(Former ~~Name, Former Address~~name, former address and ~~Former Fiscal Year,~~former fiscal year, if ~~Changed Since Last Report)~~changed since last report)

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. [X] Yes [ ] No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). [X] 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”~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 [X] No

The number of shares outstanding of the registrant’s common stock, par value $0.001 per share, as of November ~~7, 2017,~~12, 2019, was ~~370,737,143.~~388,576,975.

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 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, ~~2016)~~2018), and the following:

● our potential receipt of sales from investigational drug products PV-10 and PH-10, transaction fees, licensing and royalty payments, and/or payments in connection with the Company’s liquidation, dissolution or winding up, or any sale, lease, conveyance or other disposition of any intellectual property relating to our investigational drug products, and/or drug substance Rose Bengal;

● our ability to close on additional tranches of the financing from a group of the Company’s stockholders (the “PRH Group”) pursuant to the Definitive Financing Commitment Term Sheet we entered into with the PRH Group effective as of March 19, 2017.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

(Unaudited)

	FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019
											Accumulated
	Preferred Stock								Additional		Other
	Series B				Common Stock				Paid-In		Comprehensive			Accumulated
	Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Total

Balance at January 1, 2019		100	$	-		384,614,528	$	384,615	$	209,092,187	$	-		$	(226,894,291	)	$	(17,417,489	)

Common stock issued upon exercise of warrants		-		-		100,000		100		5,230		-			-			5,330
Comprehensive loss:								-
Net loss		-		-		-		-		-		-			(1,369,830	)		(1,369,830	)
Other comprehensive loss		-		-		-		-		-		(22,363	)		-			(22,363	)

Balance at March 31, 2019		100	$	-		384,714,528	$	384,715	$	209,097,417	$	(22,363	)	$	(228,264,121	)	$	(18,804,352	)

Common stock issued for services		-		-		191,590		191		8,771		-			-			8,962
Warrants issued for services		-		-		-		-		10,113		-			-			10,113
Comprehensive loss:
Net loss		-		-		-		-		-		-			(2,177,319	)		(2,177,319	)
Other comprehensive loss		-		-		-		-		-		(2,496	)		-			(2,496	)

Balance at June 30, 2019		100	$	-		384,906,118	$	384,906	$	209,116,301	$	(24,859	)	$	(230,441,440	)	$	(20,965,092	)

Common stock issued for services		-		-		25,000		25		1,725		-			-			1,750
Common stock issued upon exercise of warrants		-		-		3,645,857		3,646		190,678		-			-			194,324
Warrants issued for services		-		-		-		-		915		-			-			915
Comprehensive loss:
Net loss		-		-		-		-		-		-			(1,820,075	)		(1,820,075	)
Other comprehensive loss		-		-		-		-		-		58			-			58

Balance at September 30, 2019		100	$	-		388,576,975	$	388,577	$	209,309,619	$	(24,801	)	$	(232,261,515	)	$	(22,588,120	)

	FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018
	Preferred Stock								Additional
	Series B				Common Stock				Paid-In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total

Balance at January 1, 2018		100	$	-		370,961,451	$	370,962	$	208,351,431	$	(218,741,236	)	$	(10,018,843	)

Common stock issued upon exercise of warrants		-		-		7,926,739		7,927		414,568		-			422,495
Net loss		-		-		-		-		-		(2,899,612	)		(2,899,612	)

Balance at March 31, 2018		100	$	-		378,888,190	$	378,889	$	208,765,999	$	(221,640,848	)	$	(12,495,960	)

Common stock issued upon exercise of warrants		-		-		3,222,838		3,223		168,555		-			171,778
Common stock issued in lieu of accounts payable		-		-		1,000,000		1,000		79,000		-			80,000
Net loss		-		-		-		-		-		(1,456,208	)		(1,456,208	)

Balance at June 30, 2018		100	$	-		383,111,028	$	383,112	$	209,013,554	$	(223,097,056	)	$	(13,700,390	)

Common stock issued upon exercise of warrants		-		-		390,000		390		20,396		-			20,786
Common stock issued in lieu of accounts payable		-		-		-		-		-		-			-
Net loss		-		-		-		-		-		(1,609,003	)		(1,609,003	)

Balance at September 30, 2018		100	$	-		383,501,028	$	383,502	$	209,033,950	$	(224,706,059	)	$	(15,288,607	)

See accompanying notes to condensed consolidated financial statements.

PROVECTUS BIOPHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	September 30,
	2019			2018

Cash Flows From Operating Activities:
Net loss	$	(5,367,224	)	$	(5,964,823	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		21,740			80,000
Depreciation		63,492			10,570
Amortization of patents		503,340			503,340
Changes in operating assets and liabilities
Settlement receivable		52,500			434,040
Prepaid expenses		201,096			192,643
Accounts payable - trade		(1,966,372	)		(810,036	)
Other accrued expenses and lease liability		371,776			462,409
Accrued interest expense		1,068,600			697,214

Net Cash Used In Operating Activities		(5,051,052	)		(4,394,643	)

Cash Flows From Financing Activities:
Proceeds from issuance of convertible notes payable		5,235,000			2,556,000
Proceeds from issuance of convertible notes payable - related parties		25,000			1,350,000
Proceeds from exercise of warrants		199,654			615,059
Net Cash Provided By Financing Activities		5,459,654			4,521,059

Effect of Exchange Rate Changes on Cash		(24,801	)		-

Net Increase In Cash and Cash Equivalents		383,801			126,416

Cash and Cash Equivalents, Beginning of Period		50,986			105,504

Cash and Cash Equivalents, End of Period	$	434,787		$	231,920

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

Non-cash investing and financing activities:
Offset of related party receivable and payable	$	252,750		$	-

See accompanying notes to condensed consolidated financial statements.

PROVECTUS BIOPHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

Provectus Biopharmaceuticals, Inc., a Delaware corporation ~~together~~(together with its subsidiaries, ~~(“Provectus”~~“Provectus” or the “Company”), is a clinical-stage biotechnology company that is developing ~~pharmaceutical drug products~~a new class of drugs for oncology, hematology, and dermatology based on an entire, wholly-owned, family of small molecules called halogenated ~~xanthenes, such as Rose Bengal, for the treatment of solid tumor cancers in adults as well as pediatric cancers, and inflammatory dermatoses for dermatology in both adults and children.~~ xanthenes:

	●	Oncology:Intralesional (aka intratumoral) PV-10, a cancer immunotherapy, is undergoing clinical study for adult solid tumor cancers, like melanoma and gastrointestinal (“GI”) tumors (including hepatocellular carcinoma, metastatic colorectal cancer, metastatic neuroendocrine tumors, and metastatic uveal melanoma, among others). Orphan drug designation status has been granted to PV-10 by the U.S. Food and Drug Administration (the “FDA”) for the treatments of metastatic melanoma in 2006, hepatocellular carcinoma in 2011, and ocular melanoma (including uveal melanoma) in 2019.

		PV-10 is also undergoing preclinical study for pediatric solid tumor cancers (including neuroblastoma, Ewing sarcoma, rhabdomyosarcoma, and osteosarcoma). Orphan drug designation status has been granted to PV-10 by the FDA for neuroblastoma in 2018.

	●	Hematology.PV-10 is also undergoing preclinical study for pediatric blood cancers (including leukemia).

	●	Dermatology:Topical PH-10, an immuno-dermatology agent, is undergoing clinical study for inflammatory dermatoses, like psoriasis and atopic dermatitis.

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

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be reviewed in conjunction with the Company’s audited consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, ~~2016~~2018 filed with the ~~U.S. Securities and Exchange Commission (the “SEC”)~~SEC on March ~~31, 2017.~~7, 2019. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, ~~2017~~2019 are not necessarily indicative of the results that may be expected for the ~~twelve months~~year ending December 31, ~~2017.~~2019.

2. Liquidity and ~~Financial Condition~~Going Concern

The Company’s cash and cash equivalents were ~~$208,281~~$434,787 at September 30, ~~2017, compared with $1,165,738 at December 31, 2016.~~2019. 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 ~~of developing, licensing and/or commercializing~~and develop and market its ~~investigational drug~~ products. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that ~~the~~these 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 ~~license and/or commercialize its investigational drug products, and/or~~PV-10 and PH-10, and to raise additional capital.

~~The 2017 Financing~~

On March 23, 2017, the Company entered into an exclusive Definitive Financing Commitment Term Sheet with a group of the Company’s stockholders (the “PRH Group”), which was amended and restated effective as of March 19, 2017 (the “Term Sheet”) that set forth the terms on which the PRH Group would use their best efforts to arrange for a financing of a minimum of $10,000,000 and maximum of $20,000,000 (the “2017 Financing”).

As of September 30, 2017, the Company had received aggregate Loans (as defined below) of $7,100,000 in connection with the 2017 Financing. See Note 4 – Convertible Notes Payable. Subsequent to September 30, 2017, the Company received aggregate Loans of $2,150,000 in connection with the 2017 Financing. See Note 7 – Subsequent Events.

The 2017 Financing is in the form of a secured convertible loan (the “Loan”) from the PRH Group or other investors in the 2017 Financing (the “Investors”). The Loan is evidenced by secured convertible promissory notes (individually a “PRH Note” and collectively, the “PRH Notes”) from the Company to the PRH Group or the Investors. In addition to the customary provisions, the PRH Note contains the following provisions:

	~~(i)~~	~~It is secured by a first priority security interest on the Company’s intellectual property (the “IP”);~~

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

	~~(iii)~~	~~The Loan proceeds are held in one or more accounts (the “Escrow”) pending the funding of the tranches of the 2017 Financing pursuant to borrowing requests made by the Company;~~

	~~(iv)~~	The PRH Notes, including interest and principal, are due and payable in full on the earlier of: (i) on such date upon which the Company defaults under the PRH Notes, (ii) upon a change of control of the Company, or (iii) dates ranging from April 2, 2019 to the twenty-four (24) month anniversary of the funding of the Final Tranche, depending on the specific PRH Note. In the event there is a change of control of the Company’s board of directors (the “Board”) as proposed by any person or group other than the Investors, the term of the PRH Notes will be accelerated and all amounts due under the PRH Notes will be immediately due and payable, plus interest at the rate of eight percent (8%) per annum, plus a penalty in the amount equal to ten times (10x) the outstanding principal amount of the Loan that has been funded to the Company;

	~~(v)~~	The outstanding principal amount and interest payable under the Loan will be convertible at the sole discretion of the Investors into shares of the Company’s Series D Preferred Stock, a new series of preferred stock to be designated by the Board, at a price per share equal to $0.2862; and

	~~(vi)~~	Notwithstanding (v) above, the principal amounts of the PRH Notes and the interest payable under the Loan will automatically convert into shares of the Company’s Series D Preferred Stock at a price per share equal to $0.2862 effective on the 24-month anniversary of the funding of the Final Tranche of the 2017 Financing subject to certain exceptions.

