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 ~~June~~September 30,2022

☐	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.)

800 S Gay Street, Suite 1610 Knoxville, Tennessee		37929
(Address of principal executive offices)		(Zip Code)

866-594-5999

(Registrant’s telephone number, including area code)

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 ~~August 10,~~November 9, 2022, was ~~419,497,119~~419,547,119.

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~~Deficit	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	1215
Item 3. Quantitative and Qualitative Disclosures About Market Risk	1725
Item 4. Controls and Procedures	1725

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	1826
Item 1A. Risk Factors	1826
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	1826
Item 3. Defaults Upon Senior Securities	1927
Item 4. Mine Safety Disclosures	1927
Item 5. Other Information	1927
Item 6. Exhibits	1927

SIGNATURES	2028

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, 2021), ~~and Item 1A of Part II of this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022,~~ and:

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

	●	The uncertainty of raising additional capital through the proceeds of private placement transactions of debt and/or equity securities, the exercise of existing warrants and outstanding stock options, and/or public offerings of debt and/or equity securities;

	●	The disruptions from the widespread outbreak of an illness or communicable/infectious disease, such as severe acute respiratory syndrome coronavirus 2, or aanother public health crisis ~~could disrupt~~to our business ~~and~~that could adversely affect our operations and financial ~~condition,~~condition; and

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

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

Current Assets:
Cash and cash equivalents $ 84,274 $ 682,984
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 2,278,747 3,441,957

Equipment and furnishings, less accumulated depreciation of $97,215 and $91,178, respectively 25,799 31,836
Operating lease right-of-use asset 138,863 39,563

Total Assets $ 2,443,409 $ 3,513,356

Liabilities and Stockholders’ Deficiency

Current Liabilities:
Accounts payable $ 1,894,201 $ 1,287,459
Deposit for purchase of Series D-1 Preferred Stock - 150,000
Unearned grant revenue 1,990,685 2,500,000
Other accrued expenses 2,331,621 2,002,486
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 8,494,295 7,700,636

Operating lease liability, non-current portion 96,201 -

Total Liabilities 8,590,496 7,700,636

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

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 241,590,054 241,440,106
Accumulated other comprehensive loss (35,511 ) (34,467 )
Accumulated deficit (248,142,721 ) (246,033,958 )

Total Stockholders’ Deficiency (6,147,087 ) (4,187,280 )

Total Liabilities and Stockholders’ Deficiency $ 2,443,409 $ 3,513,356
September 30 December 31,
2022 2021
(Unaudited)
Assets

Current Assets:
Cash and cash equivalents $ 67,030 $ 682,984
Restricted cash 1,644,321 2,423,958
Short-term receivables 564 5,107
Prepaid expenses and other current assets 187,500 329,908

Total Current Assets 1,899,415 3,441,957

Equipment and furnishings, less accumulated depreciation of $100,035 and $91,178, respectively 22,979 31,836
Operating lease right-of-use asset 128,059 39,563

Total Assets $ 2,050,453 $ 3,513,356

Liabilities and Stockholders’ Deficit

Current Liabilities:
Accounts payable $ 1,941,315 $ 1,287,459
Deposit for purchase of Series D-1 Preferred Stock - 150,000
Unearned grant revenue 1,675,795 2,500,000
Other accrued expenses 2,444,224 2,002,486
Accrued interest 104,589 10,578
Accrued interest - related parties 22,569 6,044
Notes payable 72,135 238,452
Convertible notes payable 1,810,000 1,260,000
Convertible notes payable - related parties 710,000 200,000
Operating lease liability, current portion 43,377 45,617

Total Current Liabilities 8,824,004 7,700,636

Operating lease liability, non-current portion 85,019 -

Total Liabilities 8,909,023 7,700,636

Commitments, contingencies, and litigations (Note 12) - -

Stockholders’ Deficit:
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 September 30, 2022 and December 31, 2021; aggregate liquidation preference of $14,164,889 at September 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 September 30, 2022 and December 31, 2021, respectively; aggregate liquidation preference of $106,132,320 and $105,532,804 at September 30, 2022 and December 31, 2021, respectively 9,271 9,219
Preferred stock, value 9,271 9,219

Common stock; par value $0.001 per share; 1,000,000,000 shares authorized; 419,497,119 shares issued and outstanding at September 30, 2022 and 419,447,119 issued and outstanding at December 31, 2021 419,497 419,447
Additional paid-in capital 241,593,029 241,440,106
Accumulated other comprehensive loss (36,752 ) (34,467 )
Accumulated deficit (248,855,988 ) (246,033,958 )

Total Stockholders’ Deficit (6,858,570 ) (4,187,280 )

Total Liabilities and Stockholders’ Deficit $ 2,050,453 $ 3,513,356

See accompanying notes to condensed consolidated financial statements.

2

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
2022 2021 2022 2021
For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Nine Months Ended
June 30, June 30, September 30, September 30,
2022 2021 2022 2021 2022 2021 2022 2021

Grant Revenue $ 321,710 $ - $ 509,315 $ - $ 314,890 $ - $ 824,205 $ -

Operating Expenses:
Research and development 816,648 602,979 1,487,764 1,258,123 580,390 608,653 2,068,154 1,866,776
General and administrative 583,042 619,038 1,099,589 1,144,570 400,689 438,578 1,500,278 1,583,148
Total Operating Expenses 1,399,690 1,222,017 2,587,353 2,402,693 981,079 1,047,231 3,568,432 3,449,924

Total Operating Loss (1,077,980 ) (1,222,017 ) (2,078,038 ) (2,402,693 ) (666,189 ) (1,047,231 ) (2,744,227 ) (3,449,924 )

Other Income/(Expense):
Research and development tax credit 38,259 32,144 38,259 32,144
Research and development tax (deficit)/credit (638 ) (507 ) 37,621 31,637
Gain from extinguishment - 63,094 - 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 )
Interest expense, net (46,440 ) (3,521 ) (115,424 ) (945,607 )

Total Other Expense, Net (47,078 ) (4,028 ) (77,803 ) (850,876 )

Net Loss $ (1,077,841 ) $ (1,579,591 ) $ (2,108,763 ) $ (3,249,541 ) $ (713,267 ) $ (1,051,259 ) $ (2,822,030 ) $ (4,300,800 )

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

Weighted Average Number of Common Shares Outstanding - Basic and Diluted 419,447,119 403,628,466 419,447,119 402,910,628 419,489,239 409,961,614 419,461,313 405,286,784

See accompanying notes to condensed consolidated financial statements.
3

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
2022 2021 2022 2021
For the Three Months Ended For the Six Months Ended For the Three Months Ended For the Nine Months Ended
June 30, June 30, September 30, September 30,
2022 2021 2022 2021 2022 2021 2022 2021

Net Loss $ (1,077,841 ) $ (1,579,591 ) $ (2,108,763 ) $ (3,249,541 ) $ (713,267 ) $ (1,051,259 ) $ (2,822,030 ) $ (4,300,800 )
Other Comprehensive Loss:
Foreign currency translation adjustments (328 ) (1,121 ) (1,044 ) (284 ) (1,241 ) (193 ) (2,285 ) (477 )
Total Comprehensive Loss $ (1,078,169 ) $ (1,580,712 ) $ (2,109,807 ) $ (3,249,825 ) $ (714,508 ) $ (1,051,452 ) $ (2,824,315 ) $ (4,301,277 )

See accompanying notes to condensed consolidated financial statements.
4

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ ~~DEFICIENCY~~DEFICIT
(Unaudited)

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

Shares Amount Shares Amount Shares Amount Capital Loss Deficit Total
Accumulated
Preferred Stock Preferred Stock Additional
Accumulated
Other
Preferred Stock Preferred Stock Additional Other
Series D Series D-1 Common Stock Paid-In Comprehensive Accumulated Series D Series D-1 Common Stock Paid-In Comprehensive Accumulated
Shares Amount Shares Amount Shares Amount Capital Loss Deficit Total 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 ) 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 for services
Common stock issued upon exercise of warrants
Common stock issued upon exercise of warrants, shares
Common stock
Common 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
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

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 - - 52,411 52 - - 149,948 - - 150,000
Comprehensive loss:
Net loss - - - - - - - - - (1,030,922 ) (1,030,922 ) - - - - - - - - (1,030,922 ) (1,030,922 )
Other comprehensive loss - - - - - - - (716 ) - (716 ) - - - - - - - (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 ) 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 ) - - - - - - - - (1,077,841 ) (1,077,841 )
Other comprehensive income - - - - - - - (328 ) - (328 )
Other comprehensive loss - - - - - - - (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 ) 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 )

Stock-based compensation:
Common Stock - - - - 50,000 50 2,975 - - 3,025
Comprehensive loss:
Net loss - - - - - - - - (713,267 ) (713,267 )
Other comprehensive
loss - - - - - - - (1,241 ) - (1,241 )

Balance at September 30, 2022 12,373,247 $ 12,373 9,270,860 $ 9,271 419,497,119 $ 419,497 $ 241,593,029 $ (36,752 ) $ (248,855,988 ) $ (6,858,570 )
FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2021

Shares Amount Shares Amount Shares Amount Shares Amount Capital Loss Deficit Total
Shares Amount Shares Amount Shares Amount Shares Amount Capital Loss Deficit Total Accumulated
Preferred Stock Preferred Stock Preferred Stock Additional
Accumulated
Other
Preferred Stock Preferred Stock Preferred Stock Additional 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 upon exercise of warrants - - - - - - 4,500,000 4,500 235,350 - - 239,850 - - - - - - 4,500,000 4,500 235,350 - - 239,850
Stock-based compensation:
Common stock - - - - - - 250,000 250 19,500 - - 19,750 - - - - - - 250,000 250 19,500 - �� - 19,750
Comprehensive loss:
Net loss - - - - - - - - - - (1,669,950 ) (1,669,950 ) - - - - - - - - - - (1,669,950 ) (1,669,950 )
Other comprehensive loss - - - - - - - - - 837 - 837
Other comprehensive income - - - - - - - - - 837 - 837

Balance at March 31, 2021 100 - - - - - 403,557,037 $ 403,558 $ 210,178,197 $ (33,260 ) $ (242,164,365 ) $ (31,615,870 ) 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 - - - - - - 200,000 200 10,460 - - 10,660 - - - - - - 200,000 200 10,460 - - 10,660
Stock-based compensation:
Common stock - - - - - - 25,000 25 1,650 - - 1,675 - - - - - - 25,000 25 1,650 - - 1,675
Warrants - - - - - - - - 488 - - 488 - - - - - - - - 488 - - 488
Conversion of PRH Notes to Series D Preferred Stock - - 12,373,247 12,373 - - - - 3,528,849 - - 3,541,222 - - 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 )
Other comprehensive income (loss) - - - - - - - - - (1,121 ) - (1,121 )
Other comprehensive 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 ) $ (243,743,959 ) $ (2,610,682 ) 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 )
Beginning, balance, value 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 )

Common stock issued for services - - - - - - - - - - - -
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 )
Balance, value - $ - 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 )
See accompanying notes to condensed consolidated financial statements.

