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 March 31,
2011

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: 001-33718

________________________

BIOHEART, INC.(Exact name of registrant as specified in its charter)

________________________

|                                                                |  |                                     
|--------------------------------------------------------------- |  | ------------------------------------
|Florida                                                         |  | 65-0945967                          
|(State or other jurisdiction of  incorporation or organization) |  | (I.R.S. Employer Identification No.)

13794 NW 4th Street, Suite
212, Sunrise, Florida 33325(Address of principal executive offices) (Zip Code)

(954) 835-1500
(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 (§232.045 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 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 o Non-accelerated filer o
(Do not check if a smaller reporting company) 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

As
of May 19, 2011, there were 42,989,019 outstanding shares of the registrant’s common stock, par value $0.001 per share.

---



BIOHEART, INC. AND SUBSIDIARIES

INDEX

|           |                       |                                                                                                                                                                                             |   
|---------- | --------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --
|PART I     | Financial Information | Page Number                                                                                                                                                                                
|           |                       |                                                                                                                                                                                             |   
|           | Item 1.               | Financial Statements (unaudited)                                                                                                                                                            | 2 
|           |                       |                                                                                                                                                                                             |   
|           |                       | Condensed Consolidated Balance Sheets – March 31, 2011 (Unaudited) and December 31, 2010                                                                                                    | 2 
|           |                       |                                                                                                                                                                                             |   
|           |                       | Unaudited Condensed Consolidated Statements of Operations – Three Months Ended March 31,
    2011, March 31, 2010 and the period from August 12, 1999 (date of inception) to March 31, 2011 | 3 
|           |                       |                                                                                                                                                                                             |   
|           |                       | Unaudited Condensed Consolidated Statements of Stockholders Deficit –Three Months Ended March 31, 2011                                                                                      | 4 
|           |                       |                                                                                                                                                                                             |   
|           |                       | Unaudited Condensed Consolidated Statements of Cash Flows – Three Months Ended March 31, 2011, March 31, 2010 and the period from August 12, 1999 (date of inception) to March 31, 2011     | 5 
|           |                       |                                                                                                                                                                                             |   
|           |                       | Notes to Unaudited Condensed Consolidated Financial Statements                                                                                                                              | 7 
|           |                       |                                                                                                                                                                                             |   
|           | Item 2.               | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                                                       | 24
|           |                       |                                                                                                                                                                                             |   
|           | Item 3.               | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                  | 30
|           |                       |                                                                                                                                                                                             |   
|           | Item 4.               | Controls and Procedures                                                                                                                                                                     | 30
|           |                       |                                                                                                                                                                                             |   
|PART II    | Other Information     | 31                                                                                                                                                                                         
|           |                       |                                                                                                                                                                                             |   
|           | Item 1                | Legal Proceedings                                                                                                                                                                           | 31
|           |                       |                                                                                                                                                                                             |   
|           | Item 1A.              | Risk Factors                                                                                                                                                                                | 31
|           |                       |                                                                                                                                                                                             |   
|           | Item 2.               | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                 | 31
|           |                       |                                                                                                                                                                                             |   
|           | Item 3.               | Defaults Upon Senior Securities                                                                                                                                                             | 32
|           |                       |                                                                                                                                                                                             |   
|           | Item 4.               | Removed and Reserved                                                                                                                                                                        | 32
|           |                       |                                                                                                                                                                                             |   
|           | Item 5                | Other Information                                                                                                                                                                           | 32
|           |                       |                                                                                                                                                                                             |   
|           | Item 6.               | Exhibits                                                                                                                                                                                    | 34
|           |                       |                                                                                                                                                                                             |   
|SIGNATURES |                       | 37                                                                                                                                                                                         
|           |                       |                                                                                                                                                                                            
|EX-31.1    |                       | 38                                                                                                                                                                                         
|           |                       |                                                                                                                                                                                            
|EX-32.1    |                       | 39                                                                                                                                                                                         



|
|
|

1

---



PART I. - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BIOHEART, INC. AND SUBSIDIARIES

(a development stage company)

CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                               |  |                |              |                   |   |              |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------- | ------------ | ----------------- | - | ------------ | -
|                                                                                                                                                                               |  | March 31,
2011 |              | December 31,
2010 |  
|                                                                                                                                                                               |  | (unaudited)    |              |                   |   |             
|ASSETS                                                                                                                                                                         |  |                |              |                   |   |              |  
|Current assets:                                                                                                                                                                |  |                |              |                   |   |              |  
|Cash and cash equivalents                                                                                                                                                      |  | $              | 170,000      |                   | $ | 3,298        |  
|Accounts receivable, net                                                                                                                                                       |  |                | —            |                   |   | 1,266        |  
|Inventory                                                                                                                                                                      |  |                | 64,612       |                   |   | 64,612       |  
|Prepaid and other                                                                                                                                                              |  |                | 85,083       |                   |   | 34,322       |  
|Total current assets                                                                                                                                                           |  |                | 319,695      |                   |   | 103,498      |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Property and equipment, net                                                                                                                                                    |  |                | 38,734       |                   |   | 47,439       |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Other assets                                                                                                                                                                   |  |                | 157,859      |                   |   | 157,859      |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Total assets                                                                                                                                                                   |  | $              | 516,288      |                   | $ | 308,796      |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                          |  |                |              |                   |   |              |  
|Current liabilities:                                                                                                                                                           |  |                |              |                   |   |              |  
|Accounts payable                                                                                                                                                               |  | $              | 2,413,672    |                   | $ | 2,050,161    |  
|Accrued expenses                                                                                                                                                               |  |                | 3,690,976    |                   |   | 3,581,445    |  
|Advances, related party                                                                                                                                                        |  |                | 378,000      |                   |   | 238,000      |  
|Deposits held                                                                                                                                                                  |  |                | 465,286      |                   |   | 465,286      |  
|Subordinated debt, related party                                                                                                                                               |  |                | 1,500,000    |                   |   | 1,500,000    |  
|Notes payable, related party                                                                                                                                                   |  |                | 225,000      |                   |   | 225,000      |  
|Notes payable, net of debt discount                                                                                                                                            |  |                | 3,600,173    |                   |   | 3,232,271    |  
|Total current liabilities                                                                                                                                                      |  |                | 12,273,107   |                   |   | 11,292,163   |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Long term debt:                                                                                                                                                                |  |                |              |                   |   |              |  
|Note payable, long term                                                                                                                                                        |  |                | 410,366      |                   |   | 1,032,827    |  
|Total long term debt                                                                                                                                                           |  |                | 410,366      |                   |   | 1,032,827    |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Total liabilities                                                                                                                                                              |  |                | 12,683,473   |                   |   | 12,324,990   |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Commitments and contingencies                                                                                                                                                  |  |                | —            |                   |   | —            |  
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Stockholders’ deficit:                                                                                                                                                         |  |                |              |                   |   |              |  
|Preferred stock, par value $0.001; 5,000,000 shares authorized, none issued and outstanding as of March 31, 2011 and December 31, 2010                                         |  |                | —            |                   |   | —            |  
|Common stock, par value $0.001; 75,000,000 shares authorized, 42,443,169 and 37,545,865 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively |  |                | 42,443       |                   |   | 37,545       |  
|Additional paid in capital                                                                                                                                                     |  |                | 95,301,119   |                   |   | 94,274,281   |  
|Subscriptions receivable                                                                                                                                                       |  |                | —            |                   |   | (3,800       | )
|Deficit accumulated during development stage                                                                                                                                   |  |                | (107,510,747 | )                 |   | (106,324,220 | )
|Total stockholders’ deficit                                                                                                                                                    |  |                | (12,167,185  | )                 |   | (12,016,194  | )
|                                                                                                                                                                               |  |                |              |                   |   |              |  
|Total liabilities and stockholders’ deficit                                                                                                                                    |  | $              | 516,288      |                   | $ | 308,796      |  

See the accompanying notes to these unaudited
condensed consolidated financial statements

2

---



BIOHEART, INC. AND SUBSIDIARIES

(a development stage company)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|----------------------------------------------------------------------- |  | ---------------------------- | ---------- | ------------------------------------------- | ---------- | -------------- | - | - | ------------ | -
|                                                                        |  | Three months ended March 31, |            | From August 12, 1999 (date of Inception) to |           
|                                                                        |  | 2011                         |            | 2010                                        |            | March 31, 2011 |  
|                                                                        |  |                              |            |                                             | (restated) |                |   |   |             
|Revenue                                                                 |  | $                            | —          |                                             | $          | 29,794         |   | $ | 1,191,056    |  
|Cost of sales                                                           |  |                              | —          |                                             |            | 14,404         |   |   | 550,140      |  
|Gross profit                                                            |  |                              | —          |                                             |            | 15,390         |   |   | 640,916      |  
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|Operating expenses:                                                     |  |                              |            |                                             |            |                |   |   |              |  
|Research and development                                                |  |                              | 170,111    |                                             |            | 415,856        |   |   | 63,995,762   |  
|Marketing, general and administrative                                   |  |                              | 490,508    |                                             |            | 427,252        |   |   | 33,023,445   |  
|Depreciation and amortization                                           |  |                              | 8,705      |                                             |            | 23,113         |   |   | 860,067      |  
|Total operating expenses                                                |  |                              | 669,324    |                                             |            | 866,221        |   |   | 97,879,274   |  
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|Net loss from operations                                                |  |                              | (669,324   | )                                           |            | (850,831       | ) |   | (97,238,358  | )
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|Other income (expenses):                                                |  |                              |            |                                             |            |                |   |   |              |  
|Development revenues                                                    |  |                              | —          |                                             |            | —              |   |   | 117,500      |  
|Interest income                                                         |  |                              | —          |                                             |            | 1              |   |   | 762,277      |  
|Other income                                                            |  |                              | 3,389      |                                             |            | —              |   |   | 248,943      |  
|Loss on settlement of debt                                              |  |                              | (110,872   | )                                           |            | —              |   |   | (110,872     | )
|Interest expense                                                        |  |                              | (409,720   | )                                           |            | (399,206       | ) |   | (11,290,237  | )
|Total other income (expenses)                                           |  |                              | (517,203   | )                                           |            | (399,205       | ) |   | (10,272,389  | )
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|Net loss before income taxes                                            |  |                              | (1,186,527 | )                                           |            | (1,250,036     | ) |   | (107,510,747 | )
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|Income taxes (benefit)                                                  |  |                              | —          |                                             |            | —              |   |   | —            |  
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|NET LOSS                                                                |  | $                            | (1,186,527 | )                                           | $          | (1,250,036     | ) | $ | (107,510,747 | )
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|Net loss per common share, basic and diluted                            |  | $                            | (0.03      | )                                           | $          | (0.06          | ) |   |              |  
|                                                                        |  |                              |            |                                             |            |                |   |   |              |  
|Weighted average number of common shares outstanding, basic and diluted |  |                              | 40,517,481 |                                             |            | 21,115,148     |   |   |              |  



See the accompanying notes to these unaudited
condensed consolidated financial statements

3

---



BIOHEART, INC. AND SUBSIDIARIES

(a development stage company)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’
DEFICIT

THREE MONTHS ENDED MARCH 31, 2011

(unaudited)

|                                                                           |  |              |            |                    |   |              |  |                                        |            |       |   |        |   |   |              |   |   |             |  
|-------------------------------------------------------------------------- |  | ------------ | ---------- | ------------------ | - | ------------ |  | -------------------------------------- | ---------- | ----- | - | ------ | - | - | ------------ | - | - | ----------- | -
|                                                                           |  | Common stock |            | Additional
Paid in |   | Subscription |  | Deficit
Accumulated
During
Development |            |       |  
|                                                                           |  | Shares       |            | Amount             |   | Capital      |  | Receivable                             |            | Stage |   | Total  |  
|Balance, December 31, 2010                                                 |  |              | 37,545,865 |                    | $ | 37,545       |  | $                                      | 94,274,281 |       | $ | (3,800 | ) | $ | (106,324,220 | ) | $ | (12,016,194 | )
|Proceeds from common stock subscription                                    |  |              | —          |                    |   | —            |  |                                        | —          |       |   | 3,800  |   |   | —            |   |   | 3,800       |  
|Common stock issued in exchange for options exercised cashlessly           |  |              | 438,170    |                    |   | 438          |  |                                        | (438       | )     |   | —      |   |   | —            |   |   | —           |  
|Common stock issued upon conversion of notes payable and non-cash interest |  |              | 959,934    |                    |   | 960          |  |                                        | 275,057    |       |   | —      |   |   | —            |   |   | 276,017     |  
|Issuance of common stock, net of issuance costs of                         |  |              |            |                    |   |              |  |                                        |            |       |   |        |   |   |              |   |   |             |  
|$40,000                                                                    |  |              | 3,499,200  |                    |   | 3,500        |  |                                        | 511,001    |       |   | —      |   |   | —            |   |   | 514,501     |  
|Stock based compensation                                                   |  |              | —          |                    |   | —            |  |                                        | 105,347    |       |   | —      |   |   | —            |   |   | 105,347     |  
|Loss on settlement of debt                                                 |  |              | —          |                    |   | —            |  |                                        | 110,872    |       |   | —      |   |   | —            |   |   | 110,872     |  
|Beneficial conversion feature connection with issuance of convertible note |  |              | —          |                    |   | —            |  |                                        | 25,000     |       |   | —      |   |   | —            |   |   | 25,000      |  
|Net loss                                                                   |  |              | —          |                    |   | —            |  |                                        | —          |       |   | —      |   |   | (1,186,527   | ) |   | (1,186,527  | )
|Balance, March 31, 2011                                                    |  |              | 42,443,169 |                    | $ | 42,443       |  | $                                      | 95,301,119 |       | $ | —      |   | $ | (107,510,747 | ) | $ | (12,167,185 | )



See the accompanying notes to these unaudited
condensed consolidated financial statements