As of September 30, 2017, and through the date of filing, the Series D Preferred Stock had not been designated by the Board. As a result, the PRH Notes were not convertible as of their respective dates of issuance or as of September 30, 2017.

The Series D Preferred Stock shall have a first priority right to receive proceeds from the sale, liquidation or dissolution of the Company or any of the Company’s assets (each, a “Company Event”). If a Company Event occurs within two (2) years of the date of issuance of the Series D Preferred Stock (the “Date of Issuance”), the holders of Series D Preferred Stock shall receive a preference of four times (4x) their respective investment amount. If a Company Event occurs after the second (2nd) anniversary of the Date of Issuance, the holders of the Series D Preferred Stock shall receive a preference of six times (6x) their respective investment amount.

The Series D Preferred Stock shall be convertible at the option of the holders thereof into shares of the Company’s common stock based on a formula to achieve a one-for-one conversion ratio such that one share of Series D Preferred Stock would convert into one share of common stock. The Series D Preferred Stock shall automatically convert into shares of Common Stock upon the fifth anniversary of the Date of Issuance. On an as-converted basis, the Series D Preferred Stock shall carry the right to one (1) vote per share. The Series D Preferred Stock shall not have any dividend preference but shall be entitled to receive, on a~~pari passu~~ ~~basis, dividends, if any, that are declared and paid on any other class of the Company’s capital stock. The holders of Series D Preferred Stock shall not have anti-dilution protection.~~

The Company plans to access capital resources through possible public or private equity offerings, including the 2017 Financing (as defined in Note 4), 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 through the 2017 Financing or otherwise, it will not be able to pay its obligations as they become due.

The primary business objective of ~~Management~~management is to build the Company into a ~~fully integrated global~~commercial-stage biotechnology ~~company. However,~~company; however, the Company cannot assure you that ~~they~~it will be successful in developing further, co-developing, licensing, and/or ~~licensing~~commercializing PV-10, PH-10, and/or any other halogenated xanthene-based drug product candidate ~~developed by~~of the Company, or entering into any ~~equity~~commercial 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 ~~2017~~2019 and beyond. The Company anticipates that these funds will otherwise come from the proceeds of private placement transactions, including the 2017 Financing, 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~~assure you 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.

~~NYSE Delisting~~

On October 13, 2016, the Company received notice from NYSE MKT that NYSE MKT commenced delisting procedures and immediately suspended trading in the Company’s common stock and class of warrants that was listed on NYSE MKT (“Listed Warrants”) and on October 17, 2016, the Company’s common stock began trading on the OTCQB Marketplace. On October 20, 2016, the Company submitted a request for a review of such delisting determination and on November 10, 2016, the Company submitted to the Listing Qualifications Panel its written submission in connection with its appeal. In addition, on November 23, 2016, the Company received notice from NYSE MKT stating that the Company was not in compliance with Section 1003(a)(iii) of the NYSE MKT Company Guide (requiring stockholders’ equity of $6.0 million or more if the Company has reported losses from continuing operations and/or net losses in its five most recent fiscal years). As of December 31, 2016, the Company had stockholders’ equity of approximately $3.5 million.

The hearing before the Listing Qualifications Panel occurred on January 25, 2017. On January 31, 2017, the Company received notice from the Listing Qualifications Panel that it affirmed NYSE MKT’s original determination to delist the Company’s common stock and Listed Warrants. On February 14, 2017, the Company submitted a request for the Committee for Review to reconsider the Listing Qualification Panel’s decision. The Committee for Review considered the Company’s request for review on March 30, 2017. On April 21, 2017, the NYSE MKT filed a Form 25 with the SEC, notifying the SEC of the NYSE MKT’s intention to remove the Company’s shares of common stock and Listed Warrants from listing and registration on the NYSE MKT effective May 1, 2017, pursuant to the provisions of Rule 12d2-2(b) of the Securities Exchange Act of 1934, as amended. The Company’s common stock and Listed Warrants continue to trade on the OTCQB following the delisting from the NYSE MKT under the trading symbols “PVCT” and “PVCTWS,” respectively. However, the Company can provide no assurance that its common stock and Listed Warrants will continue to trade on the OTCQB in the future.

3. ~~Significant~~Critical Accounting Policies

~~The Company’s significant accounting policies are disclosed in Note 3 – Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.~~ Since the date of the Company’s December 31, 2018 consolidated financial statements were issued in its 2018 Annual Report, there have been no material changes to the Company’s significant accounting policies, except as disclosed below.

~~Recent Accounting Pronouncements~~Leases

In ~~October~~February 2016, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~ASU No. 2016-17, “Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control”~~a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of operating lease right-of-use (“~~ASU 2016-17”~~ROU”)~~. ASU 2016-17 requires, when assessing which party~~ assets and lease liabilities on the balance sheet (“ASC 842”) with amendments issued in 2018. Most prominent among the changes in the standard is the ~~primary beneficiary~~recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company is also required to recognize and measure new leases at the adoption date and recognize a cumulative-effect adjustment in the period of adoption using a ~~variable interest entity (VIE), that~~modified retrospective approach, with certain practical expedients available.

The Company adopted ASC 842 effective January 1, 2019 and elected to apply the ~~decision maker considers interests held by entities under common control~~available practical expedients. The standard had an impact on ~~a proportionate basis instead of treating those interests as if they were that of~~ the decision maker itself, as current GAAP requires. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2016. Early application is permitted in any interim or annual period. The adoption of this ASUCompany’s condensed consolidated balance sheets but did not have a material impact on the Company’s condensed consolidated ~~financial statements.~~

~~In May 2017,~~statements of operations or condensed consolidated statements of cash flows upon adoption. The most significant impact was the ~~FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718): Scope~~recognition of ~~Modification Accounting” (“ASU 2017-09”). ASU 2017-09 provides clarity on~~ROU assets and lease liabilities for operating leases, while the Company’s accounting for ~~modifications~~finance leases remained substantially unchanged. The adoption of ~~stock-based awards. ASU 2017-09 requires adoption on~~ASC 842 did not have a ~~prospective basis~~material impact in the ~~annual~~current year and ~~interim~~prior year comparative periods beginning after December 15, 2017 for share-based payment awards modified on or after the adoption date. The Company is currently evaluating the effect that adopting this new accounting guidance will have on its condensed consolidated financial statements and related disclosures.

In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260) and Derivatives and Hedging (Topic 815) - Accounting for Certain Financial Instruments with Down Round Features” (“ASU 2017-11”). Equity-linked instruments, such as warrants and convertible instruments may contain down round features that result in the strike price being reduced on the basis of the pricing of future equity offerings. Under ASU 2017-11, a down round feature will no longer require a freestanding equity-linked instrument (or embedded conversion option) to be classified as a liability that is re-measured at fair value through the income statement (i.e. marked-to-market). However, other features of the equity-linked instrument (or embedded conversion option) must still be evaluated to determine whether liability or equity classification is appropriate. Equity classified instruments are not marked-to-market. For earnings per share ("EPS") reporting, the ASU requires companies to recognize the effect of the down round feature only when it is triggered by treating it as a dividend and as a ~~reduction~~result, a cumulative-effect adjustment was not required.

Reclassifications

Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of ~~income available~~operations or loss per share.

Stock-Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. The fair value of the award is measured on the grant date and then is recognized over the period during which services are required to ~~common shareholders~~be provided in ~~basic EPS. The amendments in this ASU are effective~~exchange for ~~all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, including adoption in any interim~~the award, usually the vesting period. The Company computes the fair value of equity-classified warrants and options granted using the Black-Scholes option pricing model. Option valuation models require the input of highly subjective assumptions including the expected volatility factor of the market price of the Company’s common stock which is ~~currently evaluating ASU 2017-11 and~~determined by reviewing its ~~impact on its condensed consolidated financial statements.~~historical public market closing prices.

4. Convertible Notes Payable

~~Convertible Notes Payable – Related Parties~~

On February 21, 2017, the Company issued a promissory note in favor of Eric A. Wachter, Ph.D., the Company’s Chief Technology Officer (“Wachter”), evidencing an unsecured loan from Wachter to the Company in the original principal amount of up to $2,500,000 (the “Wachter Note”). Interest accrues on the outstanding balance of the Wachter Note at six percent (6%) per annum calculated on a 360-day basis. As of March 31, 2017, the Company had borrowed the entire $2,500,000 principal amount under the Wachter Note. The Company evaluated the terms of the Wachter Note and determined that since the conversion price is not yet fixed and will be based upon the price per New Security (as defined in the Wachter Note) issued upon the completion of a future Qualified Equity Financing (as defined in the Wachter Note), that the measurement of a beneficial conversion feature cannot be completed. On April 3, 2017, the Wachter Note was amended and restated in order to modify its terms to mirror the PRH Notes and to convert the Wachter Note into the 2017 Financing. The Company accounted for the amendment as a debt modification. There was no material impact as a result of applying debt modification accounting.

~~On April 3,~~23, 2017, the Company entered into an exclusive Definitive Financing Commitment Term Sheet with a ~~PRH Note with Cal Enterprises LLC, a Nevada limited liability company, an affiliate of Dominic Rodrigues, a director~~group of the ~~Company, in~~Company’s stockholders (the “PRH Group”), which was amended and restated effective as of March 19, 2017 (the “Term Sheet”) that set forth the ~~principal amount~~terms on which the PRH Group would use their best efforts to arrange for a financing of ~~up to $2,500,000.~~ a minimum of $10,000,000 and maximum of $20,000,000 (the “2017 Financing”).

As of September 30, ~~2017,~~2019, the Company had ~~borrowed $1,500,000 under this note.~~received aggregate loans of $19,192,000 in connection with the 2017 Financing.

~~Convertible Notes Payable – Non-Related Parties~~

During the three months ended September 30, 2017, the Company entered into additional PRH Notes with accredited investors in the aggregate principal amount of $550,000, of which, $150,000 was issued in satisfaction of trade debt. As of September 30, ~~2017, the Company had borrowed $3,100,000 under these notes.~~

~~See Note 2 – Liquidity and Financial Condition for the terms of the PRH Notes. As of September 30, 2017,~~2019, and through the date of filing, the Series D Preferred Stock had not been designated by the ~~Board.~~Company’s Board of Directors (the “Board”). As a result, the Company did not analyze the loan for a potential beneficial conversion feature as the definition of a firm commitment has not been met since the PRH Notes were not convertible as of their respective dates of issuance or as of September 30, ~~2017.~~2019.

Convertible Notes Payable – Related Parties

During the nine months ended September 30, 2019, the Company entered into additional related party PRH Notes in the aggregate principal amount of $25,000.

As of September 30, 2019, the Company had borrowed $6,895,000 of related party PRH Notes that were outstanding.

Convertible Notes Payable – Non-Related Parties

During the nine months ended September 30, 2019, the Company entered into additional non-related party PRH Notes in the aggregate principal amount of $5,235,000.