5

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

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

Cash Flows From Operating Activities:
Net loss $ (2,108,763 ) $ (3,249,541 ) $ (2,822,030 ) $ (4,300,800 )
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation - 21,913 3,025 23,688
Non-cash lease expense 31,142 40,012 41,947 62,085
Depreciation 6,037 6,432 8,857 9,648
Gain on forgiveness of PPP Loan and interest - (63,094 ) - (63,094 )
Changes in operating assets and liabilities
Short term receivables 2,363 (1,632 ) 4,351 2,448
Prepaid expenses and other current assets 143,940 123,230 142,129 145,639
Accounts payable - trade 606,742 252,254
Accounts payable 654,017 302,978
Unearned grant revenue (509,315 ) - (824,205 ) -
Other accrued expenses 329,135 152,786 442,355 306,116
Operating lease liability (37,196 ) (42,191 ) (47,664 ) (66,246 )
Accrued interest expense 65,811 940,212
Accrued interest 110,536 942,257

Net Cash Used In Operating Activities (1,470,104 ) (1,819,619 ) (2,286,682 ) (2,635,281 )

Cash Flows From Financing Activities:
Proceeds from issuance of convertible notes payable 550,000 1,700,000 550,000 1,700,000
Proceeds from issuance of convertible notes payable - related parties 510,000 200,000
Repayment of short-term note payable (153,185 ) (95,387 ) (166,317 ) (219,172 )
Note Payable - (85,398)
Deposit for purchase of Series D-1 Preferred Stock - 150,000
Proceeds from exercise of warrants - 250,510 - 962,223
Net Cash Provided By Financing Activities 396,815 1,769,725 893,683 2,793,051

Effect of exchange rates on cash, cash equivalents, and restricted cash (1,044 ) 70
Effect of exchange rates on cash, cash equivalents, and restricted cash (2,592 ) (918 )

Net Decrease In Cash, Cash Equivalents, and Restricted Cash (1,074,333 ) (49,824 )
Net (Decrease) Increase In Cash, Cash Equivalents, and Restricted Cash (1,395,591 ) 156,852

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

Cash, Cash Equivalents, and Restricted Cash, End of Period $ 2,032,609 $ 47,407 $ 1,711,351 $ 254,083

Cash, cash equivalents and restricted cash consisted of the following:
Cash and cash equivalents $ 84,274 $ 47,407 $ 67,030 $ 254,083
Restricted cash 1,948,335 - 1,644,321 -
$ 2,032,609 $ 47,407
Cash, Cash Equivalents, and Restricted Cash, End of Period $ 1,711,351 $ 254,083

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 ) $ (57,146 ) $ (282,667 )
Deposit applied for purchase of Series D-1 Preferred Stock $ (150,000 ) $ -
Deposit applied to equity issuances $ (150,000 ) $ -
Conversion of non-amended 2017 Notes to Series D Preferred Stock $ - $ 3,541,222 $ - $ 3,541,222
Conversion of amended 2017 Notes and 2020 Notes to Series D-1 Preferred Stock $ - $ 27,031,858 $ - $ 27,031,858
Right-of-use assets obtained in exchange for operating
lease liabilities
$
130,422
$ -

Conversion of Series D-1 Preferred Stock to Common stock $ - $ 222
Right-of-use asset for lease liability $ 130,422 $ -
See accompanying notes to condensed consolidated financial statements.

6

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”), is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases that are based on a class of synthetic small ~~molecules~~molecule immuno-modulators called halogenated xanthenes (“HXs”)~~, a class entirely owned by the Company.~~
. Our lead HX molecule is named rose bengal sodium (“RBS”).
The Company’s proprietary, patented, pharmaceutical-grade RBS is the active pharmaceutical ingredient in the drug product candidates of our current clinical development programs and the preclinical formulations of our current drug discovery programs. Importantly, our pharmaceutical-grade RBS displays different therapeutic effects at different concentrations and can be formulated for delivery by different routes of administration,
The Company ~~has established~~believes that RBS targets disease in a ~~multi-step approach using quality-by-design principles for synthesizing~~bifunctional manner. First, direct contact may lead to cell death or repair depending on the disease being treated and ~~manufacturing pharmaceutical-grade~~the concentration of the RBS ~~by current good manufacturing practice (“cGMP”)~~utilized in the treatment. Secondly, multivariate immune signaling, activation, 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.response may follow that may manifest as stimulatory, inhibitory, or both.

●
~~Oncology:~~
The Company believes that it is the first entity to advance an RBS formulation into clinical trials for the treatment of a disease, such as those trials reported on the clinical trials registry ClinicalTrials.gov.
The Company believes that it is the first and only entity to date to successfully, reproducibly, and consistently make pharmaceutical-grade RBS at a purity of nearly 100%.
The Company’s small molecule HX medical science platform comprises a number of different drug product candidates and preclinical pharmaceutical-grade RBS formulations using different concentrations and delivered by different routes of administration specific to each disease area and/or indication. The Company’s HX medical science platform includes clinical development programs in oncology, dermatology, and ophthalmology; proof-of-concept in vivo drug discovery programs in oncology, hematology, wound healing, and animal health; and preclinical in vitro drug discovery programs in infectious diseases and tissue regeneration and repair.
Risks and Uncertainties~~PV-10~~^®~~, an investigational cancer immunotherapy administered by intralesional (“IL”) injection and an injectable formulation of cGMP RBS, is undergoing clinical study for adult solid tumor cancers.~~

~~Oral formulations of cGMP RBS are also undergoing preclinical study as prophylactic and therapeutic treatments for high-risk and refractory adult solid tumor cancers.~~
● ~~Pediatric Oncology:~~ ~~IL PV-10 is undergoing preclinical study for pediatric solid tumor cancers.~~
● ~~Hematology:~~ ~~Oral formulations of cGMP RBS are undergoing preclinical study for refractory and relapsed pediatric blood cancers (including leukemias).~~
● ~~Virology:~~ Systemic administration of formulations of cGMP RBS are undergoing preclinical study for the novel strain of coronavirus (“CoV”): severe acute respiratory syndrome (“SARS”) CoV 2 (“SARS-CoV-2”).
● ~~Microbiology:~~ ~~Different formulations of cGMP RBS are undergoing preclinical study as potential treatments for multi-drug resistant (“MDR”) bacteria.~~
● ~~Ophthalmology:~~ ~~Topical formulations of cGMP RBS are undergoing preclinical study as potential treatments for diseases and disorders of the eye.~~
● ~~Dermatology:~~ ~~PH-10~~^®, an investigational immune-dermatology agent administered as a topical formulation of cGMP RBS, is undergoing monotherapy clinical study as well as preclinical study as a monotherapy and in combination therapy with approved drugs for inflammatory dermatoses.
● ~~Animal Health:~~ ~~Different formulations of cGMP 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.

7
Severe acute respiratory syndrome (“SARS”) coronavirus (“CoV”) 2 (“SARS-CoV-2”) was 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 30, 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, disrupt the Company’s regulatory activities, and/or have other adverse effects on the Company’s clinical development.
Basis of Presentation

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, 2021 filed with the SEC on March 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 ~~six~~nine months ended ~~June~~September 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

7
SARS-CoV-2 was 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 June 30, 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, disrupt the Company’s regulatory activities, and/or have other adverse effects on the Company’s clinical development.

2.Liquidity and Going Concern
To date, the Company has not generated any revenues or profits from planned principal operations.

The Company’s cash, cash equivalents, and restricted cash were $~~2,032,609~~1,711,351 at ~~June~~September 30, 2022 which includes $~~1,948,335~~1,644,321 of restricted cash resulting from a grant received from the State of Tennessee. The Company’s working capital deficiency was $~~6,215,548~~6,924,589 and $4,258,679as of ~~June~~September 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~~2022 financing (see Note 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.
8

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 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.Significant Accounting Policies

Since the date the Company’s December 31, 2021 consolidated financial statements were issued in its 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 October 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-10 “Codification Improvements”, which improves consistency by amending the Codification to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions in the Codification by amending and adding new headings, cross referencing to other guidance, and refining or correcting terminology. The guidance is effective for the Company beginning in the first quarter of fiscal year 2022 with early adoption permitted. The Company adopted this standard on January 1, 2022 and it did not have a material effect on its condensed consolidated financial statements.
8

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.