4

---





BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

|                                                                                         |  |                              |            |                                                            |   |            |   |   |              |  
|---------------------------------------------------------------------------------------- |  | ---------------------------- | ---------- | ---------------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                                                         |  | Three months ended March 31, |            | From August 12, 1999 (date of Inception) to March 31, 2011 |  
|                                                                                         |  | 2011                         |            | 2010                                                       |   |           
|                                                                                         |  |                              |            | (restated)                                                 |   |            |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |  |                              |            |                                                            |   |            |   |   |              |  
|Net loss                                                                                 |  | $                            | (1,186,527 | )                                                          | $ | (1,250,036 | ) | $ | (107,510,747 | )
|Adjustments to reconcile net loss to net cash used in operating activities:              |  |                              |            |                                                            |   |            |   |   |              |  
|Depreciation and amortization                                                            |  |                              | 8,705      |                                                            |   | 23,113     |   |   | 860,067      |  
|Bad debt expense                                                                         |  |                              | 1,266      |                                                            |   | —          |   |   | 166,266      |  
|Discount on convertible debt                                                             |  |                              | 136,288    |                                                            |   | —          |   |   | 398,512      |  
|Loss on settlement of debt                                                               |  |                              | 110,872    |                                                            |   | —          |   |   | 110,872      |  
|Amortization of warrants issued in exchange for licenses and intellectual property       |  |                              | —          |                                                            |   | —          |   |   | 5,413,156    |  
|Amortization of warrants issued in connection with notes payable                         |  |                              | 92,158     |                                                            |   | 70,330     |   |   | 5,156,258    |  
|                                                                                         |  |                              |            |                                                            |   |            |   |   |              |  
|Amortization of loan costs                                                               |  |                              | 3,054      |                                                            |   | 27,024     |   |   | 1,218,637    |  
|Warrants issued in exchange for services                                                 |  |                              | —          |                                                            |   | —          |   |   | 285,659      |  
|Equity instruments issued in connection with R&D agreement                               |  |                              | —          |                                                            |   | 203,077    |   |   | 360,032      |  
|Equity instruments issued in connection with settlement agreement                        |  |                              | —          |                                                            |   | —          |   |   | 3,381,629    |  
|Common stock issued in connection with accounts payable                                  |  |                              | —          |                                                            |   | 38,172     |   |   | 655,382      |  
|Common stock issued in exchange for services                                             |  |                              | —          |                                                            |   | —          |   |   | 1,322,917    |  
|Common stock issued in connection with amounts due to guarantors of Bank of America loan |  |                              | —          |                                                            |   | 69,159     |   |   | 69,159       |  
|Common stock issued in exchange for distribution rights                                  |  |                              |            |                                                            |   |            |   |   |              |  
|and intellectual property                                                                |  |                              | —          |                                                            |   | —          |   |   | 99,997       |  
|Warrants issued in connection with accounts payable                                      |  |                              |            |                                                            |   | —          |   |   | 7,758        |  
|Stock based compensation                                                                 |  |                              | 105,347    |                                                            |   | 47,298     |   |   | 9,570,361    |  
|(Increase) decrease in:                                                                  |  |                              |            |                                                            |   |            |   |   |              |  
|Receivables                                                                              |  |                              | —          |                                                            |   | (14,501    | ) |   | (1,265       | )
|Inventory                                                                                |  |                              | —          |                                                            |   | 31,063     |   |   | (153,618     | )
|Prepaid and other current assets                                                         |  |                              | (50,761    | )                                                          |   | 18,943     |   |   | (85,082      | )
|Other assets                                                                             |  |                              | —          |                                                            |   | —          |   |   | (28,854      | )
|Increase (decrease) in:                                                                  |  |                              |            |                                                            |   |            |   |   |              |  
|Accounts payable                                                                         |  |                              | 363,511    |                                                            |   | 37,789     |   |   | 2,997,790    |  
|Accrued expenses and deferred rent                                                       |  |                              | 109,531    |                                                            |   | 194,851    |   |   | 4,758,373    |  
|Deferred revenue                                                                         |  |                              | —          |                                                            |   | —          |   |   | 465,287      |  
|Net cash used in operating activities                                                    |  |                              | (306,556   | )                                                          |   | (503,718   | ) |   | (70,481,454  | )

See the accompanying notes to these unaudited
condensed consolidated financial statements

5

---





BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)



|                                                                          |  |                               |          |                                                            |   |         |   |   |            |  
|------------------------------------------------------------------------- |  | ----------------------------- | -------- | ---------------------------------------------------------- | - | ------- | - | - | ---------- | -
|                                                                          |  | Three months ended 
March 31, |          | From August 12, 1999 (date of Inception) to March 31, 2011 |  
|                                                                          |  | 2011                          |          | 2010                                                       |   |        
|                                                                          |  |                               |          | (restated)                                                 |   |         |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                     |  |                               |          |                                                            |   |         |   |   |            |  
|Acquisitions of property and equipment                                    |  |                               | —        |                                                            |   | —       |   |   | (898,800   | )
|Net cash used in investing activities                                     |  |                               | —        |                                                            |   | —       |   |   | (898,800   | )
|                                                                          |  |                               |          |                                                            |   |         |   |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                     |  |                               |          |                                                            |   |         |   |   |            |  
|Proceeds from issuance of common stock, net                               |  |                               | 518,300  |                                                            |   | 497,999 |   |   | 62,390,475 |  
|Proceeds from (payments for) initial public offering of common stock, net |  |                               | —        |                                                            |   | —       |   |   | 1,447,829  |  
|Proceeds from subordinated related party note                             |  |                               | —        |                                                            |   | —       |   |   | 3,000,000  |  
|Payment of note payable                                                   |  |                               | —        |                                                            |   | —       |   |   | (3,000,000 | )
|Proceeds from notes payable, related party                                |  |                               | —        |                                                            |   | —       |   |   | 225,000    |  
|Proceeds from related party advances                                      |  |                               | 140,000  |                                                            |   | —       |   |   | 378,000    |  
|Proceeds from exercise of stock options                                   |  |                               | —        |                                                            |   | —       |   |   | 292,117    |  
|Proceeds from notes payable                                               |  |                               | 25,000   |                                                            |   | —       |   |   | 11,523,000 |  
|Repayments of notes payable                                               |  |                               | (210,042 | )                                                          |   | —       |   |   | (3,486,899 | )
|Payment of loan costs                                                     |  |                               | —        |                                                            |   | (20,000 | ) |   | (1,219,268 | )
|Net cash provided by financing activities                                 |  |                               | 473,258  |                                                            |   | 477,999 |   |   | 71,550,254 |  
|                                                                          |  |                               |          |                                                            |   |         |   |   |            |  
|Net increase (decrease) in cash and cash equivalents                      |  |                               | 166,702  |                                                            |   | (25,719 | ) |   | 170,000    |  
|                                                                          |  |                               |          |                                                            |   |         |   |   |            |  
|Cash and cash equivalents, beginning of period                            |  |                               | 3,298    |                                                            |   | 75,031  |   |   | —          |  
|Cash and cash equivalents, end of period                                  |  | $                             | 170,000  |                                                            | $ | 49,312  |   | $ | 170,000    |  
|                                                                          |  |                               |          |                                                            |   |         |   |   |            |  
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                         |  |                               |          |                                                            |   |         |   |   |            |  
|Interest paid                                                             |  | $                             | 67,635   |                                                            | $ | 96,653  |   | $ | 1,674,236  |  
|Income taxes paid                                                         |  | $                             | —        |                                                            | $ | —       |   | $ | —          |  
|                                                                          |  |                               |          |                                                            |   |         |   |   |            |  
|Non cash financing activities:                                            |  |                               |          |                                                            |   |         |   |   |            |  
|Common stock issued in settlement of notes payable                        |  | $                             | 139,729  |                                                            | $ | —       |   | $ | 2,311,729  |  

See the accompanying notes to these unaudited
condensed consolidated financial statements



6

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BIOHEART, INC. AND SUBSIDIARIES
(a development stage company)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting
policies applied in the presentation of the accompanying unaudited condensed consolidated financial statements follows:

General

The accompanying unaudited condensed
consolidated financial statements of Bioheart, Inc., (the “Company”), have been prepared in accordance with the rules
and regulations (S-X) of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for
complete financial statements.

In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results from operations
for the three month period ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year
ended December 31, 2011. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated
December 31, 2010 financial statements and footnotes thereto included in the Company’s SEC Form 10-K.

Basis and business presentation

Bioheart, Inc (the “Company”)
was incorporated under the laws of the State of Florida in August 1999. The Company is in the development stage, as defined by
Accounting Standards Codification subtopic 915-10, Development Stage Entities (“ASC 915-10”) and is the cardiovascular
sector of the cell technology industry delivering cell therapies and biologics that help address congestive heart failure, lower
limb ischemia, chronic heart ischemia, acute myocardial infarctions and other issues. To date, the Company has not generated significant
sales revenues, has incurred expenses and has sustained losses. Consequently, its operations are subject to all the risks inherent
in the establishment of a new business enterprise. For the period from inception through March 31, 2011, the Company has accumulated
a deficit through its development stage of $107,510,747.

The unaudited condensed consolidated
financial statements include the accounts of the Company, and its wholly-owned subsidiaries. All significant intercompany balances
and transactions have been eliminated in consolidation.

Estimates

The preparation of the consolidated financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. The most significant estimates are those used in determination of derivative liabilities
and stock compensation. Accordingly, actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance
with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four
basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has
occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria
(3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered
and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are recorded.

At the time of each transaction, management
assesses whether the fee associated with the transaction is fixed or determinable and whether or not collection is reasonably assured.
The assessment of whether the fee is fixed or determinable is based upon the payment terms of the transaction. If a significant
portion of a fee is due after our normal payment terms or upon implementation or client acceptance, the fee is accounted for as
not being fixed or determinable



7

---





and revenue is recognized as the fees
become due or after implementation or client acceptance has occurred. Collectability is assessed based on a number of factors,
including past transaction history with the client and the creditworthiness of the client.

The Company accounts for Multiple-Element
Arrangements under ASC 605-10 which incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arrangements
(“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple
products, services and/or rights to use assets.

Unbilled revenue is revenue that is recognized
but is not currently billable to the customer pursuant to contractual terms. In general, such amounts become billable in accordance
with predetermined payment schedules, but recognized as revenue as services are performed. Amounts included in unbilled revenue
are expected to be collected within one year and are included within current assets.

Cash

The Company considers cash to consist
of cash on hand and temporary investments having an original maturity of 90 days or less that are readily convertible into cash.

Accounts Receivable

Trade receivables are carried at their
estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus trade receivables do not bear interest.
Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current
financial condition.

Allowance for Doubtful Accounts

Any changes to the allowance for doubtful
accounts on accounts receivable are charged to operations in amounts sufficient to maintain the allowance for uncollectible accounts
at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based
on historical write-off percentages and the current status of accounts receivable. Accounts receivable are charged off against
the allowance when collectability is determined to be permanently impaired. As of March 31, 2011 and December 31, 2010, allowance
for doubtful accounts was $8,751 and $7,485, respectively.

Property and Equipment

Property and equipment are stated at
cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective
accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes,
property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives of
3 to 15 years.

Long-Lived Assets

The Company follows FASB ASC 360-10-15-3,
“Impairment or Disposal of Long-lived Assets,” which established a “primary asset” approach to determine
the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset
to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable
if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived
assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

Income Taxes

The Company has adopted Accounting Standards
Codification subtopic 740-10, Income Taxes (“ASC 740-10”) which requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.
Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and
tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Temporary differences between taxable



8

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income reported for financial reporting
purposes and income tax purposes consist primarily of derivative liability and stock compensation accounting versus tax differences.

Comprehensive Income

The Company does not have any items of
comprehensive income in any of the periods presented.

Net Loss per Common Share, basic and
diluted

The Company has adopted Accounting Standards
Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure
requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number
of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted loss per
share because their effect is anti-dilutive on the computation. Fully diluted shares outstanding were 40,950,819 and 32,158,354
for the three months ended March 31, 2011 and 2010, respectively.

Stock based compensation

The Company follows Accounting Standards
Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees
and non employees be recognized in the income statement based on their fair values. (See note 11)

As of March 31, 2011, there were outstanding
stock options to purchase 1,902,820 shares of common stock, 1,307,698 shares of which were vested.

Concentrations of Credit Risk

The Company’s financial instrument
that is exposed to a concentration of credit risk is cash and accounts receivable. Effective December 31, 2010 and extending through
December 31, 2012, all non-interest-bearing transaction accounts are fully insured by the Federal Deposit Insurance Corporation
(FDIC), regardless of the balance of the account. Generally, the Company’s cash and cash equivalents in interest-bearing
accounts does not exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior
management.

As of March 31, 2011, one customer represented
83% of the Company’s accounts receivable. As of December 31, 2010, one customer represented 53% of the Company’s accounts
receivable

The Company did not generate revenues
for the three month period ended March 31, 2011. For the three month period ended March 31, 2010, the Company’s revenues
earned from sale of products and services included 78% of the Company’s total revenues from one customer.

Reliance on Key Personnel and Consultants

The Company has 7 full-time employees
and no part-time employees. The Company is heavily dependent on the continued active participation of these current executive officers,
employees and key consultants. The loss of any of the senior management or key consultants could significantly and negatively impact
the business until adequate replacements can be identified and put in place.

Research and Development

The Company accounts for research and
development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”).
Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and
development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has
been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research
and development costs related to both present and future products are expensed in the period incurred. The Company incurred research
and development expenses of $170,111, $415,856 and $63,995,762 for the three months ended March 31, 2011 and 2010, and from August
12, 1999 (date of inception) to March 31, 2011, respectively.



9

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Fair Value

Accounting Standards Codification subtopic
825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments.
The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected
in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial
assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements
together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit
risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise
only available information pertinent to fair value has been disclosed.

The company follows Accounting Standards
Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification
subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments
and certain other items at fair value. Neither of these statements had an impact on the Company’s financial position, results
of operations nor cash flows.

Reclassification

Certain reclassifications have been made
to prior periods’ data to conform with the current year’s presentation. These reclassifications had no effect on reported
income or losses.

Recent Accounting Pronouncements

There were various updates recently issued,
most of which represented technical corrections to the accounting literature or application to specific industries and are not
expected to a have a material impact on the Company’s unaudited condensed consolidated financial position, results of operations
or cash flows.