As of September 30, 2019, the Company had borrowed $12,297,000 of non-related party PRH Notes that were outstanding.

5. Receivables

The following table summarizes the receivables at September 30, 2019 and December 31, 2018:

	September 30, 2019
	Legal Fees			Settlement			Total

Gross receivable	$	683,250		$	1,703,405		$	2,386,655
Reserve for uncollectibility		(455,500	)		(1,649,043	)		(2,104,543	)
Net receivable		227,750			54,362			282,112
Short-term receivable - Settlement		-			54,362			54,362
Short-term receivable - Legal		227,750			-			227,750
Long-term receivable	$	-		$	-		$	-

	December 31, 2018
	Legal Fees			Settlement			Total

Gross receivable	$	911,000		$	1,783,795		$	2,694,795
Reserve for uncollectibility		(455,500	)		(1,649,043	)		(2,104,543	)
Net receivable		455,500			134,752			590,252
Short-term receivable - Settlement		-			134,752			134,752
Short-term receivable - Legal		455,500			-			455,500
Long-term receivable	$	-		$	-		$	-

During the nine months ended September 30, 2019, officers of the Company offset their settlement amounts owed to the Company against accrued payroll and other payables totaling $252,750. This offset reduced the amount of the settlement and was approved by the Company’s Board.

6. Stockholders’ Deficiency

~~Conversion of Series B Preferred~~Common Stock

During the nine months ended September 30, 2017, holders converted 8,500 shares of Series B Preferred Stock into 3,986,676 shares of common stock such that they were entitled to dividends, including a make-whole payment, that the Company elected to pay in shares of common stock. As a result,2019, the Company issued ~~1,594,670~~an aggregate of 216,590 shares of immediately vested restricted common stock ~~related~~ to ~~the Series B Preferred Stock dividends during~~an employee and consultants with an issuance date fair value of $10,712, which was recognized immediately.

Warrants

During the nine months ended September 30, ~~2017.~~2019, the Company issued 387,500 five-year immediately vested warrants to a consultant to purchase an aggregate of 387,500 shares of common stock with exercise prices ranging from $1.00 to $2.00 per share. The ~~Company recorded~~warrants had an aggregate ~~dividends paid~~grant date fair value of $10,113, which was recognized immediately under stock compensation in ~~kind of $14,107 during~~general and administrative.

During the nine months ended September 30, ~~2017.~~2019, the Company issued 25,000 three-year immediately vested warrants to a consultant to purchase an aggregate of 25,000 shares of common stock with an exercise price of $0.2862 per share. The warrants had an aggregate grant date fair value of $915, which was recognized immediately under stock compensation in general and administrative.

~~Exercise of Warrants~~In applying the Black-Scholes option pricing model to warrants issued, the Company used the following assumptions:

	For the Three Month Ended					For the Nine Months Ended
	September 30,					September 30,
	2019			2018		2019			2018
Expected terms (years)		3.00			n/a		3.00-5.00			n/a
Expected volatility		131	%		n/a		129-131	%		n/a
Risk free interest rate		1.82	%		n/a		1.82-2.23	%		n/a
Expected dividends		0.00	%		n/a		0.00	%		n/a

During the ~~three~~nine months ended September 30, ~~2017, a~~2019, warrant ~~holder~~holders exercised ~~a warrant~~warrants to purchase ~~10,000~~an aggregate of 3,745,857 shares of common stock at a price of ~~$0.053~~$0.0533 per share. In connection with ~~the exercise,~~these exercises, the Company received ~~$533.~~aggregate cash proceeds of $199,654 and issued 3,745,857 shares of common stock to the warrant holders.

7. Leases

~~Issuance~~The Company currently leases 4,500 square feet of ~~Common Stock~~corporate office space in Knoxville, Tennessee through an operating lease agreement for a term of five years ending on June 30, 2022. Payments range from approximately $7,300 to $7,800 per month.

~~During~~Total rent expense for the nine months ended September 30, 2019 was $79,756, of which, $53,171 was included within research and development and $26,585 was included within general and administrative expenses on the condensed consolidated statement of operations. Total rent expense for the nine months ended September 30, 2018 was $66,313, of which, $44,209 was included within research and development and $22,104 was included within general and administrative expenses on the condensed consolidated statement of operations. Total rent expense during the three months ended September 30, ~~2017,~~2019 was $22,622, of which, $15,081 was included within research and development and $7,541 was included within general and administrative expenses on the ~~Company issued an aggregate~~condensed consolidated statement of ~~372,500 shares~~operations. Total rent expense during the three months ended September 30, 2018 was $22,080, of ~~restricted unregistered common stock at an average price~~which, $14,720 was included within research and development and $7,360 was included within general and administrative expenses on the condensed consolidated statement of ~~$0.046 per share in satisfaction of accounts payable of $17,300.~~operations.

~~6. Litigation~~

~~Kleba Shareholder Derivative Lawsuit~~

On June 6, 2014, the Company, in its capacity as a nominal defendant, entered into a Stipulated Settlement Agreement and Mutual Release (the “Derivative Lawsuit Settlement”) in the shareholder derivative lawsuit filed by Glenn Kleba, derivatively on behalf of the Company, and later amended to include Don B. Dale as a plaintiff, in the Circuit Court for the State of Tennessee, Knox County (the “Court”), against H. Craig Dees, Ph.D., Timothy C. Scott, Ph.D., Eric A. Wachter, Ph.D., and Peter R. Culpepper (collectively, the “Executives”), Stuart Fuchs, Kelly M. McMasters, and Alfred E. Smith, IV (collectively, together with the Executives, the “Individual Defendants”), and against the Company as a nominal defendant (the “Shareholder Derivative Lawsuit”), which alleged (i) breach of fiduciary duties; (ii) waste of corporate assets; and (iii) unjust enrichment. Under the terms of the Derivative Lawsuit Settlement, among other things, the Executives each agreed (A) to re-pay to the Company $2.24 million of the cash bonuses they each received in 2010 and 2011, which amount equals 70% of such bonuses or an estimate of the after-tax net proceeds to each Executive; provided, however, that subject to certain terms and conditions set forth in the Derivative Lawsuit Settlement, the Executives are entitled to a 2:1 credit such that total actual repayment may be $1.12 million each; (B) to reimburse the Company for 25% of the actual costs, net of recovery from any other source, incurred by the Company as a result of the Shareholder Derivative Lawsuit; and (C) to grant to the Company a first priority security interest in 1,000,000 shares of the Company’s common stock owned by each such Executive to serve as collateral for the amounts due to the Company under the Derivative Lawsuit Settlement. Under the Derivative Lawsuit Settlement, Messrs. Fuchs and Smith and Dr. McMasters have each agreed to pay the Company $25,000 in cash, subject to reduction by such amount that the Company’s insurance carrier pays to the Company on behalf of such defendant pursuant to such defendant’s directors and officers liability insurance policy.

On July 24, 2014, the Court approved the terms of the Derivative Lawsuit Settlement and awarded $911,000 to plaintiffs’ counsel for attorneys’ fees and reimbursement of expenses in connection with their role in the Shareholder Derivative Lawsuit. The payment to plaintiff’s counsel was made by the Company during October 2014 and was recorded as other current assets at December 31, 2014, as the Company is seeking reimbursement of the full amount from its insurance carrier. If the full amount is not received from insurance, the amount remaining will be reimbursed to the Company from the Individual Defendants. As of September 30, ~~2017~~2019, the Company had no leases that were classified as a financing lease. As of September 30, 2019, the Company did not have additional operating and ~~December 31, 2016, the net amount~~financing leases that have not yet commenced.

A summary of the ~~receivable of $455,500~~Company’s right-of-use assets and liabilities is ~~reported~~ as ~~non-current assets on the condensed consolidated balance sheets.~~follows:

	Nine Months End September 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	66,952

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	265,550

Weighted Average Remaining Lease Term
Operating leases		2.75 Years

Weighted Average Discount Rate
Operating leases		8.0	%

On October 3, 2014, the Derivative Lawsuit Settlement was effective and an aggregate of 2,800,000 stock options for Dr. Dees, Dr. Scott and Mr. Culpepper were rescinded. A total of $1,816,667 had been repaid by the Executives

Future minimum payments under non-cancellable lease as of September 30, 2017. The remaining cash settlement amounts will continue to be repaid to the Company with the final payment to be received by October 3, 2019. The remaining balance of the Executives’ repayment due the Company2019 were as of September 30, 2017 is $1,039,770, including a reserve for uncollectibility of $1,549,043 in connection with the resignation of Dr. Dees, the Company’s former Chairman and Chief Executive Officer, and termination of Mr. Culpepper, the Company’s former Chief Financial Officer and Chief Operating Officer, and former interim Chief Executive Officer following Dr. Dees’ resignation, with a present value discount remaining of $57,623. As a result of his resignation, Dr. Dees is no longer entitled to the 2:1 credit, such that his total repayment obligation of $2,040,000 (the total $2.24 million owed by Dr. Dees pursuant to the Derivative Lawsuit Settlement less the $200,000 that he repaid), plus Dr. Dees’ proportionate share of the litigation costs, is immediately due and payable. The Company sent Dr. Dees a notice of default in March 2016 for the total amount he owes the Company. On July 25, 2017, the United States District Court for the Eastern District of Tennessee at Knoxville issued a Memorandum Opinion finding, among other findings, that the Company is entitled to receive total damages in the amount of $6,027,652, including $2,494,525 for Dr. Dees’ breach of the Derivative Lawsuit Settlement. See Dees Collection Lawsuit below. As a result of his termination “for cause,” Mr. Culpepper is no longer entitled to the 2:1 credit, such that his total repayment obligation of $2,051,083 (the total $2.24 million owed by Mr. Culpepper pursuant to the Derivative Lawsuit Settlement plus Mr. Culpepper’s proportionate share of the litigation cost of $227,750 less the $416,667 that he repaid) is immediately due and payable. The Company sent Mr. Culpepper a notice of default in January 2017 for the total amount he owes the Company. Mr. Culpepper disputes that he was terminated “for cause” and thus disputes that he owes the full $2,051,083 repayment amount under the Derivative Lawsuit Settlement. See Culpepper Travel Expenses and Related Collection Efforts below.follows:

For the Years Ending December 31,	Amount

2019	$	24,687
2020		90,666
2021		92,471
2022		46,687
Total future minimum lease payments		254,511
Less: amount representing imputed interest		(29,444	)
Total	$	225,067