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~~September 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~~855,679. 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~~September 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~~1,461,351 and $2,856,942, respectively.
Reclassifications

Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications had no effect on previously reported results of operations or 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

June 30, June 30, September 30, September 30,
2022 2021 2022 2021
Warrants 512,500 82,589,164 487,500 512,500
Options 3,425,000 4,800,000 3,425,000 3,625,000
Convertible preferred stock 105,081,847 106,778,757 105,081,847 104,557,737
2021 unsecured convertible notes 7,311,088 - 8,602,376 -
2022 unsecured convertible notes 646,952 -

Total potentially dilutive shares 116,330,435 194,167,921 118,243,675 108,695,237

9

4.Other Accrued Expenses
The following table summarizes the other accrued expenses at ~~June~~September 30, 2022 and December 31, 2021:
Schedule of Other Accrued Expenses

June 30,
2022

December 31,
2021

September 30,
2022

December 31,
2021

Accrued payroll and taxes $ 259,008 $ 174,533 $ 300,691 $ 174,533
Accrued vacation 56,356 42,871 57,088 42,871
Accrued directors’ fees 1,753,089 1,560,589 1,849,339 1,560,589
Accrued other expenses 263,168 224,493 237,106 224,493
Total Other Accrued Expenses $ 2,331,621 $ 2,002,486 $ 2,444,224 $ 2,002,486

5.Convertible Notes Payable
2021 Financing
Schedule of Convertible Notes Payable

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

Issued 50,000 - 50,000 50,000 - 50,000

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

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

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

Issued - 325,000 325,000

Balance as of September 30, 2022 $ 1,810,000 $ 525,000 $ 2,335,000
Ending Balance $ 1,810,000 $ 200,000 $ 2,010,000 $ 1,810,000 $ 525,000 $ 2,335,000
On August 16, 2022, the 2021 Note from a related party investor (a Company officer) was extended for up to one additional year to expire on August 16, 2023.

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

On September 20, 2022, the Board approved the closure of the 2021 Financing. As of ~~June~~September 30, 2022, the Company had received 2021 Notes proceeds of $~~2,010,000~~2,335,000, of which $~~200,000~~525,000 is from a related party investor (a Company ~~officer)~~officer and Company director).

10
~~Subsequent~~
2022 Financing

Non-Related Party Related Party
Face Amount Face Amount Total
Balance as of January 1, 2022 $ - $ - $ -

Issued - - -

Balance as of March 31, 2022 - - -

Issued - - -

Balance as of June 30, 2022 - - -
Beginning Balance - - -

Issued - 185,000 185,000

Balance as of September 30, 2022 $ - $ 185,000 $ 185,000
Ending Balance $ - $ 185,000 $ 185,000
On September 20, 2022, the Board approved a Financing Term Sheet (the “2022 Term Sheet”), which set forth the terms under which the Company will use its best efforts to ~~June~~arrange for financing of a maximum of $5,000,000 (the “2022 Financing”), which amounts will be obtained in several tranches. As of September 30, 2022, the Company had received ~~2021 Notes proceeds~~a 2022 Loan, as defined below, of $~~225,000~~185,000 from a related party investor (a Company director)~~. See Note 12. Subsequent Events.~~ in connection with the 2022 Financing.

Pursuant to the 2022 Term Sheet, the 2022 Notes (defined below) will convert into shares of the Company’s Series D-1 Preferred Stock twelve months after the issue date of a 2022 Note, subject to certain exceptions.
The 2022 Financing will be in the form of an unsecured convertible loans (the “2022 Loan”) from the investors (the “2022 Loan Investors”) and evidenced by convertible promissory notes (individually, a “2022 Note” and collectively, the “2022 Notes”). In addition to customary provisions, the 2022 Notes will contain the following provisions:
(i) The 2022 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 2022 Notes will be accelerated and all amounts due under the 2022 Notes may be immediately due and payable at the 2022 Loan Investors’ option;
(iii) The outstanding principal amount and interest payable under the 2022 Loan may be convertible at the 2022 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
(iv) The outstanding principal amount and interest payable under the 2022 Loan will be automatically convertible into shares of the Company’s Series D-1 Preferred Stock twelve (12) months after the issue date of a 2022 Note.
The embedded conversion options associated with the 2022 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.
For further details on the terms of the 2022 Financing and the details of the 2022 Notes, refer to our Form 8-K as filed with the SEC on September 26, 2022.
11
6. Notes Payable

The Company obtained short-term financing from AFCO Insurance Premium Finance for our commercial insurance policies. As of ~~June~~September 30, 2022 and December 31, 2021, the balance of the note payable was $~~142,693~~72,135 and $238,452, respectively.

7. Related Party Transactions

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

During the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, the Company paid Mr. Bruce Horowitz (Capital Strategists) consulting fees of $~~84,800~~127,200 and $~~127,200~~148,400, respectively, for services rendered. Director fees for Mr. Horowitz for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 were $~~37,500~~56,250 and $~~37,500~~56,250, respectively.

Accrued director fees for Mr. Horowitz as of ~~June~~September 30, 2022 and December 31, 2021 were $~~318,750~~337,500 and $281,250, respectively. Total amount owed to Capital Strategists for consulting fees as of ~~June~~September 30, 2022 and December 31, 2021 were $~~169,600~~190,800 and $127,200, respectively. Mr. Horowitz serves as both Chief Operating Officer (“COO”) and a Company director.

See Note 5 for details of other related party transactions.

Director fees during the three months ended ~~June~~September 30, 2022 and 2021 were $96,250 and $96,250, respectively. Director fees during the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 were $~~192,500~~288,750 and $~~192,500~~288,750, respectively. Accrued directors’ fees as of ~~June~~September 30, 2022 and December 31, 2021 were $~~1,753,089~~1,849,339 and $1,560,589, respectively.

8.Stockholders’ ~~Deficiency~~Deficit
Preferred Stock

During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company issued 52,411 shares of restricted Series D-1 Convertible Preferred Stock in exchange for an investment of $150,000 from a non-related party.
Common Stock
During the nine months ended September 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 $1,525 for services.
During the nine months ended September 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.
Options
During the nine months ended September 30, 2022, the Company did not issue any options.
The following table summarizes option activity during the nine months ended September 30, 2022:
Summary of Option Activity
Weighted Average
Shares Exercise Price

Outstanding and exercisable at January 1, 2022 3,625,000 $ 0.32

Granted - -
Exercised - -
Forfeited (200,000 ) 0.86

Outstanding and exercisable at September 30, 2022 3,425,000 $ 0.29
The following table summarizes information about options outstanding at September 30, 2022:
Summary of Stock Options Outstanding
Number Outstanding and Exercisable Weighted Average Intrinsic Value
at September 30, Remaining Contractual at September 30,
Exercise Price 2022 Life 2022

$ 0.12 2,425,000 3.10 $ -
$ 0.29 100,000 3.10 $ -
$ 0.67 200,000 0.90 $ -
$ 0.75 550,000 3.20 $ -
$ 0.88 150,000 1.80 $ -

3,425,000 2.96 $ -
12
Warrants
During the nine months ended September 30, 2022, the Company did not issue any warrants.
The following table summarizes warrant activity during the nine months ended September 30, 2022:
Summary of Warrant Activity
Weighted Average
Shares Exercise Price

Outstanding and exercisable at January 1, 2022 512,500 $ 0.92

Granted - -
Exercised - -
Forfeited (25,000 ) 0.29

Outstanding and exercisable at September 30, 2022 487,500 $ 0.95
The following table summarizes information about warrants outstanding at September 30, 2022:
Summary of Warrants Outstanding
Number Outstanding
and Exercisable
at September 30, Weighted Average
Remaining Contractual Intrinsic Value
at September 30,
Exercise Price 2022 Life 2022

$ 0.29 100,000 0.97 $ -
$ 1.00 18,000 1.64 $ -
$ 1.12 366,000 1.64 $ -
$ 2.00 3,500 1.64 $ -

487,500 1.50 $ -
Holders of the outstanding warrants are not entitled to vote and the exercise prices of such warrants are subject to customary anti-dilution provisions.

Annual Stockholder Meeting Proposals

The Company held its annual meeting of stockholders on June 22, 2022. As proposal number 4, stockholders authorized the 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 and Certificate of Designation of Series D-1 Convertible Preferred Stock (the “Certificates of Designation”),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 a ratio of between 1-for-10 and 1-for-50, where the ratio would be determined by the Board at its discretion, and to make corresponding amendments to the Certificates of 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 the Board’s recommendation.
The Board has not acted on these stockholder authorizations as of the filing date.
10

9. Leases

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

On June 30, 2022, the lease expired and was not renewed. On June 18, 2022, the Company moved into 2,700 square feet of leased corporate office space in Knoxville, Tennessee through an operating lease agreement for a term of three years ending June 30, 2025. The monthly base rent ranges from $4,053 to $4,278 over the term on the lease.

Total operating lease expense for the three months ended ~~June~~September 30, 2022 was $~~23,092~~12,497, of which, $~~15,395~~8,331 was included within research and development and $~~7,697~~4,166 was included within general and administrative expenses on the condensed consolidated statement of operations. Total operating lease expense for the three months ended ~~June~~September 30, 2021 was $~~23,044~~15,887, of which, $~~15,363~~10,591 was included within research and development and $~~7,681~~5,296 was included within general and administrative expenses on the condensed consolidated statement of operations.

Total operating lease expense for the ~~six~~nine months ended ~~June~~September 30, 2022 was $~~38,051~~50,548, of which, $~~25,367~~33,698 was included within research and development and $~~12,684~~16,850 was included within general and administrative expenses on the condensed consolidated statement of operations. Total operating lease expense for the ~~six~~nine months ended ~~June~~September 30, 2021 was $~~47,806~~63,693, of which, $~~31,871~~42,462 was included within research and development and $~~15,935~~21,231 was included within general and administrative expenses on the condensed consolidated statement of operations.

