UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~September~~June 30, ~~2021~~2022

☐	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 001-36457

PROVECTUS BIOPHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware		90-0031917
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~10025 Investment Drive~~800 S Gay Street, Suite ~~250~~1610 Knoxville, Tennessee		~~37932~~37929
(Address of principal executive offices)		(Zip Code)

866-594-5999

(Registrant’s telephone number, including area code)

~~Not Applicable~~10025 Investment Drive, Suite 250, Knoxville, TN 37932

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		N/A		N/A

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

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

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of ~~November 9, 2021,~~August 10, 2022, was ~~419,447,119~~419,497,119.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements	1
Item 1. Financial Statements (unaudited)	2
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Operations	3
Condensed Consolidated Statements of Comprehensive Loss	4
Condensed Consolidated Statements of Changes in Stockholders’ Deficiency	5
Condensed Consolidated Statements of Cash Flows	6
Notes to Condensed Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1712
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2317
Item 4. Controls and Procedures	2317

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	2418
Item 1A. Risk Factors	2418
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2418
Item 3. Defaults Upon Senior Securities	2519
Item 4. Mine Safety Disclosures	2519
Item 5. Other Information	2519
Item 6. Exhibits	2519

SIGNATURES	2620

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined under U.S. federal securities laws. These statements reflect management’s current knowledge, assumptions, beliefs, estimates, and expectations. These statements also express management’s current views of future performance, results, and trends and may be identified by their use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “predict,” “project,” “should,” “strategy,” “will,” and other similar terms. Forward-looking statements are subject to a number of risks and uncertainties that could cause our actual results to materially differ from those described in the forward-looking statements. Readers should not place undue reliance on forward-looking statements. Such statements are made as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to update such statements after this date, unless otherwise required by law.

Risks and uncertainties that could cause our actual results to materially differ from those described in forward-looking statements include those discussed in our filings with the U.S. Securities and Exchange Commission (the “SEC”) (including those described in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2020)~~2021), and Item 1A of Part II of this Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2021,~~2022, and:

●

Our potential receipt of sales from investigational rose bengal sodium-based drug products PV-10^® and PH-10^®, and/or any other halogenated xanthene-based drug products (if and when approved); and licensing, milestone, royalty, and/or other payments related to these investigational drug products and/or the Company’s liquidation, dissolution, or winding up, or any sale, lease, conveyance, or other disposition of any intellectual property relating to rose bengal sodium-based and other halogenated xanthene-based investigational drug products and/or drug substances,


	●	Our ability to raise additional capital through the proceeds of private placement transactions, the exercise of existing warrants and outstanding stock options, and/or public offerings of debt or equity securities, ~~and~~

	●	The widespread outbreak of an illness or communicable/infectious disease, such as severe acute respiratory syndrome coronavirus 2, or a public health crisis, could disrupt our business and adversely affect our operations and financial ~~condition.~~condition, and

	●	Many companies across a variety of sectors have reported and continue to report disruptions, shortages, and other supply chain-related issues. In the biopharmaceutical sector, delays and interruptions in the supply chain have been particularly pronounced. During this second quarter of 2022, we were able to effectively manage our supply of prescription drug candidates in a manner that avoided any significant interruptions to our clinical programs.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,			June 30,			December 31,
	2021			2020			2022			2021
	(Unaudited)							(Unaudited)
Assets

Current Assets:
Cash and cash equivalents	$	254,083		$	97,231		$	84,274		$	682,984
Short-term receivables - legal fees, settlement and other, net		1,354			3,930
Prepaid expenses		251,111			322,518
Restricted cash								1,948,335			2,423,958
Short-term receivables								2,744			5,107
Prepaid expenses and other current assets								243,394			329,908

Total Current Assets		506,548			423,679			2,278,747			3,441,957

Equipment and furnishings, less accumulated depreciation of $87,962 and $78,313, respectively		35,052			44,701
Equipment and furnishings, less accumulated depreciation of $97,215 and $91,178, respectively								25,799			31,836
Operating lease right-of-use asset		58,736			120,821			138,863			39,563

Total Assets	$	600,336		$	589,201		$	2,443,409		$	3,513,356

Liabilities and Stockholders’ Deficiency

Current Liabilities:
Accounts payable - trade	$	1,259,623		$	956,860
Accounts payable							$	1,894,201		$	1,287,459
Deposit for purchase of Series D-1 Preferred Stock		150,000		$	-			-			150,000
Unearned grant revenue								1,990,685			2,500,000
Other accrued expenses		1,806,000			1,500,782			2,331,621			2,002,486
Current portion of accrued interest		-			2,774,968
Current portion of accrued interest - related parties		2,044			1,766,493
Current portion of note payable		68,392			236,228
Current portion of convertible notes payable		-			16,622,000
Current portion of convertible notes payable - related parties		200,000			6,770,000
Current portion of operating lease liability		62,920			84,383
Accrued interest								68,389			10,578
Accrued interest - related parties								14,044			6,044
Notes payable								142,693			238,452
Convertible notes payable								1,810,000			1,260,000
Convertible notes payable - related parties								200,000			200,000
Operating lease liability, current portion								42,662			45,617

Total Current Liabilities		3,548,979			30,711,714			8,494,295			7,700,636

Note payable, non-current portion		-			39,061
Operating lease liability, non-current portion		-			44,783			96,201			-

Total Liabilities		3,548,979			30,795,558			8,590,496			7,700,636

Commitments and contingencies (Note 10)		-
Commitments, contingencies, and litigations (Note 11)								-			-
Stockholders’ Deficiency:
Preferred stock; par value $0.001 per share; 25,000,000 shares authorized;
Series D Convertible Preferred Stock; 12,374,000 shares designated; 12,373,247 shares issued and outstanding at June 30, 2022 and December 31, 2021; aggregate liquidation preference of $14,164,889 at June 30, 2022 and December 31, 2021								12,373			12,373
Series D-1 Convertible Preferred Stock; 11,241,000 shares designated; 9,270,860 and 9,218,449 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively; aggregate liquidation preference of $106,132,320 and $105,532,804 at June 30, 2022 and December 31, 2021, respectively								9,271			9,219
Preferred stock, value

Stockholders’ Deficiency:
Preferred stock; par value $0.001 per share; 25,000,000 shares authorized; Series B Convertible Preferred Stock; 240,000 shares designated; 0 and 100 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $0 and $3,500 at September 30, 2021 and December 31, 2020, respectively		-			-
Series D Convertible Preferred Stock; 12,374,000 shares designated; 12,373,247 and 0 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $14,164,889 and $0 at September 30, 2021 and December 31, 2020, respectively; (See Note 4. Convertible Notes Payable – Liquidation Preference)		12,373			-
Series D-1 Convertible Preferred Stock; 9,441,000 shares designated; 9,218,449 and 0 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $105,532,804 and $0 at September 30, 2021 and December 31, 2020, respectively; (See Note 4. Convertible Notes Payable – Liquidation Preference)		9,219			-
Preferred stock value
Common stock; par value $0.001 per share; 1,000,000,000 shares authorized; 419,447,119 and 398,807,037 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		419,448			398,808
Common stock; par value $0.001 per share; 1,000,000,000 shares authorized; 419,447,119 shares issued and outstanding at June 30, 2022 and December 31, 2021								419,447			419,447
Additional paid-in capital		241,440,106			209,923,347			241,590,054			241,440,106
Accumulated other comprehensive loss		(34,574	)		(34,097	)		(35,511	)		(34,467	)
Accumulated deficit		(244,795,215	)		(240,494,415	)		(248,142,721	)		(246,033,958	)

Total Stockholders’ Deficiency		(2,948,643	)		(30,206,357	)		(6,147,087	)		(4,187,280	)

Total Liabilities and Stockholders’ Deficiency	$	600,336		$	589,201		$	2,443,409		$	3,513,356

See accompanying notes to condensed consolidated financial statements.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

2021 2020 2021 2020
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2021 2020 2021 2020

Operating Expenses:
Research and development $ 608,653 $ 667,523 $ 1,866,776 $ 2,273,423
General and administrative 438,578 434,355 1,583,148 1,487,543
Total Operating Expenses 1,047,231 1,101,878 3,449,924 3,760,966

Total Operating Loss (1,047,231 ) (1,101,878 ) (3,449,924 ) (3,760,966 )
Other Income/(Expense):
EIDL grant - - - 3,000
Research and development tax credit (507 ) 1 31,637 27,187
Investment and interest income 1 823 2 3,414
Gain from extinguishment - - 63,094 -
Interest expense (3,522 ) (463,390 ) (945,609 ) (1,278,945 )
Total Other Expense, Net (4,028 ) (462,566 ) (850,876 ) (1,245,344 )

Net Loss $ (1,051,259 ) $ (1,564,444 ) $ (4,300,800 ) $ (5,006,310 )

Basic and Diluted Loss Per Common Share $ (0.00 ) $ (0.00 ) $ (0.01 ) $ (0.01 )

Weighted Average Number of Common Shares Outstanding - Basic and Diluted 409,961,614 393,495,431 405,286,784 393,443,141


	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021

Grant Revenue	$	321,710		$	-		$	509,315		$	-

Operating Expenses:
Research and development		816,648			602,979			1,487,764			1,258,123
General and administrative		583,042			619,038			1,099,589			1,144,570
Total Operating Expenses		1,399,690			1,222,017			2,587,353			2,402,693

Total Operating Loss		(1,077,980	)		(1,222,017	)		(2,078,038	)		(2,402,693	)

Other Income/(Expense):
Research and development tax credit		38,259			32,144			38,259			32,144
Gain from extinguishment		-			63,094			-			63,094
Interest income and interest expense		(38,120	)		(452,812	)		(68,984	)		(942,086	)
Total Other Income/(Expense), Net		139			(357,574	)		(30,725	)		(846,848	)

Net Loss	$	(1,077,841	)	$	(1,579,591	)	$	(2,108,763	)	$	(3,249,541	)

Basic and Diluted Loss Per Common Share	$	(0.00	)	$	(0.00	)		(0.01	)	$	(0.01	)

Weighted Average Number of Common Shares Outstanding - Basic and Diluted		419,447,119			403,628,466			419,447,119			402,910,628

See accompanying notes to condensed consolidated financial statements.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	2021			2020			2021			2020
	For the Three Months Ended						For the Nine Months Ended						For the Three Months Ended						For the Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2021			2020			2021			2020			2022			2021			2022			2021

Net Loss	$	(1,051,259	)	$	(1,564,444	)	$	(4,300,800	)	$	(5,006,310	)	$	(1,077,841	)	$	(1,579,591	)	$	(2,108,763	)	$	(3,249,541	)
Other Comprehensive Loss:
Foreign currency translation adjustments		(193	)		(1,652	)		(477	)		(8,446	)		(328	)		(1,121	)		(1,044	)		(284	)
Total Comprehensive Loss	$	(1,051,452	)	$	(1,566,096	)	$	(4,301,277	)	$	(5,014,756	)	$	(1,078,169	)	$	(1,580,712	)	$	(2,109,807	)	$	(3,249,825	)

See accompanying notes to condensed consolidated financial statements.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

(Unaudited)

FOR THE ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, 2022


		Preferred Stock				Preferred Stock								Additional		Accumulated Other
		Series D				Series D-1				Common Stock				Paid-In		Comprehensive			Accumulated
		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Total

Balance at January 1, 2022	-		12,373,247	$	12,373		9,218,449	$	9,219		419,447,119	$	419,447	$	241,440,106	$	(34,467	)	$	(246,033,958	)	$	(4,187,280	)
Common stock issued upon exercise of warrants
Common stock issued upon exercise of warrants, shares
Common stock
Common stock, shares
Warrants
Conversion of PRH Notes to Series D Preferred Stock
Conversion of PRH Notes to Series D Preferred Stock, shares
Conversion of PRH Notes to Series D-1 Preferred Stock
Conversion of PRH Notes to Series D-1 Preferred Stock, shares

Series D-1 Preferred Stock issued for cash			-		-		52,411		52		-		-		149,948		-			-			150,000
Comprehensive loss:
Net loss	-		-		-		-		-		-		-		-		-			(1,030,922	)		(1,030,922	)
Other comprehensive loss			-		-		-		-		-		-		-		(716	)		-			(716	)

Balance at March 31, 2022	-		12,373,247	$	12,373		9,270,860	$	9,271		419,447,119	$	419,447	$	241,590,054	$	(35,183	)	$	(247,064,880	)	$	(5,068,918	)

Comprehensive loss:
Net loss	-		-		-		-		-		-		-		-		-			(1,077,841	)		(1,077,841	)
Other comprehensive income			-		-		-		-		-		-		-		(328	)		-			(328	)

Balance at June 30, 2022	-		12,373,247	$	12,373		9,270,860	$	9,271		419,447,119	$	419,447	$	241,590,054	$	(35,511	)	$	(248,142,721	)	$	(6,147,087	)