~~Dees Collection Lawsuit~~8. Commitments, Contingencies and Litigation

On May 5, 2016, the Company filed a lawsuit in the United States District Court for the Eastern District of Tennessee at Knoxville (the “Court”) against Dr. Dees and his wife, Virginia Godfrey (together with Dr. Dees, the “Defendants”). The Company alleged that between 2013 and 2015, Dr. Dees received approximately $2.4 million in advanced or reimbursed travel and entertainment expenses from the Company and that Dr. Dees did not use these funds for legitimate travel and entertainment expenses as he requested and the Company intended. Instead, the Company alleged that Dr. Dees created false receipts and documentation for the expenses and applied the funds to personal use. The Company and Dr. Dees are parties to the Derivative Lawsuit Settlement that was negotiated to resolve certain claims asserted against Dr. Dees derivatively. Pursuant to the terms of the Derivative Lawsuit Settlement, Dr. Dees agreed to repay the Company compensation that was paid to him along with legal fees and other expenses incurred by the Company. As of the date of his resignation, Dr. Dees still owed the Company $2,267,750 under the Derivative Lawsuit Settlement. Dr. Dees has failed to make such payment, and the Company has notified him that he is in default and demanded payment in full. The Company established a reserve of $2,267,750 as of September 30, 2017 and December 31, 2016, which amount represents the amount the Company believed Dr. Dees owed to the Company as of those dates. Therefore, the Company alleged counts of conversion, fraud, breach of fiduciary duty, breach of contract, breach of the Derivative Lawsuit Settlement, unjust enrichment and punitive damages in this lawsuit. The Company sought an order that the Defendants be prohibited from disposing of any property that may have been paid for with the misappropriated funds, the Defendants be disgorged of any funds shown to be fraudulently misappropriated and that the Company be awarded compensatory damages in an amount not less than $5 million. Furthermore, the Company sought for the damages to be joint and several as to the Defendants and that punitive damages be awarded against Dr. Dees in the Company’s favor. The Company also sought foreclosure of the Company’s first-priority security interest in the 1,000,000 shares of common stock granted by Dr. Dees to the Company as collateral pursuant to that certain Stock Pledge Agreement dated October 3, 2014, between Dr. Dees and the Company in order to secure Dr. Dees’ obligations under the Derivative Lawsuit Settlement. The Court entered a default judgment against the Defendants on July 20, 2016. On March 15, 2017, the Court granted Ms. Godfrey’s motion to set aside the default judgment against her and set a deadline of March 30, 2017 for Ms. Godfrey to file an answer to the Company’s complaint. Ms. Godfrey filed her answer on March 28, 2017 demanding that the complaint against her be dismissed. The Court held a hearing on April 26, 2017 to determine damages with respect to the motion for default judgment against Dr. Dees. On July 25, 2017, the Court issued a Memorandum Opinion finding that the Company is entitled to receive total damages in the amount of $6,027,652, comprising compensatory damages for misappropriation of travel and expense funds, compensatory damages for Dr. Dees’ breach of the Derivative Lawsuit Settlement, and punitive damages, plus costs. There can be no assurance, however, that the Company will be able to recover any or all of the damages awarded to the Company. The Court also entered a permanent injunction enjoining Dr. Dees from selling or dissipating assets until the judgment against him is satisfied. On September 1, 2017, the Company filed a motion with the Court to appoint a receiver to sell 1,000,000 shares of the Company’s common stock held by Dr. Dees and pledged as security pursuant to the Derivative Lawsuit Settlement, and to remit the proceeds of this sale to the Company.

Culpepper Travel Expenses and Related Collection Efforts

On December 27, 2016, the ~~Company’s Board~~then-Board of Directors (the “then-Board”) unanimously voted to terminate ~~Mr.~~then-interim Chief Executive Officer, then-Chief Operating Officer, and former Chief Financial Officer, Peter Culpepper (“Culpepper”), effective immediately, from all positions he held with the Company and each of its subsidiaries, ~~including interim Chief Executive Officer and Chief Operating Officer of the Company,~~ “for ~~cause”,~~cause,” in accordance with the terms of the Amended and Restated Executive Employment Agreement entered into by ~~Mr.~~ Culpepper and the Company on April 28, 2014 (the “Culpepper Employment Agreement”), based on the results of the investigation conducted by ~~a Special~~the Audit Committee of the ~~Board of Directors~~then-Board regarding improper ~~travel~~ expense ~~advancements and~~ reimbursements to ~~Mr.~~ Culpepper.

The ~~Special~~Audit Committee retained independent counsel and an advisory firm with forensic accounting expertise to assist the ~~Special~~Audit Committee in conducting the investigation. The ~~Special~~Audit Committee found that ~~Mr.~~ Culpepper received $294,255 in ~~travel~~ expense reimbursements ~~and advances~~ that were ~~unsubstantiated.~~unsubstantiated or otherwise improper. The Company seeks to recover from ~~Mr.~~ Culpepper the entire $294,255 in ~~unsubstantiated travel~~ expense reimbursements, ~~and advances,~~ as well as all attorney’s fees and auditors’/experts’ fees incurred by the Company in connection with the examination of his ~~travel~~ expense reimbursements. On December 12, 2017, Culpepper agreed to an order by the SEC to pay disgorgement of $140,115, and prejudgment interest of $12,261, for a total of $152,376, to the Company within 30 days. The Company received the payment of $152,376 in January 2018.

~~Under~~The Company took the position that under the terms of the Culpepper Employment Agreement, ~~Mr.~~ Culpepper is owed no severance payments as a result of his termination “for cause” as that term is defined in the Culpepper Employment Agreement. Furthermore, ~~Mr.~~ Culpepper is no longer entitled to the 2:1 credit under the Stipulated Settlement Agreement and Mutual Release in the Kleba Derivative Lawsuit Settlement (the “Derivative Lawsuit Settlement”) such that the total $2,240,000 owed by ~~Mr.~~ Culpepper pursuant to the Derivative Lawsuit Settlement plus ~~Mr.~~ Culpepper’s proportionate share of the litigation cost in the amount of $227,750, less the amount that he repaid as of December 31, 2016, is immediately due and payable. The Company sent ~~Mr.~~ Culpepper a notice of default in January 2017 for the total amount he owes the Company and is in the process of ~~resolving~~pursuing these claims ~~pursuant to~~in accordance with the alternative dispute resolution provision of the Culpepper Employment Agreement. The Company has established a reserve of ~~$2,051,083~~$2,104,543 as of September 30, ~~2017~~2019 and December 31, ~~2016,~~2018, which amount represents the amount the Company currently believes ~~Mr.~~ Culpepper owes to the Company under the Derivative Lawsuit Settlement (excluding the amount of attorneys’ fees incurred in enforcing the terms of the Derivative Lawsuit Settlement), while the Company pursues collection of this amount.

~~Mr.~~ Culpepper ~~disputes~~disputed that he was terminated “for cause” under the Culpepper Employment Agreement. Pursuant to the alternative dispute resolution provisions of that agreement, the Company and ~~Mr.~~ Culpepper participated in a mediation of their dispute on June 28, 2017. Having reached no resolution during the mediation, the parties ~~are proceeding to~~participated in arbitration under the commercial rules of the American Arbitration Association, ~~which will include, among other claims,~~arbitrating both ~~Mr.~~ Culpepper’s claim for severance against ~~Provectus~~the Company and ~~Provectus’~~the Company’s claims against ~~Mr.~~ Culpepper for improper expense reimbursements and amounts Culpepper owes ~~Provectus~~the Company under the Derivative Lawsuit ~~Settlement.~~Settlement (the “Culpepper Arbitration”). The Culpepper Arbitration hearing was held from May 15 to May 18, 2018.

~~The Bible Harris Smith Lawsuit~~

On ~~November 17, 2016,~~July 12, 2018, the arbitrator issued an interim award in favor of the Company, the terms of which are confidential pursuant to the Culpepper Employment Agreement and instructed the parties that a final award was forthcoming. On September 12, 2018, the arbitrator issued his final award in favor of the Company. On October 4, 2018, the Company filed a ~~lawsuit in~~petition with the ~~Circuit~~Chancery Court for ~~Knox~~Davidson County, Tennessee ~~against Bible Harris Smith PC (“BHS”) for professional negligence, common law negligence and breach of fiduciary duty arising from accounting services provided by BHS~~to confirm the arbitration award. On November 7, 2018, the Company received Culpepper’s answer to the petition filed on October 4, 2018. This court entered an order confirming the arbitrator’s award on January 23, 2019. On February 20, 2019, Culpepper filed a motion to alter or amend this judgment. On March 22, 2019, the Chancery Court upheld the arbitration award in favor of the Company. On April 16, 2019, Culpepper filed a Notice of Appeal with the Tennessee Court of Appeals regarding the judgment confirming the arbitration award and the order denying Culpepper’s motion to alter or amend the judgment (the “Culpepper Appeal”). The Company ~~alleges that between 2013~~ and 2015, Dr. Dees received approximately $2.4 million in advanced or reimbursed travel and entertainment expenses from the Company and that Dr. Dees did not submit back-up documentation in support of substantially all of the advances he received purportedly for future travel and entertainment expenses. The Company further alleges that had BHS provided competent accounting and tax preparation services, it wouldCulpepper have discovered Dr. Dees’ failure to submit back-up documentation supporting the advanced travel funds at the inception of Dr. Dees’ conduct, and prevented the misuse of these and future funds. The Company has made a claim for damages against BHS in an amount in excess of $3 million. The complaint against BHS has been filed and served, an answer has been received, and the parties are in the midst of discovery.submitted their respective Culpepper Appeal briefs.

~~The RSM Lawsuit~~

On June 9, 2017, the Company filed a lawsuit in the Circuit Court of Mecklenburg County, North Carolina against RSM USA LLP (“RSM”) for professional negligence, common law negligence, gross negligence, intentional misrepresentation, negligent misrepresentation and breach of fiduciary duty arising from accounting, internal auditing and consulting services provided by RSM to the Company. The Company alleges that between 2013 and 2015, Dr. Dees received approximately $2.4 million in advanced or reimbursed travel and entertainment expenses from the Company and that Dr. Dees did not submit back-up documentation in support of substantially all of the advances he received purportedly for future travel and entertainment expenses. The Company similarly alleges that Mr. Culpepper received $294,255 in travel expense reimbursements and advances that were unsubstantiated. The Company further alleges that had RSM provided competent accounting, internal audit and consulting services, it would have discovered Dr. Dees’ and Mr. Culpepper’s conduct at its inception and prevented the misuse of these and future funds. The Company has made a claim for damages against RSM in an amount in excess of $10 million. The Complaint against RSM has been filed and RSM has moved to dismiss the Complaint. The parties are briefing this motion and expect it to be argued to the Court in the next 60 days.

~~Other Regulatory Matters~~

From time to time the Company receives subpoenas and/or requests for information from governmental agencies with respect to its business. The Company received a subpoena from the staff of the SEC related to the travel expense advancements and reimbursements received by Dr. Dees. The Company also received a subsequent subpoena from the staff of the SEC related to the travel expense advancements and reimbursements received by Mr. Culpepper. At this time, the staff’s investigation into these matters remains ongoing, and the Company is cooperating with the staff. The Company also has engaged in settlement negotiations with the staff but no agreement has been approved by the Commission at this time, and there can be no assurance that a settlement will be reached.