NOTE 2 – RESTATEMENT

The accompanying unaudited condensed
consolidated Statement of Operations and Statement of Cash Flows for the three months ended March 31, 2010 and from August 12,
1999 to March 31, 2010 have been restated to correct the errors in the accounting of Company issuances of warrants in connection with
notes payable from 2007 through 2009. These changes correct the allocated fair value assigned to the issued warrants and a change
in the treatment from a recorded asset (deferred financing costs) to a debt discount shown net with the related notes payable.

Unaudited Condensed Consolidated Statement
of Operations
For the Three Months Ended March 31, 2010



|                             |  | As Previously Reported |            | Adjustment |  | Reference |         | As Restated
|---------------------------- |  | ---------------------- | ---------- | ---------- |  | --------- | ------- | -----------
|Revenue                      |  | $                      | 29,794     |            |  | $         | —       |            
|Cost of sales                |  |                        | 14,404     |            |  |           | —       |            
|Gross profit                 |  |                        | 15,390     |            |  |           | —       |            
|                             |  |                        |            |            |  |           |         |            
|Operating expenses           |  |                        | 866,221    |            |  |           | —       |            
|                             |  |                        |            |            |  |           |         |            
|Loss from operations         |  |                        | (850,831   | )          |  |           | —       |            
|                             |  |                        |            |            |  |           |         |            
|Other income (expense):      |  |                        |            |            |  |           |         |            
|Interest income              |  |                        | 1          |            |  |           |         |            
|Interest expense             |  |                        | (683,110   | )          |  |           | 283,904 |            
|                             |  |                        |            |            |  |           |         |            
|Net loss before income taxes |  |                        | (1,533,940 | )          |  |           | 283,904 |            
|                             |  |                        |            |            |  |           |         |            
|Income taxes (benefit)       |  |                        | —          |            |  |           | —       |            

10

---





|NET LOSS                                                               |  | $ | (1,533,940 | ) |  | $ | 283,904 |  |  | $ | (1,250,036 | )
|---------------------------------------------------------------------- |  | - | ---------- | - |  | - | ------- |  |  | - | ---------- | -
|                                                                       |  |   |            |   |  |   |         |  |  |   |            |  
|Loss per common share, basic and fully diluted                         |  | $ | (0.07      | ) |  | $ | 0.01    |  |  | $ | (0.06      | )
|                                                                       |  |   |            |   |  |   |         |  |  |   |            |  
|Weighted average number of shares outstanding, basic and fully diluted |  |   | 21,115,148 |   |  |   |         |  |  |   | 21,115,148 |  



Unaudited Condensed Consolidated Statement
of Cash Flows
For the Three Months Ended March 31, 2010



|                                                                            |  | As Previously Reported |            | Adjustment |  | Reference |          | As Restated
|--------------------------------------------------------------------------- |  | ---------------------- | ---------- | ---------- |  | --------- | -------- | -----------
|Cash flows from operating activities:                                       |  |                        |            |            |  |           |          |            
|Net loss                                                                    |  | $                      | (1,533,940 | )          |  | $         | 283,904  |            
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                        |            |            |  |           |          |            
|Stock based compensation                                                    |  |                        | 47,298     |            |  |           | —        |            
|Amortization of warrants issued in connection with notes payable            |  |                        | 354,234    |            |  |           | (283,904 | )          
|All other operating activities (unchanged)                                  |  |                        | 628,690    |            |  |           | —        |            
|Net cash used in operations                                                 |  |                        | (503,718   | )          |  |           | —        |            
|                                                                            |  |                        |            |            |  |           |          |            
|Cash flows from investing activities (unchanged)                            |  |                        | —          |            |  |           | —        |            
|                                                                            |  |                        |            |            |  |           |          |            
|Cash flows from financing activities (unchanged)                            |  |                        | 477,999    |            |  |           | —        |            
|                                                                            |  |                        |            |            |  |           |          |            
|Net decrease in cash and cash equivalents                                   |  |                        | (25,719    | )          |  |           | —        |            
|Cash and cash equivalents, beginning of period                              |  |                        | 75,031     |            |  |           | —        |            
|Cash and cash equivalents, end of period                                    |  | $                      | 49,312     |            |  | $         | —        |            

(1) Correction of the determined fair
value of warrants and related amortization

Unaudited Condensed Consolidated Statement
of Operations
From August 12, 1999 (date of Inception) to March 31, 2010



|                                      |  | As previously  reported |             | Adjustment |  | Reference |            | As restated
|------------------------------------- |  | ----------------------- | ----------- | ---------- |  | --------- | ---------- | -----------
|Revenue                               |  | $                       | 1,174,467   |            |  | $         | —          |            
|Cost of sales                         |  |                         | 544,779     |            |  |           | —          |            
|Gross profit                          |  |                         | 629,688     |            |  |           |            |            
|                                      |  |                         |             |            |  |           |            |            
|Operating expenses:                   |  |                         |             |            |  |           |            |            
|Research and development              |  |                         | 65,774,429  |            |  |           | (3,000,000 | )          
|Marketing, general and administrative |  |                         | 31,027,348  |            |  |           | 164,229    |            
|Depreciation and amortization         |  |                         | 817,517     |            |  |           | —          |            
|Total operating expenses              |  |                         | 97,619,294  |            |  |           | (2,835,771 | )          
|                                      |  |                         |             |            |  |           |            |            
|Net loss from operations              |  |                         | (96,989,606 | )          |  |           | (2,835,771 | )          

11

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|Other income (expenses):       |  |   |              |   |  |   |            |   |  |  |    |   |  |   |              |  
|------------------------------ |  | - | ------------ | - |  | - | ---------- | - |  |  | -- | - |  | - | ------------ | -
|Development revenues           |  |   | 117,500      |   |  |   | —          |   |  |  |    |   |  |   | 117,500      |  
|Interest income                |  |   | 762,275      |   |  |   | —          |   |  |  |    |   |  |   | 762,275      |  
|Reversal of Litigation Accrual |  |   | 3,000,000    |   |  |   | 3,000,000  |   |  |  | (1 | ) |  |   | —            |  
|Interest expense               |  |   | (9,052,890   | ) |  |   | (930,936   | ) |  |  | (2 | ) |  |   | (8,121,954   | )
|Total other income (expenses)  |  |   | (5,173,115   | ) |  |   | (2,069,064 | ) |  |  |    |   |  |   | (7,242,179   | )
|                               |  |   |              |   |  |   |            |   |  |  |    |   |  |   |              |  
|Net loss before income taxes   |  |   | (102,162,721 | ) |  |   | 766,707    |   |  |  |    |   |  |   | (101,396,014 | )
|                               |  |   |              |   |  |   |            |   |  |  |    |   |  |   |              |  
|Income taxes (benefit)         |  |   | —            |   |  |   | —          |   |  |  |    |   |  |   | —            |  
|                               |  |   |              |   |  |   |            |   |  |  |    |   |  |   |              |  
|NET LOSS                       |  | $ | (102,162,721 | ) |  | $ | 766,707    |   |  |  |    |   |  | $ | (101,396,014 | )

Unaudited Condensed Consolidated Statement
of Cash flow
From August 12, 1999 (date of Inception) to March 31, 2010



|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |  | As previously reported |              | Adjustment |  | Reference |          | As restated
|--------------------------------------------------------------------------- |  | ---------------------- | ------------ | ---------- |  | --------- | -------- | -----------
|Net loss                                                                    |  | $                      | (102,162,721 | )          |  | $         | 766,707  |            
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                        | —            |            |  |           |          |            
|Amortization of warrants issued in connection with notes payable            |  |                        | 4,070,612    |            |  |           | (930,936 | )          
|Stock based compensation                                                    |  |                        | 9,099,623    |            |  |           | 164,229  |            
|All other operating activities                                              |  |                        | 20,208,115   |            |  |           | —        |            
|Net cash used in operating activities                                       |  |                        | (68,784,371  | )          |  |           | —        |            
|                                                                            |  |                        |              |            |  |           |          |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |  |                        |              |            |  |           |          |            
|Net cash used in investing activities unchanged                             |  |                        | (898,800     | )          |  |           |          |            
|                                                                            |  |                        |              |            |  |           |          |            
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |  |                        |              |            |  |           |          |            
|Net cash provided in financing activities unchanged                         |  |                        | 69,732,484   |            |  |           |          |            
|Net increase in cash and cash equivalents                                   |  |                        | 49,312       |            |  |           | —        |            
|Cash and cash equivalents, beginning of period                              |  |                        | —            |            |  |           |          |            
|                                                                            |  |                        |              |            |  |           |          |            
|Cash and cash equivalents, end of period                                    |  | $                      | 49,312       |            |  | $         | —        |            

(1) Reclassify gain on litigation accrual
to operating expenses

(2) Correction of fair value of vested employee
options

(3) Correction of the determined fair value
of warrants and related amortization

NOTE 3 – GOING CONCERN MATTERS

The accompanying unaudited condensed
consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed consolidated
financial statements during three months ended March 31, 2011, the Company incurred net losses attributable to common shareholders
of $1,186,527 and used $306,556 in cash for operating activities during three months ended March 31, 2011. These factors among
others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

12

---





The Company’s existence is dependent
upon management’s ability to develop profitable operations and to obtain additional funding sources. There can be no assurance
that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity
problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue
as a going concern.

NOTE 4 – INVENTORY

Inventory consists of raw materials.
Costs of raw materials are determined using the FIFO method. Inventory is stated at the lower of costs or market (estimated net
realizable value).

NOTE 5 – PREPAID AND OTHER CURRENT
ASSETS

Prepaid expenses and other current assets
as of March 31, 2011 and December 31, 2010 primarily consisted of payments on corporate insurance policies.

NOTE 6 – PROPERTY AND EQUIPMENT

Property and equipment as of March 31,
2011 and December 31, 2010 is summarized as follows:



|                                               |  | March 31, 2011 (unaudited) |          | December 31, 2010
|---------------------------------------------- |  | -------------------------- | -------- | -----------------
|Laboratory and medical equipment               |  | $                          | 352,358  |                  
|Furniture, fixtures and equipment              |  |                            | 130,916  |                  
|Computer equipment                             |  |                            | 53,481   |                  
|Leasehold improvements                         |  |                            | 362,046  |                  
|                                               |  |                            | 898,801  |                  
|Less accumulated depreciation and amortization |  |                            | (860,067 | )                
|                                               |  | $                          | 38,734   |                  

The Company incurred depreciation and
amortization expenses of $8,705, $23,113 and $860,067 for the three months ended March 31, 2011 and 2010, and from August 12, 1999
(date of inception) to March 31, 2011, respectively.

Property and equipment are recorded on
the basis of cost. For financial statement purposes, property, plant and equipment are depreciated using the straight-line method
over their estimated useful lives.

Expenditures for repair and maintenance
which do not materially extend the useful lives of property and equipment are charged to operations. When property or equipment
is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the
resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its property and equipment
for impairment.

NOTE 7 – ACCRUED EXPENSES

Accrued expenses consisted of the following
as of March 31, 2011 and December 31, 2010:



|                                                                                                                                         |  | March 31, 2011(unaudited) |           | December 31, 2010
|---------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | --------- | -----------------
|License and royalty fees                                                                                                                 |  | $                         | 1,333,370 |                  
|Amounts payable to the Guarantors of the Company’s loan agreement 
   with Bank of America and Seaside Bank, including fees and interest |  |                           | 1,076,761 |                  
|Interest payable on notes payable                                                                                                        |  |                           | 537,499   |                  
|Vendor accruals                                                                                                                          |  |                           | 343,278   |                  
|Employee commissions, compensation, etc                                                                                                  |  |                           | 260,068   |                  
|Other                                                                                                                                    |  |                           | 140,000   |                  
|                                                                                                                                         |  | $                         | 3,690,976 |                  

13

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NOTE 8 – NOTES PAYABLE

Notes payable were comprised of the following as of March
31, 2011 and December 31, 2010:

|                                                                                                                                                                                   |  |                |            |                   |   |            |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | ----------------- | - | ---------- | -
|                                                                                                                                                                                   |  | March 31, 2011 |            | December 31, 2010 |  
|                                                                                                                                                                                   |  | (unaudited)    |            |                   |  
|Seaside Bank note payable. Terms described below                                                                                                                                   |  | $              | 980,000    |                   | $ | 980,000    |  
|BlueCrest Capital Finance note payable. Monthly payments of principal
    and interest as described below., net of unamortized debt discount of $248,316 and $317,709 respectively |  |                | 1,678,456  |                   |   | 1,958,834  |  
|Short-term note payable, net of unamortized debt discount of $39,139 and $58,708 respectively. Terms described below                                                               |  |                | 1,345,833  |                   |   | 1,326,264  |  
|Short-term note payable, net of unamortized debt discount of $18,750. Terms described below                                                                                        |  |                | 6,250      |                   |   | —          |  
|                                                                                                                                                                                   |  |                | 4,010,539  |                   |   | 4,265,098  |  
|Less current portion                                                                                                                                                               |  |                | (3,600,173 | )                 |   | (3,232,271 | )
|Notes payable – long term                                                                                                                                                          |  | $              | 410,366    |                   | $ | 1,032,827  |  

Notes
payable at March 31, 2011 mature as follows:

|                                    |  |   |           | 
|----------------------------------- |  | - | --------- | 
|Nine months ended December 31, 2011 |  | $ | 3,600,173 | 
|2012                                |  |   | 410,366   | 
|                                    |  |   |           | 
|                                    |  | $ | 4,010,539 | 

BlueCrest Capital Finance Note Payable

On June 1, 2007, the Company closed on
a $5.0 million senior loan from BlueCrest Capital Finance, L.P. with a term of 36 months which bears interest at an annual rate
of 12.85% (the “BlueCrest Loan”). The first three months required payment of interest only with equal principal and
interest payments over the remaining 33 months. As consideration for the loan, the Company issued to BlueCrest Capital Finance,
L.P. a warrant to purchase 65,030 shares of common stock at an exercise price of $7.69 per share. The warrant, which became exercisable
one year following the date the warrant was issued, has a ten year term. This warrant had a fair value of $455,483, which was accounted
for as additional paid in capital and reflected as a component of debt discount and is being amortized as interest expense ratably
over the term of the loan. The Company also paid the lender a fee of $100,000 to cover diligence and other costs and expenses incurred
in connection with the loan. On August 31, 2007, BlueCrest Capital Finance, L.P. assigned its rights, liabilities, duties and obligations
under the BlueCrest Loan and warrant to BlueCrest Venture Finance Master Fund Limited (“BlueCrest”).