FOR THE SIX MONTHS ENDED JUNE 30, 2021


																							Accumulated										Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Total
	Preferred Stock					Preferred Stock				Preferred Stock										Additional			Other									Preferred Stock				Preferred Stock				Preferred Stock								Additional		Accumulated Other
	Series B					Series D				Series D-1						Common Stock				Paid-In			Comprehensive			Accumulated						Series B				Series D				Series D-1				Common Stock				Paid-In		Comprehensive			Accumulated
	Shares			Amount		Shares		Amount		Shares			Amount			Shares		Amount		Capital			Loss			Deficit			Total			Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Total

Balance at January 1, 2021		100		$	-		-	$	-		-		$	-			398,807,037	$	398,808	$	209,923,347		$	(34,097	)	$	(240,494,415	)	$	(30,206,357	)		100		-		-		-		-		-		398,807,037	$	398,808	$	209,923,347	$	(34,097	)	$	(240,494,415	)	$	(30,206,357	)

Common stock issued for services
Common stock issued for services, shares
Common stock issued upon exercise of warrants																																	-		-		-		-		-		-		4,500,000		4,500		235,350		-			-			239,850
Stock-based compensation:
Common stock																																	-		-		-		-		-		-		250,000		250		19,500		-			-			19,750
Comprehensive loss:
Net loss																																	-		-		-		-		-		-		-		-		-		-			(1,669,950	)		(1,669,950	)
Other comprehensive loss																																	-		-		-		-		-		-		-		-		-		837			-			837

Balance at March 31, 2021																																	100		-		-		-		-		-		403,557,037	$	403,558	$	210,178,197	$	(33,260	)	$	(242,164,365	)	$	(31,615,870	)
Beginning balance, value																																	100		-		-		-		-		-		403,557,037		403,558		210,178,197		(33,260	)		(242,164,365	)		(31,615,870	)

Common stock issued upon exercise of warrants		-			-		-		-		-			-			4,500,000		4,500		235,350			-			-			239,850			-		-		-		-		-		-		200,000		200		10,460		-			-			10,660
Stock-based compensation:
Common stock		-			-		-		-		-			-			250,000		250		19,500			-			-			19,750			-		-		-		-		-		-		25,000		25		1,650		-			-			1,675
Warrants																																	-		-		-		-		-		-		-		-		488		-			-			488
Conversion of PRH Notes to Series D Preferred Stock																																	-		-		12,373,247		12,373		-		-		-		-		3,528,849		-			-			3,541,222
Conversion of PRH Notes to Series D Preferred Stock, shares
Conversion of PRH Notes to Series D-1 Preferred Stock
Conversion of PRH Notes to Series D-1 Preferred Stock, shares
Conversion of Series B Preferred Stock to Common Stock
Conversion of Series B Preferred Stock to Common Stock, shares
Conversion of Series D-1 Preferred Stock to Common Stock
Conversion of Series D-1 Preferred Stock to Common Stock, shares
Warrants issued for services
Comprehensive loss:																			-
Net loss		-			-		-		-		-			-			-		-		-			-			(1,669,950	)		(1,669,950	)
Other comprehensive loss		-			-		-		-		-			-			-		-		-			837			-			837

Balance at March 31, 2021		100		$	-		-	$	-		-		$	-			403,557,037	$	403,558	$	210,178,197		$	(33,260	)	$	(242,164,365	)	$	(31,615,870	)

Common stock issued for services		-			-		-		-		-			-			25,000		25		1,650			-			-			1,675
Common stock issued upon exercise of warrants		-			-		-		-		-			-			200,000		200		10,460			-			-			10,660
Stock-based compensation:
Warrants		-			-		-		-		-			-			-		-		488			-			-			488
Conversion of PRH Notes to Series D Preferred Stock		-			-		12,373,247		12,373		-			-			-		-		3,528,849			-			-			3,541,222
Conversion of PRH Notes to Series D-1 Preferred Stock		-			-		-		-		9,440,594			9,441			-		-		27,022,417			-			-			27,031,858			-		-		-		-		9,440,594		9,441		-		-		27,022,417		-			-			27,031,858
Comprehensive loss:
Net loss		-			-		-		-		-			-			-		-		-			-			(1,579,591	)		(1,579,591	)		-		-		-		-		-		-		-		-		-		-			(1,579,591	)		(1,579,591	)
Net income (loss)																																	-		-		-		-		-		-		-		-		-		-			(1,579,591	)		(1,579,591	)
Other comprehensive income		-			-		-		-		-			-			-		-		-			(1,121	)		-			(1,121	)		-		-		-		-		-		-		-		-		-		(1,121	)		-			(1,121	)
Other comprehensive income (loss)																																	-		-		-		-		-		-		-		-		-		(1,121	)		-			(1,121	)

Balance at June 30, 2021		100		$	-		12,373,247	$	12,373		9,440,594		$	9,441			403,782,037	$	403,783	$	240,742,061		$	(34,381	)	$	(243,743,956	)	$	(2,610,679	)		100	$	-		12,373,247	$	12,373		9,440,594	$	9,441		403,782,037	$	403,783	$	240,742,061	$	(34,381	)	$	(243,743,959	)	$	(2,610,682	)

Common stock issued upon exercise of warrants		-			-		-		-		-			-			13,352,966		13,353		698,360			-			-			711,713
Stock-based compensation:
Common stock		-			-		-		-		-			-			25,000		25		1,750			-			-			1,775
Conversion of Series B Preferred Stock to Common Stock		(100	)		-		-		-		-			-			65,666		66		(66	)		-			-			-
Conversion of Series D-1 Preferred Stock to Common Stock		-			-		-		-		(222,145	)		(222	)		2,221,450		2,221		(1,999	)		-			-			-
Comprehensive loss:
Net loss		-			-		-		-		-			-			-		-		-			-			(1,051,259	)		(1,051,259	)
Other comprehensive loss		-			-		-		-		-			-			-		-		-			(193	)		-			(193	)

Balance at September 30, 2021		-		$	-		12,373,247	$	12,373		9,218,449		$	9,219			419,447,119	$	419,448	$	241,440,106		$	(34,574	)	$	(244,795,215	)	$	(2,948,643	)

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020~~

Accumulated
Preferred Stock Additional Other
Series B Common Stock Paid-In Comprehensive Accumulated
Shares Amount Shares Amount Capital Loss Deficit Total

Balance at January 1, 2020 100 $ - 389,889,475 $ 389,889 $ 209,378,835 $ (24,008 ) $ (233,816,828 ) $ (24,072,112 )

Common stock issued upon exercise of warrants - - 800,000 800 41,840 - - 42,640
Comprehensive loss: -
Net loss - - - - - - (1,827,061 ) (1,827,061 )
Other comprehensive loss - - - - - (9,027 ) - (9,027 )

Balance at March 31, 2020 100 $ - 390,689,475 $ 390,689 $ 209,420,675 $ (33,035 ) $ (235,643,889 ) $ (25,865,560 )

Common stock issued for services - - 25,000 25 1,125 - - 1,150
Comprehensive loss:
Net loss - - - - - - (1,614,805 ) (1,614,805 )
Other comprehensive income - - - - - 2,233 - 2,233

Balance at June 30, 2020 100 $ - 390,714,475 $ 390,714 $ 209,421,800 $ (30,802 ) $ (237,258,694 ) $ (27,476,982 )
Balance 100 $ - 390,714,475 $ 390,714 $ 209,421,800 $ (30,802 ) $ (237,258,694 ) $ (27,476,982 )

Common stock issued for services - - 37,500 38 2,775 - - 2,813
Warrants issued for services - - - - 865 - - 865
Common stock issued upon exercise of warrants - - 6,105,062 6,105 319,296 - - 325,401
Comprehensive loss:
Net loss - - - - - - (1,564,444 ) (1,564,444 )
Other comprehensive loss - - - - - (1,652 ) - (1,652)
Other comprehensive (loss) income - - - - - (1,652 ) - (1,652 )

Balance at September 30, 2020 100 $ - 396,857,037 $ 396,857 $ 209,744,736 $ (32,454 ) $ (238,823,138 ) $ (28,713,999 )
Balance 100 $ - 396,857,037 $ 396,857 $ 209,744,736 $ (32,454 ) $ (238,823,138 ) $ (28,713,999 )

See accompanying notes to condensed consolidated financial statements.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Six Months Ended
	June 30,
	2022			2021

Cash Flows From Operating Activities:
Net loss	$	(2,108,763	)	$	(3,249,541	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		-			21,913
Non-cash lease expense		31,142			40,012
Depreciation		6,037			6,432
Gain on forgiveness of PPP Loan and interest		-			(63,094	)
Changes in operating assets and liabilities
Short term receivables		2,363			(1,632	)
Prepaid expenses and other current assets		143,940			123,230
Accounts payable - trade		606,742			252,254
Unearned grant revenue		(509,315	)		-
Other accrued expenses		329,135			152,786
Operating lease liability		(37,196	)		(42,191	)
Accrued interest expense		65,811			940,212

Net Cash Used In Operating Activities		(1,470,104	)		(1,819,619	)

Cash Flows From Financing Activities:
Proceeds from issuance of convertible notes payable		550,000			1,700,000
Repayment of short-term note payable		(153,185	)		(95,387	)
Note Payable		-			(85,398)
Proceeds from exercise of warrants		-			250,510
Net Cash Provided By Financing Activities		396,815			1,769,725

Effect of exchange rates on cash, cash equivalents, and restricted cash		(1,044	)		70

Net Decrease In Cash, Cash Equivalents, and Restricted Cash		(1,074,333	)		(49,824	)

Cash, Cash Equivalents, and Restricted Cash, Beginning of Period		3,106,942			97,231

Cash, Cash Equivalents, and Restricted Cash, End of Period	$	2,032,609		$	47,407

Cash, cash equivalents and restricted cash consisted of the following:
Cash and cash equivalents	$	84,274		$	47,407
Restricted cash		1,948,335			-
	$	2,032,609		$	47,407

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	-		$	-
Income taxes	$	-		$	-

Non-cash investing and financing activities:
Purchase of insurance policies financed by short-term note payable	$	(57,426	)	$	(309,710	)
Deposit applied for purchase of Series D-1 Preferred Stock	$	(150,000	)	$	-
Conversion of non-amended 2017 Notes to Series D Preferred Stock	$	-		$	3,541,222
Conversion of amended 2017 Notes and 2020 Notes to Series D-1 Preferred Stock	$	-		$	27,031,858
Right-of-use assets obtained in exchange for operating lease liabilities	$	130,422		$	-

For the Nine Months Ended
September 30,
2021 2020

Cash Flows From Operating Activities:
Net loss $ (4,300,800 ) $ (5,006,310 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation 23,688 4,828
Non-cash lease expense 62,085 55,190
Depreciation 9,648 10,467
Amortization of patents - 228,107
Forgiveness of PPP Loan (62,500 ) -
Changes in operating assets and liabilities
Short term receivables 2,448 47,250
Prepaid expenses 145,639 185,329
Accounts payable - trade 302,978 (61,026 )
Other accrued expenses 306,116 187,705
Operating lease liability (66,246 ) (58,437 )
Accrued interest expense 941,663 1,278,665

Net Cash Used In Operating Activities (2,635,281 ) (3,128,232 )

Cash Flows From Financing Activities:
Proceeds from issuance of convertible notes payable 1,700,000 3,000,000
Proceeds from issuance of convertible notes payable - related parties 200,000 100,000
Deposit for purchase of Series D-1 Preferred Stock 150,000 -
Repayment of short-term note payable (219,172 ) -
Proceeds from note payable - 62,500
Proceeds from exercise of warrants 962,223 368,040
Net Cash Provided By Financing Activities
2,793,051
3,530,540

Effect of Exchange Rate Changes on Cash (918 ) (6,492 )

Net Increase In Cash and Cash Equivalents 156,852 395,816

Cash and Cash Equivalents, Beginning of Period 97,231 590,706

Cash and Cash Equivalents, End of Period $ 254,083 $ 986,522

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ -
Income taxes $ - $ -

Non-cash investing and financing activities:
Purchase of insurance policies financed by short-term note payable $ (282,667 ) $ -
Conversion of non-amended 2017 Notes to Series D Preferred Stock $ 3,541,222 $ -
Conversion of amended 2017 Notes and 2020 Notes to Series D-1 Preferred Stock $ 27,031,858 $ -
Conversion of Series D-1 Preferred Stock to Common Stock $ 222 $ -

See accompanying notes to condensed consolidated financial statements.

PROVECTUS BIOPHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Business Organization, Nature of Operations and Basis of Presentation

Provectus Biopharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, “Provectus” or ~~the “Company”~~“the Company”), is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases ~~with the aim of maximizing the curative impact of these medicines and achieving immunity from treated disease. These investigational drugs are~~ based on a ~~wholly owned~~ class of small molecules called halogenated xanthenes (“HXs”). , a class entirely owned by the Company.