7.9. Subsequent Events

Convertible Notes Payable

Subsequent to September 30, ~~2017,~~2019, the Company entered into PRH Notes with ~~accredited investors~~non-related parties in the aggregate principal amount of ~~$1,150,000 in connection with Loans received~~$200,000. The Company had drawn down the entire $200,000 under these notes.

Scott Kleba Settlement Agreement Satisfaction

Pursuant to the terms and conditions of the Stipulated Settlement Agreement and Mutual Release made and entered into by and between the Company (then-Provectus Pharmaceuticals, Inc.) and Timothy C. Scott, Ph.D. on June 6, 2014, and consented to and approved by Glenn Kleba and Don B. Dale (the “Plaintiffs”), derivatively on behalf of the Company in the Plaintiffs’ shareholder derivative lawsuit (the “Kleba Settlement Agreement”), Dr. Scott completed repayment of his Cash Repayment Obligations (as defined in the Kleba Settlement Agreement) on October 9, 2019. Dr. Scott’s Cash Repayment Obligations equaled (i) the Reduced Repayment Amount (as defined in the Kleba Settlement Agreement) of $1,199,303, including imputed interest, plus (ii) Dr. Scott’s pro rata portion of the Company’s Litigation Costs (as defined in the Kleba Settlement Agreement) of $227,750, for a total payment to the Company of $1,427,053. As part of his prepayment completion, the PRH Note in the principal amount of $250,000 and accrued interest of $32,111, that the Company entered into with Dr. Scott and Leigh Anne Scott on February 28, 2018 was cancelled. Pursuant to the terms and conditions of the Stock Pledge Agreement related to the Kleba Settlement Agreement, satisfaction of his Cash Repayment Obligations removed the Company’s first-priority security interest in 1,000,000 shares of the Company’s common stock beneficially owned by Dr. Scott, which had served as collateral for the ~~same amount. See Note 2 – Liquidity and Financial Condition for~~Cash Repayment Obligations owed to the ~~terms of the PRH Notes.~~

~~In addition, the Company received the remaining $1,000,000 in funding available under the Cal Enterprises LLC note, such that $2,500,000 of principal is now outstanding under the note.~~Company.

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 financial statements and our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2018 filed with the SEC on March 7, 2019 (“~~2016~~2018 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 statement of operations, including trends which might appear, are not necessarily indicative of future operations.

Overview

Provectus is a clinical-stage biotechnology company developing a new class of drugs for oncology, hematology, and dermatology based on an entire, wholly-owned, family of chemical small molecules called halogenated xanthenes, such as rose bengal (4,5,6,7-tetrachloro-2’,4’,5’,7’-tetraiodofluorescein). Intralesional (aka intratumoral) PV-10, the first small molecule oncolytic immunotherapy, which can induce immunogenic cell death, is undergoing clinical study for adult solid tumor cancers, like melanoma and GI tumors (like hepatocellular carcinoma, metastatic colorectal cancer, metastatic neuroendocrine tumors, and metastatic uveal melanoma, among others), and preclinical study for pediatric solid tumor cancers (like neuroblastoma, Ewing sarcoma, rhabdomyosarcoma, and osteosarcoma) and blood cancers (like leukemia). Topical PH-10 is undergoing clinical study for inflammatory dermatoses like psoriasis and atopic dermatitis.

Our Core ~~Technologies~~Science and Technology

Oncology.PV-10 is an injectable formulation of rose bengal disodium (4,5,6,7-tetrachloro-2’,4’,5’,7’-tetraiodofluorescein disodium salt). PV-10 drug product is a bright rose red solution containing 10% w/v rose bengal disodium in 0.9% saline for injection, which is supplied in single-use glass vials containing 5 mL (to deliver) of solution and administered without dilution to solid tumors via intralesional (intratumoral) injection. PV-10 selectively accumulates in the lysosomes of cancer cells. Physicochemical properties of lysosomes trap PV-10. Lumenal pH of 4.5 to 5 is ideal for the conversion of soluble rose bengal disodium into insoluble rose bengal lactone.

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

Provectus showed that PV-10 selectively accumulates in the lysosomes of cancer cells and disrupts them, causing the cancer cells to die. PV-10 (rose bengal) has also been shown by Provectus and independent researchers to trigger each major, distinct form of lysosomal cell death; that is, apoptosis, autophagy, and necrosis.

PV-10’s lysosomal targeting comprises:

	●	Transiting the plasmalemma of cancer cells. PV-10 penetrates the cell membrane of cancerous cells. The plasmalemma previously protected the cancer cell from its surrounding environment. PV-10, however, is excluded from normal cells,

	●	Accumulating in the lysosomes of cancer cells. As noted above, the physicochemical properties of lysosomes trap PV-10,

	●	Triggering the release of lysosomal contents. Acute autolysis occurs within 30 to 60 minutes. Early preclinical work by Provectus on PV-10’s lysosomal targeting showed identical responses in different disease models, such as Hepa1-6 murine hepatocellular carcinoma, HTB-133 human breast carcinoma, and H96Ar human multi-drug resistant small cell lung carcinoma,

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

	●	Intracellular pH consistency with the release of acidic lysosomal contents. Early SNARF-1 staining work by Provectus confirmed lower intracellular pH upon exposure to PV-10 (rose bengal).

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

Our Drug Development Strategy for Oncology

The Company’s strategy is designed to (i) demonstrate the single-agent activity of PV-10; that is, safety and activity in T cell and non-T cell inflamed tumor types, and in high and low tumor mutation burden tumor types, (ii) demonstrate the T cell response generated by PV-10 treatment, and (iii) contrast and compare PV-10 treatment – safety, activity, and induced immune response – with that of checkpoint inhibitor (“CI”) and other drug classes in monotherapy and combination therapy settings.

We believe this strategy should quicken the advancement of single-agent PV-10 along a pathway-to-approval in solid tumor cancer indications where there is high unmet need, limited activity from other therapies, and the opportunity to display the immune response from PV-10 treatment, such as for metastatic neuroendocrine tumors (NCT02693067). This strategy also should permit the Company to develop and advance a cancer combination therapy involving a CI or other drug class along a pathway-to-approval in a disease indication where there is high unmet need, limited activity from standard of care (“SOC”) treatment, and the opportunity to display how PV-10 augments clinical response to existing or emerging SOCs, such as for metastatic uveal melanoma (i.e., combination therapy with anti-CTLA-4 and anti-PD-1 agents) (NCT00986661).

Our Drug Development Strategy for Dermatology

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

Our Advisory Boards

The Company isnamed a ~~biopharmaceutical company developing investigational drug products based on Rose Bengal and related halogenated xanthenes~~second member, Frank Akers, Ph.D., to its Strategic Advisory Board effective as of September 1, 2019. The purpose of the Strategic Advisory Board is for the ~~treatment~~Company to have formal access to a group of ~~solid tumor cancers~~independent people with significant, meaningful, professional experience who provide high quality, objective advice to the Company in ~~adults~~areas of strategic importance, including but not limited to business development, corporate development, and business operations (such as ~~well~~clinical operations, drug development, regulatory affairs, and manufacturing of drug substance and drug product). The Company named the first member, Harold Schmitz, Ph.D., to its Scientific Advisory Board effective as ~~pediatric cancers (i.e., intralesional PV-10),~~of September 1, 2019. The purpose of the Scientific Advisory Board is for the Company to have formal access to a group of independent people with significant, meaningful, professional experience who provide high quality, objective advice to the Company in areas of strategic scientific importance, such as but not limited to the Company’s science and ~~inflammatory dermatoses for dermatology in both adults~~technology, and ~~children (i.e., topical PH-10).~~drug development.

The Company is innovating a different approach to treating cancer by developing the first small molecule oncolytic immunotherapy. Delivered by intralesional injection (i.e., injection into a cancerous tumor), PV-10 can act locally, causing oncolytic destructionComponents of injected tumors. The local immunogenic cell death then has the potential to engage the adaptive immune system for a systemic, or global, effect. By harnessing the immune system in this way, PV-10 may enable patients to achieve immunity to their cancer. PH-10, delivered topically to affected skin, shares some similar mechanistic themes.Operating Results

~~The~~Research and Development Expenses

A large component of our total operating expenses is the Company’s ~~approach to drug~~investment in research and development ~~is centered around designing clinical studies for success based on science and medicine, rather than supporting~~activities, including the ~~broadest possible label at the outset. We have bifurcated our overall~~ clinical development ~~program into two complementary and related paths based on the features~~ of our ~~investigational drugs~~product candidates. Research and development expenses represent costs incurred to conduct research and undertake clinical trials to develop our drug product candidates. We recognize all research and development costs as they are incurred. Clinical trial costs, contractor labor, personnel cost, and other research and development-based costs incurred by third parties are expensed as the contracted work is performed.

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 ~~rational applicability~~regulatory approval. Undertaking clinical development and ~~relevancy~~pursuing regulatory approval are both costly and time-consuming activities. As a result of known and unknown uncertainties, we are unable to ~~different patient populations. In cancer,~~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 expenses include personnel costs, expenses for ~~example, we believe PV-10 has important implications as a single agent for earlier stages~~outside professional services, and other allocated expenses. Personnel costs consists of ~~disease (i.e., Stage III or earlier), while combination~~salaries, benefits, and stock-based compensation. Outside professional services consist of ~~PV-10 with~~accounting and audit services, administrative services, and other classes of therapy or therapeutic agent is more appropriate for more advanced stages (i.e., Stage IV). Our ongoing preclinical and clinical work in melanoma, cancers of the liver, pancreatic cancer, and pediatric cancers, follow this approach.consulting fees.

Results of Operations

Comparison of the Three Months Ended September 30, ~~2017~~2019 and September 30, ~~2016~~2018

Overview

	For the Three Months Ended
	September 30,						Increase/
	2019			2018			(Decrease)			% Change

Operating Expenses:
Research and development	$	1,004,454		$	528,355		$	476,099			90.1	%
General and administrative		438,359			829,406			(391,047	)		-47.1	%
Total Operating Expenses		1,442,813			1,357,761			85,052			6.3	%

Total Operating Loss		(1,442,813	)		(1,357,761	)		(85,052	)		6.3	%
Other Income/(Expense):
Gain on settlement of lawsuits		-			-			-			0.0	%
Research and development tax credit		(826	)		-			(826	)		100.0	%
Investment and interest income		1,140			4,931			(3,791	)		-76.9	%
Interest expense		(377,576	)		(256,173	)		(121,403	)		47.4	%

Net Loss	$	(1,820,075	)	$	(1,609,003	)	$	(211,072	)		13.1	%

Research and Development Expenses

Research and development expenses were $1,004,454 for the three months ended September 30, 2019, an increase of $476,099 or 90.1% compared to the three months ended September 30, 2018. The increase was due to (i) the 2018 settlement between the Company and a former clinical operations vendor whereby the Company received a credit for $596,894 against its overall amounts due, partially offset by (ii) lower insurance costs, and (iii) a decrease in payroll and related taxes due to a lower negotiated employment agreement.

