10-Q

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 September 30, 2013

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

(954) 835-1500
(Registrant’s telephone number, including area code)

______________
 
Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value per share

(Title of Class)

_____________

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 xNo 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 ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No  x.

As of November ____, 2013, there were 347,175,310 outstanding shares of the Registrant’s common stock, par value $0.001 per share.

Transitional Small Business Disclosure Format Yes  o    No  x

BIOHEART, INC.

INDEX TO FORM 10-Q FILING

SEPTEMBER 30, 2013

TABLE OF CONTENTS

PART I		Financial Information	Page Number
	Item 1.	Financial Information	3
		Condensed Balance Sheets – September 30, 2013 (Unaudited) and December 31, 2012	4
		Unaudited Condensed Statements of Operations (Unaudited) – Three and Nine Months Ended September 30, 2013, September 30, 2012 and the period from August 12, 1999 (date of inception) to September 30, 2013	5
		Unaudited Condensed Statements of Stockholders Deficit (Unaudited) –Nine Months Ended September 30, 2013	6
		Unaudited Condensed Statements of Cash Flows (Unaudited) – Nine Months Ended September 30, 2013, September 30, 2012 and the period from August 12, 1999 (date of inception) to September 30, 2013	7
		Notes to Unaudited Condensed Financial Statements	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
	Item 4.	Controls and Procedures	35
PART II		Other Information
	Item 1.	Legal Proceedings	35
	Item 1A.	Risk Factors	35
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
	Item 3.	Defaults Upon Senior Securities	36
	Item 4.	Mine Safety Disclosures	36
	Item 5.	Other Information	36
	Item 6.	Exhibits	37
SIGNATURES			38
EX-31.1		Management Certification
EX-32.1		Sarbanes-Oxley Act

2

PART I – FINANCIAL INFORMATION

Item 1.

Interim Financial Statements and Notes to Interim Financial Statements

General

The accompanying reviewed interim financial unaudited statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that can be expected for the year ending December 31, 2013.

3

BIOHEART, INC.

(a development stage company)

CONDENSED BALANCE SHEETS

		September 30,			December 31,
		2013			2012
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	6,684		$	—
Accounts receivable, net		8,895			1,342
Inventory		—			62,953
Prepaid and other		—			41,533
Total current assets		15,579			105,828
Property and equipment, net		492			1,820
Other assets		54,662			54,662
Total assets	$	70,733		$	162,310
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Bank overdraft	$	—		$	89
Accounts payable		2,407,463			2,556,043
Accrued expenses		4,530,681			4,731,488
Advances, related party		316,198			313,448
Deposits		465,286			465,286
Subordinated debt, related party		1,500,000			1,500,000
Notes payable, related party		2,330,324			2,215,324
Notes payable, net of debt discount		1,890,410			2,364,972
Total current liabilities		13,440,362			14,146,650
Long term debt:
Derivative liability		281,037			611,227
Stockholders'  deficit:
Preferred stock, par value $0.001; 20,000,000 and 5,000,000 shares authorized as of September 30, 2013 and December 31, 2012, respectively, 20,000,000 and -0- issued and outstanding as of September 30, 2013 and December 31, 2012, respectively		20,000			—
Common stock, par value $0.001; 950,000,000 and 195,000,000 shares authorized as of September 30, 2013 and December 31, 2012, respectively, 319,315,563 and 182,062,802 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively		319,316			182,063
Additional paid in capital		103,113,742			100,260,094
Common stock subscription		350,000			—
Deficit accumulated during development stage		(117,453,724	)		(115,037,724	)
Total stockholders' deficit		(13,650,667	)		(14,595,567	)
Total liabilities and stockholders' deficit	$	70,733		$	162,310

See the accompanying notes to these unaudited condensed consolidated financial statements

4

BIOHEART, INC.

(a development stage company)

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

													From August 12,
													1999 (date of
	Three months ended September 30,						Nine months ended September 30,						Inception) to
	2013			2012			2013			2012			September 30, 2013
Revenue	$	—		$	4,072		$	—		$	47,245		$	1,269,640
Cost of sales		—			—			—			417			551,904
Gross profit		—			4,072			—			46,828			717,736
Operating expenses:
Research and development		158,381			106,889			494,762			297,535			65,187,814
Marketing, general and administrative		940,354			677,950			1,750,276			1,571,288			38,588,112
Impairment of investment		—			—			—			—			58,695
Depreciation and amortization		77			3,377			1,327			11,570			899,241
Total operating expenses		1,098,812			788,216			2,246,365			1,880,393			104,733,862
Net loss from operations		(1,098,812	)		(784,144	)		(2,246,365	)		(1,833,565	)		(104,016,126	)
Other income (expenses):
Development revenues		—			—			—			—			117,500
Gain on settlement of debt		—			—			1,004,224			—			1,004,224
Gain on change of fair value of derivative liability		129,298			20,804			39,885			27,265			134,654
Interest income		—			—			—			—			762,277
Other income		31,659			819			56,919			18,234			327,984
Interest expense		(208,914	)		(342,022	)		(1,270,663	)		(1,023,654	)		(15,784,237	)
Total other income (expenses)		(47,956	)		(320,399	)		(169,635	)		(978,155	)		(13,437,598	)
Net loss before income taxes		(1,146,769	)		(1,104,543	)		(2,416,000	)		(2,811,720	)		(117,453,724	)
Income taxes (benefit)		—			—			—			—			—
NET LOSS	$	(1,146,769	)	$	(1,104,543	)	$	(2,416,000	)	$	(2,811,720	)	$	(117,453,724	)
Net loss per common share, basic and diluted	$	(0.005	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted average number of common shares outstanding, basic and diluted		246,229,899			155,968,821			217,392,664			135,812,320

See the accompanying notes to these unaudited condensed consolidated financial statements

5

BIOHEART, INC.

(a development stage company)

CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT

NINE MONTHS ENDED SEPTEMBER 30, 2013

(unaudited)

											Deficit
											Accumulated
							Additional				During
	Preferred stock			Common stock				Paid in		Subscription		Development
	Shares		Amount	Shares		Amount		Capital		Receivable		Stage			Total
Balance, December 31, 2012	—	$	—	182,062,802	$	182,063	$	100,260,094	$	—	$	(115,037,724	)	$	(14,595,567	)
Reclassify  the fair value of excess committed shares liability to equity upon common share authorization increase	—		—	—		—		474,954		—		—			474,954
Issuance of common stock	—		—	29,776,525		29,777		520,223		—		—			550,000
Common stock issued under put agreement	—		—	12,658,545		12,659		187,341		—		—			200,000
Common stock issued in connection with issuance of convertible debt	—		—	2,500,000		2,500		33,750		—		—			36,250
Common stock issued in connection with settlement of debt	—		—	39,833,771		39,834		535,629		—		—			575,463
Common stock issued for services	—		—	2,532,471		2,532		37,987		—		—			40,519
Common stock issued in settlement of related party notes payable	—		—	44,890,348		44,890		492,860		—		—			537,750
Common stock issued in settlement of accounts payable	—		—	5,061,101		5,061		144,179		—		—			149,240
Preferred stock issued in settlement of debt	5,000,000		5,000	—		—		65,000		—		—			70,000
Preferred stock issued in settlement of forbearance agreement	15,000,000		15,000	—		—		259,050							274,050
Proceeds from common stock subscription	—		—	—		—		—		350,000		—			365,000
Stock based compensation	—		—	—		—		102,674		—		—			102,674
Net loss	—		—	—		—		—		—		(2,416,000	)		(2,416,000	)
Balance, September 30, 2013	20,000,000	$	20,000	319,315,563	$	319,316	$	103,113,742	$	350,000	$	(117,453,724	)	$	(13,650,667	)

See the accompanying notes to these unaudited condensed consolidated financial statements

6

BIOHEART, INC.

(a development stage company)

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

							From August 12,
							1999 (date of
	Nine months ended September 30,						Inception) to
	2013			2012			September 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,416,000	)	$	(2,811,720	)	$	(117,457,622	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,328			11,570			899,242
Bad debt expense		—			—			166,266
Discount on convertible debt		295,750			382,693			1,907,318
Loss (gain) on change in fair value of derivative liability		(39,885	)		(27,265	)		(134,654	)
Gain on settlement of debt		(1,004,224	)		—			(1,004,224	)
Non cash payment of interest		168,350			36,251			439,462
Amortization of warrants issued in exchange for licenses and intellectual property		—			—			5,413,156
Amortization of warrants issued in connection with notes payable		—			95,291			5,437,604
Amortization of loan costs		—			927			1,228,717
Related party notes payable issued for services rendered		500,000			—			500,000
Warrants issued in exchange for services		—			—			285,659
Warrants issued in exchange for forbearance agreement		—			119,023			430,213
Equity instruments issued in connection with R&D agreement		—			—			360,032
Equity instruments issued in connection with settlement agreement		—			—			3,381,629
Common stock issued in connection with accounts payable		2,500			—			759,316
Common stock issued in exchange for services		40,519			34,600			1,523,041
Common stock issued in connection with amounts due to guarantors of Bank of America loan		—			—			69,159
Common stock issued in exchange for distribution rights and intellectual property		—			—			99,997
Preferred stock issued in settlement of forbearance agreement penalty		274,050			—			274,050
Warrants issued in connection with accounts payable					—			7,758
Stock based compensation		102,674			56,476			10,053,676
(Increase) decrease in:
Receivables		(7,553	)		2,379			(10,160	)
Inventory		62,953			417			(1	)
Prepaid and other current assets		41,533			(21,169	)		(9,969	)
Other assets		—			—			(28,854	)
Increase (decrease) in:
Accounts payable		(76,240	)		272,566			3,183,437
Accrued expenses		485,518			942,562			7,227,660
Deferred revenue		—			—			465,287
Net cash used in operating activities		(1,568,727	)		(905,399	)		(74,532,805	)

7

BIOHEART, INC.

(a development stage company)

CONDENSED STATEMENTS OF CASH FLOWS

(unaudited)

							From August 12,
							1999 (date of
	Nine months ended September 30,						Inception) to
	2013			2012			September 30, 2013
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment		—			(933	)		(899,733	)
Net cash used by investing activities		—			(933	)		(899,733	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft		(89	)		—			—
Proceeds from issuance of common stock, net		1,100,000			459,800			64,981,775
Proceeds from (payments for) initial public offering of common stock, net		—			—			1,447,829
Proceeds from subordinated related party note		—			—			3,000,000
Payment of note payable		—			—			(3,000,000	)
Proceeds from notes payable, related party		—			—			505,000
Proceeds from related party advances		180,500			351,492			1,047,992
Proceeds from exercise of stock options		—			—			293,749
Proceeds from notes payable		295,000			63,000			11,915,750
Repayments of notes payable		—			—			(3,533,605	)
Payment of loan costs		—			—			(1,219,268	)
Net cash provided in financing activities		1,575,411			874,292			75,439,222
Net increase (decrease) in cash and cash equivalents		6,684			(32,040	)		6,684
Cash and cash equivalents, beginning of period		—			36,828			—
Cash and cash equivalents, end of period	$	6,684		$	4,788		$	6,684
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	$	513,986		$	403,618		$	2,698,068
Income taxes paid	$	—		$	—		$	—
Non cash financing activities:
Common stock issued in settlement of notes payable	$	345,000		$	570,181		$	4,597,959
Common stock issued in settlement of accounts payable	$	149,239		$	14,000		$	163,239
Preferred stock issued in settlement of notes payable	$	70,000		$	—		$	84,000

See the accompanying notes to these unaudited condensed consolidated financial statements

8

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

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

General

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

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results from operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ended December 31, 2013. The unaudited condensed financial statements should be read in conjunction with the December 31, 2012 financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K.

Basis and business presentation

Bioheart, Inc. (the “Company”) was incorporated under the laws of the State of Florida in August, 1999. The Company is in the development stage, as defined by Accounting Standards Codification subtopic 915-10, Development Stage Entities (“ASC 915-10”) and is the cardiovascular sector of the cell technology industry delivering cell therapies and biologics that help address congestive heart failure, lower limb ischemia, chronic heart ischemia, acute myocardial infarctions and other issues. To date, the Company has not generated significant sales revenues, has incurred expenses, and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from inception through September 30, 2013, the Company has accumulated a deficit through its development stage of $117,453,724.

Comprehensive Income

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

Net Loss per Common Share, basic and diluted

The Company has adopted Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation. Fully diluted shares outstanding were 323,296,916 and 182,807,340 for the three months ended September 30, 2013 and 2012, respectively and 336,682,241 and 174,169,691 for the nine months ended September 30, 2013 and 2012, respectively.

9

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

Stock Based Compensation

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

As of September 30, 2013, there were outstanding stock options to purchase 25,206,532 shares of common stock, 7,544,618 shares of which were vested.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable. The financial stability of these institutions is periodically reviewed by senior management.

As of September 30, 2013 and December 31, 2012, three (3) and one (1) customer represented 98% and 97% of the Company’s accounts receivable, respectively.

For the three and nine month period ended September 30, 2012, the Company’s revenues earned from the sale of products and services were $4,072 and $47,245 respectively from three (3) customers.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $158,381 and $106,889 for the three months ended September 30, 2013 and 2012, respectively; $494,762 and $297,535 for the nine months ended September 30, 2013 and 2012, respectively and $65,187,814 from August 12, 1999 (date of inception) to September 30, 2013.

Fair Value

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

10

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

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

Reliance on Key Personnel and Consultants

The Company has 4 full-time employees and 1 part-time employee. The Company is heavily dependent on the continued active participation of these current executive officers, employees and key consultants. The loss of any of the senior management or key consultants could significantly and negatively impact the business until adequate replacements can be identified and put in place.

Derivative Instrument Liability

The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges.

Reclassification

Certain reclassifications have been made to prior periods’ data to conform with the current year’s presentation. These reclassifications had no effect on reported income or losses. Specifically, the Company reclassified advances and accrued expenses due related parties to notes payable related party within current liabilities of the balance sheet.

Recent Accounting Pronouncements

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

NOTE 2 – GOING CONCERN MATTERS

The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed financial statements, during nine months ended September 30, 2013, the Company incurred net losses attributable to common shareholders of $2,416,000 and used $1,568,727 in cash for operating activities. As of September 30, 2013, the Company had a working capital deficit (current liabilities in excess of current assets) of approximately $13.4 million. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

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

11

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

NOTE 3 – INVENTORY

Inventory consists of raw materials. Costs of raw materials are determined using the FIFO method. Inventory is stated at the lower of costs or market (estimated net realizable value). During the nine months ended September 30, 2013, the Company wrote-off the full balance of inventory to expense due to obsolescence.

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment as of September 30, 2013 and December 31, 2012 is summarized as follows:

	September 30, 2013			December 31, 2012
Laboratory and medical equipment	$	352,358		$	352,358
Furniture, fixtures and equipment		130,916			130,916
Computer equipment		54,414			54,414
Leasehold improvements		362,046			362,046
		899,734			899,734
Less accumulated depreciation and amortization		(899,242	)		(897,914	)
	$	492		$	1,820

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

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

NOTE 5 – ACCRUED EXPENSES

Accrued expenses consisted of the following as of September 30, 2013 and December 31, 2012:

	September 30, 2013		December 31, 2012
License and royalty fees	$	2,046,789	$	1,825,675
Amounts payable to the Guarantors of the Company’s loan agreement with Bank of America and Seaside Bank, including fees and interest		1,354,043		1,284,705
Interest payable on notes payable		833,105		1,100,174
Vendor accruals and other		174,268		120,133
Employee commissions, compensation, etc.		122,476		400,801
	$	4,530,681	$	4,731,488

During the nine months ended September 30, 2013, 1,000,000 shares of common stock were issued to one debt holder in exchange for $500,000 in principal and $598,125 of accrued interest relating to a previously issued note.

12

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

NOTE 6 – STANDBY EQUITY DISTRIBUTION AGREEMENT

On November 2, 2011, the Company and Greystone Capital Partners (“Greystone”) entered into a Standby Equity Distribution Agreement (the “Agreement”).  Pursuant to the Agreement, Greystone has agreed to provide the Company with up to $1,000,000 of funding for the 24-month period following the date a registration statement of the Company’s common stock is declared effective by the SEC (the “Equity Line”).  

During this 24-month period, commencing on the date on which the SEC first declared the registration statement effective, the Company may request a draw down under the Equity Line by which the Company would sell shares of its common stock to Greystone, which is obligated to purchase the shares under the Agreement.  

For each share of the Company common stock purchased under the Agreement, Greystone will pay eighty percent (80%) of the average of the lowest daily volume weighted average price for five consecutive trading days immediately preceding Advance Notice (the "Valuation Period") commencing the date an Advance Notice (the "Advance Notice") is delivered to Greystone in a manner provided by the Agreement. Subject to certain limitations and floor price reductions, the Company may, at its sole discretion, issue a Put Notice to Greystone and Greystone will then be irrevocably bound to acquire such shares. The registration statement of the Company's common stock pursuant to the Agreement was declared effective on February 10, 2012 and a Post-Effective Amendment was declared effective on May 7, 2013. On December 1, 2012, the parties to the Equity Line agreed that the Purchase Price be adjusted to seventy-five percent (75%) of the lowest daily volume weighted average price of the Common Stock as quoted by Bloomberg, LP, during the five (5) consecutive Trading Days (as such term is defined in the Equity Line) immediately subsequent to the date of the relevant Advance Notice.

During the nine months ended September 30, 2013, the Company issued an aggregate of 12,658,545 shares of its common stock in exchange for $200,000 draw down on the equity line.

