##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 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.
  
 Florida
(State or other jurisdiction of 
incorporation or organization)
    
    65-0945967
(I.R.S. Employer Identification No.)
 13794 NW 4 th Street, Suite 212, Sunrise, Florida 33325
 (954) 835-1500
 
 þ o
 o o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ o þ




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##### 



BIOHEART, INC.
 INDEX
 PART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    21) Consolidated Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008
    
    
    22) Consolidated Statements of Operations for the three month periods ended March 31, 2009 and 2008 (unaudited)
    
    
    33) Consolidated Statement of Shareholders Deficit for the three-month period ended March 31, 2009 (unaudited)
    
    
    44) Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2009 and 2008 (unaudited)
    
    
    55) Notes to Consolidated Interim Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4T. Controls and Procedures
    
    
    33PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    35Item 1A. Risk Factors
    
    
    37Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    38Item 5. Other Information
    
    
    39Item 6. Exhibits
    
    
    40Signatures
    
    
    43Index to Exhibits
    
    
    44EX-31.1EX-32.1
  1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 
 Consolidated Balance Sheets
 March 31,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent assetsCash and cash equivalents
    
    $
    171,073
    
    
    $
    50,091Receivables
    
    
    62,492
    
    
    
    57,258Inventory
    
    
    337,587
    
    
    
    395,034Prepaid expenses and other current assets
    
    
    312,747
    
    
    
    723,882Total current assets
    
    
    883,899
    
    
    
    1,226,265Property and equipment, net
    
    
    235,811
    
    
    
    281,107Deferred loan costs, net
    
    
    227,903
    
    
    
    278,945Other assets
    
    
    68,854
    
    
    
    68,854Total assets
    
    $
    1,416,467
    
    
    $
    1,855,171LIABILITIES AND SHAREHOLDERS DEFICITCurrent liabilitiesAccounts payable
    
    $
    2,220,834
    
    
    $
    1,700,841Accrued expenses and other current liabilities
    
    
    5,457,958
    
    
    
    4,970,518Deferred revenue
    
    
    465,286
    
    
    
    465,286Notes payable  current
    
    
    5,412,853
    
    
    
    7,898,960Total current liabilities
    
    
    13,556,931
    
    
    
    15,035,605Deferred rent
    
    
    8,571
    
    
    
    11,141Subordinated related party loan
    
    
    3,000,000
    
    
    
    Note payable  long term
    
    
    530,579
    
    
    
    1,044,472Total liabilities
    
    
    17,096,081
    
    
    
    16,091,218Commitments and contingenciesShareholders deficitPreferred 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; 16,395,610 and 15,739,196
shares issued and outstanding as of March 31,
2009 and December 31, 2008, respectively
    
    
    16,396
    
    
    
    15,739Additional paid-in capital
    
    
    82,904,942
    
    
    
    82,532,746Deficit accumulated during the development stage
    
    
    (98,600,952
    )
    
    
    (96,784,532
    )Total shareholders deficit
    
    
    (15,679,614
    )
    
    
    (14,236,047
    )Total liabilities and shareholders deficit
    
    $
    1,416,467
    
    
    $
    1,855,171
  2




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 
 Consolidated Statements of Operations
 CumulativePeriod fromAugust 12,1999 (date ofFor the Three-Month Period
    
    
    inception) toEnded March 31,
    
    
    March 31,2009
    
    
    2008
    
    
    2009(Unaudited)
    
    
    (Unaudited)Revenues
    
    $
    109,090
    
    
    $
    25,995
    
    
    $
    893,963Cost of sales
    
    
    49,297
    
    
    
    3,125
    
    
    
    374,658Gross profit
    
    
    59,793
    
    
    
    22,870
    
    
    
    519,305Development revenues
    
    
    
    
    
    
    61,500
    
    
    
    117,500Expenses:Research and development
    
    
    626,363
    
    
    
    1,358,057
    
    
    
    63,493,747Marketing, general and
administrative
    
    
    646,882
    
    
    
    1,072,269
    
    
    
    29,151,686Depreciation and amortization
    
    
    45,296
    
    
    
    45,628
    
    
    
    662,302Total expenses
    
    
    1,318,541
    
    
    
    2,475,954
    
    
    
    93,307,735Loss from operations
    
    
    (1,258,748
    )
    
    
    (2,391,584
    )
    