13
A summary of the Company’s right-of-use assets and liabilities is as follows:
Schedule of Right-of-use Assets and Liabilities
For The Six Months Ended For The Nine Months Ended
June 30, September 30,
2022 2021 2022 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases $ 38,625 $ 45,784 $ 50,784 $ 64,231

Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ 151,693 $ - $ 130,422 $ -

Weighted Average Remaining Lease Term
Operating leases 3 years 1 year
2 years 9 months
9 months

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

Future remaining minimum payments under the Company’s non-cancellable lease obligations as of ~~June~~September 30, 2022 were as follows:
Schedule of Future Minimum Payments Under Non-cancellable Lease

Years Amount Amount
2022 $ 24,318 $ 12,159
2023 49,311 49,311
2024 50,663 50,663
2025 25,669 25,669
Total future minimum lease payments 149,961 137,802
Less: amount representing imputed interest 11,098 (9,406 )
Total $ 138,863 $ 128,396

10.Grants

On October 25, 2021, the Company received a grant award of $2,500,000from 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 “Tennessee Grant” or “Grant”). The ~~Company recorded $509,315~~ ~~of grant revenue during the six months ended June 30, 2022. The grant~~Tennessee Grant was pre-funded; therefore, the funds do not need to be used in full by June 30, 2022. The Tennessee Grant was provided as reimbursement of research and development expenses related to the development of animal health drug products. The Company has elected gross presentation of the Tennessee Grant income earned and the related research and development expenses with Grant income presented as Grant revenue in the period in which it is earned, and qualifying costs presented as research and development expenses included in the Company’s income from operations, in the period that such costs are incurred. As of September 30, 2022, $1,675,795 has been recorded as unearned Grant revenue liability on the accompanying condensed consolidated balance sheets. The Company recorded $824,205 of grant revenue during the nine months ended September 30, 2022.
11.License Transactions
In the third quarter of 2019, the Company entered into a dialog with Bascom Palmer Eye Institute (“BPEI”) regarding collaboration on BPEI’s ophthalmic photodynamic antimicrobial therapy (“PDAT”) using the Company’s pharmaceutical-grade RBS. On February 16, 2022, and later amended on May 11, 2022, the Company entered into an option agreement with the University of Miami (“UM”) for an exclusive worldwide license of intellectual property (“IP”) developed by the Ophthalmic Biophysics Center (“OBC”) of BPEI that included the use of OBC’s PDAT medical device in combination with formulations of the Company’s pharmaceutical-grade RBS for the treatment of bacterial, fungal, and viral infections of the eye. The Company completed the arrangements of this collaboration during the third quarter of 2022, whereby the Company paid $5,000 for the option that expires on May 31, 2023, and agreed to pay up to $10,000 of new UM patent expenses for this IP during the period of the option and up to $25,000 of past UM patent expenses for this IP. The Company also entered into a sponsored research agreement with UM on September 16, 2022 to study the combination of OBC’s PDAT and TOP PV-305, a formulation of the Company’s pharmaceutical-grade RBS, for the treatment of infectious keratitis. This sponsored research by the Company is not associated with BPEI’s clinical efforts to utilize non-pharmaceutical grade rose bengal.
12. Commitments, Contingencies and Litigation

The Company may, from time to time, be involved in litigation arising from the ordinary course of business and/or 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.

~~12.~~13. Subsequent Events

The Company has evaluated events that have occurred after the balance sheet and through the date the condensed consolidated 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.

Convertible Notes Payable

Subsequent to ~~June~~September 30, 2022, the Company ~~received 2021 Notes proceeds~~entered into a 2022 Note with a non-related party investor in the aggregate principal amount of $~~225,000~~75,000 ~~from~~in connection with a 2022 Loan received by the Company for the same amount.
Subsequent to September 30, 2022, the Company entered into a 2022 Note with a related party investor (a Company ~~director).~~Director) in the aggregate principal amount of $92,500
~~Common Stock~~
~~Subsequent to June 30,~~ in connection with a 2022 Loan received by 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.~~the same amount.
~~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.~~
1114

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, 2021 filed with the SEC on March 29, 2022 (“2021 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.

Clinical Development and Drug Discovery
The Company’s small molecule HX medical science platform, which comprises a number of different drug product candidates and preclinical formulations made from pharmaceutical-grade RBS using different concentrations and delivered by different routes of administration specific to each disease area and/or indication, includes:
Clinical Development Programs
● Oncology: Intratumoral (“ITU”) formulation PV-10^®(“ITU PV-10”) has undergone and is undergoing multiple, monotherapy and combination therapy, early- to late-stage clinical trials, expanded access programs (“EAPs”) for groups of and individual patients, and/or quality of life (“QOL”) study at multiple clinical sites in Australia, Europe, and the U.S. for the treatments of Stage III and IV melanoma and different types of liver cancers. ITU PV-10 has undergone and is undergoing clinical monotherapy and combination therapy mechanism of action and mechanism of immune response study for melanoma, metastatic uveal melanoma, and metastatic neuroendocrine tumors at and/or with Moffitt Cancer Center in Tampa, Florida, The Queen Elizabeth Hospital in Adelaide, Australia, and MD Anderson Cancer Center in Houston, Texas.
●
Dermatology: Topical (“TOP”) formulation PH-10^® (“TOP PH-10”) has undergone multiple mid-stage, monotherapy clinical trials for the treatments of psoriasis and atopic dermatitis at different clinical sites in the U.S. TOP PH-10 has undergone clinical monotherapy mechanism of action and mechanism of immune response study for psoriasis at The Rockefeller University in New York, New York (“TRU”).
Different formulations have undergone preclinical combination therapy study for psoriasis and are undergoing preclinical monotherapy study for skin inflammation at TRU.
●
Ophthalmology: The Company believes that clinical monotherapy proof-of-concept (“POC”) of TOP administration of non-pharmaceutical grade rose bengal for the treatment of infectious keratitis has been shown by clinicians and researchers at the University of Miami’s Bascom Palmer Eye Institute (“BPEI”) in Miami, Florida, who are now collaborating with the Company to evaluate the potential use of our pharmaceutical-grade RBS.
Pharmaceutical-grade TOP PV-305 is undergoing preclinical monotherapy study for diseases and disorders of the eye, such as infectious keratitis at BPEI.
15
Proof-of-Concept In Vivo Drug Discovery Programs
● Oncology: ITU PV-10 has undergone preclinical monotherapy and combination therapy study for the treatment of relapsed and refractory pediatric solid tumor cancers at the University of Calgary’s Cumming School of Medicine in Calgary, Canada (“UCal”). The Company believes that the UCal researchers have achieved monotherapy POC in vivo of ITU administration.
Oral (“PO”) formulations are undergoing preclinical monotherapy study for high-risk and refractory adult solid tumor cancers at UCal. The Company believes that the UCal researchers and the Company have both achieved monotherapy POC in vivo of PO administration, that the Company has achieved monotherapy proof-of-concept in vivo of PO administration in prophylactic and therapeutic settings, and that the Company has achieved monotherapy POC in vivo of intravenous (“IV”) administration.
● Hematology: PO formulations are undergoing preclinical monotherapy study for the treatment of refractory and relapsed pediatric and other blood cancers, including leukemias, at UCal. The Company believes that the UCal researchers have achieved POC in vivo of PO administration.
● Wound Healing: Different formulations are undergoing preclinical monotherapy study for the healing of full-thickness cutaneous wounds. The Company believes that monotherapy POC in vivo of TOP administration of non-pharmaceutical grade rose bengal for the treatment of this indication has been shown by researchers at the University of Texas Medical Branch in Galveston, Texas, who are now collaborating with the Company to use our pharmaceutical-grade RBS.
● Animal Health: Different formulations are undergoing preclinical monotherapy study for the treatment of cutaneous canine cancers at the University of Tennessee’s College of Veterinary Medicine in Knoxville, Tennessee. The Company believes that it has achieved monotherapy POC in canines of ITU administration.
Preclinical In Vitro Drug Discovery Programs
● Infectious Diseases: PO and intranasal (“IN”) formulations have undergone and are undergoing preclinical monotherapy study for the treatment of SARS-CoV-2 at UCal, another Canadian academic research center, the University of Tennessee Health Science Center (“UTHSC”) in Memphis, Tennessee, and a U.S. contract research organization.
Different formulations have undergone preclinical monotherapy and combination therapy study for the treatment of gram-positive and gram-negative bacterial infections (including multi-drug resistant strains) and are undergoing preclinical monotherapy study for the treatment of oral bacterial infections at UTHSC.
Different formulations are undergoing preclinical monotherapy study for the treatment of fungal infections at UTHSC.
● Tissue Regeneration and Repair: Different formulations are undergoing preclinical monotherapy study for vertebrate development, wound healing, and tissue regrowth at the University of Nevada, Las Vegas in Las Vegas, Nevada.
Business Strategy
The Company is selectively continuing ongoing and planning to initiate new monotherapy and combination therapy ITU PV-10 clinical trials in melanoma and liver cancer indications to generate more and/or new clinical data and appropriately utilizing clinical data from historical ITU PV-10 trials, EAPs, and/or QOL study of these oncology indications. Our goals are to pursue drug approval pathways and/or co-development relationships with commercial pharmaceutical companies for ITU PV-10 based on these indications and data.
The Company is developing a systemically-administered formulation of pharmaceutical-grade RBS for the treatment of cancer. Our goals, when this work is complete, are to file an investigational new drug application (“IND”) with the U.S. Food and Drug Administration (“FDA”), take an initial systemic drug product candidate into an early-stage clinic trial for an initial oncology or hematology indication, and/or pursue a co-development collaboration or out-license arrangement for this route of administration and disease area.
The Company is developing different formulations of pharmaceutical-grade RBS using different concentrations and different routes of administration (e.g., PO, IV, IN) for other disease areas by endeavoring to show preclinical activity and lack of toxicity. Our goals, when each task of this work is completed, are to file an IND with the FDA, take an initial drug product candidate into an early-stage clinic trial for an initial indication, and/or pursue a co-development collaboration or out-license arrangement for the respective disease area and route of administration.
The Company is endeavoring to fully elucidate the traits and characteristics of the RBS molecule using different academic medical centers under sponsored research and testing agreements. Our goal is to gain and communicate additional knowledge of the RBS molecule’s targeting, mechanism, signaling, immune response, and other features that are common to and/or different from each disease area and indication under research.
The Company is doing rigorous, chemical analytical comparisons of non-pharmaceutical grades of rose bengal from specialty chemical suppliers against the Company’s pharmaceutical-grade RBS. Our goal is to demonstrate the proprietary nature of the Company’s pharmaceutical-grade RBS and that our pharmaceutical-grade RBS meets the necessary uniformity and purity requirements for commercial pharmaceutical use.
16
RBS Drug Substance and Drug Product Candidate Manufacturing
Our pharmaceutical-grade RBS resulted from the Company’s innovation of a proprietary, patented, commercial-scale process to synthesize and utilize the RBS molecule into a viable active pharmaceutical ingredient (“API”) for commercial pharmaceutical use; the development of unique chemistry, manufacturing, and control (“CMC”) specifications for drug substance and drug product candidate manufacturing processes; the production and multi-year stability testing of multiple drug substance and drug product candidate lots; the comprehensive documentation of lot composition and reproducibility; and the review and acceptance of CMC data from these lots by seven different national drug regulatory agencies for use in a prior, multi-country, multi-center Phase 3 randomized control trial of the Company.
The Company’s drug substance and drug product candidate manufacturing processes employ Quality-by-Design principles, current good manufacturing practice (“cGMP”) regulations, and the guidelines of The International Council for Harmonization (ICH) of Technical Requirements for Pharmaceuticals for Human Use. These processes utilize controls that eliminate the formation of historical impurities and avoid the introduction of potentially hazardous impurities that the Company believes may have been and could be present in uncontrolled and unreported amounts in non-pharmaceutical-grades of rose bengal.
The Company’s processes of synthesizing the RBS molecule into pharmaceutical-grade RBS and manufacturing RBS drug substance and ITU PV-10 drug product candidate, the processes’ CMC specifications, and the CMC data from the production of stability lots of drug substance and drug product candidate have been reviewed by multiple national drug regulatory agencies prior to granting clinical trial authorizations for the Company to commence a historical Phase 3 study of ITU PV-10 for the treatment of locally advanced cutaneous melanoma, including the U.S. FDA, Germany’s Bundesinstitut für Arzneimittel und Medizinprodukte (BfArM), Australia’s Therapeutic Goods Administration (TGA) under a clinical trial notification, France’s Agence Nationale de Sécurité du Médicament et des Produits de Santé (ANSM), Italy’s Agenzia Italiana del Farmaco (AIFA), Mexico’s Comisión Federal para la Protección contra Riesgos Sanitarios (COFEPRIS), and Argentina’s Administración Nacional de Medicamentos, Alimentos y Tecnología Médica (ANMAT).
RBS Nonproprietary Name
The RBS name for the Company’s pharmaceutical-grade API was selected by and passed the review of the World Health Organization (“WHO”) Expert Advisory Panel on the International Pharmacopoeia and Pharmaceutical Preparations after the Company applied for the non-proprietary name in the third quarter of 2020, and reached the status of recommended International Nonproprietary Names (“INN”). INN Recommended List 88, which includes the RBS name, was published with the No. 3 issue of the WHO Drug Information, Volume 36 in the fourth quarter of 2022.
The aim of the INN system since inception has been to provide health professionals with a unique and universally available designated name to identify each pharmaceutical substance or API, according to the WHO. The existence of an international nomenclature, in the form of INN, is important for the accurate identification, prescribing, and dispensing of medicines to patients, and for communication and exchange of information among health professionals and scientists worldwide.
17
Prior Medical Diagnostic Use of Rose Bengal
FDA-Approved Liver Diagnostic Use
In 1971, ¹³¹I rose bengal (Robengatope^® [rose bengal sodium ¹³¹I injection USP]) was approved by the FDA (NDA 016224) for use as a diagnostic aid to determine liver function. In 2009, manufacturer Bracco Diagnostics Inc. withdrew Robengatope from the U.S. market because of the emergence of newer liver imaging methods, such as computed tomography.
Historic Ophthalmic Diagnostic Use
In 1974, Barnes-Hind Pharmaceuticals, Inc. (“Barnes-Hind”) introduced a medical device product of 1% rose bengal in an aqueous solution for the diagnosis of corneal injury, diagnosis of keratitis, keratoconjunctivitis, and sicca, and detection of foreign bodies in the eye. In 1981, Barnes-Hind introduced ophthalmic strips of the same concentration for the same indications. While both the solution and strip medical device products were accepted by the FDA for marketing, the Company does not believe that the devices or their respective claims were approved by the FDA because their introductions predated formal FDA review and approval of medical devices.
Non-Pharmaceutical Grades of Rose Bengal
Commercial-Grade
This material may be purchased from specialty chemical suppliers in the U.S. and from other parts of the world; however, the Company believes that the material itself is almost exclusively made in China and India under non-cGMP conditions. Commercial-grade rose bengal appears to have reported purity that may vary between approximately 80% and 95%, and that may contain substantial amounts of unreported impurities and/or gross contaminants. Commercial-grade rose bengal is typically used by researchers for preclinical study of the rose bengal molecule for potential biomedical therapeutic applications.
We believe that commercial-grade rose bengal is still manufactured using the historical process (or a variant thereof) that was developed by the synthetic molecule’s Swiss creator Rudolph Gnehm in 1881. Some manufacturers may, however, apply purification techniques that the Company believes still result in material that may possess questionable purity and contaminants and may also be subject to substantial lot-to-lot manufacturing variability.
Diagnostic-Grade
The Company coined this phrase to describe non-approved rose bengal that is used as an ingredient in historical or current ophthalmic solutions and strips, has been historically or is presently compounded by pharmacists for ophthalmic use, and has been or is in other non-ophthalmic diagnostic tests such as the rose bengal test in human brucellosis.
We presume, but have not yet confirmed, that diagnostic-grade rose bengal is derived from commercial-grade rose bengal that may have undergone a form of purification and/or may have been compounded under cGMP regulations by a pharmacist, academic medical researcher, or commercial entity. Here too, the Company believes that purification may not sufficiently improve the amounts and accuracy of rose bengal purity and lot contents and may not adequately reduce or eliminate lot-to-lot manufacturing variability.
Chemical Analytical Comparison
In the first quarter of 2022, the Company began work with a U.S. contract development and manufacturing organization to rigorously and methodically assess three lots of commercial-grade rose bengal, one each from three different specialty chemical suppliers, and compare and contrast these non-pharmaceutical grade materials with the Company’s pharmaceutical-grade RBS. This chemical analytical work was substantially completed by the end of the third quarter of 2022. The Company believes that the preliminary results of these analyses indicate that all three lots of commercial-grade rose bengal had rose bengal purity that was drastically different from what was represented on their respective certificates of analysis (“CofAs”), and that one of the three lots contained gross contaminants that were not represented on its CofA.
Potential Barriers to Entry
The Company believes that the Company’s proprietary, patented, pharmaceutical-grade RBS possesses several competitive advantages over non-pharmaceutical-grades of rose bengal that researchers, clinicians, and academic, business, and/or governmental competitors have used, are using, and/or may attempt to use for potential biomedical applications. The Company believes that non-pharmaceutical-grades of rose bengal may suffer from the uncontrolled presence of substance-related impurities and/or gross contaminants, substantial lot-to-lot manufacturing variability, inaccurately reported and/or misrepresented purity and contents, and the lack of reproducible, consistent, and fullsome CMC specifications and documentation.
18
The Company believes that historical and potentially hazardous impurities and other manufacturing and handling issues facing non-pharmaceutical-grades of rose bengal may pose significant scientific, technological, and economic challenges to overcome and validate for compliance with modern drug regulatory standards.
Components of Operating Results
Grant Revenue
Grant ~~income~~revenue 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~~grant revenue 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.

