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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 March 31, 2022

 

or

 

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

 

For the transition period from to

 

Commission file number 001-36457

 

PROVECTUS BIOPHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   90-0031917

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

     

10025 Investment Drive, Suite 250

Knoxville, Tennessee

  37932
(Address of principal executive offices)   (Zip Code)

 

866-594-5999

(Registrant’s telephone number, including area code)

 

Not Applicable

(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 May 11, 2022, was 419,447,119.

 

 

 

 
 

 

TABLE OF CONTENTS

 

  Page
PART I - FINANCIAL INFORMATION  
   
Cautionary Note Regarding Forward-Looking Statements 1
Item 1. Financial Statements (unaudited) 2
Condensed Consolidated Balance Sheets 2
Condensed Consolidated Statements of Operations 3
Condensed Consolidated Statements of Comprehensive Loss 4
Condensed Consolidated Statements of Changes in Stockholders’ Deficiency 5
Condensed Consolidated Statements of Cash Flows 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 17
Item 4. Controls and Procedures 17
   
PART II - OTHER INFORMATION  
   
Item 1. Legal Proceedings 17
Item 1A. Risk Factors 17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 17
Item 3. Defaults Upon Senior Securities 18
Item 4. Mine Safety Disclosures 18
Item 5. Other Information 18
Item 6. Exhibits 18
   
SIGNATURES 19

 

 
 

 

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 March 31, 2022, and:

 

  Our potential receipt of sales from investigational rose bengal sodium-based drug products PV-10® and PH-10®, and/or any other halogenated xanthene-based drug products (if and when approved); and licensing, milestone, royalty, and/or other payments related to these investigational drug products and/or the Company’s liquidation, dissolution, or winding up, or any sale, lease, conveyance, or other disposition of any intellectual property relating to rose bengal sodium-based and other halogenated xanthene-based investigational drug products and/or drug substances,
     
  Our ability to raise additional capital through the proceeds of private placement transactions, the exercise of existing warrants and outstanding stock options, and/or public offerings of debt or equity securities,
     
  The widespread outbreak of an illness or communicable/infectious disease, such as severe acute respiratory syndrome coronavirus 2, or a public health crisis, could disrupt our business and adversely affect our operations and financial condition, and
     
  Recently, many companies across a variety of sectors have reported disruptions, shortages, and other supply chain-related issues. In the biopharmaceutical sector, delays and interruptions in the supply chain have been particularly pronounced. During the first quarter of 2022, we were able to effectively manage our supply of prescription drug candidates in a manner that avoided any significant interruptions to our clinical programs.

 

1
 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS.

 

PROVECTUS BIOPHARMACEUTICALS, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   March 31,   December 31, 
   2022   2021 
    (Unaudited)      
Assets          
           
Current Assets:          
Cash and cash equivalents  $173,614   $682,984 
Restricted cash   2,307,395    2,423,958 
Short-term receivables   3,050    5,107 
Prepaid expenses and other current assets   227,908    329,908 
           
Total Current Assets   2,711,967    3,441,957 
           
Equipment and furnishings, less accumulated depreciation of $94,396 and $91,178, respectively   28,618    31,836 
Operating lease right-of-use asset   15,177    39,563 
           
Total Assets  $2,755,762   $3,513,356 
           
Liabilities and Stockholders’ Deficiency          
           
Current Liabilities:          
Accounts payable  $1,597,496   $1,287,459 
Deposit for purchase of Series D-1 Preferred Stock   -    150,000 
Unearned grant revenue   2,312,395    2,500,000 
Other accrued expenses   2,185,761    2,002,486 
Accrued interest   35,856    10,578 
Accrued interest - related parties   10,044    6,044 
Notes payable   154,925    238,452 
Convertible notes payable   1,310,000    1,260,000 
Convertible notes payable - related parties   200,000    200,000 
Operating lease liability   18,203    45,617 
           
Total Current Liabilities   7,824,680    7,700,636 
           
Commitments, contingencies, and litigations (Note 11)   -       
           
Stockholders’ Deficiency:          
Series D Convertible Preferred Stock; 12,374,000 shares designated; 12,373,247 shares issued and outstanding at March 31, 2022 and December 31, 2021; aggregate liquidation preference of $14,164,889 at March 31, 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 March 31, 2022 and December 31, 2021, respectively; aggregate liquidation preference of
$106,132,320
and $105,532,804 at March 31, 2022 and December 31, 2021, respectively
 
     
              9,271                               9,219        
Common stock; par value $0.001 per share; 1,000,000,000 shares authorized; 419,447,119 shares issued and outstanding at March 31, 2022 and December 31, 2021                 419,447                       419,447      
Additional paid-in capital   241,590,054    241,440,106 
Accumulated other comprehensive loss   (35,183)   (34,467)
Accumulated deficit   (247,064,880)   (246,033,958)
           
Total Stockholders’ Deficiency   (5,068,918)   (4,187,280)
           
Total Liabilities and Stockholders’ Deficiency  $2,755,762   $3,513,356 

 

See accompanying notes to condensed consolidated financial statements.

 

2
 

 

PROVECTUS BIOPHARMACEUTICALS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   2022   2021 
   For the Three Months Ended 
   March 31, 
   2022   2021 
         
Grant Revenue  $187,605   $- 
           
Operating Expenses:          
Research and development   671,116    655,144 
General and administrative   516,547    525,532 
Total Operating Expenses   1,187,663    1,180,676 
           
Total Operating Loss   (1,000,058)   (1,180,676)
           
Other Income/(Expense):          
Interest income and interest expense   (30,864)   (489,274)
           
Total Other Expense, Net   (30,864)   (489,274)
           
Net Loss  $(1,030,922)  $(1,669,950)
           
Basic and Diluted Loss Per Common Share  $(0.00)  $(0.00)
           
Weighted Average Number of Common Shares Outstanding - Basic and Diluted   419,447,119    402,184,815 

 

See accompanying notes to condensed consolidated financial statements.

