---

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

_______________________________________

**FORM 10-Q**

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

For the quarterly period ended June 30, 2010

OR

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

For the transition period from __________ to
__________

Commission File Number: 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 June 30, 2010 there were 27,327,705 outstanding shares of the registrants
common stock, par value $0.001 per share.

---

---

BIOHEART, INC.

INDEX

PART I  FINANCIAL INFORMATION

|         |                                                                                        |                                                                                           
|-------- | -------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------
|Item 1.  | Financial Statements                                                                  
|         |                                                                                        |                                                                                           
|         | 1)                                                                                     | Consolidated
 Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009        
|         |                                                                                        |                                                                                           
|         | 2)                                                                                     | Consolidated
 Statements of Operations for the three and Six Months ended June 30, 2010   
|         |                                                                                        | and 2009
 (unaudited)                                                                     
|         |                                                                                        |                                                                                           
|         | 3)                                                                                     | Consolidated
 Statement of Shareholders Deficit for the period from inception to June 30,
|         |                                                                                        | 2010 (unaudited)                                                                          
|         |                                                                                        |                                                                                           
|         | 4)                                                                                     | Consolidated
 Statements of Cash Flows for the Six Months ended June 30, 2010 and 2009    
|         |                                                                                        | (unaudited)                                                                               
|         |                                                                                        |                                                                                           
|         | 5)                                                                                     | Notes to
 Consolidated Interim Financial Statements (unaudited)                           
|         |                                                                                        |                                                                                           
|Item 2.  | Managements Discussion and Analysis of Financial Condition and
 Results of Operations
|         |                                                                                       
|Item 3.  | Quantitative and Qualitative Disclosures About Market Risk                            
|         |                                                                                       
|         |                                                                                       
|Item 4T. | Controls and Procedures                                                               
|         |                                                                                       
|         | PART II  OTHER INFORMATION                                                           
|         |                                                                                       
|Item 1.  | Legal Proceedings                                                                     
|         |                                                                                       
|Item 1A. | Risk Factors                                                                          
|         |                                                                                       
|Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                           
|         |                                                                                       
|Item 3.  | Defaults Upon Senior Securities                                                       
|         |                                                                                       
|Item 4.  | Removed and Reserved                                                                  
|         |                                                                                       
|Item 5.  | Other Information                                                                     
|         |                                                                                       
|Item 6.  | Exhibits                                                                              

Signatures

Index to Exhibits

1

---

PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

Bioheart, Inc. and Subsidiaries 
(A development stage enterprise)

Consolidated Balance Sheets

|                                                                                                                                                                                |  |                |              |                    |   |              |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------------ | ------------------ | - | ------------ | -
|                                                                                                                                                                                |  | June 30,
 2010 |              | December 31,
 2009 |  
|                                                                                                                                                                                |  |                |              |                    |  
|                                                                                                                                                                                |  | (Unaudited)    |              | (Audited)          |  
|ASSETS                                                                                                                                                                          |  |                |              |                    |   |              |  
|Current
 assets                                                                                                                                                                 |  |                |              |                    |   |              |  
|Cash and cash equivalents                                                                                                                                                       |  | $              | 4,872        |                    | $ | 75,031       |  
|Receivables                                                                                                                                                                     |  |                | 140,434      |                    |   | 142,279      |  
|Inventory                                                                                                                                                                       |  |                | 79,061       |                    |   | 199,914      |  
|Prepaid expenses and other current assets                                                                                                                                       |  |                | 32,939       |                    |   | 25,729       |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Total current assets                                                                                                                                                            |  |                | 257,306      |                    |   | 442,953      |  
|Property and
 equipment, net                                                                                                                                                    |  |                | 67,700       |                    |   | 104,397      |  
|Deferred
 loan costs, net                                                                                                                                                       |  |                | 1,333,932    |                    |   | 1,250,106    |  
|Other assets                                                                                                                                                                    |  |                | 68,854       |                    |   | 68,854       |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Total assets                                                                                                                                                                    |  | $              | 1,727,792    |                    | $ | 1,866,310    |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                                                                           |  |                |              |                    |   |              |  
|Current
 liabilities                                                                                                                                                            |  |                |              |                    |   |              |  
|Accounts payable                                                                                                                                                                |  | $              | 1,991,650    |                    | $ | 1,911,893    |  
|Accrued expenses and other current
 liabilities                                                                                                                                 |  |                | 3,218,557    |                    |   | 3,530,246    |  
|Deferred revenue                                                                                                                                                                |  |                | 507,281      |                    |   | 507,281      |  
|Notes payable  current                                                                                                                                                         |  |                | 5,596,161    |                    |   | 4,051,861    |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Total current liabilities                                                                                                                                                       |  |                | 11,313,649   |                    |   | 10,001,281   |  
|Deferred
 rent                                                                                                                                                                  |  |                |             |                    |   | 857          |  
|Subordinated
 related party loan                                                                                                                                                |  |                |             |                    |   | 3,000,000    |  
|Note payable
  long term                                                                                                                                                       |  |                | 1,565,643    |                    |   | 2,276,543    |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Total liabilities                                                                                                                                                               |  |                | 12,879,292   |                    |   | 15,278,681   |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Commitments
 and contingencies                                                                                                                                                  |  |                |              |                    |   |              |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Shareholders
 deficit                                                                                                                                                          |  |                |              |                    |   |              |  
|Preferred stock ($0.001 par value)
 5,000,000 shares authorized; none issued and outstanding                                                                                    |  |                |             |                    |   |             |  
|Common stock ($0.001 par value) 75,000,000
 shares authorized; 27,327,705 and 20,035,684 shares issued and outstanding as
 of June 30, 2010 and December 31, 2009, respectively |  |                | 26,773       |                    |   | 20,036       |  
|Additional paid-in capital                                                                                                                                                      |  |                | 92,513,595   |                    |   | 87,196,374   |  
|Deficit accumulated during the development
 stage                                                                                                                               |  |                | (103,691,868 | )                  |   | (100,628,781 | )
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Total shareholders deficit                                                                                                                                                     |  |                | (11,151,500  | )                  |   | (13,412,371  | )
|                                                                                                                                                                                |  |                |              |                    |   |              |  
|Total liabilities and shareholders deficit                                                                                                                                     |  | $              | 1,727,792    |                    | $ | 1,866,310    |  
|                                                                                                                                                                                |  |                |              |                    |   |              |  

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

2

---

Bioheart, Inc. and Subsidiaries 
(A development stage enterprise)

Consolidated Statements of Operations

|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|-------------------------------------------------------- |  | ------------------------------------------ | ---------- | --------------------------------------- | - | -------------------------------------------------------------------------- | - | ---- | ---------- | ---- | ----------- | ---------- | - | - | ------------ | -
|                                                         |  | For the Three-Month Period
 Ended June 30, |            | For the Six-Month Period
 Ended June 30 |   | Cumulative
 Period from
 August 12, 1999
 (date of inception)
 to June 30, |  
|                                                         |  |                                            |            |                                         |   |                                                                            |  
|                                                         |  | 2010                                       |            | 2009                                    |   | 2010                                                                       |   | 2009 |            | 2010 |            
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |            
|                                                         |  | (Unaudited)                                |            |                                         |   |                                                                            |   |      |            |      | (Unaudited) |           
|                                                         |  |                                            |            |                                         |   |                                                                            |   |     
|Revenues                                                 |  | $                                          | 29,794     |                                         | $ | 109,090                                                                    |   |      | 36,466     |      |             | 206,885    |   | $ | 1,181,139    |  
|Cost of
 sales                                           |  |                                            | 14,404     |                                         |   | 49,297                                                                     |   |      | 16,799     |      |             | 112,781    |   |   | 547,174      |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Gross profit                                             |  |                                            | 15,390     |                                         |   | 59,793                                                                     |   |      | 19,667     |      |             | 94,104     |   |   | 633,965      |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Development
 revenues                                    |  |                                            |           |                                         |   |                                                                           |   |      |           |      |             |           |   |   | 117,500      |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Expenses:                                                |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Research and development                                 |  |                                            | 415,856    |                                         |   | 626,363                                                                    |   |      | 1,093,677  |      |             | 1,041,693  |   |   | 66,452,250   |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Marketing, general and administrative                    |  |                                            | 427,252    |                                         |   | 646,882                                                                    |   |      | 813,967    |      |             | 1,119,034  |   |   | 31,414,063   |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Depreciation and amortization                            |  |                                            | 23,113     |                                         |   | 45,296                                                                     |   |      | 36,697     |      |             | 90,204     |   |   | 831,101      |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Total expenses                                           |  |                                            | 866,221    |                                         |   | 1,318,541                                                                  |   |      | 1,944,341  |      |             | 2,250,931  |   |   | 98,697,414   |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Loss from operations                                     |  |                                            | (850,831   | )                                       |   | (1,258,748                                                                 | ) |      | (1,924,674 | )    |             | (2,156,827 | ) |   | (97,945,949  | )
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Interest
 income                                         |  |                                            | 1          |                                         |   | 10                                                                         |   |      | 1          |      |             | 16         |   |   | 762,276      |  
|Interest
 expense                                        |  |                                            | (683,110   | )                                       |   | (557,682                                                                   | ) |      | (1,138,413 | )    |             | (1,335,808 | ) |   | (9,508,195   | )
|Reversal of Litigation Accrual                           |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   | 3,000,000    |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Net interest
 expense                                    |  |                                            | (683,109   | )                                       |   | (557,672                                                                   | ) |      | (1,138,412 | )    |             | (1,335,792 | ) |   | (5,745,919   | )
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Loss before income taxes                                 |  |                                            | (1,533,940 | )                                       |   | (1,816,420                                                                 | ) |      | (3,063,086 | )    |             | (3,492,619 | ) |   | (103,691,868 | )
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Income taxes                                             |  |                                            |           |                                         |   |                                                                           |   |      |           |      |             |           |   |   |             |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Net loss                                                 |  | $                                          | (1,533,940 | )                                       | $ | (1,816,420                                                                 | ) | $    | (3,063,086 | )    | $           | (3,492,619 | ) | $ | (103,691,868 | )
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Loss per
 share - basic and diluted                      |  | $                                          | (0.07      | )                                       | $ | (0.11                                                                      | ) | $    | (0.13      | )    | $           | (0.21      | ) |   |              |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  
|Weighted average shares outstanding - basic
 and diluted |  |                                            | 21,115,148 |                                         |   | 15,931,615                                                                 |   |      | 23,670,644 |      |             | 16,596,241 |   |   |              |  
|                                                         |  |                                            |            |                                         |   |                                                                            |   |      |            |      |             |            |   |   |              |  

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

3

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Consolidated Statement of Shareholders
Deficit
(Unaudited)

|                                                                                |  |              |            |        |   |                              |  |                          |            |                                                     |  |         |   |  |               |   |   |             |  
|------------------------------------------------------------------------------- |  | ------------ | ---------- | ------ | - | ---------------------------- |  | ------------------------ | ---------- | --------------------------------------------------- |  | ------- | - |  | ------------- | - | - | ----------- | -
|                                                                                |  | Common Stock |            |        |   |                              |  |                          |            |                                                     | 
|                                                                                |  |              |            |        |   |                              |  |                          |            |                                                     | 
|                                                                                |  | Shares       |            | Amount |   | Additional
 Paid-in
 Capital |  | Subscription
 Receivable |            | Deficit
 Accumulated During the Development 
 Stage |  | Total   |  
|                                                                                |  |              |            |        |   |                              |  |                          |            |                                                     |  |         |  
|Balance as of December 31, 2009                                                 |  |              | 20,035,684 |        | $ | 20,036                       |  | $                        | 87,255,910 |                                                     |  | (59,536 | ) |  | $(100,628,781 | ) | $ | (13,412,371 | )
|Stock-based compensation                                                        |  |              |           |        |   |                             |  |                          | 94,596     |                                                     |  |        |   |  |              |   |   | 94,596      |  
|Common stock issued in settlement of
 accounts payable                          |  |              | 140,471    |        |   | 122                          |  |                          | 93,796     |                                                     |  |        |   |  |              |   |   | 93,918      |  
|Issuance of warrants in connection with
 notes payable                          |  |              |           |        |   |                             |  |                          | 687,677    |                                                     |  |        |   |  |              |   |   | 687,677     |  
|Issuance of common stock (net of issuance
 costs of $2,950)                     |  |              | 1,512,890  |        |   | 1,513                        |  |                          | 853,528    |                                                     |  | 59,536  |   |  |              |   |   | 914,577     |  
|Common stock issued in exchange for
 services                                   |  |              | 844,230    |        |   | 308                          |  |                          | 567,512    |                                                     |  |        |   |  |              |   |   | 567,820     |  
|Common stock issued in connection with Bank
 of America loan guarantors payment |  |              | 4,794,430  |        |   | 4,794                        |  |                          | 2,960,576  |                                                     |  |        |   |  |              |   |   | 2,965,370   |  
|Net loss                                                                        |  |              |           |        |   |                             |  |                          |           |                                                     |  |        |   |  | (3,063,087    | ) |   | (3,063,087  | )
|                                                                                |  |              |            |        |   |                              |  |                          |            |                                                     |  |         |   |  |               |   |   |             |  
|Balance as of June 30, 2010                                                     |  |              | 27,327,705 |        | $ | 26,773                       |  | $                        | 92,513,595 |                                                     |  |        |   |  | $(103,691,868 | ) | $ | 11,511,500  | )
|                                                                                |  |              |            |        |   |                              |  |                          |            |                                                     |  |         |   |  |               |   |   |             |  