1219

Results of Operations

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

Overview

Total operating expenses were ~~$1,399,690~~$981,079 for the three months ended ~~June~~September 30, 2022, ~~an increase~~a decrease of ~~$177,673~~$66,152 or ~~14.5%~~6.3% compared to the three months ended ~~June~~September 30, 2021. The ~~increase~~decrease was driven primarily by (i) ~~increased~~reduced clinical trial cost, (ii) ~~higher insurance costs~~lower rent and utilities, (iii) ~~higher~~lower legal and litigation fees and (iv) lower professional fees, partially offset by ~~(iv) lower legal~~(v) higher insurance cost and ~~litigation fees.~~(vi) higher other general and administrative cost. Net loss for the three months ended ~~June~~September 30, 2022 was ~~$1,077,841,~~$713,267, a decrease of ~~$501,750~~$337,992 or ~~31.8%~~32.2% which was primarily attributable to ~~lower~~a decrease in operating expenses, partially offset by higher interest expense ~~costs incurred in connection with~~from the ~~2017 and 2020 Notes which converted to preferred stock on June 20,~~ 2021 and ~~the recognition of grant revenue in the amount of $321,710.~~2022 Financing Notes.

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

Grant Revenue $ 321,710 $ - $ 321,710 0.0 % $ 314,890 $ - $ 314,890 0.0 %

Operating Expenses:
Research and development 816,648 602,979 213,669 35.4 % 580,390 608,653 (28,263 ) -4.6 %
General and administrative 583,042 619,038 (35,996 ) -5.8 % 400,689 438,578 (37,889 ) -8.6 %
Total Operating Expenses 1,399,690 1,222,017 177,673 14.5 % 981,079 1,047,231 (66,152 ) -6.3 %

Total Operating Loss (1,077,980 ) (1,222,017 ) 144,037 -11.8 % (666,189 ) (1,047,231 ) 381,042 -36.4 %

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 %
Research and development tax (deficit)/credit (638 ) (507 ) (131 ) 25.8 %
Interest expense, net (46,440 ) (3,521 ) (42,919 ) 1218.9 %

Total Other Income/ (Expense), Net 139 (357,574 ) 357,713 -100.0 %
Total Other Expense, Net (47,078 ) (4,028 ) (43,050 ) 1068.8 %

Net Loss $ (1,077,841 ) $ (1,579,591 ) $ 501,750 -31.8 % $ (713,267 ) $ (1,051,259 ) $ 337,992 -32.2 %

