# Provectus Biopharmaceuticals, Inc.: Form 10-K for the period ended Dec 31, 2021

- Company: [Provectus Biopharmaceuticals, Inc.](/companies/pvct.md) (CIK 315545)
- Form: 10-K
- Filed: 2022-03-29
- Accepted by EDGAR: Mar 29, 2022, 16:04 ET
- Period: 2021-12-31
- Accession: 0001493152-22-008016
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/315545/000149315222008016/form10-k.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/315545/000149315222008016/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2021-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 12 months, 2021-01-01 to 2021-12-31 | $2.6m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 12 months, 2021-01-01 to 2021-12-31 | −$4.7m | us-gaap:OperatingIncomeLoss |
| Interest expense | 12 months, 2021-01-01 to 2021-12-31 | $961.7k | us-gaap:InterestExpense |
| Net income | 12 months, 2021-01-01 to 2021-12-31 | −$5.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 12 months, 2021-01-01 to 2021-12-31 | −$0.01 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 12 months, 2021-01-01 to 2021-12-31 | −$1.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2021-12-31 | $683.0k | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2021-12-31 | $3.4m | us-gaap:AssetsCurrent |
| Total assets | at 2021-12-31 | $3.5m | us-gaap:Assets |
| Current liabilities | at 2021-12-31 | $7.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2021-12-31 | $7.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2021-12-31 | −$4.2m | us-gaap:StockholdersEquity |

## Business

As filed, 19,833 characters.

### General

Provectus Biopharmaceuticals, Inc., a Delaware corporation incorporated in 2002 (together with its subsidiaries, “Provectus” or the “Company”), is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases, based on a family of small molecules called halogenated xanthenes (“HXs”). Our lead HX molecule is named rose bengal sodium (“RBS”).

### Science

The prerequisite mechanistic step for these immunotherapies is direct contact between HX, such as RBS, and disease, which may lead to disease death or repair, HX treatment-specific innate immune activation, and a disease-specific functional adaptive immune response. HX displays consistent mechanistic behavior across different indications of a disease and across different disease areas, with the potential to be a multi-disease treatment platform and a universal contributor to standard of care and emerging medical treatments.

### Intellectual Property (“IP”)

#### U.S. Patents

We hold a number of patents covering the technologies we have developed and are continuing to develop for the production of investigational drugs and other technologies. All patents material to an understanding of the Company are included in the table below:

| U.S. Patent No. | Title | Issue Date | Expiration Date |
| ---: | --- | --- | --- |
| 7,201,914 | Combination antiperspirant and antimicrobial compositions | April 10, 2007 | May 15, 2024 |
| 8,470,296 | Improved intracorporeal medicaments for high energy photodynamic treatment of disease | June 25, 2013 | July 28, 2022 |
| 8,530,675 | Process for the synthesis of rose bengal and related xanthenes | September 10, 2013 | April 21, 2031 |
| 9,107,887 | Combination therapy for cancer | August 15, 2015 | March 9, 2032 |
| 9,273,022 | Process for the synthesis of rose bengal and related xanthenes | March 1, 2016 | September 17, 2030 |
| 9,422,260 | Process for the synthesis of rose bengal and related xanthenes | August 23, 2016 | September 26, 2030 |
| 9,808,524 | Combination of local and systematic immunomodulative therapies for melanoma and liver cancer | November 7, 2017 | March 9, 2032 |
| 9,839,688 | Combination of rose bengal and systemic immunomodulative therapies for enhanced treatment of cancer | December 12, 2017 | March 9, 2032 |
| 10,130,658 | Method of ex vivo enhancement of immune cell activity for cancer immunotherapy with a small molecule ablative compound | November 20, 2018 | December 18, 2035 |
| 10,471,144 | Combination of local rose bengal and systemic immunomodulative therapies for enhanced treatment of cancer | November 12, 2019 | November 12 2034 |
| 11,058,664 | In vitro and xenograft anti-tumor activity of a halogenated-xanthene against refractory pediatric solid tumors | July 13, 2021 | May 15, 2039 |
| 11,071,781 | Combination of local and systemic immunomodulative therapies for enhanced treatment of cancer | July 27, 2021 | March 9, 2032 |

3

We received two patent awards from the U.S. Patent and Trademark Office (USPTO) in 2021, U.S. patent numbers 11,058,664 and 11,071,781. Five patent applications were published on the USPTO’s website:

- Composition and Method for Treating Hematologic Cancers (USPTO application number 16/688319),
- Composition and Method for Oral Treatment of Leukemia (17/232393),
- Treatment of Solid Cancerous Tumors by Oral Administration of a Halogenated Xanthene (17/214590),
- Novel Uses of Halogenated Xanthenes in Oncology and Virology (17/212723), and
- *In Vitro* and Xenograft Anti-Tumor Activity of a Halogenated-Xanthene Against Refractory Pediatric Solid Tumors (17/344418).