NOTE 7 – NOTES PAYABLE

Notes payable were comprised of the following as of September 30, 2013 and December 31, 2012:

	September 30, 2013			December 31, 2012
Seaside Bank note payable.	$	980,000		$	980,000
August 2008 Unsecured Promissory Note		500,000			1,000,000
Hunton & Williams notes payable		384,972			384,972
Asher notes payable		90,000			—
Total notes payable		1,954,972			2,364,972
Less unamortized debt discount		(64,562	)		—
Total notes payable net of unamortized debt discount	$	1,890,410		$	2,364,972

Seaside Bank

On October 25, 2010, the Company entered into a Loan Agreement with Seaside National Bank and Trust for a $980,000 loan at 4.25% per annum interest that was used to refinance the Company’s loan with Bank of America. The obligation is guaranteed by certain shareholders of the Company.

13

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

August 2008 Unsecured Promissory Note

On August 20, 2008, the Company borrowed $1.0 million from a third party pursuant to the terms of an unsecured Promissory Note and Agreement. Outstanding principal and interest on the loan, which accrues at the rate of 13.5% per annum, is payable in one balloon payment upon the Company’s repayment of the BlueCrest Loan, which is scheduled to mature in May 2010, however the Company is not obligated to make payments until BlueCrest Loan is paid off. In the event the Company completes a private placement of its common stock and/or securities exercisable for or convertible into its common stock which generates at least $19.0 million of gross proceeds, the Company may prepay, without penalty, all outstanding principal and interest due under the loan using the same type of securities issued in the subject private placement. Because repayment of the loan could occur within 12 months from the date of the balance sheet, the Company has classified this loan as short term.

Subject to certain conditions, at the end of each calendar quarter during the time the loan is outstanding, the Company may, but is not required to, pay all or any portion of the interest accrued but unpaid as of such date with shares of its common stock. In April 2009, as consideration for the authorization to amend certain documents related to the Note, the Company issued to the Note holder a warrant to purchase 451,053 shares of common stock at an exercise price of $0.5321 per share.

The warrant, which became exercisable immediately upon issuance, has a ten year term. This warrant had a fair value of $195,694, which was accounted for as additional paid in capital and reflected as a component of debt discount and has been fully amortized as interest expense ratably over the term of the loan.

During the nine months ended September 30, 2013, 1,000,000 shares of common stock were issued to the debt holder, in exchange for $500,000 in principal and $598,125 of accrued interest relating to a previously issued note resulting in a gain of $1,078,625. A gain of $1,078,625 was included in the net gain on settlement of debt and trade payables on the statement of operations. As of September 30, 2013 the principle of this note was $500,000.

Hunton & Williams Notes

At September 30, 2013 and December 31, 2012, the Company has two outstanding notes payable with interest at 8% per annum due at maturity. The two notes, $61,150 and $323,822 are payable in one balloon payment upon the date the Noteholder provides written demand, however the Company is not obligated to make payments until the Northstar (or successor) Loan is paid off.

Asher Notes (During this year)

During the nine months ended September 30, 2013, the Company entered into a Securities Purchase Agreements with Asher Enterprises, Inc. (“Asher”), for the sale of 8% convertible notes in aggregate principal amount of $170,000 (the “Asher Notes”).

The Asher Notes bear interest at the rate of 8% per annum. As of the quarter ended September 30, 2013 all interest and principal must be repaid nine months from the issuance date, the last note due June 11, 2014. The Notes are convertible into common stock, at Asher’s option, at a 42% to 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The Company has identified the embedded derivatives related to the Asher Notes. These embedded derivatives included certain conversion features and reset provision.

14

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date which at September 30, 2013 was $118,934. At the inception of the Asher Notes, the Company determined the aggregate fair value of $207,176 of the embedded derivatives.

The fair value of the embedded derivatives was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 154.80% to 163.73%, (3) weighted average risk-free interest rate of 0.09% to 0.17%, (4) expected lives of 0.67 to .77 years, and (5) estimated fair value of the Company’s common stock from $0.011 to $0.0373 per share. The initial fair value of the embedded debt derivative of $207,176 was allocated as a debt discount up to the proceeds of the note ($170,000) with the remainder ($37,176) charged to current period operations as interest expense. For the three and nine months ended September 30, 2013, the Company amortized $53,115 and $105,438 of debt discount to current period operations as interest expense, respectively. As of September 30, 2013 the gross balance of the Asher Notes was $90,000.

NOTE 8 — RELATED PARTY TRANSACTIONS

Lease Guarantee

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

Advances

As of September 30, 2013 and December 31, 2012, the Company officers and directors have provided advances in the aggregate of $316,198 and $313,448 respectively, for working capital purposes. The advances are unsecured, due on demand and non-interest bearing.

On August 1, 2013, advances in aggregate of $22,750 were converted into a demand promissory note with 5% interest per annum.  On September 30, 2013, the Company issued 1,995,614 shares of common stock in settlement of the $22,750 promissory note.

On September 30, 2013, the Company issued 8,771,929 shares of its common stock as payment of $100,000 towards cash advances.

Notes payable-related party

Northstar Biotechnology Group, LLC

On February 29, 2012, a note issued to BlueCrest Master Fund Limited was assigned to Northstar Biotechnology Group, LLC (“Northstar”), owned partly by certain directors and existing shareholders of the Company, including Dr. William P. Murphy Jr., Dr. Samuel Ahn and Charles Hart. At the date of the assignment, the principal amount of the BlueCrest note was $544,267.

On March 30, 2012, the Company and Northstar agreed to extend until May 1, 2012 the initial payment date for any and all required monthly under the Note, such that the first of the four monthly payments required under the Note will be due and payable on May, 2012 and all subsequent payments will be due on a monthly basis thereafter commencing on June 1, 2012, and to waive any and all defaults and/or events of default under the Note with respect to such payments. As of September 30, 2012, the Company was in default, however, subsequent to September 30, 2012, the Company renegotiated the terms of the Note, Northstar has agreed to suspend the requirement of principal payments by the Company and allow payment of interest-only in common stock.

15

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

On September 21, 2012, the Company issued 5,000,000 common stock purchase warrants to Northstar that was treated as Additional interest expense upon issuance.

On October 1, 2012, the Company and Northstar entered into a limited waiver and forbearance agreement whereby the Company agreed to issue 5,000,000 shares of Series A Convertible Preferred Stock and 10,000,000 of common stock in exchange for $210,000 as payment towards outstanding debt, default interest, penalties, professional fees outstanding and due Northstar. In addition, the Company executed a security agreement granting Northstar a lien on all patents, patent applications, trademarks, service marks, copyrights and intellectual property rights of any nature, as well as the results of all clinical trials, know-how for preparing Myoblasts, old and new clinical data, existing approved trials, all right and title to Myoblasts, clinical trial protocols and other property rights.

In addition, the Company granted Northstar a perpetual license on products as described for resale, relicensing and commercialization outside the United States. In connection with the granted license, Northstar shall pay the Company a royalty of up to 8% on revenues generated.

Effective October 1, 2012, the effective interest rate will be 12.85% per annum.  The parties agreed, as of February 28, 2013, to reduce the interest rate to 7% per annum (see Note 14 below).

In connection with the consideration paid, Northstar waived, from the effective date through the earlier of termination or expiration of the agreement, satisfaction of the obligations as described in the forbearance agreement. In 2012, 5,000,000 shares of Series A Convertible Preferred Stock were approved to be issued. In addition, the Company is obligated to issue additional preferred stock equal in lieu of payment of cash of accrued and unpaid interest on each six month anniversary of the effective date (October 1, 2012). In lieu of the initial two payments in preferred stock, the parties have determined to modify the voting rights of the Series A Convertible Preferred Stock from 20 votes per share on matters to be voted on by the common stock holders to 25 votes per share on matters to be voted on by the common stock holders and all prior and subsequent payments of interest will be in common stock; payments of common stock for April 1, 2013 and October 1, 2013 shall be made the fourth quarter of 2013 based on the closing price of the common stock on April 1, 2013 and October 1, 2013 respectively (see Note 14 below).

As described above, during the nine months ended September 30, 2013, the Company issued the 5,000,000 shares of Series A Convertible Preferred Stock and the 10,000,000 of common stock described above in exchange for the $210,000 as payment towards outstanding principle of the debt. In addition, the Company issued 15,000,000 shares of Series A Convertible Preferred Stock as a penalty in settlement of the terms of the forbearance agreement. The fair value of the Preferred Stock of $274,050 was included in interest expense for the nine months ended September 30, 2013. On September 30, 2013, the Company issued 8,771,929 shares of its common stock as payment of $100,000 towards cash advances. As of September 30, 2013, the principle of this note was $362,000.

Officer and Director Notes

At September 30, 2013 and December 31, 2012, the Company has outstanding notes payable to officers and directors with interest at 8% per annum due at maturity. The three subordinated notes, $125,000, $100,000 and $140,000 were previously due on October 22, 2012, November 30, 2012 and June 4, 2011 respectively, and are unsecured. The Company is not obligated to make payment until Northstar loan is paid off.

On October 9, 2012, the Company issued an aggregate of $1,278,324 promissory notes due October 9, 2013 to officers and directors in settlement of outstanding advances and accrued compensation. The promissory notes bear interest of 5% per annum and due at maturity.

On August 1, 2013, the Company issued an aggregate of $500,000 promissory notes due on demand to officers and employee in settlement of accrued compensation. The promissory notes bear interest of 5% per annum and due at various maturity dates.

16

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

On September 30, 2013, the Company issued an aggregate of 15,350,876 shares of its common stock in settlement of $175,000 of related party notes payable.

Subordinated debt, related party

As of September 30, 2013 and December 31, 2012, the Company officers and directors have provided notes in aggregate of $1,500,000. The notes are at 8% per annum and are due upon payoff of the Northstar note payable described above.

NOTE 9 — DERIVATIVE LIABILITIES

Excessive committed shares

On December 31, 2012, in connection with the previously issued stock options and warrants, the Company had the possibility of exceeding their common shares authorized when considering the number of possible shares that may be issuable to satisfy settlement provisions of these agreements after consideration of all existing instruments that could be settled in shares. The accounting treatment of derivative financial instruments required that the Company reclassify the derivative from equity to a liability at their fair values as of the date possible issuable shares exceeded the authorized level and at fair value as of each subsequent balance sheet date. Any change in fair value was recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives was higher at the subsequent balance sheet date, the Company recorded a non-operating, non-cash charge. If the fair value of the derivatives was lower at the subsequent balance sheet date, the Company recorded non-operating, non-cash income.

On February 4, 2013, in conjunction with the increase in authorized number of shares to 970,000,000, the Company determined it had adequate authorized shares to settle all of these agreements. As such, the Company adjusted the derivative liability to fair value on February 4, 2013 and reclassified the derivative liability to equity. The fair value of the derivative liability of $474,954 (a non-cash item) as of February 4, 2013 was determined using the Binomial Option Pricing model with the following assumptions: dividend yield: 0%; volatility: 156.52%; risk free rate: 0.38%; and expected life: 3.5 years. The Company recorded a loss on change in derivative liabilities of $84,907 during the nine months ended September 30, 2013.

Reset warrants

On October 1, 2012, in connection with the forbearance agreement with Northstar as discussed in Note 8 above, the Company issued an aggregate of 15,000,000 common stock purchase warrants to purchase the Company’s common stock with an exercise price of $0.014 per share for ten years with anti-dilutive (reset) provisions.

The Company has identified embedded derivatives related to the issued warrants. These embedded derivatives included certain and anti-dilutive (reset) provisions. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to fair value as of each subsequent reporting date.

At September 30, 2013, the fair value of the reset provision of $162,103 was determined using the Binomial Option Pricing model with the following assumptions: dividend yield: 0%; volatility: 162.57%; risk free rate: 2.64%; and expected life: 9.00 years. The Company recorded a gain on change in derivative liabilities of $59,076 during the nine months ended September 30, 2013.

17

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

Convertible notes

During the nine months ended September 30, 2013, the Company issued convertible notes (see Note 7 above).

These notes are convertible into common stock, at holders’ option, at a discount to the market price of the Company’s common stock. The Company has identified the embedded derivatives related to these notes relating to certain anti-dilutive (reset) provisions. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Note and to fair value as of each subsequent reporting date.

The fair value of the embedded derivatives at September 30, 2013, in the amount of $118,934, was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 162.57%, (3) weighted average risk-free interest rate of 0.04%, (4) expected lives of 0.39 to 0.70 years, and (5) estimated fair value of the Company’s common stock of $0.011 per share. The Company recorded a gain on change in derivative liabilities of $65,716 during the nine months ended September 30, 2013.

Based upon ASC 840-15-25 (EITF Issue 00-19, paragraph 11) the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes. Pursuant to the sequencing approach, the Company evaluates its contracts based upon earliest issuance date.

At September 30, 2013, the aggregate derivative liabilities was valued at $281,037, the Company believes an event under the contract that would create an obligation to settle in cash or other current assets is remote and has classified the obligation as a long term liability.

NOTE 10 – STOCKHOLDERS’ EQUITY

Preferred stock

On August 17, 2012, the board of directors designated 5,000,000 shares of preferred stock as Series A Convertible Preferred Stock which was increased to 20,000,000 shares of preferred stock as Series A Convertible Preferred Stock. Each share of preferred stock is convertible into equal number of common shares at the option of the holder; entitled to 20 votes on all matters presented to be voted by the holders of common stock; upon event of liquidation, entitled to amount equal to stated value plus any accrued and unpaid dividends or other fees before distribution to junior securities. In lieu of the initial two payments due to Northstar, the parties have determined to modify the voting rights of the Series A Convertible Preferred Stock from 20 votes per share on matters to be voted on by the common stock holders to 25 votes per share on matters to be voted on by the common stock holders (see Note 8 above).

During the nine months ended September 30, 2013, the Company issued an aggregate of 20,000,000 shares of Series A Convertible Preferred Stock for principle payment and settlement of forbearance (see note 8 above).

Common stock

On February 4, 2013, the Company amended its Articles of Incorporation to increase the number of authorized shares to 970,000,000, consisting of 20,000,000 $0.001 par value preferred stock and 950,000,000 $0.001 common stock.

During the nine months ended September 30, 2013, the Company issued an aggregate of 5,061,101 shares of its common stock for settlement of $74,839 of accounts payable. In connection with the settlement, the Company recorded a loss on settlement of debt of $74,401.

18

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

During the nine months ended September 30, 2013, the Company issued 2,500,000 shares of its common stock in connection with the issuance of a note payable.

During the nine months ended September 30, 2013, the Company issued 39,833,771 shares of its common stock in connection with the settlement and/or conversion of various notes payable.

During the nine months ended September 30, 2013, the Company issued 44,890,348 shares of its common stock in connection with the settlement of related party notes payable and advances.

During the nine months ended September 30, 2013, the Company issued 2,532,471 shares of its common stock services rendered valued at $40,519.

NOTE 11 — STOCK OPTIONS AND WARRANTS

Stock Options

In December 1999, the Board of Directors and shareholders adopted the 1999 Officers and Employees Stock Option Plan, or the Employee Plan, and the 1999 Directors and Consultants Stock Option Plan, or the Director Plan. The Employee Plan and the Director Plan are collectively referred to herein as the Plans. The Plans are administered by the Board of Directors and the Compensation Committee. The objectives of the Plans include attracting and retaining key personnel by encouraging stock ownership in the Company by such persons. In February 2010, the Directors & Consultants Plan was amended to extend the termination date of the Plan to December 1, 2011.

In April 1, 2013, the Board of Directors approved, subject to shareholder approval, the establishment of the Bioheart 2013 Omnibus Equity Compensation Plan, or the “2013 Omnibus Plan”. The 2013 Omnibus Plan reserves up to fifty million shares of common stock for issuance.

Effective April 1, 2013, the Board of Directors resolved that stock options granted for the past three years as of February 25, 2013 be repriced for employees, management and board members, at the exercise price of the average of the last 5 trading days’ closing price as of February 25, 2013. Subsequently, this action was rescinded and the repricing date was set for August 5, 2013.

A summary of options at September 30, 2013 and activity during the year then ended is presented below:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)
Options outstanding at January 1, 2012		4,636,318		$	1.20	8.1
Granted		3,300,000		$	0.04
Exercised				$
Forfeited/Expired		(82,942	)	$	5.57
Options outstanding at December 31, 2012		7,853,376		$	0.67	8.2
Granted		17,400,000		$	0.016	9.9
Exercised
Forfeited/Expired		(46,844	)	$	5.67
Options outstanding at September 30, 2013		25,206,532		$	0.20	9.1
Options exercisable at September 30, 2013		7,544,618		$	0.62	7.9
Available for grant at September 30, 2013		32,600,000

19

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

The following information applies to options outstanding and exercisable at September 30, 2013:

	Options Outstanding							Options Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares			Weighted- Average Exercise Price
$0.00 – $0.70		24,194,360		9.4	$	0.04			6,436,627		$	0.08
$0.71 – $1.28		324,471		4.6	$	0.77			429,290		$	0.76
$5.25 – $5.67		641,951		2.2	$	5.56			632,951		$	5.57
$7.69		39,572		2.9	$	7.69			39,572		$	7.69
$8.47		6,178		3.9	$	8.47			6,178		$	8.47
		25,206,532		9.1	$	0.20			7,544,618		$	0.62

On August 5, 2013, the Company re-priced options previously issued from 2011 through 2012 for current employees and officers in aggregate of 4,890,000 options with previous exercise prices from $0.03 to $0.21 per share to $0.01694 per share, all other terms remaining unchanged.  The gross change in fair value, determined using the Black Scholes option pricing model, of $1,630 was charged to current period operations.