 

3
 

 

PROVECTUS BIOPHARMACEUTICALS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

 

   2022   2021 
   For the Three Months Ended 
   March 31, 
   2022   2021 
         
Net Loss  $(1,030,922)  $(1,669,950)
Other Comprehensive Loss:          
Foreign currency translation adjustments   (716)   837 
Total Comprehensive Loss  $(1,031,638)  $(1,669,113)

 

See accompanying notes to condensed consolidated financial statements.

 

4
 

 

PROVECTUS BIOPHARMACEUTICALS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

(Unaudited)

 

FOR THE THREE MONTHS ENDED MARCH 31, 2022

 

   Preferred Stock  Preferred Stock  Preferred Stock        Additional  Accumulated Other      
   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
                                     
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)
                                                             
Series D-1 Preferred Stock issued for cash     -     -   -    -    52,411    52    -    -    149,948    -    -    150,000 
Comprehensive loss:     -     -                            -                   - 
Net loss             -    -    -    -    -    -    -    -    (1,030,922)   (1,030,922)
Other comprehensive loss           -    -    -    -    -    -    -    (716)   -    (716)
                                                             
Balance at March 31, 2022     -     -   12,373,247   $12,373    9,270,860   $9,271    419,447,119   $419,447   $241,590,054   $(35,183)  $(247,064,880)  $(5,068,918)

 

FOR THE THREE MONTHS ENDED MARCH 31, 2021

 

   Preferred Stock  Preferred Stock  Preferred Stock        Additional  Accumulated Other      
   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
                                     
Balance at January 1, 2021   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 
Stock-based compensation:                                                            
Common Stock   -    -                    250,000    250    19,500    -    -    19,750 
Comprehensive loss:                                  -                     
Net loss   -    -      -     -     -     -   -    -    -    -    (1,669,950)   (1,669,950)
Other comprehensive loss   -    -                        -    -    -    837    -    837 
                                                             
Balance at March 31, 2021   100   $-     -    -    -    -   403,557,037   $403,558   $210,178,197   $(33,260)  $(242,164,365)  $(31,615,870)

 

See accompanying notes to condensed consolidated financial statements.

 

5
 

 

PROVECTUS BIOPHARMACEUTICALS, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   2022   2021 
   For the Three Months Ended 
   March 31, 
   2022   2021 
Cash Flows From Operating Activities:          
Net loss  $(1,030,922)  $(1,669,950)
Adjustments to reconcile net loss to net cash used in operating activities:          
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation   -    19,750 
Non-cash lease expense   24,386    20,006 
Depreciation   3,218    3,216 
Changes in operating assets and liabilities          
Short term receivables   2,143    (515)
Prepaid expenses   101,964    45,822 
Accounts payable   309,732    (10,927)
Unearned grant revenue   (187,605)   - 
Other accrued expenses   183,001    12,252 
Operating lease liability   (27,414)   (21,096)
Accrued interest expense   29,278    487,962 
           
Net Cash Used In Operating Activities   (592,219)   (1,113,480)
           
Cash Flows From Financing Activities:          
Proceeds from issuance of convertible notes payable  
 
 
 
 
50,000
 
 
 
 
 
 
 
1,200,000
 
 
Repayment of short-term note payable   (83,527)   (74,417)
Proceeds from exercise of warrants   -    239,850 
Net Cash (Used In) Provided By Financing Activities   (33,527)   1,365,433 
           
Effect of exchange rates on cash, cash equivalents, and restricted cash   (187)   587 
           
Net (Decrease) Increase In Cash, Cash Equivalents, and Restricted Cash   (625,933)   252,540 
           
Cash, Cash Equivalents, and Restricted Cash, Beginning of Period   3,106,942    97,231 
           
Cash, Cash Equivalents, and Restricted Cash, End of Period  $2,481,009   $349,771 
           
Cash, cash equivalents and restricted cash consisted of the following:          
Cash and cash equivalents  $173,614   $349,771 
Restricted cash   2,307,395    - 
   $2,481,009   $349,771 
           
Supplemental Disclosures of Cash Flow Information:          
Cash paid during the period for:          
Interest  $-   $- 
Income taxes  $-   $- 

 

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, based on a class of small molecules called halogenated xanthenes (“HXs”) that is entirely owned by the Company. Our lead HX molecule is named rose bengal sodium (“RBS”). A second synthesized HX molecule is 4,5,6,7-tetrabromo-3′,6′-dihydroxy-2′,4′,5′,7′-tetraiodo-3H-spiro[isobenz- ofuran-1,9′-xanthen]-3-one.

 

 

Oncology: PV-10®, an investigational cancer immunotherapy administered by intralesional (“IL”) injection and an injectable formulation of cGMP RBS, is undergoing clinical study for adult solid tumor cancers, such as melanoma and gastrointestinal (“GI”) tumors, including hepatocellular carcinoma (“HCC”), colorectal cancer metastatic to the liver (“mCRC”), neuroendocrine tumors (“NET”) metastatic to the liver (“mNET”), and uveal melanoma metastatic to the liver (“mUM”), among others. Orphan drug designation (“ODD”) status was granted to PV-10 by the U.S. Food and Drug Administration (the “FDA”) for metastatic melanoma in 2006, HCC in 2011, and ocular melanoma (including uveal melanoma) in 2019.

 

Oral formulations of cGMP RBS are also undergoing preclinical study as prophylactic and therapeutic treatments for high-risk and refractory adult solid tumor cancers, such as head and neck, breast, colorectal, and testicular cancers. In vivo data of a colorectal tumor murine model that continuously promotes abnormal cell proliferation and transformation into cancer indicate increased survival in both prophylactic and therapeutic settings.

     
  Pediatric Oncology: IL PV-10 is undergoing preclinical study for pediatric solid tumor cancers (including neuroblastoma, Ewing sarcoma, rhabdomyosarcoma, and osteosarcoma). ODD status was granted to PV-10 by the FDA for neuroblastoma in 2018.
     
  Hematology: Oral formulations of cGMP RBS are undergoing preclinical study for refractory and relapsed pediatric blood cancers (including leukemias). In vivo data of an acute lymphoblastic leukemia murine model indicated increased survival.
     