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

4

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Consolidated Statements of Cash Flows

|                                                                                       |      |                                        |            |                                                                               |   |            |   |   |              |  
|-------------------------------------------------------------------------------------- | ---- | -------------------------------------- | ---------- | ----------------------------------------------------------------------------- | - | ---------- | - | - | ------------ | -
|                                                                                       |      | For the Six-Month Period EndedJune 30, |            | Cumulative Period from August 12, 1999
 (date of inception)
 to June 30, 2010 |  
|                                                                                      
|                                                                                       | 2010 |                                        |            | 2009                                                                         
|                                                                                       |      |                                        |            |                                                                               |   |            |   |  
|                                                                                       |      | (Unaudited)                            |            | (Unaudited)                                                                   |  
|Cash flows from operating activities                                                   |      |                                        |            |                                                                               |   |            |   |   |              |  
|Net loss                                                                               |      | $                                      | (3,063,087 | )                                                                             | $ | (3,492,619 | ) | $ | (103,691,868 | )
|Adjustments to reconcile net loss to net
 cash used in operating activities:           |      |                                        |            |                                                                               |   |            |   |   |              |  
|Depreciation and amortization                                                          |      |                                        | 36,697     |                                                                               |   | 90,204     |   |   | 831,101      |  
|Bad debt expense                                                                       |      |                                        |            |                                                                               |   |            |   |   | 165,000      |  
|Discount on convertible debt                                                           |      |                                        |           |                                                                               |   | 200,000    |   |   | 262,224      |  
|Amortization of warrants issued in exchange
 for licenses and intellectual property    |      |                                        |            |                                                                               |   |            |   |   | 5,413,156    |  
|Amortization of warrants issued in
 connection with notes payable                      |      |                                        | 542,927    |                                                                               |   | 337,654    |   |   | 4,259,305    |  
|Amortization of loan costs                                                             |      |                                        | 66,154     |                                                                               |   | 78,616     |   |   | 1,209,475    |  
|Warrants issued in exchange for services                                               |      |                                        |           |                                                                               |   |           |   |   | 285,659      |  
|Equity instruments issued in connection
 with                                          |      |                                        |           |                                                                               |   |           |   |   | 3,381,629    |  
|settlement agreement                                                                   |      |                                        |            |                                                                               |   |            |   |   |              |  
|Equity instruments issued in connection
 with R & D agreement                          |      |                                        | 567,529    |                                                                               |   |           |   |   | 563,372      |  
|Common stock issued in exchange for
 services                                          |      |                                        |            |                                                                               |   | 45,900     |   |   | 1,322,917    |  
|Common stock issued in connection with
 amounts due to Bank of America loan guarantors |      |                                        | 69,159     |                                                                               |   |           |   |   | 69,159       |  
|Common stock issued in exchange for
 distribution rights and intellectual property     |      |                                        |           |                                                                               |   |           |   |   | 99,997       |  
|Common stock issued in connection with
 accounts payable                               |      |                                        | 93,918     |                                                                               |   |            |   |   | 340,797      |  
|Warrants issued in connection with accounts
 payable                                   |      |                                        |            |                                                                               |   | 133,531    |   |   | 7,758        |  
|Stock-based compensation                                                               |      |                                        | 94,596     |                                                                               |   | (47,750    | ) |   | 9,146,921    |  
|Changes in assets and liabilities                                                      |      |                                        |            |                                                                               |   |            |   |   |              |  
|Receivables                                                                            |      |                                        | 1,845      |                                                                               |   | 49,265     |   |   | (140,433     | )
|Inventory                                                                              |      |                                        | 120,853    |                                                                               |   | 120,067    |   |   | (79,062      | )
|Prepaid expenses and other current assets                                              |      |                                        | (7,210     | )                                                                             |   | 521,969    |   |   | (32,939      | )
|Other assets                                                                           |      |                                        |            |                                                                               |   | 40,000     |   |   | (28,854      | )
|Accounts payable                                                                       |      |                                        | 74,527     |                                                                               |   | 534,063    |   |   | 2,575,768    |  
|Accrued expenses and deferred rent                                                     |      |                                        | 437,065    |                                                                               |   | 475,052    |   |   | 4,285,955    |  
|Deferred revenue                                                                       |      |                                        |           |                                                                               |   |           |   |   | 507,282      |  
|                                                                                       |      |                                        |            |                                                                               |   |            |   |   |              |  
|Net cash used in operating activities                                                  |      |                                        | (965,027   | )                                                                             |   | (914,048   | ) |   | (69,245,681  | )
|                                                                                       |      |                                        |            |                                                                               |   |            |   |   |              |  

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

5

---

|                                                                           |      |                                        |          |                                                                               |   |            |   |   |            |  
|-------------------------------------------------------------------------- | ---- | -------------------------------------- | -------- | ----------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                           |      | For the Six-Month Period EndedJune 30, |          | Cumulative Period from August 12, 1999
 (date of inception)
 to June 30, 2010 |  
|                                                                          
|                                                                           | 2010 |                                        |          | 2009                                                                         
|                                                                           |      |                                        |          |                                                                               |   |            |   |  
|                                                                           |      | (Unaudited)                            |          | (Unaudited)                                                                   |  
|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 (payments for) initial public
 offering of common stock, net |      |                                        |         |                                                                               |   |           |   |   | 1,447,829  |  
|Proceeds from private placements of common
 stock, net                     |      |                                        | 914,868  |                                                                               |   | 652,000    |   |   | 60,387,243 |  
|Proceeds from exercise of stock options                                    |      |                                        |         |                                                                               |   | 42,031     |   |   | 292,116    |  
|Proceeds from notes payable                                                |      |                                        |         |                                                                               |   | 190,001    |   |   | 11,498,001 |  
|Proceeds from subordinated related party
 loan                             |      |                                        |         |                                                                               |   | 3,000,000  |   |   | 3,000,000  |  
|Payment of notes payable                                                   |      |                                        |         |                                                                               |   | (3,000,000 | ) |   | (3,000,000 | )
|Prepayment of notes payable                                                |      |                                        |         |                                                                               |   |           |   |   | (2,256,568 | )
|Payment of loan costs                                                      |      |                                        | (20,000) |                                                                               |   |           |   |   | (1,219,268 | )
|                                                                           |      |                                        |          |                                                                               |   |            |   |   |            |  
|Net cash provided by financing activities                                  |      |                                        | 894,868  |                                                                               |   | 884,032    |   |   | 70,149,353 |  
|                                                                           |      |                                        |          |                                                                               |   |            |   |   |            |  
|Net increase (decrease) in cash and cash
 equivalents                      |      |                                        | (70,159  | )                                                                             |   | (30,016    | ) |   | 4,872      |  
|                                                                           |      |                                        |          |                                                                               |   |            |   |   |            |  
|Cash and cash equivalents, beginning of
 period                            |      |                                        | 75,031   |                                                                               |   | 50,091     |   |   |           |  
|                                                                           |      |                                        |          |                                                                               |   |            |   |   |            |  
|Cash and cash equivalents, end of period                                   |      | $                                      | 4,872    |                                                                               | $ | 20,075     |   | $ | 4,872      |  
|                                                                           |      |                                        |          |                                                                               |   |            |   |   |            |  
|Disclosures of cash flow information:                                      |      |                                        |          |                                                                               |   |            |   |   |            |  
|                                                                           |      |                                        |          |                                                                               |   |            |   |   |            |  
|Interest paid                                                              |      | $                                      | 193,393  |                                                                               | $ | 5,366      |   | $ | 1,438,047  |  
|Income taxes paid                                                          |      | $                                      |         |                                                                               | $ |           |   |   |           |  

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

6

---

Bioheart, Inc. and Subsidiaries 
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) (Unaudited)

1.
Organization and Summary of Significant Accounting Policies

Organization and Business

Bioheart,
Inc. (the Company) is committed to maintaining our leading position within
the cardiovascular sector of the cell technology industry delivering cell
therapies, intelligent devices and biologics that help address congestive heart
failure, lower limb ischemia, chronic heart ischemia, acute myocardial
infarctions andother issues. We work to prevent the worsening of heart failure
conditions with devices that monitor and diagnose. Our goals are to cause
damaged tissue to be regenerated, if possible, and to improve a patients
quality of life and reduce health care costs and hospitalizations.

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.

The
Companys pipeline includes multiple product candidates for the treatment of
heart damage, including Bioheart Acute Cell Therapy, an autologous, adipose
tissue-derived cell treatment for acute heart damage, and MyoCell® SDF-1, a
therapy utilizing autologous cells that are genetically modified to express
additional potentially therapeutic growth proteins.

The
Company was incorporated in Florida on August 12, 1999.

Development Stage

The
Company has operated as a development stage enterprise since its inception by
devoting substantially all of its effort to raising capital, research and
development of products noted above, and developing markets for its products.
Accordingly, the consolidated financial statements of the Company have been
prepared in accordance with the accounting and reporting principles prescribed
by Accounting Standards Codification (ASC) Topic 915, Development Stage Entities,issued by the
Financial Accounting Standards Board (FASB).

Prior
to marketing its products in the United States, the Companys products must
undergo rigorous preclinical and clinical testing and an extensive regulatory
approval process implemented by the Food and Drug Administration (FDA) and
other regulatory authorities. There can be no assurance that the Company will
not encounter problems in clinical trials that will cause the Company or the
FDA to delay or suspend clinical trials. The Companys success will depend in
part on its ability to successfully complete clinical trials, obtain necessary
regulatory approvals, obtain patents and product license rights, maintain trade
secrets, and operate without infringing on the proprietary rights of others,
both in the United States and other countries. There can be no assurance that
patents issued to or licensed by the Company will not be challenged,
invalidated, or circumvented, or that the rights granted thereunder will
provide proprietary protection or competitive advantages to the Company. The
Company will require substantial future capital in order to meet its
objectives. The Company currently has no committed sources of capital. The
Company will need to seek substantial additional financing through public
and/or private financing, and financing may not be available when the Company
needs it or may not be available on acceptable terms.

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

7

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

Basis of Presentation

The
accompanying unaudited consolidated interim financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission (the SEC) for reporting of interim financial information. Pursuant
to such rules and regulations, certain information and footnote disclosures
normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States have been
condensed or omitted.

In
the opinion of management, the accompanying unaudited consolidated interim
financial statements of the Company contain all adjustments (consisting of
normal recurring adjustments) necessary to present fairly the financial
position of the company as of June 30, 2010, the results of its operations for
the three and six months periods ended June 30, 2010 and 2009, and its cash
flows for the six month periods ended June 30, 2010 and 2009. The results of
operations and cash flows for the six month periods ended June 30, 2010 are not
necessarily indicative of the results of operations or cash flows which may be
reported for future periods or for the year ending December 31, 2010.

The
accompanying unaudited consolidated interim financial statements included the
accounts of Bioheart, Inc. and its wholly-owned subsidiaries. All intercompany
transactions are eliminated in consolidation.

The
accompanying unaudited consolidated interim financial statements and notes
thereto should be read in conjunction with Managements Discussion and Analysis
of Financial Condition and Results of Operations contained in this report and
the audited financial statements for the year ended December 31, 2009 and the
notes thereto included in the Companys Annual Report on Form 10-K and Form
10-K/A for the year ended December 31, 2009.

Use of Estimates

The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and the disclosure of contingent assets and liabilities as of the
date of the financial statements, and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.

Fair Value of Financial Instruments

Fair value of
certain of the Companys financial instruments including cash and cash
equivalents, accounts receivable, accounts payable, accrued expenses, notes
payables, and other accrued liabilities approximate cost because of their short
maturities. The Company measures and reports fair value in accordance with ASC
820, Fair Value Measurements and Disclosure defines fair value, establishes a
framework for measuring fair value in accordance with generally accepted
accounting principles and expands disclosures about fair value investments.

Fair value, as
defined in ASC 820, is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value of an asset should reflect
its highest and best use by market participants, principal (or most
advantageous) markets, and an in-use or an in-exchange valuation premise. The
fair value of a liability should reflect the risk of nonperformance, which
includes, among other things, the Companys credit risk.

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

8

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

Valuation
techniques are generally classified into three categories: the market approach;
the income approach; and the cost approach. The selection and application of
one or more of the techniques may require significant judgment and are
primarily dependent upon the characteristics of the asset or liability, and the
quality and availability of inputs. Valuation techniques used to measure fair
value under ASC 820 must maximize the use of observable inputs and minimize the
use of unobservable inputs. ASC 820 also provides fair value hierarchy for
inputs and resulting measurement as follows:

Level 1

Quoted prices
(unadjusted) in active markets that are accessible at the measurement date for
identical assets or liabilities;

Level 2

Quoted prices for similar assets or
liabilities in active markets; quoted prices for identical or similar assets or
liabilities in markets that are not active; inputs other than quoted prices
that are observable for the asset or liability; and inputs that are derived
principally from or corroborated by observable market data for substantially
the full term of the assets or liabilities; and

Level 3

Unobservable
inputs for the asset or liability that are supported by little or no market
activity and that are significant to the fair values.

Fair value
measurements are required to be disclosed by the Level within the fair value
hierarchy in which the fair value measurements in their entirety fall. Fair
value measurements using significant unobservable inputs (in Level 3 measurements)
are subject to expanded disclosure requirements including a reconciliation of
the beginning and ending balances, separately presenting changes during the
period attributable to the following: (i) total gains or losses for the period
(realized and unrealized), segregating those gains or losses included in
earnings, and a description of where those gains or losses included in earning
are reported in the statement of income.

The Company
has no fair value items required to be disclosed.

Inventory

Inventory
consists of raw materials and finished product. Finished product consists
primarily of finished catheters. Cost of finished product, consisting of raw
materials and contract manufacturing costs, is determined by the first-in,
first-out (FIFO) method for valuing inventories. Costs of raw materials are
determined using the FIFO method. Inventory is stated at the lower of costs or
market (estimated net realizable value).