The following table summarizes our research and development expenses incurred during the three months ended September 30, 2019 and September 30, 2018:

	For the Three Months Ended
	September 30,				Increase/
	2019		2018		(Decrease)			% Change

Research and development:
Clinical trial and research expenses	$	689,203	$	134,818	$	554,385			411.2	%
Depreciation/amortization		169,941		169,942		(1	)		0.0	%
Insurance		66,762		67,964		(1,202	)		-1.8	%
Payroll and taxes		61,793		139,172		(77,379	)		-55.6	%
Rent and utilities		16,755		16,459		296			1.8	%
Total research and development	$	1,004,454	$	528,355	$	476,099			90.1	%

General and Administrative Expenses

General and administrative expenses were $438,359 for the three months ended September 30, 2019, a decrease of $391,047 or 47.1% compared to the three months ended September 30, 2018. The decrease was due to (i) lower legal fees as we concluded the Company’s lawsuits against former accounting vendors, (ii) a decrease in payroll and related taxes, and (iii) lower professional fees.

The following table summarizes our general and administrative expenses incurred during the three months ended September 30, 2019 and September 30, 2018:

	For the Three Months Ended
	September 30,				Increase/
	2019		2018		(Decrease)			% Change

General and administrative:
Depreciation	$	1,361	$	1,361	$	(0	)		0.0	%
Directors fees		96,250		96,250		-			0.0	%
Insurance		39,052		56,712		(17,660	)		-31.1	%
Legal and litigation		71,362		325,880		(254,518	)		-78.1	%
Other general and administrative cost		23,691		36,605		(12,914	)		-35.3	%
Payroll and taxes		55,162		116,122		(60,960	)		-52.5	%
Professional fees		143,278		188,000		(44,722	)		-23.8	%
Rent and utilities		8,203		8,476		(273	)		-3.2	%
Total general and administrative	$	438,359	$	829,406	$	(391,047	)		-47.1	%

Other Income/(Expense)

Other income decreased by $4,617 from $4,931 for the three months ended September 30, 2018 to $314 for the three months ended September 30, 2019.

Interest expense increased by $121,403 from $256,173 for the three months ended September 30, 2018 to $377,576 for the three months ended September 30, 2019. The increase was due to the increased number of convertible notes payable relating to the PRH Notes.

Comparison of Nine Months Ended September 30, 2019 and September 30, 2018

Overview

	For the Nine Months Ended
	September 30,						Increase/
	2019			2018			(Decrease)			% Change

Operating Expenses:
Research and development	$	3,250,109		$	3,458,657		$	(208,548	)		-6.0	%
General and administrative		1,828,675			2,693,293			(864,618	)		-32.1	%
Total Operating Expenses		5,078,784			6,151,950			(1,073,166	)		-17.4	%

Total Operating Loss		(5,078,784	)		(6,151,950	)		1,073,166			-17.4	%

Other Income/(Expense):
Gain on settlement of lawsuits		675,000			825,000			(150,000	)		-18.2	%
Research and development tax credit		82,115			42,685			39,430			92.4	%
Investment and interest income		23,045			16,656			6,389			38.4	%
Interest expense		(1,068,600	)		(697,214	)		(371,386	)		53.3	%

Net Loss	$	(5,367,224	)	$	(5,964,823	)	$	597,599			-10.0	%

Research and Development

Research and ~~Development~~development expenses ~~decreased by $71,346, or approximately 3%, from $2,461,407~~were $3,250,109 for the ~~three~~nine months ended September 30, ~~2016~~2019, a decrease of $208,548 or 6.0% compared to ~~$2,390,061 for~~ the ~~three~~nine months ended September 30, ~~2017. Research~~2018. The decrease was due to (i) lower clinical operations due to drug manufacturing in 2018, (ii) the 2018 settlement between the Company and a former clinical operations vendor whereby the Company received a credit for $596,894 against its overall amounts due, (iii) lower insurance costs, and (iv) lower payroll and related taxes due to a lower negotiated employment agreement

The following table summarizes our research and development ~~costs of $2,390,061 for~~expenses incurred during the ~~three~~nine months ended September 30, ~~2017 included amortization of patents of $167,780, payroll of $215,705, consulting~~2019 and contract labor of $1,790,622, legal of $129,001, insurance of $75,073, lab supplies and pharmaceutical preparations of $7,820, rent and utilities of $982, and depreciation expense of $3,078. Research and development costs of $2,461,407 for the three months ended September 30, 2016 included patent amortization expense of $167,780, payroll of $206,563, consulting and contract labor of $1,866,360, legal of $109,828, insurance of $65,772, lab supplies and pharmaceutical preparations of $23,975, rent and utilities of $18,195, and depreciation expense of $2,934. The overall decrease was due primarily to lower consulting and contract labor of approximately $75,738 and an increase of other costs totaling $4,392.2018:

	For the Nine Months Ended
	September 30,				Increase/
	2019		2018		(Decrease)			% Change

Operating Expenses:
Research and development:
Clinical trial and research expenses	$	2,227,329	$	2,256,074	$	(28,745	)		-1.3	%
Depreciation/amortization		509,825		509,825		-			0.0	%
Insurance		193,774		218,917		(25,143	)		-11.5	%
Payroll and taxes		262,200		423,766		(161,566	)		-38.1	%
Rent and utilities		56,981		50,075		6,906			13.8	%
Total research and development	$	3,250,109	$	3,458,657	$	(208,548	)		-6.0	%

General and Administrative

General and administrative expenses decreased by $2,586,611, or approximately 78%, from $3,315,555 for the three months ended September 30, 2016 to $728,944 for the three months ended September 30, 2017. The overall decrease was due primarily to (i) decreased legal expenses of approximately $1.2 million due to a decline in investigations and litigation as well as lower negotiated hourly rates, (ii) an approximate $828,034 decrease in professional fees due to the termination and reduction in scope of certain vendor services and contracts, (iii) an approximate $176,430 decrease in payroll expense, which was due primarily to reduced salary and other benefits associated with the departure of certain executives in 2016, (iv) an approximate $155,895 decrease in travel and conference expenses, and (v) an approximate $278,750 decrease in directors fees, and an increase of other costs totaling $34,263.

~~Investment Income~~

~~Investment income is immaterial for all periods presented.~~

~~Public Offering Issuance Expense~~

~~Public offering expense was $436,248 as a result of a public offering in the three months ended September 30, 2016, as compared to no expense in the 2017 period.~~

~~Gain on Change in Fair Value of Warrant Liability~~

~~The gain on change in fair value of warrant liability was $336,649 due to a change in the fair value of warrants that~~ were ~~issued in connection with our August 2016 public offering in the three months ended September 30, 2016, as compared to no expense in the 2017 period.~~

~~Comparison of the Nine Months Ended September 30, 2017 and September 30, 2016~~

~~Research and Development~~

~~Research and Development expenses decreased by $251,971, or approximately 4%, from$6,874,353~~$1,828,675 for the nine months ended September 30, ~~2016~~2019, a decrease of $864,618 or 32.1% compared to the nine months ended September 30, 2018. The decrease was due to (i) lower legal fees as we concluded the Company’s lawsuits against former accounting vendors, (ii) lower payroll and related taxes, and (iii) lower other general and administrative cost (travel and entertainment), partially offset by (vi) increased director fees (from having period-over-period, a five-member Board compared to a four-member Board in previous year).

The following table summarizes our general and administrative expenses incurred during the nine months ended September 30, 2019 and 2018:

	For the Nine Months Ended
	September 30,				Increase/
	2019		2018		(Decrease)			% Change

General and administrative:
Depreciation	$	4,084	$	4,084	$	(0	)		0.0	%
Directors fees		288,750		137,107		151,643			110.6	%
Insurance		130,894		146,433		(15,539	)		-10.6	%
Legal and litigation		418,719		1,173,040		(754,321	)		-64.3	%
Other general and administrative cost		92,582		236,267		(143,685	)		-60.8	%
Payroll and taxes		253,601		356,948		(103,347	)		-29.0	%
Professional fees		610,755		633,750		(22,995	)		-3.6	%
Rent and utilities		29,290		5,664		23,626			417.1	%
Total general and administrative	$	1,828,675	$	2,693,293	$	(864,618	)		-32.1	%

~~$6,622,382~~Other Income/(Expense)

Other income decreased by $104,181 from $884,341 for the nine months ended September 30, ~~2017.Research and development costs of $6,622,382~~2018 to $780,160 for the nine months ended September 30, ~~2017 included patent amortization~~2019. During the nine months ended September 30, 2019, the matters with former accounting vendors Bible Harris Smith, PC (“BHS”) and RSM US LLP (“RSM”) were resolved pursuant to a settlement between these parties and the Company, the terms of which are confidential. During the nine months ended September 30, 2018, the matter with BDO, the Company’s former external audit firm, was resolved pursuant to a settlement between the party and the Company, the terms of which are confidential.

Interest expense of $503,340, payroll of $395,192, consulting and contract labor of $5,032,358, legal of $354,783, insurance of $228,961, lab supplies and pharmaceutical preparations of $22,272, rent and utilities of $38,922,~~conference expenses of $34,054, and depreciation expense of $12,500. Research and development costs of $6,874,353~~increased by $371,386 from $697,214 for the nine months ended September 30, 2016 included patent amortization expense of $503,340, payroll of $737,704, consulting and contract labor of $5,054,234, legal of $256,238, insurance of $177,567, lab supplies and pharmaceutical preparations of $63,718, rent and utilities of $71,626, and depreciation expense of $9,926.

~~The overall decrease was due primarily~~2018 to ~~decreased payroll expense of approximately $342,512, which was due to reduced salary and other benefits associated with the departure of an executive in 2016, and $21,876 reduction in contractor labor, offset by increases in legal of $98,545 and $13,872 of other costs.~~

~~General and Administrative~~

~~General and administrative expenses decreased by $8,256,972, or approximately 66%, from $12,454,661~~$1,068,600 for the nine months ended September 30, ~~2016 to $4,197,689 for the nine months ended September 30, 2017.~~2019. The ~~overall decrease~~increase was ~~due primarily to (i) an approximate $2,718,407 decrease in warrant incentive expense which was recorded in the 2016 period, (ii) an approximate $2,142,509 decrease in professional fees~~ due to the ~~termination and reduction in scope~~increased number of ~~certain vendor services and contracts, (iii) decreased legal expenses of approximately $1,922,763 due~~convertible notes payable relating to a decline in investigations and litigation, as well as lower negotiated hourly rates, (iv) an approximate $684,828 decrease in payroll expense which was due primarily to reduced salary and other benefits associated with the departure of certain executives in 2016, (v) an approximate $496,979 decrease in travel and conference expenses, and (vi) an approximate $242,917 decrease in director’s fees and a decrease of other costs of $48,568.PRH Notes.