  Virology: 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”). In silico data indicate docking-based binding affinity to SARS-CoV-2’s main protease, spike protein, and different variants of the spike protein. In vitro data indicate activity against SARS-CoV-2 in African green monkey kidney cell (Vero) and human lung epithelial cell (Calu-3) models, and synergistic activity with remdesivir in a Vero cell model.
     
  Microbiology: Different formulations of cGMP RBS are undergoing preclinical study as potential treatments for multi-drug resistant (“MDR”) bacteria, such as gram-positive and gram-negative. In vitro data indicate activity against a battery of gram-positive bacteria, including MDR strains, under fluorescent, LED, and natural light, and against gram-positive bacterial biofilms.
     
  Ophthalmology: Topical formulations of cGMP RBS are undergoing preclinical study as potential treatments for diseases of the eye, such as infectious keratitis.
     
  Dermatology: PH-10®, an investigational immune-dermatology agent administered as a topical formulation of cGMP RBS, is undergoing monotherapy clinical study and preclinical study as a monotherapy and in combination therapy with approved drugs for inflammatory dermatoses (including psoriasis and atopic dermatitis).
     
  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
 

 

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 months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

 

SARS-CoV-2 was reportedly first identified in late-2019 and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the SARS-CoV-2 pandemic, many companies have experienced disruptions of their operations and the markets they serve. The Company has taken several temporary precautionary measures intended to help ensure the well-being of its employees and contractors and to minimize business disruption. The Company considered the impact of SARS-CoV-2 pandemic on its business and operational assumptions and estimates, and determined there were no material adverse impacts on the Company’s results of operations and financial position at March 31, 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

 

The Company’s cash, cash equivalents, and restricted cash were $2,481,009 at March 31, 2022 which includes the $2,307,395 of restricted cash resulting from a grant received from the State of Tennessee. The Company’s working capital deficiency was $5,112,713 and $4,258,679 as of March 31, 2022 and December 31, 2021, respectively. The Company continues to incur significant operating losses. Management expects that significant on-going operating expenditures will be necessary to successfully implement the Company’s business plan and develop and market its products. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. Implementation of the Company’s plans and its ability to continue as a going concern will depend upon the Company’s ability to develop PV-10, PH-10, and/or any other halogenated xanthene-based drug products, and to raise additional capital.

 

The Company plans to access capital resources through possible public or private equity offerings, including the 2021 financing (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.

 

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 March 31, 2022 and December 31, 2021, the Company’s cash equivalents consist of Treasury bills of $42,594.

 

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 $192,605. 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 March 31, 2022 and December 31, 2021, the Company had cash, cash equivalent, and restricted cash balances in excess of FDIC insurance limits of $2,231,009 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:

 

   March 31,   March 31, 
   2022   2021 
Warrants   512,500    82,764,164 
Options   3,625,000    4,800,000 
Convertible preferred stock   105,081,847    65,666 
2021 unsecured convertible notes   5,436,408    - 
           
Total potentially dilutive shares   114,655,755    87,629,830 

 

9
 

 

4. Other Accrued Expenses

 

The following table summarizes the other accrued expenses at March 31, 2022 and December 31, 2021:

 

   March 31, 2022   December 31, 2021 
Accrued payroll and taxes  $244,349   $174,533 
Accrued vacation   50,859    42,871 
Accrued directors’ fees   1,656,839    1,560,589 
Accrued other expenses   233,714    224,493 
Total Other Accrued Expenses  $2,185,761   $2,002,486 

 

5. Convertible Notes Payable

 

2021 Financing

   Non-Related Party   Related Party     
   Face Amount   Face Amount   Total 
Balance as of January 1, 2022  $1,260,000   $200,000   $1,460,000 
                
Issued   50,000    -     50,000 
                
Balance as of March 31, 2022  $1,310,000   $200,000   $1,510,000 

 

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

 

As of March 31, 2022, the Company had received 2021 Notes proceeds of $1,510,000, of which $200,000 is from a related party investor (an officer of the Company).

 

6. Notes Payable

 

The Company obtained short-term financing from AFCO Insurance Premium Finance for our commercial insurance policies. As of March 31, 2022 and December 31, 2021, the balance of the note payable was $154,925 and $238,452, respectively.

 

7. Related Party Transactions

 

During the three months ended March 31, 2022 and 2021, the Company paid Mr. Bruce Horowitz (Capital Strategists) consulting fees of $42,400 and $84,800, respectively, for services rendered. Director fees for Mr. Horowitz for the three months ended March 31, 2022 and 2021 were $18,750 and $18,750, respectively. Accrued director fees for Mr. Horowitz as of March 31, 2022 and December 31, 2021 were $300,000 and $281,250, respectively. Total amount owed to Capital Strategists as of March 31, 2022 and December 31, 2021 were $127,200. Mr. Horowitz serves as both COO and a Director, of the Company.

 

See Note 5 for details of other related party transactions.

 

Director fees during the three months ended March 31, 2022 and 2021 were $96,250 and $96,250, respectively. Accrued directors’ fees as of March 31, 2022 and December 31, 2021 were $1,656,839 and $1,560,589, respectively.

 

8. Stockholders’ Deficiency

 

Preferred Stock

 

During the three months ended March 31, 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 investor.

 

10
 

 

9. Leases

 

The Company currently leases 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 are approximately $6,100 per month.

 

On February 23, 2022, the Company negotiated a continued reduced rent from January 1, 2022 through June 30, 2022 in the amount of $6,100 per month.

 

Total operating lease expense for the three months ended March 31, 2022 was $14,959, of which, $9,973 was included within research and development and $4,986 was included within general and administrative expenses on the condensed consolidated statement of operations. Total operating lease expense for the three months ended March 31, 2021 was $24,762, of which, $16,508 was included within research and development and $8,254 was included within general and administrative expenses on the condensed consolidated statement of operations.