Inventory
consisted of the following as of June 30, 2010 and December 31,2009

|                  |  |          |        |              |   |         | 
|----------------- |  | -------- | ------ | ------------ | - | ------- | 
|                  |  | June 30, |        | December 31, |  
|                  |  |          |        |              |   |         | 
|                  |  |          | 2010   |              |   | 2009    | 
|                  |  |          |        |              |   |         | 
|Finished
 product |  | $        | 22,307 |              | $ | 143,160 | 

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

9

---

Bioheart, Inc. and Subsidiaries (A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) (Unaudited)

|                |  |   |        |  |   |         | 
|--------------- |  | - | ------ |  | - | ------- | 
|Raw
 materials  |  |   | 56,754 |  |   | 56,754  | 
|                |  |   |        |  |   |         | 
|Total inventory |  | $ | 79,061 |  | $ | 199,914 | 
|                |  |   |        |  |   |         | 

Prepaid Expenses and Other Current Assets

Prepaid
expenses and other current assets as of June 30, 2010 consisted principally of
prepaid insurance.

Deferred Loan Costs

Deferred
loan costs consist principally of legal and loan origination fees incurred to
obtain $10 million in loans in June 2007 and the fair value of warrants issued
in connection with the loans. These deferred loan costs are being amortized to
interest expense over the terms of the respective loans using the effective
interest rate method. At June 30, 2010 and December 31, 2009 , the Company had
net deferred loan costs of $1,333,932 and $1,250,106, respectively. For the six
months ended June 30, 2010 and for the six months ended June 30, 2009, the
Company recorded $609,081 and $416,270, respectively, of interest expense
related to the amortization of deferred loan costs, which included $542,927 and
$337,654, respectively, related to the fair value of warrants issued in
connection with the loans.

Stock Options and Warrants

On
January 1, 2006, the Company adopted the provisions of ASC Topic 718, formerly
SFAS No. 123 (revised 2004), Share-Based
Payment(SFAS No. 123R) using the modified prospective transition
method. ASC Topic 718, formerly SFAS No. 123R, requires the Company to measure all
share-based payment awards granted after January 1, 2006, including those with
employees, at fair value. Under ASC Topic 718, formerly SFAS No. 123R, the fair
value of stock options and other equity-based compensation must be recognized
as expense in the statements of operations over the requisite service period of
each award.

Share-based
awards granted subsequent to January 1, 2006 are valued using the fair value
method and compensation expense is recognized on a straight-line basis over the
vesting period of the awards. Beginning January 1, 2006, the Company also began
recognizing compensation expense under ASC Topic 718, formerly SFAS No. 123R
for the unvested portions of outstanding share-based awards previously granted
under its stock option plans, over the periods these awards continue to vest.

The
Company accounts for certain share-based awards, including warrants, with
non-employees in accordance with ASC Topic 718, formerly SFAS No. 123R and
related guidance, including ASC Topic 505, formerly 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. The Company estimates the fair value of such awards using
the Black-Scholes valuation model at each reporting period and expenses the
fair value over the vesting period of the share-based award, which is generally
the period in which services are provided.

In
its meeting of August 12, 2009, the Board of Directors approved the repricing
of current employees stock options (other than Executive Officers). In
accordance with regulations concerning such a repricing and in conformance with
generally accepted procedures, all options granted before August 12, 2008, were
repriced on the basis of the 5-day average closing price of BHRT, during the
period of August 11 through August 17, 2009.

The
following information applies to the repricing which occurred as of October 8,
2009.

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

10

---

Bioheart, Inc. and Subsidiaries 
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

|                  |  |   |              |  |  |                  | 
|----------------- |  | - | ------------ |  |  | ---------------- | 
|Original Exercise |  |   | New Exercise |  |  | Number of shares | 
|Price             |  |   | Price        |  |  | underlying       | 
|                  |  |   |              |  |  | Options          | 
|                  |  |   |              |  |  |                  | 
|$1.28             |  | $ | 0.71         |  |  | 61,778           | 
|$4.11             |  | $ | 0.71         |  |  | 10,000           | 
|$5.67             |  | $ | 0.71         |  |  | 409,144          | 
|$7.69             |  | $ | 0.71         |  |  | 12,851           | 
|$8.47             |  | $ | 0.71         |  |  | 38,163           | 
|                  |  |   |              |  |  |                  | 
|                  |  |   |              |  |  | 531,936          | 

Of
those options listed above, 61,778 expired in December 2009 without having been
exercised and 334,891 expired in March 2010 without having been exercised.

On
February 24, 2010, by way of a written consent, the Companys Board of
Directors amended the Directors and Consultants 1999 Stock Option Plan to
extend the termination date of the Plan to December 1, 2011.

Loss Per Share

Loss
per share has been computed based on the weighted average number of shares
outstanding during each period, in accordance with ASC Topic 260, formerly SFAS
No. 128, Earnings per Share. The
effect of outstanding stock options and warrants, which could result in the
issuance of 11,406,579 and 5,230,637 shares of common stock at June 30, 2010
and 2009 respectively, is antidilutive. As a result, diluted loss per share
data does not include the assumed exercise of outstanding stock options and
warrants and has been presented jointly with basic loss per share.

Recent Accounting Updates

Recent
accounting pronouncements that the Company has adopted or that will be required
to adopt in the future are summarized below.

On
September 30, 2009, the Company adopted updates issued by the Financial
Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These
changes establish the FASB Accounting Standards CodificationTM (ASC) as the
source of authoritative accounting principles recognized by the FASB to be
applied by nongovernmental entities in the preparation of financial statements
in conformity with GAAP. Rules and interpretive releases of the Securities and
Exchange Commission (SEC) under authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. The FASB will no longer
issue new standards in the form of Statements, FASB Staff Positions, or
Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting
Standards Updates. Accounting Standards Updates will not be authoritative in
their own right as they will only serve to update the Codification. These
changes and the Codification itself do not change GAAP. Other than the manner
in which new accounting guidance is referenced, the adoption of these changes
had no impact on the Consolidated Financial Statements.

In
August 2009, the FASB issued ASU 2009-05, which amends ASC 820 to provide
further guidance on measuring the fair value of a liability. It primarily does
three things: 1) sets forth the types of valuation

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

11

---

Bioheart, Inc. and Subsidiaries 
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

techniques to be used to value a liability
when a quoted price in an active market for the identical liability is not
available, 2) clarifies that when estimating the fair value of a liability, a
reporting entity is not required to include a separate input or adjustment to
other inputs relating to the existence of a restriction that prevents the transfer
of the liability, and 3) clarifies that both a quoted price in an active market
for the identical liability at the measurement date and the quoted price for
the identical liability when traded as an asset in an active market, when no
adjustments to the quoted price of the asset are required, are Level 1 fair
value measurements. This standard became effective for the Company beginning in
the fourth quarter of 2009. The Companys adoption of ASU 2009-05 did not have
a material impact on its financial position, results of operations or
liquidity.

In
June 2009, the FASB issued guidance now codified as ASC Topic 105, Generally Accepted Accounting Principles
(ASC 105), which establishes the FASB Accounting Standards Codification as
the source of GAAP to be applied to nongovernmental agencies. ASC 105
explicitly recognizes rules and interpretive releases of the SEC under
authority of federal securities laws as authoritative GAAP for SEC registrants.
ASC 105 became effective for interim or annual periods ending after September
15, 2009. ASC 105 does not have a material impact on the Companys consolidated
financial statements presented hereby.

In
May 2009, the FASB issued guidance now codified as ASC Topic 855, Subsequent Events (ASC 855). The
pronouncement modifies the definition of what qualifies as a subsequent
eventthose events or transactions that occur following the balance sheet date,
but before the financial statements are issued, or are available to be
issuedand requires companies to disclose the date through which it has
evaluated subsequent events and the basis for determining that date. The
Company adopted the provisions of ASC 855 in the third quarter of 2009, in
accordance with the effective date.

In
January 2010, the FASB issued Update No. 2010-6, Improving Disclosures About
Fair Value Measurements (ASU 2010-6), which requires reporting entities to
make new disclosures about recurring or nonrecurring fair-value measurements
including significant transfers into and out of Level 1 and Level 2 fair-value
measurements and information on purchases, sales, issuances, and settlements on
a gross basis in the reconciliation of Level 3 fair-value measurements. ASU
2010-6 is effective for annual reporting periods beginning after December 15,
2009, except for Level 3 reconciliation disclosures, which are effective for
annual periods beginning after December 15, 2010. The Company is currently
evaluating the effect of this update on its financial position, results of operations
and liquidity.

In
October 2009, the FASB issued authoritative guidance on revenue recognition
that will become effective for the Company beginning July 1, 2010, with earlier
adoption permitted. Under the new guidance on arrangements that include
software elements, tangible products that have software components that are
essential to the functionality of the tangible product will no longer be within
the scope of the software revenue recognition guidance, and software-enabled
products will now be subject to other relevant revenue recognition guidance. We
believe adoption of this new guidance will not have a material impact on our
financial statements.

Other
recent accounting pronouncements issued by the FASB (including its Emerging Issues
Task Force), the AICPA, and the SEC did not or are not believed by management
to have a material impact on the Companys present or future financial
statements

2. Going Concern

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

12

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

The
accompanying consolidated financial statements have been prepared and are presented
assuming the Companys ability to continue as a going concern. The Company has
incurred significant operating losses over the past several years and has a
deficit accumulated during the development stage of $103.7 million as of June
30, 2010 In addition, as of June 30, 2010, the Companys current liabilities
exceed current assets by $11.1 million. Current liabilities include notes
payable of $5.6 million. While, subsequent to June 30, 2010, the Company
received cash proceeds of approximately $234,000 in a series of private
placements, this will not provide sufficient cash to support the Companys
operations through December 2010. The Company will need to secure additional
sources of capital by the end of August 2010 to develop its business and product
candidates as planned, and continue as a going concern.

The
Company currently has no commitments or arrangements from third parties for any
additional financing to fund research and development and/or other operations,
except for its REGEN trial, discussed below. That trial is being funded by the
Ascent Medical Technology Fund II, LP, and the Ascent Medical Product
Development Centre Inc., which is controlled by a current director and a former
director of the Company. In addition, the Ascent Medical Technology Fund II, LP
is funding, on a project basis, some of the activities of the Companys Centers
of Excellence, discussed below. The Company is seeking substantial additional
financing through public and/or private financing, which may include equity
and/or debt financings, research grants, and through other arrangements,
including collaborative arrangements. As part of such efforts, the Company may
seek loans from certain of our executive officers, directors and/or current
shareholders. However, financing may not be available to the Company or on
terms acceptable to the Company. The Companys inability to obtain additional
financing would have a material adverse effect on its financial condition and
ability to continue operations. Accordingly, the Company could be forced to
significantly curtail or suspend operations, default on its debt obligations,
file for bankruptcy or seek to sell some or all of its assets. As such, the
Companys continuation as a going concern is uncertain.

Due
to the Companys financial condition, the report of the Companys independent
registered public accounting firm on the Companys December 31, 2009
consolidated financial statements includes an explanatory paragraph indicating
that these conditions raise substantial doubt about the Companys ability to
continue as a going concern. The accompanying consolidated financial statements
do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might be necessary should the Company be unable to continue as
a going concern.

3. Collaborative License and
Research/Development Agreements

The
Company has entered into a number of contractual relationships for technology
licenses and research and development projects. The following provides a
summary of the Companys significant contractual relationships:

In
February 2000, the Company entered into a license agreement (the Original
License Agreement) with Cell Transplants International, LLC (CTI). Pursuant
to the Original 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, the Company and CTI,
together with Dr. Peter K. Law, executed an addendum to the Original License
Agreement, which amended or superseded a number of terms of the Original
License Agreement (the License Addendum).

More
specifically, the License Addendum provided, among other things:

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

13

---

Bioheart, Inc. and Subsidiaries (A development stage enterprise)

Notes to Consolidated Interim Financial
Statements-
(Continued) 
(Unaudited)

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The parties
 agreed that the Company would issue, and the Company did issue, to CTI a
 five-year warrant exercisable for 1.2 million shares of the Companys common
 stock at an exercise price of $8.00 per share instead of, as originally
 contemplated under the Original License Agreement, issuing to CTI or Dr. Law
 600,000 shares of the Companys common stock and options to purchase 600,000
 shares of the Companys common stock at an exercise price of $1.80 per share.
 These share amounts and exercise prices do not take into account any
 subsequent recapitalizations or reverse stock splits.
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The parties agreed that the Companys
 obligation to pay CTI a $3.0 million milestone payment would be triggered
 upon the Companys commencement of a bona fide U.S. Phase II human clinical
 trial study that utilizes technology claimed under U.S. Patent No. 5,130,141
 with FDA approval in the United States, instead of, as originally
 contemplated under the Original License Agreement, upon initiation of an FDA
 approved human clinical trial study of such technology in the United States.                                                                                                          

In
addition, if the Company obtains FDA approval of a method of heart muscle
regeneration utilizing the patented technology licensed under the Original
License Agreement, the Company will be required to pay CTI $5 million. Further,
the Company would be obligated to pay CTI a royalty of 5% of gross sales of
products and services that directly read upon the claims of the licensed
patents. During the course of certain litigation initiated by Dr. Law against
the Company, see Note 8, the Company learned that CTI, a Tennessee limited
liability company, was administratively dissolved by the Secretary of State of
Tennessee in 2004.

In
February 2006, the Company entered into an exclusive license agreement with The
Cleveland Clinic Foundation for various pending patents to be used in
connection with the MyoCell SDF-1 product candidate. Our MyoCell SDF-1 product
candidate, which has recently completed preclinical testing, is intended to be
an improvement to MyoCell. Dr. Marc Penn, the Medical Director of the Cardiac
Intensive Care Unit at the Cleveland Clinic and a staff cardiologist in the
Departments of Cardiovascular Medicine and Cell Biology, joined our Scientific
Advisory Board. The license for SDF-1 was passed on to a Cleveland Clinic
affiliate, Juventas, in July of 2009. Bioheart entered into a memorandum of
understanding with Juventas pursuant to which the license with Bioheart would
be reinstated upon completion by Bioheart of certain financial milestones by
February, 2010. In October of 2009, Cleveland Clinics patent applications were
denied by the United States Patent Office. Although Cleveland Clinic filed an
appeal, Bioheart allowed the memorandum of understanding with Juventas to
lapse, believing that the current climate concerning the patenting of genetic
properties would not permit the patents to be issued, even in a revised form.