    
    (92,670,930
    )Interest income
    
    
    10
    
    
    
    33,946
    
    
    
    762,263Interest expense
    
    
    (557,682
    )
    
    
    (933,410
    )
    
    
    (6,692,285
    )Net interest expense
    
    
    (557,672
    )
    
    
    (899,464
    )
    
    
    (5,930,022
    )Loss before income taxes
    
    
    (1,816,420
    )
    
    
    (3,291,048
    )
    
    
    (98,600,952
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (1,816,420
    )
    
    $
    (3,291,048
    )
    
    $
    (98,600,952
    )Loss per share  basic and diluted
    
    $
    (0.11
    )
    
    $
    (0.24
    )Weighted average shares
outstanding  basic and diluted
    
    
    15,931,615
    
    
    
    13,854,830
  3




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 
 Consolidated Statement of Shareholders Deficit
(Unaudited)
 DeficitAccumulatedAdditional
    
    
    During theCommon Stock
    
    
    Paid-in
    
    
    DevelopmentShares
    
    
    Amount
    
    
    Capital
    
    
    Stage
    
    
    TotalBalance as of December 31, 2008
    
    
    15,739,196
    
    
    $
    15,739
    
    
    $
    82,532,746
    
    
    $
    (96,784,532
    )
    
    $
    (14,236,047
    )Exercise of stock options
    
    
    40,000
    
    
    
    40
    
    
    
    31,960
    
    
    
    
    
    
    
    32,000Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    (95,047
    )
    
    
    
    
    
    
    (95,047
    )Common stock issued in
exchange for services
    
    
    45,000
    
    
    
    45
    
    
    
    45,855
    
    
    
    
    
    
    
    45,900Common stock issued in
connection with the
issuance of note payable
    
    
    200,000
    
    
    
    200
    
    
    
    189,800
    
    
    
    
    
    
    
    190,000Common stock issued upon
the conversion of note
payable
    
    
    371,414
    
    
    
    372
    
    
    
    199,628
    
    
    
    
    
    
    
    200,000Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,816,420
    )
    
    
    (1,816,420
    )Balance as of March 31, 2009
    
    
    16,395,610
    
    
    $
    16,396
    
    
    $
    82,904,942
    
    
    $
    (98,600,952
    )
    
    $
    (15,679,614
    )
  4




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Consolidated Statements of Cash Flows
 CumulativePeriod fromAugust 12, 1999For the Three-Month Period Ended
    
    
    (date of inception)March 31,
    
    
    to March 31,2009
    
    
    2008
    
    
    2009(Unaudited)
    
    
    (Unaudited)Cash flows from operating activitiesNet loss
    
    $
    (1,816,420
    )
    
    $
    (3,291,048
    )
    
    $
    (98,600,952
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation and amortization
    
    
    45,296
    
    
    
    45,628
    
    
    
    662,302Bad debt expense
    
    
    
    
    
    
    
    
    
    
    165,000Discount on convertible debt
    
    
    200,000
    
    
    
    
    
    
    
    200,000Amortization of warrants issued in exchange for
licenses and intellectual property
    
    
    
    
    
    
    
    
    
    
    5,413,156Amortization of warrants issued in connection with
notes payable
    
    
    37,725
    
    
    
    456,540
    
    
    
    3,209,033Amortization of loan costs
    
    
    39,247
    
    
    
    159,482
    
    
    
    967,987Warrants issued in exchange for services
    
    
    
    
    
    
    
    
    
    
    285,659Equity instruments issued in connection with settlement
agreement
    
    
    
    
    
    
    
    
    
    
    3,381,629Common stock issued in exchange for services
    
    
    45,900
    
    
    
    
    
    
    
    1,322,917Common stock issued in exchange for distribution rights
and intellectual property
    
    
    
    
    
    
    
    
    
    
    99,997Stock-based compensation
    
    
    (95,047
    )
    
    
    212,415
    
    
    
    8,824,668Changes in assets and liabilitiesReceivables
    
    
    (5,234
    )
    
    
    28,037
    
    
    
    (62,492
    )Inventory
    
    
    57,447
    
    
    
    (18,020
    )
    
    
    (337,587
    )Prepaid expenses and other current assets
    
    
    411,135
    
    
    
    (2,521,129
    )
    
    
    (312,747
    )Other assets
    
    
    40,000
    
    
    
    2,294
    
    
    