Grant Revenue
For the three months ended ~~June~~September 30, 2022 and 2021, there was ~~$321,710~~$314,890 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 ~~$816,648~~$580,390 for the three months ended ~~June~~September 30, 2022, a decrease of $28,263 or 4.6% compared to $608,653 for the three months ended September 30, 2021. The decrease was primarily due to (i) decreased cost of clinical trials due to full enrollment and follow up treatments and (ii) lower rent and utilities, partially offset by (iii) higher insurance cost and (iv) higher payroll cost.
For the Three Months Ended
September 30,
2022 2021 Increase/(Decrease) % Change
Operating Expenses:
Research and development:
Clinical trial and research expenses $ 449,638 $ 497,525 $ (47,887 ) -9.6 %
Depreciation/amortization 1,765 2,161 (396 ) -18.3 %
Insurance 57,620 51,982 5,638 10.8 %
Payroll and taxes 62,457 45,366 17,091 37.7 %
Rent and utilities 8,910 11,619 (2,709 ) -23.3 %
Total research and development $ 580,390 $ 608,653 $ (28,263 ) -4.6 %
20
General and Administrative Expenses
General and administrative expenses were $400,689 for the three months ended September 30, 2022, a decrease of $37,889 or 8.6% compared to $438,578 for the three months ended September 30, 2021. The decrease was primarily due to (i) lower legal fees relating to patents, (ii) lower professional fees, and (iii) lower rent and utilities, partially offset by (iv) higher insurance cost, (v) higher payroll cost, and (vi) increased other general and administration expenses.
For the Three Months Ended
September 30,
2022 2021 Increase/(Decrease) % Change
Operating Expenses:
General and administrative:
Depreciation $ 1,054 $ 1,054 $ - 0.0 %
Directors fees 96,250 96,250 - 0.0 %
Insurance 45,272 37,138 8,134 21.9 %
Legal and litigation 65,602 130,683 (65,081 ) -49.8 %
Other general and administrative cost 14,991 9,052 5,939 65.6 %
Payroll and taxes 61,554 43,981 17,573 40.0 %
Professional fees 111,310 114,496 (3,186 ) -2.8 %
Rent and utilities 4,656 5,883 (1,227 ) -20.9 %
Foreign currency translation - 41 (41 ) -100.0 %
Total general and administrative $ 400,689 $ 438,578 $ (37,889 ) -8.6 %
Other Income/(Expense)
Other expense increased by $43,050 from ($4,028) for the three months ended September 30, 2021 to ($47,078) for the three months ended September 30, 2022. The increase was due to the higher interest expense costs incurred in connection with the 2021 and 2022 Notes.
For the Three Months Ended
September 30,
2022 2021 Increase/(Decrease) % Change
Other Income/(Expense):
Research and development tax credit $ (638 ) $ (507 ) $ (131 ) 25.8 %
Interest expense, net (46,440 ) (3,521 ) $ (42,919 ) 1218.9 %
Total Other Expenses, Net $ (47,078 ) $ (4,028 ) $ (43,050 ) 1068.8 %
21
Comparison of the Nine Months Ended September 30, 2022 and September 30, 2021
Overview
Total operating expenses were $3,568,432 for the nine months ended September 30, 2022, an increase of ~~$213,669~~$118,508 or ~~35.4%~~3.4% compared to ~~$602,979~~the nine months ended September 30, 2021. The increase was driven primarily by (i) increased clinical trial cost, (ii) higher insurance costs, (iii) higher professional fees, (iv) higher payroll cost, and (v) higher other general and administrative cost, partially offset by (vi) lower legal and litigation fees, (vii) lower rent and utility expense, and (viii) lower foreign currency translation cost. Net loss for the ~~three~~nine months ended ~~June~~September 30, 2022 was $2,822,030, a decrease of $1,478,770 or 34.4% which was primarily attributable to a decrease in interest expense costs incurred in connection with the 2021 and 2022 Notes, partially offset by higher operating expenses.
For the Nine Months Ended
September 30,
2022 2021 Increase/(Decrease) % Change

Grant Revenue $ 824,205 $ - $ 824,205 0.0 %

Operating Expenses:
Research and development 2,068,154 1,866,776 201,378 10.8 %
General and administrative 1,500,278 1,583,148 (82,870 ) -5.2 %
Total Operating Expenses 3,568,432 3,449,924 118,508 3.4 %

Total Operating Loss (2,744,227 ) (3,449,924 ) 705,697 -20.5 %

Other Income/(Expense):
Research and development tax (deficit)/credit 37,621 31,637 5,984 18.9 %
Gain from extinguishment - 63,094 (63,094 ) -100.0 %
Interest expense, net (115,424 ) (945,607 ) 830,183 -87.8 %
Total Other Income (Expense), Net (77,803 ) (850,876 ) 773,073 -90.9 %

Net Loss $ (2,822,030 ) $ (4,300,800 ) $ 1,478,770 -34.4 %
Grant Revenue
For the nine months ended September 30, 2022 and 2021, there was $824,205 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 $2,068,154 for the nine months ended September 30, 2022, an increase of $201,378 or 10.8% compared to $1,866,776 for the nine months ended September 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.~~cost and (iii) higher payroll cost, partially offset by (iv) a decrease in rent and utility expenses.

For the Three Months Ended For the Nine Months Ended
June 30, September 30,
2022 2021 Increase/(Decrease) % Change 2022 2021 Increase/(Decrease) % Change
Operating Expenses:
Research and development:
Clinical trial and research expenses $ 674,294 $ 465,627 $ 208,667 44.8 % 1,655,623 1,474,732 $ 180,891 12.3 %
Depreciation/amortization 1,765 2,162 (397 ) -18.4 % 5,694 6,485 (791 ) -12.2 %
Insurance 57,367 51,393 5,974 11.6 % 173,510 154,763 18,747 12.1 %
Payroll and taxes 67,360 67,706 (346 ) -0.5 % 196,932 185,406 11,526 6.2 %
Rent and utilities 15,862 16,091 (229 ) -1.4 % 36,395 45,390 (8,995 ) -19.8 %
Total research and development $ 816,648 $ 602,979 $ 213,669 35.4 % $ 2,068,154 $ 1,866,776 $ 201,378 10.8 %

1322

General and Administrative Expenses

General and administrative expenses were ~~$583,042~~$1,500,278 for the ~~three~~nine months ended ~~June~~September 30, 2022, a decrease of ~~$35,996~~$82,870 or ~~5.8%~~5.2% compared to ~~$619,038~~$1,583,148 for the ~~three~~nine months ended ~~June~~September 30, 2021. The decrease was primarily due to (i) lower legal fees relating to patents, (ii) lower rent and utilities cost, and (iii) lower foreign currency transactions, partially offset by ~~(ii)~~(iv) higher professional fees, (v) increased payroll and ~~(iii)~~taxes, (vi) increased insurance cost, and (vii) increased other general and administration expenses.

For the Three Months Ended For the Nine Months Ended
June 30, September 30,
2022 2021 Increase/(Decrease) % Change 2022 2021 Increase/(Decrease) % Change
Operating Expenses:
General and administrative:
Depreciation $ 1,055 $ 1,055 $ - 0.0 % $ 3,163 $ 3,163 $ - 0.0 %
Directors fees 96,250 96,250 - 0.0 % 288,750 288,750 - 0.0 %
Insurance 44,672 42,262 2,410 5.7 % 138,162 122,966 15,196 12.4 %
Legal and litigation 126,087 216,723 (90,636 ) -41.8 % 304,223 479,421 (175,198 ) -36.5 %
Other general and administrative cost 34,476 15,583 18,893 121.2 % 72,326 55,640 16,686 30.0 %
Payroll and taxes 63,575 62,540 1,035 1.7 % 189,428 152,581 36,847 24.1 %
Professional fees 208,678 172,759 35,919 20.8 % 486,343 452,971 33,372 7.4 %
Rent and utilities 8,267 8,219 48 0.6 % 18,522 22,828 (4,306 ) -18.9 %
Foreign currency translation (18 ) 3,647 (3,665 ) -100.5 %
Foreign currency transaction (639 ) 4,828 (5,467 ) -113.2 %
Total general and administrative $ 583,042 $ 619,038 $ (35,996 ) -5.8 % $ 1,500,278 $ 1,583,148 $ (82,870 ) -5.2 %

Other Income/(Expense)
Other income/(expense) decreased by ~~$357,713~~$773,073 from ($~~357,574)~~850,876) for the ~~three~~nine months ended ~~June~~September 30, 2021 to ~~$139~~($77,803) for the ~~three~~nine months ended ~~June~~September 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 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 %
14
~~Comparison of the Six Months Ended June 30, 2022 and June 30, 2021~~
~~Overview~~
Total operating expenses were $2,587,353 for the six months ended June 30, 2022, an increase of $184,660 or 7.7% compared to the six months ended June 30, 2021. The increase was driven primarily by (i) increased clinical trial cost, (ii) higher insurance costs and (iii) higher professional fees, partially offset by (iv) lower legal and litigation fees, and (v) lower rent and utility expense. Net loss for the six months ended June 30, 2022 was $2,108,763, a decrease of $1,140,778 or 35.1% 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 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 %
15
~~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 For the Nine Months Ended
June 30, September 30,
2022 2021 Increase/(Decrease) % Change 2022 2021 Increase/(Decrease) % Change
Other Income/(Expense):
Research and development tax credit $ 38,259 $ 32,144 $ 6,115 19.0 % $ 37,621 $ 31,637 $ 5,984 -
Gain from extinguishment - 63,094 (63,094 ) -100.0 % - 63,094 (63,094 ) 0.0 %
Interest income and interest expense (68,984 ) (942,087 ) 873,103 -92.7 %
Interest expense, net (115,424 ) (945,607 ) 830,183 -87.8 %
Total Other Expenses, Net $ (30,725 ) $ (846,848 ) $ 816,123 -96.4 % $ (77,803 ) $ (850,876 ) $ 773,073 -90.9 %

Liquidity and Capital Resources

The Company’s cash, cash equivalents, and restricted cash were ~~$2,032,609~~$1,711,351 at ~~June~~September 30, 2022 which includes the ~~$1,948,335~~$1,644,321 of restricted cash resulting from a grant received from the State of Tennessee, compared to $3,106,942 at December 31, 2021, which included $2,423,958 of restricted cash. The Company’s working capital deficiency was ~~$6,215,548~~$6,924,589 and $4,258,679 as of ~~June~~September 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 ~~$248,142,721~~$248,855,988 as of ~~June~~September 30, 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.

23
As of ~~June~~September 30, 2022, cash required for our current liabilities included approximately ~~$4,350,917~~$4,428,916 for accounts payable and other accrued expenses (including lease liability) and ~~a $142,693~~$72,135 note payable related to our short-term financing of our commercial insurance policies. Also, if not converted prior to maturity, convertible debt in the amount of ~~$2,010,000~~$2,520,000 plus accrued interest will mature one year from the date of the notes. Cash requirements for long-term liabilities were ~~$96,201~~$85,019 at ~~June~~September 30, 2022. The Company intends to meet these cash requirements from its current cash balance and from future financing.