In
April 2006, the Company entered into an agreement to license from TriCardia,
LLC various patents to be used in connection with the MyoCath® II product
candidate. In exchange for the license, the Company agreed to do the following:
1) pay $100,000 upon the closing of the agreement; and 2) issue a warrant
exercisable for 32,515 shares of the Companys common stock at an exercise
price of $7.69 per share. The warrant vested on a straight line basis over a 12
month period and expires on February 28, 2016. The fair value of this warrant
of approximately $193,000, as determined using the Black-Scholes valuation
model, was amortized to research and development expense on a straight line
basis over the twelve month vesting period. The Company recorded $144,867 of
expense in 2006 and the remaining $48,289 of expense in 2007.

In
December 2006, the Company entered into an agreement with Tissue Genesis, Inc.
(Tissue Genesis) for exclusive distribution rights to Tissue Genesis
products and a license for various patents to be used in connection with the
Bioheart Acute Cell Therapy and TGI 1200 product candidates. In exchange for
the license, the Company agreed to do the following: 1) issue 13,006 shares of
the Companys common stock at a price of $7.69 per share; and 2) issue a
warrant exercisable for 1,544,450 shares of the Companys common stock to
Tissue Genesis at an exercise price of $7.69 per share, which warrant expires
on December 31, 2026.

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

14

---

Bioheart, Inc. and Subsidiaries (A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

This warrant
shall vest in three parts as follows: i) 617,780 shares vesting only upon the
Companys successful completion of human safety testing of the licensed
technology, ii) 463,335 shares vesting only upon the Company exceeding net
sales of $10 million or net profit of $2 million from the licensed technology,
and iii) 463,335 shares vesting only upon the Company exceeding net sales of
$100 million or net profit of $20 million from the licensed technology. Since
the vesting of this warrant is contingent upon the achievement of the specific
milestones, the fair value of this warrant at the time the milestones are met
will be expensed to research and development. In the event of an acquisition
(or merger) of the Company by a third party, all unvested shares of common
stock subject to the warrant shall immediately vest prior to such event. In
addition, the Company will pay a 2% royalty of net sales of licensed products.

On
April 13, 2007 Bioheart signed a Research Agreement with Indiana University to
sponsor pre-IND large animal research related to the use of adipose tissue
derived stem cells for use in treating acute myocardial infarction. The data
from research will be used to file an IND related to this product platform. The
total budget for this study is $726,584.06, of which $506,719 has been spent to
date.

Bioheart
originally entered into a Research Agreement with the University of Florida on
July 1, 2004. The original purpose of this Research Agreement was to conduct
small animal research related to Biohearts SDF-1 gene modified cell therapy.
The research continued into large animals and the contract has been amended six
times. The most recent budget amendment was to sponsor an additional $305,855
for large animal research which was signed on November 18, 2008, of which
$209,799 has been spent to date.

There are
currently 11 executed clinical site contracts and one open Academic Research
Organization contract (ARO) associated with the ongoing Marvel Clinical Trial.
Clinical site contracts include Minneapolis Heart Institute, Scripps Hospital,
Florida Hospital, Jim Moran Heart Institute, Mayo Clinic, The Lindner Center,
Swedish Medical Center, Newark Beth Israel, Arizona Heart Institute, Cardiology
P. C. and Mercy Gilbert Medical Center. Bioheart is obligated for payments in
the aggregate amount of $375,773 for clinical site contracts. Bioheart also
entered into a contract in support of the Marvel trial with Duke Clinical
Research Institute, an Academic Research Organization (ARO) on March 9, 2007.
The total obligation for this contract is $469,844, of which $464,844 has been
spent to date. In addition, there are various consultants and core laboratories
which provide support for Marvel. Biohearts total commitment towards contracts
for all consultants and Core Laboratories is $301,651.

On
February 2, 2010, Bioheart, Inc. (the Company) and the Ascent Medical Product
Development Centre Inc. (Ascent) entered into an agreement whereby Ascent
would oversee the conduct of a Phase I Clinical Trial for the Company, namely
the REGEN trial. Ascent is owned by the Ascent Medical Technology Fund II, LP,
(the Fund), which will provide funding for the study. The Funds General
Partner is Ascent Private Equity II, LLC, which is controlled by Karl E. Groth,
Ph.D., a current director of the Company and Peggy A. Farley, a former director
of the Company. On March 23, 2010, the
Company announced plans for establishing five Centers of Excellence in Latin
America to provide its cell therapy procedures to patients suffering from
congestive heart failure (CHF) and peripheral arterial disease (PAD). Bioheart
entered into its first agreement with a leading treatment facilitator,
Regenerative Medicine Institute of Tijuana, Mexico. Therapies for CHF and PAD
patients will be made available at the Hospital Angeles Tijuana, a fully
equipped state-ofthe-art private specialties hospital. This is the first of
five Centers of Excellence with four additional Centers to be announced.

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

15

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

4. Accrued Expenses and Other Current
Liabilities

Accrued
expenses and other current liabilities consisted of the following, as of June
30, 2010 and December 31, 2009.

|                                                                                                                      |  |              |           |                    |   |           | 
|--------------------------------------------------------------------------------------------------------------------- |  | ------------ | --------- | ------------------ | - | --------- | 
|                                                                                                                      |  | June 30,2010 |           | December 31,
 2009 |  
|                                                                                                                      |  |              |           |                    |   |           | 
|License and
 royalty fees                                                                                             |  | $            | 985,000   |                    | $ | 880,000   | 
|Amounts
 payable to the Guarantors of the Companys loan agreement with Bank of
 America, including fees and interest |  |              | 1,186,405 |                    |   | 1,745,745 | 
|Interest
 payable on notes payable                                                                                    |  |              | 333,022   |                    |   | 248,586   | 
|Other                                                                                                                 |  |              | 714,130   |                    |   | 655,915   | 
|                                                                                                                      |  |              |           |                    |   |           | 
|                                                                                                                      |  | $            | 3,218,557 |                    | $ | 3,530,246 | 
|                                                                                                                      |  |              |           |                    |   |           | 

5. Notes Payable

Notes
payable were comprised of the following as of June 30, 2010 and December 31,
2009:

|                                                                                                         |  |                |            |   |                    |            |  
|-------------------------------------------------------------------------------------------------------- |  | -------------- | ---------- | - | ------------------ | ---------- | -
|                                                                                                         |  | June 30,
 2010 |            |   | December 31,
 2009 |           
|                                                                                                         |  |                |            |   |                    |            |  
|Bank of
 America note payable. Terms described below.                                                    |  | $              | 1,333,400  |   | $                  | 2,000,000  |  
|BlueCrest
 Capital Finance note payable. Monthly payments of principal and interest as
 described below. |  |                | 2,943,432  |   |                    | 2,943,432  |  
|Short-term
 note payable. Terms described below                                                          |  |                | 2,884,972  |   |                    | 4,384,972  |  
|                                                                                                         |  |                |            |   |                    |            |  
|                                                                                                         |  |                | 7,161,804  |   |                    | 9,328,404  |  
|Less current
 portion.                                                                                   |  |                | (5,596,161 | ) |                    | (4,051,861 | )
|                                                                                                         |  |                |            |   |                    |            |  
|Notes
 payable  long term.                                                                              |  | $              | 1,565,643  |   | $                  | 5,276,543  |  
|                                                                                                         |  |                |            |   |                    |            |  

Notes
payable at June 30, 2010 mature as follows:

|     |  |   |           | 
|---- |  | - | --------- | 
|2010 |  | $ | 666,889   | 
|2011 |  |   | 1,468,716 | 
|2012 |  |   | 5,026,199 | 
|     |  |   |           | 
|     |  | $ | 7,161,804 | 
|     |  |   |           | 

Bank of America Note
Payable

On
June 1, 2007, the Company entered into a loan agreement with Bank of America,
N.A. for an eight month, $5.0 million term loan, to be used for working capital
purposes. The loan bears interest at the annual rate of the prime rate plus
1.5%. The prime rate was 3.25% and 7.25% at December 31, 2008 and 2007,
respectively. As consideration for the loan, the Company paid Bank of America a
fee of $100,000. Effective as of January 31, 2008, the maturity date of the
loan was extended until June 1, 2008. As consideration for this extension of
the maturity date of the loan, the Company paid Bank of America a fee of
$50,000. Effective as of June 1, 2008, Bank of America agreed to extend the maturity
date of the loan until January 5, 2009. As consideration for this extension of
the maturity date of the loan, the Company paid Bank of America a fee of
$75,000. Effective January 5, 2009, Bank of America agreed to extend the
maturity date of the loan until July 6,
2009. As consideration for this extension of the maturity date of the loan, the
Company paid Bank of America a fee of $50,000. Effective July 6, 2009, Bank of
America agreed to extend the maturity of the loan

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

16

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

until January 5, 2010. As consideration for this extension of the
maturity date of the loan, the Company paid Bank of America a fee of $25,000.
Effective January 5, 2010, Bank of America agreed to extend the maturity of the
loan until July 6, 2010. As consideration for this extension of the maturity
date of the loan, the Company paid Bank of America a fee of $25,000. Under the
terms of the loan, Bank of America is entitled to receive a semi-annual payment
of interest and all outstanding principal and accrued interest by the maturity
date.

The Company
has provided no collateral for the loan. On June 1, 2007, for the Companys
benefit, the Companys Chief Science and Technology Officer and his former
spouse, certain other members of the Companys Board of Directors and one of
the Companys shareholders (the Guarantors) provided collateral to guarantee
the loan. Except for a $1.1 million personal guaranty (backed by collateral)
provided by the Companys Chief Science and Technology Officer and his former
spouse, these guarantees are limited to the collateral each provided to the
lender.

In June
2007,the Company and Bank of America have agreed with BlueCrest Capital
Finance, L.P., the lender of the BlueCrest Loan (defined below), that the
Company will not individually make any payments due under the Bank of America
loan while the BlueCrest Loan is outstanding. For the Companys benefit, the
Guarantors agreed to provide Bank of America in the aggregate up to $5.5
million of funds and/or securities to make these payments.

In June
2007, the Company has agreed to reimburse the Guarantors with interest at an
annual rate of the prime rate plus 5.0% for any and all payments made by them
under the Bank of America loan as well as to pay them certain cash fees in
connection with their provision of collateral to guarantee the loan. Upon
entering into the loan agreement, the Company issued to each Guarantor warrants
to purchase 3,250 shares of common stock at an exercise price of $7.69 per
share for each $100,000 of principal amount of the loan guaranteed by such
Guarantor. The warrants have a ten-year term and became exercisable one year
following the date the warrants were issued. Warrants to purchase an aggregate
of 216,095 shares of common stock were issued to the Guarantors. These warrants
had an aggregate fair value of $1,437,638, which amount was accounted for as
additional paid in capital and reflected as a component of deferred loan costs
and amortized as interest expense over the initial term of the loan using the
effective interest method. As discussed below, certain of these Guarantors were
replaced in September 2007. The unamortized fair value of the warrants issued
to the Guarantors that were replaced, which was previously reflected as a
component of deferred loan costs, was recorded as interest expense in September
2007.

In
September 2007, a member of the Companys Board of Directors and two of the
Companys shareholders agreed to provide collateral valued at $750,000,
$600,000 and $500,000, respectively, to secure the loan. The collateral
provided by these new Guarantors fully replaced the collateral originally
provided by one of the members of the Companys Board of Directors and
partially replaced the collateral originally provided by another member of the
Companys Board of Directors whose collateral now secures $400,000 of the loan.
In consideration for providing the collateral, the Company issued to the new
Guarantors warrants to purchase 3,250 shares of common stock at an exercise
price of $7.69 per share for each $100,000 of principal amount of the loan
guaranteed by such new Guarantor. The warrants have a ten-year term and became
exercisable one year following the date the warrants were issued. Warrants to
purchase an aggregate of 60,118 shares of the Companys common stock were
issued to the new Guarantors. These warrants had an aggregate fair value of
$380,482, which was accounted for as additional paid in capital and reflected
as a component of deferred loan costs and amortized as interest expense over
the initial term of the loan using the effective interest method.

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

17

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

In
accordance with the provisions of the warrants issued to the Guarantors, the
aggregate number of shares of common stock underlying such warrants increased
on September 30, 2007 as the Bank of America loan remained outstanding at that
date. The additional 38,861 warrant shares had an aggregate fair value of
$244,463. The portion of this amount attributed to the Guarantors that were
replaced in September 2007 was accounted for as additional paid in capital and
immediately recorded as interest expense with the remainder accounted for as
additional paid in capital and reflected as a component of deferred loan costs
and amortized as interest expense over the initial term of the loan using the
effective interest method.

In October
2007, the Companys Chief Science and Technology Officer and his former spouse
agreed to provide an additional $2.2 million limited personal guarantee of the
loan and pledged securities accounts to backup this limited personal guarantee.
The additional collateral provided by the Companys Chief Science and
Technology Officer and his former spouse fully replaced the collateral provided
by one of the original Guarantors. The Companys Chief Science and Technology
Officer and his former spouse by then had personally guaranteed an aggregate of
$3.3 million of the loan. The Companys agreement with the Companys Chief
Science and Technology Officer and his former spouse with respect to the
additional collateral is substantially similar to the Companys agreement with
them in connection with the $1.1 million personal guarantee they originally
provided in June 2007. In consideration for providing the collateral, the
Company issued to the Companys Chief Science and Technology Officer and his
former spouse, a warrant to purchase 81,547 shares of the Companys common
stock at an exercise price of $7.69 per share. The warrant has a ten-year term
and became exercisable one year following the date the warrant was issued. The
warrant had a fair value of $516,193, which was accounted for as additional
paid in capital and reflected as a component of deferred loan costs and
amortized as interest expense over the initial term of the loan using the
effective interest method.