 

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

 

   For The Three Months Ended 
   March 31, 
   2022   2021 
Cash paid for amounts included in the measurement of lease liabilities:          
Operating cash flows used in operating leases  $18,447   $23,831 
           
Right-of-use assets obtained in exchange for lease obligations:          
Operating leases  $-   $- 
           
Weighted Average Remaining Lease Term          
Operating leases   3 months    1 year 3 months 
           
Weighted Average Discount Rate          
Operating leases   8.0%   8.0%

 

Future minimum payments under the Company’s non-cancellable lease obligations as of March 31, 2022 were as follows:

 

Years  Amount 
2022  $18,447 
Total future minimum lease payments   18,447 
Less: amount representing imputed interest   (234)
Total  $18,203 

 

10. Grants

 

On October 25, 2021, the Company received a grant award of $2,500,000 from the State of Tennessee for the study of animal cancers and dermatological disorders for the period October 15, 2021 to June 30, 2022. As of March 31, 2022, the grant award of $2,312,395 is recorded as unearned grant revenue liability on the accompanying condensed consolidated balance sheets. The Company recorded $187,605 of grant revenue during the three months ended March 31, 2022.

 

11. Commitments, Contingencies and Litigation

 

The Company may, from time to time, be involved in litigation arising in the ordinary course of business or which 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. Subsequent Events

 

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

 

Subsequent to March 31, 2022, the Company entered into a 2021 Note with a non-related party investor in the aggregate principal amount of $500,000 in connection with a 2021 Loan received by the Company for the same amount.

 

Subsequent to March 31, 2022, the Company announced it has added Aru Narendran, MD, PhD at the University of Calgary to the Scientific Advisory Board.

 

11
 

 

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.

 

Overview

 

Provectus is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases, based on a class of small molecules called HXs that is entirely owned by the Company. The Company’s lead HX molecule is cGMP RBS.

 

Components of Operating Results

 

Grant Revenue

 

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

 

Research and Development Expenses

 

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

 

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

 

We expense research and development costs as incurred.

 

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

 

General and Administrative Expenses

 

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

 

12

 

 

Results of Operations

 

Comparison of the Three Months Ended March 31, 2022 and March 31, 2021

 

Overview

 

Total operating expenses were $1,187,663 for the three months ended March 31, 2022, an increase of $6,987 or 0.6% compared to the three months ended March 31, 2021. The increase was driven primarily by (i) increased clinical trial cost, (ii) higher insurance costs and (iii) higher payroll and taxes, partially offset by (iv) lower legal and litigation fees and (v) lower rent and utilities cost. Net loss for the three months ended March 31, 2022 was $1,030,922, a decrease of $639,028 or 38.3% 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 $187,605.

 

   For the Three Months Ended         
   March 31,         
   2022   2021   Increase/(Decrease)   % Change 
                 
Grant Revenue  $187,605   $-   $187,605    0.0%
                     
Operating Expenses:                    
Research and development   671,116    655,144    15,972    2.4%
General and administrative   516,547    525,532    (8,985)   -1.7%
Total Operating Expenses   1,187,663    1,180,676    6,987    0.6%
                     
Total Operating Loss   (1,000,058)   (1,180,676)   180,618    -15.3%
                     
Other Income/(Expense):                    
Interest income and interest expense   (30,864)   (489,274)   458,410    -93.7%
                     
Total Other Expense, Net   (30,864)   (489,274)   458,410    -93.7%
                     
Net Loss  $(1,030,922)  $(1,669,950)  $639,028    -38.3%

 

Grant Revenue

 

For the 3 months ended March 31, 2022 and 2021, there was $187,605 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 $671,116 for the three months ended March 31, 2022, an increase of $15,972 or 2.4% compared to $655,144 for the three months ended March 31, 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 expense.

 

   For the Three Months Ended         
   March 31,         
   2022   2021   Increase/(Decrease)   % Change 
                 
Research and development:                    
Clinical trial and research expenses   531,691    511,580   $20,111    3.9%
Depreciation/amortization   2,164    2,162    2    0.1%
Insurance   58,523    51,388    7,135    13.9%
Payroll and taxes   67,115    72,334    (5,219)   -7.2%
Rent and utilities   11,623    17,680    (6,057)   -34.3%
Total research and development  $671,116   $655,144   $15,972    2.4%

 

13

 

 

General and Administrative Expenses

 

General and administrative expenses were $516,547 for the three months ended March 31, 2022, a decrease of $8,985 or 1.7% compared to $525,532 for the three months ended March 31, 2021. The decrease was primarily due to (i) lower legal fees relating to patents, (ii) reduced rent and utilities cost, and (iii) lower other general and administrative cost, partially offset by (iv) increased payroll and taxes and (v) higher insurance cost.

  

     For the Three Months Ended         
   March 31,         
   2022   2021   Increase/(Decrease)   % Change 
                 
General and administrative:                    
Depreciation  $1,054   $1,054   $-    0.0%
Directors fees   96,250    96,250    -    0.0%
Insurance   48,218    43,566    4,652    10.7%
Legal and litigation   112,534    132,015    (19,481)   -14.8%
Other general and administrative cost   22,859    31,005    (8,146)   -26.3%
Payroll and taxes   64,299    46,060    18,239    39.6%
Professional fees   166,355    165,716    639    0.4%
Rent and utilities   5,599    8,726    (3,127)   -35.8%
Foreign currency translation   (621)   1,140    (1,761)   -154.5%
Total general and administrative  $516,547   $525,532   $(8,985)   -1.7%

 

Other Income/(Expense)

 

Interest expense decreased by $458,410 from $489,274 for the three months ended March 31, 2021 to $30,864 for the three months ended March 31, 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.

 

   For the Three Months Ended         
   March 31,         
   2022   2021   Increase/(Decrease)   % Change 
                 
Other Income/(Expense):                    
Interest income and interest expense  $(30,864)  $ (489,274)  $ 458,410    -93.7%
Total Other Expenses, Net  $(30,864)  $(489,274)  $458,410    -93.7%

 

14

 

 

Liquidity and Capital Resources

 

The Company’s cash, cash equivalents, and restricted cash were $2,481,009 at March 31, 2022 which includes the $2,307,395 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 $5,112,713 and $4,258,679 as of March 31, 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 $247,064,880 as of March 31, 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.