The loan may be prepaid in whole but
not in part. However, the Company is subject to a prepayment penalty equal to 3% of the outstanding principal if the BlueCrest
Loan is prepaid during the first year of the loan, 2% of the outstanding principal if prepaid during the second year of the loan
and 1% of the outstanding principal if prepaid during the third year of the loan. As collateral to secure its repayment obligations
under the loan, the Company granted BlueCrest a first priority security interest in all of the Company’s assets, excluding
intellectual property but including the proceeds from any sale of any of the Company’s intellectual property. The loan has
certain restrictive terms and covenants including among others, restrictions on the Company’s ability to incur additional
senior or pari-passu indebtedness or make interest or principal payments on other subordinate loans.

In the event of an uncured event of default
under the loan, all amounts owed to BlueCrest are immediately due and payable and BlueCrest has the right to enforce its security
interest in the assets securing the loan. During the continuance of an event of default, all outstanding amounts under the loan
will bear interest (payable on demand) at an annual rate of the 14.85%. In addition, any unpaid amounts are subject, until paid,
to a service charge in an amount equal to two percent (2%) of the unpaid amount. Events of default include, among others, the Company’s
failure to timely make payments of principal when due, the Company’s uncured failure to timely pay any other amounts owing
to BlueCrest under the loan, the Company’s material breach of the representations and warranties contained in the loan agreement
and the Company’s default in the payment of any debt to any of its other lenders in excess of $100,000 or any other default
or breach under any agreement relating to such debt, which gives the holders of such debt the right to accelerate the debt.

14

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The amount of interest expense on the
principal amount of the BlueCrest Loan for the three months ended March 31, 2011 and 2010 totaled approximately $65,670 and $94,558,
respectively.

On January 2, 2009, the Company failed
to make the monthly payment of principal and interest of approximately $181,000 due on such date. On January 28, 2009, the Company
received from BlueCrest notice of this event of default (the “Default Notice”) under the BlueCrest Loan. By reason
of the stated event, BlueCrest demanded payment of a 2% late fee of approximately $3,600, together with the principal and interest
payment of approximately $181,000. On February 2, 2009, the Company received from BlueCrest notice of acceleration of the outstanding
principal amount of the BlueCrest Loan and demanded repayment in full of all outstanding principal and accrued interest on the
loan, including late fees, in the aggregate amount of $2,947,045. (The acceleration notice, together with the Default Notice, are
referred to as the “Notices”).

The Company and BlueCrest entered into
an amendment to the BlueCrest Loan as of April 2, 2009 (the “ BlueCrest Loan Amendment”), that, among other things,
includes BlueCrest’s agreement to forbear from exercising any of its rights or remedies regarding the defaults described
in Notices (the “Forbearance”) as long as there are no new defaults under the BlueCrest Loan, as amended.

The BlueCrest Loan Amendment, (a) increases
the amount of permitted unsecured indebtedness of the Company, (b) amended the amortization schedule for the Loan to provide for
interest-only payments until July 1, 2009, at which time monthly principal and interest payments of $262,692 will commence, and
(c) prohibits the Company from granting any lien against its intellectual property and grants to BlueCrest a lien against the Company’s
intellectual property that will become effective in the event of a default. In addition, the Company issued BlueCrest a warrant
to purchase 1,315,542 shares of the Company’s common stock at $0.53 per share. The fair value of the issued warrants of $539,676
was determined using the Black Scholes Option Pricing Model and was recorded as a debt discount and amortized ratably over the
term of the loan. In connection with the BlueCrest Loan Amendment the Company paid BlueCrest accrued interest in the aggregate
amount of $126,077. The Company also paid BlueCrest a fee of $15,000. Effective July 1, 2009, the Company and BlueCrest agreed
to enter into an amendment to the BlueCrest Loan to amend the amortization schedule for the Loan to provide for interest-only payments
until January 1, 2010, at which time monthly principal and interest payments of $139,728 will commence. In connection with that
Amendment the Company issued BlueCrest a warrant to purchase $600,000 of the Company’s common shares and paid a fee of $29,435.
The fair value of the issued warrants of $575,529 was determined using the Black Scholes Option Pricing Model and was recorded
as a debt discount and amortized ratably over the term of the loan.

Effective December 31, 2009, the Company
and BlueCrest entered into an amendment to the BlueCrest Loan to amend the amortization schedule for the Loan to provide for interest-only
payments until July 1, 2010, at which time monthly principal and interest payments of $139,728.82 will commence. In connection
with that Amendment, the Company issued BlueCrest a warrant to purchase $600,000 of the Company’s common shares and paid
a fee of $20,000. The Company also provided BlueCrest with a lien on its Intellectual Property. The fair value of the issued warrants
of $507,606 was determined using the Black Scholes Option Pricing Model and was recorded as a debt discount and amortized ratably
over the term of the loan.

Short-term Notes Payable

On August 20, 2008, the Company borrowed
$1.0 million from a third party pursuant to the terms of an unsecured Promissory Note and Agreement. Outstanding principal and
interest on the loan, which accrues at the rate of 13.5% per annum, is payable in one balloon payment upon the Company’s
repayment of the BlueCrest Loan, which is scheduled to mature in May 2010, however the Company is not obligated to make payments
until BlueCrest Loan is paid off. In the event the Company completes a private placement of its common stock and/or securities
exercisable for or convertible into its common stock which generates at least $19.0 million of gross proceeds, the Company may
prepay, without penalty, all outstanding principal and interest due under the loan using the same type of securities issued in
the subject private placement. Because repayment of the loan could occur within 12 months from the date of the balance sheet, the
Company has classified this loan as short term. Subject to certain conditions, at the end of each calendar quarter during the time
the loan is outstanding, the Company may, but is not required to, pay all or any portion of the interest accrued but unpaid as
of such date with shares of its common stock. In April 2009, as consideration for the authorization to amend certain documents
related to the Note, the Company issued to the Noteholder a warrant to purchase 451,053 shares of common stock at an exercise price
of $0.5321 per share. The warrant, which became exercisable immediately upon issuance, has a ten year term. This warrant had a
fair value of $195,694, which was accounted for as additional paid in

15

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capital and reflected as a component
of debt discount and is being amortized as interest expense ratably over the term of the loan.

The amount of interest expense on the
principal amount of the loan for the year ended December 31, 2009 was approximately $187,000. The Company has not paid any of the
interest accrued to date under the Promissory Note and Agreement.

In July 2009, Bruce Meyers and Dana Smith
(jointly, the “Lenders”) funded a total $120,000 loan to the Company. The Loan was in the nature of convertible debt
and was evidenced by an unsecured promissory note (the “Note”), that was convertible into common stock of the Company
at a price that was 22.5% less than the average of the closing bid prices for the Company’s shares for the five (5) days
prior to the Lenders’ election to exercise their conversion right under the Note. The Note was to bear interest at the rate
of 10% per annum, with interest payable due at maturity. The terms sheet provides that all unpaid interest (and principal) will
be due and payable on the date that is the earlier to occur of the first anniversary of the closing date of the Loan or the closing
of a financing in an amount that is equal to or greater than $3.0 million that will satisfy the Company’s obligation under
its loan with BlueCrest. However, during the year ended December 31, 2009, the Lenders elected to convert the entire amount of
the Loan to shares of the Company’s common stock. Accordingly, the aggregate number of unregistered and restricted shares
of the Company’s common stock issued in connection with, and as a result of the conversion of, the Loan was 355,294 shares.
The Company will have no obligation to file any registration statement with respect to the shares, except that the Lenders will
have customary “piggyback” registration rights.

In February 2009, Bruce Meyers and Robert
Seguso (jointly, the “Lenders”) funded the remaining $100,000 of a total $200,000 loan to the Company. The funds were
delivered, net of original issue discount in the amount of $10,000, pursuant to a terms sheet provided by Bruce Meyers, for a convertible
debt financing to be provided to the Company (the “Loan”). Although the terms sheet provided that the Lenders would
be provided a complete set of loan documentation, the Lenders delivered to the Company the entire net proceeds of the Loan, in
the amount of $190,000, in advance of receiving any documentation. The initial funding of $100,000 was made to the Company on January
21, 2009. However, the Company determined that it would not proceed with the Loan unless and until the Lenders funded the balance
of the net proceeds which was completed on February 3, 2009 and provided that the Board of Directors of the Company approved the
Loan, which approval was obtained on February 11, 2009.

The above Loan was in the nature of convertible
debt and was evidenced by an unsecured promissory note (the “Note”), that was convertible into common stock of the
Company at a price that was 22.5% less than the average of the closing bid prices for the Company’s shares for the five (5)
days prior to the Lenders’ election to exercise their conversion right under the Note. The Note was to bear interest at the
rate of 10% per annum, with interest payable due at maturity. The terms sheet provides that all unpaid interest (and principal)
will be due and payable on the date that is the earlier to occur of the first anniversary of the closing date of the Loan or the
closing of a financing in an amount that is equal to or greater than $3 million that will satisfy the Company’s obligation
under its loan with BlueCrest. However, during the year ended December 31, 2009, the Lenders elected to convert the entire amount
of the Loan to shares of the Company’s common stock.

In addition to the Note, the Company
issued to the Lenders 200,000 unregistered and restricted shares of the Company’s common stock. We believe that the offer
and sale of the securities is made only to accredited investors and, accordingly, is exempt from registration under Section 4(2)
of the Securities Act of 1933, as amended. The fair value of the issued shares were recorded as a debt discount and amortized ratably
over the term of the loan.

Prior to funding the balance of the Loan,
the Lenders delivered to the Company, on January 26, 2009, a notice electing to convert $100,000 of the Loan into shares of the
Company’s common stock. The price per share for such election was $0.50995. This required the issuance to the Lenders of
196,098 unregistered and restricted shares of the Company’s common stock.

On February 3, 2009, contemporaneously
with the funding of the remainder of the Loan, the Lenders delivered to the Company notice of their election to convert the remainder
of the Loan into shares of the Company’s common stock at a price per share of $0.5704. This required the issuance to the
Lenders of 175,316 unregistered and restricted shares of the Company’s common stock.

Accordingly, the aggregate number of
unregistered and restricted shares of the Company’s common stock issued in connection with, and as a result of the conversion
of, the Loan was 571,414 shares. The Company will have no obligation

16

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to file any registration statement with
respect to the shares, except that the Lenders will have customary “piggyback” registration rights.

At March 31, 2011 and December 31, 2010,
the Company has outstanding two notes payable with interest at 8% per annum due at maturity. The two notes, $61,150 and $323,822
are payable in one balloon payment upon the date the Noteholder provides written demand, however the Company is not obligated to
make payments until the BlueCrest Loan is paid off.

On January 3, 2011, the Company issued
a $139,729 Unsecured Convertible Note that matures in June 1, 2012 in exchange for Bluecrest Capital Finance note payable. Note
bears interest at a rate of 8% per annum and is convertible into shares of the Company’s common stock, at a conversion rate
of 50% of the five lowest closing prices for the common stock during the five trading day period prior to date of conversion. During
the three months ended March 31, 2011, the Company recorded a loss on settlement of debt of $110,872.

The Company’s identified embedded
derivatives related to the Convertible Promissory Note entered into on January 3, 2011. These embedded derivatives included certain
conversion features. The accounting treatment of derivative financial instruments requires that the Company record fair value of
the derivatives as of the inception date of the Convertible Promissory Note and to fair value as of each subsequent balance sheet
date. At the inception of the Convertible Promissory Note, the Company determined a fair value $146,013 of the embedded derivative.
The fair value of the embedded derivative was determined using the Binomial Lattice Pricing Model based on the following assumptions:

|                |  |  |        |  
|--------------- |  |  | ------ | -
|Dividend yield: |  |  | -0-    | %
|Volatility      |  |  | 169.48 | %
|Risk free rate: |  |  | 0.19   | %

The initial fair value of the embedded
debt derivative of $146,013 was allocated as a debt discount up to the proceeds of the note ($139,729) with the remainder ($6,284)
charged to current period operations as interest expense.

During the three months ended March 31,
2011, the Company issued an aggregate of 959,934 shares of common stock valued at $276,017, in settlement of the Convertible Promissory
Note of $139,729 and balance $136,288 charged to operation for current quarter.

On January 3, 2011, the Company issued
a $25,000 Unsecured Convertible Note that matures in January 2012. Note bears interest at a rate of 8% per annum and is convertible
into shares of the Company’s common stock, at a conversion rate of 50% of the three lowest closing prices for the common
stock during the ten trading day period prior to date of conversion, minimum conversion rate of $0.001 per share.

In accordance with ASC 470-20, the Company
recognized an imbedded beneficial conversion feature present in Convertible Note. The Company allocated a portion of the proceeds
equal to the intrinsic value of that feature to additional paid-in capital and a discount against the Convertible Note.

The total debt discount attributed to
the beneficial conversion feature and common stock issued in the amount of $25,000 is charged operations ratably over the note
term as interest expense.

For the three months ended March 31,
2011, the Company amortized $6,250 to current period operations as interest expense.

Notes payable, related party

At March 31, 2011, the Company has outstanding
two related party notes payable with interest at 8% per annum due at maturity. The two notes, $125,000 and $100,000 are due on
October 22, 2012 and November 30, 2012, respectively, and are unsecured.

NOTE 9 – STOCKHOLDERS’ EQUITY

Preferred stock

17

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The Company is authorized to issue 5,000,000
shares of preferred stock with par value $.001 per share. As of March 31, 2011 and December 31, 2010, no shares of preferred stock
were issued or outstanding.

Common stock

The Company is authorized to issue 75,000,000
shares of common stock with par value $.001 per share. As of March 31, 2011 and December 31, 2010, the Company had 42,443,169 shares
and 37,545,865 shares of common stock issued and outstanding, respectively.

During the three months ended March 31,
2011, the Company issued an aggregate of 438,170 shares of its common stock on exercise of options.