On August 1, 2013, the Company issued an aggregate 15,000,000 options to purchase the Company’s common stock at $0.01576 per share, respectively; to employees, exercisable over 4 years.   The fair value of $245,749, determined using the Black Scholes option pricing model with the following assumptions: Dividend yield: 0%; Volatility: 153.27% and Risk free rate: 2.74%, of which $10,240 was charged to current period operations.

On September 1, 2013, the Company issued an aggregate 2,400,000 options to purchase the Company’s common stock at $0.01654 per share, respectively; to officers and employees, exercisable immediately. The fair value of $37,823, determined using the Black Scholes option pricing model with the following assumptions: Dividend yield: 0%; Volatility: 150.98% and Risk free rate: 2.78%, was charged to current period operations.

The fair value of all options vesting during the three and nine months ended September 30, 2013 of $64,294 and $102,674, respectively, and $20,865 and $56,476 for the three and nine months ended September 30, 2012, respectively was charged to current period operations.

20

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

Warrants

A summary of common stock purchase warrants at September 30, 2013 and activity during the year then ended is presented below:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)
Outstanding at January 1, 2012		32,610,075	$	0.86		3.8
Issued		42,396,432	$	0.018		5.78
Exercised		—	$	0.00
Forfeited		(933,185)	$	0.69
Outstanding at December 31, 2012		74,073,322	$	0.28		4.5
Issued		40,954,886	$	0.016		9.2
Exercised		—	$
Expired		(2,332,877)	$	0.73
Outstanding at September 30, 2013		112,695,331	$	0.23		6.0
Exercisable at September 30, 2013		84,534,199	$	0.16		4.7

In conjunction with the authorized issuance of common stock, the Company granted approximately 35 million common stock purchase warrants during the nine months ended September 30, 2013.

The following information applies to common stock purchase warrants outstanding and exercisable at September 30, 2013:

	Warrants Outstanding						Warrants Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$0.01 – $0.50		106,441,198		6.0	$	0.03		79,824,516		$	0.04
$0.52 – $0.68		2,699,675		5.6	$	0.58		2,699,675		$	0.58
$0.70 – $1.62		853,176		6.2	$	0.71		853,176		$	0.71
$5.67 – $7.69		2,701,282		9.1	$	7.55		1,156,832		$	7.35
		112,695,331		6.0	$	0.23		84,534,199		$	0.15

NOTE 12 — COMMITMENTS AND CONTINGENCIES

Royalty Payments

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

21

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

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

William Beaumont Hospital

In June 2000, the Company entered into an exclusive license agreement to use certain patents for the life of the patents in future projects. The patents expire in 2015. In addition to a payment of $55,000, the Company made to acquire the license, the Company is required to pay an annual license fee of $10,000 and royalties ranging from 2% to 4% of net sales of products that are covered by the patents. In order to maintain the exclusive license rights, the agreement also calls for a minimum annual royalty threshold. The minimum royalty threshold was $200,000 for 2011 and $200,000 for 2010. This minimum royalty threshold will remain $200,000 for 2012 and thereafter. As of September 30, 2013, the Company has not made any payments other than the initial payment to acquire the license. At September 30, 2013 and December 31, 2012, the Company’s liability under this agreement was $2,046,789 and $1,825,675, respectively, which is reflected as a component of accrued expenses on the balance sheets (see Note 5). During the nine months ended September 30, 2013 and 2012, the Company incurred expenses of $221,113, $157,500 respectively, and $2,046,789 from August 12, 1999 (date of inception) to September 30, 2013. The Company has accrued interest for the past due commitment at 2% over the prime rate per the terms of the agreement. The Company has included $379,289 in accrued expenses as of September 30, 2013.

Approximate annual future minimum obligations under this agreement as of September 30, 2013 are as follows:

Year Ending December 31,
2013	$	52,500
2014		210,000
2015		210,000
Total	$	472,500

Contingency for Registration of the Company’s common stock

The Company believes that it may have issued options to purchase common stock to certain of its employees, directors and consultants in California in violation of the registration or qualification provisions of applicable California securities laws. As a result, the Company intends to make a rescission offer to these persons. The Company will make this offer to all persons who have a continuing right to rescission, which it believes to include two persons. In the rescission offer, in accordance with California law, the Company will offer to repurchase all unexercised options issued to these persons at 77% of the option exercise price multiplied by the number of option shares, plus interest at the rate of 7% from the date the options were granted. Based upon the number of options that were subject to rescission as of December 31, 2009, assuming that all such options are tendered in the rescission offer, the Company estimated that its total rescission liability would be up to approximately $371,000. However, as the Company believes there is only a remote likelihood the rescission offer will be accepted by any of these persons in an amount that would result in a material expenditure by the Company, no liability was recorded as of September 30, 2013 or December 31, 2012.

22

BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

Litigation

The Company is subject to other legal proceedings that arise in the ordinary course of business. In the opinion of management, as of September 30, 2013, the amount of ultimate liability with respect to such matters, if any, in excess of applicable insurance coverage, is not likely to have a material impact on the Company’s business, financial position, results of operations or liquidity. However, as the outcome of litigation and other claims is difficult to predict significant changes in the estimated exposures could exist.

NOTE 13 — FAIR VALUE MEASUREMENT

The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

All items required to be recorded or measured on a recurring basis are based upon level 3 inputs.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements.

The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.

As of September 30, 2013 or December 31, 2012, the Company did not have any items that would be classified as level 1 or 2 disclosures.

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BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed in notes 7 and 9. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed in Notes 7 and 9 are that of volatility and market price of the underlying common stock of the Company.

As of September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges.

The derivative liability as of September 30, 2013, in the amount of $281,037 has a level 3 classification.

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of September 30, 2013:

	Derivative Liability
Balance, December 31, 2012	$	611,227
Total (gains) losses
Initial fair value of debt derivative at note issuance		492,412
Mark-to-market at September 30, 2013:		(39,885)
Transfers out of Level 3 upon increase in authorized shares		(474,954)
Transfers out of Level 3 upon conversion of notes payable		(307,763)
Balance, September 30, 2013	$	281,037
Net Gain for the period included in earnings relating to the liabilities held at September 30, 2013	$	39,885

NOTE 14 — SUBSEQUENT EVENTS

Subsequent financing

On October 4, 2013, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $32,500 (the "Note").

The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on July 8, 2014. The Note is convertible into common stock, at Asher’s option, at a 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 120% if prepaid during the period commencing on the closing date through 30 days thereafter, (ii) 125% if prepaid 31 days following the closing through 60 days following the closing, (iii) 130% if prepaid 61 days following the closing through 90 days following the closing and (iv) 135% if prepaid 91 days following the closing through 120 days following the closing. (v) 140% if prepaid 121 days following the closing through 150 days following the closing, (vi) 150% if prepaid 121 days following the closing through 180 days following the closing. After the expiration of 180 days following the date of the Note, the Company has no right of prepayment.

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BIOHEART, INC.
(a development stage company)
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2013

Northstar Letter Agreement

The Company and Northstar entered into a limited waiver and forbearance agreement whereby the Company is obligated to issue additional preferred stock in lieu of payment of cash equal to the accrued and unpaid interest on each six month anniversary of the effective date (October 1, 2012). As of April 1, 2013 and October 1, 2013 the Company owes 5,000,000 shares of Series A Convertible Preferred Stock for accrued and unpaid interest for both of the six month anniversaries of the forbearance agreements for a total of 10,000,000 shares of Series A Convertible Preferred Stock to be issued.

On November 11, 2013, the Company and Northstar (collectively, the “Parties”) agreed to modify the terms of the October 1, 2012 limited waiver and forbearance agreement whereby the Parties agreed to modify the interest rate on the agreement from 12.85% was modified to 7% effective February 28, 2013.   In addition, the Parties agreed the Company would modify the Series A Preferred Stock to read that each share of Series A Preferred Stock shall have 25 votes on all matters presented to be voted by the holders of common stock which will satisfy the preferred stock  payment due of all accrued and unpaid interest on the outstanding note with Northstar due on April 1, 2013 and October 1, 2013.  Lastly, all payments of accrued and unpaid interest shall be in shares of common stock of the Company and that payments of common stock for April 1, 2013 and October 1, 2013 will be made in the fourth quarter of 2013.

Issuance of Common Stock

In October 2013, the Company issued an aggregate of 27,859,747 shares of common stock in connection with stock subscriptions.

In October 2013, the Company issued an aggregate of 5,493,056 shares of common stock in settlement of $25,312 of notes payable and accrued interest.

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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, unless the context requires otherwise. The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed interim financial statements and the accompanying related notes included in this quarterly report and our audited 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, 2012 filed with the Securities and Exchange Commission.

Cautionary Statement Regarding Forward-Looking Statements

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

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

Additional information concerning these and other risks and uncertainties is contained in our filings with the Securities and Exchange Commission, including the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012.

In this Quarterly Report on Form 10-Q, “Company,” “our company,” “us,” and “our” refer to Bioheart, Inc., unless the context requires otherwise.

Our Ability to Continue as a Going Concern

Our independent registered public accounting firm has issued its report dated March 28, 2013, in connection with the audit of our financial statements as of December 31, 2012, that included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern.

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Our unaudited condensed financial statements as of September 30, 2013 have been prepared under the assumption that we will continue as a going concern. Specifically, Note 2 of our unaudited financial statement for the nine months ended September 30, 2013 addresses the issue of our ability to continue as a going concern. If we are not able to continue as a going concern, it is likely that holders of our common stock will lose all of their investment. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Overview

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

We were incorporated in the State of Florida in August 1999. Our principal executive offices are located at 13794 NW 4th Street, Suite 212, Sunrise, Florida 33325 and our telephone number is (954) 835-1500. Information about us is available on our corporate web site at www.bioheartinc.com. Information contained on the web site does not constitute part of, and is not incorporated by reference in, this report.

In January 2013, the Company amended its facility lease to extend the term of the lease until April 30, 2013. In April 2013, we amended our facility lease to extend the term of the lease until August 15, 2013. The Company is in the process of further extending the lease and has executed a non-binding term sheet proposing a three and one half year extension.

In April 2013, the Company amended its facility lease to extend the term of the lease until August 15, 2013.

In September 2013, the Company amended its facility lease to extend the term until August 2016.

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. In our pipeline, we have multiple product candidates for the treatment of heart damage, including MyoCell, Myocell SDF-1, and Adipocell. MyoCell and MyoCell SDF-1 are clinical muscle-derived cell therapies 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.

MyoCell SDF-1 is intended to be an improvement to MyoCell. MyoCell SDF-1 is similar to MyoCell except that the myoblast cells to be injected for use in MyoCell SDF-1 will be modified prior to injection by an adenovirus vector or non-viral vector so that they will release extra quantities of the SDF-1 protein, which expresses angiogenic factors. AdipoCell is a patient-derived cell therapy proposed for the treatment of acute myocardial infarction, chronic heart ischemia, and lower limb ischemia. We hope to demonstrate that these product candidates are safe and effective complements to existing therapies for chronic and acute heart damage.

We have completed various clinical trials for MyoCell including the SEISMIC Trial, a 40-patient, randomized, multicenter, controlled, Phase II-a study conducted in Europe and the MYOHEART Trial, a 20-patient, multicenter, Phase I dose-escalation trial conducted in the United States. We were approved by the U.S. Food and Drug Administration, or the “FDA”, to proceed with a 330-patient, multicenter Phase II/III trial of MyoCell in North America and Europe, or the MARVEL Trial. We completed the MyoCell implantation procedure on the first patient in the MARVEL Trial on October 24, 2007. Thus far, 20 patients, including 6 control patients, have been treated. Initial results for the 20 patients were released at the Heart Failure Society of American meeting in September, 2009, showing a significant (35%) improvement in the 6 minute walk for those patients who were treated, and no improvement for those who received a placebo. On the basis of these results, we have applied for and received approval from the FDA to reduce the number of additional patients in the trial to 134, for a total of 154 patients.

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We have also initiated the MIRROR trial, which is a Phase III, double-blind placebo controlled study for centers outside the US. The SEISMIC, MYOHEART,MARVEL and MIRROR Trials have been designed to test the safety and efficacy of MyoCell in treating patients with severe, chronic damage to the heart. Upon regulatory approval of MyoCell, we intend to generate revenue in the United States from the sale of MyoCell cell-culturing services for treatment of patients by qualified physicians.

We received approval from the FDA in July of 2009 to conduct a Phase I safety study on 15 patients of a combined therapy (Myocell with SDF-1), which we believe was the first approval of a study combining gene and cell therapies. We initially commenced work on this study, called the REGEN Trial, during the first quarter of 2010. We suspended activity on the trial in 2010 while seeking additional funding necessary to conduct the trial.

We are seeking to secure sufficient funds to reinitiate enrollment in the MARVEL and REGEN trials. If we successfully secure such funds, we intend to re-engage a contract research organization, or CRO, investigators and certain suppliers to advance such trials.

We have completed the Phase I Angel Trial for AdipoCell (adipose derived stem cells). Five patients were enrolled and treated in the second quarter of 2013.

MyoCell

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

When injected into scar tissue within the heart wall, myoblasts have been shown to be capable of engrafting in the damaged tissue and differentiating into mature skeletal muscle cells. In a number of clinical and animal studies, the engrafted skeletal muscle cells have been shown to express various proteins that are important components of contractile function. By using myoblasts obtained from a patient’s own body, we believe MyoCell is able to avoid certain challenges currently faced by other types of cell-based clinical therapies including tissue rejection and instances of the cells differentiating into cells other than muscle. Although a number of therapies have proven to improve the cardiac function of a damaged heart, no currently available treatment, to our knowledge, has demonstrated an ability to generate new muscle tissue within the scarred regions of a heart.

Our completed clinical trials of MyoCell to date, l have been primarily targeted to patients with severe, chronic damage to the heart who are in Class II or Class III heart failure according to the New York Heart Association, or NYHA, heart failure classification system. The NYHA system classifies patients in one of four categories based on how limited they are during physical activity. NYHA Class II heart failure patients have a mild limitation of activity and are generally comfortable at rest or with mild exertion while NYHA Class III heart failure patients suffer from a marked limitation of activity and are generally comfortable only at rest.

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In addition to studies we have sponsored, we understand that myoblast-based clinical therapies have been the subject of at least eleven clinical trials involving more than 325 enrollees, including at least 235 treated patients. Although we believe many of the trials are different from the trials sponsored by us in a number of important respects, it is our view that the trials have advanced the cell therapy industry’s understanding of the potential opportunities and limitations of myoblast-based therapies.

We believe the market for treating patients in NYHA Class II or NYHA Class III heart failure is significant. According to the AHA Statistics and the European Society of Cardiology Task Force for the Treatment of Chronic Heart Failure, in the United States and Europe there are approximately 5.2 million and 9.6 million, respectively, patients with heart failure. The AHA Statistics further indicate that, after heart failure is diagnosed, the one-year mortality rate is high, with one in five dying and that 80% of men and 70% of women under age 65 who have heart failure will die within eight years.

We believe that approximately 60% of heart failure patients are in either NYHA Class II or NYHA Class III heart failure based upon a 1999 study entitled “Congestive Heart Failure Due to Diastolic or Systolic Dysfunction – Frequency and Patient Characteristics in an Ambulatory Setting” by Diller, PM, et. al.

MyoCath Product Candidate

The MyoCath was developed by Bioheart co-founder Robert Lashinski specifically for delivering new cells to damaged tissue. It is a deflecting tip needle injection catheter that has a larger needle which is 25 gauge for better flow rates and less leakage than systems that are 27 gauge. This larger needle allows for thicker compositions to be injected which helps with cell retention in the heart. Also, the MyoCath needle has more fluoroscopic brightness than the normally used nitinol needle, enabling superior visualization during the procedure. Seeing the needle well during injections enables the physician who is operating the catheter to pinpoint targeted areas more precisely, thus improving safety. The MyoCath competes well with other biological delivery systems on price and efficiency and allows the physician to utilize standard fluoroscopy and echo equipment found in every cath lab. The MyoCath is used to inject cells into cardiac tissue in therapeutic procedures to treat chronic heart ischemic and congestive heart failure. The MyoCath catheters are currently produced by a contract manufacturer on an as needed basis.

AdipoCell

Bioheart has successfully completed various trials using adipose stem cells.  In August 2013, the Company canceled its license agreement with the Ageless Regenerative Institute for adipose derived stem cells called LipiCell.  Bioheart has entered into a term sheet agreement with Invitrx to License their adipose derived stem cell products.  Bioheart has changed its adipose derived stem cell product name to AdipoCell.  

Bioheart has funded and completed enrollment of 5 patients in the Angel Trial in Mexico utilizing adipose derived cells.  Preliminary 3 month follow up data in the study was reported in September 2013. At the 3 month time point, patients are demonstrating an average improvement in exercise capacity or a six minute walk test of 47 meters.  In addition, 60% percent or a majority of the patients are walking greater than 65 meters further at 3 months post stem cell injection.

The patients are also reporting an average improvement of 13 points in their Minnesota Living with Heart Failure questionnaire.  An improvement of 5 points or greater is considered “clinically meaningful” and 80% of the patients in the trial had a greater than 5 point improvement.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our 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 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

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

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Revenue Recognition

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

Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

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

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

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

Research and Development Activities

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

Derivative financial instruments

Accounting Standards Codification subtopic 815-40, Derivatives and Hedging, Contracts in Entity’s own Equity (“ASC 815-40”) became effective for the Company on October 1, 2009. The Company has identified the embedded derivatives related to the issued Notes and anti-dilutive warrants.  These embedded derivatives included in our debt contain certain conversion features and reset provision.  The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date.  