    (28,854
    )Accounts payable
    
    
    494,064
    
    
    
    258,800
    
    
    
    2,185,211Accrued expenses and deferred rent
    
    
    444,869
    
    
    
    264,002
    
    
    
    5,804,314Deferred revenue
    
    
    
    
    
    
    (61,500
    )
    
    
    465,287Net cash used in operating activities
    
    
    (101,018
    )
    
    
    (4,464,499
    )
    
    
    (66,355,472
    )Cash flows from investing activitiesAcquisitions of property and equipment
    
    
    
    
    
    
    (17,560
    )
    
    
    (898,112
    )Net cash used in investing activities
    
    
    
    
    
    
    (17,560
    )
    
    
    (898,112
    )Cash flows from financing activitiesProceeds from (payments for) initial public offering
of common stock, net
    
    
    
    
    
    
    4,266,581
    
    
    
    1,447,828Proceeds from private placements of common stock, net
    
    
    
    
    
    
    
    
    
    
    57,612,553Proceeds from exercise of stock options
    
    
    32,000
    
    
    
    
    
    
    
    292,116Proceeds from notes payable
    
    
    190,000
    
    
    
    
    
    
    
    11,390,000Proceeds from subordinated related party loan
    
    
    3,000,000
    
    
    
    
    
    
    
    3,000,000Payment of notes payable
    
    
    (3,000,000
    )
    
    
    (397,971
    )
    
    
    (5,256,568
    )Payment of loan costs
    
    
    
    
    
    
    (94,919
    )
    
    
    1,061,272Net cash provided by financing activities
    
    
    222,000
    
    
    
    3,773,691
    
    
    
    67,424,657Net increase (decrease) in cash and cash
equivalents
    
    
    120,982
    
    
    
    (708,368
    )
    
    
    171,073Cash and cash equivalents, beginning of period
    
    
    50,091
    
    
    
    5,492,157
    
    
    
    Cash and cash equivalents, end of period
    
    $
    171,073
    
    
    $
    4,783,789
    
    
    $
    171,073Disclosures of cash flow information:Interest paid
    
    $
    3,429
    
    
    $
    146,879
    
    
    $
    860,543Income taxes paid
    
    $
    
    
    
    $
    
    
    
    $
    
  5




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements
(Unaudited)
 1. Organization and Summary of Significant Accounting Policies
 Organization and Business
  Development Stage
 Accounting and Reporting by Development
Stage Enterprises ,
  Basis of Presentation
  6




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
    Reverse Stock Split
  Initial Public Offering
     7




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
 NASDAQ Delisting
   Use of Estimates
  Fair Value of Financial Instruments
 Disclosures
about Fair Value of Financial Instruments
 Inventory
  8




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
  March 31,
    
    
    December 31,2009
    
    
    2008Finished product
    
    $
    280,833
    
    
    $
    338,280Raw materials
    
    
    56,754
    
    
    
    56,754Total inventory
    
    $
    337,587
    
    
    $
    395,034
 Prepaid Expenses and Other Current Assets
  Deferred Loan Costs
  Stock Options and Warrants
 Share-Based Payment
  Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling Goods or Services
 9




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
 Loss Per Share
 Earnings per Share
 2. Going Concern
    3. Collaborative License and Research/Development Agreements
   10




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##### Table of Contents



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.
     11




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
  4. Accrued Expenses and Other Current Liabilities
  March 31,
    
    
    December 31,2009
    
    
    2008License and royalty fees
    
    $
    3,722,500
    
    
    $
    3,670,000Fees and interest payable to the
Guarantors of the Companys loan
agreement with Bank of America
    
    
    1,237,560
    
    
    
    926,628Interest payable on notes payable
    
    
    121,492
    
    
    
    262,950Other
    
    
    376,406
    
    
    
    110,940$
    5,457,958
    
    
    $
    4,970,518
 5. Notes Payable
  March 31,
    
    
    December 31,2009
    
    
    2008Bank of America note payable. Terms described below
    
    $
    2,000,000
    
    
    $
    5,000,000BlueCrest Capital Finance note payable. Monthly
payments of principal and interest as described
below
    
    
    2,943,432
    
    
    
    2,943,432Short-term note payable. Terms described below
    
    
    1,000,000
    
    
    
    1,000,0005,943,432
    
    
    
    8,943,432Less current portion
    
    
    (5,412,853
    )
    