Management’s plans include selling our equity securities and obtaining other financing, including the ~~2021~~2022 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.
16

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 ~~June~~September 30, 2022.
Access to Capital

Management plans to access capital resources through possible public or private equity offerings, including the ~~2021~~2022 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 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 Estimates

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 comprehensive list of all of our accounting policies or estimates. Our accounting policies are more fully described in Note 3 –Significant Accounting Policies in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

24
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 – 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”).
17

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.

25
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 ~~11.~~12.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors that were disclosed in the 2021 Form 10-K.

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

2021 Financing

During the three months ended ~~June~~September 30, 2022, the Company had received aggregate proceeds of ~~$500,000~~$325,000 pursuant to certain unsecured convertible notes (the “2021 Notes”). As of ~~June~~September 30, 2022, the Company had cumulatively drawn down ~~$2,010,000~~$2,335,000 under the 2021 Notes.

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.
2022 Financing
During the three months ended September 30, 2022, the Company had received aggregate proceeds of $185,000 pursuant to certain unsecured convertible notes (the “2022 Notes”). As of September 30, 2022, the Company had cumulatively drawn down $185,000 under the 2022 Notes.
For further details on the terms of the 2022 Notes, refer to our Form 8-K as filed with the SEC on September 26, 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.

1826

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 September 26, 2022).
10.1** 2022 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 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.
1927

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.

~~August 11,~~November 9, 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)

2028


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

Current Assets:
Cash and cash equivalents	$	84,274		$	682,984
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		2,278,747			3,441,957

Equipment and furnishings, less accumulated depreciation of $97,215 and $91,178, respectively		25,799			31,836
Operating lease right-of-use asset		138,863			39,563

Total Assets	$	2,443,409		$	3,513,356

Liabilities and Stockholders’ Deficiency

Current Liabilities:
Accounts payable	$	1,894,201		$	1,287,459
Deposit for purchase of Series D-1 Preferred Stock		-			150,000
Unearned grant revenue		1,990,685			2,500,000
Other accrued expenses		2,331,621			2,002,486
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		8,494,295			7,700,636

Operating lease liability, non-current portion		96,201			-

Total Liabilities		8,590,496			7,700,636

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

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		241,590,054			241,440,106
Accumulated other comprehensive loss		(35,511	)		(34,467	)
Accumulated deficit		(248,142,721	)		(246,033,958	)

Total Stockholders’ Deficiency		(6,147,087	)		(4,187,280	)

Total Liabilities and Stockholders’ Deficiency	$	2,443,409		$	3,513,356

	September 30			December 31,
	2022			2021
	(Unaudited)
Assets

Current Assets:
Cash and cash equivalents	$	67,030		$	682,984
Restricted cash		1,644,321			2,423,958
Short-term receivables		564			5,107
Prepaid expenses and other current assets		187,500			329,908

Total Current Assets		1,899,415			3,441,957

Equipment and furnishings, less accumulated depreciation of $100,035 and $91,178, respectively		22,979			31,836
Operating lease right-of-use asset		128,059			39,563

Total Assets	$	2,050,453		$	3,513,356

Liabilities and Stockholders’ Deficit

Current Liabilities:
Accounts payable	$	1,941,315		$	1,287,459
Deposit for purchase of Series D-1 Preferred Stock		-			150,000
Unearned grant revenue		1,675,795			2,500,000
Other accrued expenses		2,444,224			2,002,486
Accrued interest		104,589			10,578
Accrued interest - related parties		22,569			6,044
Notes payable		72,135			238,452
Convertible notes payable		1,810,000			1,260,000
Convertible notes payable - related parties		710,000			200,000
Operating lease liability, current portion		43,377			45,617

Total Current Liabilities		8,824,004			7,700,636

Operating lease liability, non-current portion		85,019			-

Total Liabilities		8,909,023			7,700,636

Commitments, contingencies, and litigations (Note 12)		-			-

Stockholders’ Deficit:
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 September 30, 2022 and December 31, 2021; aggregate liquidation preference of $14,164,889 at September 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 September 30, 2022 and December 31, 2021, respectively; aggregate liquidation preference of $106,132,320 and $105,532,804 at September 30, 2022 and December 31, 2021, respectively		9,271			9,219
Preferred stock, value		9,271			9,219

Common stock; par value $0.001 per share; 1,000,000,000 shares authorized; 419,497,119 shares issued and outstanding at September 30, 2022 and 419,447,119 issued and outstanding at December 31, 2021		419,497			419,447
Additional paid-in capital		241,593,029			241,440,106
Accumulated other comprehensive loss		(36,752	)		(34,467	)
Accumulated deficit		(248,855,988	)		(246,033,958	)

Total Stockholders’ Deficit		(6,858,570	)		(4,187,280	)

Total Liabilities and Stockholders’ Deficit	$	2,050,453		$	3,513,356

																									Shares		Amount		Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Total
																																							Accumulated
		Preferred Stock				Preferred Stock								Additional		Accumulated Other									Preferred Stock				Preferred Stock								Additional		Other
		Series D				Series D-1				Common Stock				Paid-In		Comprehensive			Accumulated						Series D				Series D-1				Common Stock				Paid-In		Comprehensive			Accumulated
		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Total			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	)		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 for services
Common stock issued upon exercise of warrants
Common stock issued upon exercise of warrants, shares
Common stock
Common 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
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

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			-		-		52,411		52		-		-		149,948		-			-			150,000
Comprehensive loss:
Net loss	-		-		-		-		-		-		-		-		-			(1,030,922	)		(1,030,922	)		-		-		-		-		-		-		-		-			(1,030,922	)		(1,030,922	)
Other comprehensive loss			-		-		-		-		-		-		-		(716	)		-			(716	)		-		-		-		-		-		-		-		(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	)		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	)		-		-		-		-		-		-		-		-			(1,077,841	)		(1,077,841	)
Other comprehensive income			-		-		-		-		-		-		-		(328	)		-			(328	)
Other comprehensive loss																										-		-		-		-		-		-		-		(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	)		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	)

Stock-based compensation:
Common Stock																										-		-		-		-		50,000		50		2,975		-			-			3,025
Comprehensive loss:
Net loss																										-		-		-		-		-		-		-		-			(713,267	)		(713,267	)
Other comprehensive loss																										-		-		-		-		-		-		-		(1,241	)		-			(1,241	)

Balance at September 30, 2022																										12,373,247	$	12,373		9,270,860	$	9,271		419,497,119	$	419,497	$	241,593,029	$	(36,752	)	$	(248,855,988	)	$	(6,858,570	)

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

Cash Flows From Operating Activities:
Net loss	$	(2,108,763	)	$	(3,249,541	)	$	(2,822,030	)	$	(4,300,800	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		-			21,913			3,025			23,688
Non-cash lease expense		31,142			40,012			41,947			62,085
Depreciation		6,037			6,432			8,857			9,648
Gain on forgiveness of PPP Loan and interest		-			(63,094	)		-			(63,094	)
Changes in operating assets and liabilities
Short term receivables		2,363			(1,632	)		4,351			2,448
Prepaid expenses and other current assets		143,940			123,230			142,129			145,639
Accounts payable - trade		606,742			252,254
Accounts payable								654,017			302,978
Unearned grant revenue		(509,315	)		-			(824,205	)		-
Other accrued expenses		329,135			152,786			442,355			306,116
Operating lease liability		(37,196	)		(42,191	)		(47,664	)		(66,246	)
Accrued interest expense		65,811			940,212
Accrued interest								110,536			942,257

Net Cash Used In Operating Activities		(1,470,104	)		(1,819,619	)		(2,286,682	)		(2,635,281	)

Cash Flows From Financing Activities:
Proceeds from issuance of convertible notes payable		550,000			1,700,000			550,000			1,700,000
Proceeds from issuance of convertible notes payable - related parties								510,000			200,000
Repayment of short-term note payable		(153,185	)		(95,387	)		(166,317	)		(219,172	)
Note Payable		-			(85,398)
Deposit for purchase of Series D-1 Preferred Stock								-			150,000
Proceeds from exercise of warrants		-			250,510			-			962,223
Net Cash Provided By Financing Activities		396,815			1,769,725			893,683			2,793,051

Effect of exchange rates on cash, cash equivalents, and restricted cash		(1,044	)		70
Effect of exchange rates on cash, cash equivalents, and restricted cash								(2,592	)		(918	)

Net Decrease In Cash, Cash Equivalents, and Restricted Cash		(1,074,333	)		(49,824	)
Net (Decrease) Increase In Cash, Cash Equivalents, and Restricted Cash								(1,395,591	)		156,852

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

Cash, Cash Equivalents, and Restricted Cash, End of Period	$	2,032,609		$	47,407		$	1,711,351		$	254,083

Cash, cash equivalents and restricted cash consisted of the following:
Cash and cash equivalents	$	84,274		$	47,407		$	67,030		$	254,083
Restricted cash		1,948,335			-			1,644,321			-
	$	2,032,609		$	47,407
Cash, Cash Equivalents, and Restricted Cash, End of Period							$	1,711,351		$	254,083

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	)	$	(57,146	)	$	(282,667	)
Deposit applied for purchase of Series D-1 Preferred Stock	$	(150,000	)	$	-
Deposit applied to equity issuances							$	(150,000	)	$	-
Conversion of non-amended 2017 Notes to Series D Preferred Stock	$	-		$	3,541,222		$	-		$	3,541,222
Conversion of amended 2017 Notes and 2020 Notes to Series D-1 Preferred Stock	$	-		$	27,031,858		$	-		$	27,031,858
Right-of-use assets obtained in exchange for operating lease liabilities	$	130,422		$	-
Conversion of Series D-1 Preferred Stock to Common stock							$	-		$	222
Right-of-use asset for lease liability							$	130,422		$	-