Our lead HX molecule is named rose bengal ~~disodium~~sodium (“~~RBD”~~RBS”). The Company has established a multi-step approach using quality-by-design principles for synthesizing and manufacturing pharmaceutical-grade RBS by current good manufacturing practice (“cGMP”) and under the guidelines of The International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use. A second HX molecule has been synthesized, 4,5,6,7-tetrabromo-3′,6′-dihydroxy-2′,4′,5′,7′-tetraiodo-3H-spiro[isobenz- ofuran-1,9′-xanthen]-3-one.

	●	Oncology: PV-10^®, an investigational cancer immunotherapy administered by intralesional (“IL”) injection and an injectable formulation of cGMP ~~RBD,~~RBS, is undergoing clinical study for adult solid tumor cancers, such as melanoma and gastrointestinal (“GI”) tumors (including hepatocellular carcinoma (“HCC”), colorectal cancer metastatic to the liver (“mCRC”), neuroendocrine tumors (“NET”) metastatic to the liver (“mNET”), and uveal melanoma metastatic to the liver (“mUM”), among others). Orphan drug designation (“ODD”) status was granted to PV-10 by the U.S. Food and Drug Administration (the “FDA”) for metastatic melanoma in 2006, HCC in 2011, and ocular melanoma (including uveal melanoma) in 2019.cancers. Oral formulations of cGMP ~~RBD~~RBS are also undergoing preclinical study as prophylactic and therapeutic treatments for high-risk and refractory adult solid tumor ~~cancers, such as head and neck, breast, colorectal, and testicular~~ cancers.~~In vivo~~ ~~data of a colorectal tumor murine model that continuously promotes abnormal cell proliferation and transformation into cancer indicate increased survival in both prophylactic and therapeutic settings.~~

	●	Pediatric Oncology: IL PV-10 is ~~also~~ undergoing preclinical study for pediatric solid tumor ~~cancers (including neuroblastoma, Ewing sarcoma, rhabdomyosarcoma, and osteosarcoma). ODD status was granted to PV-10 by the FDA for neuroblastoma in 2018.~~cancers.

	●	Hematology: Oral formulations of cGMP ~~RBD~~RBS are undergoing preclinical study for refractory and relapsed pediatric blood cancers (including leukemias).~~In vivo~~ ~~data of an acute lymphoblastic leukemia murine model indicated increased survival.~~

	●	Virology: ~~Systemically administered~~Systemic administration of formulations of cGMP ~~RBD~~RBS are undergoing preclinical study for the novel strain of coronavirus (“CoV”): severe acute respiratory syndrome (“SARS”) CoV 2 (“SARS-CoV-2”).~~In silico~~ ~~data indicate docking-based binding affinity to SARS-CoV-2’s main protease, spike protein, and different variants of the spike protein.~~ ~~In vitro~~ ~~data indicate activity against SARS-CoV-2 in African green monkey kidney cell (Vero) and human lung epithelial cell (Calu-3) models, and synergistic activity with remdesivir in a Vero cell model.~~

	●	Microbiology: Different formulations of cGMP ~~RBD~~RBS are undergoing preclinical study as potential treatments for multi-drug resistant (“MDR”) ~~bacteria, such as gram-positive and gram-negative.~~bacteria.

	●	Ophthalmology: Topical formulations of cGMP ~~RBD~~RBS are undergoing preclinical study as potential treatments for diseases and disorders of the ~~eye, such as infectious keratitis.~~eye.

	●	Dermatology: PH-10^®, an investigational ~~immuno-dermatology~~immune-dermatology agent administered as a topical ~~gel and~~ formulation of cGMP ~~RBD,~~RBS, is undergoing monotherapy clinical study ~~and~~as well as preclinical study ofas a monotherapy and in combination therapy with approved drugs for inflammatory ~~dermatoses (including psoriasis and atopic dermatitis).~~dermatoses.

	●	Animal Health: Different formulations of cGMP ~~RBD~~RBS are undergoing development as potential treatments for animal cancers and dermatological disorders.

To date, the Company has not generated any revenues or profits from planned principal operations. The Company’s activities are subject to significant risks and uncertainties, including failing to successfully develop and license or commercialize the Company’s prescription drug candidates.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be reviewed in conjunction with the Company’s audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, ~~2020~~2021 filed with the SEC on March ~~2, 2021.~~29, 2022. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~2022.

SARS-CoV-2 was ~~reportedly~~ first identified in late-2019 and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the SARS-CoV-2 pandemic, many companies have experienced disruptions of their operations and the markets they serve. The Company has taken several temporary precautionary measures intended to help ensure the well-being of its employees and contractors and to minimize business disruption. The Company considered the impact of SARS-CoV-2 pandemic on its business and operational assumptions and estimates, and determined there were no material adverse impacts on the Company’s results of operations and financial position at ~~September~~June 30, ~~2021.~~2022.

The full extent of the SARS-CoV-2 pandemic impacts on the Company’s operations and financial condition is uncertain. The Company has experienced slower than normal enrollment and treatment of patients, and a prolonged SARS-CoV-2 pandemic could have a material adverse impact on the Company’s business and financial results, including the timing and ability of the Company to raise capital, initiate and/or complete current and/or future preclinical studies and/or clinical ~~trials;~~trials, disrupt the Company’s regulatory ~~activities;~~activities, and/or have other adverse effects on the Company’s clinical development.

2. Liquidity and Going Concern

The Company’s cash, ~~and~~ cash equivalents, and restricted cash were $~~254,083~~2,032,609 at ~~September~~June 30, ~~2021.~~2022 which includes $1,948,335 of restricted cash resulting from a grant received from the State of Tennessee. The Company’s working capital deficiency was $6,215,548 and $4,258,679 as of June 30, 2022 and December 31, 2021, respectively. The Company continues to incur significant operating losses. Management expects that significant on-going operating expenditures will be necessary to successfully implement the Company’s business plan and develop and market its products. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to develop PV-10, PH-10, and/or any other halogenated xanthene-based drug products, and to raise additional capital.

The Company plans to access capital resources through possible public or private equity offerings, including the 2021 financing ~~(as defined in~~(see Note 4)5), exchange offers, debt financings, corporate collaborations, or other means. In addition, the Company continues to explore opportunities to strategically monetize its lead drug candidates, PV-10 and PH-10, through potential co-development and licensing transactions, although there can be no assurance that the Company will be successful with such plans. The Company has historically been able to raise capital through equity offerings, although no assurance can be provided that it will continue to be successful in the future. If the Company is unable to raise sufficient capital, it will not be able to pay its obligations as they become due.

The primary business objective of management is to build the Company into a commercial-stage biotechnology company; however, the Company cannot assure that it will be successful in co-developing, licensing, and/or commercializing PV-10, PH-10, and/or any other halogenated xanthene-based drug candidate developed by the Company or entering into any financial transaction. Moreover, even if the Company is successful in improving its current cash flow position, the Company nonetheless plans to seek additional funds to meet its long-term requirements in ~~2021~~2022 and beyond. The Company anticipates that these funds will otherwise come from the proceeds of private placement transactions, the exercise of existing warrants and outstanding stock options, or public offerings of debt or equity securities. While the Company believes that it has a reasonable basis for its expectation that it will be able to raise additional funds, the Company cannot provide assurance that it will be able to complete additional financing in a timely manner. In addition, any such financing may result in significant dilution to stockholders.

3. ~~Critical~~Significant Accounting Policies

Since the date the Company’s December 31, ~~2020~~2021 consolidated financial statements were issued in its ~~2020~~2021 Annual Report, there have been no material changes to the Company’s significant accounting policies, except as disclosed below.

Recently Adopted Accounting Standards

In ~~December 2019,~~October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting ~~Standard~~Standards Update (“ASU”) ~~2019-12,~~2020-10 ~~Simplifying~~“Codification Improvements”, which improves consistency by amending the ~~Accounting for Income Taxes.~~ ~~The amendments~~Codification to include all disclosure guidance in ~~ASU 2019-12 simplify~~ the ~~accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification (“ASC”) Topic 740,~~ ~~Income Taxes~~~~. The amendments also improve consistent~~appropriate disclosure sections and clarifies application of various provisions in the Codification by amending and ~~simplify GAAP~~adding new headings, cross referencing to other guidance, and refining or correcting terminology. The guidance is effective for ~~other areas~~the Company beginning in the first quarter of ~~Topic 740 by clarifying and amending existing guidance.~~fiscal year 2022 with early adoption permitted. The Company adopted ~~ASU 2019-12~~this standard on January 1, ~~2021~~2022 and ~~there was no~~it did not have a material ~~impact~~effect on ~~the Company’s~~its condensed consolidated financial ~~statements or disclosures.~~statements.

On May 3, 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard. Early adoption is permitted, including adoption in an interim period. If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The Company adopted this standard on January 1, 2022 and it did not have a material effect on its condensed consolidated financial statements.

~~Convertible Instruments~~

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. As of June 30, 2022 and December 31, 2021, the Company’s cash equivalents consist of Treasury bills of $0 and $42,594, respectively.

Restricted Cash

Restricted cash consists of a grant award of $2,500,000 received in cash from the State of Tennessee less expenses and deposits to vendors in the amount of $551,665. See Note 10. Grants.

Cash Concentrations

Cash, cash equivalents, and restricted cash are maintained at financial institutions and, at times, balances may exceed federally insured limits of $250,000, although the Company seeks to minimize this through treasury management. The Company has never experienced any losses related to these balances although no assurance can be provided that it will not experience any losses in the future. As of June 30, 2022 and December 31, 2021, the Company had cash, cash equivalents, and restricted cash balances in excess of FDIC insurance limits of $1,782,609 and $2,856,942, respectively.

The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with ASC Topic 815: ~~Derivatives and Hedging~~. The accounting treatment of derivative financial instruments requires that the Company record embedded conversion options and any related freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Embedded conversion options and any related freestanding instruments are recorded as a discount to the host instrument.Reclassifications

~~If the instrument is determined~~Certain prior year balances have been reclassified in order to ~~not be a derivative liability, the Company then evaluates for the existence~~conform to current year presentation. These reclassifications had no effect on previously reported results of ~~a beneficial conversion feature by comparing the commitment date fair value to the effective conversion price of the instrument.~~

~~Preferred Stock~~

The Company applies the accounting standards for distinguishing liabilities from equity when determining the classification and measurement of its preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holderoperations or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as stockholders’ deficiency.loss per share.

Basic and Diluted Loss Per Common Share

Basic loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:

Schedule of Securities Excluded from Calculation of Weighted Average Dilutive Common Shares


	September 30,		September 30,		June 30,		June 30,
	2021		2020		2022		2021
Warrants		512,500		89,699,866		512,500		82,589,164
Options		3,625,000		2,275,000		3,425,000		4,800,000
Convertible preferred stock		104,557,737		65,666		105,081,847		106,778,757
2021 unsecured convertible notes						7,311,088		-

Total potentially dilutive shares		108,695,237		92,040,532		116,330,435		194,167,921

4. ~~Convertible Notes Payable~~Other Accrued Expenses

~~2017 Financing~~

~~On March 23, 2017,~~The following table summarizes the ~~Company entered into a 2017 Term Sheet with the PRH Group that set forth the terms on which the PRH Group would use their best efforts to arrange for a financing of a minimum of $10,000,000~~ ~~and maximum of $20,000,000~~ ~~(the “2017 Financing”). The 2017 Financing was in the form of a secured convertible loan from the PRH Group and~~ other investors in the 2017 Financing, which were evidenced by secured convertible promissory notes (individually a “2017 Note” and collectively, the “2017 Notes”) from the Company to the PRH Group and other investors. Cumulatively through Septemberaccrued expenses at June 30, ~~2021~~2022 and December 31, ~~2020, the Company had received aggregate proceeds of $20,067,000~~ ~~from the issuance of the 2017 Notes, respectively, of which $6,770,000~~ ~~was received from related parties.~~

~~2020 Financing~~

On December 31, 2019, the Board approved a Definitive Financing Term Sheet (the “2020 Term Sheet”), which sets forth the terms under which the Company would use its best efforts to arrange for financing of a maximum of $~~20,000,000~~ (the “2020 Financing”). The 2020 Financing was in the form of secured convertible loans from investors that were evidenced by secured convertible promissory notes (the “2020 Notes”). The 2020 Term Sheet was similar to the 2017 Term Sheet. Subject to the terms and conditions of the 2020 Term Sheet, the Company used its best efforts to arrange for the 2020 Financing, which amounts were obtained in several tranches. Cumulatively through September 30, 2021 and December 31, 2020, the Company had received proceeds of $~~5,025,000~~ ~~and $3,325,000, respectively, in connection with the 2020 Financing, of which $100,000~~ ~~was received from related parties.~~

~~Firm Commitment~~

Previously, the Company had not designated the Series D Preferred Stock into which the 2017 Notes and the 2020 Notes (collectively the “Notes”) were convertible into. As a result, the Company did not analyze the Notes for a potential beneficial conversion feature as the definition of a firm commitment had not been met since the Notes were not yet convertible. On June 17, 2021, the required Certificates of Designation were filed with the Delaware Secretary of State. Accordingly, a firm commitment was achieved. The Company analysed the Notes for a beneficial conversion feature and determined that there was none because the Notes have an effective conversion price of $~~0.2862~~ ~~per share of underlying common stock, which exceeds the $0.07per share commitment date closing market price of the common stock.~~

~~The Series D and D-1 Convertible Preferred Stock~~

~~The 2017 Notes originally provided that they were convertible into a new class of the Company’s preferred stock, $0.001~~ ~~par value per share (“Preferred Stock”), at a price per share equal to $0.2862~~ ~~(the “Original Conversion Price”), which would be convertible into one share (the “Original Conversion Ratio”) of the Company’s common stock, $0.001~~ ~~par value per share (“Common Stock”).~~

In order to ensure that the Company had sufficient authorized shares of Preferred Stock into which the 2017 Notes would convert, yet keep the economic terms of the 2017 Notes substantially equivalent, the Company entered into amendments (the “Amendments”) to the 2017 Notes (as amended, the “Amended 2017 Notes”) with a large majority of the holders of 2017 Notes to increase the conversion price by 10 times from $~~0.2862~~ ~~to $2.862~~ (the “New Conversion Price”) and to change the conversion ratio by providing that one share of Preferred Stock would be convertible into 10 shares of Common Stock (the “New Conversion Ratio”). The impact of the Amendments was to reduce by 10 times the number of shares of Preferred Stock into which the 2017 Notes would convert, while keeping the economic terms the same by increasing the conversion ratio into Common Stock by 10 times. The 2020 Notes had substantially similar terms to the Amended 2017 Notes, including being convertible into Preferred Stock at the New Conversion Price, with the Preferred Stock being convertible into Common Stock at the New Conversion Ratio.