 

As of March 31, 2022, cash required for our current liabilities included approximately $3,801,460 for accounts payable and accrued expenses (including lease liabilities) and a $154,925 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 $1,510,000 plus accrued interest will mature one year from the date of the notes. There are no cash requirements for long-term liabilities at March 31, 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 financing, to fund our capital requirements and on-going operations; however, there can be no assurance we will be successful in these efforts. The condensed consolidated financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern. Significant funds will be needed to continue and complete our ongoing and planned clinical trials.

 

The SARS-CoV-2 pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, which could impact our ability to raise additional funds and may also impact the volatility of our stock price and trading in our stock. Moreover, the pandemic has also significantly impacted economies worldwide, which could result in adverse effects on our business and operations. We cannot be certain what the overall impact of the SARS-CoV-2 pandemic will be on our business. It has the potential to adversely affect our business, financial condition, results of operations, and prospects. The Company has experienced slower than normal enrollment and treatment of patients, and a prolonged SARS-CoV-2 pandemic could have a material adverse impact on the Company’s business and financial results, including the timing and ability of the Company to raise capital, initiate and/or complete current and/or future preclinical studies and/or clinical trials; disrupt the Company’s regulatory activities; and/or have other adverse effects on the Company’s clinical development. We have taken several temporary precautionary measures intended to help ensure the well-being of our employees and contractors and to minimize disruption to our business. We considered the impact of the SARS-CoV-2 pandemic on our business and operational assumptions and estimates, and determined there were no material adverse impacts on our results of operations and financial position at March 31, 2022.

 

15

 

 

Access to Capital

 

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

 

The primary business objective of management is to build the Company into a commercial-stage biotechnology company; however, we cannot assure you that management will be successful in implementing the Company’s business plan of developing, licensing, and/or commercializing our prescription drug product candidates. Moreover, even if we are successful in improving our current cash flow position, we nonetheless plan to seek additional funds to meet our current and long-term requirements in 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.

 

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”).

 

16

 

 

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 first quarter of 2022 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

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

 

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 March 31, 2022, the Company had received aggregate proceeds of $50,000 pursuant to certain unsecured convertible notes (the “2021 Notes”). As of March 31, 2022, the Company had drawn down $1,510,000 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.

 

Preferred Convertible Stock

 

During the three months ended March 31, 2022, the Company issued 52,411 shares of Series D-1 Convertible Preferred Stock in consideration of a $150,000 investment.

 

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.

 

17

 

 

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
     
3.1   Certificate of Incorporation of Provectus Biopharmaceuticals, Inc., as amended (incorporated by reference to Exhibit 3.1 of the Company’s annual report on Form 10-K filed with the SEC on March 31, 2017).
     
3.2   Certificate of Elimination with respect to Series B Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s current report on Form 8-K filed with the SEC on April 5, 2022).
     
3.3   Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s current report on Form 8-K filed with the SEC on June 24, 2021).
     
3.4**   Certificate of Designation of Preferences, Rights and Limitations of Series D-1 Convertible Preferred Stock (as amended by the Certificate of Amendment, dated March 30, 2022).
     
3.5   Bylaws of Provectus Biopharmaceuticals, Inc. (incorporated by reference to Exhibit 3.4 of the Company’s annual report on Form 10-K filed with the SEC on March 13, 2014).
     
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.

 

18

 

 

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.
                                         
May 12, 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)

 

19

 

Exhibit 3.4

 

provectus BIOpharmaceuticals, inc.

 

CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES D-1 CONVERTIBLE PREFERRED STOCK

 

PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW

 

(As Amended by Certificate of Amendment, dated March 30, 2022)

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, PROVECTUS BIOPHARMACEUTICALS, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 103 thereof, does hereby submit the following:

 

WHEREAS, the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) authorizes the issuance of up to 25,000,000 shares of preferred stock, par value $0.001 per share, of the Corporation (“Preferred Stock”) in one or more series, and expressly authorizes the Board of Directors of the Corporation (the “Board of Directors”), subject to limitations prescribed by law, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions and limitations of the shares of such series; and

 

WHEREAS, it is the desire of the Board to establish and fix the number of shares to be included in a new series of Preferred Stock and the designation, rights, preferences and limitations of the shares of such new series.

 

NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby provide for the issue of a series of Preferred Stock and does hereby in this Certificate of Designation (the “Certificate of Designation”) establish and fix and herein state and express the designation, rights, preferences, powers, restrictions and limitations of such series of Preferred Stock as follows:

 

1. Designation and Number of Shares. One series of Preferred Stock is established and designated as Series D-1 Convertible Preferred Stock, par value $0.001 per share (the “Series D-1 Convertible Preferred Stock”). The number of shares constituting the Series D-1 Convertible Preferred Stock shall be 11,241,0009,441,000 shares.

 

2. Definitions. For the purpose of this Certificate of Designation, the following definitions apply:

 

(a) “Affiliate” means, with respect to any person that directly or indirectly, through one or more intermediaries Controls, or is controlled by, or is under common control with, such person.

 

(b) “Business Day” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York.

 

(c) “Change of Control Transaction” means the occurrence after the date hereof of any of (i) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise) of in excess of 33% of the voting securities of the Corporation (other than by means of conversion or exercise of Series D Preferred), (ii) the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the Corporation or the successor entity of such transaction, (iii) the Corporation sells or transfers all or substantially all of its assets to another Person and the stockholders of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after the transaction, (iv) a replacement at one time or within a one year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the Original Issue Date), or (v) the execution by the Corporation of an agreement to which the Corporation is a party or by which it is bound, providing for any of the events set forth in clauses (i) through (iv) above.

 

(d) “Commission” means the United States Securities and Exchange Commission.

 

(e) “Common Stock” means the common stock, par value $0.001 per share, of the Corporation authorized for issuance under the Certificate of Incorporation.