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Results of Operations

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

Comparison of the Three Months Ended September 30, 2013 and 2012

Revenues

We recognized revenues of $0 in the three month period ended September 30, 2013 compared to revenues of $4,072 in the three month period ended September 30, 2012.

Cost of Sales

Cost of sales was $0 in the three month period ended September 30, 2013 and September 30, 2012.

Research and Development

Research and development expenses were $158,381 in the three month period ended in September 30, 2013, an increase of $51,492 from the research and development expenses of $106,889 in the three month period ended in September 30, 2012. The increase was primarily attributable to an increase in the amount of funds allocated to our clinical trials.

The timing and amount of our planned research and development expenditures is dependent on our ability to obtain additional financing. See “- Existing Capital Resources and Future Capital Requirements” and Item 1A. “Risk Factors - We will need to secure additional financing …” as filed with our Form 10-K with the Securities and Exchange Commission on April 12, 2012.

Marketing, General and Administrative

Marketing, general and administrative expenses were approximately $940,354 in the three month period ended September 30, 2013, an increase of $262,404 from marketing, general and administrative expenses of approximately $677,950 in the three month period ended in September 30, 2012. The increase in marketing, general and administrative expenses is attributable, in part, to stock based compensation paid in the current period of $104,813 for services.

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Gain on change in fair value of derivative liabilities.

As of September 30, 2013, we issued convertible notes and warrants with anti-dilutive provisions that had the possibility of exceeding our common shares authorized when considering the number of possible shares that may be issuable to satisfy settlement provisions of these agreements after consideration of all existing instruments that could be settled in shares. As such, we are required to determine the fair value of this derivative and mark to market each reporting period. For the three months ended September 30, 2013, we incurred a $129,298 gain on change in fair value of our derivative liabilities compared to a gain of $20,804 the same period last year.

Interest Expense

Interest expense was $208,914 in the three month period ended September 30, 2013 compared to interest expense of $342,022 in the three month period ended in September 30, 2012, a decrease of $133,108. During the three months ended September 30, 2013, we incurred a non-cash interest expense of $65,382 from the set up and amortization of debt discounts associated with our issued convertible notes and payment of forbearance costs as compared to $78,106 for the same period last year.

Comparison of the Nine Months Ended September 30, 2013 and 2012

Revenues

We recognized revenues of $0 in the nine month period ended September 30, 2013 compared to revenues of $47,245 in the nine month period ended September 30, 2012.

Cost of Sales

Cost of sales was $0 in the nine month period ended September 30, 2013 compared to $417 in the nine month period ended September 30, 2012.

Research and Development

Research and development expenses were $494,792 in the nine month period ended in September 30, 2013, an increase of $197,227 from the research and development expenses of $297,535 in the nine month period ended in September 30, 2012. The increase was primarily attributable to an increase in the amount of funds allocated to our clinical trials.

The timing and amount of our planned research and development expenditures is dependent on our ability to obtain additional financing. See “- Existing Capital Resources and Future Capital Requirements” and Item 1A. “Risk Factors - We will need to secure additional financing …” as filed with our Form 10-K with the Securities and Exchange Commission on April 12, 2012.

Marketing, General and Administrative

Marketing, general and administrative expenses were approximately $1,750,276 in the nine month period ended September 30, 2013, an increase of $178,988 from marketing, general and administrative expenses of approximately $1,571,288 in the nine month period ended in September 30, 2012. The increase in marketing, general and administrative expenses is attributable, in part, to higher stock based compensation paid in the current period to officers, directors and key employees.

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Gain on settlement of debt

During the nine months ended September 30, 2013, we settled an outstanding note payable and certain accounts payable by issuances of common stock. As such we realized a net $1,004,224 gain on settlement of debt during the nine months ended September 30, 2013, as compared to nil for same period last year.

Gain on change in fair value of derivative liabilities.

As of September 30, 2013, we issued convertible notes and common stock purchase warrants with anti-dilutive provisions that had the possibility of exceeding our common shares authorized when considering the number of possible shares that may be issuable to satisfy settlement provisions of these agreements after consideration of all existing instruments that could be settled in shares. As such, we are required to determine the fair value of this derivative and mark to market each reporting period. For the nine months ended September 30, 2013, we incurred a $39,885 gain on change in fair value of our derivative liabilities compared to a gain of $27,265 the same period last year.

Interest Expense

Interest expense was $1,270,663 in the nine month period ended September 30, 2013 compared to interest expense of $1,023,654 in the nine month period ended in September 30, 2012, an increase of $247,009. During the nine months ended September 30, 2013, we incurred a non-cash interest expense of $464,100 from the set up and amortization of debt discounts associated with our issued convertible notes and payment of forbearance costs as compared to $418,944 for the same period last year.

Inflation

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

Climate Change

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

Concentrations of Credit Risk

As of September 30, 2013 and December 31, 2012, three and one customers representing 98% and 97% of the Company’s accounts receivable, respectively.

Liquidity and Capital Resources

In the nine months ended September 30, 2013, we continued to finance our considerable operational cash needs with cash generated from financing activities.

Operating Activities

Net cash used in operating activities was $1,568,727 in the nine month period ended September 30, 2013 as compared to $905,399 of cash used in the nine month period ended in September 30, 2012.

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Our use of cash for operations in the nine months ended September 30, 2013 reflected a net loss generated during the period of approximately $2.4 million, adjusted for non-cash items such as stock-based compensation of $102,674, depreciation of $1,328, amortization of debt discounts of $295,750 and non-cash interest paid of $168,350, net with gain on settlement of debt of $1,004,224 and gain on change in fair value of derivative liabilities of $39,885. In addition we had a net decrease in operating assets of $96,933 and an increase in accrued expenses of $485,518 and a decrease in accounts payable of $76,240.

Our use of cash for operations in the nine months ended September 30, 2012 reflected a net loss generated during the period of approximately $2.8 million, adjusted for non-cash items such as stock-based compensation of $91,076, amortization of the fair value of common stock purchase warrants granted in connection with the Note payable of $95,291, amortization of debt discounts incurred in connection with the BlueCrest Loan and Bank of America and other Loans of $382,693, non-cash interest paid of $36,251 and depreciation of $11,570. In addition we had a net increase in operating assets of $18,373 and an increase in accrued expenses of $942,562 and in accounts payable of $272,566.

Investing Activities

Net cash used in investing activities was nil for the nine months ended September 30, 2013 and $933 for the nine months ended September 30, 2012, where we acquired equipment.

Financing Activities

Net cash provided by financing activities was an aggregate of $1,575,411 in the nine month period ended September 30, 2013 as compared to $874,292 in the nine month period ended in September 30, 2012. In the nine month period ended September 30, 2013 we sold, in private placements, shares of common stock and common stock purchase warrants for aggregate net cash proceeds of $1,100,000, received proceeds from issuance of note payable of $295,000 and related party advances of $180,500.

Existing Capital Resources and Future Capital Requirements

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

At September 30, 2013, we had cash and cash equivalents totaling $6,684. However our working capital deficit as of such date was approximately $13.4 million. Our independent registered public accounting firm has issued its report dated March 28, 2013 in connection with the audit of our financial statements as of December 31, 2012 that included an explanatory paragraph describing the existence of conditions that raise substantial doubt about our ability to continue as a going concern and Note 2 of our unaudited financial statement for the quarter ended September 30, 2013 addresses the issue of 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.

34

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required under Regulation S-K for “smaller reporting companies.”

Item 4. Controls and Procedures

Disclosure Controls and Procedures

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

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

Changes In Internal Control Over Financial Reporting

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

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

Not required under Regulation S-K for “smaller reporting companies.”

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

Subscription Agreements – Common Stock and Warrants

In March 2013, the Company sold an aggregate of 22,988,724 shares of the Company’s common stock and common stock purchase warrants to purchase 23,421,250 shares of the Company’s common stock for aggregate gross cash proceeds of $400,000. The warrants are (i) exercisable solely for cash at an exercise price of $0.01734 to $0.0184 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 tenth year anniversary of the date of issuance.

35

During the nine months ended September 30, 2013, 1,000,000 shares of common stock were issued to one debt holder in exchange for $500,000 in principal and $598,125 of accrued interest relating to a previously issued note.

In April, 2013, the Company sold an aggregate of 4,613,611 shares of the Company’s common stock and common stock purchase warrants to purchase 4,613,611 shares of the Company’s common stock for aggregate gross cash proceeds of $135,000. The warrants are (i) exercisable solely for cash at an exercise price of $0.0173 to $0.0381 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 tenth year anniversary of the date of issuance.

During the three months ended September 30, 2013, the Company sold an aggregate of 11,838,832 shares of the Company’s common stock and common stock purchase warrants to purchase 11,838,832 shares of the Company’s common stock for aggregate gross cash proceeds of $200,000. The warrants are (i) exercisable solely for cash at an exercise price of $0.0134 to $0.0257 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 tenth year anniversary of the date of issuance.

The offer and sale of such shares of our common stock and warrants were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933 (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

Item 3. Defaults Upon Senior Securities

There were no defaults upon senior securities during the period ended September 30, 2013.

Item 4. Mine Safety Disclosures

Not applicable. 

Item 5. Other Information

There is no information with respect to which information is not otherwise called for by this form.

36

Item 6. Exhibits

Exhibit No.	Exhibit Description
31.1*	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.LAB	XBRL Taxonomy Labels Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document

37

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: November  14, 2013	By:	/s/Mike Tomas
		Mike Tomas
		Chief Executive Officer & President and Principal Financial and Accounting Officer

38

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer and Principal Accounting Officer

I, Mike Tomas, certify that:

1. I have reviewed this report on Form 10-Q of Bioheart, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2013		/s/Mike Tomas
	Name:	Mike Tomas
		President and Chief Executive Officer Chief Financial Officer and Principal Accounting Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Mike Tomas, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge, Bioheart, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: November 14, 2013		/s/Mike Tomas
	Name:	Mike Tomas
		President and Chief Executive Officer Chief Financial Officer and Principal Accounting Officer

XML

Stock Option and Warrants

9 Months Ended

Sep. 30, 2013

Stock Options and Warrants [Abstract]

STOCK OPTIONS AND WARRANTS

NOTE 11 — STOCK OPTIONS AND WARRANTS

Stock Options

In December 1999, the Board of Directors and shareholders adopted the 1999 Officers and Employees Stock Option Plan, or the Employee Plan, and the 1999 Directors and Consultants Stock Option Plan, or the Director Plan. The Employee Plan and the Director Plan are collectively referred to herein as the Plans. The Plans are administered by the Board of Directors and the Compensation Committee. The objectives of the Plans include attracting and retaining key personnel by encouraging stock ownership in the Company by such persons. In February 2010, the Directors & Consultants Plan was amended to extend the termination date of the Plan to December 1, 2011.

In April 1, 2013, the Board of Directors approved, subject to shareholder approval, the establishment of the Bioheart 2013 Omnibus Equity Compensation Plan, or the “2013 Omnibus Plan”. The 2013 Omnibus Plan reserves up to fifty million shares of common stock for issuance.

Effective April 1, 2013, the Board of Directors resolved that stock options granted for the past three years as of February 25, 2013 be repriced for employees, management and board members, at the exercise price of the average of the last 5 trading days’ closing price as of February 25, 2013. Subsequently, this action was rescinded and the repricing date was set for August 5, 2013.

A summary of options at September 30, 2013 and activity during the year then ended is presented below:

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)
Options outstanding at January 1, 2012		4,636,318		$	1.20	8.1
Granted		3,300,000		$	0.04
Exercised				$
Forfeited/Expired		(82,942	)	$	5.57
Options outstanding at December 31, 2012		7,853,376		$	0.67	8.2
Granted		17,400,000		$	0.016	9.9
Exercised
Forfeited/Expired		(46,844	)	$	5.67
Options outstanding at September 30, 2013		25,206,532		$	0.20	9.1
Options exercisable at September 30, 2013		7,544,618		$	0.62	7.9
Available for grant at September 30, 2013		32,600,000

The following information applies to options outstanding and exercisable at September 30, 2013:

	Options Outstanding							Options Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares			Weighted- Average Exercise Price
$0.00 – $0.70		24,194,360		9.4	$	0.04			6,436,627		$	0.08
$0.71 – $1.28		324,471		4.6	$	0.77			429,290		$	0.76
$5.25 – $5.67		641,951		2.2	$	5.56			632,951		$	5.57
$7.69		39,572		2.9	$	7.69			39,572		$	7.69
$8.47		6,178		3.9	$	8.47			6,178		$	8.47
		25,206,532		9.1	$	0.20			7,544,618		$	0.62

On August 5, 2013, the Company re-priced options previously issued from 2011 through 2012 for current employees and officers in aggregate of 4,890,000 options with previous exercise prices from $0.03 to $0.21 per share to $0.01694 per share, all other terms remaining unchanged.  The gross change in fair value, determined using the Black Scholes option pricing model, of $1,630 was charged to current period operations.

On August 1, 2013, the Company issued an aggregate 15,000,000 options to purchase the Company’s common stock at $0.01576 per share, respectively; to employees, exercisable over 4 years.   The fair value of $245,749, determined using the Black Scholes option pricing model with the following assumptions: Dividend yield: 0%; Volatility: 153.27% and Risk free rate: 2.74%, of which $10,240 was charged to current period operations.

On September 1, 2013, the Company issued an aggregate 2,400,000 options to purchase the Company’s common stock at $0.01654 per share, respectively; to officers and employees, exercisable immediately. The fair value of $37,823, determined using the Black Scholes option pricing model with the following assumptions: Dividend yield: 0%; Volatility: 150.98% and Risk free rate: 2.78%, was charged to current period operations.

The fair value of all options vesting during the three and nine months ended September 30, 2013 of $64,294 and $102,674, respectively, and $20,865 and $56,476 for the three and nine months ended September 30, 2012, respectively was charged to current period operations.

Warrants

A summary of common stock purchase warrants at September 30, 2013 and activity during the year then ended is presented below:

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)
Outstanding at January 1, 2012		32,610,075	$	0.86		3.8
Issued		42,396,432	$	0.018		5.78
Exercised		—	$	0.00
Forfeited		(933,185)	$	0.69
Outstanding at December 31, 2012		74,073,322	$	0.28		4.5
Issued		40,954,886	$	0.016		9.2
Exercised		—	$
Expired		(2,332,877)	$	0.73
Outstanding at September 30, 2013		112,695,331	$	0.23		6.0
Exercisable at September 30, 2013		84,534,199	$	0.16		4.7

In conjunction with the authorized issuance of common stock, the Company granted approximately 35 million common stock purchase warrants during the nine months ended September 30, 2013.

The following information applies to common stock purchase warrants outstanding and exercisable at September 30, 2013:

	Warrants Outstanding						Warrants Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$0.01 – $0.50		106,441,198		6.0	$	0.03		79,824,516		$	0.04
$0.52 – $0.68		2,699,675		5.6	$	0.58		2,699,675		$	0.58
$0.70 – $1.62		853,176		6.2	$	0.71		853,176		$	0.71
$5.67 – $7.69		2,701,282		9.1	$	7.55		1,156,832		$	7.35
		112,695,331		6.0	$	0.23		84,534,199		$	0.15

XML

Condensed Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended		170 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Statements of Operations [Abstract]
Revenue		$ 4,072		$ 47,245	$ 1,269,640
Cost of sales				417	551,904
Gross profit		4,072		46,828	717,736
Operating expenses:
Research and development	158,381	106,889	494,762	297,535	65,187,814
Marketing, general and administrative	940,354	677,950	1,750,276	1,571,288	38,588,112
Impairment of investment					58,695
Depreciation and amortization	77	3,377	1,327	11,570	899,241
Total operating expenses	1,098,812	788,216	2,246,365	1,880,393	104,733,862
Net loss from operations	(1,098,812)	(784,144)	(2,246,365)	(1,833,565)	(104,016,126)
Other income (expenses):
Development revenues					117,500
Gain on settlement of debt			1,004,224		1,004,224
Gain on change of fair value of derivative liability	129,298	20,804	39,885	27,265	134,654
Interest income					762,277
Other income	31,659	819	56,919	18,234	327,984
Interest expense	(208,914)	(342,022)	(1,270,663)	(1,023,654)	(15,784,237)
Total other income (expenses)	(47,956)	(320,399)	(169,635)	(978,155)	(13,437,598)
Net loss before income taxes	(1,146,769)	(1,104,543)	(2,416,000)	(2,811,720)	(117,453,724)
Income taxes (benefit)
NET LOSS	$ (1,146,769)	$ (1,104,543)	$ (2,416,000)	$ (2,811,720)	$ (117,453,724)
Net loss per common share, basic and diluted	$ (0.005)	$ (0.01)	$ (0.01)	$ (0.02)
Weighted average number of common shares outstanding, basic and diluted	246,229,899	155,968,821	217,392,664	135,812,320

XML

Property and Equipment

9 Months Ended

Sep. 30, 2013

Property and Equipment [Abstract]

PROPERTY AND EQUIPMENT

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment as of September 30, 2013 and December 31, 2012 is summarized as follows:

	September 30, 2013			December 31, 2012
Laboratory and medical equipment	$	352,358		$	352,358
Furniture, fixtures and equipment		130,916			130,916
Computer equipment		54,414			54,414
Leasehold improvements		362,046			362,046
		899,734			899,734
Less accumulated depreciation and amortization		(899,242	)		(897,914	)
	$	492		$	1,820

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

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

XML

Notes Payable (Tables)

9 Months Ended

Sep. 30, 2013

Notes Payable [Abstract]

Summary of notes payable

	September 30, 2013			December 31, 2012
Seaside Bank note payable.	$	980,000		$	980,000
August 2008 Unsecured Promissory Note		500,000			1,000,000
Hunton & Williams notes payable		384,972			384,972
Asher notes payable		90,000			—
Total notes payable		1,954,972			2,364,972
Less unamortized debt discount		(64,562	)		—
Total notes payable net of unamortized debt discount	$	1,890,410		$	2,364,972

XML

Commiments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 12 — COMMITMENTS AND CONTINGENCIES

Royalty Payments

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

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

William Beaumont Hospital

In June 2000, the Company entered into an exclusive license agreement to use certain patents for the life of the patents in future projects. The patents expire in 2015. In addition to a payment of $55,000, the Company made to acquire the license, the Company is required to pay an annual license fee of $10,000 and royalties ranging from 2% to 4% of net sales of products that are covered by the patents. In order to maintain the exclusive license rights, the agreement also calls for a minimum annual royalty threshold. The minimum royalty threshold was $200,000 for 2011 and $200,000 for 2010. This minimum royalty threshold will remain $200,000 for 2012 and thereafter. As of September 30, 2013, the Company has not made any payments other than the initial payment to acquire the license. At September 30, 2013 and December 31, 2012, the Company’s liability under this agreement was $2,046,789 and $1,825,675, respectively, which is reflected as a component of accrued expenses on the balance sheets (see Note 5). During the nine months ended September 30, 2013 and 2012, the Company incurred expenses of $221,113, $157,500 respectively, and $2,046,789 from August 12, 1999 (date of inception) to September 30, 2013. The Company has accrued interest for the past due commitment at 2% over the prime rate per the terms of the agreement. The Company has included $379,289 in accrued expenses as of September 30, 2013.

