PROVECTUS BIOPHARMACEUTICALS INC

Previous wording

The Company’s small molecule HX medical science platform, which comprises different drug candidates and non-clinical formulations made from pharmaceutical-grade RBS using different concentrations and delivered by different routes of administration specific to each disease and/or disease indication, includes:

Current wording

The Company’s small molecule platform, which comprises different drug candidates and non-clinical formulations made from pharmaceutical-grade RBS using different concentrations and delivered by different routes of administration specific to each disease and/or disease indication, includes:

Previous wording

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 non-clinical 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 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.

Current wording

The Company is developing different formulations of pharmaceutical-grade RBS using different concentrations and different routes of administration for other disease areas by endeavoring to show non-clinical 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 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.

Previous wording

The Company’s processes of synthesizing the RBS molecule into pharmaceutical-grade RBS and manufacturing RBS API and ITU PV-10 drug candidate, the processes’ CMC specifications, and the CMC data from the production of stability lots of API and drug 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).

Current wording

The Company’s processes of synthesizing the RBS molecule into pharmaceutical-grade RBS and manufacturing RBS API and ITU PV-10 drug candidate, the processes’ CMC specifications, and the CMC data from the production of stability lots of API and drug 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 the Company’s former lead indication 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).

Previous wording

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 Non-proprietary 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.

Current wording

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 a non-proprietary name in the third quarter of 2020 and reached the status of recommended International Non-proprietary 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.

Previous wording

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 unaffiliated with the Company for non-clinical study of the rose bengal molecule for potential biomedical therapeutic applications.

Current wording

Commercial grade rose bengal can be purchased from specialty chemical suppliers in the U.S. and in other parts of the world that manufacture it under non-cGMP conditions. Commercial grade rose bengal appears to have reported purities that may vary between 80% and 95% and may contain substantial amounts of unreported impurities and/or gross contaminants. Commercial grade rose bengal is typically used by researchers unaffiliated with the Company for non-clinical study of the rose bengal molecule for potential biomedical therapeutic applications.

Previous wording

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 original Swiss creator Rudolph Gnehm in 1881. Some manufacturers may, however, apply purification techniques that the Company believes still result in materials that may possess questionable purity and contaminants and may also be subject to substantial lot-to-lot manufacturing variability.

Current wording

We believe that commercial grade rose bengal is still manufactured using the original historical process, or a variant thereof, developed by the molecule’s original Swiss creator Rudolph Gnehm in 1881. Some chemical manufacturers may, however, apply purification techniques that the Company believes still result in commercial grade rose bengal possessing questionable purity and contaminants and substantial lot-to-lot manufacturing variability.

Previous wording

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.

Current wording

Diagnostic grade rose bengal describes non-approved rose bengal that is used as an ingredient in historical or current ophthalmic solutions, strips, and devices, 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 for human brucellosis.

Previous wording

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.

Current wording

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 under cGMP regulations and/or may have been compounded by a pharmacist, academic medical researcher, or commercial entity under cGMP regulations. Here too, the Company believes that purification may not sufficiently improve the amounts and accuracy of diagnostic grade rose bengal purity and lot contents and may not adequately reduce or eliminate lot-to-lot manufacturing variability.

Previous wording

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 fulsome CMC specifications and documentation.

Current wording

The Company believes that the Company’s proprietary, patented, pharmaceutical-grade RBS possesses several competitive advantages over non-pharmaceutical-grade rose bengal (i.e., commercial and diagnostic grades) 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-grade 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 fulsome CMC specifications and documentation. The Company believes that historical and potentially hazardous impurities and other manufacturing and handling issues facing non-pharmaceutical grade rose bengal may pose significant scientific, technological, and economic challenges to overcome and validate for compliance with modern drug regulatory standards.

Previous wording

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.

Current wording

General and administrative expenses consist 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.

Previous wording

Grant revenue was $254,991 for the three months ended June 30, 2024, an increase of $93,149 or 57.6% compared to the three months ended June 30, 2023. Total operating expenses were $1,049,845 for the three months ended June 30, 2024, an increase of $87,800 or 9.1% compared to the three months ended June 30, 2023. The increase was driven primarily by (i) increased payroll and taxes for the addition of two officers, (ii) higher clinical trial costs related to study closure, partially offset by (iii) lower directors’ fees and professional fees due to the resignation of Bruce Horowitz, our former Chief Operating Officer, (iv) lower legal costs related to patents, and (v) lower insurance costs. Net loss for the three months ended June 30, 2024 was $846,848, an increase of $11,786 or 1.4% compared to the three months ended June 30, 2023.

Current wording

Grant revenue was $109,745 for the three months ended September 30, 2024, an increase of $40,012 or 57.4% compared to the three months ended September 30, 2023. Total operating expenses were $1,065,473 for the three months ended September 30, 2024, an increase of $281,592 or 35.9% compared to the three months ended September 30, 2023. The increase was driven primarily by (i) increased payroll and taxes for the addition of two officers, (ii) higher clinical trial costs related to study closure, (iii) higher legal expenses related to patent costs, partially offset by (iv) lower directors’ fees and professional fees due to the resignation of Mr. Horowitz, our former COO, and (v) lower other general and administrative costs primarily attributable to a refund received in July 2024 from the State of Tennessee following the repeal of the franchise/excise property tax measure. Net loss for the three months ended September 30, 2024 was $1,014,351, an increase of $238,512 or 30.7% compared to the three months ended September 30, 2023.