 

(f) “Control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise.

 

(g) “Conversion Shares” shall have the meaning as set forth in Section 7(a) herein.

 

 

 

 

(h) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(i) “Fundamental Transaction” shall have the meaning set forth in Section 9(c).

 

(j) “Junior Stock” means the Common Stock and each other class or series of the Corporation’s capital stock, whether common, preferred or otherwise, the terms of which do not provide that shares of such class or series rank senior to or on par with the Series D Preferred as to distributions of dividends and distributions upon a Change of Control Transaction or the liquidation, winding-up and dissolution of the Corporation.

 

(k) “Original Issue Date” means the date of the first issuance of any shares of the Series D-1 Convertible Preferred Stock regardless of the number of transfers of any particular shares of Series D-1 Convertible Preferred Stock and regardless of the number of certificates which may be issued to evidence such Series D-1 Convertible Preferred Stock.

 

(l) “Original Issue Price” means the original issue price of $2.862 per share of Series D-1 Convertible Preferred Stock, as adjusted pursuant to Section 9.

 

(m) “Pari Passu Stock” means any class or series of the Corporation’s capital stock, the terms of which provide that shares of such class or series rank on par with the Series D-1 Convertible Preferred Stock, including but not limited to the Series D-1 Convertible Preferred Stock, as to distributions of dividends and distributions upon a Change of Control Transaction or the liquidation, winding-up and dissolution of the Corporation.

 

(n) “Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

(o) “Series D Preferred” means the Series D-1 Convertible Preferred Stock together with the Series D-1 Convertible Preferred Stock.

 

(p) “Series D Convertible Preferred Stock” means the Corporation’s Series D Convertible Preferred Stock, par value $0.001 per share.

 

(q) “Trading Day” means a day on which the principal Trading Market is open for business.

 

(r) “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

 

3. Rank. The Series D-1 Convertible Preferred Stock shall rank on par to the Series D Convertible Preferred Stock and senior to the Junior Stock as to distributions of assets upon a Change in Control Transaction, the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary.

 

4. Dividends. The holders of Series D-1 Convertible Preferred Stock will be entitled to receive dividend payments only when, as and if declared by the Corporation’s Board of Directors or a duly authorized committee of the Corporation’s Board of Directors; provided, however, that the holders of Series D-1 Convertible Preferred Stock shall be entitled to receive dividend payments if the Corporation’s Board of Directors or a duly authorized committee of the Corporation’s Board of Directors, declare and pay a dividend in respect of the Common Stock, or any Junior Stock or Pari Passu Stock, and, provided, further, that such dividend payment may be paid only out of funds legally available for payment of such dividends.

 

 

 

 

5. Liquidation Rights.

 

(a) Upon the voluntary or involuntary liquidation, winding-up or dissolution of the Corporation, the Corporation shall designate a time period (which shall not be less than ten Business Days) during which the holders of Series D-1 Convertible Preferred Stock may exercise their rights to convert all or a portion of their Series D-1 Convertible Preferred Stock into Common Stock as set forth in Section 7. Each holder of Series D-1 Convertible Preferred Stock that does not exercise its rights to convert shall be entitled to receive out of the assets of the Corporation, for each share of Series D-1 Convertible Preferred Stock, before any distributions are made to holders of any other classes or series of Junior Stock, cash in an amount equal to the Original Issue Price multiplied by either (i) four, if such liquidation occurs within two years of the issuance date of the Series D-1 Convertible Preferred Stock, or (ii) six, if such liquidation occurs from and after two years of the issuance date of the Series D-1 Convertible Preferred Stock, before any payment or distribution shall be made on the Junior Stock. After the payment to the holders of Series D-1 Convertible Preferred Stock of the full preferential amounts set forth above, the holders of Series D-1 Convertible Preferred Stock shall have no right or claim to any of the remaining assets of the Corporation. Shares of Series D-1 Convertible Preferred Stock shall not be entitled to participate in the liquidation as shares of Common Stock without first foregoing the Series D-1 Convertible Preferred Stock liquidation preference. If the assets of the Corporation available for distribution to the holders of Series D Preferred upon any liquidation, dissolution or winding-up of the Corporation are insufficient to pay the full preferential amount to which the holders of Series D Preferred are entitled, then the holders of Series D Preferred shall share in such distribution of assets pro rata in accordance with the amount that would be payable on such distribution if the amounts to which the holders of Series D Preferred were entitled were paid in full.

 

(b) For purposes of this Section 5, a merger or other corporate reorganization in which the Corporation’s stockholders shall receive cash or securities of another corporation or entity (except in connection with a consolidation or merger in which the holders of voting stock of the Corporation immediately before the consolidation or merger will in the aggregate own more than 50% of the voting shares of the continuing or surviving corporation after the consolidation or merger) or any transaction in which the assets of the Corporation are sold shall be treated as a liquidation for purposed of the liquidation preference contained in this Section 5. Prior to the consummation of such transaction, the Corporation shall designate a time period (which shall not be less than ten Business Days) during which the holders of Series D-1 Convertible Preferred Stock may exercise their rights to convert all or a portion of their Series D-1 Convertible Preferred Stock into Common Stock as set forth in Section 7.

 

6. Voting Rights.

 

(a) Generally. Except as otherwise required by Delaware law or as expressly provided in this Certificate of Designation or the Certificate of Incorporation, the holders of Series D-1 Convertible Preferred Stock shall have voting rights as follows: With respect to any matter on which the holders of Common Stock and Series D Convertible Preferred Stock shall be entitled to vote, the holders of shares of Series D-1 Convertible Preferred Stock shall vote together with the holders of Common Stock and Series D Convertible Preferred Stock, and not as a separate class, and each share of Series D-1 Convertible Preferred Stock shall have a number of votes equal to the number of shares of Common Stock then issuable upon conversion of such share of Series D-1 Convertible Preferred Stock.