In order to (i) address the fact that a small minority of the holders of 2017 Notes did not execute the Amendments and (ii) ensure economic fairness for all of the holders of the 2017 Notes and 2020 Notes, the Company designated two separate classes of Preferred Stock into which the 2017 Notes and 2020 Notes would convert: (i) the Company’s Series D Convertible Preferred Stock, par value $~~0.001~~ per share (the “Series D Convertible Preferred Stock”), was designated for the holders of 2017 Notes who did not execute the Amendments and (ii) the Company’s Series D-1 Convertible Preferred Stock, par value $~~0.001~~ ~~per share (the “Series D-1 Convertible Preferred Stock”), was designated for the holders of Amended 2017 Notes (i.e., who did execute the Amendments) and the holders of the 2020 Notes.~~

~~On June 20, 2021, the outstanding non-amended 2017 Notes converted into~~ ~~12,373,247~~ ~~shares of Series D Convertible Preferred Stock at the Original Conversion Price of $0.2862, and all the outstanding Amended 2017 Notes and outstanding 2020 Notes converted into~~ ~~9,440,594~~ ~~shares of Series D-1 Convertible Preferred Stock at the New Conversion Price of $2.862~~.

~~As a result of the conversion of the 2017 Notes and 2020 Notes into convertible preferred stock, all the security interests of these notes in the Company’s intellectual property were released.~~

The rights, preferences and privileges of the Series D Convertible Preferred Stock are set forth in a Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (the “Series D Certificate of Designation”). The rights, preferences and privileges of the Series D-1 Convertible Preferred Stock are set forth in a Certificate of Designation of Preferences, Rights and Limitations of Series D-1 Convertible Preferred Stock (the “Series D-1 Certificate of Designation”). The Board of Directors of the Company approved each of the Series D Certificate of Designation and Series D-1 Certificate of Designation on June 16, 2021, and each of the Series D Certificate of Designation and Series D-1 Certificate of Designation were filed with the Delaware Secretary of State on June 17, 2021. The Series D Certificate of Designation and Series D-1 Certificate of Designation are the same, other than certain key differences to account solely for the different conversion ratios for the holders of 2017 Notes who did not execute Amendments compared to the holders of Amended 2017 Notes and the holders of 2020 Notes.

~~Number of Shares~~

~~The Series D Certificate of Designation established and designated~~ ~~12,374,000~~ ~~shares of Series D Convertible Preferred Stock. The Series D-1 Certificate of Designation established and designated~~ ~~9,441,000~~ ~~shares of Series D-1 Convertible Preferred Stock.~~

~~Rank~~

~~The Series D Convertible Preferred Stock and the Series D-1 Convertible Preferred Stock rank~~ ~~pari passu~~ with each other. The Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock rank senior to the Common Stock and any other class or series of the Company’s capital stock, the terms of which do not provide that shares of such class rank senior to, or ~~pari passu~~ with, the Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock as to dividends and distributions upon a change of control transaction, or the liquidation, winding-up and dissolution of the Company.

~~Dividends~~

~~The Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock do not have any dividend preference but are entitled to receive, on a~~ ~~pari passu~~ basis, dividends, if any, that are declared and paid on the Common Stock and any other class of the Company’s capital stock that ranks junior or on par to the Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock.

~~Liquidation Preference~~

Upon the occurrence of the liquidation, winding-up or dissolution of the Company or certain mergers, corporate reorganizations or sales of the Company’s assets (each, a “Company Event”), holders of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock will be entitled to receive a liquidation preference before any distributions are made to holders of any other class or series of the Company’s capital stock junior to the Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock. If a Company Event occurs within two years of June 20, 2021 (the “Date of Issuance”), the holders of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock will receive for each share of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock, respectively, an amount in cash equal to the Original Issue Price (as defined in the Series D Certificate of Designation and Series D-1 Certificate of Designation, respectively) multiplied by four. If a Company Event occurs from and after the second anniversary of the Date of Issuance, the holders of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock will receive for each share of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock, respectively, an amount in cash equal to the Original Issue Price multiplied by six. The Original Issue Price for the Series D Convertible Preferred Stock is $~~0.2862, and the Original Issue Price for the Series D-1 Convertible Preferred Stock is $2.862~~.

~~Voting Rights~~

2021:

~~Holders~~Schedule of shares of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock will vote together with the holders of Common Stock as a single class. Each share of Series D Convertible Preferred Stock carries the right to one vote per share. Each share of Series D-1 Convertible Preferred Stock carries the right to 10 votes per shareOther Accrued Expenses.


	June 30, 2022		December 31, 2021
Accrued payroll and taxes	$	259,008	$	174,533
Accrued vacation		56,356		42,871
Accrued directors’ fees		1,753,089		1,560,589
Accrued other expenses		263,168		224,493
Total Other Accrued Expenses	$	2,331,621	$	2,002,486

The Company is not permitted to amend, alter or repeal its Certificate of Incorporation or Bylaws in a manner adverse to the relative rights, preferences, qualifications, limitations or restrictions of the Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock without the affirmative vote of a majority of the votes entitled to be cast by holders of outstanding shares of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock, voting together as a single class with each share of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock having a number of votes equal to the number of shares of Common Stock then issuable upon conversion of such share of Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock.

~~Series D and Series D-1 Conversion~~

The Series D Convertible Preferred Stock is convertible at the option of the holders thereof into shares of Common Stock based on a one-for-one conversion ratio. The Series D-1 Convertible Preferred Stock is convertible at the option of the holders thereof into shares of Common Stock based on a one-for-10 conversion ratio. The conversion ratio of the Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock is subject to adjustment for stock splits and combinations, recapitalizations, reclassifications, reorganizations, mergers, and consolidations. The Series D Convertible Preferred Stock and Series D-1 Convertible Preferred Stock will automatically convert into shares of Common Stock upon the fifth anniversary of the Date of Issuance.

~~During the three months ended September 30, 2021, a holder of~~ ~~222,145~~ ~~shares of Series D-1 Convertible Preferred Stock voluntarily converted the Preferred Stock into~~ ~~2,221,450~~ ~~shares of common stock.~~

~~2021 Financing~~

On August 13, 2021, the Board approved a Financing Term Sheet (the “2021 Term Sheet”), which sets forth the terms under which the Company will use its best efforts to arrange for financing of a maximum of $~~5,000,000~~ ~~(the “2021 Financing”), which amounts will be obtained in several tranches.~~

~~As of September 30, 2021, the Company had received a 2021 Loan, as defined below, of $200,000~~ ~~from a related party investor in connection with the 2021 Financing.~~

Pursuant to the 2021 Term Sheet, the 2021 Notes (defined below) will be paid back, convert into shares of the Company’s Series D-1 Preferred Stock, or convert into Company equity securities and/or debt instruments of certain future financings on or before twelve months after the issue date of a 2021 Note, subject to certain exceptions.

The 2021 Financing will be in the form of an unsecured convertible loans (the “2021 Loan”) from the investors (the “2021 Loan Investors”) and evidenced by convertible promissory notes (individually, a “2021 Note” and collectively, the “2021 Notes”). In addition to customary provisions, the 2021 Notes will contain the following provisions:

~~(i)~~

~~The 2021 Loan will bear interest at the rate of eight percent (~~8~~%) per annum on the outstanding principal amount of the Loan that has been funded to the Company;~~

~~(ii)~~

In the event there is a change of control of the Board, the term of the 2021 Notes will be accelerated and all amounts due under the 2021 Notes may be immediately due and payable at the 2021 Loan Investors’ option;

~~(iii)~~

~~The outstanding principal amount and interest payment under the 2021 Loan may be paid back at maturity at the 2021 Loan Investors’ option;~~

~~(iv)~~

The outstanding principal amount and interest payable under the 2021 Loan may be convertible at the 2021 Loan Investors’ option into shares of Series D-1 Convertible Preferred Stock at a price per share equal to $~~2.8620. The Series D-1 Convertible Preferred Stock is convertible into ten (~~10~~) shares of common stock; and~~

~~(v)~~

~~In the event the Company conducts a qualified equity or debt financing and the Company receives gross proceeds in the aggregate amount of $~~20 ~~million, the note may be converted into the equity securities and/or debt instruments of such financing at the same terms as those investors.~~

The embedded conversion options associated with the 2021 Note do not require bifurcation and treatment as a derivative liability and they do not represent a beneficial conversion feature because the effective conversion price is not at a discount to the commitment date market price.

5. Convertible Notes Payable

~~On April 20, 2020,~~2021 Financing

Schedule of Convertible Notes Payable


	Non-Related Party		Related Party
	Face Amount		Face Amount		Total
Balance as of January 1, 2022	$	1,260,000	$	200,000	$	1,460,000

Issued		50,000		-		50,000

Balance as of March 31, 2022	$	1,310,000	$	200,000	$	1,510,000

Beginning Balance	$	1,310,000	$	200,000	$	1,510,000
Issued		500,000		-		500,000

Balance as of June 30, 2022	$	1,810,000	$	200,000	$	2,010,000
Ending Balance	$	1,810,000	$	200,000	$	2,010,000

For further details on the terms of the 2021 Notes, refer to our Form 10-K as filed with the SEC on March 29, 2022.

As of June 30, 2022, the Company had received 2021 Notes proceeds of $2,010,000, of which $200,000 is from a related party investor (a Company officer).

Subsequent to June 30, 2022, the Company received 2021 Notes proceeds of $225,000 from a $~~62,500~~ ~~loan under the CARES Act PPP (the “PPP Loan”)~~related party investor (a Company director). See Note 12. Subsequent Events.

~~The PPP provides for loans to qualifying businesses for amounts of up to 2.5 times certain of the borrower’s average monthly payroll expenses.~~ On May 20, 2021, the Company applied for forgiveness of the PPP Loan. On June 2, 2021, the Company was awarded full forgiveness of the PPP Loan and accrued interest. The Company recognized a gain on forgiveness of note payable in the period in which it obtained forgiveness and is included in gain from extinguishment on the accompanying condensed consolidated statements of operations.

6. Notes Payable

The Company obtained short-term financing from AFCO Insurance Premium Finance for our commercial insurance policies. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the balance of the note payable was $~~68,392~~142,693 and $~~212,790~~238,452, respectively.

6.7. Related Party Transactions

During the three months ended ~~September~~June 30, ~~2021~~2022 and ~~September 30, 2020,~~2021, the Company paid Mr. Bruce Horowitz (Capital Strategists) consulting fees of $~~21,200~~42,400 and $~~127,200~~42,400, respectively, for services rendered. Director fees for Mr. Horowitz for the three months ended June 30, 2022 and 2021 were $18,750 and $18,750, respectively.

During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~September 30, 2020,~~2021, the Company paid Mr. Bruce Horowitz (Capital Strategists) consulting fees of $~~148,400~~84,800 and $~~190,800~~127,200, respectively, for services rendered. Director fees for Mr. Horowitz for the six months ended June 30, 2022 and 2021 were $37,500 and $37,500, respectively.

Accrued director fees for Mr. Horowitz as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 were $~~56,250~~318,750 and $~~75,000~~281,250, respectively. Total amount owed to Capital Strategists for consulting fees as of June 30, 2022 and December 31, 2021 were $169,600 and $127,200, respectively. Mr. Horowitz serves as both ~~COO~~Chief Operating Officer (“COO”) and a ~~Director.~~Company director.