Previous wording

For the three months ended June 30, 2024 and June 30, 2023, there was $254,991 and $161,842, respectively, of grant revenue recognized related to qualifying expenses that were incurred and included within research and development expenses on the condensed consolidated statements of operations.

Current wording

For the three months ended September 30, 2024 and September 30, 2023, there was $109,745 and $69,733, respectively, of grant revenue recognized related to qualifying expenses that were incurred and included within research and development expenses on the condensed consolidated statements of operations.

Previous wording

Research and development expenses were $472,927 for the three months ended June 30, 2024, an increase of $38,713 or 8.9% compared to $434,214 for the three months ended June 30, 2023. The increase was primarily due to (i) higher clinical trial costs associated with study closure, and (ii) increased insurance costs.

Current wording

Research and development expenses were $413,987 for the three months ended September 30, 2024, an increase of $63,195 or 18.0% compared to $350,792 for the three months ended September 30, 2023. The increase was primarily due to higher clinical trial costs associated with study closure.

Previous wording

General and administrative expenses were $576,918 for the three months ended June 30, 2024, an increase of $49,087 or 9.3% compared to $527,831 for the three months ended June 30, 2023. The increase was primarily due to (i) increased payroll and taxes for the addition of two new officers, and (ii) increased other general and administrative costs, partially offset by (iii) lower directors’ fees and professional fees due to the resignation of Bruce Horowitz, our prior Chief Operating Officer, (iv) lower insurance costs, and (v) lower legal costs related to patents.

Current wording

General and administrative expenses were $651,486 for the three months ended September 30, 2024, an increase of $218,397 or 50.4% compared to $433,089 for the three months ended September 30, 2023. The increase was primarily due to (i) increased payroll and taxes for the addition of two new officers, and (ii) increased legal fees related to patents, partially offset by (iii) lower directors’ fees and professional fees due to the resignation of Mr. Horowitz, our former COO.

Previous wording

Interest expense increased by $10,471 or 20.6% from $50,824 for the three months ended June 30, 2023 to $61,295 for the three months ended June 30, 2024. The increase was mainly due to the interest expense costs incurred in connection with the higher notes payable and convertible debt balances.

Current wording

Interest expense decreased by $2,845 or 4.6% from $61,524 for the three months ended September 30, 2023 to $58,679 for the three months ended September 30, 2024. The decrease was mainly due to the interest expense costs incurred in connection with the lower average notes payable balances.

Previous wording

Research and development tax credit in Australia decreased by $6,664 or 41.7% from $15,965 for the six months ended June 30, 2023 to $9,301 for the six months ended June 30, 2024. The decrease was mainly due to no active clinical trials currently in Australia.

Current wording

Research and development tax credit in Australia increased by $223 or 133.5% from ($167) for the three months ended September 30, 2023 to $56 for the three months ended September 30, 2024. The increase was mainly due to currency fluctuations in Australia.

Previous wording

Grant revenue was $493,063 for the six months ended June 30, 2024, an increase of $126,196 or 34.4% compared to the six months ended June 30, 2023. Total operating expenses were $1,735,182 for the six months ended June 30, 2024, a decrease of $214,101 or 11.0% compared to the six months ended June 30, 2023. The decrease was driven primarily by (i) reduced directors’ fees and professional fees due to the resignation of Bruce Horowitz, our former Chief Operating Officer, partially offset by (ii) higher clinical trial costs related to study closure, (iii) increased payroll and taxes due to the addition of two new officers, (iv) higher legal costs related to patents and general corporate counsel, and (v) higher other general and administrative cost. Net loss for the six months ended June 30, 2024 was $1,350,890, a decrease of $311,626 or 18.7% compared to the six months ended June 30, 2023.

Current wording

Grant revenue was $602,808 for the nine months ended September 30, 2024, an increase of $166,208 or 38.1% compared to the nine months ended September 30, 2023. Total operating expenses were $2,800,655 for the nine months ended September 30, 2024, an increase of $67,491 or 2.5% compared to the nine months ended September 30, 2023. The increase was driven primarily by (i) higher clinical trial costs related to study closure, (ii) increased payroll and taxes due to the addition of two new officers, (iii) higher legal costs related to patents and general corporate matters, partially offset by (iv) reduced directors’ fees and professional fees due to the resignation of Mr. Horowitz, our former COO. Net loss for the nine months ended September 30, 2024 was $2,365,241, a decrease of $73,114 or 3.0% compared to the nine months ended September 30, 2023.

Previous wording

For the six months ended June 30, 2024 and June 30, 2023, there was $493,063 and $366,867, respectively, of grant revenue recognized related to qualifying expenses that were incurred and included within research and development expenses on the condensed consolidated statements of operations.