As a result
of this replacement of the collateral originally provided by one of the
original Guarantors in October 2007, the unamortized fair value of the warrant
to purchase 81,548 shares of the Companys common stock at an exercise price of
$7.69 per share issued to that Guarantor was recorded as interest expense in
October 2007. In October 2007, the Company cancelled the warrant previously
issued to such original Guarantor, which warrant included the adjustment
provisions discussed above, and, in exchange, issued to them a warrant to
purchase 101,934 shares of the Companys common stock at an exercise price of
$7.69 per share, which new warrant does not contain the adjustment provisions
discussed above. The additional 20,386 warrant shares had an aggregate fair
value of $128,228, which was accounted for as additional paid in capital and
immediately recorded as interest expense.

In
accordance with the provisions of the warrants issued to the Guarantors, the
aggregate number of shares of common stock underlying such warrants increased
on June 1, 2008 as the Bank of America loan remained outstanding at that date.
The additional 78,773 warrant shares had an aggregate fair value of $168,387.
The portion of this amount attributed to the Guarantors that were replaced in
September 2007 was accounted for as additional paid in capital and immediately
recorded as interest expense with the remainder accounted for as additional
paid in capital and reflected as a component of deferred loan costs to be
amortized as interest expense over the term of the loan using the effective
interest method. In the event that as of the second anniversary and third
anniversary of the closing date of the loan, the Company has not reimbursed the
Guarantors in full for payments made by them in connection with the loan, the
number of shares subject to the warrants will further increase.

The amount
of interest expense on the principal amount of the loan for the six months
ended June 30, 2010 and 2009 totaled approximately $40,450 and $79,000,
respectively. Fees and interest earned by the Guarantors, which are recorded as
interest expense, for the six months ended June 30, 2010 and 2009 totaled

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

18

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

approximately $161,256 and $232,000, respectively. Interest due on the
principal amount of the loan has been paid by the Guarantors. As of June 30,
2010 and December 31, 2009, that amount totaled approximately $779,100 and
$616,000, respectively, and was included in accrued expenses at those dates.

In March
2009, the Companys Chief Science and Technology Officer and his former spouse
repaid $3.0 million of principal and a pro rata portion of accrued interest on
behalf of the Company. The Company then owed this $3.0 million to the Companys
Chief Science and Technology Officer and his former spouse. This liability was
reflected on the Companys consolidated balance sheet on a separate line titled
Subordinated related party loan. This amount continued to accrue interest at
an annual rate of the prime rate plus 5.0%.

In February
2010 the Companys Chief Science and Technology Officer and his spouse filed
for divorce papers. Pursuant to the divorce, their jointly owned shares and
their ownership of the loan to Bioheart for which they hold as a result of
their payment of $3 million of principal and related interest to Bank of
America on behalf of Bioheart, would be divided equally between them. As a
result, the Chief Science and Technology Officers common shares were then
reduced to 2,513,840 and his percentage shareholding of the Company to 13.8%,
with his former spouse assuming ownership of the same number of common shares
and percentage shareholding of the Company. Their commonly owned loan and
related interest, as of March 29, 2010, of $4,140,201, was been equally split.
The Chief Science and Technology Officer on March 29, 2010, elected to convert
his portion of the loan and related interest to restricted common stock and
warrants. As a result, Howard Leonhardt, the Companys Chief Science and
Technology Officer, as of June 30, 2010, owns approximately 20% of the Company
as of June 30, 2010.

In March of
2010, one of the Guarantors paid directly to Bank of America the $666,600 of
principal that he had been guaranteeing, and a pro rata portion of accrued
interest on behalf of the Company. That Guarantor agreed to accept from the
Company the equivalent of his payment to Bank of America in restricted common
stock and warrants. With his acceptance of the restricted common stock and
warrants, the former Guarantor owned, at June 30, 2010, approximately 7% of the
Company.

As of June
30, 2010, the outstanding obligation to Bank of America was approximately $1.3
million plus interest.

On July 16,
2010, the Company received a written notice of default under the Bank of
America loan documents by reason of the Companys failure to pay the loan in
full at maturity on July 5, 2010 and failure to pay the extension fee of
$30,000 by June 28, 2010, as required by the loan documents, as amended. The
Company is engaged in discussions with the guarantors, who provided the loan
collateral regarding a structuring of the indebtedness in the event Bank of
America seeks recourse against the collateral and those guarantors, by reason
of such action, become successors to Bank of America rights and interests under
the Bank of America loan.

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

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

19

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

value of $432,635, which was accounted for as additional paid in
capital and reflected as a component of deferred loan costs and is being
amortized as interest expense over the term of the loan using the effective
interest method. 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.

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

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

20

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

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.

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.

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 amount
of interest expense on the principal amount of the BlueCrest Loan for the six
months ended June 30, 2010 totaled approximately $189,115 and for the year
ended December 31, 2009 the interest totaled approximately $378,231.

Short-term Note
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. 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.

The amount
of interest expense on the principal amount of the loan accrued as of June 30,
2010 is $255,000. The Company has not paid any of the interest accrued to date
under the Promissory Note and Agreement.

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

21

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) (Unaudited)

6. Related Party Transactions

The
Companys Chief Science and 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 use only.

A cousin of
the Companys Chairman Chief Science and Technology Officer was an officer of
the Company from August 12, 1999 until December 11, 2009.

On August
24, 2006, the Company entered into a Settlement Agreement, with the cousin of
the Companys Chief Science and Technology Officer. Prior to entering into the
Settlement Agreement, certain disputes had arisen between the officer and the
Company as to the number of stock options awarded to the officer and the amount
of unpaid salary and other compensation owed to the officer since he commenced
his employment with the Company in December 1999. The shares, options and
warrants granted to the officer pursuant to the Settlement Agreement were
issued to settle the disputed items and in consideration for the officers
release of any claims he may have against the Company related to or arising
from his employment or any compensation owed to him.

The officer
requested and received permission to sell the 47,658 shares of the companys
stock that had been awarded to him. On December 8, 2009, the company was
informed by the officer that all of these shares had been sold. In addition,
the officer elected not to exercise certain of his options that expired on
December 24, 2009. The officer, in accordance with Company policy, was required
to exercise his remaining options within 90 days of the termination of his
position on December 11, 2009. The officer did not exercise his remaining
options by March 11, the 90th day.

In 2010,
the Company entered into a research agreement with an entity controlled by a
current director and a former director of the Company, with funding for the
project emanating from venture capital funds controlled by the same two board
members. In connection with its funding of the REGEN trial, Ascent Medical
Technology Fund II, LP, the Ascent Medical Technology Fund, LP, and Ascent
Medical Product Development Centre Inc. are being issued a total of 1,044,451
shares of the Companys common stock, and warrants to purchase 90,861 shares at
exercise prices 20% above the price at which the related common will be issued.

In February
2010, the Company sold to four members of the Board of Directors, in a private
placement, an aggregate of 121,450 shares of the Companys common stock and warrants
to purchase 36,435 shares of the Companys common stock for aggregate gross
cash proceeds of $70,441.

In February
2010 the Companys Chief Science and Technology Officer and his spouse filed
for divorce. Pursuant to the divorce, their jointly owned shares and their
ownership of the loan to Bioheart which they hold as a result of their payment
of $3 million of principal and related interest to Bank of America on behalf of
Bioheart, would be divided equally between them. As a result, the Chief Science
and Technology Officers common shares were then reduced to 2,513,840 and his
percentage shareholding of the Company to 13.8%, with his former spouse
assuming ownership of the same number of common shares and percentage
shareholding of the Company. Their commonly owned loan and related interest, as
of March 29, 2010, $4,140,201, was been equally split. The Chief Science and
Technology Officer on March 29, 2010, elected to convert his portion of the
loan and related interest to restricted common stock and warrants. As a result,
Howard Leonhardt, the Companys Chief Science and Technology Officer, owns
approximately 20% of the Company as of June 30, 2010.

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

22

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued) 
(Unaudited)

7. Shareholders Equity

In
September 2007, by way of a written consent, the Companys shareholders holding
a majority of its outstanding shares of common stock, the Companys
shareholders approved an amendment to Biohearts Articles of Incorporation,
increasing the number of authorized shares of capital stock so that, following
the reverse stock split that was effectuated on September 27, 2007, the Company
had 50 million shares of common stock authorized with a par value of $0.001 per
share and five million shares of preferred stock authorized with a par value of
$0.001 per share.

As further
discussed in Note 1, on February 22, 2008 the Company completed its IPO
pursuant to which it sold 1,100,000 shares of common stock at a price per share
of $5.25 for net proceeds of approximately $1.45 million after deducting
underwriter discounts of approximately $400,000 and offering costs of
approximately $3.92 million. The Consolidated Statement of Cash Flows for the
year ended December 31, 2008 reflects the Companys receipt of approximately
$4.24 million of Proceeds from (payments for) initial public offering of
common stock, net. The $4.24 million cash proceeds figure is approximately
$2.79 million higher than the $1.45 million net proceeds figure identified
above due to payment of $2.79 million of various offering expenses prior to
January 1, 2008.

On August
6, 2008, the Company amended its Articles of Incorporation to increase the
number of authorized shares of its common stock from 50 million to 75 million
shares. This amendment was approved by the Companys shareholders at the Annual
Meeting of Shareholders held on July 30, 2008.

In the six
month period ended June 30, 2010, the Company sold in a private placement to
accredited investors an aggregate of 6,836,840 shares of its common stock and
warrants to purchase 2,051,052 shares of its common stock for aggregate gross
cash proceeds of approximately $853,640. The warrants are (i) exercisable
solely for cash at a weighted average exercise price of $ 0.73 per share, (ii)
non-transferable for six months following issuance and (iii) exercisable, in
whole or in part, at any time and from time to 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 December
2009, the Company also sold in a private placement to accredited investors an
aggregate of 255,830 shares of its common stock and warrants (the Warrants)
to purchase 76,749 shares of its common stock for aggregate gross cash proceeds
of approximately $188,996. The Warrants are (i) exercisable solely for cash at
a weighted average exercise price of $0.89 per share, (ii) non-transferable for
six months following issuance and (iii) exercisable, in whole or in part, at
any time and from time to 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 2009,
the Company also sold in a private placement to accredited investors, initiated
in 2008, an aggregate of 2,509,480 shares of its common stock and warrants (the
Warrants) to purchase 752,844 shares of its common stock for aggregate gross
cash proceeds of approximately $1,74 million. The Warrants are (i) exercisable
solely for cash at a weighted average exercise price of $0.83 per share, (ii)
non-transferable for six months following issuance and (iii) exercisable, in
whole or in part, at any time and from time to 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
connection with the private placement, the Company paid to a finder who
introduced certain investors to the Company aggregate cash fees of $17,856 and
warrants to purchase 26,592 shares of common stock at a weighted average
exercise price of $0.89 per share. The

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

23

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

warrants issued to the finder have the same terms and conditions as the
Warrants issued in the private placement. The 2008 PIPE was closed on October
31, 2009, with total capital raised of $3,887,032.

In 2008,
the Company also sold, in a private placement to accredited investors, an
aggregate of 1,230,280 shares of its common stock and warrants (the Warrants)
to purchase 369,084 shares of its common stock for aggregate gross cash
proceeds of approximately $2.14 million. The Warrants are (i) exercisable
solely for cash at a weighted average exercise price of $2.09 per share, (ii)
non-transferable for six months following issuance and (iii) exercisable, in
whole or in part, at any time and from time to 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
connection with the private placement, the Company paid to a finder who
introduced certain investors to the Company aggregate cash fees of $24,325 and
warrants to purchase 24,325 shares of common stock at a weighted average
exercise price of $1.95 per share. The warrants issued to the finder have the
same terms and conditions as the Warrants issued in the private placement.

In 2007,
the Company sold 529,432 shares of common stock at a price of $7.69 per share
to various investors for net proceeds of approximately $3.9 million.

In 2006,
the Company sold 1,069,699 shares of common stock at a price of $7.69 per share
to accredited investors. The Company also issued 63,566 shares in exchange for
services at a price ranging from $5.67 to $7.69 per share.

In 2005,
the Company sold 1,994,556 shares of common stock at a price of $5.67 per share
to accredited investors. The Company also issued 1,210 shares in exchange for
services and issued 95,807 shares in exchange for debt at a price of $5.67 per
share.

In 2004,
the Company sold 808,570 shares of common stock at a price of $5.67 per share
to accredited investors. The Company also issued 1,854 shares to various
vendors in exchange for services valued at $10,500. The Company also issued
15,150 shares to the Companys Chief Science and Technology Officer as
compensation for services valued at $85,830.

In March
2003, the Company effected a recapitalization. The recapitalization provided
two shares of common stock for every one share issued as of that date. The
Companys Chief Science and Technology Officer and founding shareholder, who
owned 4,405,541 shares of common stock, did not participate in the
recapitalization. The number of shares and prices per share in the accompanying
financial statements has been retroactively adjusted to reflect the effect of
the recapitalization.

After the
2003 recapitalization, the Company sold 561,701 shares of common stock at a
price of $5.67 per share to accredited investors. The Company issued 72,980
shares valued at $416,383 to employees as compensation for services related to
the closing of various locations. The Company also issued 4,248 shares to
various vendors in exchange for services valued at $24,066 and issued 67,073
shares to the Companys Chief Technology Officer as compensation for services
provided to the Company during 2003 and 2002.

In 2002,
the Company sold 1,092,883 shares of common stock at a price of $6.47 per share
to accredited investors. The Company also issued 35,137 shares to various
vendors in exchange for services valued at $227,503.

In 2001,
the Company sold 985,668 shares of common stock at a price of $6.47 per share
to accredited investors. The Company also issued 8,291 shares to various
vendors in exchange for services valued at

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

24

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

$54,001 and issued 81,084 shares to the Companys Chief Science and
Technology Officer as compensation for services provided to the Company during
2001.