See Note 45 for details of other related party transactions.

Director fees during the three months ended ~~September~~June 30, ~~2021~~2022 and ~~September 30, 2020~~2021 were $96,250 and $96,250, respectively.

Director fees during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~September 30, 2020~~2021 were $~~288,750~~192,500 and $~~288,750~~192,500, respectively.

Accrued directors’ fees as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 were $~~1,464,339~~1,753,089 and $~~1,175,589~~1,560,589, ~~respectively, and are included in other accrued expenses on the accompanying condensed consolidated balance sheet.~~respectively.

7. ~~Short-term Receivables~~

~~The following table summarizes the receivables at September 30, 2021 and December 31, 2020:~~

~~Summary of Short-term Receivables~~

September 30, 2021
Tax Credit Legal Fees Settlement Total

Provectus Australia Tax Credit $ 1,354 $ - $ - $ 1,354
Gross receivable - 455,500 1,649,043 2,104,543
Reserve for uncollectibility - (455,500 ) (1,649,043 ) (2,104,543 )
Net receivable $ 1,354 $ - $ - $ 1,354

December 31, 2020
Tax Credit Legal Fees Settlement Total

Provectus Australia Tax Credit $ 3,930 $ - $ - $ 3,930
Gross receivable - 455,500 1,649,043 2,104,543
Reserve for uncollectibility - (455,500 ) (1,649,043 ) (2,104,543 )
Net receivable $ 3,930 $ - $ - $ 3,930

8. Stockholders’ Deficiency

~~Common~~Preferred Stock

During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company issued ~~an aggregate of~~ ~~300,000~~ ~~shares of immediately vested restricted common stock with a grant date value of $23,200~~ ~~for services.~~

~~During the nine months ended September 30, 2021, the Company issued~~ ~~2,221,450~~ ~~shares of common stock upon the voluntary conversion of Series D-1 Convertible Preferred Stock.~~

~~During the nine months ended September 30, 2021, the Company issued~~ ~~65,666~~ ~~shares of common stock upon the automatic conversion of Series B Convertible Preferred Stock.~~

~~Preferred Stock~~

~~On June 20, 2021, the Company issued~~ ~~12,373,247~~ ~~and~~ ~~9,440,594~~ ~~shares of Series D and D-1 Convertible Preferred Stock, respectively. See Note 4 - Convertible Notes Payable.~~

~~During the nine months ended September 30, 2021, the Company received total investments of $150,000~~ ~~from non-related party investors in exchange for an aggregate of~~ 52,411 shares of restricted Series D-1 Convertible Preferred Stock ~~that have not yet been issued.~~in exchange for an investment of $150,000 from a non-related party.

~~Options~~Annual Stockholder Meeting Proposals

~~During the nine months ended September 30, 2021, a total of~~ ~~1,175,000~~ ~~options to purchase the Company’s common stock expired.~~

The ~~following table summarizes option activity during~~Company held its annual meeting of stockholders on June 22, 2022. As proposal number 4, stockholders authorized the ~~nine months ended September 30, 2021:~~

~~Schedule~~Company’s board of directors (the “Board”) to amend the Company’s Certificate of Incorporation, as amended by the Certificate of Designation of Series D Convertible Preferred Stock ~~Option Activity~~

Weighted Average
Shares Exercise Price

Outstanding and exercisable at January 1, 2021 4,800,000 $ 0.46

Granted - -
Exercised - -
Forfeited (1,175,000 ) 0.98

Outstanding and exercisable at September 30, 2021 3,625,000 $ 0.32

and Certificate of Designation of Series D-1 Convertible Preferred Stock (the “Certificates of Designation”),

~~The following table summarizes information about options outstanding~~to effect a reverse stock split of the Company’s common stock, Series D Convertible Preferred Stock, and Series D-1 Convertible Preferred Stock at ~~September 30, 2021:~~

~~Summary~~a ratio of ~~Stock Options Outstanding~~between 1-for-10 and 1-for-50

Number Outstanding and Exercisable Weighted Average Intrinsic Value
at September 30, Remaining Contractual at September 30,
Exercise Price 2021 Life 2021

$ 0.12 2,425,000 4.10 $ -
$ 0.29 100,000 4.10 $ -
$ 0.67 200,000 1.90 $ -
$ 0.75 550,000 4.20 $ -
$ 0.84 150,000 0.70 $ -
$ 0.88 150,000 2.80 $ -
$ 0.93 50,000 0.60 $ -

3,625,000 3.77 $ -

~~Warrants~~

~~During~~, where the ~~nine months ended September 30, 2021,~~ratio would be determined by the ~~Company granted three-year immediately vested warrants~~Board at its discretion, and to ~~purchase an aggregate~~make corresponding amendments to the Certificates of ~~25,000~~Designation to provide for the proportional adjustment of certain terms upon a reverse stock split, consistent with the Board’s recommendation. As proposal number 5, the Company’s stockholders also authorized the Board, given the stockholders’ approval of proposal number 4, to amend the Company’s Certificate of Incorporation, as amended by the Certificates of Designation, to decrease the number of authorized shares of the Company’s common stock and preferred stock by the same reverse stock split ratio determined by the Board, consistent with ~~an exercise price of $0.2862~~ ~~per share to an advisory board member.~~the Board’s recommendation. The ~~warrants had an issuance date fair value of an aggregate of $488, which was recognized immediately and is included in general and administrative expenses~~Board has not acted on ~~the condensed consolidated statements of operations.~~

~~During the nine months ended September 30, 2021, warrant holders exercised warrants to purchase an aggregate of~~ ~~18,052,966~~ ~~shares of common stock at a price of $0.0533~~ ~~per share. In connection with~~ these ~~exercises, the Company received aggregate cash proceeds of $962,223. On August 30, 2021, a total of~~ ~~68,723,698~~ of ~~August 2016~~ ~~warrants expired.~~

~~The following table summarizes warrant activity during the nine months ended September 30, 2021:~~

~~Summary of Warrant Activity~~

Weighted Average
Shares Exercise Price

Outstanding and exercisable at January 1, 2021 87,264,164 $ 0.02

Granted 25,000 0.29
Exercised (18,052,966 ) 0.05
Forfeited (68,723,698 ) 0.05

Outstanding and exercisable at September 30, 2021 512,500 $ 0.92

~~The following table summarizes information about warrants outstanding at September 30, 2021:~~

~~Summary of Warrants Outstanding~~

Number Outstanding

and Exercisable
at September 30,

Weighted Average
Remaining Contractual

Intrinsic Value
at September 30,

Exercise Price 2021 Life 2021

$ 0.29 125,000 1.75 $ -
$ 1.00 18,000 2.64 $ -
$ 1.12 366,000 2.64 $ -
$ 2.00 3,500 2.64 $ -

512,500 2.42 $ -

~~Holders~~stockholder authorizations as of the ~~outstanding warrants are not entitled to vote and the exercise prices of such warrants are subject to customary anti-dilution provisions.~~filing date.

1510

9. Leases

The Company ~~currently leases~~leased 4,500 square feet of corporate office space in Knoxville, Tennessee through an operating lease agreement for a term of five yearsending on June 30, ~~2022~~.2022. Payments ~~are~~were approximately $~~7,900~~ 6,100per ~~month.~~month due to the Company negotiating a continued reduced rent from January 1, 2022 through June 30, 2022.

On ~~August 13, 2021,~~June 30, 2022, the lease expired and was not renewed. On June 18, 2022, the Company ~~negotiated~~moved into 2,700 square feet of leased corporate office space in Knoxville, Tennessee through an operating lease agreement for a ~~reduced~~term of three years ending June 30, 2025. The monthly base rent ranges from ~~July 1, 2021 through December 31, 2021 in~~$4,053 to $4,278 over the ~~amount of $6,100~~ ~~per month.~~term on the lease.

Total operating lease expense for the three months ended ~~September~~June 30, ~~2021~~2022 was $~~15,887~~23,092, of which, $~~10,591~~15,395 was included within research and development and $~~5,296~~7,697 was included within general and administrative expenses on the condensed consolidated statement of operations. Total operating lease expense for the three months ended ~~September~~June 30, ~~2020~~2021 was $~~24,446~~23,044, of which, $~~16,297~~15,363 was included within research and development and $~~8,149~~7,681 was included within general and administrative expenses on the condensed consolidated statement of operations.

Total operating lease expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was $~~63,693~~38,051, of which, $~~42,462~~25,367 was included within research and development and $~~21,231~~12,684 was included within general and administrative expenses on the condensed consolidated statement of operations. Total operating lease expense for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was $~~68,080~~47,806, of which, $~~45,387~~31,871 was included within research and development and $~~22,693~~15,935 was included within general and administrative expenses on the condensed consolidated statement of operations.

A summary of the Company’s right-of-use assets and liabilities is as follows:

Schedule of ~~Right-of-Use~~Right-of-use Assets and Liabilities

For The Nine Months Ended
September 30,
2021 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases $ 64,231 $ 67,774

Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ - $ -

Weighted Average Remaining Lease Term
Operating leases 9 months 1 year 9 months

Weighted Average Discount Rate
Operating leases 8.0 % 8.0 %

	For The Six Months Ended
	June 30,
	2022			2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	38,625		$	45,784

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	151,693		$	-

Weighted Average Remaining Lease Term
Operating leases		3 years			1 year

Weighted Average Discount Rate
Operating leases		5% - 8.0	%		8.0	%

Future minimum payments under the Company’s non-cancellable lease obligations as of ~~September~~June 30, ~~2021~~2022 were as follows:

Schedule of Future Minimum ~~Payment for~~Payments Under Non-cancellable Lease


Years	Amount			Amount
2021	$	18,447
2022		46,687		$	24,318
2023					49,311
2024					50,663
2025					25,669
Total future minimum lease payments		65,134			149,961
Less: amount representing imputed interest		(2,214	)		11,098
Total	$	62,920		$	138,863

10.Grants

On October 25, 2021, the Company received a grant award of $2,500,000 from the State of Tennessee for the study of animal cancers and dermatological disorders for the period October 15, 2021 to June 30, 2022. As of June 30, 2022, $1,990,685 has been recorded as unearned grant revenue liability on the accompanying condensed consolidated balance sheets. The Company recorded $509,315 of grant revenue during the six months ended June 30, 2022. The grant was pre-funded; therefore, the funds do not need to be used in full by June 30, 2022.

11. Commitments, Contingencies and Litigation

The Company may, from time to time, be involved in litigation arising infrom the ordinary course of business and/or ~~which~~that may be expected to be covered by insurance. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

~~11.~~12. Subsequent Events

The Company has evaluated events that have occurred after the balance sheet and through the date the financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed below.

~~On October 25, 2021, the Company’s grant award of $~~Convertible Notes Payable

~~2,500,000~~

~~from the State of Tennessee for the study of animal cancers and dermatological disorders for the period October 15, 2021~~Subsequent to June 30, 2022, ~~was funded.~~the Company received 2021 Notes proceeds of $225,000 from a related party investor (a Company director).

Common Stock

Subsequent to June 30, 2022, the Company issued an aggregate of 25,000 shares of immediately vested restricted common stock to a consultant with a grant date value of $1,500 for services.

Subsequent to June 30, 2022, the Company issued an aggregate of 25,000 shares of immediately vested restricted common stock to an employee with a grant date value of $1,500 as an award.

1611

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion is intended to assist in the understanding and assessment of significant changes and trends related to our results of operations and our financial condition together with our consolidated subsidiaries. This discussion and analysis should be read in conjunction with the accompanying unaudited condensed financial statements and our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 filed with the SEC on March 2, 29, 2022 (“2021 ~~(“2020~~ Form 10-K”), which includes additional information about our critical accounting policies and practices and risk factors. Historical results and percentage relationships set forth in the consolidated statement of operations, including trends which might appear, are not necessarily indicative of future operations.

~~Overview~~

Provectus is a clinical-stage biotechnology company developing immunotherapy medicines based on an entire, wholly owned, family of small molecules called HXs. The Company’s lead HX molecule is proprietary cGMP RBD. IL PV-10, a cancer immunotherapy and injectable formulation of cGMP RBD, can induce immunogenic cell death (“ICD”), and is undergoing clinical study for adult solid tumor cancers, such as melanoma and GI tumors (e.g., HCC, mCRC, mNET, mUM), and preclinical study for pediatric solid tumor cancers (e.g., neuroblastoma, Ewing sarcoma, rhabdomyosarcoma, osteosarcoma). Topically administered PH-10, an immune-modulatory agent and formulation of cGMP RBD, is undergoing clinical study for inflammatory dermatoses (e.g., psoriasis, atopic dermatitis). New formulations of and routes of administration for cGMP RBD are being investigated for hematology (e.g., acute myeloid leukemia, acute monocytic leukemia), virology (e.g., SARS-CoV-2), oncology (e.g., high-risk and refractory adult solid tumor cancers), microbiology (e.g., MDR bacteria), and ophthalmology (e.g., infectious keratitis).