Approximate annual future minimum obligations under this agreement as of September 30, 2013 are as follows:

Year Ending December 31,
2013	$	52,500
2014		210,000
2015		210,000
Total	$	472,500

Contingency for Registration of the Company’s common stock

The Company believes that it may have issued options to purchase common stock to certain of its employees, directors and consultants in California in violation of the registration or qualification provisions of applicable California securities laws. As a result, the Company intends to make a rescission offer to these persons. The Company will make this offer to all persons who have a continuing right to rescission, which it believes to include two persons. In the rescission offer, in accordance with California law, the Company will offer to repurchase all unexercised options issued to these persons at 77% of the option exercise price multiplied by the number of option shares, plus interest at the rate of 7% from the date the options were granted. Based upon the number of options that were subject to rescission as of December 31, 2009, assuming that all such options are tendered in the rescission offer, the Company estimated that its total rescission liability would be up to approximately $371,000. However, as the Company believes there is only a remote likelihood the rescission offer will be accepted by any of these persons in an amount that would result in a material expenditure by the Company, no liability was recorded as of September 30, 2013 or December 31, 2012.

Litigation

The Company is subject to other legal proceedings that arise in the ordinary course of business. In the opinion of management, as of September 30, 2013, the amount of ultimate liability with respect to such matters, if any, in excess of applicable insurance coverage, is not likely to have a material impact on the Company’s business, financial position, results of operations or liquidity. However, as the outcome of litigation and other claims is difficult to predict significant changes in the estimated exposures could exist.

XML

Subsequent Events (Details) (USD $)

0 Months Ended

1 Months Ended

Sep. 30, 2013

Aug. 01, 2013

Dec. 31, 2012

Apr. 01, 2013

Series A Convertible Preferred Stock [Member]

Northstart Letter Agreement [Member]

Nov. 11, 2013

Subsequent Event [Member]

Oct. 30, 2013

Subsequent Event [Member]

Northstart Letter Agreement [Member]

Oct. 30, 2013

Subsequent Event [Member]

Asher [Member]

Oct. 04, 2013

Subsequent Event [Member]

Asher [Member]

Oct. 01, 2013

Subsequent Event [Member]

Series A Convertible Preferred Stock [Member]

Northstart Letter Agreement [Member]

Subsequent Events (Textual)

Common stock issued in settlement of notes payable and related accrued interest, Shares

5,000,000

5,493,056

10,000,000

Common stock issued in settlement of notes payable and related accrued interest

$ 25,312

Convertible Debt, principal amount

$ 32,500

Convertible note, interest rate

8.00%

5.00%

8.00%

8.00%

Debt Instrument, principal and interest repayment date

Jul. 08, 2014

Convertibel notes description

The Note is convertible into common stock, at Asher's option, at a 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 120% if prepaid during the period commencing on the closing date through 30 days thereafter, (ii) 125% if prepaid 31 days following the closing through 60 days following the closing, (iii) 130% if prepaid 61 days following the closing through 90 days following the closing and (iv) 135% if prepaid 91 days following the closing through 120 days following the closing. (v) 140% if prepaid 121 days following the closing through 150 days following the closing, (vi) 150% if prepaid 121 days following the closing through 180 days following the closing. After the expiration of 180 days following the date of the Note, the Company has no right of prepayment.

Forbearance agreement description

On November 11, 2013, the Company and Northstar (collectively, the “Parties”) agreed to modify the terms of the October 1, 2012 limited waiver and forbearance agreement whereby the Parties agreed to modify the interest rate on the agreement from 12.85% was modified to 7% effective February 28, 2013.

Preferred Stock, voting rights

25 votes

Common Stock issued with connection of stock subcriptions

27,859,747

XML

Stockholders' Equity (Details) (USD $)	9 Months Ended				1 Months Ended			9 Months Ended
	Sep. 30, 2013	Feb. 04, 2013	Dec. 31, 2012	Aug. 17, 2012 Votes	Aug. 17, 2012 Series A Convertible Preferred Stock [Member]	Sep. 30, 2013 Series A Convertible Preferred Stock [Member]	Feb. 04, 2013 Series A Convertible Preferred Stock [Member]	Sep. 30, 2013 Common stock [Member]	Feb. 04, 2013 Common stock [Member]
Stockholders Equity (Textual)
Preferred stock designated as Series A Convertible Preferred Stock					5,000,000	20,000,000
Number of votes hold by the holder per common share issued in conversion of preferred stock				20
Preferred stock shares increased					20,000,000
Increased number of authorized capital, shares		970,000,000					20,000,000		950,000,000
Preferred stock, par value	$ 0.001	$ 0.001	$ 0.001
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
Common stock issued in settlement of accounts payable, Shares								5,061,101
Common stock issued in settlement of accounts payable	$ 149,240							$ 74,839
Loss on settlement of debt								$ 74,401
Common stock issued in connection with issuance of a note payable, Shares								2,500,000
Common stock issued in connection with settlement of note payable								39,833,771
Preferred Stock, voting rights					20 votes
Common Stock, Voting Rights					25 votes

XML

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurement [Abstract]

Summary of changes in fair value of the Company's Level 3 financial liabilities

	Derivative Liability
Balance, December 31, 2012	$	611,227
Total (gains) losses
Initial fair value of debt derivative at note issuance		492,412
Mark-to-market at September 30, 2013:		(39,885)
Transfers out of Level 3 upon increase in authorized shares		(474,954)
Transfers out of Level 3 upon conversion of notes payable		(307,763)
Balance, September 30, 2013	$	281,037
Net Gain for the period included in earnings relating to the liabilities held at September 30, 2013	$	39,885

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Commiments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies [Abstract]

Summary of future minimum obligations under the agreement

Year Ending December 31,
2013	$	105,000
2014		210,000
2015		210,000
Total	$	525,000

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Fair Value Measurement (Details) (USD $)	3 Months Ended		9 Months Ended		170 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Summary of changes in fair value of the Company's Level 3 financial liabilities
Beginning Balance			$ 611,227
Total (gains) losses
Initial fair value of debt derivative at note issuance			492,415
Mark-to-market at June 30, 2013:			(39,885)
Transfers out of Level 3 upon increase in authorized shares			(474,954)
Balance	281,307,000		281,307,000		281,307,000
Net Loss for the period included in earnings relating to the liabilities held at June 30, 2013	$ 129,298	$ 20,804	$ 39,885	$ 27,265	$ 134,654

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Notes Payable (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Oct. 25, 2010
Summary of notes payable
Total notes payable	$ 1,954,972	$ 2,364,972
Less unamortized debt discount	(64,562)
Total notes payable net of unamortized debt discount	1,890,410	2,364,972
Seaside Bank note payable [Member]
Summary of notes payable
Total notes payable	980,000	980,000	980,000
August 2008 Unsecured Promissory Note [Member]
Summary of notes payable
Total notes payable	500,000	1,000,000
Hunton & Williams notes payable [Member]
Summary of notes payable
Total notes payable	384,972	384,972
Asher notes payable [Member]
Summary of notes payable
Total notes payable	$ 90,000

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Stock Option and Warrants (Details 1) (Stock Options [Member], USD $)	9 Months Ended
	Sep. 30, 2013
Options outstanding and exercisable for stock-based payment awards
Options Outstanding, Shares	25,206,532
Options Outstanding, Weighted-Average Remaining Contractual Term	9 years 1 month 6 days
Options Outstanding, Weighted- Average Exercise Price	$ 0.20
Options Exercisable, Shares	7,544,618
Options Exercisable, Weighted-Average Exercise Price	$ 0.62
$0.00 - $0.70 [Member]
Options outstanding and exercisable for stock-based payment awards
Range of Exercise Prices, Minimum	$ 0.00
Range of Exercise Prices, Maximum	$ 0.70
Options Outstanding, Shares	24,194,360
Options Outstanding, Weighted-Average Remaining Contractual Term	9 years 4 months 24 days
Options Outstanding, Weighted- Average Exercise Price	$ 0.04
Options Exercisable, Shares	64,366,247
Options Exercisable, Weighted-Average Exercise Price	$ 0.08
$0.71 - $1.28 [Member]
Options outstanding and exercisable for stock-based payment awards
Range of Exercise Prices, Minimum	$ 0.71
Range of Exercise Prices, Maximum	$ 1.28
Options Outstanding, Shares	324,471
Options Outstanding, Weighted-Average Remaining Contractual Term	4 years 7 months 6 days
Options Outstanding, Weighted- Average Exercise Price	$ 0.77
Options Exercisable, Shares	429,290
Options Exercisable, Weighted-Average Exercise Price	$ 0.76
$5.25 - $5.67 [Member]
Options outstanding and exercisable for stock-based payment awards
Range of Exercise Prices, Minimum	$ 5.25
Range of Exercise Prices, Maximum	$ 5.67
Options Outstanding, Shares	641,951
Options Outstanding, Weighted-Average Remaining Contractual Term	2 years 2 months 12 days
Options Outstanding, Weighted- Average Exercise Price	$ 5.56
Options Exercisable, Shares	632,951
Options Exercisable, Weighted-Average Exercise Price	$ 5.57
$7.69 [Member]
Options outstanding and exercisable for stock-based payment awards
Range of Exercise Prices	$ 7.69
Options Outstanding, Shares	39,572
Options Outstanding, Weighted-Average Remaining Contractual Term	2 years 10 months 24 days
Options Outstanding, Weighted- Average Exercise Price	$ 7.69
Options Exercisable, Shares	39,572
Options Exercisable, Weighted-Average Exercise Price	$ 7.69
$8.47 [Member]
Options outstanding and exercisable for stock-based payment awards
Range of Exercise Prices	$ 8.47
Options Outstanding, Shares	6,178
Options Outstanding, Weighted-Average Remaining Contractual Term	3 years 10 months 24 days
Options Outstanding, Weighted- Average Exercise Price	$ 8.47
Options Exercisable, Shares	6,178
Options Exercisable, Weighted-Average Exercise Price	$ 8.47

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Accrued Expenses (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Summary of accrued expenses
License and royalty fees	$ 2,046,789	$ 1,825,675
Amounts payable to the Guarantors of the Company's loan agreement with Bank of America and Seaside Bank, including fees and interest	1,354,043	1,284,705
Interest payable on notes payable	833,105	1,100,174
Vendor accruals and other	174,268	120,133
Employee commissions, compensation, etc.	122,476	400,801
Accrued expenses, Total	$ 4,530,681	$ 4,731,488

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Stock Option and Warrants (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Apr. 01, 2013
Stock Options and Warrants (Textual)
Fair value of the option vested	$ 64,294	$ 20,865	$ 102,674	$ 56,476
Shares reserved for future issuance under 2013 Omnibus Plan					50,000,000
Options to purchase the Company's common stock			15,000,000
Exercise price			$ 0.01576
Number of warrants granted			35,000,000
Dividend yield			0.00%
Volatility			153.27%
Risk free rate			2.74%
August 5, 2013
Stock Options and Warrants (Textual)
Options to purchase the Company's common stock			4,890,000
Exercise price			$ 0.01694
Gross change in fair value, determined using Black Scholes option pricing model			$ 1,630
September 1, 2013
Stock Options and Warrants (Textual)
Options to purchase the Company's common stock			2,400,000
Exercise price			$ 0.01654
Dividend yield			0.00%
Volatility			150.98%
Risk free rate			2.78%

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Stock Option and Warrants (Tables)

9 Months Ended

Sep. 30, 2013

Stock Options and Warrants [Abstract]

Summary of options and activity

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)
Options outstanding at January 1, 2012		4,636,318		$	1.20	8.1
Granted		3,300,000		$	0.04
Exercised				$
Forfeited/Expired		(82,942	)	$	5.57
Options outstanding at December 31, 2012		7,853,376		$	0.67	8.2
Granted		17,400,000		$	0.016	9.9
Exercised
Forfeited/Expired		(46,844	)	$	5.67
Options outstanding at September 30, 2013		25,206,532		$	0.20	9.1
Options exercisable at September 30, 2013		7,544,618		$	0.62	7.9
Available for grant at September 30, 2013		32,600,000

Summary of options outstanding and exercisable for stock-based payment awards

	Options Outstanding							Options Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares			Weighted- Average Exercise Price
$0.00 – $0.70		24,194,360		9.4	$	0.04			6,436,627		$	0.08
$0.71 – $1.28		324,471		4.6	$	0.77			429,290		$	0.76
$5.25 – $5.67		641,951		2.2	$	5.56			632,951		$	5.57
$7.69		39,572		2.9	$	7.69			39,572		$	7.69
$8.47		6,178		3.9	$	8.47			6,178		$	8.47
		25,206,532		9.1	$	0.20			7,544,618		$	0.62

Summary of warrants and activity

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)
Outstanding at January 1, 2012		32,610,075	$	0.86		3.8
Issued		42,396,432	$	0.018		5.78
Exercised		—	$	0.00
Forfeited		(933,185)	$	0.69
Outstanding at December 31, 2012		74,073,322	$	0.28		4.5
Issued		40,954,886	$	0.016		9.2
Exercised		—	$
Expired		(2,332,877)	$	0.73
Outstanding at September 30, 2013		112,695,331	$	0.23		6.0
Exercisable at September 30, 2013		84,534,199	$	0.16		4.7

Summary of warrants outstanding and exercisable

	Warrants Outstanding						Warrants Exercisable
	Shares		Weighted- Average Remaining Contractual Term		Weighted- Average Exercise Price		Shares		Weighted- Average Exercise Price
$0.01 – $0.50		106,441,198		6.0	$	0.03		79,824,516		$	0.04
$0.52 – $0.68		2,699,675		5.6	$	0.58		2,699,675		$	0.58
$0.70 – $1.62		853,176		6.2	$	0.71		853,176		$	0.71
$5.67 – $7.69		2,701,282		9.1	$	7.55		1,156,832		$	7.35
		112,695,331		6.0	$	0.23		84,534,199		$	0.15

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Condensed Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended		170 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,416,000)	$ (2,811,720)	$ (117,453,724)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,328	11,570	899,242
Bad debt expense			166,266
Discount on convertible debt	295,750	382,693	1,907,318
Loss (gain) on change in fair value of derivative liability	(39,885)	(27,265)	(134,654)
Gain on settlement of debt	(1,004,224)		(1,004,224)
Non cash payment of interest	168,350	36,251	439,462
Amortization of warrants issued in exchange for licenses and intellectual property			5,413,156
Amortization of warrants issued in connection with notes payable		95,291	5,437,604
Amortization of loan costs		927	1,228,717
Related party notes payable issued for services rendered	500,000		500,000
Warrants issued in exchange for services			285,659
Warrants issued in exchange for forbearance agreement		119,023	430,213
Equity instruments issued in connection with R&D agreement			360,032
Equity instruments issued in connection with settlement agreement			3,381,629
Common stock issued in connection with accounts payable	2,500		759,316
Common stock issued in exchange for services	40,519	34,600	1,523,041
Common stock issued in connection with amounts due to guarantors of Bank of America loan			69,159
Common stock issued in exchange for distribution rights and intellectual property			99,997
Preferred stock issued in settlement of forbearance agreement penalty	274,050		274,050
Warrants issued in connection with accounts payable			7,758
Stock based compensation	102,674	56,476	10,053,676
(Increase) decrease in:
Receivables	(7,553)	2,379	(10,160)
Inventory	62,953	417	(1)
Prepaid and other current assets	41,533	(21,169)	(9,969)
Other assets	0	0	(28,854)
Increase (decrease) in:
Accounts payable	(76,240)	272,566	3,183,437
Accrued expenses	485,518	942,562	7,227,660
Deferred revenue			465,287
Net cash used in operating activities	(1,568,727)	(905,399)	(74,532,805)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of property and equipment		(933)	(899,733)
Net cash used by investing activities		(933)	(899,733)
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank overdraft	(89)
Proceeds from issuance of common stock, net	1,100,000	459,800	64,981,775
Proceeds from (payments for) initial public offering of common stock, net			1,447,829
Proceeds from subordinated related party note			3,000,000
Payment of note payable			(3,000,000)
Proceeds from notes payable, related party			505,000
Proceeds from related party advances	180,500	351,492	1,047,992
Proceeds from exercise of stock options			293,749
Proceeds from notes payable	295,000	63,000	11,915,750
Repayments of notes payable			(3,533,605)
Payment of loan costs			(1,219,268)
Net cash provided in financing activities	1,575,411	874,292	75,439,222
Net increase (decrease) in cash and cash equivalents	6,684	(32,040)	6,684
Cash and cash equivalents, beginning of period		36,828
Cash and cash equivalents, end of period	6,684	4,788	6,684
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid	513,986	403,618	2,698,068
Income taxes paid
Non-cash financing activities:
Common stock issued in settlement of notes payable	345,000	570,181	4,597,959
Common stock issued in settlement of accounts payable	149,239	14,000	163,239
Preferred stock issued in settlement of notes payable	$ 70,000		$ 84,000

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Going Concern Matters

9 Months Ended

Sep. 30, 2013

Going Concern Matters [Abstract]

GOING CONCERN MATTERS

NOTE 2 – GOING CONCERN MATTERS

The accompanying unaudited condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying unaudited condensed financial statements, during nine months ended September 30, 2013, the Company incurred net losses attributable to common shareholders of $2,416,000 and used $1,568,727 in cash for operating activities. As of September 30, 2013, the Company had a working capital deficit (current liabilities in excess of current assets) of approximately $13.4 million. These factors among others may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.