#### International Patents

In 2021, the Canadian Patent Office granted the Company’s patent application “Method of *ex vivo* enhancement of immune cell activity for cancer immunotherapy with a small molecule ablative compound.

### PV-10 Product Pipeline

PV-10 is an injectable pharmaceutical formulation of RBS and registration study-ready investigational drug product (“PV-10 DP”). Provectus has developed two clinical-stage formulations of PV-10: an intralesional (IL) administration for oncology (10% RBS) for the treatment of cancers of the skin and cancers of the liver, and topical (“top.”) application for dermatology (0.01% RBS) for the treatment of inflammatory dermatoses (e.g., psoriasis, atopic dermatitis, and actinic keratosis). A third formulation is under development for a currently proprietary disease area. Research into new routes of RBS administration and formulations of PV-10 is ongoing, including oral (*per os* or “PO”), intranasal (“IN”), inhaled top., and/or intravenous (“IV”) for hematology, oncology, virology, microbiology, ophthalmology, and animal health.

For additional information on the disease areas in which the Company is targeting, please see Note 1 to the Company’s Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Data.

### 2021 Activity

In January, H. Lee Moffitt Cancer Center released a preprint manuscript describing how PV-10 in combination with gemcitabine may enhance the chemotherapy’s efficacy against pancreatic tumors: “Intralesional injection of Rose Bengal augments the efficacy of gemcitabine chemotherapy against pancreatic tumors.” Chemotherapy regimens that include gemcitabine are the standard of care for the treatment of pancreatic cancer.

In March, Melanoma Research published results from an investigator-led, single-center study of Australian in-transit melanoma patients who received IL PV-10 under a Company-sponsored expanded access (“EAP;” aka compassionate use) program. The Melanoma Research article, entitled “Treatment of in-transit melanoma metastases using intralesional PV-10,” detailed the experience of investigators at Melanoma Institute Australia (formerly the Sydney Melanoma Unit) in Sydney, Australia who treated 48 patients from 2008 to 2016.

The State of Tennessee, as part of its fiscal year 2021-2022 budget, directed funding in the amount of $2.5 million to the Company to develop animal health drug products through partnerships with state universities that have agriculture and veterinary medicine programs and the Company.

Data from the Company’s Phase 1 clinical trial of PV-10 for the treatment of neuroendocrine tumors (“NET”) metastatic to the liver (“mNET”) refractory to somatostatin analogs (“SSAs”) and peptide receptor radionuclide therapy (“PRRT”) (NCT02693067) was presented at the American Society of Clinical Oncology (“ASCO”) 2021 Annual Meeting, held June 4-8 online: “Phase I study of autolytic immunotherapy of metastatic neuroendocrine tumors using intralesional rose bengal disodium.”

Data from the Company’s research on oral delivery of PV-10 for the treatment of adult solid tumors were published as an abstract as part of ASCO 2021 “Pre-clinical evaluation of PV-10 for *in vitro* anti-tumor activity in refractory and high-risk adult solid tumors.”

Data from an ongoing clinical trial of PV-10 for the treatment of mNET refractory to SSAs and PRRT (NCT02693067) was presented at the European Society for Medical Oncology (“ESMO”) Congress, held online from September 16-21: “Phase I study of hepatic intralesional rose bengal disodium (PV10), an autolytic immunotherapy, in metastatic neuroendocrine neoplasms.”

Data from the Company’s ongoing Phase 1b clinical trial of PV-10 in combination with Keytruda® (pembrolizumab) for the treatment of advanced cutaneous melanoma in patients refractory to immune checkpoint blockade (“CB”) (NCT02557321: first expansion cohort) was presented at the SMR 2021 Virtual Congress (the Society for Melanoma Research annual meeting), held online from October 28-31: “PV-10 and anti-PD-1 in cutaneous melanoma refractory to checkpoint blockade.”

Results from a meta-analysis of the Company’s Phase 2 and 3 clinical trials (NCT00521053 and NCT02288897, respectively) and EAP (NCT01260779) of single-agent PV-10 for the treatment of Stage III cutaneous melanoma was presented at the SMR 2021 Virtual Congress: “Lesion-Level Response to Single-Agent PV-10 in Stage III Cutaneous Melanoma.”