Current wording

For the nine months ended September 30, 2024 and September 30, 2023, there was $602,808 and $436,600, respectively, of grant revenue recognized related to qualifying expenses that were incurred and included within research and development expenses on the condensed consolidated statements of operations.

Previous wording

Research and development expenses were $1,028,462 for the six months ended June 30, 2024, an increase of $45,855 or 4.7% compared to $982,607 for the six months ended June 30, 2023. The increase was primarily due to (i) higher clinical trial costs associated with study closure, and (ii) higher payroll and taxes.

Current wording

Research and development expenses were $1,442,449 for the nine months ended September 30, 2024, an increase of $109,050 or 8.2% compared to $1,333,399 for the nine months ended September 30, 2023. The increase was primarily due to higher clinical trial costs associated with study closure.

Previous wording

The following table summarizes research and development expenses for the six months ended June 30, 2024 and 2023.

Current wording

The following table summarizes research and development expenses for the nine months ended September 30, 2024 and 2023.

Previous wording

General and administrative expenses were $706,720 for the six months ended June 30, 2024, a decrease of $259,956 or 26.9% compared to $966,676 for the six months ended June 30, 2023. The decrease was primarily due to (i) lower directors’ fees and professional fees due to the resignation of Bruce Horowitz, our prior Chief Operating Officer partially offset by (ii) higher legal fees related to patents and corporate matters pertaining to the 2024 proxy statement and officer’s resignation, (iii) higher payroll and taxes due to addition of two new officers, and (iv) higher other general and administrative costs due to a refund received in 2023 for employee retention.

Current wording

General and administrative expenses were $1,358,206 for the nine months ended September 30, 2024, a decrease of $41,559 or 3.0% compared to $1,399,765 for the nine months ended September 30, 2023. The decrease was primarily due to (i) lower directors’ fees and professional fees due to the resignation of Mr. Horowitz, our former COO, partially offset by (ii) higher legal fees related to patents and corporate matters pertaining to the 2024 proxy statement and officer’s resignation, (iii) higher payroll and taxes due to addition of two new officers, and (iv) higher other general and administrative costs due to a refund received in 2023 for employee retention.

Previous wording

The following table summarizes general and administrative expenses for the six months ended June 30, 2024 and 2023.

Current wording

The following table summarizes general and administrative expenses for the nine months ended September 30, 2024 and 2023.

Previous wording

Interest expense increased by $22,007 or 22.9% from $96,065 for the six months ended June 30, 2023 to $118,072 for the six months ended June 30, 2024. The increase was mainly due to the interest expense costs incurred in connection with the higher notes payable and convertible debt balances.

Current wording

Interest expense increased by $19,162 or 12.2% from $157,589 for the nine months ended September 30, 2023 to $176,751 for the nine months ended September 30, 2024. The increase was mainly due to the interest expense costs incurred in connection with the higher average note payables balances.

Previous wording

Research and development tax credit in Australia decreased by $6,664 or 41.7% from $15,965 for the three months ended June 30, 2023 to $9,301 for the three months ended June 30, 2024. The decrease was mainly due to no active clinical trials currently in Australia.

Current wording

Research and development tax credit in Australia decreased by $6,441 or 40.8% from $15,798 for the nine months ended September 30, 2023 to $9,357 for the nine months ended September 30, 2024. The decrease was mainly due to no active clinical trials currently in Australia.

Previous wording

The Company’s cash and restricted cash were $589,283 at June 30, 2024 which includes $559,702 of restricted cash resulting from a grant received from the State of Tennessee, compared to $1,026,799 at December 31, 2023, which included $950,223 of restricted cash. The Company’s working capital deficit was $7,569,256 and $7,652,098 as of June 30, 2024 and December 31, 2023, respectively. We have continuing net losses and negative cash flows from operating activities. In addition, we have an accumulated deficit of $254,041,299 as of June 30, 2024. 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. 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. 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.

Current wording

The Company’s cash and restricted cash were $614,189 at September 30, 2024 which includes $426,732 of restricted cash resulting from a grant received from the State of Tennessee, compared to $1,026,799 at December 31, 2023, which included $950,223 of restricted cash. The Company’s working capital deficit was $5,464,760 and $7,652,098 as of September 30, 2024 and December 31, 2023, respectively. We have continuing net losses and negative cash flows from operating activities. In addition, we have an accumulated deficit of $255,055,650 as of September 30, 2024. 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. 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. 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.

Previous wording

As of June 30, 2024, cash required for our current liabilities included approximately $4,760,347 for accounts payable and other accrued expenses (including operating lease liabilities) and a $109,862 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 $2,888,000 plus accrued interest will mature one year from the date of the notes. The Company intends to meet these cash requirements from its current cash balance and from future financing.

Current wording

As of September 30, 2024, cash required for our current liabilities included approximately $2,977,080 for accounts payable and other accrued expenses (including operating lease liabilities) and a $110,544 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 $2,653,000 plus accrued interest will mature one year from the date of the notes. The Company intends to meet these cash requirements from its current cash balance and from future financing.