing and sales support.  However, as an alternative, we may
choose to market the ProUroScan system ourselves by establishing a limited sales
force and concentrate on large practices in major metro markets to prove our
business model before engaging with a distribution partner.  We will
require additional financing if this path is chosen.




In
addition to warrant exercises or corporate funding, we will continue to pursue
additional private funding in 2010 and 2011 to accelerate development of a
portable system and low cost sensors, expand clinical studies with our
scientific advisor board, and more aggressively scale up manufacturing and
marketing.  The amounts of such additional funding will depend upon
the amount of funding we receive from exercise of the outstanding warrants,
including the warrants that may be exercised pursuant to the potential exercise
of our redemption rights.  The additional private funding may be from
the issuance of equity securities, convertible debt, private debt or debt
guarantees for which stock-based consideration is paid.  If any of
these funding events occur, existing shareholders will likely experience
dilution in their ownership interest.  If additional funds are raised
by the issuance of debt or certain equity instruments, we may become subject to
certain operational limitations, and such securities may have rights senior to
those of our existing holders of common stock.




Page
18




If our
funding from warrants or other private funding initiatives is delayed or proves
insufficient to allow an aggressive ramp-up toward market launch, or if FDA
clearance of the ProUroScan system is delayed, we will be forced to delay U.S.
commercialization activities.  An alternative strategy could involve
expanded sales and marketing activities in select foreign markets.  In
these markets, we would attempt to begin selling systems through dedicated
international distributors.




Off-Balance
Sheet Arrangements




None.




Going
Concern




We have
incurred operating losses, accumulated deficit and negative cash flows from
operations since inception. As of June 30, 2010, we had an accumulated deficit
of approximately $30.8 million. These factors, among others, raise substantial
doubt about our ability to continue as a going concern. Our consolidated
financial statements included in this Quarterly Report on Form 10-Q do not
include any adjustments related to recoverability and classification of asset
carrying amounts or the amount and classification of liabilities that might
result should we be unable to continue as a going concern.




Critical
Accounting Policies




Our
critical accounting policies are policies which have a high impact on the
reporting of our financial condition and results, and require significant
judgments and estimates. Our critical accounting policies relate to (a) the
valuation of stock-based compensation awarded to employees, directors, loan
guarantors and consultants and (b) the accounting for debt with beneficial
conversion features.




Valuation
of Stock-Based Compensation




Since
inception, we have measured and recognized compensation expense for all
share-based payment awards made to employees and directors including employee
stock options based on fair value. Our determination of fair value of
share-based payment awards is based on the date of grant using an option-pricing
model which incorporates a number of highly complex and subjective variables.
These variables include, but are not limited to, the expected volatility of our
stock price and estimates regarding projected employee stock option exercise
behaviors and forfeitures. We recognize the expense related to the fair value of
the award straight-line over the vesting period.




The
beneficial conversion features of the promissory notes were valued using the
Black-Scholes pricing model. The resulting original issue discount is amortized
over the life of the promissory notes using the straight-line method, which
approximates the interest method.




Item
4T.  Controls and Procedures.




Disclosure
Controls and Procedures





We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in our reports filed or submitted under the Securities
and Exchange Act of 1934, as amended (the “Exchange Act”) is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities and Exchange Commission (the “SEC”). As of
June 30, 2010, the end of the period covered by this Quarterly Report on Form
10-Q, we carried out an evaluation, under the supervision and with the
participation of management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange
Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures are
effective.


Page
19




Changes
in Internal Control Over Financial Reporting




During
the quarter ended June 30, 2010, there has been no change in the Company’s
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.




PART
II.  OTHER INFORMATION.




Item
1A. Risk Factors.




Investing
in our common stock involves a high degree of risk. You should carefully
consider the risks and uncertainties set forth under Part I, Item 1A of our
Annual Report on Form 10-K for the year ended December 31,
2009.  These risks and uncertainties are not the only ones facing our
Company; additional risks and uncertainties may also impair our business
operations. If any of the risks actually occur, our business, financial
condition, results of operations or cash flows would likely suffer. In that
case, the trading price of our common stock could fall, and you may lose all or
part of your investment.  We undertake no obligation to update or
revise any forward-looking statement except as required by the SEC.





Item
5.  Other Information





The
Company held our Annual Meeting of Shareholders on August 10, 2010, at which the
shareholders took the following actions:





Matter 1:
Election of Directors





The
director nominees described in the Company's Proxy Statement were elected as
follows:





For
                                    
                                    
                                    Withhold
                                    
                                    
                                    Abstain
                                    
                                    BrokerNon-VotesRichard
      C. Carlson
                                    
                                    5,887,767
                                    
                                    
                                    186,427
                                    
                                    
                                    843
                                    
                                    5,975,874Michael
      Chambers
                                    
                                    6,074,194
                                    
                                    
                                    0
                                    
                                    
                                    843
                                    
                                    5,975,974James
      L. Davis
                                    
                                    5,911,767
                                    
                                    
                                    162,427
                                    
                                    
                                    843
                                    
                                    5,975,974David
      F. Koenig
                                    
                                    6,071,694
                                    
                                    
                                    2,500
                                    
                                    
                                    843
                                    
                                    5,975,974Robert
      J. Rudelius
                                    
                                    6,074,194
                                    
                                    
                                    0
                                    
                                    
                                    843
                                    
                                    5,975,974Scott
      E. Smith
                                    
                                    6,074,194
                                    
                                    
                                    0
                                    
                                    
                                    843
                                    
                                    5,975,974





Each
director has consented to hold office until the next annual meeting of
shareholders or until his successor is elected and shall have
qualified.