    
    (7,898,960
    )Notes payable  long term
    
    $
    530,579
    
    
    $
    1,044,472
  2009
    
    $
    5,412,8532010
    
    
    530,579$
    5,943,432
 Bank of America Note Payable
  12




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
      13




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
      14




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
  BlueCrest Capital Finance Note Payable
      15




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
     Short-term Note Payable
   Convertible Debt
  16




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
       6. Related Party Transactions
  17




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
     7. Shareholders Equity
  8. Stock Options and Warrants
 Stock Options
   18




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
   Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Term (in years)
    
    
    Value (1)Options outstanding at January 1, 2009
    
    
    2,279,619
    
    
    $
    5.11Granted
    
    
    350,374
    
    
    $
    0.73Exercised
    
    
    (40,000
    )
    
    $
    0.80Forfeited
    
    
    (203,471
    )
    
    $
    5.58Options outstanding at March 31, 2009
    
    
    2,386,522
    
    
    $
    4.49
    
    
    
    5.3
    
    
    $
    Options exercisable at March 31, 2009
    
    
    1,982,839
    
    
    $
    5.02
    
    
    
    4.4
    
    
    $
    Available for grant at March 31, 2009
    
    
    5,567,430
 
 (1)
    
    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 March 31, 2009. At March 31,
2009, the exercise price of all options was less than the fair market value of the Companys
common stock.  Transition Election Related to
Accounting for the Tax Effects of Share-Based Payment Awards.
 19




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
   Options Outstanding
    
    Options ExercisableWeighted-Average
    
    Weighted-
    
    
    
    
    
    Weighted-Remaining
    
    Average
    
    
    
    
    
    AverageContractual
    
    Exercise
    
    
    
    
    
    ExerciseShares
    
    Term
    
    Price
    
    Shares
    
    Price$0.71  $1.28
    
    
    640,568
    
    
    
    5.6
    
    
    $
    1.02
    
    
    
    314,552
    
    
    $
    1.23$2.83  $4.11
    
    
    51,701
    
    
    
    2.5
    
    
    $
    3.08
    
    
    
    41,701
    
    
    $
    2.83$5.25  $5.67
    
    
    1,531,190
    
    
    
    5.3
    
    
    $
    5.60
    
    
    
    1,495,796
    
    
    $
    5.61$7.69
    
    
    59,529
    
    
    
    6.5
    
    
    $
    7.69
    
    
    
    48,151
    
    
    $
    7.69$8.47
    
    
    103,534
    
    
    
    3.6
    
    
    $
    8.47
    
    
    
    82,639
    
    
    $
    8.472,386,522
    
    
    
    5.3
    
    
    $
    4.49
    
    
    
    1,982,839
    
    
    $
    5.02
   For the three-monthperiods ended March 31,2009
    
    2008Expected dividend yield
    
    
    00.0
    %
    
    
    00.0
    %Expected price volatility
    
    
    75.0
    %
    
    
    100.0
    %Risk free interest rate
    
    
    2.0
    %
    
    
    3.0
    %Expected life of options in years
    
    
    5.5
    
    
    
    6.25
 Stock Warrants
  20




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
 Weighted-AverageWeighted-
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateExercise
    
    
    Term
    
    
    IntrinsicShares
    
    
    Price
    
    
    (in years)
    
    
    ValueOutstanding at January 1, 2009
    
    
    2,951,018
    
    
    $
    6.65Issued
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding at March 31, 2009
    
    
    2,951,018
    
    
    $
    6.65
    
    
    
    12.1
    
    
    $
    Exercisable at March 31, 2009
    
    
    1,003,159
    
    
    $
    6.87
    
    
    
    7.1
    
    
    $
    
    Warrants Outstanding
    
    Warrants ExercisableWeighted-Average
    
    Weighted-
    
    
    
    
    
    Weighted-Remaining
    
    Average
    
    
    
    
    
    AverageContractual
    
    Exercise
    
    
    
    
    
    ExerciseShares
    
    Term
    
    Price
    
    Shares
    
    Price$1.09
    
    
    5,000
    
    
    
    4.7
    
    
    $
    1.09
    
    
    
    
    
    
    $
    $1.90  $2.60
    
    
    393,409
    
    
    
    2.5
    
    
    $
    2.08
    
    
    
    
    