 

(b) Certain Actions. In addition to the voting rights described in Section 6(a) above, so long any shares of Series D Preferred are outstanding, the Corporation will not, without the affirmative vote of a majority of the votes entitled to be cast by the holders of outstanding shares of Series D Preferred, voting together as a single class with each share of Series D Convertible Preferred having a number of votes equal to the number of shares of Common Stock then issuable upon conversion of such share of Series D Preferred, amend, alter, or repeal any provision of the Certificate of Incorporation or Bylaws in a manner that is adverse to the relative rights, preferences, qualifications, limitation or restrictions of the Series D Preferred.

 

 

 

 

7. Optional Conversion by Holder. The Series D-1 Convertible Preferred Stock shall be convertible into Common Stock of the Corporation as follows:

 

(a) Optional Conversion. Subject to and upon compliance with the provisions of this Section 7, the holder of any shares of Series D-1 Convertible Preferred Stock shall have the right at such holder’s option, at any time or from time to time, to convert each share of Series D-1 Convertible Preferred Stock into ten shares of fully paid and nonassessable shares of Common Stock (the “Conversion Shares”). Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Series D-1 Convertible Preferred Stock to be converted, the number of shares of Series D-1 Convertible Preferred Stock owned prior to the conversion at issue, the number of shares of Series D-1 Convertible Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable holder delivers by facsimile such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Series D-1 Convertible Preferred Stock, a holder shall not be required to surrender the certificate(s) representing the shares of Series D-1 Convertible Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby are so converted, in which case such holder shall deliver the certificate representing such shares of Series D-1 Convertible Preferred Stock promptly following the Conversion Date at issue. Shares of Series D-1 Convertible Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.

 

(b) Mechanics of Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting holder a certificate or certificates representing the Conversion Shares, which shall be free of restrictive legends and trading restrictions on or after the one year anniversary of the Original Issue Date (or such other period as may be provided under Rule 144 under the Securities Act of 1933, as amended, permitting the resale of restricted securities without restriction) (the “Restriction Termination Date”), representing the number of Conversion Shares being acquired upon the conversion of the Series D-1 Convertible Preferred Stock. On or after the Restriction Termination Date, the Corporation shall use its best efforts to deliver any certificate or certificates required to be delivered by the Corporation under this Section 7 electronically through the Depository Trust Company or another established clearing corporation performing similar functions.

 

(c) Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable holder by the Share Delivery Date, the holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Corporation shall promptly return to the holder any original Series D-1 Convertible Preferred Stock certificate delivered to the Corporation and the holder shall promptly return to the Corporation the Common Stock certificates issued to such holder pursuant to the rescinded Conversion Notice.

 

(d) Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Series D-1 Convertible Preferred Stock shall be made without charge to any holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the holders of such shares of Series D-1 Convertible Preferred Stock and the Corporation shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.

 

(e) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of shares of Series D-1 Convertible Preferred Stock. As to any fraction of a share which may be issued upon conversion of shares of Series D-1 Convertible Preferred Stock, the Corporation shall round up to the next whole share.

 

 

 

 

8. Automatic Conversion. On the fifth anniversary of the Original Issue Date, each outstanding share of Series D-1 Convertible Preferred Stock held by stockholders shall automatically convert into ten Conversion Shares without any further action by the relevant holder of such shares or the Corporation. All Conversion Shares issued hereunder by the Corporation shall be duly and validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof. As promptly as practicable following such fifth anniversary of the Original Issue Date (but in any event within ten Business Days thereafter), the Corporation shall send each holder of shares of Series D-1 Convertible Preferred Stock written notice of such event. Upon receipt of such notice, each holder shall surrender to the Corporation the certificate or certificates representing the shares being converted, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto) or, in the event the certificate or certificates are lost, stolen or missing, accompanied by an affidavit of loss executed by the holder. Upon the surrender of such certificate(s) and accompanying materials, the Corporation shall as promptly as practicable (but in any event within ten (10) Business Days thereafter) deliver to the relevant holder a certificate in such holder’s name (or the name of such holder’s designee as stated in the written election) for the number of Conversion Shares to which such holder shall be entitled upon conversion of the applicable shares.

 

9. Adjustments.

 

(a) Adjustment for Stock Splits and Combinations. If at any time or from time to time after the Original Issue Date the Corporation effects a subdivision of the outstanding Common Stock without a corresponding subdivision of the Series D-1 Convertible Preferred Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately decreased. Conversely, if at any time or from time to time after the Original Issue Date the Corporation combines the outstanding shares of Common Stock into a smaller number of shares without a corresponding combination of the Series D-1 Convertible Preferred Stock, the Conversion Price in effect immediately before that subdivision shall be proportionately increased. Any adjustment under this Section 9(a) shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

(b) Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date, the Common Stock issuable upon the conversion of the Series D-1 Convertible Preferred Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this Section 9), in any such event each holder of Series D-1 Convertible Preferred Stock shall then have the right to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Series D-1 Convertible Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

 

 

 

 

(c) Reorganizations, Mergers or Consolidations. If, at any time while this Series D-1 Convertible Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Series D-1 Convertible Preferred Stock, the holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the number of shares of Common Stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Series D-1 Convertible Preferred Stock is convertible immediately prior to such Fundamental Transaction. For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Series D-1 Convertible Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms and conditions and issue to the holders new preferred stock consistent with the foregoing provisions and evidencing the holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Corporation under this Certificate of Designation in accordance with the provisions of this Section 9(c) pursuant to written agreements in form and substance reasonably satisfactory to the holder and approved by the holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Series D-1 Convertible Preferred Stock, deliver to the holder in exchange for this Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Series D-1 Convertible Preferred Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Series D-1 Convertible Preferred Stock (without regard to any limitations on the conversion of this Series D-1 Convertible Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Series D-1 Convertible Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designation with the same effect as if such Successor Entity had been named as the Corporation herein.

 

10. Reservation of Shares. The Corporation shall reserve at all times so long as any shares of Series D-1 Convertible Preferred Stock remain outstanding, free from preemptive rights, out of its treasury stock (if applicable) or its authorized but unissued shares of Common Stock, or both, solely for the purpose of effecting the conversion of the shares of Series D-1 Convertible Preferred Stock, sufficient shares of Common Stock to provide for the conversion of all outstanding shares of Series D-1 Convertible Preferred Stock.