	●	~~Oncology:~~ The Company believes that it is the first entity to advance an RBS formulation into clinical trials for the treatment of a disease, such as those trials reported on the clinical trials registry ClinicalTrials.gov. The Company believes that it is the first and only entity to date to successfully, reproducibly, and consistently make pharmaceutical-grade RBS at a purity of nearly 100%. The Company’s small molecule HX medical science platform comprises a number of different drug product candidates and preclinical pharmaceutical-grade RBS formulations using different concentrations and delivered by different routes of administration specific to each disease area and/or indication. The Company’s HX medical science platform includes clinical development programs in oncology, dermatology, and ophthalmology; proof-of-concept in vivo drug discovery programs in oncology, hematology, wound healing, and animal health; and preclinical in vitro drug discovery programs in infectious diseases and tissue regeneration and repair. Risks and Uncertainties~~PV-10~~^®~~, an investigational cancer immunotherapy administered by intralesional (“IL”) injection and an injectable formulation of cGMP RBS, is undergoing clinical study for adult solid tumor cancers.~~ ~~Oral formulations of cGMP RBS are also undergoing preclinical study as prophylactic and therapeutic treatments for high-risk and refractory adult solid tumor cancers.~~

	●	~~Pediatric Oncology:~~ ~~IL PV-10 is undergoing preclinical study for pediatric solid tumor cancers.~~

	●	~~Hematology:~~ ~~Oral formulations of cGMP RBS are undergoing preclinical study for refractory and relapsed pediatric blood cancers (including leukemias).~~

	●	~~Virology:~~ Systemic administration of formulations of cGMP RBS are undergoing preclinical study for the novel strain of coronavirus (“CoV”): severe acute respiratory syndrome (“SARS”) CoV 2 (“SARS-CoV-2”).

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

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

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

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


	June 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Accrued payroll and taxes	$	259,008	$	174,533	$	300,691	$	174,533
Accrued vacation		56,356		42,871		57,088		42,871
Accrued directors’ fees		1,753,089		1,560,589		1,849,339		1,560,589
Accrued other expenses		263,168		224,493		237,106		224,493
Total Other Accrued Expenses	$	2,331,621	$	2,002,486	$	2,444,224	$	2,002,486


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

Issued		50,000		-		50,000		50,000		-		50,000

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

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

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

Issued								-		325,000		325,000

Balance as of September 30, 2022							$	1,810,000	$	525,000	$	2,335,000
Ending Balance	$	1,810,000	$	200,000	$	2,010,000	$	1,810,000	$	525,000	$	2,335,000

	(i)	The 2022 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 2022 Notes will be accelerated and all amounts due under the 2022 Notes may be immediately due and payable at the 2022 Loan Investors’ option;

	(iii)	The outstanding principal amount and interest payable under the 2022 Loan may be convertible at the 2022 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

	(iv)	The outstanding principal amount and interest payable under the 2022 Loan will be automatically convertible into shares of the Company’s Series D-1 Preferred Stock twelve (12) months after the issue date of a 2022 Note.

				Weighted Average
	Shares			Exercise Price

Outstanding and exercisable at January 1, 2022		3,625,000		$	0.32

Granted		-			-
Exercised		-			-
Forfeited		(200,000	)		0.86

Outstanding and exercisable at September 30, 2022		3,425,000		$	0.29

		Number Outstanding and Exercisable		Weighted Average		Intrinsic Value
		at September 30,		Remaining Contractual		at September 30,
Exercise Price		2022		Life		2022

$	0.12		2,425,000		3.10	$	-
$	0.29		100,000		3.10	$	-
$	0.67		200,000		0.90	$	-
$	0.75		550,000		3.20	$	-
$	0.88		150,000		1.80	$	-

			3,425,000		2.96	$	-

		Number Outstanding
		and Exercisable at September 30,		Weighted Average Remaining Contractual		Intrinsic Value at September 30,
Exercise Price		2022		Life		2022

$	0.29		100,000		0.97	$	-
$	1.00		18,000		1.64	$	-
$	1.12		366,000		1.64	$	-
$	2.00		3,500		1.64	$	-

			487,500		1.50	$	-


Years	Amount		Amount
2022	$	24,318	$	12,159
2023		49,311		49,311
2024		50,663		50,663
2025		25,669		25,669
Total future minimum lease payments		149,961		137,802
Less: amount representing imputed interest		11,098		(9,406	)
Total	$	138,863	$	128,396

	●	Oncology: Intratumoral (“ITU”) formulation PV-10^®(“ITU PV-10”) has undergone and is undergoing multiple, monotherapy and combination therapy, early- to late-stage clinical trials, expanded access programs (“EAPs”) for groups of and individual patients, and/or quality of life (“QOL”) study at multiple clinical sites in Australia, Europe, and the U.S. for the treatments of Stage III and IV melanoma and different types of liver cancers. ITU PV-10 has undergone and is undergoing clinical monotherapy and combination therapy mechanism of action and mechanism of immune response study for melanoma, metastatic uveal melanoma, and metastatic neuroendocrine tumors at and/or with Moffitt Cancer Center in Tampa, Florida, The Queen Elizabeth Hospital in Adelaide, Australia, and MD Anderson Cancer Center in Houston, Texas.

	●	Dermatology: Topical (“TOP”) formulation PH-10^® (“TOP PH-10”) has undergone multiple mid-stage, monotherapy clinical trials for the treatments of psoriasis and atopic dermatitis at different clinical sites in the U.S. TOP PH-10 has undergone clinical monotherapy mechanism of action and mechanism of immune response study for psoriasis at The Rockefeller University in New York, New York (“TRU”). Different formulations have undergone preclinical combination therapy study for psoriasis and are undergoing preclinical monotherapy study for skin inflammation at TRU.

	●	Ophthalmology: The Company believes that clinical monotherapy proof-of-concept (“POC”) of TOP administration of non-pharmaceutical grade rose bengal for the treatment of infectious keratitis has been shown by clinicians and researchers at the University of Miami’s Bascom Palmer Eye Institute (“BPEI”) in Miami, Florida, who are now collaborating with the Company to evaluate the potential use of our pharmaceutical-grade RBS. Pharmaceutical-grade TOP PV-305 is undergoing preclinical monotherapy study for diseases and disorders of the eye, such as infectious keratitis at BPEI.

	●	Oncology: ITU PV-10 has undergone preclinical monotherapy and combination therapy study for the treatment of relapsed and refractory pediatric solid tumor cancers at the University of Calgary’s Cumming School of Medicine in Calgary, Canada (“UCal”). The Company believes that the UCal researchers have achieved monotherapy POC in vivo of ITU administration.

		Oral (“PO”) formulations are undergoing preclinical monotherapy study for high-risk and refractory adult solid tumor cancers at UCal. The Company believes that the UCal researchers and the Company have both achieved monotherapy POC in vivo of PO administration, that the Company has achieved monotherapy proof-of-concept in vivo of PO administration in prophylactic and therapeutic settings, and that the Company has achieved monotherapy POC in vivo of intravenous (“IV”) administration.

	●	Hematology: PO formulations are undergoing preclinical monotherapy study for the treatment of refractory and relapsed pediatric and other blood cancers, including leukemias, at UCal. The Company believes that the UCal researchers have achieved POC in vivo of PO administration.

	●	Wound Healing: Different formulations are undergoing preclinical monotherapy study for the healing of full-thickness cutaneous wounds. The Company believes that monotherapy POC in vivo of TOP administration of non-pharmaceutical grade rose bengal for the treatment of this indication has been shown by researchers at the University of Texas Medical Branch in Galveston, Texas, who are now collaborating with the Company to use our pharmaceutical-grade RBS.

	●	Animal Health: Different formulations are undergoing preclinical monotherapy study for the treatment of cutaneous canine cancers at the University of Tennessee’s College of Veterinary Medicine in Knoxville, Tennessee. The Company believes that it has achieved monotherapy POC in canines of ITU administration.

	●	Infectious Diseases: PO and intranasal (“IN”) formulations have undergone and are undergoing preclinical monotherapy study for the treatment of SARS-CoV-2 at UCal, another Canadian academic research center, the University of Tennessee Health Science Center (“UTHSC”) in Memphis, Tennessee, and a U.S. contract research organization.

		Different formulations have undergone preclinical monotherapy and combination therapy study for the treatment of gram-positive and gram-negative bacterial infections (including multi-drug resistant strains) and are undergoing preclinical monotherapy study for the treatment of oral bacterial infections at UTHSC.

		Different formulations are undergoing preclinical monotherapy study for the treatment of fungal infections at UTHSC.

	●	Tissue Regeneration and Repair: Different formulations are undergoing preclinical monotherapy study for vertebrate development, wound healing, and tissue regrowth at the University of Nevada, Las Vegas in Las Vegas, Nevada.

	●	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.

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

Grant Revenue	$	321,710		$	-		$	321,710			0.0	%	$	314,890		$	-		$	314,890			0.0	%

Operating Expenses:
Research and development		816,648			602,979			213,669			35.4	%		580,390			608,653			(28,263	)		-4.6	%
General and administrative		583,042			619,038			(35,996	)		-5.8	%		400,689			438,578			(37,889	)		-8.6	%
Total Operating Expenses		1,399,690			1,222,017			177,673			14.5	%		981,079			1,047,231			(66,152	)		-6.3	%

Total Operating Loss		(1,077,980	)		(1,222,017	)		144,037			-11.8	%		(666,189	)		(1,047,231	)		381,042			-36.4	%

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	%
Research and development tax (deficit)/credit														(638	)		(507	)		(131	)		25.8	%
Interest expense, net														(46,440	)		(3,521	)		(42,919	)		1218.9	%

Total Other Income/ (Expense), Net		139			(357,574	)		357,713			-100.0	%
Total Other Expense, Net														(47,078	)		(4,028	)		(43,050	)		1068.8	%

Net Loss	$	(1,077,841	)	$	(1,579,591	)	$	501,750			-31.8	%	$	(713,267	)	$	(1,051,259	)	$	337,992			-32.2	%

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 September 26, 2022).

10.1**		2022 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		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)

	PROVECTUS BIOPHARMACEUTICALS, INC.

~~August 11,~~November 9, 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)