~~Our Science and Technology~~

~~Oncology.~~ IL PV-10 drug product is Provectus’ cGMP injectable formulation of the Company’s pharmaceutical-grade (cGMP) RBD (4,5,6,7-tetrachloro-2’,4’,5’,7’-tetraiodofluorescein disodium salt) drug substance. RBD selectively accumulates in the lysosomes of cancer cells. Cancer cells, particularly advanced cancer cells, are very dependent on effective lysosomal functioning (Piao et al., ~~Ann N Y Acad Sci~~ ~~2016). Cancer progression and metastasis are associated with lysosomal compartment changes (Nishimura et al.,~~ ~~Pathol Oncol Res~~ ~~1998; Gocheva et al.,~~ ~~Genes Dev~~ ~~2006), which are closely correlated with, among other things, invasive growth, angiogenesis, and drug resistance (Fahrenbacher et al.,~~ ~~Cancer Res~~ ~~2005).~~

Lysosomes are the central organelles for intracellular degradation of biological macromolecules and organelles. Discovered by Christian de Duve, M.D. in 1955, lysosomes have been linked with a number of biological processes like cell death, inflammasome activation, and immune response. In 1959, Dr. de Duve described lysosomes as “suicide bags,” because their rupture led to cell death and tissue autolysis. Lysosomes have been shown to play a role in each of the primary pathways of cell death, which are apoptosis, autophagy, and necrosis. He was awarded the Nobel Prize in 1974 for discovering and characterizing lysosomes.

Provectus showed that RBD selectively accumulates in the lysosomes of cancer cells and disrupts them, causing the cancer cells to die. RBD has also been shown by Provectus and independent researchers to trigger each major, distinct form of lysosomal cell death; that is, apoptosis, autophagy, and necrosis.

~~RBD’s lysosomal targeting comprises:~~

	●	Transiting the plasmalemma (i.e., the cell membrane) of cancer cells. RBD penetrates the cell membrane of cancerous cells which normally protects the cancer cell from its surrounding environment. RBD, however, is excluded from normal cells;

	●	~~Accumulating in the lysosomes of cancer cells. As noted above, the physicochemical properties of lysosomes trap RBD;~~

	●	Triggering the release of lysosomal contents. Acute autolysis can occur within 60 minutes. Early preclinical work by Provectus on RBD’s lysosomal targeting showed identical responses in different disease models, such as Hepa1-6 murine hepatocellular carcinoma, HTB-133 human breast carcinoma, and H96Ar human multi-drug resistant small cell lung carcinoma;

	●	~~Inducing the rapid cell death of cancer cells. Early trypan blue exclusion work by Provectus confirmed cell death within hours; and,~~

	●	Intracellular pH consistency with the release of acidic lysosomal contents. Early seminaphthorhodafluor-1 (“SNARF-1”) staining work by Provectus confirmed lower intracellular pH upon exposure to RBD.

~~Hematology.~~ In primary cells and cell lines derived from pediatric leukemia patients, RBD may lead to stimulator of interferon genes (“STING”) dimerization and the release of interferon gamma, indicating a potential immune activation mechanism of RBD. Heat shock proteins, which chaperone misfolded or abnormally folded proteins, associated with STING dimerization in RBD-treated cells, indicating a mechanism that may lead to enhanced STING activation following RBD-specific treatment.

~~Virology.~~ ~~The Company’s work in this disease area to identify drug activity and elucidate mechanism(s) of action is ongoing.~~

~~Microbiology.~~ ~~The Company’s work in this disease area to identify drug activity and elucidate mechanism(s) of action is ongoing.~~

~~Ophthalmology.~~ ~~The Company’s work in this disease area to identify drug activity is ongoing.~~

~~Dermatology.~~ For psoriasis, pathways significantly improved by monotherapy PH-10 drug product treatment include published psoriasis transcriptomes and cellular responses mediated by IL-17, IL-22, and interferons. Clinical work has shown that more than 500 disease-related genes were down-regulated after four weeks of application and a wide-range of central psoriasis-related genes, including IL-23, IL-17, IL-22, S100A7, IL-19, IL-36, and CXCL1, were normalized (i.e., treated lesional skin had values in the same range as baseline non-lesional skin).

~~Animal Health.~~ ~~The Company’s work in this disease area to develop a drug candidate or candidates is ongoing.~~

~~Our Drug Development Strategy~~

~~Oncology.~~ The Company’s strategy is to (i) demonstrate the independent action of single-agent IL PV-10; that is, safety and activity in T cell and non-T cell inflamed tumor types, in high and low tumor mutation burden tumor types, and in other tumor type categories, such as gene mutations, (ii) demonstrate the coordinated induction of multiple immune signaling pathways (i.e., functional ICD), (Snyder et al., ~~Sci Immunol~~ 2019) by IL PV-10 treatment, (iii) demonstrate the functional T cell response generated by IL PV-10 treatment, and (iv) contrast and compare IL PV-10 treatment (i.e., safety, activity, and induced immune response) with that of immune checkpoint blockade (“CB”) and other drug classes in single-agent and IL PV-10-based combination therapy settings.

This strategy may quicken the advancement of single-agent IL PV-10 along a pathway-to-approval in solid tumor cancer indications where there is high unmet need, limited activity from other therapies, and the opportunity to display the immune response from IL PV-10 treatment, such as mNET (NCT02693067). This strategy may also permit the Company to develop and advance a cancer combination therapy involving one or more CB and/or other drug classes along a pathway-to-approval in a disease indication where there is high unmet need, limited activity from standard of care (“SOC”) treatment, and the opportunity to display how IL PV-10 augments clinical response to existing or emerging SOCs, such as mUM (i.e., combination therapy with an anti-CTLA-4 agent and an anti-PD-1 agent) (NCT00986661).

~~Hematology.~~ ~~The Company and research collaborators are undertaking preclinical work on a potential, systemically administered, cGMP RBD leukemia treatment and/or cancer vaccine for pediatric patients.~~

~~Virology.~~ The Company and research collaborators are undertaking preclinical work on a potential, systemically administered, cGMP RBD therapy for SARS-CoV-2 and other classes of enveloped and non-enveloped viruses.

~~Microbiology.~~ ~~The Company and research collaborators are undertaking preclinical work on cGMP RBD therapy for MDR bacteria.~~

~~Ophthalmology.~~ ~~The Company and clinical and research collaborators are undertaking preclinical work on potential, topically administered, cGMP RBD therapy for the treatment of infectious keratitis.~~

~~Dermatology.~~ The Company’s strategy is to (i) demonstrate 12-week single-agent administration proof-of-concept (“POC”) for topical PH-10 that includes (a) a preclinical safety study of extended 12-week administration (compared to, previously, four weeks), (b) a clinical mechanism of action study in atopic dermatitis, which would be a “book-end” trial to the already completed clinical mechanism study in psoriasis, (c) Phase 2 randomized controlled trials of topical PH-10 for the treatment of psoriasis and atopic dermatitis that may potentially utilize SOC comparators, and (d) end-of-Phase 2 meetings with the FDA upon the completion of the abovementioned Phase 2 trials, and (ii) expand POC topical PH-10 treatment to include dermatology combination therapy. Our goal for this POC work is to achieve Phase 3 trial-ready status for topical PH-10 in both psoriasis and atopic dermatitis.

~~Animal health.~~ ~~The Company and research collaborators are undertaking work on cGMP RBD therapies for animal cancers and dermatological disorders.~~

Components of Operating Results

Grant Revenue

Grant income is recognized when qualifying costs are incurred and there is reasonable assurance that conditions of the grant have been met. Cash received from grants in advance of incurring qualifying costs is recorded as unearned grant revenue and recognized as other income when qualifying costs are incurred.

Research and Development Expenses

A large component of our total operating expenses is the Company’s investment in research and development activities, including the clinical development of our product candidates. Research and development expenses represent costs incurred to conduct research and undertake clinical trials to develop our drug product candidates. These expenses consist primarily of:

	●	Costs of conducting clinical trials, including amounts paid to clinical centers, clinical research organizations and consultants, among others;
	●	Salaries and related expenses for personnel, including stock-based compensation expense;
	●	Other outside service costs including cost of contract manufacturing;
	●	The costs of supplies and reagents; and,
	●	Occupancy and depreciation charges.

We expense research and development costs as incurred.

Research and development activities are central to our business model. We expect our research and development expenses to increase in the future as we advance our existing product candidates through clinical trials and pursue their regulatory approval. Undertaking clinical development and pursuing regulatory approval are both costly and time-consuming activities. As a result of known and unknown uncertainties, we are unable to determine the duration and completion costs of our research and development activities, or if, when, and to what extent we will generate revenue from any subsequent commercialization and sale of our drug product candidates.

General and Administrative Expenses

General and administrative expense consists primarily of salaries, stock-based compensation expense and other related costs for personnel in executive, finance, accounting, business development, legal, information technology and corporate communication functions. Other costs include facility costs not otherwise included in research and development expense, insurance, and professional fees for legal, patent and accounting services.

1912

Results of Operations

Comparison of the Three Months Ended ~~September~~June 30, ~~2021~~2022 and ~~September~~June 30, ~~2020~~2021

Overview

Total operating expenses were ~~$1,047,231~~$1,399,690 for the three months ended ~~September~~June 30, ~~2021, a decrease~~2022, an increase of ~~$54,647~~$177,673 or ~~5.0%~~14.5% compared to the three months ended ~~September~~June 30, ~~2020.~~2021. The ~~decrease~~increase was driven primarily by ~~lower~~(i) increased clinical trial cost, (ii) higher insurance costs and (iii) higher professional fees, partially offset by (iv) lower legal and litigation fees. Net loss for the three months ended ~~September~~June 30, ~~2021~~2022 was ~~$1,051,259,~~$1,077,841, a decrease of ~~$513,185~~$501,750 or ~~32.8%~~31.8% which was primarily attributable to lower interest expense costs incurred in connection with the 2017 and 2020 Notes which converted to preferred stock on June 20, ~~2021.~~2021 and the recognition of grant revenue in the amount of $321,710.

	For the Three Months Ended												For the Three Months Ended
	September 30,						Increase/						June 30,
	2021			2020			(Decrease)			% Change			2022			2021			Increase/(Decrease)			% Change

Grant Revenue													$	321,710		$	-		$	321,710			0.0	%

Operating Expenses:
Research and development	$	608,653		$	667,523		$	(58,870	)		-8.8	%		816,648			602,979			213,669			35.4	%
General and administrative		438,578			434,355			4,223			1.0	%		583,042			619,038			(35,996	)		-5.8	%
Total Operating Expenses		1,047,231			1,101,878			(54,647	)		-5.0	%		1,399,690			1,222,017			177,673			14.5	%

Total Operating Loss		(1,047,231	)		(1,101,878	)		54,647			-5.0	%		(1,077,980	)		(1,222,017	)		144,037			-11.8	%

Other Income/(Expense):
EIDL grant		-			-			-			0.0	%
Research and development tax credit		(507	)		1			(508	)		-50800.0	%		38,259			32,144			6,115			19.0	%
Investment and interest income		1			823			(822	)		-99.9	%
Gain from extinguishment		-			-			-			0.0	%		-			63,094			(63,094	)		-100.0	%
Interest expense		(3,522	)		(463,390	)		459,868			-99.2	%
Total Other Expense, Net		(4,028	)		(462,566	)		458,538			-99.1	%
Interest income and interest expense														(38,120	)		(452,812	)		414,692			-91.6	%

Total Other Income/ (Expense), Net														139			(357,574	)		357,713			-100.0	%

Net Loss	$	(1,051,259	)	$	(1,564,444	)	$	513,185			-32.8	%	$	(1,077,841	)	$	(1,579,591	)	$	501,750			-31.8	%

Grant Revenue

For the three months ended June 30, 2022 and 2021, there was $321,710 and $0, respectively, of grant revenue recognized related to qualifying expenses that were incurred and included within research and development on the condensed consolidated statements of operations.

Research and Development Expenses

Research and development expenses were ~~$608,653~~$816,648 for the three months ended ~~September~~June 30, ~~2021, a decrease~~2022, an increase of ~~$58,870~~$213,669 or ~~8.8%~~35.4% compared to ~~$667,523~~$602,979 for the three months ended ~~September~~June 30, ~~2020.~~2021. The ~~decrease~~increase was primarily due to (i) ~~reduced~~increased cost on clinical trials due to ~~slower~~increased recruitment and treatment in clinical trials, ~~due to the effects of SARS-CoV-2,~~and (ii) ~~lower payroll and payroll taxes, and (iii) a decrease in rent expense.~~higher insurance cost.