Matter
2:  Appointment of Independent Registered Public Accounting
Firm





The
appointment of Baker Tilly Virchow Krause, LLP as the Company’s independent
registered public accounting firm for the 2010 fiscal year was ratified as
follows:





For
                                  
                                  Against
                                  
                                  
                                  Abstain12,050,911
                                  
                                  0
                                  
                                  
                                  500




Page
20


Item
6.  Exhibits





Exhibit No.
              
              Description4.1
              
              Form
      of warrant to be issued as interest under form of unsecured promissory
      note issued pursuant to June 11, 2010 $885,000 private placement
      (incorporated by reference to Exhibit 4.1 to Amended Current Report on
      Form 8-K/A filed June 25, 2010).4.2
              
              Form
      of Second Amendment to Warrant Agreement between ProUroCare Medical Inc.
      and Interwest Transfer Company, Inc. (incorporated by reference to Exhibit
      4.24 to Registration Statement on Form S-4 filed July 2,
      2010).4.3
              
              Specimen
      2010 Replacement Warrant (incorporated by reference to Exhibit 4.25 to
      Registration Statement on Form S-4 filed July 2, 2010).10.1
              
              Form
      of Promissory Note issued pursuant to the Company’s private placement of
      promissory notes on June 11, 2010 (incorporated by reference to Exhibit
      10.1 to Current Report on Form 8-K/A filed June 25,
  2010).10.2
              
              $900,000
      Promissory Note dated June 28, 2010 issued in favor of Crown Bank
      (incorporated by reference to Exhibit 10.1 to Current Report on
      Form 8-K filed July 2, 2010).10.3
              
              $100,000
      Promissory Note dated June 28, 2010 issued in favor of Crown Bank
      (incorporated by reference to Exhibit 10.2 to Current Report on
      Form 8-K filed July 2, 2010).10.4
              
              Form of
      Loan Guarantor Compensation Letter Agreement dated June 28, 2010
      (incorporated by reference to Exhibit 10.3 to Current Report on
      Form 8-K filed July 2, 2010).31.1         *
              
              Certification
      of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the
      Sarbanes-Oxley Act of 2002.31.2         *
              
              Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the
      Sarbanes-Oxley Act of 2002.32.1         *
              
              Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of
2002


Page
21


SIGNATURES




Pursuant
to the Securities Exchange Act of 1934, as amended, the Company has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.




ProUroCare Medical
      Inc.Date:  August
      16, 2010
                          By:
                          /s/ Richard C.
      CarlsonName:  Richard
      C. CarlsonTitle:  Chief
      Executive OfficerDate:  August
      16, 2010
                          By:
                          /s/ Richard
  ThonName:  Richard
      ThonTitle:  Chief
      Financial
Officer




Page
22


Exhibit
Index





Exhibit No.
              
              Description4.1
              
              Form
      of warrant to be issued as interest under form of unsecured promissory
      note issued pursuant to June 11, 2010 $885,000 private placement
      (incorporated by reference to Exhibit 4.1 to Amended Current Report on
      Form 8-K/A filed June 25, 2010).4.2
              
              Form
      of Second Amendment to Warrant Agreement between ProUroCare Medical Inc.
      and Interwest Transfer Company, Inc. (incorporated by reference to Exhibit
      4.24 to Registration Statement on Form S-4 filed July 2,
      2010).4.3
              
              Specimen
      2010 Replacement Warrant (incorporated by reference to Exhibit 4.25 to
      Registration Statement on Form S-4 filed July 2, 2010).10.1
              
              Form
      of Promissory Note issued pursuant to the Company’s private placement of
      promissory notes on June 11, 2010 (incorporated by reference to Exhibit
      10.1 to Current Report on Form 8-K/A filed June 25,
  2010).10.2
              
              $900,000
      Promissory Note dated June 28, 2010 issued in favor of Crown Bank
      (incorporated by reference to Exhibit 10.1 to Current Report on
      Form 8-K filed July 2, 2010).10.3
              
              $100,000
      Promissory Note dated June 28, 2010 issued in favor of Crown Bank
      (incorporated by reference to Exhibit 10.2 to Current Report on
      Form 8-K filed July 2, 2010).10.4
              
              Form of
      Loan Guarantor Compensation Letter Agreement dated June 28, 2010
      (incorporated by reference to Exhibit 10.3 to Current Report on
      Form 8-K filed July 2, 2010).31.1         *
              
              Certification
      of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the
      Sarbanes-Oxley Act of 2002.31.2         *
              
              Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the
      Sarbanes-Oxley Act of 2002.32.1         *
              
              Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of
2002