During the three months ended March 31,
2011, the Company issued an aggregate of 959,934 shares of its common stock in exchange for outstanding notes payable.

NOTE 10 – STOCK OPTIONS AND WARRANTS

Stock Options

A summary of options at March 31, 2011
and activity during the year then ended is presented below:

|                                         |  |        |            |                                  |   |                                                         |  |  |     | 
|---------------------------------------- |  | ------ | ---------- | -------------------------------- | - | ------------------------------------------------------- |  |  | --- | 
|                                         |  | Shares |            | Weighted- Average Exercise Price |   | Weighted- Average Remaining Contractual Term (in years) | 
|Options outstanding at January 1, 2010   |  |        | 2,119,431  |                                  | $ | 3.28                                                    |  |  | 5.4 | 
|Granted                                  |  |        | 1,764,940  |                                  | $ | 0.32                                                    |  |  |     | 
|Exercised                                |  |        | (831,526   | )                                | $ | 0.001                                                   |  |  |     | 
|Forfeited/Expired                        |  |        | (1,027,301 | )                                | $ | 2.62                                                    |  |  |     | 
|Options outstanding at December 31, 2010 |  |        | 2,025,544  |                                  | $ | 2.79                                                    |  |  | 6.8 | 
|Granted                                  |  |        | 312,167    |                                  | $ | 0.001                                                   |  |  |     | 
|Exercised                                |  |        | (312,167   | )                                | $ | 0.001                                                   |  |  |     | 
|Forfeited/Expired                        |  |        | (122,724   | )                                | $ | 1.01                                                    |  |  |     | 
|Options outstanding at March 31, 2011    |  |        | 1,902,820  |                                  | $ | 2.90                                                    |  |  | 6.5 | 
|Options exercisable at March 31, 2011    |  |        | 1,307,698  |                                  | $ | 3.93                                                    |  |  | 5.4 | 
|Available for grant at March 31, 2011    |  |        | 4,870,392  |                                  |   |                                                         |  |  |     | 

The following information applies to
options outstanding and exercisable at March 31, 2011:

|              |  |                     |           |                                              |  |                                  |  |        |      |                                  |  |           |  |   |      | 
|------------- |  | ------------------- | --------- | -------------------------------------------- |  | -------------------------------- |  | ------ | ---- | -------------------------------- |  | --------- |  | - | ---- | 
|              |  | Options Outstanding |           | Options Exercisable                          | 
|              |  | Shares              |           | Weighted- Average Remaining Contractual Term |  | Weighted- Average Exercise Price |  | Shares |      | Weighted- Average Exercise Price | 
|$0.00 – $0.70 |  |                     | 724,360   |                                              |  | 9.12                             |  | $      | 0.56 |                                  |  | 201,161   |  | $ | 0.68 | 
|$0.71 – $1.28 |  |                     | 324,780   |                                              |  | 7.05                             |  | $      | 0.77 |                                  |  | 267,107   |  | $ | 0.76 | 
|$5.25 – $5.67 |  |                     | 807,312   |                                              |  | 4.01                             |  | $      | 5.58 |                                  |  | 793,062   |  | $ | 5.59 | 
|$7.69         |  |                     | 39,572    |                                              |  | 5.42                             |  | $      | 7.69 |                                  |  | 39,572    |  | $ | 7.69 | 
|$8.47         |  |                     | 6,796     |                                              |  | 6.03                             |  | $      | 8.47 |                                  |  | 6,796     |  | $ | 8.47 | 
|              |  |                     | 1,902,820 |                                              |  | 6.51                             |  | $      | 2.90 |                                  |  | 1,307,698 |  | $ | 3.93 | 

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During the three months ended March 31,
2011, the Company granted an aggregate of 312,167 non employee stock options in connection services rendered at the exercise price
of $0.001 per share.

The fair values of the vesting non employee
options for the three months ended March 31, 2011 were determined using the Black Scholes option pricing model with the following
assumptions: Dividend yield: 0%; Volatility: 146.17% to 147.71%; and Risk free rate: 3.30% to 3.48%.

The fair value of all options vesting
during the three months ended March 31, 2011 and 2010 of $105,347 and $47,298, respectively, was charged to current period operations.

Warrants

A summary of warrants at March 31, 2011
and activity during the year then ended is presented below:

|                                 |  |        |            |                                 |   |                                                         |  |  |     | 
|-------------------------------- |  | ------ | ---------- | ------------------------------- | - | ------------------------------------------------------- |  |  | --- | 
|                                 |  | Shares |            | Weighted-Average Exercise Price |   | Weighted- Average Remaining Contractual Term (in years) | 
|Outstanding at January 1, 2010   |  |        | 7,355,057  |                                 | $ | 3.06                                                    |  |  | 9.4 | 
|Issued                           |  |        | 6,693,712  |                                 | $ | 0.78                                                    |  |  |     | 
|Exercised                        |  |        | —          |                                 | $ | 0.00                                                    |  |  |     | 
|Forfeited                        |  |        | 128,040    |                                 | $ | 0.74                                                    |  |  |     | 
|Outstanding at December 31, 2010 |  |        | 13,920,729 |                                 | $ | 1.98                                                    |  |  | 5.8 | 
|Issued                           |  |        | 2,231,785  |                                 | $ | 0.39                                                    |  |  |     | 
|Exercised                        |  |        | —          |                                 | $ |                                                         |  |  |     | 
|Forfeited                        |  |        | —          |                                 | $ |                                                         |  |  |     | 
|Outstanding at March 31, 2011    |  |        | 16,152,514 |                                 | $ | 1.73                                                    |  |  | 5.2 | 
|Exercisable at March 31, 2011    |  |        | 8,402,494  |                                 | $ | 1.78                                                    |  |  | 5.1 | 

During the three months ended March 31,
2011, the Company issued an aggregate of 1,951,785 warrants to purchase the Company’s common stock at $0.18 per share expiring
three years from the date of issuance in connection with the sale of the Company’s common stock.

In addition, during the three months
ended March 31, 2011, the Company issued an aggregate of 280,000 warrants to purchase the Company’s common stock from $1.44
per share expiring in February 2016 in connection with the sale of the Company’s common stock.

The following information applies to
warrants outstanding and exercisable at March 31, 2011:

|             |  |                      |            |                                              |  |                                  |  |        |      |                                  |  |           |  |   |      | 
|------------ |  | -------------------- | ---------- | -------------------------------------------- |  | -------------------------------- |  | ------ | ---- | -------------------------------- |  | --------- |  | - | ---- | 
|             |  | Warrants Outstanding |            | Warrants Exercisable                         | 
|             |  | Shares               |            | Weighted- Average Remaining Contractual Term |  | Weighted- Average Exercise Price |  | Shares |      | Weighted- Average Exercise Price | 
|0.01 - $0.50 |  |                      | 6,375,750  |                                              |  | 2.8                              |  | $      | 0.18 |                                  |  | 170,180   |  |   | 0.18 | 
|0.52 - $0.68 |  |                      | 3,776,909  |                                              |  | 6.3                              |  | $      | 0.59 |                                  |  | 3,776,909 |  | $ | 0.59 | 
|0.70 - $1.62 |  |                      | 2,649,454  |                                              |  | 4.0                              |  | $      | 0.79 |                                  |  | 2,649,454 |  | $ | 0.79 | 
|1.81 – $2.61 |  |                      | 427,119    |                                              |  | 0.6                              |  | $      | 2.07 |                                  |  | 427,119   |  | $ | 2.07 | 
|3.60 – $4.93 |  |                      | 105,000    |                                              |  | 2.4                              |  | $      | 4.87 |                                  |  | 105,000   |  | $ | 4.87 | 
|5.67 – $7.69 |  |                      | 2,818,282  |                                              |  | 11.2                             |  | $      | 7.50 |                                  |  | 1,273,832 |  | $ | 7.26 | 
|             |  |                      | 16,152,514 |                                              |  | 5.2                              |  | $      | 1.73 |                                  |  | 8,402,494 |  | $ | 1.78 | 

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NOTE 11 – RELATED PARTY TRANSACTIONS

Lease Guarantee

The
Company’s former Chairman of the Board, Chief Executive Officer and Chief Technology Officer has personally guaranteed the
Company’s obligations under its lease for its facilities in Sunrise, Florida and has provided a personal guarantee for the
Company credit card, which is for his own use only.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Royalty Payments

The
Company is obligated to pay royalties on commercial sales of certain products that may be developed and sold under various licenses
and agreements that have been obtained by the Company.

The
Company has entered into various licensing agreements, which include the potential for royalty payments, as follows:

William Beaumont Hospital

In
June 2000, the Company entered into an exclusive license agreement to use certain patents for the life of the patents in future
projects. The patents expire in 2015. In addition to a payment of $55,000 the Company made to acquire the license, the Company
is required to pay an annual license fee of $10,000 and royalties ranging from 2% to 4% of net sales of products that are covered
by the patents. In order to maintain the exclusive license rights, the agreement also calls for a minimum annual royalty threshold.
The minimum royalty threshold was $200,000 for 2010 and $200,000 for 2009. This minimum royalty threshold will remain $200,000
for 2011 and thereafter. As of March 31, 2011, the Company has not made any payments other than the initial payment to acquire
the license. At March 31, 2011 and December 31, 2010, the Company’s liability under this agreement was $1,333,370 and $1,090,000,
respectively, which is reflected as a component of accrued expenses on the consolidated balance sheets. In the three months ended
March 31, 2011, 2010 and for the cumulative period from August 12, 1999 (date of inception) to March 31, 2011, the Company incurred
expenses of $52,500, $52,500 and $1,333,370, respectively. The Company has accrued interest for the past due commitment at 2% over
the prime rate per the terms of the agreement. The Company has included $190,870 in accrued expenses as of March 31, 2011.

Approximate
annual future minimum obligations under this agreement as of March 31, 2011 are as follows:

Year Ending December 31,

|            |  |   |        
|----------- |  | - | -------
|2011        |  | $ | 157,500
|2012        |  |   | 210,000
|2013        |  |   | 210,000
|2014 — 2015 |  |   | 420,000
|Total       |  | $ | 997,500

Contingency for Registration of the
Company’s common stock

The
Company believes that it may have issued options to purchase common stock to certain of its employees, directors and consultants
in California in violation of the registration or qualification provisions of applicable California securities laws. As a result,
the Company intends to make a rescission offer to these persons. The Company will make this offer to all persons who have a continuing
right to rescission, which it believes to include two persons. In the rescission offer, in accordance with California law, the
Company will offer to repurchase all unexercised options issued to these persons at 77% of the option exercise price multiplied
by the number of option shares, plus interest at the rate of 7% from the date the options were granted. Based upon the number of
options that were subject to rescission as of December 31, 2009, assuming that all such options are tendered in the rescission
offer, the Company estimated that its total rescission liability would be up to approximately $371,000. However, as the Company
believes there is only a remote likelihood the rescission offer will be accepted by any of these persons in an amount that would
result in a material expenditure by the Company, no liability was recorded as of March 31, 2011 or December 31, 2010.

20

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Litigation

On
March 13, 2009, Judge Bernice Bouie Donald of the United States District Court for the Western District of Tennessee issued a Memorandum
Opinion and Order in litigation brought against the Company by Dr. Peter K. Law and Cell Transplants Asia Limited (“CTAL”)
(collectively, the “Plaintiffs”), captioned Peter K. Law, et al. v. Bioheart, Inc., No. 2:07-cv-2177 (the “Action”).
The Action, which has been the subject of previous disclosures by the Company, was commenced on March 9, 2007, and asserted claims
against the Company and Howard J. Leonhardt, individually, with respect to a license agreement entered into between Bioheart, Inc.
and Cell Transplants International, LLC (“CTI”) on February 7, 2000 (the “Original License Agreement”).
Pursuant to the License Agreement, among other things, CTI granted the Company a license to certain patents “related to heart
muscle regeneration and angiogenesis for the life of the patents.” In July 2000, Bioheart and CTI, together with Dr. Law,
executed an addendum to the License Agreement, which amended or superseded a number of the terms of the License Agreement (the
“License Addendum”).

In
their amended complaint, Dr. Law and CTAL asserted 14 breach of contract and related claims pertaining to the Original License
Agreement and License Addendum, including, among others, claims that the Company had breached obligations to provide shares of
Bioheart common stock to Dr. Law, pay royalties on “gross sales” of MyoCell, pay a $3 million milestone payment due
upon Bioheart’s “commencement of a bona fide Phase II human clinical trial study that utilizes technology claimed under
U.S. Patent No. 5,130,141 with F.D.A. approval in the United States,” and to refrain from sublicensing Plaintiffs’
patents. Plaintiffs also sought a declaratory judgment that the License Addendum was unenforceable due to a lack of consideration
and/or economic duress. At the outset of the Action, the individual claim against Mr. Leonhardt was dismissed along with Plaintiffs’
claim for civil conspiracy, leaving 12 claims to be adjudicated.

The
Company denied the material allegations of the amended complaint, denied it had any liability to Plaintiffs, and asserted a number
of defenses to Plaintiffs’ claims, as well as counterclaims seeking a declaration that the License Addendum was a legally
valid and binding agreement and asserting that Dr. Law and/or CTI had breached various obligations in the parties’ agreements.

Following
the completion of discovery, the Action was tried to the Court, without a jury, from September 22-25, 2008.

On
March 13, 2009, the Court rendered its decision in the Action, dismissing the amended complaint after finding that Plaintiffs had
failed to establish any of their 12 remaining claims. With respect to Plaintiffs’ claim for the $3 million milestone payment,
the Court found that the payment was “payable only to CTI,” not the Plaintiffs, and that CTI, a dissolved Tennessee
limited liability company, had never been made a party to the Action and therefore was “not properly before the Court.”
The Court also found that, even assuming Plaintiffs could assert a claim for the milestone payment on behalf of CTI, the payment
was not due because “Bioheart’s MyoCell process does not utilize technology claimed under the ‘141 patent.”
In addition, the Court found that Bioheart owed no royalties because it has not yet made any “gross sales” of MyoCell.