	For the Three Months Ended
	September 30,				Increase/						For the Three Months Ended
	2021		2020		(Decrease)			% Change			June 30,
											2022		2021		Increase/(Decrease)			% Change
Operating Expenses:
Research and development:
Clinical trial and research expenses	$	497,525	$	527,415	$	(29,890	)		-5.7	%	$	674,294	$	465,627	$	208,667			44.8	%
Depreciation/amortization		2,161		2,161		-			0.0	%		1,765		2,162		(397	)		-18.4	%
Insurance		51,982		53,885		(1,903	)		-3.5	%		57,367		51,393		5,974			11.6	%
Payroll and taxes		45,366		66,583		(21,217	)		-31.9	%		67,360		67,706		(346	)		-0.5	%
Rent and utilities		11,619		17,479		(5,860	)		-33.5	%		15,862		16,091		(229	)		-1.4	%
Total research and development	$	608,653	$	667,523	$	(58,870	)		-8.8	%	$	816,648	$	602,979	$	213,669			35.4	%

2013

General and Administrative Expenses

General and administrative expenses were ~~$438,578~~$583,042 for the three months ended ~~September~~June 30, ~~2021, an increase~~2022, a decrease of ~~$4,223~~$35,996 or ~~1.0%~~5.8% compared to ~~$434,355~~$619,038 for the three months ended ~~September~~June 30, ~~2020.~~2021. The ~~increase~~decrease was primarily due to (i) ~~higher~~lower legal fees relating to patents, partially offset by (ii) ~~lower~~higher professional fees, ~~cost.~~and (iii) increased other general and administration expenses.

	For the Three Months Ended										For the Three Months Ended
	September 30,				Increase/						June 30,
	2021		2020		(Decrease)			% Change			2022			2021		Increase/(Decrease)			% Change
Operating Expenses:
General and administrative:
Depreciation	$	1,054	$	1,259	$	(205	)		-16.3	%	$	1,055		$	1,055	$	-			0.0	%
Directors fees		96,250		94,315		1,935			2.1	%		96,250			96,250		-			0.0	%
Insurance		37,138		40,796		(3,658	)		-9.0	%		44,672			42,262		2,410			5.7	%
Legal and litigation		130,683		87,122		43,561			50.0	%		126,087			216,723		(90,636	)		-41.8	%
Other general and administrative cost		9,052		16,168		(7,116	)		-44.0	%		34,476			15,583		18,893			121.2	%
Payroll and taxes		43,981		45,102		(1,121	)		-2.5	%		63,575			62,540		1,035			1.7	%
Professional fees		114,496		140,732		(26,236	)		-18.6	%		208,678			172,759		35,919			20.8	%
Rent and utilities		5,883		8,746		(2,863	)		-32.7	%		8,267			8,219		48			0.6	%
Foreign currency translation		41		115		(74	)		0.0	%		(18	)		3,647		(3,665	)		-100.5	%
Total general and administrative	$	438,578	$	434,355	$	4,223			1.0	%	$	583,042		$	619,038	$	(35,996	)		-5.8	%

Other Income/(Expense)

Other ~~income~~income/(expense) decreased by ~~$1,330~~$357,713 from ~~$824~~($357,574) for the three months ended ~~September~~June 30, ~~2020~~2021 to ~~($506)~~$139 for the three months ended ~~September~~June 30, ~~2021. The decrease was mainly due to lower interest income.~~

~~Interest expense decreased by $459,868 from $463,390 for the three months ended September 30, 2020 to $3,522 for the three months ended September 30, 2021.~~2022. The decrease was due to the lower interest expense costs incurred in connection with the 2017 and 2020 Notes which converted to preferred stock on June 20, ~~2021.~~2021, offset by the gain from extinguishment of debt in 2021 relating to the PPP loan forgiveness.

	For the Three Months Ended
	June 30,
	2022			2021			Increase/(Decrease)			% Change
Other Income/(Expense):
Research and development tax credit	$	38,259		$	32,144		$	6,115			19.0	%
Gain from extinguishment		-			63,094			(63,094	)		-100.0	%
Interest income and interest expense		(38,120	)		(452,812	)		414,692			-91.6	%
Total Other Income/(Expenses), Net	$	139		$	(357,574	)	$	357,713			-100.0	%

Comparison of the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~September~~June 30, ~~2020~~2021

Overview

Total operating expenses were ~~$3,449,924~~$2,587,353 for the ~~nine~~six months ended ~~September~~June 30, ~~2021, a decrease~~2022, an increase of ~~$311,042~~$184,660 or ~~8.3%~~7.7% compared to the ~~nine~~six months ended September 30, 2020. The decrease was driven primarily by our continued transformation and process improvement efforts within the Company along with lower amortization due to patents being fully amortized, slower recruitment and treatment in clinical trials due to the effects of SARS-CoV-2 and lower professional fees. Net loss for the nine months ended September 30, 2021 was $4,300,800, a decrease of $705,510 or 14.1% which was primarily attributable to lower costs incurred in connection with our preclinical and clinical trial programs and lower interest expense costs incurred in connection with the 2017 and 2020 Notes which converted to preferred stock on June ~~20, 2021.~~

For the Nine Months Ended
September 30, Increase/
2021 2020 (Decrease) % Change

Operating Expenses:
Research and development $ 1,866,776 $ 2,273,423 $ (406,647 ) -17.9 %
General and administrative 1,583,148 1,487,543 95,605 6.4 %
Total Operating Expenses 3,449,924 3,760,966 (311,042 ) -8.3 %

Total Operating Loss (3,449,924 ) (3,760,966 ) (311,042 ) 8.3 %
Other Income/(Expense):
EIDL grant - 3,000 (3,000 ) -100.0 %
Research and development tax credit 31,637 27,187 4,450 16.4 %
Investment and interest income 2 3,414 (3,412 ) -99.9 %
Gain from extinguishment 63,094 - 63,094 0.0 %
Interest expense (945,609 ) (1,278,945 ) 333,336 -26.1 %
Total Other Expense, Net (850,876 ) (1,245,344 ) 394,468 -31.7 %

Net Loss $ (4,300,800 ) $ (5,006,310 ) $ (705,510 ) 14.1 %

~~Research and Development Expenses~~

Research and development expenses were $1,866,776 for the nine months ended September 30, 2021, a decrease of $406,647 or 17.9% compared to $2,273,423 for the nine months ended September 30, 2020. The decrease was primarily due to (i) reduced cost on clinical trials due to slower recruitment and treatment in clinical trials due to the effects of SARS-CoV-2, (ii) lower amortization due to patents being fully amortized, and (iii) a decrease in insurance expense.

For the Nine Months Ended
September 30, Increase/
2021 2020 (Decrease) % Change

Operating Expenses:
Research and development:
Clinical trial and research expenses $ 1,474,732 $ 1,588,856 $ (114,124 ) -7.2 %
Depreciation/amortization 6,485 234,592 (228,107 ) -97.2 %
Insurance 154,763 200,162 (45,399 ) -22.7 %
Payroll and taxes 185,406 201,344 (15,938 ) -7.9 %
Rent and utilities 45,390 48,469 (3,079 ) -6.4 %
Total research and development $ 1,866,776 $ 2,273,423 $ (406,647 ) -17.9 %

~~General and Administrative Expenses~~

General and administrative expenses were $1,583,148 for the nine months ended September 30, 2021, an increase of $95,605 or 6.4% compared to $1,487,543 for the nine months ended September 30, 2020. The increase was primarily due to (i) higher legal fees relating to patents, (ii) an increase in payroll and related taxes due to an additional employee, partially offset by (iii) a decrease in professional fees.

For the Nine Months Ended
September 30, Increase/
2021 2020 (Decrease) % Change

Operating Expenses:
General and administrative:
Depreciation $ 3,163 $ 3,982 $ (819 ) -20.6 %
Directors fees 288,750 286,815 1,935 0.7 %
Insurance 122,966 136,272 (13,306 ) -9.8 %
Legal and litigation 479,421 304,747 174,674 57.3 %
Other general and administrative cost 55,640 51,941 3,699 7.1 %
Payroll and taxes 152,581 129,024 23,557 18.3 %
Professional fees 452,971 549,061 (96,090 ) -17.5 %
Rent and utilities 22,828 24,484 (1,656 ) -6.8 %
Foreign currency translation 4,828 1,217 3,611 296.7 %
Total general and administrative $ 1,583,148 $ 1,487,543 $ 95,605 6.4 %

~~Other Income/(Expense)~~

~~Other income increased by $61,132 from $33,601 for the nine months ended September 30, 2020 to $94,733 for the nine months ended September~~ 30, 2021. The increase was ~~mainly due to the PPP loan forgiveness~~driven primarily by (i) increased clinical trial cost, (ii) higher insurance costs and ~~the research~~(iii) higher professional fees, partially offset by (iv) lower legal and ~~development tax credit in Australia.~~

~~Interest expense decreased by $333,336 from $1,278,945~~litigation fees, and (v) lower rent and utility expense. Net loss for the ~~nine~~six months ended ~~September~~June 30, ~~2020 to $945,609 for the nine months ended September 30, 2021. The~~2022 was $2,108,763, a decrease of $1,140,778 or 35.1% which was ~~due~~primarily attributable to lower interest expense costs incurred in connection with the 2017 and 2020 Notes which converted to preferred stock on June 20, ~~2021.~~2021 and the recognition of grant revenue in the amount of $509,315.

	For the Six Months Ended
	June 30,
	2022			2021			Increase/(Decrease)			% Change

Grant Revenue	$	509,315		$	-		$	509,315			0.0	%

Operating Expenses:
Research and development		1,487,764			1,258,123			229,641			18.3	%
General and administrative		1,099,589			1,144,570			(44,981	)		-3.9	%
Total Operating Expenses		2,587,353			2,402,693			184,660			7.7	%

Total Operating Loss		(2,078,038	)		(2,402,693	)		324,655			-13.5	%

Other Income/(Expense):
Research and development tax credit		38,259			32,144			6,115			19.0	%
Gain from extinguishment		-			63,094			(63,094	)		-100.0	%
Interest income and interest expense		(68,984	)		(942,086	)		873,102			-92.7	%
Total Other Expense, Net		(30,725	)		(846,848	)		816,123			-96.4	%

Net Loss	$	(2,108,763	)	$	(3,249,541	)	$	1,140,778			-35.1	%

Grant Revenue

For the six months ended June 30, 2022 and 2021, there was $509,315 and $0, respectively, of grant revenue recognized related to qualifying expenses that were incurred and included within research and development on the condensed consolidated statements of operations.

Research and Development Expenses

Research and development expenses were $1,487,764 for the six months ended June 30, 2022, an increase of $229,641 or 18.3% compared to $1,258,123 for the six months ended June 30, 2021. The increase was primarily due to (i) increased cost on clinical trials due to increased recruitment and treatment in clinical trials, and (ii) higher insurance cost, partially offset by (iii) lower payroll and payroll taxes, and (iv) a decrease in rent and utility expenses.

	For the Six Months Ended
	June 30,
	2022		2021		Increase/(Decrease)			% Change
Operating Expenses:
Research and development:
Clinical trial and research expenses	$	1,205,985	$	977,207	$	228,778			23.4	%
Depreciation/amortization		3,929		4,324		(395	)		-9.1	%
Insurance		115,890		102,781		13,109			12.8	%
Payroll and taxes		134,475		140,040		(5,565	)		-4.0	%
Rent and utilities		27,485		33,771		(6,286	)		-18.6	%
Total research and development	$	1,487,764	$	1,258,123	$	229,641			18.3	%

General and Administrative Expenses

General and administrative expenses were $1,099,589 for the six months ended June 30, 2022, a decrease of $44,981 or 3.9% compared to $1,144,570 for the six months ended June 30, 2021. The decrease was primarily due to (i) lower legal fees relating to patents, partially offset by (ii) higher professional fees, (iii) increased payroll and taxes, and (iv) increased other general and administration expenses.

	For the Six Months Ended
	June 30,
	2022			2021		Increase/(Decrease)			% Change
Operating Expenses:
General and administrative:
Depreciation	$	2,109		$	2,109	$	-			0.0	%
Directors fees		192,500			192,500		-			0.0	%
Insurance		92,890			85,828		7,062			8.2	%
Legal and litigation		238,621			348,738		(110,117	)		-31.6	%
Other general and administrative cost		57,335			46,588		10,747			23.1	%
Payroll and taxes		127,874			108,600		19,274			17.7	%
Professional fees		375,033			338,475		36,558			10.8	%
Rent and utilities		13,866			16,945		(3,079	)		-18.2	%
Foreign currency translation		(639	)		4,787		(5,426	)		-113.3	%
Total general and administrative	$	1,099,589		$	1,144,570	$	(44,981	)		-3.9	%

Other Income/(Expense)

Other income/(expense) decreased by $816,123 from ($846,848) for the six months ended June 30, 2021 to ($30,725) for the six months ended June 30, 2022. The decrease was due to the lower interest expense costs incurred in connection with the 2017 and 2020 Notes which converted to preferred stock on June 20, 2021, offset by the gain from extinguishment of debt in 2021 relating to the PPP loan forgiveness.