    
    $
    $3.60  $4.93
    
    
    105,000
    
    
    
    4.4
    
    
    $
    4.87
    
    
    
    100,000
    
    
    $
    4.93$5.67  $7.69
    
    
    2,447,609
    
    
    
    14.0
    
    
    $
    7.47
    
    
    
    903,159
    
    
    $
    7.092,951,018
    
    
    
    12.1
    
    
    $
    6.65
    
    
    
    1,003,159
    
    
    $
    6.87
  
    
    a warrant to purchase 1,315,542 shares of common stock at an exercise price of $0.53.
This warrant was issued in connection with the BlueCrest Loan Amendment discussed in Note
5. The warrant vested immediately upon issuance and expires on the tenth anniversary of
the issuance date.
    
    a warrant to purchase 451,043 shares of common stock at an exercise price of $0.53. This
warrant was
issued in connection with the BlueCrest Loan Amendment discussed in Note 5. The warrant
vested immediately upon issuance and expires on the tenth anniversary of the issuance date.
 21




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
 
    
    a warrant to purchase 173,638 shares of common stock at an exercise price of $0.53. This
warrant was issued in connection with the BlueCrest Loan Amendment discussed in Note 5.
The warrant vested immediately upon issuance and expires on the tenth anniversary of the
issuance date.
    
    a warrant to purchase 183,672 shares of common stock at an exercise price of $0.59. This
warrant was issued in connection with the private placement discussed in Note 11. The
warrant vests six months following issuance and expires on the third year anniversary of
the date of issuance.
    
    a warrant to purchase 26,316 shares of common stock at an exercise price of $0.68. This
warrant was issued in connection with the private placement discussed in Note 11. The
warrant vests six months following issuance and expires on the third year anniversary of
the date of issuance.
 9. Legal Proceedings
      22




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
       Other
  10. Contingency
  23




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##### Table of Contents



Bioheart, Inc. and Subsidiaries
(A development stage enterprise)
 Notes to Consolidated Interim Financial Statements  (Continued)
(Unaudited)
  11. Subsequent Events
 Private Placement  Common Stock and Warrants
   MARVEL Study MARVEL-1 MARVEL-2. MARVEL-1
 24




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Unless otherwise indicated, references in this Quarterly Report on Form 10-Q to we, us
and our are to the Company. The following discussion and analysis by our management of our
financial condition and results of operations should be read in conjunction with our unaudited
consolidated interim financial statements and the accompanying related notes included in this
quarterly report and our audited consolidated financial statements and related notes and
Managements Discussion and Analysis of Financial Condition and Results of Operations included in
our Annual Report on Form 10-K for the year ended December 31, 2008, as amended by Amendment No. 1
on Form 10-K/A filed with the Securities and Exchange Commission.
 Cautionary Statement Regarding Forward-Looking Statements
   
    
    our ability to obtain additional financing;
    
    our ability to control and reduce our expenses;
    
    our ability to meet our obligations on our outstanding indebtedness, certain of which
indebtedness imposes restrictions on how we conduct our business and is secured by all of
our assets except our intellectual property;
    
    our ability to timely and successfully initiate and complete our clinical trials;
    
    our estimates regarding future revenues and timing thereof, expenses, capital
requirements and needs for additional financing;
    
    our ongoing and planned discovery programs, preclinical studies and additional clinical
trials; and
    
    the timing of and our ability to obtain and maintain regulatory approvals for our
product candidates;
  25




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##### Table of Contents



Our Ability To Continue as a Going Concern
  Overview
  Biotechnology Product Candidates
  ®
 26




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##### Table of Contents



®
 Intelligent Devices  Distribution Agreements
    27




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##### Table of Contents



Critical Accounting Policies
  Share-Based Compensation
 Share-Based Payment
  Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling Goods or Services
 Revenue Recognition
 Revenue Recognition in Financial Statements Revenue Recognition
  28




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##### Table of Contents



Research and Development Activities
  Results of Operations
  Revenues
  Development Revenues
  Cost of Sales
  29




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##### Table of Contents



Research and Development
   Marketing, General and Administrative
  Interest Income
  Interest Expense
   Liquidity and Capital Resources
  Operating Activities
   30




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##### Table of Contents



Investing Activities
  Financing Activities
     Existing Capital Resources and Future Capital Requirements
  31




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##### Table of Contents



Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 Organization and Summary of Significant Accounting Policies
 Effects of Being a Public Company
    32




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate Risk
   
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
      Inherent Limitations in Control Systems
  33




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Changes In Internal Control Over Financial Reporting
  34




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
        35




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36




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Item 1A. Risk Factors
   37




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Private Placement  Convertible Debt
       Private Placement  Common Stock and Warrants
  38




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Item 5. Other Information
   39




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##### Table of Contents



Item 6. Exhibits
 Exhibit No.
    