In 2000,
the Company sold 1,493,575 shares of common stock at a price of $6.47 per share
to accredited investors. Of the 1,493,575 shares sold in 2000, payment on
77,222 of these shares was not received until January 2001. The Company also
issued 7,964 shares to various vendors in exchange for services valued at
$52,001.

In 1999,
the Companys Chief Science and Technology Officer purchased 4,324,458 shares
of common stock from the company for $400,000..

8. Stock Options and Warrants

Stock Options

In July
2008, the Board of Directors approved, subject to shareholder approval, the
establishment of the Bioheart Omnibus Equity Compensation Plan (the Omnibus
Plan). The establishment of the Omnibus Plan was approved by the Companys
shareholders at the Annual Meeting of Shareholders held on July 30, 2008.
Pursuant to the Omnibus Plan, the Company may grant restricted stock, incentive
stock options, non-statutory stock options, stock appreciation rights, deferred
stock, stock awards, performance shares, and other stock-based awards
consisting of cash, restricted stock or unrestricted stock in various
combinations to the Companys employees, directors and consultants. 5,000,000
shares of common stock have been reserved for issuance under the Omnibus Plan.
As of December 31, 2008, no instruments had been issued under the Omnibus Plan.

In December
1999, the Company adopted two stock option plans; an employee stock option plan
and a directors and consultants stock option plan (collectively referred to as
the Stock Option Plans), under which a total of 1,235,559 shares of common
stock were reserved for issuance upon exercise of options granted by the
Company. In 2001, the Company amended the Stock Option Plans to increase the
total shares of common stock reserved for issuance to 1,698,894. In 2003, the
Company approved an increase of 308,890 shares, making the total 2,007,784
shares available for issuance under the Stock Option Plans. In 2006, the
Company approved an increase of 1,081,114 shares, making the total 3,088,898
shares available for issuance under the Stock Option Plans. The Stock Option
Plans provide for the granting of incentive and non-qualified options. The
terms of stock options granted under the Stock Option Plans are determined by
the Compensation Committee of the Board of Directors at the time of grant,
including the exercise price, vesting provisions and contractual term of such
options. The exercise price of incentive stock options must equal at least the
fair value of the common stock on the date of grant, and the exercise price of
non-qualified stock options may be no less than the per share par value. The
options have terms of up to ten years after the date of grant and become
exercisable as determined upon grant, typically over either three or four year
periods from the date of grant. Certain outstanding options vested over a
one-year period and some vested immediately. On February 24, 2010, by way of a
written consent, the Companys Board of Directors amended the Directors and
Consultants 1999 Stock Option Plan to extend the termination date of the Plan
to December 1, 2011.

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

25

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

A summary
of options at June 30, 2010 and activity during the six-month period then ended
is presented below:

|                                        |  |        |           |                                     |   |                                                              |  |                                 |     |  |  |        | 
|--------------------------------------- |  | ------ | --------- | ----------------------------------- | - | ------------------------------------------------------------ |  | ------------------------------- | --- |  |  | ------ | 
|                                        |  | Shares |           | Weighted-
 Average
 Exercise
 Price |   | Weighted-
 Average
 Remaining
 Contractual
 Term (in
 years) |  | Aggregate
 Intrinsic
 Value (1) |    
|                                        |  |        |           |                                     |   |                                                              |  |                                 |    
|Options
 outstanding at January 1, 2010 |  |        | 2,119,431 |                                     | $ | 3.28                                                         |  |                                 |     |  |  |        | 
|Granted                                 |  |        | 838,595   |                                     | $ | 0.31                                                         |  |                                 |     |  |  |        | 
|Exercised                               |  |        | 455,181   |                                     | $ | 0.001                                                        |  |                                 |     |  |  |        | 
|Forfeited                               |  |        | 502,357   |                                     | $ | 2.87                                                         |  |                                 |     |  |  |        | 
|                                        |  |        |           |                                     |   |                                                              |  |                                 |     |  |  |        | 
|Options
 outstanding at June 30, 2010   |  |        | 2,000,488 |                                     | $ | 3.30                                                         |  |                                 | 6.1 |  |  | 33,497 | 
|                                        |  |        |           |                                     |   |                                                              |  |                                 |     |  |  |        | 
|Options
 exercisable at June 30, 2010   |  |        | 1,641,994 |                                     | $ | 3.81                                                         |  |                                 | 5.5 |  |  | 23,183 | 
|                                        |  |        |           |                                     |   |                                                              |  |                                 |     |  |  |        | 
|Available
 for grant at June 30, 2010   |  |        | 465,561   |                                     |   |                                                              |  |                                 |     |  |  |        | 
|                                        |  |        |           |                                     |   |                                                              |  |                                 |     |  |  |        | 

The aggregate
intrinsic value represents the amount by which the fair market value of the
Companys common stock exceeds the exercise price of options at June 30, 2010.
The weighted average fair value of options granted in the six month periods
ended June 30, 2010 and 2009 was $0.63 and $0.55 per share, respectively. The
total intrinsic value of options exercised in the six month periods ended June
30, 2010 was $289,275.

For the six
month period ended June 30, 2010, the Company recognized a net $94,596 in stock
based compensation expense. This amount consisted of $53,310 in stock-based
compensation that was included in research and development expenses and $41,286
that was included in marketing, general and administrative expenses. For the
six month period ended June 30, 2009, the Company recognized a net credit of
$47,750 in stock based compensation expense. This amount consisted of $52,042
in stock based compensation that was included in research and development
expenses and a credit of $99,792 that was include in marketing, general and
administrative expenses. No tax benefits were attributed to the stock-based
compensation expense because a valuation allowance was maintained for all net
deferred tax assets. The Company elected to adopt the alternative method of
calculating the historical pool of windfall tax benefits as permitted by ASC
Topic 718, formerly FSP No. SFAS 123R-c, Transition
Election Related to Accounting for the Tax Effects of Share-Based Payment
Awards. This is a simplified method to determine the pool of
windfall tax benefits that is used in determining the tax effects of stock
compensation in the results of operations and cash flow reporting for awards
that were outstanding as of the adoption of ASC Topic 718, formerly SFAS No.
123R.

The
following information applies to options outstanding and exercisable at June
30, 2010:

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

26

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

|               |  |                     |           |                                                  |  |                                      |  |        |      |                                     |  |           |  |   |      | 
|-------------- |  | ------------------- | --------- | ------------------------------------------------ |  | ------------------------------------ |  | ------ | ---- | ----------------------------------- |  | --------- |  | - | ---- | 
|               |  | Options Outstanding |           | Options Exercisable                              | 
|               |  |                     |           |                                                  | 
|               |  | Shares              | `         | Weighted-
 Average
 Remaining
 Contractual
 Term |  | Weighted- 
 Average
 Exercise
 Price |  | Shares |      | Weighted-
 Average
 Exercise
 Price | 
|               |  |                     |           |                                                  |  |                                      |  |        |      |                                     | 
|$0.001
 $0.70 |  |                     | 383,414   |                                                  |  | 9.5                                  |  | $      | 0.68 |                                     |  | 250,000   |  | $ | 0.68 | 
|$0.71 
 $1.28 |  |                     | 590,008   |                                                  |  | 6.9                                  |  | $      | 0.85 |                                     |  | 379,178   |  | $ | 0.83 | 
|$5.25 
 $5.67 |  |                     | 980,698   |                                                  |  | 4.2                                  |  | $      | 5.58 |                                     |  | 966,448   |  | $ | 5.59 | 
|$7.69          |  |                     | 39,572    |                                                  |  | 6.2                                  |  | $      | 7.69 |                                     |  | 39,572    |  | $ | 7.69 | 
|$8.47          |  |                     | 6,796     |                                                  |  | 6.8                                  |  | $      | 8.47 |                                     |  | 6,796     |  | $ | 8.47 | 
|               |  |                     |           |                                                  |  |                                      |  |        |      |                                     |  |           |  |   |      | 
|               |  |                     | 2,000,488 |                                                  |  | 6.1                                  |  | $      | 3.30 |                                     |  | 1,641,994 |  | $ | 3.81 | 
|               |  |                     |           |                                                  |  |                                      |  |        |      |                                     |  |           |  |   |      | 

The Company
uses the Black-Scholes valuation model to determine the fair value of options
on the date of grant. This model derives the fair value of options based on
certain assumptions related to expected stock price volatility, expected option
life, risk-free interest rates and dividend yield. The Companys expected
volatility is based on the historical volatility of other publicly traded
development stage companies in the same industry. Prior to January 1, 2008, the
Company estimated the expected term for stock option grants by review of
similar data from a peer group of companies. The Company adopted SAB 110
effective January 1, 2008 and will apply the simplified method in SAB 107 until
enough historical experience is readily available to provide a reasonable
estimate of the expected term for stock option grants. The risk-free interest
rate assumption is based upon the U.S. Treasury yield curve appropriate for the
term of the expected life of the options.

For the
six-month periods ended June 30, 2010 and 2009, the fair value of each option
grant was estimated on the date of grant using the following weighted-average
assumptions.

For the Six Months ended June 30,2010
 
 2009Expected
 dividend yield
 0.0%
 
 0.0%Expected
 price volatility
 152%
 
 104%Risk free
 interest rate
 1.91%
 
 2.43%Expected
 life of options in years
 4
 
 6.8


During the
six-month period ended June 30, 2010, the Company issued options to purchase an
aggregate of 838,595 shares of its common stock at a weighted average exercise
price of $0.31 per share. These options consisted of the following:

| |   |                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | stock options to purchase an aggregate of 307,692 shares of common
 stock at an exercise price of $0.001 per share issued to a related party as
 discussed in Note 9. The options vested immediately upon issuance and will
 expire on the tenth anniversary of the issuance date.
| |   |                                                                                                                                                                                                                                                                                   
| |  | stock options to purchase an aggregate of 147,489 shares of common
 stock at an exercise price of $0.001 per share issued to Consultants. The
 options vested immediately upon issuance and will expire on the tenth
 anniversary of the issuance date.                           
| |   |                                                                                                                                                                                                                                                                                   
| |  | stock options to purchase an aggregate of 250,000 shares of common
 stock at an exercise price of                                                                                                                                                                                 

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

27

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

| |   |                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | $0.68 per share issued to certain members of the Companys Board of
 Directors. The options vested immediately upon issuance and will expire on
 the tenth anniversary of the issuance date.                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                       
| |  | Stock options to purchase an aggregate of 133,414 shares of common
 stock at an exercise price of $0.68 per share issued to employees. The
 options vest in 4 equal annual installments, commencing one month after the
 date of grant, and will expire on the tenth anniversary of the issuance date.

In its
meeting of August 12, 2009, the Board of Directors approved the repricing of
current employees stock options (other than Executive Officers). In accordance
with regulations concerning such a repricing and in conformance with generally
accepted procedures, all options granted before August 12, 2008, were repriced
on the basis of the 5-day average closing price of BHRT, during the period of
August 11 through August 17, 2009.

The following information applies to the
repricing which occurred as of October 8, 2009.

|                                   |                   |              |                  |                           | 
|---------------------------------- | ----------------- | ------------ | ---------------- | ------------------------- | 
|                                   |                   |              | Number of shares |                           | 
|                                   | Original Exercise | New Exercise | underlying       |                           | 
|                                   | Price             | Price        | Options          |                           | 
|                                   |                   |              |                  |                           | 
|                                   | $1.28             | $0.71        | 61,778           |                           | 
|                                   | $4.11             | $0.71        | 10,000           | options
 listed above,    | 
|Of those
 61,778 expired in having | $5.67             | $0.71        | 409,144          | December
 2009 without    | 
|been expired
 during the 30, 2010  | $7.69             | $0.71        | 12,851           | exercised
 and 502,357    | 
|without                            | $8.47             | $0.71        | 38,163           | six months
 ended June    | 
|                                   |                   |              |                  |                           | 
|                                   |                   |              | 531,936          | having been
 exercised. . | 

Warrants to Purchase
Common Stock

The Company
does not have a formal plan in place for the issuance of common stock purchase
warrants. However, at times, the Company will issue warrants to non-employees
or in connection with financing transactions. The exercise price, vesting
period, and term of these warrants is determined by the Companys Board of
Directors at the time of issuance. A summary of warrants at June 30, 2010 and
activity during the three-month period then ended is presented below:

|                                |  |        |           |                                     |   |                                                              |  |                             |     |  |  |           | 
|------------------------------- |  | ------ | --------- | ----------------------------------- | - | ------------------------------------------------------------ |  | --------------------------- | --- |  |  | --------- | 
|                                |  | Shares |           | Weighted
 -Average
 Exercise
 Price |   | Weighted-
 Average
 Remaining
 Contractual
 Term (in
 years) |  | Aggregate
 Intrinsic
 Value |    
|                                |  |        |           |                                     |   |                                                              |  |                             |    
|Outstanding
 at January 1, 2010 |  |        | 7,355,057 |                                     | $ | 3.06                                                         |  |                             |     |  |  |           | 
|Issued                          |  |        | 2,171,277 |                                     | $ | 0.73                                                         |  |                             |     |  |  |           | 
|Exercised                       |  |        | 0         |                                     | $ | 0.00                                                         |  |                             |     |  |  |           | 
|Forfeited                       |  |        | 128,040   |                                     | $ | 0.74                                                         |  |                             |     |  |  |           | 
|                                |  |        |           |                                     |   |                                                              |  |                             |     |  |  |           | 
|Outstanding
 at June 30, 2010   |  |        | 9,406,091 |                                     | $ | 2.55                                                         |  |                             | 7.6 |  |  | 7,184,435 | 
|                                |  |        |           |                                     |   |                                                              |  |                             |     |  |  |           | 
|Exercisable
 at June 30, 2010   |  |        | 4,962,428 |                                     | $ | 2.02                                                         |  |                             | 6.5 |  |  | 4,097,567 | 
|                                |  |        |           |                                     |   |                                                              |  |                             |     |  |  |           | 

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

28

---

Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

The Company
uses the Black-Scholes valuation model to determine the fair value of warrants
on the date of issuance. The Companys expected volatility is based on the
historical volatility of other publicly traded development stage companies in
the same industry. The expected life of the warrants is based primarily on the
contractual life of the warrants. The risk-free interest rate assumption is
based upon the U.S. Treasury yield curve appropriate for the term of the
expected life of the warrants.