 

 

 

 

11. Report or Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or other securities) issuable upon the conversion of shares of Series D-1 Convertible Preferred Stock, the Corporation at its expense will promptly deliver a certificate of the Chief Financial Officer showing in reasonable detail the computation of such adjustment or readjustment in accordance with the terms of this Certificate of Designation. The Corporation shall also cause independent certified public accountants of recognized national standing (which may be the regular auditors of the Corporation) selected by the Corporation to verify such computation and prepare a report setting forth such adjustment or readjustment and showing in detail the method of calculation thereof and the facts upon which such adjustment or readjustment is based. The Corporation will forthwith (and in any event not later than 30 days following the occurrence of the event requiring such adjustment) furnish a copy of each such report to each holder, and will, upon the written request at any time of a holder, furnish to such holder a like report setting forth the Conversion Price at the time in effect and showing how it was calculated. The Corporation will also keep copies of all such reports at its principal office and will cause the same to be available for inspection at such office during normal business hours by each holder or any prospective purchaser of shares of Series D-1 Convertible Preferred Stock designated by the holder thereof.

 

12. Notices of Corporate Action. In the event of (i) any capital reorganization of the Corporation, any reclassification or recapitalization of the capital stock of the Corporation, any consolidation or merger involving the Corporation and any other person or any transfer of all or substantially all the assets of the Corporation to any other person; or (ii) any voluntary or involuntary dissolution, liquidation or winding-up of the Corporation; then the Corporation will deliver to each holder of the Series D-1 Convertible Preferred Stock a notice specifying the date or expected date on which any such reorganization, reclassification, recapitalization, consolidation, merger, transfer, dissolution, liquidation or winding-up is to take place and the time, if any such time is to be fixed, as of which the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares of Common Stock (or other securities) for the securities or other property deliverable upon such reorganization, reclassification, recapitalization, consolidation, merger, transfer, dissolution, liquidation or winding-up. Such notice shall be furnished at least 20 days prior to the date therein specified; provided, however, if such date is prior to a public announcement relating to the events set forth and on such date the Corporation is either bound by an agreement with a third party of confidentiality with respect to the corporate action the subject of this Section 12, or the Corporation’s securities are traded or quoted on any recognized national securities exchange or quotation system, then such notice shall be provided to each holder of the Series D-1 Convertible Preferred Stock simultaneously with the notice provided to the Corporation’s stockholders.

 

13. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by this Certificate of Designation (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the United States District Court for the District of Delaware or in the Court of Chancery of the State of Delaware (or, if such court lacks subject matter jurisdiction, in the Superior Court of the State of Delaware) (collectively, the “Delaware Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Delaware Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Delaware Courts, or such Delaware Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

14. Severability of Provisions. Whenever possible, each provision hereof shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision hereof is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or otherwise adversely affecting the remaining provisions hereof. If a court of competent jurisdiction should determine that a provision hereof would be valid or enforceable if a period of time were extended or shortened or a particular percentage were increased or decreased, then such court may make such change as shall be necessary to render the provision in question effective and valid under application law.

 

15. No Other Rights or Preferences. The Series D-1 Convertible Preferred Stock shall have no other rights or preferences other than set forth in this Certificate of Designation.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designation on behalf of the Corporation as of the 17th day of June, 2021.

 

  PROVECTUS BIOPHARMACEUTICALS, INC.
                                              
  By: /s/ Heather Raines
  Name: Heather Raines
  Title: Chief Financial Officer

 

 

 

 

ANNEX A

 

NOTICE OF CONVERSION

 

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF
SERIES D-1 CONVERTIBLE PREFERRED STOCK)

 

The undersigned holder hereby irrevocably elects to convert the number of shares of Series D-1 Convertible Preferred Stock indicated below into shares of common stock, par value $0.001 per share (the “Common Stock”), of Provectus Biopharmaceuticals, Inc., a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written below. If securities are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designation of Preferences, Rights and Limitations of Series D-1 Convertible Preferred Stock (the “Certificate of Designation”) filed by the Corporation on June 17, 2021.

 

Conversion Calculations:

 

Date to Effect Conversion: ________________________________________________________
Number of shares of Series D-1 Convertible Preferred Stock owned prior to Conversion: __________________
Number of shares of Series D-1 Convertible Preferred Stock to be Converted: ___________________________
Number of Conversion Shares to be Issued: ______________________________________
Number of shares of Series D-1 Convertible Preferred Stock subsequent to Conversion: ____________________
 
Address for delivery of physical certificates: __________________________________________
or for DWAC Delivery:
DWAC Instructions:
Broker no: _____________________________________________________________________
Account no: ____________________________________________________________________

 

  [HOLDER]
  By:           
  Name:  
  Title:  
  Date:  

 

 

 

 

Exhibit 31.1

 

CERTIFICATION

 

I, Bruce Horowitz, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Provectus Biopharmaceuticals, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 12, 2022 By: /s/ Bruce Horowitz
    Bruce Horowitz
    Chief Operating Officer (Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION

 

I, Heather Raines, CPA, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Provectus Biopharmaceuticals, Inc.;
   
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
   
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
   
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

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

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: May 12, 2022 By: /s/ Heather Raines
    Heather Raines, CPA
    Chief Financial Officer (Principal Financial Officer)

 

 

 

Exhibit 32

 

CERTIFICATION PURSUANT TO RULE 13a-14(b) UNDER

THE SECURITIES EXCHANGE ACT OF 1934 AND

SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

 

Each of the undersigned, Bruce Horowitz, the Chief Operating Officer (principal executive officer) of Provectus Biopharmaceuticals, Inc. (the “Company”), and Heather Raines, CPA, the Chief Financial Officer (principal financial officer) of the Company, certifies, pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, that (1) this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act, and (2) the information contained in this report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

This Certification is signed on May 12, 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)