The
Court found in Bioheart’s favor on its counterclaim seeking a declaration that the License Addendum was a valid and enforceable
agreement and its counterclaim that Dr. Law breached his obligation under the License Addendum to provide Bioheart with “all
pertinent and critical information” related to Bioheart’s filing of an IND application with the FDA. The Court awarded
Bioheart nominal damages of $1.00 on the latter counterclaim, and dismissed Bioheart’s other counterclaims. Judgment upon
the Memorandum Opinion and Order was entered on March 18, 2009.

Subsequent
to the Court rendering its decision in the Action, the Plaintiffs filed a motion with the Court seeking reconsideration of its
decision. The Company’s response was filed on April 20, 2009, and the Court’s response was received on October 15,
2009. The Plaintiffs’ motion to alter or amend was granted in partto clarify that Plaintiff failed to prove that
the MyoCath catheter reads upon the claims of a patent other than the Schmidt catheter patent. Plaintiffs’ motion was otherwise
denied.

A
notice of appeal was to have been filed by November 16, 2009, by Dr. Law. The appeal was not filed. The accrual made prior to November
16, 2009, to accommodate a judgment in favor of Dr. Law has been reversed.

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The
Company is subject to other legal proceedings that arise in the ordinary course of business. In the opinion of management, as of
March 31, 2011, the amount of ultimate liability with respect to such matters, if any, in excess of applicable insurance coverage,
is not likely to have a material impact on the Company’s business, financial position, consolidated results of operations
or liquidity. However, as the outcome of litigation and other claims is difficult to predict significant changes in the estimated
exposures could exist.

NOTE 13 – SUBSEQUENT EVENTS

Subscription Agreements

In
April 2011, the Company sold an aggregate of 97,400 shares of the Company’s common stock and warrants to purchase 82,790
shares of the Company’s common stock for aggregate gross cash proceeds of $15,000. The warrants are (i) exercisable solely
for cash at an exercise price of $0.15 per share, (ii) non-transferable for six months following issuance and (iii) exercisable,
in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of
issuance and ending on the third year anniversary of the date of issuance.

On
April 18, 2011 the Company delivered a written notice of default and termination to each of Anc Bio Holdings, Inc., a South Korean
biomedical company, and one of its U.S. agents, Bioheart Florida, LLC, in respect of the Subscription Agreements dated January
23, 2011. The notice stated that it was being given as a result of the breach by each of ABH and BF of their respective payment
obligations under the Agreements. A copy of the notice of default was filed with the Company’s Current Report on Form 8-K
filed with the SEC on April 22, 2011.

Issuance of Options and Warrants

Between
April 1, 2011 and May 23, 2011, the Company issued options to purchase an aggregate of 145,000 shares of its common stock at a
weighted average exercise price of $0.001 per share. The options vested immediately upon issuance and will expire on the tenth
anniversary of the issuance date. As of May 23, 2011 an aggregate of 145,000 shares of common stock have been issued upon the exercise
of the aforementioned options.

Between
April 1, 2011 and May 23, 2011, the Company issued warrants to purchase an aggregate of 82,790 shares of its common stock at a
weighted average exercise price of $0.15 per share. These warrants were issued in connection with Subscription agreement discussed
above. The warrant vests six months following issuance and expires on the third year anniversary of the date of issuance.

Loan Agreement Amendment

On
May 16, 2011, the Company and BlueCrest Venture Finance Master Fund Limited (“BlueCrest”) entered into an Amendment
to Loan and Security Agreement, amending that certain loan from BlueCrest to the Company originated as of May 31, 2007 (the “Loan”).
The outstanding principal amount of the Loan as of May 1, 2011 was $1,807,675.34. On May 16, 2011, BlueCrest agreed with the Company
and Magna Group, LLC (“Magna”) to split the note evidencing the Loan into two notes aggregating the outstanding principal
balance, with the new note being in the principal amount of $139,729.82 (the “New Note”). The New Note was assigned
to Magna in consideration for a payment by them to BlueCrest of $139,729.82, and modified. Additionally, Magna purchased a $34,750
convertible note from the Company (the “Convertible Note”).

The
loan evidenced by the New Note is the nature of convertible debt evidenced by an unsecured convertible promissory note, bearing
interest at the rate of 8% per annum, payable at maturity and convertible into common stock of the Company at a price that is 45%
less than the average of the closing prices for the Company’s shares for the five (5) days prior to the Lenders’ election
to exercise its conversion right.

The
loan evidenced by the Convertible Note is in the nature of convertible debt evidenced by an unsecured convertible promissory note,
bearing interest at the rate of 8% per annum, payable at maturity and convertible into common stock of the Company at a price that
is 50% less than the average of the lowest three (3) closing prices for the Company’s shares for the ten (10) days prior
to the Lenders’ election to exercise its conversion right.

Issuance of Shares

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Between
April 1, 2011 and May 23, 2011, the Company issued an aggregate of 300,000 shares of common stock to Consultants.

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|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless
otherwise indicated, references in this Quarterly Report on Form 10-Q to “we,” “us,” and “our”
are to the Company. The following discussion and analysis by our management of our financial condition and results of operations
should be read in conjunction with our unaudited consolidated interim financial statements and the accompanying related notes included
in this quarterly report and our audited consolidated financial statements and related notes and Management’s Discussion
and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December
31, 2010 filed with the Securities and Exchange Commission.

Cautionary Statement Regarding Forward-Looking
Statements

This
report may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act, and we intend that such forward-looking statements be subject to the safe harbors created thereby. These forward-looking
statements are based on our management’s beliefs and assumptions and on information currently available to our management.
Any such forward-looking statements would be contained principally in “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and “Risk Factors.” Forward-looking statements include information concerning
our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment,
potential growth opportunities and the effects of regulation. Forward-looking statements include all statements that are not historical
facts and can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,”
“expects,” “hopes,” “intends,” “may,” “plans,” “potential,”
“predicts,” “projects,” “should,” “will,” “would” or similar expressions.

Forward-looking
statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking
statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should
not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s
beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in
this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be
materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements
publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements,
even if new information becomes available in the future.

Additional
information concerning these and other risks and uncertainties is contained in our filings with the Securities and Exchange Commission,
including the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2010.

Our Ability To Continue as a Going
Concern

Our
independent registered public accounting firm has issued its report dated, May 10, 2011,in connection with the audit of
our financial statements as of December 31, 2010, that included an explanatory paragraph describing the existence of conditions
that raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements
as of March 31, 2011 have been prepared under the assumption that we will continue as a going concern. If we are not able to continue
as a going concern, it is likely that holders of our common stock will lose all of their investment. Our financial statements do
not include any adjustments that might result from the outcome of this uncertainty.

Overview

We
are committed to maintaining our leading position within the cardiovascular sector of the cell technology industry delivering cell
therapies and biologics that help address congestive heart failure, lower limb ischemia, chronic heart ischemia, acute myocardial
infarctions and other issues. Our goals are to regenerate damaged tissue, if possible, improve a patient’s quality of life,
reduce hospitalizations and reduce overall health care costs.

We
were incorporated in the state of Florida in August 1999. Our principal executive offices are located at 13794 NW 4th Street, Suite
212, Sunrise, Florida 33325 and our telephone number is (954) 835-1500. Information about us is

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available on our corporate web site at
www.bioheartinc.com. Information contained on the web site does not constitute part of, and is not incorporated by reference in,
this report.

Biotechnology Product Candidates

Specific
to biotechnology, we are focused on the discovery, development and, subject to regulatory approval, commercialization of autologous
cell therapies for the treatment of chronic and acute heart damage and peripheral vascular disease. MyoCell is a clinical muscle-derived
cell therapy designed to populate regions of scar tissue within a patient’s heart with new living cells for the purpose of
improving cardiac function in chronic heart failure patients. Our most recent clinical trials of MyoCell include the SEISMIC Trial,
a completed 40-patient, randomized, multicenter, controlled, Phase II-a study conducted in Europe and the MYOHEART Trial, a completed
20-patient, multicenter, Phase I dose-escalation trial conducted in the United States. We were approved by the U.S. Food and Drug
Administration (the “FDA”) to proceed with a 330-patient, multicenter Phase II/III trial of MyoCell in North America
and Europe (the “MARVEL Trial”). We completed the MyoCell implantation procedure on the first patient in the MARVEL
Trial on October 24, 2007. Thus far, 20 patients, including 6 control patients, have been treated. Initial results for the 20 patients
were released at the Heart Failure Society of American meeting in September, 2009, showing a significant (35%) improvement in the
6 minute walk for those patients who were treated, and no improvement for those who received a placebo. We are planning, on the
basis of these results, to ask the FDA to consider the MARVEL Trial a pivotal trial (pivotal from Phase II to Phase III) and to
reduce the number of patients in the trial to 150. The SEISMIC, MYOHEART and MARVEL Trials have been designed to test the safety
and efficacy of MyoCell in treating patients with severe, chronic damage to the heart. Upon regulatory approval of MyoCell, we
intend to generate revenue in the United States from the sale of MyoCell cell-culturing services for treatment of patients by qualified
physicians. Abroad, we are identifying centers where it is already acceptable to use the Myocell treatment so that greater numbers
of patients with this problem can have access to treatment.

We
received approval from the FDA in July of 2009 to conduct a Phase I safety study on 15 patients of a combined therapy (Myocell
with SDF-1), which we believe is the first approval of a study combining gene and cell therapies. We initially commenced work on
this study, called the REGEN trial, during the first quarter of 2010. The Company suspended activity on the trial in 2010 while
seeking additional funding necessary to conduct the trial. Work on the trial was reinitiated in 2011. Based on the results of the
trial, we intend to either incorporate the combined treatment into the Marvel Trial, or continue with the Marvel Trial based on
the use of Myocell alone.

In
our pipeline, we have multiple product candidates for the treatment of heart damage, including autologous, adipose cell treatment
for acute heart damage, chronic ischemia and critical limb ischemia.We hope to demonstrate that our various product candidates
are safe and effective complements to existing therapies for chronic and acute heart damage as well as peripheral arterial disease.

MyoCell

MyoCell
is a clinical therapy intended to improve cardiac function for those with congestive heart failure and is designed to be utilized
months or even years after a patient has suffered severe heart damage due to a heart attack or other cause. We believe that MyoCell
has the potential to become a leading treatment for severe, chronic damage to the heart due to its perceived ability to satisfy,
at least in part, what we believe to be an unmet demand for more effective and/or more affordable therapies for chronic heart damage.
MyoCell uses myoblasts, cells that are precursors to muscle cells, from the patient’s own body. The myoblasts are removed
from a patient’s thigh muscle, isolated, grown through our proprietary cell culturing process, and injected directly in the
scar tissue of a patient’s heart. A qualified physician performs this minimally invasive procedure using an endoventricular
catheter. We entered into an agreement with a Johnson & Johnson company to use its NOGA® Cardiac Navigation System along
with its MyoStarTM injection catheter for the delivery of MyoCell in the MARVEL Trial.

When
injected into scar tissue within the heart wall, myoblasts have been shown to be capable of engrafting in the damaged tissue and
differentiating into mature skeletal muscle cells. In a number of clinical and animal studies, the engrafted skeletal muscle cells
have been shown to express various proteins that are important components of contractile function. By using myoblasts obtained
from a patient’s own body, we believe MyoCell is able to avoid certain challenges currently faced by other types of cell-based
clinical therapies including tissue rejection and instances of the cells differentiating into cells other than muscle. Although
a number of therapies have proven to improve the cardiac function

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of a damaged heart, no currently available
treatment has demonstrated an ability to generate new muscle tissue within the scarred regions of a heart.

We
believe the market for treating patients in NYHA Class II or NYHA Class III heart failure is significant. According to the AHA
Statistics and the European Society of Cardiology Task Force for the Treatment of Chronic Heart Failure, in the United States and
Europe there are approximately 5.2 million and 9.6 million, respectively, patients with heart failure. The AHA Statistics further
indicate that, after heart failure is diagnosed, the one-year mortality rate is high, with one in five dying and that 80% of men
and 70% of women under age 65 who have heart failure will die within eight years. We believe that approximately 60% of heart failure
patients are in either NYHA Class II or NYHA Class III heart failure based upon a 1999 study entitled “Congestive Heart Failure
Due to Diastolic or Systolic Dysfunction – Frequency and Patient Characteristics in an Ambulatory Setting” by Diller,
PM, et. al.

MyoCath

The
MyoCath was developed by Bioheart co-founder Robert Lashinski specifically for delivering new cells to damaged tissue. It is a
deflecting tip needle injection catheter that has a larger needle which is 25 gauge for better flow rates and less leakage than
systems that are 27 gauge. This larger needle allows for thicker compositions to be injected which helps with cell retention in
the heart. Also, the MyoCath needle has more fluoroscopic brightness than the normally used nitinol needle, enabling superior visualization
during the procedure. Seeing the needle well during injections enables the physician who is operating the catheter to pinpoint
targeted areas more precisely, thus improving safety. The MyoCath competes well with other biological delivery systems on price
and efficiency and allows the physician to utilize standard fluoroscopy and echo equipment found in every cath lab. The MyoCath
is used to inject cells into cardiac tissue in therapeutic procedures to treat chronic heart ischemic and congestive heart failure.
Inventory of MyoCath is limited as it is not currently in production. The Company is considering several contract manufacturers
to produce additional inventory.

Critical Accounting Policies

Our
discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or
conditions. While our critical accounting policies are described in Note 1 to our consolidated financial statements appearing elsewhere
in this report, we believe the following policies are important to understanding and evaluating our reported financial results:

Stock-Based Compensation

On
January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards No. 123R, Share-Based Payment(“SFAS
No. 123R”) using the modified prospective transition method. SFAS No. 123R requires us to measure all share-based payment
awards granted after January 1, 2006, including those with employees, at fair value. Under SFAS No. 123R, the fair value of stock
options and other share-based compensation must be recognized as expense in the statements of operations over the requisite service
period of each award.

The
fair value of share-based awards granted subsequent to January 1, 2006 is determined using the Black-Scholes valuation model and
compensation expense is recognized on a straight-line basis over the vesting period of the awards. Beginning January 1, 2006, we
also began recognizing compensation expense under SFAS No. 123R for the unvested portions of outstanding share-based awards previously
granted under our stock option plans, over the periods these awards continue to vest. Our future share-based compensation expense
will depend on the number of equity instruments granted and the estimated value of the underlying common stock at the date of grant.