~~Investment Income~~

~~Investment income is immaterial for all periods presented.~~

~~Public Offering Issuance Expense~~

~~Public offering expense was $436,248 as a result of a public offering in the nine months ended September 30, 2016, as compared to no expense in the 2017 period.~~

~~Gain on Change in Fair Value of Warrant Liability~~

The gain on change in fair value of warrant liability was $336,649 due to a change in the fair value of warrants that were issued in connection with our August 2016 public offering in the nine months ended September 30, 2016, as compared to no expense in the 2017 period.

Liquidity and Capital Resources

~~The Company’s~~Our cash and cash equivalents were ~~$208,281~~$434,787 at September 30, ~~2017,~~2019, compared ~~with $1,165,738~~to $50,986 at December 31, ~~2016.~~2018. 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 ~~$216,019,230~~$232,261,515 as of September 30, ~~2017.~~2019. These conditions raise substantial doubt about our ability to continue as a going concern for a period within one year ~~after~~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 obtainadditional financing as may be required to fund current operations.

Management’s plans include selling ~~its~~our equity securities ~~negotiating with significant vendors to reduce present and future obligations~~ and obtaining other financing to fund ~~its~~our capital requirement and on-going operations, including the 2017 ~~Financing discussed below;~~Financing; however, there can be no assurance ~~the Company~~we will be successful in these efforts. During 2017, we have successfully negotiated reductions, with respect to outstanding obligation, owed to certain of our vendors (who provide research and development services), and we expect to continue to pursue further settlements, in consideration of our cash constraints. We have also successfully negotiated substantial reductions in professional fees to be paid to other service providers. The financial statements do not include any adjustment that might be necessary if ~~the Company is~~we are unable to continue as a going concern. Significant funds will be needed ~~for the Company~~ to continue ~~to implement its business plan of developing, licensing and/or commercializing the Company’s investigational drug products.~~

~~The 2017 Financing~~

~~On March 23, 2017, the Company entered into an exclusive Definitive Financing Commitment Term Sheet with a group of the Company’s stockholders (the “PRH Group”), which was amended~~ and ~~restated effective as of March 19, 2017 (the “Term Sheet”), which sets forth the terms on which the PRH Group will use their best efforts to arrange for a financing of a minimum of $10,000,000~~complete our ongoing and ~~maximum of $20,000,000 (the “2017 Financing”).~~planned clinical trials.

As of September 30, 2017, the Company had received aggregate Loans (as defined below) of $7,100,000 in connection with the 2017 Financing. Subsequent to September 30, 2017, the Company received aggregate proceeds of $2,150,000 in connection with the 2017 Financing.

	~~(i)~~	~~It is secured by a first priority security interest on the Company’s intellectual property (the “IP”);~~

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

	~~(iii)~~	~~The Loan proceeds are held in one or more accounts (the “Escrow”) pending the funding of the tranches of the 2017 Financing pursuant to borrowing requests made by the Company;~~

	~~(iv)~~	The PRH Notes, including interest and principal, shall be due and payable in full on the earlier of: (i) on such date upon which the Company defaults under the PRH Notes, (ii) upon a change of control of the Company, or (iii) dates ranging from April 2, 2019 to the twenty-four (24) month anniversary of the funding of the Final Tranche, depending on the specific PRH Note. In the event there is a change of control of the Company’s board of directors (the “Board”) as proposed by any person or group other than the Investors, the term of the PRH Notes will be accelerated and all amounts due under the PRH Notes will be immediately due and payable, plus interest at the rate of eight percent (8%) per annum, plus a penalty in the amount equal to ten times (10x) the outstanding principal amount of the Loan that has been funded to the Company;

	~~(v)~~	The outstanding principal amount and interest payable under the Loan will be convertible at the sole discretion of the Investors into shares of the Company’s Series D Preferred Stock, a new series of preferred stock to be designated by the Board, at a price per share equal to $0.2862; and

~~(vi)~~

Notwithstanding (v) above, the principal amount of the PRH Note and the interest payable under the Loan will automatically convert into shares of the Company’s Series D Preferred Stock at a price per share equal to $0.2862 effective on the 24-month anniversary of the funding of the final tranche of the 2017 Financing subject to certain exceptions.

The Series D Preferred Stock shall be convertible at the option of the holders thereof into shares of the Company’s common stock based on a formula to achieve a one-for-one conversion ratio. The Series D Preferred Stock shall automatically convert into shares of Common Stock upon the fifth anniversary of the Date of Issuance. On an as-converted basis, the Series D Preferred Stock shall carry the right to one (1) vote per share. The Series D Preferred Stock shall not have any dividend preference but shall be entitled to receive, on a~~pari passu~~ ~~basis, dividends, if any, that are declared and paid on any other class of the Company’s capital stock. The holders of Series D Preferred Stock shall not have anti-dilution protection.~~

~~NYSE Delisting~~

On October 13, 2016, the Company received notice from NYSE MKT that NYSE MKT commenced delisting procedures and immediately suspended trading in the Company’s common stock and class of warrants that was listed on NYSE MKT (“Listed Warrants”) and on October 17, 2016, our common stock began trading on the OTCQB Marketplace. On October 20, 2016, the Company submitted a request for a review of such delisting determination and on November 10, 2016, the Company submitted to the Listing Qualifications Panel its written submission in connection with its appeal. In addition, on November 23, 2016, the Company received notice from NYSE MKT stating that the Company was not in compliance with Section 1003(a)(iii) of the NYSE MKT Company Guide (requiring stockholders’ equity of $6.0 million or more if the Company has reported losses from continuing operations and/or net losses in its five most recent fiscal years). As of December 31, 2016, the Company had stockholders’ equity of approximately $3.5 million.

The hearing before the Listing Qualifications Panel occurred on January 25, 2017. On January 31, 2017, the Company received notice from the Listing Qualifications Panel that it affirmed NYSE MKT’s original determination to delist the Company’s common stock and Listed Warrants. On February 14, 2017, the Company submitted a request for the Committee for Review to reconsider the Listing Qualification Panel’s decision. The Committee for Review considered the Company’s request for review on March 30, 2017. On April 21, 2017, the NYSE MKT filed a Form 25 with the U.S. Securities and Exchange Commission (the “SEC”), notifying the SEC of the NYSE MKT’s intention to remove the Company’s shares of common stock and Listed Warrants from listing and registration on the NYSE MKT effective May 1, 2017, pursuant to the provisions of Rule 12d2-2(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s common stock and Listed Warrants continue to trade on the OTCQB following the delisting from the NYSE MKT under the trading symbols “PVCT” and “PVCTWS,” respectively. The Company can provide no assurance that its common stock and Listed Warrants will continue to trade on the OTCQB in the future.

Access to Capital

Management plans to access capital resources through possible public or private equity offerings, including the 2017 Financing, exchange offers, debt financings, corporate collaborations or other means. ~~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~~we are unable to raise sufficient capital through the 2017 Financing or otherwise, itwe will not be able to pay ~~its~~our obligations as they become due.

The primary business objective of ~~Management~~management is to build the Company into a ~~fully integrated~~commercial-stage biotechnology ~~company. However, the Company~~company; however, we cannot assure you that itmanagement will be successful in implementing ~~its~~the Company’s business plan of developing, licensing, and/or commercializing ~~the Company’s investigational~~our prescription drug ~~products.~~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 ~~2017~~2019 and beyond. We anticipate that these funds will otherwise come from the proceeds of private placement transactions, including the 2017 Financing, the exercise of existing warrants and outstanding stock options, or public offerings of debt or equity securities. While we believe that we have a reasonable basis for our expectation that we will be able to raise additional funds, we cannot assure you that we will be able to complete additional financing in a timely manner. In addition, any such financing may result in significant dilution to stockholders.

Critical Accounting Policies

~~Management’s discussion and analysis~~For a description of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe there have been no material changes to the items that we disclosed as our critical accounting policies, ~~under~~see Note 3 – Critical Accounting Policies in Part ~~II,~~1, Item ~~7, “Management’s Discussion and Analysis~~1 of ~~Financial Condition and Results of Operations,” in our 2016~~this Quarterly Report on Form ~~10-K.~~10-Q.

Off-Balance Sheet Arrangements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

~~Management,~~

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 ~~at September 30, 2017.~~of 1934, as amended (the “Exchange Act”). Based on ~~that~~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 ~~not~~ 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.

~~Management’s assessment of internal controls over financial reporting at December 31, 2016 identified certain material weaknesses, as detailed~~Changes in ~~our 2016 Form 10-K. As of the filing date of this Quarterly Report, we have completed our remediation of certain deficient internal controls, including:~~

	●	~~Our new directors and officers have reestablished an appropriate “tone at the top” that is conducive to the proper designing, and functioning of a system of internal control.~~

	●	~~Enhanced the design and functioning of controls over:~~

	-	~~period-end financial reporting, including the implementation of a quarterly financial close checklist;~~

	-	~~disclosure processes, including the establishment of a Disclosure Committee that meets quarterly in advance of the filing of our Quarterly and Annual Reports;~~

	-	~~the information technology environment; and~~

	-	~~travel and entertainment expenditures.~~

	●	~~Added procedures designed to improve the evidencing of (i) transaction approvals; and (ii) certain review functions.~~

	●	~~Improved the segregation of duties by adding a controller to the finance function of the Company.~~

~~Since~~these remediation measures have not been in place and tested for a sufficient period of time, we are not yet in a position to conclude that our disclosure controls and procedures and our internal controls over financial reporting are now effective, but that is our near-term goal.Internal Control Over Financial Reporting

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

~~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, do not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error or 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. 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.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures by us are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The information required by this item is incorporated by reference from Part 1,I, Item 1. Financial Statements, Notes to Condensed Consolidated Financial Statements, Note ~~6 – Litigation.~~8.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

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

2017 Financing

~~The information above~~During the three months ended September 30, 2019, the Company entered into additional PRH Notes with non-related party accredited investors in the aggregate principal amount of $410,000. As of September 30, 2019, the Company had drawn down the entire $410,000 under “Part 1, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—The 2017 Financing” is incorporated herein by reference.these notes.

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 of Regulation D promulgated thereunder) as transactions by an issuer not involving a public offering.

For further details on the terms of the PRH Notes, refer to our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on March 7, 2019.

~~Exercise of Warrants~~Incentive Compensation to Consultants

During the ~~quarter~~three months ended September 30, ~~2017, a warrant holder exercised a warrant to purchase 10,000~~2019, the Company issued 25,000 shares of common stock ~~at a price of $0.053 per share or $533.00.~~

~~Issuance of Common Stock~~to an advisory board member in ~~Payment of Trade Debt~~

~~Also during~~connection with the ~~quarter~~contract entered into on August 1, 2019. During the three months ended September 30, ~~2017,~~2019, the Company issued ~~372,500~~25,000 three-year immediately vested warrants to a consultant to purchase an aggregate of 25,000 shares of ~~restricted unregistered~~ common ~~stock at~~stocks with an ~~average~~exercise price of ~~$0.046~~$0.2862 per ~~share or $17,300 to holders~~share. The Company believes that such transactions were exempt from the registration requirements of the Securities Act in ~~settlement~~reliance on Section 4(a)(2) of ~~trade debt.~~the Securities Act (or Rule 506 of Regulation D promulgated thereunder) as a transaction by an issuer not involving a public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

~~None~~None.