    Exhibit Description3.1(6)
    
    Amended and Restated Articles of Incorporation of the registrant, as amended3.2(9)
    
    Articles of Amendment to the Articles of Incorporation of the registrant3.3(8)
    
    Amended and Restated Bylaws4.1(5)
    
    Loan and Security Agreement, dated as of May 31, 2007 by and between BlueCrest
Capital Finance, L.P. and the registrant4.2(12)
    
    Notice of Event of Default, from BlueCrest Venture Finance Master Fund Limited
to the Company, dated January 28, 20094.3(12)
    
    Notice of Acceleration, from BlueCrest Venture Finance Master Fund Limited to
the Company, dated February 2, 20094.4(13)
    
    Amendment to Loan and Security Agreement, between the Company and BlueCrest
Venture Finance Master Fund Limited, dated as of April 2, 20094.5(13)
    
    Grant of Security Interest (Patents), between the Company and BlueCrest
Venture Finance Master Fund Limited, dated as of April 2, 20094.6(13)
    
    Security Agreement (Intellectual Property), between the Company and BlueCrest
Venture Finance Master Fund Limited, dated as of April 2, 20094.7(13)
    
    Subordination Agreement, by Hunton & Williams, LLP in favor of BlueCrest
Venture Finance Master Fund Limited, entered into and effective April 2, 20094.8(13)
    
    Amended and Restated Promissory Note, dated April 2, 2009, by the Company to
BlueCrest Venture Finance Master Fund Limited4.9(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 Limited4.10(14)
    
    Warrant to purchase 451,043 shares of the registrants common stock, dated
April 2, 2009, issued to Rogers Telecommunications Limited4.11(14)
    
    Warrant to purchase 173,638 shares of the registrants common stock, dated
April 2, 2009, issued to Hunton & Williams, LLP10.1**(1)
    
    1999 Officers and Employees Stock Option Plan10.2**(1)
    
    1999 Directors and Consultants Stock Option Plan10.3(1)
    
    Form of Option Agreement under 1999 Officers and Employees Stock Option Plan10.4(3)
    
    Form of Option Agreement under 1999 Directors and Consultants Stock Option Plan10.5**(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 Leonhardt10.10(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 Leonhardt10.13(4)
    
    Warrant to purchase shares of the registrants common stock issued to Howard
J. Leonhardt
 40




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##### Table of Contents



Exhibit No.
    
    Exhibit Descriptionand Brenda Leonhardt10.14(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 Partnership10.16(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 Marino10.20(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 Taylor10.22(7)
    
    Loan Guarantee, Payment and Security Agreement, dated as of October 10, 2007,
by and between the registrant and Howard and Brenda Leonhardt10.23(7)
    
    Warrant to purchase shares of the registrants common stock issued to Howard
and Brenda Leonhardt10.24(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
Leonhardt10.25(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 Plan10.27(11)
    
    Form of Warrant Agreement for October 2008 Private Placement10.28(11)
    
    Form of Registration Rights Agreement for October 2008 Private Placement31.1*
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232.1*
    
    Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
 *
    
    Filed herewith**
    
    Indicates management contract or compensatory plan.(1)
    
    Incorporated by reference to the Companys Form S-1 filed with the Securities and Exchange
Commission on February 13, 2007(2)
    
    Reserved(3)
    
    Incorporated by reference to Amendment No. 2 to the Companys Form S-1 filed with the
Securities and Exchange Commission on July 12, 2007(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 41




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(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 42




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SIGNATURES
  Bioheart, Inc.Date: May 20, 2009
    By:
    /s/ Howard J. LeonhardtHoward J. LeonhardtChairman of the Board, Chief Executive
Officer and Chief Technology Officer
(Principal Executive Officer, Principal
Financial Officer and Principal Accounting
Officer) 43




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INDEX OF EXHIBITS
 Exhibit No.
    
    Exhibit Description31.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002