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

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Accrued Expenses

9 Months Ended

Sep. 30, 2013

Accrued Expenses [Abstract]

ACCRUED EXPENSES

NOTE 5 – ACCRUED EXPENSES

Accrued expenses consisted of the following as of September 30, 2013 and December 31, 2012:

	September 30, 2013		December 31, 2012
License and royalty fees	$	2,046,789	$	1,825,675
Amounts payable to the Guarantors of the Company’s loan agreement with Bank of America and Seaside Bank, including fees and interest		1,354,043		1,284,705
Interest payable on notes payable		833,105		1,100,174
Vendor accruals and other		174,268		120,133
Employee commissions, compensation, etc.		122,476		400,801
	$	4,530,681	$	4,731,488

During the nine months ended September 30, 2013, 1,000,000 shares of common stock were issued to one debt holder in exchange for $500,000 in principal and $598,125 of accrued interest relating to a previously issued note.

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Inventory

9 Months Ended

Sep. 30, 2013

Inventory [Abstract]

INVENTORY

NOTE 3 – INVENTORY

Inventory consists of raw materials. Costs of raw materials are determined using the FIFO method. Inventory is stated at the lower of costs or market (estimated net realizable value). During the nine months ended September 30, 2013, the Company wrote-off the full balance of inventory to expense due to obsolescence.

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Stock Option and Warrants (Details 2) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Summary of warrants and activity
Exercised, Weighted - Average Exercise Price	$ 0.01576
Options outstanding, Balance	7,817,852
Warrant [Member]
Summary of warrants and activity
Options outstanding, Beginning Balance	74,073,322	32,610,075
Options outstanding, Weighted - Average Exercise Price, Beginning Balance	$ 0.28	$ 0.86
Warrants outstanding, Weighted - Average Remaining Contractual Term (in years)	4 years 6 months	3 years 9 months 18 days
Shares, issued	40,954,886	42,396,432
Warrants, Weighted-Average Exercise Price	$ 0.016	$ 0.018
Warrants, Weighted Average Remaining Contractual Term (in years)	9 years 2 months 12 days	5 years 9 months 11 days
Exercised, Shares
Exercised, Weighted - Average Exercise Price		$ 0.00
Forfeited/Expired, Shares	(2,332,877)	(933,185)
Forfeited/Expired, Weighted - Average Exercise Price	$ 0.73	$ 0.69
Options outstanding, Balance	112,695,331	74,073,322
Options outstanding, Weighted - Average Exercise Price, Balance	$ 0.23	$ 0.28
Options outstanding, Weighted - Average Remaining Contractual Term	6 years	4 years 6 months
Options Exercisable, Shares	84,534,199
Options exercisable, Weighted - Average Exercise Price	$ 0.16
Warrants exercisable, Weighted - Average Remaining Contractual Term (in years)	4 years 8 months 12 days

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Significant Accounting Policies (Details) (USD $)	3 Months Ended		9 Months Ended		170 Months Ended		9 Months Ended	12 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Employees	Sep. 30, 2012	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Accounts Receivable [Member] Customer Concentration Risk [Member] Customer	Dec. 31, 2012 Accounts Receivable [Member] Customer Concentration Risk [Member] Customer	Sep. 30, 2012 Sales Revenue Goods and Services Net [Member] Customer Concentration Risk [Member] Customer	Sep. 30, 2012 Sales Revenue Goods and Services Net [Member] Customer Concentration Risk [Member] Customer
Significant Accounting Policies (Textual)
Concentration Risk, Percentage							98.00%	97.00%
Number of customer accounted for accounts receivable							3	1
Revenue		$ 4,072		$ 47,245	$ 1,269,640				$ 4,072	$ 47,245
Number of customers accounted for revenue									3	3
Deficit accumulated during development stage	117,453,724		117,453,724		117,453,724	115,037,724
Number of fully diluted shares outstanding	323,296,916	182,807,340	336,682,241	174,169,691
Option outstanding to purchase common stock	7,817,852		7,817,852		7,817,852
Options vested	7,544,618		7,544,618		7,544,618
Number of full time employees			4
Number of part time employees			1
Research and development expense	$ 158,381	$ 106,889	$ 494,762	$ 297,535	$ 65,187,814

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Accrued Expenses (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2013
Accrued Expenses (Textual)
Accrued interest	$ 598,125
Common stock [Member]
Accrued Expenses (Textual)
Amount of debt exchanged for shares	$ 500,000
Shares issued in conversion of debt	1,000,000
Number of debt holder	1

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Derivative Liabilities (Details) (USD $)	0 Months Ended	9 Months Ended	2 Months Ended	9 Months Ended		9 Months Ended
	Feb. 04, 2013 Excessive Committed Shares [Member]	Sep. 30, 2013 Excessive Committed Shares [Member]	Oct. 31, 2012 Reset Warrants [Member]	Sep. 30, 2013 Reset Warrants [Member]	Oct. 01, 2012 Reset Warrants [Member]	Sep. 30, 2013 Convertible Notes Payable [Member]	Sep. 30, 2013 Convertible Notes Payable [Member] Minimum [Member]	Sep. 30, 2013 Convertible Notes Payable [Member] Maximum [Member]
Derivative Liabilities (Textual)
Increase in common stock, shares, authorized	970,000,000
Fair value of derivative liability	$ 474,954			$ 162,103		$ 648,331
Fair value of embedded derivatives						118,934
Dividend yield	0.00%			0.00%		0.00%
Expected volatility	156.52%			161.86%		162.57%
Risk free rate	0.38%			2.64%		0.04%
Expected Term	3 years 6 months			9 years			4 months 21 days	8 months 12 days
Loss on change in derivative liabilities		$ 84,907		$ 59,076		$ 65,716
Common stock purchase warrants issued			15,000,000
Exercise price of warrant					0.014
Warrants exercisable period					10 years
Fair value of common stock						$ 0.011

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Commiments and Contingencies (Details Textual) (USD $)	1 Months Ended	9 Months Ended		12 Months Ended			170 Months Ended
	Jun. 30, 2000	Sep. 30, 2013 Employees	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Sep. 30, 2013
Commitments and Contingencies (Textual)
Patent expiration period	2015
Payment made to acquire license	$ 55,000
Annual license fee payable	10,000
Royalties payable	2% to 4% of net sales of products that are covered by the patents.
Minimum royalty threshold				200,000	200,000	200,000
License and royalty fees		2,046,789		1,825,675			2,046,789
License expenses incurred		221,113	157,500				2,046,789
Accrued interest for past due commitment under license agreement		At 2% over the prime rate.
Accrued expenses		379,289					379,289
Number of persons with continuing right to rescission		2
Repurchase consideration for unexercised options		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.
Total rescission liability		$ 371,000					$ 371,000

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Condensed Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Balance Sheets [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	5,000,000
Preferred stock, shares issued	20,000,000	0
Preferred stock, shares outstanding	20,000,000	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	950,000,000	195,000,000
Common stock, shares issued	319,315,563	182,062,802
Common stock, shares outstanding	319,315,563	182,062,802

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Related Party Transactions

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 8 — RELATED PARTY TRANSACTIONS

Lease Guarantee

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

Advances

As of September 30, 2013 and December 31, 2012, the Company officers and directors have provided advances in the aggregate of $316,198 and $313,448 respectively, for working capital purposes. The advances are unsecured, due on demand and non-interest bearing.

On August 1, 2013, advances in aggregate of $22,750 were converted into a demand promissory note with 5% interest per annum.  On September 30, 2013, the Company issued 1,995,614 shares of common stock in settlement of the $22,750 promissory note.

On September 30, 2013, the Company issued 8,771,929 shares of its common stock as payment of $100,000 towards cash advances.

Notes payable-related party

Northstar Biotechnology Group, LLC

On February 29, 2012, a note issued to BlueCrest Master Fund Limited was assigned to Northstar Biotechnology Group, LLC (“Northstar”), owned partly by certain directors and existing shareholders of the Company, including Dr. William P. Murphy Jr., Dr. Samuel Ahn and Charles Hart. At the date of the assignment, the principal amount of the BlueCrest note was $544,267.

On March 30, 2012, the Company and Northstar agreed to extend until May 1, 2012 the initial payment date for any and all required monthly under the Note, such that the first of the four monthly payments required under the Note will be due and payable on May, 2012 and all subsequent payments will be due on a monthly basis thereafter commencing on June 1, 2012, and to waive any and all defaults and/or events of default under the Note with respect to such payments. As of September 30, 2012, the Company was in default, however, subsequent to September 30, 2012, the Company renegotiated the terms of the Note, Northstar has agreed to suspend the requirement of principal payments by the Company and allow payment of interest-only in common stock.

On September 21, 2012, the Company issued 5,000,000 common stock purchase warrants to Northstar that was treated as Additional interest expense upon issuance.

On October 1, 2012, the Company and Northstar entered into a limited waiver and forbearance agreement whereby the Company agreed to issue 5,000,000 shares of Series A Convertible Preferred Stock and 10,000,000 of common stock in exchange for $210,000 as payment towards outstanding debt, default interest, penalties, professional fees outstanding and due Northstar. In addition, the Company executed a security agreement granting Northstar a lien on all patents, patent applications, trademarks, service marks, copyrights and intellectual property rights of any nature, as well as the results of all clinical trials, know-how for preparing Myoblasts, old and new clinical data, existing approved trials, all right and title to Myoblasts, clinical trial protocols and other property rights.

In addition, the Company granted Northstar a perpetual license on products as described for resale, relicensing and commercialization outside the United States. In connection with the granted license, Northstar shall pay the Company a royalty of up to 8% on revenues generated.

Effective October 1, 2012, the effective interest rate will be 12.85% per annum.  The parties agreed, as of February 28, 2013, to reduce the interest rate to 7% per annum (see Note 14 below).

In connection with the consideration paid, Northstar waived, from the effective date through the earlier of termination or expiration of the agreement, satisfaction of the obligations as described in the forbearance agreement. In 2012, 5,000,000 shares of Series A Convertible Preferred Stock were approved to be issued. In addition, the Company is obligated to issue additional preferred stock equal in lieu of payment of cash of accrued and unpaid interest on each six month anniversary of the effective date (October 1, 2012). In lieu of the initial two payments in preferred stock, the parties have determined to modify the voting rights of the Series A Convertible Preferred Stock from 20 votes per share on matters to be voted on by the common stock holders to 25 votes per share on matters to be voted on by the common stock holders and all prior and subsequent payments of interest will be in common stock; payments of common stock for April 1, 2013 and October 1, 2013 shall be made the fourth quarter of 2013 based on the closing price of the common stock on April 1, 2013 and October 1, 2013 respectively (see Note 14 below).

As described above, during the nine months ended September 30, 2013, the Company issued the 5,000,000 shares of Series A Convertible Preferred Stock and the 10,000,000 of common stock described above in exchange for the $210,000 as payment towards outstanding principle of the debt. In addition, the Company issued 15,000,000 shares of Series A Convertible Preferred Stock as a penalty in settlement of the terms of the forbearance agreement. The fair value of the Preferred Stock of $274,050 was included in interest expense for the nine months ended September 30, 2013. On September 30, 2013, the Company issued 8,771,929 shares of its common stock as payment of $100,000 towards cash advances. As of September 30, 2013, the principle of this note was $362,000.

Officer and Director Notes

At September 30, 2013 and December 31, 2012, the Company has outstanding notes payable to officers and directors with interest at 8% per annum due at maturity. The three subordinated notes, $125,000, $100,000 and $140,000 were previously due on October 22, 2012, November 30, 2012 and June 4, 2011 respectively, and are unsecured. The Company is not obligated to make payment until Northstar loan is paid off.

On October 9, 2012, the Company issued an aggregate of $1,278,324 promissory notes due October 9, 2013 to officers and directors in settlement of outstanding advances and accrued compensation. The promissory notes bear interest of 5% per annum and due at maturity.

On August 1, 2013, the Company issued an aggregate of $500,000 promissory notes due on demand to officers and employee in settlement of accrued compensation. The promissory notes bear interest of 5% per annum and due at various maturity dates.

On September 30, 2013, the Company issued an aggregate of 15,350,876 shares of its common stock in settlement of $175,000 of related party notes payable.

Subordinated debt, related party

As of September 30, 2013 and December 31, 2012, the Company officers and directors have provided notes in aggregate of $1,500,000. The notes are at 8% per annum and are due upon payoff of the Northstar note payable described above

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Condensed Statement of Stockholders' Deficit (Unaudited) (USD $)	Total	Preferred stock	Common stock	Additional paid in capital	Subscription Receivable	Deficit accumulated during development stage
Beginning Balance at Dec. 31, 2012	$ (14,595,567)		$ 182,063	$ 100,260,094		$ (115,037,724)
Beginning Balance, Shares at Dec. 31, 2012			182,062,802
Reclassify the fair value of excess committed shares liability to equity upon common share authorization increase	474,954			474,954
Issuance of common stock	550,000		29,777	520,223
Issuance of common stock, Shares			29,776,525
Common stock issued under put agreement	200,000		12,659	187,341
Common stock issued under put agreement, Shares			12,658,545
Common stock issued in connection with issuance of convertible debt	36,250		2,500	33,750
Common stock issued in connection with issuance of convertible debt, Shares			2,500,000
Common stock issued in connection with settlement of debt	575,463		39,834	535,629
Common stock issued in connection with settlement of debt, Shares			39,833,771
Common stock issued for services	40,519		2,532	37,987
Common stock issued for services,Shares			2,532,471
Common stock issued in settlement of related party notes payable	537,750		44,890	492,860
Common stock issued in settlement of related party notes payable,Shares			44,890,348
Common stock issued in settlement of accounts payable	149,240		5,061	144,179
Common stock issued in settlement of accounts payable, Shares			5,061,101
Preferred stock issued in settlement of debt	70,000	5,000		65,000
Preferred stock issued in settlement of debt, Shares		5,000,000
Preferred stock issued in settlement of forbearance agreement	274,050	15,000		259,050
Preferred stock issued in settlement of forbearance agreement, Shares		15,000,000
Proceeds from common stock subscription	365,000				350,000
Stock based compensation	102,674			102,674
Net loss	(2,416,000)					(2,416,000)
Balance at Sep. 30, 2013	$ (13,650,667)	$ 20,000	$ 319,316	$ 103,113,742	$ 350,000	$ (117,453,724)
Balance, Shares at Sep. 30, 2013		20,000,000	319,315,563

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Condensed Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 6,684
Accounts receivable, net	8,895	1,342
Inventory		62,953
Prepaid and other		41,533
Total current assets	15,579	105,828
Property and equipment, net	492	1,820
Other assets	54,662	54,662
Total assets	70,733	162,310
Current liabilities:
Bank overdraft		89
Accounts payable	2,407,463	2,556,043
Accrued expenses	4,530,681	4,731,488
Advances, related party	316,198	313,448
Deposits	465,286	465,286
Subordinated debt, related party	1,500,000	1,500,000
Notes payable, related party	2,330,324	2,215,324
Notes payable, net of debt discount	1,890,410	2,364,972
Total current liabilities	13,440,362	14,146,650
Long term debt:
Derivative liability	281,037	611,227
Stockholders' deficit:
Preferred stock, par value $0.001; 20,000,000 and 5,000,000 shares authorized as of September 30, 2013 and December 31, 2012, respectively, 20,000,000 and -0- issued and outstanding as of September 30, 2013 and December 31, 2012, respectively	20,000
Common stock, par value $0.001; 950,000,000 and 195,000,000 shares authorized as of September 30, 2013 and December 31, 2012, respectively, 319,315,563 and 182,062,802 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively	319,316	182,063
Additional paid in capital	103,113,742	100,260,094
Common stock subscription	350,000
Deficit accumulated during development stage	(117,453,724)	(115,037,724)
Total stockholders' deficit	(13,650,667)	(14,595,567)
Total liabilities and stockholders' deficit	$ 70,733	$ 162,310