We
account for certain share-based awards, including warrants, with non-employees in accordance with SFAS No. 123R and related guidance,
including EITF Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling Goods or Services. We estimate the fair value of such awards

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using the Black-Scholes valuation model
at each reporting period and expense the fair value over the vesting period of the share-based award, which is generally the period
in which services are provided.

Revenue Recognition

We
recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”)
which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement
exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured.
Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices
of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated
returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

At
the time of each transaction, management assesses whether the fee associated with the transaction is fixed or determinable and
whether or not collection is reasonably assured. The assessment of whether the fee is fixed or determinable is based upon the payment
terms of the transaction. If a significant portion of a fee is due after our normal payment terms or upon implementation or client
acceptance, the fee is accounted for as not being fixed or determinable and revenue is recognized as the fees become due or after
implementation or client acceptance has occurred. Collectability is assessed based on a number of factors, including past transaction
history with the client and the creditworthiness of the client.

We
account for Multiple-Element Arrangements under ASC 605-10 which incorporates Accounting Standards Codification subtopic 605-25,
Multiple-Element Arrangements (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the
delivery or performance of multiple products, services and/or rights to use assets.

Unbilled
revenue is revenue that is recognized but is not currently billable to the customer pursuant to contractual terms. In general,
such amounts become billable in accordance with predetermined payment schedules, but recognized as revenue as services are performed.
Amounts included in unbilled revenue are expected to be collected within one year and are included within current assets.

Research and Development Activities

We
account for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development
(“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly,
internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when
the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored
research and development costs related to both present and future products are expensed in the period incurred

Results of Operations

We
are a development stage company and our MyoCell product candidate has not received regulatory approval or generated any material
revenues and is not expected to until 2012 if ever. We have generated substantial net losses and negative cash flow from operations
since inception and anticipate incurring significant net losses and negative cash flows from operations for the foreseeable future
as we continue clinical trials, undertake new clinical trials, apply for regulatory approvals, make capital expenditures, add information
systems and personnel, make payments pursuant to our license agreements upon our achievement of certain milestones, continue development
of additional product candidates using our technology, establish sales and marketing capabilities and incur the additional cost
of operating as a public company.

Comparison of the three months
Ended March 31, 2011 and 2010

Revenues

We
recognized revenues of $0.00 in the three month period ended March 31, 2011 compared to revenues of $29,800 in the three month
period ended March 31, 2010. The revenue in the three month period ended March 31, 2010 was generated mainly from the sale of MyoCath
catheters.

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Cost of Sales

Cost
of sales was $0.00 in the three month period ended March 31, 2011 compared to $14,404 in the three month period ended March 31,
2010.

Research and Development

Research
and development expenses were approximately $170,100 in the three month period ended in March 31, 2011, a decrease of approximately
$245,800 from research and development expenses of $415,900 in 2010. The decrease was primarily attributable to a reduction in
the amount of funds allocated to our clinical trials.

The
timing and amount of our planned research and development expenditures is dependent on our ability to obtain additional financing.
See “- Existing Capital Resources and Future Capital Requirements”and Item 1A.“Risk Factors - We
will need to secure additional financing ...” as filed with our Form 10-K with the Securities and Exchange Commission
on May 10, 2011

Marketing, General and Administrative

Marketing,
general and administrative expenses were approximately $490,500 in the three month period ended March 31 2011, an increase of $63,200
from marketing, general and administrative expenses of approximately $427,300 in 2010. The increase in marketing, general and administrative
expenses is attributable, in part, to an increase in salaries & wages due to the hiring of the President and CEO for the company.

Interest Income

Interest
income consists of interest earned on our cash and cash equivalents. Interest income was $0.03 in the three month period ended
March 31, 2011 compared to interest income of $0.83 in 2010..The decrease in interest income was primarily attributable to lower
cash balances in the three month period ended March 31, 2011 compared to 2010.

Interest Expense

On
June 1, 2007, we entered into the BlueCrest Loan and the Bank of America Loan, both in the principal amount of $5.0 million, with
interest rates of 12.85% and 4.75% (prime plus 1.5%), respectively, at December 31, 2008. On August 20, 2008, we borrowed $1.0
million from a third party at an interest rate of 13.5% per annum. Interest expense primarily consists of interest incurred on
the principal amount of these loans, accrued fees and interest earned by the guarantors of the Bank of America Loan, the amortization
of related deferred loan costs and the amortization of the fair value of warrants issued in connection with the BlueCrest and Bank
of America Loans. The fair value of the warrants originally issued in connection with the Bank of America Loan was amortized by
the end of January 2008.

Interest
expense was $409,720 in the three month period ended March 31, 2011 compared to interest expense of $399,206 in 2010. Interest
incurred on the principal amount of our outstanding loans and interest and fees earned by the guarantors totaled $178,253 in the
three month period ended March 31, 2011 and $299,755 in 2010. Amortization of debt discounts and amortization of the fair value
of warrants issued in connection with the Note payable totaled $95,212 in the three month period ended March 31, 2011 compared
to $97,354 in 2010.

Inflation

Our
opinion is that inflation has not had, and is not expected to have, a material effect on our operations.

Climate Change

Our
opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have,
any material effect on our operations.

Liquidity and Capital Resources

In
the three month period ended March 31, 2011, we continued to finance our considerable operational cash needs with cash generated
from financing activities.

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Operating Activities

Net
cash used in operating activities was $306,556 in the three month period ended March 31, 2011 as compared to $503,718 of cash used
in 2010.

Our
use of cash for operations in the three months ended March 31, 2011 reflected a net loss generated during the period of approximately
$1.2 million, adjusted for non-cash items such as stock-based compensation of $105,347, amortization of the fair value of warrants
granted in connection with the Note payable of $92,158, amortization of debt discounts incurred in connection with the BlueCrest
Loan and Bank of America Loan of $3,054. A increase in prepaid and other current assets of $50,761 contributed to our use of operating
cash in the three months ended March 31, 2011. The increase in prepaid expenses and other current assets was due mainly to the
increase in prepaid insurance. Partially offsetting these uses of cash was an increase in accrued expenses of $109,531 and accounts
payable of $363,511.

Our
use of cash for operations in the three month period ended March 31, 2010 reflected a net loss generated during the period of approximately
$1.3 million. However, our net loss was significantly offset by a decrease in prepaid expenses and other current assets of $18,943,
an increase in accounts payable of $37,789 and an increase in accrued expenses of $194,851. The decrease in prepaid expenses was
due to the refund of upfront payments under an agreement with the contract research organization that we were utilizing for the
MARVEL trial. Accounts payable increased as we have sought to conserve cash until significant additional financing was obtained.

Investing Activities

Net
cash used in investing activities was $0 in the three month period ended March 31, 2011 and $0 in 2010.

Financing Activities

Net
cash provided by financing activities was $473,258 in the three month period ended March 31, 2011 as compared to $478,000 in 2010.

In
the three month period ended March 31, 2011 we sold, in a private placement,shares of common
stock for aggregate net cash proceeds of approximately $514,501.

Existing Capital Resources and
Future Capital Requirements

Our
MyoCell product candidate has not received regulatory approval or generated any material revenues. We do not expect to generate
any material revenues or cash from sales of our MyoCell product candidate until commercialization of MyoCell, if ever. We have
generated substantial net losses and negative cash flow from operations since inception and anticipate incurring significant net
losses and negative cash flows from operations for the foreseeable future. Historically, we have relied on proceeds from the sale
of our common stock and our incurrence of debt to provide the funds necessary to conduct our research and development activities
and to meet our other cash needs.

At
March 31, 2011 we had cash and cash equivalents totaling $170,000 however, our working capital deficit
as of such date wasapproximately$11.95 million.Our independent registered public accounting
firm has issued its report dated May 10, 2011 in connection with the audit of our financial statements as of December 31, 2010
that included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to
continue as a going concern.

Off-Balance Sheet Arrangements

We
do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.

Recent Accounting Pronouncements

Refer
to Note 1. Organization and Summary of Significant Accounting Policies in the notes to our unaudited condensed consolidated
financial statements for a discussion of recent accounting pronouncements.

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Item 3. Quantitative and Qualitative
Disclosures About Market Risk

Not Applicable.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls
and procedures, which are designed to ensure that information required to be
disclosed in the reports we file or submit under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission’s rules and
forms, and that such information is accumulated and communicated to our
management, including our CEO and Controller, as appropriate, to allow timely
decisions regarding required disclosure.

Under the supervision and with
the participation of our management, including our CEO and Controller, an
evaluation was performed on the effectiveness of the design and operation of
our disclosure controls and procedures as of the end of the period covered by
this quarterly report. Based on that evaluation, our management, including our
CEO and Controller, concluded that our disclosure controls and procedures were
ineffective as of the end of the period covered by this report due to the
Company’s limited resources and limited number of employees. To mitigate the
current limited resources and limited employees, we rely heavily on direct
management oversight of transactions, along with the use of legal and
outsourced accounting professionals. As we grow, we expect to increase our
number of employees, which, we believe, will enable us to implement adequate
segregation of duties within the internal control framework.

Changes In Internal Control Over
Financial Reporting

There were no changes in the
Company’s internal controls over financial reporting during the most recently
completed fiscal quarter that have materially affected or are reasonably likely
to materially affect the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Our
company is not involved in any material litigation and we are unaware of any threatened material litigation. However, the
biotechnology and medical device industries have been characterized by extensive litigation regarding patents and other intellectual
property rights. In addition, from time to time, we may become involved in litigation relating to claims arising from the ordinary
course of our business.

Item 1A. Risk Factors

There
have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2010.

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

Private Placement – Common Stock
and Warrants

In
January 2011, the Company sold, in a private placement, an aggregate of 102,780 shares of the Company’s common stock
and warrants to purchase 51,390 shares of the Company’s common stock for aggregate gross cash proceeds of $18,500. The warrants
are (i) exercisable solely for cash at an exercise price of $0.22 per share, (ii) non-transferable for six months following issuance
and (iii) exercisable, in whole or in part, at any time during the period commencing on the date that is six months and one day
following the date of issuance and ending on the third year anniversary of the date of issuance.

In
January 2011, the Company sold an aggregate of 318,750 shares of the Company’s common stock and warrants to purchase
159,375 shares of the Company’s common stock for aggregate gross cash proceeds of $51,000. The warrants are (i) exercisable
solely for cash at an exercise price of $0.19 per share, (ii) non-transferable for six months following issuance and (iii) exercisable,
in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of
issuance and ending on the third year anniversary of the date of issuance.

In
March 2011, the Company sold an aggregate of 577,670 shares of the Company’s common stock and warrants to purchase
491,020 shares of the Company’s common stock for aggregate gross cash proceeds of $85,000. The warrants are (i) exercisable
solely for cash at an exercise price of $0.14 to $0.15 per share, (ii) non-transferable for six months following issuance and (iii)
exercisable, in whole or in part, at any time during the period commencing on the date that is six months and one day following
the date of issuance and ending on the third year anniversary of the date of issuance.

In
April 2011, the Company sold an aggregate of 97,400 shares of the Company’s common stock and warrants to purchase
82,790 shares of the Company’s common stock for aggregate gross cash proceeds of $15,000. The warrants are (i) exercisable
solely for cash at an exercise price of $0.15 per share, (ii) non-transferable for six months following issuance and (iii) exercisable,
in whole or in part, at any time during the period commencing on the date that is six months and one day following the date of
issuance and ending on the third year anniversary of the date of issuance.

Subscription agreement

On
January 23, 2011, Bioheart, Inc. (the “Company”) announced that it has entered into a subscription agreement with Anc
Bio Holdings, Inc., a South Korean biomedical company, and a subscription agreement with one of its U.S. agents, Bioheart Florida,
LLC for a $4 million equity investment, in the aggregate. Funding of the investment will be made ratably by them in installments
with 10% immediately, followed by 40% within 45 days and the remaining 50% subject to certain conditions which the Company expects
to satisfy in the next 90 days.

The
aggregate number of shares of common stock anticipated to be issued in connection with the investment is 25,000,000 shares. The
Company will also issue to the purchasers of common stock, warrants to purchase, in the aggregate, up to 12,500,000 shares of common
stock. In connection with the common stock issuance, the subscribers received “piggyback” registration rights exercisable
under certain circumstances more particularly set forth in the Registration Rights Agreement entered into with each investor.

Under
the terms of the subscription agreements, the Company has agreed, among other things, that:

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(a)
Until April 20, 2011, the Company shall not initiate or support any action to increase the number of directors serving on the Company’s
Board of Directors and, subject to unforeseen circumstances outside of the Company’s control (i.e., the death or disability
of a board member), the Company will not initiate or support any change to the composition of the Board of Directors’ Committees
without the investors’ prior consent;

(b)
The Company will provide the Investors with an estimated use of proceeds prior to the first installment payment date and the Company
will utilize not less than sixty percent (60%) of such proceeds for research and development costs and clinical trial costs;

(c)
The proceeds may be used to attract and hire a new Company Chief Financial Officer and the Investors, or their designee(s) will
have the right to participate in the interviewing of, and the selection of, that new Chief Financial Officer; and

(d)
Until April 20, 2011, the Company shall not issue more than Two Hundred, Fifty Thousand (250,000) shares of the Company’s
Common Stock in connection with any single transaction (other than shares that may be issued in connection with the conversion
of the existing convertible promissory note into such shares of common stock by Magna Group, LLC).

(e)
the Company has agreed that, following its receipt of the first installment payment, the Company will cause a vacancy on the Company’s
Board of Directors to be filled by one person designated by ABH. Additionally, the Company agreed with ABH that it shall not call
a meeting nor schedule a meeting of its shareholders to be held prior to April 20, 2011.

On
January 23, 2011 the Company did receive the initial 10% and is currently engaged in discussions with the investors to determine
new timing for the funding of the remaining installments. As of April 18, 2011, the second installment had not been received from
either ABH or BF.