The Company
did not issue any warrants that require Fair Value Calculation during the
quarter ended June 30, 2010. For the period ended June 30, 2009, the fair value
of warrants issued in transactions that resulted in the recognition of expense,
was estimated on the date of issuance using the following weighted-average
assumptions.

|                                   |                                         |  |      
|---------------------------------- | --------------------------------------- |  | -----
|                                   | For the Six Month Period ended June 30,
|                                   |                                        
|                                   | 2010                                    |  | 2009 
|                                   |                                         |  |      
|Expected
 dividend yield           | n/a                                     |  | 00.0%
|Expected
 price volatility         | n/a                                     |  | 75%  
|Risk free
 interest rate           | n/a                                     |  | 3.3% 
|Expected
 life of options in years | n/a                                     |  | 5.1  

The following information applies to warrants
outstanding and exercisable at June 30, 2010:

|               |  |                      |           |                                                  |  |                                      |  |        |      |                                      |  |           |  |   |      | 
|-------------- |  | -------------------- | --------- | ------------------------------------------------ |  | ------------------------------------ |  | ------ | ---- | ------------------------------------ |  | --------- |  | - | ---- | 
|               |  | Warrants Outstanding |           | Warrants Exercisable                             | 
|               |  |                      |           |                                                  | 
|               |  | Shares               |           | Weighted-
 Average
 Remaining
 Contractual
 Term |  | Weighted- 
 Average
 Exercise
 Price |  | Shares |      | Weighted
 -Average 
 Exercise
 Price | 
|               |  |                      |           |                                                  |  |                                      |  |        |      |                                      | 
|$0.53 -
 $0.68 |  |                      | 3,776,909 |                                                  |  | 7.0                                  |  | $      | 0.59 |                                      |  | 3,018,626 |  | $ | 0.58 | 
|$0.70 -
 $1.89 |  |                      | 2,662,887 |                                                  |  | 1.7                                  |  | $      | 0.79 |                                      |  | 521,957   |  | $ | 0.94 | 
|$1.90 
 $2.60 |  |                      | 413,686   |                                                  |  | 1.3                                  |  | $      | 2.08 |                                      |  | 413,686   |  | $ | 2.08 | 
|$3.60 
 $4.93 |  |                      | 105,000   |                                                  |  | 3.2                                  |  | $      | 4.87 |                                      |  | 105,000   |  | $ | 4.87 | 
|$5.67 
 $7.69 |  |                      | 2,447,609 |                                                  |  | 12.7                                 |  | $      | 7.47 |                                      |  | 903,159   |  | $ | 7.09 | 
|               |  |                      |           |                                                  |  |                                      |  |        |      |                                      |  |           |  |   |      | 
|               |  |                      | 9,406,091 |                                                  |  | 6.7                                  |  | $      | 2.55 |                                      |  | 4,962,428 |  | $ | 2.02 | 
|               |  |                      |           |                                                  |  |                                      |  |        |      |                                      |  |           |  |   |      | 

| |  During the six month period ended
 June 30, 2010, the Company issued warrants to purchase an aggregate of
 2,171,277 shares of its common stock at a weighted average exercise price of
 $0.73 per share. These warrants were issued in connection with a private
 placement. The warrant vests six months following issuance and expires on the
 third year anniversary of the date of issuance.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                    
| |  During the six month period
 ended June 30, 2010 the Company canceled and reissued warrants to purchase
 128,040 shares of its common stock that had previously been issued in a
 private placement.                                                                                                                                                                                             

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

29

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Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

9. Legal Proceedings

The Company
is not subject to any legal proceedings.

10. Contingency

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 June 30,
2010 or December 31, 2009.

11. Supplemental Disclosure of Cash Flow
Information

During the
six months ended June 30, 2010 and December 31, 2009, the Company issued
warrants in connection with the renewal of the BlueCrest loan with an aggregate
fair value of $687,677 and $1,580,575, respectively.

For the six
months ended June 30, 2010 the Company issued Common Stock in connection with
the settlement of Accounts Payable with an aggregate value of $43,100.

For the six
months ended June 30, 2010 the Company issued Common Stock in connection with
amount due to loan guarantor for payment of $666,600 to Bank of America.

For the six
months ended June 30, 2010 the Company issued Common Stock in connection with
payment of the subordinated related party loan for $1,500,000.

For the six
months ended June 30, 2010 the Company issued Common Stock in connection with
the payment of accrued interest and loans fees due to Bank of America loan
guarantors for $798,770.

12. Subsequent Events

Private Placement 
Common Stock and Warrants

During the
six month period ended June 30, 2010, the Company sold, an aggregate of
6,836,840 shares of the Companys common stock and warrants to purchase
2,051,052 shares of the Companys common stock for aggregate gross cash
proceeds of $853,640. The warrants are (i) exercisable solely for cash at an
exercise price of $0.54 to $0.84 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.

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

30

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Bioheart, Inc. and Subsidiaries
(A development stage enterprise)

Notes to Consolidated Interim Financial
Statements - (Continued)
(Unaudited)

During July
2010, the Company sold, an aggregate of 1,460,135 shares of the Companys
common stock for aggregate gross cash proceeds of $219,020.

On July 20,
2010, the Company announced that it closed its offering under Regulation D (the
Offering). The Company received total gross cash proceeds in the amount of
$1,046,986 from the placement of restricted common stock and warrants under the
Offering. The number of shares of common stock issued in connection with the
Offering was 1,768,720. The Company also issued to the purchasers of those
shares of common stock, warrants to purchase additional 530,616 shares of
common stock. Total compensation paid to third parties consisted of $4,350 in
cash and warrants to purchase 2,456 shares of common stock. In addition, the
Company issued 5,323,950 shares of common stock in consideration for $3,207,075
of outstanding nonconvertible debt, and issued to the holders of that debt
warrants to purchase as additional 1,597,185 shares of common stock.

During
August 2010 the Company sold 93,750 shares of the Companys common stock for
gross cash proceeds of $15,000.

Defaults Upon Senior Securities

On July 16, 2010, the Company received a written notice of default under the Bank of America loan documents by reason of the Companys failure to pay the loan in full at maturity on July 5, 2010 and failure to pay the extension fee of $30,000 by June 28, 2010, as required by the loan documents, as amended.  The Company is engaged in discussions with the guarantors, who have provided the loan collateral, regarding a restructuring of the indebtedness in the event Bank of America seeks recourse against the collateral and those guarantors, by reason of such action, become successors to the Bank of America rights and interests under the Bank of America Loan.  See,Bank of America Note Payable,in Note 5, Notes Payable, Notes to Consolidated Interim Financial Statements.

Patient Treatment at Center of Excellence

On April 14, 2010, the Company announced that treatment with stem cell therapy on two congestive heart failure (CHF) patients was performed successfully at the Hospital Angeles Tijuana, Mexico, through Bioheart's Center of Excellence program with Regenerative Medicine Institute As of June 30, 2010 one additional patient has been treated.

Other Information

As reported in the Companys Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 9, 2010, the Board of Directors of the Company appointedCatherine Sulawske-Guck as Chief Operating Officer. Ms. Sulawske-Guck has served as the Vice President of Administration and Human Resources since January 2007. She joined Bioheart in the full-time capacity as Director of Administration and Human Resources in January 2004 after having served in a consulting capacity since December 2001.

On August 13, 2010 Peggy A. Farley resigned as a director of the Company.



31

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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 and on Form 10-K/A for
the year ended December 31, 2009 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 and on Form 10-K/A
for the year ended December 31, 2009.

Our Ability To Continue as a Going Concern

Our
independent registered public accounting firm has issued its report dated, March
31, 2010, in connection with the audit of our financial statements as of
December 31, 2009, that included an explanatory paragraph describing the
existence of conditions that raise substantial doubt about our ability to
continue as a going concern. Our consolidated financial statements as of June
30, 2010 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.

32

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Overview

We are
committed to maintaining a leading position within the cardiovascular sector of
the cell technology industry, delivering cell therapies, intelligent devices
and biologics that help address congestive heart failure, lower limb ischemia,
chronic heart ischemia, acute myocardial infarctions and other issues. We work
to prevent the worsening of heart failure conditions with devices that monitor
and diagnose. Our goals are to cause damaged tissue to be regenerated, if
possible, and to improve a patients quality of life and reduce health care
costs and hospitalizations.

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
October, 2009, showing a dramatic (35%) improvement in 6 minute walk distance
for those patients who were treated, and less distance from baseline 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 from 330.
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 or MyCell SDF-1, our second
generation therapy, discussed below, we intend to generate revenue in the
United States from the sale of cell-culturing services for treatment of
patients by qualified physicians. Abroad, we are identifying centers where it
is acceptable to use the MyoCell and MyoCell SDF-1 treatments so that 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), the first approval of a
study combining gene and cell therapies. Work commenced on this study, called
the REGEN trial, during the first quarter of 2010. Based on the results of the
trial, we intend to either incorporate the combination 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 Bioheart Acute Cell Therapy, an autologous, adipose cell
treatment for acute heart damage designed to be used in connection with the TGI
1200 tissue processing system, and MyoCell® SDF-1. Tissue Genesis, Inc., the
entity from whom we have obtained the worldwide right to sell or lease the TGI
1200 announced on November 13, 2008 that the TGI 1200 had been certified with
a CE Marking, thus making the system available throughout the European
marketplace. We understand that Tissue Genesis is in the process of evaluating
the regulatory pathway that should be pursued for the TGI 1200 device. 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.

33

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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 being used to inject cells into cardiac tissue in therapeutic procedures to
treat chronic heart ischemic and congestive heart failure.

Center of Excellence
Program

On March
23, 2010, the Company announced plans for establishing five Centers of
Excellence in Latin America to provide its cell therapy procedures to patients
suffering from congestive heart failure (CHF) and peripheral arterial disease
(PAD). Bioheart entered into its first agreement with a leading treatment
facilitator, Regenerative Medicine Institute of Tijuana, Mexico. Therapies for
CHF and PAD patients will be made available at the Hospital Angeles Tijuana, a
fully equipped state-ofthe-art private specialties hospital. This is the first
of five Centers of Excellence with four additional Centers to be announced in
the coming months

On April
14, 2010, the Company announced that treatment with stem cell therapy on two
congestive heart failure (CHF) patients was performed successfully at the
Hospital Angeles Tijuana, Mexico, through Biohearts Center of Excellence
program with Regenerative Medicine Institute.

Intelligent Devices - Distribution Agreements

Effective
as of April 3, 2008, we entered into a distribution agreement with RTX
Healthcare A/S (Denmark) (RTX) pursuant to which we secured worldwide,
non-exclusive distribution rights to the Bioheart 3370 Heart Failure Monitor,
an interactive and simple-to-use at-home intelligent device designed
specifically to improve available healthcare to patients outside hospitals who
are suffering from heart failure. The device, manufactured by RTX, has 510(k)
market clearance from the U.S. Food and Drug Administration for marketing in
the United States and CE mark approval for marketing in Europe and other
countries that follow this mark. The compact Bioheart 3370 Heart Failure Monitor
engages patients through personalized daily interactions and questions, while
collecting vital signs and transmitting the information directly into a
database. The data are regularly monitored by a remotely located medical
professional, who watches for any abnormal readings that may signal a change in
the patients health status. These changes are reported back to the treating
physician. We do not have any minimum purchase commitment under the agreement.
However, the per unit purchase price payable by us is inversely related to the
number of units we purchase per annum. The distribution agreement has an
initial term of two years and is subject to automatic renewal for additional
one-year periods unless either party indicates an intent to terminate the
agreement prior to the end of the then current term. The distribution agreement
may be terminated by either party upon the other partys default.

The company
has signed distribution agreements with Restoration Medical, McRay Medical,
Alamo Scientific and Morey Medical. These distributors will assist Bioheart
with introducing its Home Heart Failure Monitoring Systems to physicians and
hospitals throughout the United States. McRay Medical will distribute the
systems in Northern California; Alamo Scientific will distribute in Texas,
Louisiana and Arkansas; Morey

34

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Medical will distribute in Okalahoma and parts of Kansas; Restoration
Medical will distribute the monitoring systems in the rest of the country.

Effective
as of October 22, 2009, the Company entered into a distribution agreement with
Morey Medical Inc. pursuant to which Morey was granted exclusive rights to
market and promote the Bioheart 3370-1 Heart Failure Monitor throughout a
specific territory. In consideration for identifying purchasers who purchase or
rent the Bioheart 3370-1 Heart Failure Monitor from the Company, the Company
will pay to Morey a set fee. Morey is required to meet certain quarterly
minimum purchase commitments under the agreement. The agreement has an initial
term of one year and is subject to automatic renewal for additional one-year
periods unless either party indicates intent to terminate the agreement no less
than 60 days prior to the end of the then current term.

Effective
as of December 10, 2009, the Company entered into a distribution agreement with
McRay Medical, LLC, pursuant to which McRay was granted exclusive rights to
market and promote the Bioheart 3370-1 Heart Failure Monitor throughout a
specific territory. In consideration for identifying purchasers who purchase or
rent the Bioheart 3370-1 Heart Failure Monitor from the Company the Company
will pay to McRay a set fee. McRay is required to meet certain quarterly
minimum purchase commitments under the agreement. The agreement has an initial
term of one year and is subject to automatic renewal for additional one-year
periods unless either party indicates intent to terminate the agreement no less
than 60 days prior to the end of the then current term.