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Going Concern Matters (Details) (USD $)	9 Months Ended		170 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013
Going Concern Matters (Textual)
Net losses attributable to common shareholders	$ 2,416,000
Net cash used in operating activities	(1,568,727)	(905,399)	(74,532,805)
Working capital deficit	$ 13,400,000		$ 13,400,000

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2013

Accrued Expenses [Abstract]

Summary of accrued expenses

	September 30, 2013		December 31, 2012
License and royalty fees	$	2,046,789	$	1,825,675
Amounts payable to the Guarantors of the Company’s loan agreement with Bank of America and Seaside Bank, including fees and interest		1,354,043		1,284,705
Interest payable on notes payable		833,105		1,100,174
Vendor accruals and other		174,268		120,133
Employee commissions, compensation, etc.		122,476		400,801
	$	4,530,681	$	4,731,488

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Commiments and Contingencies (Details) (USD $)	Sep. 30, 2013
Summary of future minimum obligations under the agreement
2013	$ 52,500
2014	210,000
2015	210,000
Total	$ 472,500

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Stock Option and Warrants (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Dec. 31, 2011
Summary of options and activity
Granted, shares	15,000,000
Options outstanding, Balance	7,817,852
Exercised, Weighted - Average Exercise Price	$ 0.01576
Stock Options [Member]
Summary of options and activity
Options outstanding, Beginning Balance	7,853,376	4,636,318
Granted, shares	17,400,000	3,300,000
Exercised, Shares
Forfeited/Expired, Shares	(46,844)	(82,942)
Options outstanding, Balance	25,206,532	7,853,376	4,636,318
Options Exercisable, Shares	7,544,618
Available for grant, Shares	32,600,000
Options outstanding, Weighted - Average Exercise Price, Beginning Balance	$ 0.67	$ 1.20
Granted, Weighted - Average Exercise Price	$ 0.016	$ 0.04
Exercised, Weighted - Average Exercise Price
Forfeited/Expired, Weighted - Average Exercise Price	$ 5.67	$ 5.57
Options outstanding, Weighted - Average Exercise Price, Balance	$ 0.20	$ 0.67	$ 1.20
Options exercisable, Weighted - Average Exercise Price	$ 0.62
Options Excercised, Weighted - Average Remaining Contractual Term	9 years 10 months 24 days
Options outstanding, Weighted - Average Remaining Contractual Term (in years)	9 years 1 month 6 days	8 years 2 months 12 days	8 years 1 month 6 days
Options exercisable, Weighted - Average Remaining Contractual Term (in years)	7 years 10 months 24 days

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Notes Payable (Details Textual) (USD $)	9 Months Ended		170 Months Ended			9 Months Ended	1 Months Ended				1 Months Ended			9 Months Ended		9 Months Ended						3 Months Ended	9 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Aug. 01, 2013	Dec. 31, 2012	Sep. 30, 2013 Common stock [Member]	Oct. 31, 2010 Seaside Bank note payable [Member]	Sep. 30, 2013 Seaside Bank note payable [Member]	Dec. 31, 2012 Seaside Bank note payable [Member]	Oct. 25, 2010 Seaside Bank note payable [Member]	Apr. 30, 2009 BlueCrest Loan Amendment [Member]	Apr. 30, 2009 August 2008 Unsecured Promissory Note [Member]	Aug. 20, 2008 August 2008 Unsecured Promissory Note [Member]	Sep. 30, 2013 August 2008 Unsecured Promissory Note [Member]	Dec. 31, 2012 August 2008 Unsecured Promissory Note [Member]	Sep. 30, 2013 August 2008 Unsecured Promissory Note [Member] Common stock [Member]	Sep. 30, 2013 Hunton & Williams notes payable [Member] Notes_Payable	Dec. 31, 2012 Hunton & Williams notes payable [Member] Notes_Payable	Sep. 30, 2013 Hunton & Williams notes payable [Member] Note payable one [Member]	Sep. 30, 2013 Hunton & Williams notes payable [Member] Note payable two [Member]	Jan. 09, 2013 IBC Funds note payable [Member]	Sep. 30, 2013 Asher notes payable [Member]	Sep. 30, 2013 Asher notes payable [Member]	Dec. 31, 2012 Asher notes payable [Member]	Sep. 30, 2013 Asher notes payable [Member] Maximum [Member]	Sep. 30, 2013 Asher notes payable [Member] Minimum [Member]
Notes Payable (Textual)
Net of unamortized debt discount	$ 64,562		$ 64,562
Notes payable	1,954,972		1,954,972		2,364,972			980,000	980,000	980,000				500,000	1,000,000		384,972	384,972				90,000	90,000
Common stock issued in connection with issuance of a note payable, Shares						2,500,000
Effective interest rate	8.00%		8.00%	5.00%	8.00%					4.25%			13.50%				8.00%	8.00%			8.00%	8.00%	8.00%
Notes payable, net of debt discount	1,890,410		1,890,410		2,364,972
Term of notes payable							2 years
Borrowings from third party pursuant to terms of unsecured promissory note and agreement													1,000,000
Debt instrument, Maturity date													May 31, 2010
Gross proceeds from private placement													19,000,000
Occurrence period of repayment of loan													Within 12 months
Warrant issued to purchase common stock												451,053
Warrant exercise price											$ 0.53	$ 0.5321
Fair value of warrant issued													195,694
Number of outstanding notes payable																	2	2
Outstanding notes payable																			61,150	323,822
Accrued interest	598,125
Shares issued in conversion of debt																1,000,000
Amount of debt exchanged for shares																500,000
Gain (loss) on settlement of note payable														1,078,625
Warrant expected term													10 years
Description of note payable																							The Notes are convertible into common stock, at Asher's option, at a 42% to 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion.
Percentage of discount to the lowest closing price prior to conversion																									45.00%	42.00%
Fair value of embedded derivatives																					198,987	207,176	207,176
Recorded fair value of derivatives and faire value of each subsequent reporting date																						118,934	118,934
Amortization of debt discount	295,750	382,693	1,907,318																			53,115	105,438
Interest expense																							37,176
Dividend yield																							0.00%
Expected volatility																									163.73%	154.80%
Risk free rate																									0.17%	0.09%
Expected Term																									9 months 7 days	8 months 1 day
Estimated fair value of the Company's common stock																					$ 0.0135				$ 0.0373	$ 0.0151
Notes payable, Principle value														$ 500,000								$ 170,000	$ 170,000

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Related Party Transaction (Details) (USD $)	9 Months Ended			9 Months Ended		0 Months Ended	1 Months Ended	2 Months Ended					1 Months Ended	0 Months Ended	9 Months Ended
	Sep. 30, 2013	Aug. 01, 2013	Dec. 31, 2012	Sep. 30, 2013 Common stock [Member]	Sep. 30, 2013 Preferred stock [Member]	Oct. 05, 2012 Northstar Biotechnology Group, LLC Promissory Note [Member]	Feb. 28, 2013 Northstar Biotechnology Group, LLC Promissory Note [Member]	Oct. 31, 2012 Northstar Biotechnology Group, LLC Promissory Note [Member]	Sep. 30, 2013 Northstar Biotechnology Group, LLC Promissory Note [Member]	Dec. 31, 2012 Northstar Biotechnology Group, LLC Promissory Note [Member]	Oct. 02, 2012 Northstar Biotechnology Group, LLC Promissory Note [Member]	Feb. 29, 2012 Northstar Biotechnology Group, LLC Promissory Note [Member]	Mar. 30, 2012 Promissory Note [Member]	Oct. 09, 2012 Officer and Director [Member]	Sep. 30, 2013 Officer and Director [Member]	Aug. 01, 2013 Officer and Director [Member]	Dec. 31, 2012 Officer and Director [Member]	Nov. 30, 2012 Officer and Director [Member]	Oct. 22, 2012 Officer and Director [Member]	Jun. 04, 2011 Officer and Director [Member]
Related Party Transactions (Textual)
Advances, related party	$ 316,198	$ 22,750	$ 313,448
Outstanding principal amount of the Loan									362,000			544,267
Repayment terms													The first of the four monthly payments required under the Note will be due and payable on May, 2012 and all subsequent payments will be due on a monthly basis thereafter commencing on June 1, 2012.
Series A convertible preferred stock issued in exchange for payments									5,000,000	5,000,000	5,000,000
Common stock issued in exchange for payments									10,000,000		10,000,000
Value of debt outstanding									210,000		210,000
Percentage of revenues to be received as royalty						8.00%
Effective interest rate						12.85%	7.00%
Convertible preferred stock issued for penalty settlement									15,000,000
Fair value for Preferred Stock									274,050
Subordinated debt, related party	1,500,000		1,500,000
Effective interest rate	8.00%	5.00%	8.00%											5.00%	8.00%	5.00%	8.00%
Subordinated notes																		100,000	125,000	140,000
Face value of note														1,278,324		500,000
Debt instrument, Maturity date														Oct. 09, 2013
Common stock issued in settlement of promissory notes		22,750
Common stock issued in settlement of promissory note,shares		1,995,614
Common stock issued as payment,shares	8,771,929
Advances of cash	100,000
Common Stock, Voting Rights								25 votes
Preferred Stock, Voting Rights								20 votes
Common stock issued in settlement of related party notes payable,Shares				44,890,348											15,350,876
Common stock issued in settlement of related party notes payable	$ 537,750			$ 44,890											$ 175,000

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Notes Payable

9 Months Ended

Sep. 30, 2013

Notes Payable [Abstract]

NOTES PAYABLE

NOTE 7 – NOTES PAYABLE

Notes payable were comprised of the following as of September 30, 2013 and December 31, 2012:

	September 30, 2013			December 31, 2012
Seaside Bank note payable.	$	980,000		$	980,000
August 2008 Unsecured Promissory Note		500,000			1,000,000
Hunton & Williams notes payable		384,972			384,972
Asher notes payable		90,000			—
Total notes payable		1,954,972			2,364,972
Less unamortized debt discount		(64,562	)		—
Total notes payable net of unamortized debt discount	$	1,890,410		$	2,364,972

Seaside Bank

On October 25, 2010, the Company entered into a Loan Agreement with Seaside National Bank and Trust for a $980,000 loan at 4.25% per annum interest that was used to refinance the Company’s loan with Bank of America. The obligation is guaranteed by certain shareholders of the Company.

August 2008 Unsecured Promissory Note

On August 20, 2008, the Company borrowed $1.0 million from a third party pursuant to the terms of an unsecured Promissory Note and Agreement. Outstanding principal and interest on the loan, which accrues at the rate of 13.5% per annum, is payable in one balloon payment upon the Company’s repayment of the BlueCrest Loan, which is scheduled to mature in May 2010, however the Company is not obligated to make payments until BlueCrest Loan is paid off. In the event the Company completes a private placement of its common stock and/or securities exercisable for or convertible into its common stock which generates at least $19.0 million of gross proceeds, the Company may prepay, without penalty, all outstanding principal and interest due under the loan using the same type of securities issued in the subject private placement. Because repayment of the loan could occur within 12 months from the date of the balance sheet, the Company has classified this loan as short term.

Subject to certain conditions, at the end of each calendar quarter during the time the loan is outstanding, the Company may, but is not required to, pay all or any portion of the interest accrued but unpaid as of such date with shares of its common stock. In April 2009, as consideration for the authorization to amend certain documents related to the Note, the Company issued to the Note holder a warrant to purchase 451,053 shares of common stock at an exercise price of $0.5321 per share.

The warrant, which became exercisable immediately upon issuance, has a ten year term. This warrant had a fair value of $195,694, which was accounted for as additional paid in capital and reflected as a component of debt discount and has been fully amortized as interest expense ratably over the term of the loan.

During the nine months ended September 30, 2013, 1,000,000 shares of common stock were issued to the debt holder, in exchange for $500,000 in principal and $598,125 of accrued interest relating to a previously issued note resulting in a gain of $1,078,625. A gain of $1,078,625 was included in the net gain on settlement of debt and trade payables on the statement of operations. As of September 30, 2013 the principle of this note was $500,000.

Hunton & Williams Notes

At September 30, 2013 and December 31, 2012, the Company has two outstanding notes payable with interest at 8% per annum due at maturity. The two notes, $61,150 and $323,822 are payable in one balloon payment upon the date the Noteholder provides written demand, however the Company is not obligated to make payments until the Northstar (or successor) Loan is paid off.

Asher Notes (During this year)

During the nine months ended September 30, 2013, the Company entered into a Securities Purchase Agreements with Asher Enterprises, Inc. (“Asher”), for the sale of 8% convertible notes in aggregate principal amount of $170,000 (the “Asher Notes”).

The Asher Notes bear interest at the rate of 8% per annum. As of the quarter ended September 30, 2013 all interest and principal must be repaid nine months from the issuance date, the last note due June 11, 2014. The Notes are convertible into common stock, at Asher’s option, at a 42% to 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. The Company has identified the embedded derivatives related to the Asher Notes. These embedded derivatives included certain conversion features and reset provision.

The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Notes and to fair value as of each subsequent reporting date which at September 30, 2013 was $118,934. At the inception of the Asher Notes, the Company determined the aggregate fair value of $207,176 of the embedded derivatives.

The fair value of the embedded derivatives was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 154.80% to 163.73%, (3) weighted average risk-free interest rate of 0.09% to 0.17%, (4) expected lives of 0.67 to .77 years, and (5) estimated fair value of the Company’s common stock from $0.011 to $0.0373 per share. The initial fair value of the embedded debt derivative of $207,176 was allocated as a debt discount up to the proceeds of the note ($170,000) with the remainder ($37,176) charged to current period operations as interest expense. For the three and nine months ended September 30, 2013, the Company amortized $53,115 and $105,438 of debt discount to current period operations as interest expense, respectively. As of September 30, 2013 the gross balance of the Asher Notes was $90,000.

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Property and Equipment (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Summary of property and equipment
Laboratory and medical equipment	$ 352,358	$ 352,358
Furniture, fixtures and equipment	130,916	130,916
Computer equipment	54,414	54,414
Leasehold improvements	362,046	362,046
Property and equipment, Gross	899,734	899,734
Less accumulated depreciation and amortization	(899,242)	(897,914)
Property and equipment, net	$ 492	$ 1,820

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Stock Option and Warrants (Details 3) (Warrant [Member], USD $)	9 Months Ended
	Sep. 30, 2013
Warrants outstanding and exercisable
Warrants Outstanding, Shares	112,695,331
Warrants Outstanding, Weighted-Average Remaining Contractual Term	3 years 10 months 6 days
Warrants Outstanding, Weighted- Average Exercise Price	$ 0.23
Warrants Exercisable, Shares	84,534,199
Warrants Exercisable, Weighted-Average Exercise Price	$ 0.15
0.01 - $0.50 [Member]
Warrants outstanding and exercisable
Range of Exercise Prices, Minimum	$ 0.01
Range of Exercise Prices, Maximum	$ 0.50
Warrants Outstanding, Shares	106,441,198
Warrants Outstanding, Weighted-Average Remaining Contractual Term	6 years
Warrants Outstanding, Weighted- Average Exercise Price	$ 0.03
Warrants Exercisable, Shares	79,824,516
Warrants Exercisable, Weighted-Average Exercise Price	$ 0.04
0.52 - $0.68 [Member]
Warrants outstanding and exercisable
Range of Exercise Prices, Minimum	$ 0.52
Range of Exercise Prices, Maximum	$ 0.68
Warrants Outstanding, Shares	2,699,675
Warrants Outstanding, Weighted-Average Remaining Contractual Term	5 years 7 months 6 days
Warrants Outstanding, Weighted- Average Exercise Price	$ 0.58
Warrants Exercisable, Shares	2,699,675
Warrants Exercisable, Weighted-Average Exercise Price	$ 0.58
0.70 - $1.62 [Member]
Warrants outstanding and exercisable
Range of Exercise Prices, Minimum	$ 0.70
Range of Exercise Prices, Maximum	$ 1.62
Warrants Outstanding, Shares	853,176
Warrants Outstanding, Weighted-Average Remaining Contractual Term	6 years 2 months 12 days
Warrants Outstanding, Weighted- Average Exercise Price	$ 0.71
Warrants Exercisable, Shares	853,176
Warrants Exercisable, Weighted-Average Exercise Price	$ 0.71
5.67 - $7.69 [Member]
Warrants outstanding and exercisable
Range of Exercise Prices, Minimum	$ 5.67
Range of Exercise Prices, Maximum	$ 7.69
Warrants Outstanding, Shares	2,701,282
Warrants Outstanding, Weighted-Average Remaining Contractual Term	9 years 1 month 6 days
Warrants Outstanding, Weighted- Average Exercise Price	$ 7.55
Warrants Exercisable, Shares	1,156,832
Warrants Exercisable, Weighted-Average Exercise Price	$ 7.35

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Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 10 – STOCKHOLDERS’ EQUITY

Preferred stock

On August 17, 2012, the board of directors designated 5,000,000 shares of preferred stock as Series A Convertible Preferred Stock which was increased to 20,000,000 shares of preferred stock as Series A Convertible Preferred Stock. Each share of preferred stock is convertible into equal number of common shares at the option of the holder; entitled to 20 votes on all matters presented to be voted by the holders of common stock; upon event of liquidation, entitled to amount equal to stated value plus any accrued and unpaid dividends or other fees before distribution to junior securities. In lieu of the initial two payments due to Northstar, the parties have determined to modify the voting rights of the Series A Convertible Preferred Stock from 20 votes per share on matters to be voted on by the common stock holders to 25 votes per share on matters to be voted on by the common stock holders (see Note 8 above).