Accordingly,on April 18, 2011 the Company delivered a written notice of default and termination to each of ABH and BF, in respect of
the Agreements. The notice stated that it was being given as a result of the breach by each of ABH and BF of their respective payment
obligations under the Agreements. A copy of the notice of default was filed with the Company’s Current Report on Form 8-Kfiled with the SEC on April 22, 2011.

Each
of the listed sales was exempt from registration in reliance upon Section 4(s) of the Securities Act of 1933, as amended (the “Securities
Act”), for transactions by an issuer not involving a public offering. The offer and sale of such securities was made without
general solicitation or advertising to “accredited investors” as defined in Rule 501(a) of Regulation D promulgated
by the Securities Act.

Item 3. Defaults Upon Senior Securities

Not Applicable

Item 4. Removed and Reserved

Item 5. Other Information

Increase to Authorized Common Stock

As
of December 31, 2010, our Articles of Incorporation authorized us to issue up to 75,000,000 shares of common stock, par value $0.001
per share. The Board of Directors proposed, and on January 13, 2011 (the “Record Date”) the holders of a majority of
the Company’s issued and outstanding voting common shares as of the Record Date approved, an increase in the number of authorized
shares of the common stock from 75,000,000 shares to 195,000,000 shares. On January 21, 2011 the Company filed a 14C Information
Statement with the Securities and Exchange Commission. Following approval by the Securities and Exchange Commission and upon the
filing of the Certificate of Amendment to the Articles of Incorporation, the Company’s will be authorized to issue a total
of 195,000,000 shares of common stock, par value of $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001
per share.

Approval of Option Issuance

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In
February 2011, the Board of Directors approved the issuance of stock options to purchase an aggregate of 210,000 shares of common
stock at an exercise price of $0.21 per share issued to certain members of the Company’s Board of Directors. The options
will vest immediately upon issuance and will expire on the tenth anniversary of the issuance date.



Loan agreement amendment



On
December 31, 2009, the Company and BlueCrest Venture Finance Master Fund Limited (“BlueCrest”) entered into an Amendment
to Loan and Security Agreement, amending that certain loan from BlueCrest to the Company originated as of May 31, 2007 (the “Loan”).
The outstanding principal amount of the Loan as of December 31, 2010 was $2,276,543.03. On January 7, 2011, BlueCrest agreed with
the Company and Magna Group, LLC (“Magna”) to split the note evidencing the Loan into two notes aggregating the outstanding
principal balance, with the new note being in the principal amount of $139,729.82 (the “New Note”). The New Note was
assigned to Magna in consideration for a payment by them to BlueCrest of $139,729.82, and modified. Additionally, Magna purchased
a $25,000 convertible note from the Company (the “Convertible Note”).



The
loans evidenced by the New Note and Convertible Note are in the nature of convertible debt evidenced by two unsecured convertible
promissory notes, each bearing interest at the rate of 8% per annum, payable at maturity and each convertible into common stock
of the Company at a price that is 50% less than the average of the closing prices for the Company’s shares for the five (5)
days prior to the Lenders’ election to exercise its conversion right.



|• | In January 2011, we issued an aggregate of 538,542 shares of our common stock in connection with the conversion of $87,729 of the convertible note.                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                              
|• | In February 2011, we issued an aggregate of 421,392 shares of our common stock in connection with the conversion of the remaining balance of $52,000 of the convertible note.

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Item 6.	Exhibits



|Exhibit No. |  | Exhibit Description                                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |  |                                                                                                                                                             
|3.1(6)      |  | Amended and Restated Articles of Incorporation of the registrant, as amended                                                                                
|3.2(9)      |  | Articles of Amendment to the Articles of Incorporation of the registrant                                                                                    
|3.3(8)      |  | Amended and Restated Bylaws                                                                                                                                 
|4.1(5)      |  | Loan and Security Agreement, dated as of May 31, 2007 by and between BlueCrest Capital Finance, L.P. and the registrant                                     
|4.2(12)     |  | Notice of Event of Default, from BlueCrest Venture Finance Master Fund Limited to the Company, dated January 28, 2009                                       
|4.3(12)     |  | Notice of Acceleration, from BlueCrest Venture Finance Master Fund Limited to the Company, dated February 2, 2009                                           
|4.4(13)     |  | Amendment to Loan and Security Agreement, between the Company and BlueCrest Venture Finance Master Fund Limited, dated as of April 2, 2009                  
|4.5(13)     |  | Grant of Security Interest (Patents), between the Company and BlueCrest Venture Finance Master Fund Limited, dated as of April 2, 2009                      
|4.6(13)     |  | Security Agreement (Intellectual Property), between the Company and BlueCrest Venture Finance Master Fund Limited, dated as of April 2, 2009                
|4.7(13)     |  | Subordination Agreement, by Hunton & Williams, LLP in favor of BlueCrest Venture Finance Master Fund Limited, entered into and effective April 2, 2009      
|4.8(13)     |  | Amended and Restated Promissory Note, dated April 2, 2009, by the Company to BlueCrest Venture Finance Master Fund Limited                                  
|4.9(13)     |  | Warrant to purchase 1,315,542 shares of the registrant’s common stock, dated April 2, 2009, issued to BlueCrest Venture Finance Master Fund Limited         
|4.10(14)    |  | Warrant to purchase 451,043 shares of the registrant’s common stock, dated April 2, 2009, issued to Rogers Telecommunications Limited                       
|4.11(14)    |  | Warrant to purchase 173,638 shares of the registrant’s common stock, dated April 2, 2009, issued to Hunton & Williams, LLP                                  
|10.1**(1)   |  | 1999 Officers and Employees Stock Option Plan                                                                                                               
|10.2**(1)   |  | 1999 Directors and Consultants Stock Option Plan                                                                                                            
|10.2(a)     |  |                                                                                                                                                             
|10.3(1)     |  | Form of Option Agreement under 1999 Officers and Employees Stock Option Plan                                                                                
|10.4(3)     |  | Form of Option Agreement under 1999 Directors and Consultants Stock Option Plan                                                                             
|10.5**(4)   |  | Employment Letter Agreement between the registrant and Scott Bromley, dated August 24, 2006.                                                                
|10.6(1)     |  | Lease Agreement between the registrant and Sawgrass Business Plaza, LLC, as amended, dated November 14, 2006.                                               
|10.7(1)     |  | Asset Purchase Agreement between the registrant and Advanced Cardiovascular Systems, Inc., dated June 24, 2003.                                             
|10.8(4)     |  | Conditionally Exclusive License Agreement between the registrant, Dr. Peter Law and Cell Transplants International, LLC, dated February 7, 2000, as amended.
|10.9(4)     |  | Loan Guarantee, Payment and Security Agreement, dated as of June 1, 2007, by and between the registrant, Howard J. Leonhardt and Brenda Leonhardt           
|10.10(4)    |  | Loan Guarantee, Payment and Security Agreement, dated as of June 1, 2007, by and between the registrant and William P. Murphy Jr., M.D.                     
|10.11(4)    |  | Loan Agreement, dated as of June 1, 2007, by and between the registrant and Bank of America, N.A.                                                           
|10.12(4)    |  | Warrant to purchase shares of the registrant's common stock issued to Howard J. Leonhardt and Brenda Leonhardt                                              
|10.13(4)    |  | Warrant to purchase shares of the registrant's common stock issued to Howard J. Leonhardt and Brenda Leonhardt                                              
|10.14(4)    |  | Warrant to purchase shares of the registrant's common stock issued to William P. Murphy Jr., M.D.                                                           
|10.15(4)    |  | Warrant to purchase shares of the registrant's common stock issued to the R&A Spencer Family Limited Partnership                                            
|10.16(4)    |  | Supply and License Agreement, dated June 7, 2007, by and between the registrant and BioLife Solutions, Inc.***                                              
|10.17(5)    |  | Warrant to purchase shares of the registrant's common stock issued to BlueCrest Capital Finance, L.P.                                                       

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|10.18(6)    |  | Loan Guarantee, Payment and Security Agreement, dated as of September 12, 2007, by and between the registrant and Samuel S. Ahn, M.D.                           
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.19(6)    |  | Loan Guarantee, Payment and Security Agreement, dated as of September 12, 2007, by and between the registrant and Dan Marino                                    
|10.20(6)    |  | Warrant to purchase shares of the registrant's common stock issued to Samuel S. Ahn, M.D.                                                                       
|10.21(6)    |  | Loan Guarantee, Payment and Security Agreement, dated as of September 19, 2007, by and between the registrant and Jason Taylor                                  
|10.22(7)    |  | Loan Guarantee, Payment and Security Agreement, dated as of October 10, 2007, by and between the registrant and Howard and Brenda Leonhardt                     
|10.23(7)    |  | Warrant to purchase shares of the registrant's common stock issued to Howard and Brenda Leonhardt                                                               
|10.24(7)    |  | Second Amendment to Loan Guarantee, Payment and Security Agreement, dated as of October 10, 2007, by and between the registrant and Howard and Brenda Leonhardt 
|10.25(7)    |  | Second Amendment to Loan Guarantee, Payment and Security Agreement, dated as of October 10, 2007, by and between the registrant and William P. Murphy, Jr., M.D.
|10.26**(10) |  | Bioheart, Inc. Omnibus Equity Compensation Plan                                                                                                                 
|10.27(11)   |  | Form of Warrant Agreement for October 2008 Private Placement                                                                                                    
|10.28(11)   |  | Form of Registration Rights Agreement for October 2008 Private Placement                                                                                        
|10.29(19)   |  | 10% Convertible Promissory Note Due July 23, 2010, in the amount of $20,000, payable to Dana Smith                                                              
|10.30(19)   |  | 10% Convertible Promissory Note Due July 23, 2010, in the amount of $100,000, payable to Bruce Meyers                                                           
|10.31(19)   |  | Registration Rights Agreement, dated July 23, 2009                                                                                                              
|10.32(19)   |  | Subordination Agreement, dated July 23, 2009                                                                                                                    
|10.33(19)   |  | Note Purchase Agreement, dated July 23, 2009                                                                                                                    
|10.34(19)   |  | Closing Confirmation of Conversion Election, dated July 23, 2009                                                                                                
|10.35**(20) |  | Amended and Restated 1999 Directors and Consultants Stock Option Plan                                                                                           
|10.36(21)   |  | Letter of Intent with Seaside National Bank and Trust, dated September 30, 2010.                                                                                
|10.37(22)   |  | Loan Agreement with Seaside National Bank and Trust, dated October 25, 2010.                                                                                    
|10.38(22)   |  | Promissory Note with Seaside National Bank and Trust, dated October 25, 2010.                                                                                   
|10.39(22)   |  | Amended and Restated Loan and Security Agreement with BlueCrest Venture Finance Master Fund Limited, dated October 25, 2010.                                    
|10.40(23)   |  | Form of Subscription Agreement, executed November 30, 2010.                                                                                                     
|10.41(23)   |  | Form of Common Stock Purchase Warrant, issued November 30, 2010.                                                                                                
|10.42(23)   |  | Form of Registration Rights Agreement, dated November 30, 2010.                                                                                                 
|10.43(24)   |  | Unsecured Convertible Promissory Note for $25,000, with Magna Group, LLC, dated January 3, 2011.                                                                
|10.44(24)   |  | Promissory Note for $139,728.82 with Magna Group, LLC, dated January 3, 2011.                                                                                   
|10.45(24)   |  | Securities Purchase Agreement with Magna Group, LLC, dated January 3, 2011.                                                                                     
|10.46(24)   |  | Subordination Agreement, dated January 3, 2011.                                                                                                                 
|10.47(24)   |  | Notice of Conversion Election, dated January 3, 2011.                                                                                                           
|            |  |                                                                                                                                                                 
|31.1*       |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                          
|32.1*       |  | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                          
|            |  |                                                                                                                                                                 

________________

|*  |  | Filed herewith                                     
|-- |  | ---------------------------------------------------
|** |  | Indicates management contract or compensatory plan.



|(1) |  | Incorporated by reference to the Company’s Form S-1 filed with the Securities and Exchange Commission on February 13, 2007               
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|(2) |  | Reserved                                                                                                                                 
|(3) |  | Incorporated by reference to Amendment No. 2 to the Company’s Form S-1 filed with the Securities and Exchange Commission on July 12, 2007

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|     |  |                                                                                                                                                                                                
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4)  |  | Incorporated by reference to Amendment No. 3 to the Company’s Form S-1 filed with the Securities and Exchange                                                                                  
|     |  | Commission on August 9, 2007                                                                                                                                                                   
|(5)  |  | Incorporated by reference to Amendment No. 4 to the Company’s Form S-1 filed with the Securities and Exchange  Commission on September 6, 2007                                                 
|(6)  |  | Incorporated by reference to Amendment No. 5 to the Company’s Form S-1 filed with the Securities and Exchange Commission on October 1, 2007                                                    
|(7)  |  | Incorporated by reference to Post-effective Amendment No. 1 to the Company’s Form S-1 filed with the Securities and Exchange Commission on October 11, 2007                                    
|(8)  |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2008                                                        
|(9)  |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 8, 2008                                                      
|(10) |  | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2008                                                  
|(11) |  | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2008                                                
|(12) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 3, 2009                                                    
|(13) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 8, 2009                                                       
|(14) |  | Incorporated by reference to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2009                                                      
|(15) |  | Incorporated by reference to the Company’s Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on April 30, 2009                                                    
|(16) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2009                                                        
|(17) |  | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 20, 2009                                                     
|(18) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 9, 2009                                                        
|(19) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2009                                                       
|(20) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 3, 2009                                                      
|(21) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 18, 2009                                                     
|(22) |  | Incorporated by reference to Exhibit 4.6 to the Company’s Post Effective Amendment to Registration Statement on Form S-8/A, filed with the Securities and Exchange Commission on April 28, 2010
|(23) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2010.                                                                                  
|(24) |  | Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 12, 2011.                                                                                  

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SIGNATURES



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



|                   |     |                                     | 
|------------------ | --- | ----------------------------------- | 
|                   |     | Bioheart, Inc.                      | 
|                   |     |                                     | 
|Date: May 23, 2011 | By: | /s/Mike Tomas                       | 
|                   |     | Mike Tomas                          | 
|                   |     | Chief Executive Officer & President | 

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