ITEM 4.Mine Safety Disclosures.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit No.		Description

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

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

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

101**		Interactive Data Files.

**	Filed herewith. * Furnished herewith.

SIGNATURES

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

	PROVECTUS BIOPHARMACEUTICALS, INC.

November ~~8, 2017~~12, 2019	By:	/s/ ~~Timothy C. Scott, Ph.D.~~Bruce Horowitz
		~~Timothy C. Scott, Ph.D.~~Bruce Horowitz
		~~On behalf of the registrant and as President~~Chief Operating Officer (Principal Executive Officer)

	By:	/s/ ~~John R. Glass~~Heather Raines
		~~John R. Glass~~Heather Raines, CPA
		~~Interim~~ Chief Financial Officer (Principal Financial Officer)

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)

Large accelerated filer	[ ]	Accelerated filer	[X] ]

Non-accelerated filer	[ ~~] (Do not check if a smaller reporting company)~~X]	Smaller reporting company	[X]

		Emerging growth company	[ ]

	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	46
Notes to Condensed Consolidated Financial Statements	57
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1214
Item 3. Quantitative and Qualitative Disclosures About Market Risk	1619
Item 4. Controls and Procedures	1619

PART II OTHER INFORMATION

Item 1. Legal Proceedings	20
Item 1A. Risk Factors	1720
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	1720
Item 3. Defaults Upon Senior Securities	1821
Item 4. Mine Safety Disclosures	1821
Item 5. Other Information	1821
Item 6. Exhibits	1821

SIGNATURES	1922

		September 30, 2017			December 31, 2016
		(Unaudited)
Assets

Current Assets:
Cash and cash equivalents		$	208,281		$	1,165,738
Short-term receivable - settlement			-			300,000
Prepaid expenses			325,423			360,562

Total Current Assets			533,704			1,826,300

Equipment and furnishings, less accumulated depreciation of $33,081 and $464,140, respectively			85,172			72,033
Patents, net of accumulated amortization of $9,977,317 and $9,473,978, respectively			1,738,127			2,241,467
Long-term receivable – reimbursable legal fees, net of reserve for uncollectibility of $455,500			455,500			455,500
Long-term receivable – settlement, net of discount and reserve for uncollectibility of $1,549,043			1,039,769			1,015,710
Total Assets		$	3,852,272		$	5,611,010

Liabilities and Stockholders’ (Deficiency) Equity

Current Liabilities:
Accounts payable - trade	��	$	3,551,979		$	1,919,870
Other accrued expenses			509,086			221,956

Total Current Liabilities		$	4,061,065		$	2,141,826

Convertible notes payable			3,100,000			-
Convertible notes payable - related parties			4,000,000			-

Total Liabilities			11,161,065			2,141,826
Commitments and contingencies
Stockholders' (Deficiency) Equity:
Preferred stock; par value $0.001 per share; 25,000,000 shares authorized; Series B Convertible Preferred Stock; 240,000 shares designated; 100 and 8,600 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively; aggregate liquidation preference of $3,500 and $301,000 at September 30, 2017 and December 31, 2016, respectively			-			9
Common stock; par value $0.001 per share; 1,000,000,000 shares authorized; 370,737,143 and 364,773,297 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively			370,737			364,773
Additional paid-in capital			208,339,700			208,327,822
Accumulated deficit			(216,019,230	)		(205,223,420	)
Total Stockholder's (Deficiency) Equity			(7,308,793	)		3,469,184
Total Liabilities and Stockholders' (Deficiency) Equity		$	3,852,272		$	5,611,010

	September 30,			December 31,
	2019			2018
	(Unaudited)
Assets

Current Assets:
Cash and cash equivalents	$	434,787		$	50,986
Short-term receivables - legal fees, settlement and other, net		290,076			595,326
Prepaid expenses		169,113			370,209

Total Current Assets		893,976			1,016,521

Equipment and furnishings, less accumulated depreciation of $61,107 and $50,538, respectively		61,907			72,476
Operating lease right-of-use asset		212,187			-
Patents, net of accumulated amortization of $11,319,558 and $10,816,218, respectively		395,887			899,227

Total Assets	$	1,563,957		$	1,988,224

Liabilities and Stockholders’ Deficiency

Current Liabilities:
Accounts payable - trade	$	1,345,677		$	3,312,049
Other accrued expenses		949,427			790,358
Current portion of operating lease liability		76,423			-

Total Current Liabilities		2,371,527			4,102,407

Accrued interest		1,314,357			659,379
Accrued interest - related parties		1,125,549			711,927
Convertible notes payable		12,297,000			7,062,000
Convertible notes payable - related parties		6,895,000			6,870,000
Non-current portion of operating lease liability		148,644			-

Total Liabilities		24,152,077			19,405,713

Commitments and contingencies (Note 8)

Stockholders’ Deficiency:
Preferred stock; par value $0.001 per share; 25,000,000 shares authorized; Series B Convertible Preferred Stock; 240,000 shares designated; 100 shares issued and outstanding at September 30, 2019 and December 31, 2018; aggregate liquidation preference of $3,500 at September 30, 2019 and December 31, 2018		-			-
Common stock; par value $0.001 per share; 1,000,000,000 shares authorized; 388,576,975 and 384,614,528 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively		388,577			384,615
Additional paid-in capital		209,309,619			209,092,187
Accumulated other comprehensive loss		(24,801	)		-
Accumulated deficit		(232,261,515	)		(226,894,291	)

Total Stockholders’ Deficiency		(22,588,120	)		(17,417,489	)

Total Liabilities and Stockholders’ Deficiency	$	1,563,957		$	1,988,224

Title of each class		Trading Symbol(s)		Name of each exchange on which registered

	●	Our potential receipt of sales from investigational drug products PV-10 and PH-10 (if and when approved); transaction fees; licensing, milestone, and/or royalty payments; and/or payments in connection with the Company’s liquidation, dissolution or winding up, or any sale, lease, conveyance or other disposition of any intellectual property relating to our investigational drug products and/or drug substance rose bengal (and/or any other halogenated xanthene),

	●	Our ability to raise additional capital, and

	●	Our ability to close on additional tranches of the financing from a group of the Company’s stockholders (the “PRH Group”) pursuant to the Definitive Financing Commitment Term Sheet we entered into with the PRH Group (which has specifically disclaimed it is a “group” as defined under U.S. federal securities law) effective as of March 19, 2017.

													For the Three Months Ended						For the Nine Months Ended
	Three Months Ended September 30,						Nine Months Ended September 30,						September 30,						September 30,
	2017			2016			2017			2016			2019			2018			2019			2018

Operating Expenses:
Research and development	$	2,390,061		$	2,461,407		$	6,622,382		$	6,874,353		$	1,004,454		$	528,355		$	3,250,109		$	3,458,657
General and administrative		728,943			3,315,555			4,197,689			12,454,661			438,359			829,406			1,828,675			2,693,293
Total Operating Expenses														1,442,813			1,357,761			5,078,784			6,151,950

Total Operating Loss		(3,119,004	)		(5,776,962	)		(10,820,071	)		(19,329,014	)		(1,442,813	)		(1,357,761	)		(5,078,784	)		(6,151,950	)

Investment income		7,511			318			24,261			1,985
Public offering issuance expense		-			(436,248	)		-			(436,248	)
Gain on change in fair value of warrant liability		-			336,649			-			336,649
Other Income/(Expense):
Gain on settlement of lawsuits														-			-			675,000			825,000
Research and development tax credit														(826	)		-			82,115			42,685
Investment and interest income														1,140			4,931			23,045			16,656
Interest expense														(377,576	)		(256,173	)		(1,068,600	)		(697,214	)

Net Loss		(3,111,493	)		(5,876,243	)		(10,795,810	)		(19,426,628	)	$	(1,820,075	)	$	(1,609,003	)	$	(5,367,224	)	$	(5,964,823	)

Dividend paid-in kind to preferred shareholders		(50	)		(2,257,432	)		(14,107	)		(2,257,432	)
Deemed dividend		-			(726,989	)		-			(726,989	)

Net Loss Applicable to Common Shareholders	$	(3,111,543	)	$	(8,860,664	)	$	(10,809,917	)	$	(22,411,049	)

Basic and Diluted Loss Per Common Share	$	(0.01	)	$	(0.04	)	$	(0.03	)	$	(0.10	)	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.02	)

Weighted Average Number of Common Shares Outstanding - Basic and Diluted		370,546,735			222,959,570			368,722,485			213,722,977			385,817,485			383,256,742			385,726,721			380,754,529

	Nine Months Ended September 30,
	2017			2016

Cash Flows From Operating Activities
Net loss	$	(10,795,810	)	$	(19,426,628	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		12,500			9,926
Amortization of patents		503,340			503,340
Warrant incentive expense		-			2,718,407
Issuance of stock for services		-			20,163
Public offering issuance expense		-			436,248
Gain on change in fair value of warrant liability		-			(336,649	)
Changes in operating assets and liabilities
Settlement receivable		275,941			386,226
Other current assets		35,139			(146,030	)
Accounts payable - trade		1,799,409			(400,931	)
Accrued settlement expense		-			(1,850,000	)
Other accrued expenses		287,130			161,532

Net Cash Used In Operating Activities		(7,882,351	)		(17,924,396	)

Cash Flows From Investing Activities
Purchase of fixed assets		(25,639	)		-
Net Cash Used In Operating Activities		(25,639	)		-

Cash Flows From Financing Activities
Gross proceeds from sales of convertible preferred stock and warrants		-			6,000,000
Payment of offering costs in connection with August 2016 financing		-			(711,470	)
Net proceeds from the issuance of common stock and warrants pursuant to warrant exchange offer		-			3,635,040
Proceeds from issuance of convertible notes payable		2,950,000			-
Proceeds from issuance of convertible notes payable - related party		4,000,000			-
Proceeds from exercise of warrants		533			-
Net Cash Provided By Financing Activities		6,950,533			8,923,570

Net Change In Cash and Cash Equivalents		(957,457	)		(9,000,826	)

Cash and Cash Equivalents, Beginning of Period		1,165,738			14,178,902

Cash and Cash Equivalents, End of Period	$	208,281		$	5,178,076

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

Non-cash investing and financing activities:
Conversion of preferred stock into common stock	$	3,987		$	31,066
Dividend paid-in kind to preferred shareholders	$	1,595		$	-
Contractual dividends on preferred stock	$	-		$	729,989
Issuance in-kind of preferred stock dividends	$	14,107		$	2,257,432
Common stock issued in satisfaction of trade debt	$	17,300		$	-
Notes payable issued in satisfaction of trade debt	$	150,000		$	-