During the nine months ended September 30, 2013, the Company issued an aggregate of 20,000,000 shares of Series A Convertible Preferred Stock for principle payment and settlement of forbearance (see note 8 above).

Common stock

On February 4, 2013, the Company amended its Articles of Incorporation to increase the number of authorized shares to 970,000,000, consisting of 20,000,000 $0.001 par value preferred stock and 950,000,000 $0.001 common stock.

During the nine months ended September 30, 2013, the Company issued an aggregate of 5,061,101 shares of its common stock for settlement of $74,839 of accounts payable. In connection with the settlement, the Company recorded a loss on settlement of debt of $74,401.

During the nine months ended September 30, 2013, the Company issued 2,500,000 shares of its common stock in connection with the issuance of a note payable.

During the nine months ended September 30, 2013, the Company issued 39,833,771 shares of its common stock in connection with the settlement and/or conversion of various notes payable.

During the nine months ended September 30, 2013, the Company issued 44,890,348 shares of its common stock in connection with the settlement of related party notes payable and advances.

During the nine months ended September 30, 2013, the Company issued 2,532,471 shares of its common stock services rendered valued at $40,519.

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Standby Equity Distribution Agreement

9 Months Ended

Sep. 30, 2013

Standby Equity Distribution Agreement [Abstract]

STANDBY EQUITY DISTRIBUTION AGREEMENT

NOTE 6 – STANDBY EQUITY DISTRIBUTION AGREEMENT

On November 2, 2011, the Company and Greystone Capital Partners (“Greystone”) entered into a Standby Equity Distribution Agreement (the “Agreement”).  Pursuant to the Agreement, Greystone has agreed to provide the Company with up to $1,000,000 of funding for the 24-month period following the date a registration statement of the Company’s common stock is declared effective by the SEC (the “Equity Line”).  

During this 24-month period, commencing on the date on which the SEC first declared the registration statement effective, the Company may request a draw down under the Equity Line by which the Company would sell shares of its common stock to Greystone, which is obligated to purchase the shares under the Agreement.  

For each share of the Company common stock purchased under the Agreement, Greystone will pay eighty percent (80%) of the average of the lowest daily volume weighted average price for five consecutive trading days immediately preceding Advance Notice (the "Valuation Period") commencing the date an Advance Notice (the "Advance Notice") is delivered to Greystone in a manner provided by the Agreement. Subject to certain limitations and floor price reductions, the Company may, at its sole discretion, issue a Put Notice to Greystone and Greystone will then be irrevocably bound to acquire such shares. The registration statement of the Company's common stock pursuant to the Agreement was declared effective on February 10, 2012 and a Post-Effective Amendment was declared effective on May 7, 2013. On December 1, 2012, the parties to the Equity Line agreed that the Purchase Price be adjusted to seventy-five percent (75%) of the lowest daily volume weighted average price of the Common Stock as quoted by Bloomberg, LP, during the five (5) consecutive Trading Days (as such term is defined in the Equity Line) immediately subsequent to the date of the relevant Advance Notice.

During the nine months ended September 30, 2013, the Company issued an aggregate of 12,658,545 shares of its common stock in exchange for $200,000 draw down on the equity line.

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Significant Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES

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

General

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

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results from operations for the three and nine month periods ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ended December 31, 2013. The unaudited condensed financial statements should be read in conjunction with the December 31, 2012 financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K.

Basis and business presentation

Bioheart, Inc. (the “Company”) was incorporated under the laws of the State of Florida in August, 1999. The Company is in the development stage, as defined by Accounting Standards Codification subtopic 915-10, Development Stage Entities (“ASC 915-10”) and is the cardiovascular sector of the cell technology industry delivering cell therapies and biologics that help address congestive heart failure, lower limb ischemia, chronic heart ischemia, acute myocardial infarctions and other issues. To date, the Company has not generated significant sales revenues, has incurred expenses, and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from inception through September 30, 2013, the Company has accumulated a deficit through its development stage of $117,453,724.

Comprehensive Income

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

Net Loss per Common Share, basic and diluted

The Company has adopted Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation. Fully diluted shares outstanding were 323,296,916 and 182,807,340 for the three months ended September 30, 2013 and 2012, respectively and 336,682,241 and 174,169,691 for the nine months ended September 30, 2013 and 2012, respectively.

Stock Based Compensation

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

As of September 30, 2013, there were outstanding stock options to purchase 25,206,532 shares of common stock, 7,544,618 shares of which were vested.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable. The financial stability of these institutions is periodically reviewed by senior management.

As of September 30, 2013 and December 31, 2012, three (3) and one (1) customer represented 98% and 97% of the Company’s accounts receivable, respectively.

For the three and nine month period ended September 30, 2012, the Company’s revenues earned from the sale of products and services were $4,072 and $47,245 respectively from three (3) customers.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $158,381 and $106,889 for the three months ended September 30, 2013 and 2012, respectively; $494,762 and $297,535 for the nine months ended September 30, 2013 and 2012, respectively and $65,187,814 from August 12, 1999 (date of inception) to September 30, 2013.

Fair Value

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

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

Reliance on Key Personnel and Consultants

The Company has 4 full-time employees and 1 part-time employee. The Company is heavily dependent on the continued active participation of these current executive officers, employees and key consultants. The loss of any of the senior management or key consultants could significantly and negatively impact the business until adequate replacements can be identified and put in place.

Derivative Instrument Liability

The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges.

Reclassification

Certain reclassifications have been made to prior periods’ data to conform with the current year’s presentation. These reclassifications had no effect on reported income or losses. Specifically, the Company reclassified advances and accrued expenses due related parties to notes payable related party within current liabilities of the balance sheet.

Recent Accounting Pronouncements

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

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Fair Value Measurement (Details Textual) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Fair Value Measurement (Textual)
Derivative liability	$ 281,307,000	$ 611,227

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Standby Equity Distribution Agreement (Details) (USD $)	0 Months Ended	9 Months Ended
	Nov. 02, 2011	Sep. 30, 2013
Standby Equity Distribution Agreement (Textual)
Funds contributed by Greystone	$ 1,000,000
Period for which funding is provided	24 months
Transaction description of agreement with affiliates		For each share of the Company common stock purchased under the Agreement, Greystone will pay eighty percent (80%) of the average of the lowest daily volume weighted average price for five consecutive trading days immediately preceding Advance Notice (the "Valuation Period") commencing the date an Advance Notice (the "Advance Notice") is delivered to Greystone in a manner provided by the Agreement.
Description of purchase price adjustment under equity line		The parties to the Equity Line agreed that the Purchase Price be adjusted to seventy-five percent (75%) of the lowest daily volume weighted average price of the Common Stock as quoted by Bloomberg, LP, during the five (5) consecutive Trading Days (as such term is defined in the Equity Line) immediately subsequent to the date of the relevant Advance Notice.
Common stock share issued in exchange for $150,000 draw down on the equity line		12,658,545
Amount draw down on the equity line due to issuance of common stock		$ 200,000

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Fair Value Measurement

9 Months Ended

Sep. 30, 2013

Fair Value Measurement [Abstract]

FAIR VALUE MEASUREMENT

NOTE 13 — FAIR VALUE MEASUREMENT

The Company adopted the provisions of Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) on January 1, 2008. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

All items required to be recorded or measured on a recurring basis are based upon level 3 inputs.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

Upon adoption of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the financial statements.

The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.

As of September 30, 2013 or December 31, 2012, the Company did not have any items that would be classified as level 1 or 2 disclosures.

The Company recognizes its derivative liabilities as level 3 and values its derivatives using the methods discussed in notes 7 and 9. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed in Notes 7 and 9 are that of volatility and market price of the underlying common stock of the Company.

As of September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges.

The derivative liability as of September 30, 2013, in the amount of $281,037 has a level 3 classification.

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of September 30, 2013:

	Derivative Liability
Balance, December 31, 2012	$	611,227
Total (gains) losses
Initial fair value of debt derivative at note issuance		492,412
Mark-to-market at September 30, 2013:		(39,885)
Transfers out of Level 3 upon increase in authorized shares		(474,954)
Transfers out of Level 3 upon conversion of notes payable		(307,763)
Balance, September 30, 2013	$	281,037
Net Gain for the period included in earnings relating to the liabilities held at September 30, 2013

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Derivative Liabilities

9 Months Ended

Sep. 30, 2013

Derivative Liabilities [Abstract]

DERIVATIVE LIABILITIES

NOTE 9 — DERIVATIVE LIABILITIES

Excessive committed shares

On December 31, 2012, in connection with the previously issued stock options and warrants, the Company had the possibility of exceeding their common shares authorized when considering the number of possible shares that may be issuable to satisfy settlement provisions of these agreements after consideration of all existing instruments that could be settled in shares. The accounting treatment of derivative financial instruments required that the Company reclassify the derivative from equity to a liability at their fair values as of the date possible issuable shares exceeded the authorized level and at fair value as of each subsequent balance sheet date. Any change in fair value was recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives was higher at the subsequent balance sheet date, the Company recorded a non-operating, non-cash charge. If the fair value of the derivatives was lower at the subsequent balance sheet date, the Company recorded non-operating, non-cash income.

On February 4, 2013, in conjunction with the increase in authorized number of shares to 970,000,000, the Company determined it had adequate authorized shares to settle all of these agreements. As such, the Company adjusted the derivative liability to fair value on February 4, 2013 and reclassified the derivative liability to equity. The fair value of the derivative liability of $474,954 (a non-cash item) as of February 4, 2013 was determined using the Binomial Option Pricing model with the following assumptions: dividend yield: 0%; volatility: 156.52%; risk free rate: 0.38%; and expected life: 3.5 years. The Company recorded a loss on change in derivative liabilities of $84,907 during the nine months ended September 30, 2013.

Reset warrants

On October 1, 2012, in connection with the forbearance agreement with Northstar as discussed in Note 8 above, the Company issued an aggregate of 15,000,000 common stock purchase warrants to purchase the Company’s common stock with an exercise price of $0.014 per share for ten years with anti-dilutive (reset) provisions.

The Company has identified embedded derivatives related to the issued warrants. These embedded derivatives included certain and anti-dilutive (reset) provisions. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to fair value as of each subsequent reporting date.

At September 30, 2013, the fair value of the reset provision of $162,103 was determined using the Binomial Option Pricing model with the following assumptions: dividend yield: 0%; volatility: 162.57%; risk free rate: 2.64%; and expected life: 9.00 years. The Company recorded a gain on change in derivative liabilities of $59,076 during the nine months ended September 30, 2013.

Convertible notes

During the nine months ended September 30, 2013, the Company issued convertible notes (see Note 7 above).

These notes are convertible into common stock, at holders’ option, at a discount to the market price of the Company’s common stock. The Company has identified the embedded derivatives related to these notes relating to certain anti-dilutive (reset) provisions. These embedded derivatives included certain conversion features. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Asher Note and to fair value as of each subsequent reporting date.

The fair value of the embedded derivatives at September 30, 2013, in the amount of $118,934, was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 162.57%, (3) weighted average risk-free interest rate of 0.04%, (4) expected lives of 0.39 to 0.70 years, and (5) estimated fair value of the Company’s common stock of $0.011 per share. The Company recorded a gain on change in derivative liabilities of $65,716 during the nine months ended September 30, 2013.

Based upon ASC 840-15-25 (EITF Issue 00-19, paragraph 11) the Company has adopted a sequencing approach regarding the application of ASC 815-40 to its outstanding convertible notes. Pursuant to the sequencing approach, the Company evaluates its contracts based upon earliest issuance date.

At September 30, 2013, the aggregate derivative liabilities was valued at $281,037, the Company believes an event under the contract that would create an obligation to settle in cash or other current assets is remote and has classified the obligation as a long term liability.

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2013

Property and Equipment [Abstract]

Summary of property and equipment

	September 30, 2013			December 31, 2012
Laboratory and medical equipment	$	352,358		$	352,358
Furniture, fixtures and equipment		130,916			130,916
Computer equipment		54,414			54,414
Leasehold improvements		362,046			362,046
		899,734			899,734
Less accumulated depreciation and amortization		(899,242	)		(897,914	)
	$	492		$	1,820

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 14 — SUBSEQUENT EVENTS

Subsequent financing

On October 4, 2013, the Company entered into a Securities Purchase Agreement with Asher Enterprises, Inc. ("Asher"), for the sale of an 8% convertible note in the principal amount of $32,500 (the "Note").

The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on July 8, 2014. The Note is convertible into common stock, at Asher’s option, at a 45% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 120% if prepaid during the period commencing on the closing date through 30 days thereafter, (ii) 125% if prepaid 31 days following the closing through 60 days following the closing, (iii) 130% if prepaid 61 days following the closing through 90 days following the closing and (iv) 135% if prepaid 91 days following the closing through 120 days following the closing. (v) 140% if prepaid 121 days following the closing through 150 days following the closing, (vi) 150% if prepaid 121 days following the closing through 180 days following the closing. After the expiration of 180 days following the date of the Note, the Company has no right of prepayment.

Northstar Letter Agreement

The Company and Northstar entered into a limited waiver and forbearance agreement whereby the Company is obligated to issue additional preferred stock in lieu of payment of cash equal to the accrued and unpaid interest on each six month anniversary of the effective date (October 1, 2012). As of April 1, 2013 and October 1, 2013 the Company owes 5,000,000 shares of Series A Convertible Preferred Stock for accrued and unpaid interest for both of the six month anniversaries of the forbearance agreements for a total of 10,000,000 shares of Series A Convertible Preferred Stock to be issued.

On November 11, 2013, the Company and Northstar (collectively, the “Parties”) agreed to modify the terms of the October 1, 2012 limited waiver and forbearance agreement whereby the Parties agreed to modify the interest rate on the agreement from 12.85% was modified to 7% effective February 28, 2013.   In addition, the Parties agreed the Company would modify the Series A Preferred Stock to read that each share of Series A Preferred Stock shall have 25 votes on all matters presented to be voted by the holders of common stock which will satisfy the preferred stock  payment due of all accrued and unpaid interest on the outstanding note with Northstar due on April 1, 2013 and October 1, 2013.  Lastly, all payments of accrued and unpaid interest shall be in shares of common stock of the Company and that payments of common stock for April 1, 2013 and October 1, 2013 will be made in the fourth quarter of 2013.

Issuance of Common Stock

In October 2013, the Company issued an aggregate of 27,859,747 shares of common stock in connection with stock subscriptions.

In October 2013, the Company issued an aggregate of 5,493,056 shares of common stock in settlement of $25,312 of notes payable and accrued interest.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	BIOHEART, INC.
Entity Central Index Key	0001388319
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		347,175,310

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Significant Accounting Policies [Abstract]

Basis and business presentation

Basis and business presentation

Bioheart, Inc. (the “Company”) was incorporated under the laws of the State of Florida in August, 1999. The Company is in the development stage, as defined by Accounting Standards Codification subtopic 915-10, Development Stage Entities (“ASC 915-10”) and is the cardiovascular sector of the cell technology industry delivering cell therapies and biologics that help address congestive heart failure, lower limb ischemia, chronic heart ischemia, acute myocardial infarctions and other issues. To date, the Company has not generated significant sales revenues, has incurred expenses, and has sustained losses. Consequently, its operations are subject to all the risks inherent in the establishment of a new business enterprise. For the period from inception through September 30, 2013, the Company has accumulated a deficit through its development stage of $117,453,724.

Comprehensive Income

Comprehensive Income

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

Net Loss per Common Share, basic and diluted

Net Loss per Common Share, basic and diluted

The Company has adopted Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Stock options and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation. Fully diluted shares outstanding were 323,296,916 and 182,807,340 for the three months ended September 30, 2013 and 2012, respectively and 336,682,241 and 174,169,691 for the nine months ended September 30, 2013 and 2012, respectively.

Stock based compensation

Stock Based Compensation

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

As of September 30, 2013, there were outstanding stock options to purchase 25,206,532 shares of common stock, 7,544,618 shares of which were vested.

Concentrations of Credit Risk

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable. The financial stability of these institutions is periodically reviewed by senior management.

As of September 30, 2013 and December 31, 2012, three (3) and one (1) customer represented 98% and 97% of the Company’s accounts receivable, respectively.

For the three and nine month period ended September 30, 2012, the Company’s revenues earned from the sale of products and services were $4,072 and $47,245 respectively from three (3) customers.

Reliance on Key Personnel and Consultants

Reliance on Key Personnel and Consultants

The Company has 4 full-time employees and 1 part-time employee. The Company is heavily dependent on the continued active participation of these current executive officers, employees and key consultants. The loss of any of the senior management or key consultants could significantly and negatively impact the business until adequate replacements can be identified and put in place.

Research and Development

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $158,381 and $106,889 for the three months ended September 30, 2013 and 2012, respectively; $494,762 and $297,535 for the nine months ended September 30, 2013 and 2012, respectively and $65,187,814 from August 12, 1999 (date of inception) to September 30, 2013.

Fair Value

Fair Value

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

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

Derivative Instrument Liability

Derivative Instrument Liability

The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At September 30, 2013 and December 31, 2012, the Company did not have any derivative instruments that were designated as hedges.

Reclassification

Reclassification

Certain reclassifications have been made to prior periods’ data to conform with the current year’s presentation. These reclassifications had no effect on reported income or losses. Specifically, the Company reclassified advances and accrued expenses due related parties to notes payable related party within current liabilities of the balance sheet.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

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