	For the Six Months Ended
	June 30,
	2022			2021			Increase/(Decrease)			% Change
Other Income/(Expense):
Research and development tax credit	$	38,259		$	32,144		$	6,115			19.0	%
Gain from extinguishment		-			63,094			(63,094	)		-100.0	%
Interest income and interest expense		(68,984	)		(942,087	)		873,103			-92.7	%
Total Other Expenses, Net	$	(30,725	)	$	(846,848	)	$	816,123			-96.4	%

Liquidity and Capital Resources

~~Our~~The Company’s cash, ~~and~~ cash equivalents, and restricted cash were ~~$254,083~~$2,032,609 at ~~September~~June 30, ~~2021,~~2022 which includes the $1,948,335 of restricted cash resulting from a grant received from the State of Tennessee, compared to ~~$97,231~~$3,106,942 at December 31, ~~2020.~~2021, which included $2,423,958 of restricted cash. The Company’s working capital deficiency was $6,215,548 and $4,258,679 as of June 30, 2022 and December 31, 2021, respectively. The condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have continuing net losses and negative cash flows from operating activities. In addition, we have an accumulated deficit of ~~$244,795,217~~$248,142,721 as of ~~September~~June 30, ~~2021.~~2022. These conditions raise substantial doubt about our ability to continue as a going concern for a period within one year from the date that the financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued. Our financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on our ability to obtain additional financing as may be required to fund current operations.

~~During the nine months ended September~~As of June 30, ~~2021, the Company entered into additional non-related party 2020 Notes~~2022, cash required for our current liabilities included approximately $4,350,917 for accounts payable and accrued expenses (including lease liability) and a $142,693 note payable related to our short-term financing of our commercial insurance policies. Also, if not converted prior to maturity, convertible debt in the ~~aggregate principal~~ amount of ~~$1,700,000. On~~$2,010,000 plus accrued interest will mature one year from the date of the notes. Cash requirements for long-term liabilities were $96,201 at June ~~20, 2021, the outstanding non-amended 2017 Notes converted into 12,373,247 shares of Series D Convertible Preferred Stock at the Original Conversion Price of $0.2862,~~30, 2022. The Company intends to meet these cash requirements from its current cash balance and all the outstanding Amended 2017 Notes and outstanding 2020 Notes converted into 9,440,594 shares of Series D-1 Convertible Preferred Stock at the New Conversion Price of $2.862. The outstanding non-amended 2017 Notes, Amended 2017 Notes, and 2020 Notes had totalled $30,573,080 in principal and interest.

~~During the nine months ended September 30, 2021, the Company received total investments of $150,000~~ from ~~non-related party investors in exchange for an aggregate of 52,411 shares of restricted Series D-1 Convertible Preferred Stock that have not yet been issued.~~

During the nine months ended September 30, 2021, warrant holders exercised warrants to purchase an aggregate of 18,052,966 shares of common stock at an exercise price of $0.0533 per share. In connection with these exercises, the Company received aggregate cash proceeds of $962,445.

~~On August 13, 2021, the Board approved the 2021 Term Sheet, which sets forth the terms under which the Company will use its best efforts to arrange for financing of a maximum of $5,000,000.~~

~~On August 16, 2021, the Company received a Loan of $200,000 from a related party investor in connection with the 2021 Financing.~~future financing.

Management’s plans include selling our equity securities and obtaining other financing, including the 2021 financing, to fund our capital requirements and on-going operations; however, there can be no assurance we will be successful in these efforts. The condensed consolidated financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern. Significant funds will be needed to continue and complete our ongoing and planned clinical trials.

The SARS-CoV-2 pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, which could impact our ability to raise additional funds and may also impact the volatility of our stock price and trading in our stock. Moreover, the pandemic has also significantly impacted economies worldwide, which could result in adverse effects on our business and operations. We cannot be certain what the overall impact of the SARS-CoV-2 pandemic will be on our business. It has the potential to adversely affect our business, financial condition, results of operations, and prospects. The Company has experienced slower than normal enrollment and treatment of patients, and a prolonged SARS-CoV-2 pandemic could have a material adverse impact on the Company’s business and financial results, including the timing and ability of the Company to raise capital, initiate and/or complete current and/or future preclinical studies and/or clinical trials; disrupt the Company’s regulatory activities; and/or have other adverse effects on the Company’s clinical development. We have taken several temporary precautionary measures intended to help ensure the well-being of our employees and contractors and to minimize disruption to our business. We considered the impact of the SARS-CoV-2 pandemic on our business and operational assumptions and estimates, and determined there were no material adverse impacts on our results of operations and financial position at ~~September~~June 30, ~~2021.~~2022.

Access to Capital

Management plans to access capital resources through possible public or private equity offerings, including the 2021 financing, equity financings, debt financings, corporate collaborations, or other means. If we are unable to raise sufficient capital, we will not be able to pay our obligations as they become due.

The primary business objective of management is to build the Company into a commercial-stage biotechnology company; however, we cannot assure you that management will be successful in implementing the Company’s business plan of developing, licensing, and/or commercializing our prescription drug product candidates. Moreover, even if we are successful in improving our current cash flow position, we nonetheless plan to seek additional funds to meet our current and long-term requirements in ~~2021~~2022 and beyond. We anticipate that these funds will otherwise come from the proceeds of private placement transactions, the exercise of existing warrants and outstanding stock options, or public offerings of debt or equity securities. While we believe that we have a reasonable basis for our expectation that we will be able to raise additional funds, we cannot assure you that we will be able to complete additional financing in a timely manner. In addition, any such financing may result in significant dilution to stockholders.

Critical Accounting ~~Policies~~Estimates

~~For~~The preparation of financial statements and related disclosures must be in conformity with U.S. GAAP. These accounting principles require us to make estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates and judgments upon which it relies are reasonably based upon information available to us at the time that it makes these estimates and judgments. To the extent that there are material differences between these estimates and actual results, our financial results will be affected. The accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.

The following is not intended to be a ~~description~~comprehensive list of all of our ~~critical~~ accounting policies ~~see~~or estimates. Our accounting policies are more fully described in Note 3 ~~– Critical~~–Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

Stock-Based Compensation

We measure the cost of services received in exchange for an award of equity instruments based on the fair value of the award on the date of grant. The fair value amount of the shares expected to ultimately vest is then recognized over the period for which services are required to be provided in exchange for the award, usually the vesting period. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period that the estimates are revised. We account for forfeitures as they occur.

Research and Development

Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits for research and development employees and consultants, facilities expenses, overhead expenses, cost of laboratory supplies, manufacturing expenses, fees paid to third parties and other outside expenses. We accrue for costs incurred as the services are being provided by monitoring the status of the clinical trial or project and the invoices received from our external service providers. We adjust our accrual as actual costs become known.

Recently Adopted Accounting Standards

Recently adopted accounting standards are included in Note 3 – ~~Critical~~Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as special purpose entities (“SPEs”).

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Inherent Limitations on Effectiveness of Controls

Even assuming the effectiveness of our controls and procedures, our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error or all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. In general, our controls and procedures are designed to provide reasonable assurance that our control system’s objective will be met, and our principal executive officer and principal financial officer has concluded that our disclosure controls and procedures are effective at the reasonable assurance level. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls in future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The information required by this item is incorporated by reference from Part I, Item 1. Financial Statements, Notes to Condensed Consolidated Financial Statements, Note ~~10.~~11.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors that were disclosed in the ~~2020~~2021 Form ~~10-K, other than set forth below.~~10-K.

Our business, financial condition and results of operations may be adversely affected by the severe acute respiratory syndrome (SARS)-associated CoV-2 (SARS-CoV-2) pandemic or other similar outbreaks of contagious diseases.

Outbreaks of contagious diseases and other adverse public health developments, affecting us and/or the third parties on which we rely, could have a material and adverse effect on our business, financial condition, and results of operations. The severe acute respiratory syndrome (SARS)-associated CoV-2 (SARS-CoV-2) pandemic, which was reported to have begun in late-2019 and has spread worldwide, may affect our ability to initiate and/or complete current and/or or future preclinical studies and/or clinical trials; disrupt our regulatory activities; and/or have other adverse effects on our clinical development. In addition, stay-at-home orders, business closures, travel restrictions, supply chain disruptions and employee or independent contractor illness or quarantines could result in disruptions to our operations, which could adversely impact our results from operations and financial condition. The SARS-CoV-2 pandemic has also caused substantial disruption in capital and financial markets and adversely impacted economies worldwide, any and/or all of which may disrupt our business, negatively impact our ability to raise additional funds, and adversely affect our results of operations and financial condition. Moreover, many risk factors set forth in the 2020 Form 10-K should be interpreted as heightened risks as a result of the impact of the SARS-CoV-2 pandemic. The extent to which the SARS-CoV-2 pandemic may impact our business, financial condition and results of operations will depend on the manner in which this pandemic continues to evolve and future developments in response thereto, which are highly uncertain and cannot be predicted with confidence as of the date of this Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

2021 Financing

During the three months ended ~~September~~June 30, ~~2021,~~2022, the Company had received aggregate ~~Loan~~proceeds of ~~$200,000 from a related party investor in connection with the 2021 Financing.~~$500,000 pursuant to certain unsecured convertible notes (the “2021 Notes”). As of ~~September~~June 30, ~~2021,~~2022, the Company had cumulatively drawn down $2,010,000 under the ~~entire $200,000 under this note.~~2021 Notes.

For further details on the terms of the 2021 ~~Note,~~Notes, refer to our Form ~~8-K~~10-K as filed with the SEC on ~~August 18, 2021.~~

~~Series D-1 Convertible Preferred Stock~~

During the three months ended September 30, 2021, the Company received total investments of $150,000 from non-related party investors in exchange for an aggregate of 52,411 shares of restricted Series D-1 Convertible Preferred Stock that have not yet been issued.

~~Common Stock~~

~~During the three months ended September 30, 2021, the Company issued an aggregate of 25,000 shares of immediately vested restricted common stock to a consultant for services.~~March 29, 2022.

The Company believes that such transactions were exempt from the registration requirements of the Securities Act of 1933, as amended, (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act (or Rule 506(b) of Regulation D promulgated thereunder) as transactions by an issuer not involving a public offering.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. Mine Safety Disclosures.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit No.		Description

~~4.1~~		~~Form of Unsecured Convertible Promissory Note (incorporated by reference to Exhibit 4.1 of the Company’s current report on Form 8-K filed on August 18, 2021).~~

10.1**		~~2021 Financing Term Sheet.~~

31.1**		Certification of Principal Executive Officer Pursuant to Rule 13a-14(a) (Section 302 Certification).

31.2**		Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) (Section 302 Certification).

32***		Certification of Principal Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 (Section 906 Certification).

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

~~101.PRE~~101 PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

** Filed herewith.

*** Furnished herewith.

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SIGNATURES

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

PROVECTUS BIOPHARMACEUTICALS, INC.

~~November 10, 2021~~
August 11, 2022	By:	/s/ Bruce Horowitz
		Bruce Horowitz
		Chief Operating Officer (Principal Executive Officer)

	By:	/s/ Heather Raines
		Heather Raines, CPA
		Chief Financial Officer (Principal Financial Officer)

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	September 30, 2021
	Tax Credit		Legal Fees			Settlement			Total

Provectus Australia Tax Credit	$	1,354	$	-		$	-		$	1,354
Gross receivable		-		455,500			1,649,043			2,104,543
Reserve for uncollectibility		-		(455,500	)		(1,649,043	)		(2,104,543	)
Net receivable	$	1,354	$	-		$	-		$	1,354

	December 31, 2020
	Tax Credit		Legal Fees			Settlement			Total

Provectus Australia Tax Credit	$	3,930	$	-		$	-		$	3,930
Gross receivable		-		455,500			1,649,043			2,104,543
Reserve for uncollectibility		-		(455,500	)		(1,649,043	)		(2,104,543	)
Net receivable	$	3,930	$	-		$	-		$	3,930

				Weighted Average
	Shares			Exercise Price

Outstanding and exercisable at January 1, 2021		4,800,000		$	0.46

Granted		-			-
Exercised		-			-
Forfeited		(1,175,000	)		0.98

Outstanding and exercisable at September 30, 2021		3,625,000		$	0.32

		Number Outstanding and Exercisable		Weighted Average		Intrinsic Value
		at September 30,		Remaining Contractual		at September 30,
Exercise Price		2021		Life		2021

$	0.12		2,425,000		4.10	$	-
$	0.29		100,000		4.10	$	-
$	0.67		200,000		1.90	$	-
$	0.75		550,000		4.20	$	-
$	0.84		150,000		0.70	$	-
$	0.88		150,000		2.80	$	-
$	0.93		50,000		0.60	$	-

			3,625,000		3.77	$	-

		Number Outstanding
		and Exercisable at September 30,		Weighted Average Remaining Contractual		Intrinsic Value at September 30,
Exercise Price		2021		Life		2021

$	0.29		125,000		1.75	$	-
$	1.00		18,000		2.64	$	-
$	1.12		366,000		2.64	$	-
$	2.00		3,500		2.64	$	-

			512,500		2.42	$	-