Effective
as of October 22, 2009, the Company entered into a distribution agreement with
Alamo Scientific, Inc. pursuant to which Alamo was granted exclusive rights to
market and promote the Bioheart 3370-1 Heart Failure Monitor throughout a
specific territory. In consideration for identifying purchasers who purchase or
rent the Bioheart 3370-1 Heart Failure Monitor from the Company the Company
will pay to Alamo a set fee. Alamo is required to meet certain quarterly
minimum purchase commitments under the agreement. The agreement has an initial
term of one year and is subject to automatic renewal for additional one-year
periods unless either party indicates intent to terminate the agreement no less
than 60 days prior to the end of the then current term.

Effective
as of December 18, 2009, the Company entered into a distribution agreement with
Restoration Medical Inc. pursuant to which Restoration was granted exclusive
rights to market the Bioheart 3370-1 Heart Failure Monitoring System throughout
those territories not covered by Morey Medical, McRay Medical and Alamo
Scientific. In consideration for identifying purchasers who purchase or lease
the Bioheart 3370-1 Heart Failure Monitoring System from the Company, the
Company will pay to Restoration a set fee. Restoration is required to meet
certain quarterly minimum purchase commitments under the agreement. The
agreement has an initial term of one year and is subject to automatic renewal
for additional one-year periods unless either party indicates intent to
terminate the agreement no less than 60 days prior to the end of the then
current term.

The heart
failure monitors are reimbursed by Medicare to home health companies. In 2009,
reimbursement was added to the National Episode Rate for cardiac patients. The
monitors in conjunction with the nurses visit are essential to the well being
of chronic heart failure patients. Care Plan Oversight (CPO) reimbursement also
allows physicians to bill Medicare for their time overseeing the care of home
care or hospice patients.

Operations

We conduct
operations in one business segment. We may organize our business into more
discrete business units when and if we generate significant revenue from the
sale of our product candidates. Substantially all of our revenue since
inception has been generated in the United States, and the majority of our
long-lived assets are located in the United States.

35

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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
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

Since
inception, we have not generated any material revenues from our MyoCell product
candidate. In accordance with Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements,
as amended by SEC Staff Accounting Bulletin No. 104, Revenue Recognition, our revenue policy is to recognize
revenues from product sales and service transactions generally when persuasive
evidence of an arrangement exists, the price is fixed or determined, collection
is reasonably assured and delivery of product or service has occurred.

We
initially recorded payments received by us pursuant to our agreements with ACS
as deferred revenue. Revenues are recognized on a pro rata basis as the
catheters are delivered pursuant to those agreements.

36

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Research and Development
Activities

Research
and development expenditures, including payments to collaborative research
partners, are charged to expense as incurred. We expense amounts paid to obtain
patents or acquire licenses as the ultimate recoverability of the amounts paid
is uncertain.

Results of Operations

We are a
development stage company and neither our MyoCell product candidate nor our
other product candidates has received regulatory approval or generated any
material revenues and neither is expected to in the near future, 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
six months Ended June 30, 2010 and 2009

Revenues

We
recognized revenues of $36,466 in the six month period ended June 30, 2010
compared to revenues of $206,885 in the six month period ended June 30, 2009.
Our revenue in the six month period ended June 30, 2010 was generated mainly
from the sale of Cardio Devices and the revenue in the six month period ended
June 30, 2009 was generated mainly from the sale of MyoCath catheters.

Cost of Sales

Cost of
sales was $16,799 in the six month period ended June 30, 2010 compared to
$112,781 in the six month period ended June 30, 2009.

Research and Development

Research
and development expenses were approximately $1,093,677 in the six month period
ended in June 30, 2010, an increase of approximately $52,000_from research and
development expenses of $1,041,693_ in same six month period in 2009. The
increase was primarily attributable to the write-off of expired Myocath
inventory in the amount of $89,717.

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

Marketing, General and Administrative

Marketing,
general and administrative expenses were approximately $813,967 in the six
month period ended June 30 2010, a decrease of $305,000 from marketing, general
and administrative expenses of approximately $1,119,034 in the same six month
period in 2009. The decrease in marketing, general and administrative expenses
is attributable, in part, to a decrease in insurance, legal and rent expenses.

37

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Interest Income

Interest
income consists of interest earned on our cash and cash equivalents. Interest
income was $1 in the six month period ended June 30, 2010 compared to interest
income of $14 in the same six month period in 2009. The decrease in interest
income was primarily attributable to lower cash balances in the six month
period ended June 30, 2010 compared to 2009.

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 $1,138,413 in the six month period ended June 30, 2010 compared to
interest expense of $1,335,808 in the same six month period in 2009. Interest
incurred on the principal amount of our outstanding loans and interest and fees
earned by the guarantors totaled $525,055 in the six month period ended June
30, 2010 and $580,700 in the same six month period in 2009. Amortization of
deferred loan costs and amortization of the fair value of warrants issued in
connection with the BlueCrest and Bank of America loans totaled $609,081 in the
six month period ended June 30, 2010 compared to $416,270 in the same six month
period in 2009.

Liquidity and Capital Resources

In the six
month period ended June 30, 2010, we continued to finance our considerable
operational cash needs with cash generated from financing activities.

Operating Activities

Net cash
used in operating activities was $965,027 in the six month period ended June
30, 2010 as compared to $914,048 of cash used in the same six month period in
2009.

Our use of
cash for operations in the six months ended June 30, 2010 reflected a net loss
generated during the period of $3.1 million, adjusted for non-cash items such
as stock-based compensation of $94,596 amortization of the fair value of
warrants granted in connection with the BlueCrest Loan and Bank of America loan
of $542,927, amortization of loan costs incurred in connection with the
BlueCrest Loan and Bank of America Loan of $66,154. A increase in prepaid and
other current assets of $7,210 and an increase in accounts payable of $74,527
contributed to our use of operating cash in 2010. The increase in prepaid
expenses and other current assets was due mainly to the increase in prepaid
insurance. Partially offsetting these uses of cash were decreases in accrued
expenses of $437,065.

Investing Activities

Net cash
used in investing activities was $0.00 for the six month period ended June 30,
2010, compared to $0.00 for the same six month period in 2009. There were none
investing activities for the six month periods ended June 30, 2010 and the six
months ended June 30, 2009.

38

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Financing Activities

Net cash
provided by financing activities was $894,868 in the six month period ended
June 30, 2010 as compared to $884,032 for the same six month period in 2009.

Existing Capital
Resources and Future Capital Requirements

Neither our
MyoCell product candidate nor our other product candidates has received
regulatory approval or generated any material revenues. We do not expect to
generate any material revenues or cash from sales of our MyoCell and other
product candidates in the near future, 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 additional debt to provide the funds
necessary to conduct our research and development activities and to meet our
other cash needs.

At June 30,
2010 we had cash and cash equivalents totaling $4,872. However, our working
capital deficit as of such date was $11.1 million. Our independent registered
public accounting firm has issued its report dated March 31, 2010 in connection
with the audit of our financial statements as of December 31, 2009 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 consolidated financial statements for a discussion of recent
accounting pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

Item 4.
Controls and Procedures

*Disclosure Controls and Procedures*

We have
established disclosure controls and procedures to ensure that material
information relating to us is *-made known to the officers who certify our
financial reports, as well as to other members of senior management and the
Board of Directors.

We carried
out an evaluation, under the supervision and with the participation of our
management, including our Principal Executive Officer, as well as our Principal
Financial and Accounting Officer of the effectiveness of our disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act as of the end of the period covered by this
quarterly report on Form 10-Q. Based on such evaluation, our Principal
Executive Officer, as well as our Principal Financial and Accounting Officer
concluded that, as of June 30, 2010, our disclosure controls and procedures
were effective. In making this assessment, we used the criteria set forth in
*Internal Control-Integrated Framework* issued by the Committee

39

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of Sponsoring Organizations of the Treadway Commission. The controls
that management sought to identify and evaluate were those processes designed
by, or under the supervision of, the Companys principal financial officer, or
persons performing similar functions, and implemented by our board of
directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures that:

| |     |                                                                                                                                                                                                                                                                                                                                               
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | pertain to the maintenance of records that in reasonable detail
 accurately and fairly reflect the transactions and dispositions of the assets
 of the Company;                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                               
| | (2) | provide reasonable assurance that transactions are recorded as
 necessary to permit preparation of financial statements in accordance with
 generally accepted accounting principles, and that receipts and expenditures
 of the issuer are being made only in accordance with authorizations of
 management and directors of the Company; and
| |     |                                                                                                                                                                                                                                                                                                                                               
| | (3) | provide reasonable assurance regarding prevention or timely detection
 of unauthorized acquisition, use or disposition of the issuers assets that
 could have a material effect on the financial statements.                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                               

A
deficiency in the design of internal control over financial reporting exists
when (a) necessary controls are missing or (b) existing controls are not
properly designed so that, even if the control operates as designed, the
financial reporting risks would not be addressed.

A material
weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a
material misstatement of the companys annual or interim financial statements
will not be prevented or detected on a timely basis. Management has determined
that, as of June 30, 2010, the Company did not have a deficiency or material
weakness in our internal control over financial reporting.

This
Quarterly Report on Form 10-Q does not, and is not required to; include an
attestation report of the Companys independent registered public accounting
firm regarding internal control over financial reporting.

Changes In Internal
Control Over Financial Reporting

There were
no changes in our internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
quarter ended June 30, 2010 that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.

40

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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, 2009.

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

Private Placement 
Common Stock and Warrants

In April
2010, the Company sold, in a private placement, an aggregate of 849,690 shares
of the Companys common stock and warrants to purchase 254,907 shares of the
Companys common stock for aggregate gross cash proceeds of $455,204. The
warrants are (i) exercisable solely for cash at an exercise price of $0.77 to
$0.84 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 May
2010, the Company sold, in a private placement, 39,060 shares of the Companys
common stock and warrants to purchase 11,718 shares of the Companys common
stock for aggregate gross cash proceeds of $25,000. The warrants are (i)
exercisable solely for cash at an exercise price of $0.77 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 June
2010, the Company sold, in a private placement, an aggregate of 362,660 shares
of the Companys common stock and warrants to purchase 108,798 shares of the
Companys common stock for aggregate gross cash proceeds of $166,800. The warrants
are (i) exercisable solely for cash at an exercise price of $0.54 to $0.58 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 July
2010, the Company sold, in a private placement, an aggregate of 1,460,135
shares of the Companys common stock for aggregate gross cash proceeds of
$219,020.

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

On July 16,
2010, the Company received a written notice of default under the Bank of
America loan documents by reason of the Companys failure to pay the loan in
full at maturity on July 5, 2010 and failure to pay the extension fee of
$30,000 by June 28, 2010, as required by the loan documents, as amended. The

41

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Company is engaged in discussions with the guarantors, who have
provided the loan collateral, regarding a restructuring of the indebtedness in
the event Bank of America seeks recourse against the collateral and those
guarantors, by reason of such action, become successors to the Bank of America
rights and interests under the Bank of America Loan. See, Bank of America Note
Payable, in Note 5, Notes Payable, Notes to Consolidated Interim Financial
Statements.

Item 4.
Other Information

On June 19,
2010, as reported in the Companys Current Report on Form 8-K, filed with the
Securities and Exchange Commission on June 24, 2010 (the Current Report), the
Board of Directors of the Company appointed Mike Tomas as the Companys
President and Chief Executive Officer, and as a director. A copy of the
Companys employment agreement with Mr. Tomas was filed as Exhibit 10.1 to the
Current Report.

On June 20,
2010, also as reported in the Current Report, the Board of Directors appointed
Howard J. Leonhardt as a director to fill a vacancy created by director
resignations received by the Company on June 19, 2010. Mr. Leonhardt is the
Companys founder and a former Chief Executive Officer of the Company, and
currently serves as its Chief Science and Technology Officer.

Also as
reported in the Current Report, on June 19, 2010, Peggy A. Farley resigned as
Chief Financial Officer and Chief Operating Officer, effective July 1, 2010,
and Karl E. Groth, Ph.D. resigned as the Chief Executive Officer of the
Company. However, each shall remain on the Companys Board of Directors and Dr.
Groth shall remain as its Chairman. On August 13, 2010, Ms. Farley resigned as
a director.

The Current
Report also reported that, on June 19, 2010, the Company received a letter from
Ms. Lee Jones resigning from the Board of Directors effective as of June 18,
2010.

As reported
in the Companys Current Report on Form 8-K, filed with the Securities and Exchange
Commission on July 9, 2010, the Board of Directors of the Company appointed Catherine Sulawske-Guck as Chief Operating
Officer. Ms. Sulawske-Guck has served as the Vice President of Administration
and Human Resources since January 2007. She joined Bioheart in the full-time
capacity as Director of Administration and Human Resources in January 2004
after having served in a consulting capacity since December 2001.

On July 20,
2010, the Company announced that it closed its offering under Regulation D (the
Offering). The Company received total gross cash proceeds in the amount of
$1,046,986 from the placement of restricted common stock and warrants under the
Offering. The number of shares of common stock issued in connection with the
Offering was 1,768,720 shares. The Company also issued to the purchasers of
those shares of common stock, warrants to purchase an additional 530,616 shares
of common stock. Total compensation paid to third parties consisted of $4,350
in cash and warrants to purchase 2,456 shares of common stock. In addition, the
Company issued 5,323,950 shares of common stock in consideration for $3,207,075
of outstanding nonconvertible debt, and issued to the holders of that debt
warrants to purchase an additional 1,597,185 shares of common stock.

On August
13, 2010 Peggy A. Farley resigned as a director of the Company.

42

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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                                               

43

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|            |  |                                                                                                                                                                   
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.                                                            
|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                                                                                                 
|            |  |                                                                                                                                                                   
|31.1*       |  | Certification pursuant to 18 U.S.C. Section
 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                           
|31.2*       |  | 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                                           
|32.2*       |  | 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.

44

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|     |  |                                                                                                                                                                                                  
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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                                                      
|(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

45

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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: August
 20, 2010 | By: | /s/ Mike
 Tomas                      
|                       |     |                                      
|                       |     | Mike Tomas                           
|                       |     | Chief Executive Officer and President

46

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