### Competition

In general, the pharmaceutical and biotechnology industries are competitive, characterized by steady and sometimes disruptive advances in products and technology. A number of companies have developed and continue to develop products that address the areas we have targeted. Some of these companies are pharmaceutical companies and biotechnology companies that are international in scope and very large in size, while others are small companies that have been successful in one or more areas we are targeting. Existing or future pharmaceutical, device, or other competitors may develop products that accomplish similar functions to our technologies in ways that may be less expensive, receive faster regulatory approval, or receive greater market acceptance than our products. Many of our competitors have been in existence longer than we have, have greater capital resources, broader internal structure for research, development, manufacturing, and marketing, and may be further along in their respective product cycles.

### Supply Chain

Recently, many companies across a variety of sectors have reported disruptions, shortages, and other supply chain-related issues. In the biopharmaceutical sector, delays and interruptions in the supply chain have been particularly pronounced. During 2021, we were able to effectively manage our supply of prescription drug candidates in a manner that avoided any significant interruptions to our clinical programs.

### Federal Regulation of Therapeutic Products

All of the prescription drug candidates we currently contemplate developing will require approval by the U.S. Food and Drug Administration (“FDA”) prior to sales within the U.S. and by comparable international governmental healthcare regulatory agencies prior to sale outside the U.S. The FDA and comparable international agencies impose substantial requirements on the manufacturing and marketing of pharmaceutical products. These agencies and other entities regulate, among other things, research and development activities and the testing, manufacturing, quality control, safety and effectiveness claims, labeling, storage, record keeping, approval, advertising, and promotion of our prescription drug candidates. While we attempt to minimize and avoid significant regulatory bars when formulating our products, some degree of regulation from these regulatory agencies is unavoidable.

The regulatory process required by the FDA, through which our prescription drug candidates must successfully pass before they may be marketed in the U.S., generally involves pre-clinical laboratory and animal testing, submission of an application that must become effective before clinical trials may begin, adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for its intended indication, and FDA approval to market a given product for a given indication after the appropriate application has been filed. For pharmaceutical products, pre-clinical tests include laboratory evaluation of the product, its chemistry, formulation, and stability, as well as *in vitro* and animal studies to assess the potential safety and efficacy of the product. We will require sponsored work to be conducted in compliance with pertinent local and international regulatory requirements, including those providing for Institutional Review Board approval, national governing agency approval, and patient informed consent, using protocols consistent with ethical principles stated in the Declaration of Helsinki and other internationally recognized standards and delineated by ICH Good Clinical Practice (“GCP”) standards.

If the FDA is satisfied with the results and data from pre-clinical tests, it will authorize human clinical trials. Human clinical trials traditionally are conducted in three sequential phases which may overlap. Each of the three phases involves testing and study of specific aspects of the effects of the investigational product on human subjects, including testing for safety, dosage tolerance, side effects, absorption, metabolism, distribution, excretion, and clinical efficacy.

Phase 1 clinical trials include the initial introduction of an investigational new drug into humans, or via a new route of administration or new organ system if previously investigated in humans. These studies are closely monitored and may be conducted in patients but may also be conducted in healthy volunteer subjects. These studies are designed to determine the metabolic and pharmacologic actions of the drug in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness. While the FDA can cause us to end clinical trials at any phase due to safety concerns, Phase 1 clinical trials are primarily concerned with safety issues. We also attempt to obtain sufficient information about the drug candidate’s pharmacokinetics and pharmacological effects during Phase 1 clinical trials to permit the design of scientifically valid, Phase 2 studies.

Phase 1 studies also evaluate drug metabolism, structure-activity relationships, and the mechanism of action in humans. These studies also determine which investigational drugs are used as research tools to explore biological phenomena or disease processes. The total number of subjects included in Phase 1 studies varies with the drug but is generally in the range of 10 to 80.

Phase 2 clinical trials include early controlled clinical studies conducted to obtain preliminary data on the effectiveness of the drug for a particular indication or indications in patients with the disease or condition. This phase of testing also helps determine the common short-term side effects and risks associated with the drug. Phase 2 studies are often randomized controlled studies that are closely monitored and conducted in a relatively small number of patients, usually involving up to several hundred people.

Phase 3 studies are expanded controlled and uncontrolled trials. They are performed after preliminary evidence suggesting effectiveness of the drug has been obtained in Phase 2 and are intended to gather definitive information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug. Phase 3 studies also provide an adequate basis for extrapolating the results to the general population and transmitting that information in the physician labeling. Phase 3 studies usually include several hundred to several thousand people.

We have established a core clinical development team and have been working with external and FDA-experienced consultants to assist us in developing product-specific development and approval strategies, preparing the required submittals, guiding us through the regulatory process, and providing input into the design and site selection of human clinical studies.

The testing and approval process require substantial time, effort, and financial resources, and we may not obtain FDA approval on a timely basis, if at all. Success in preclinical or early-stage clinical trials does not assure success in later-stage clinical trials. The FDA or research institution conducting the trials may suspend clinical trials or may not permit trials to advance from one phase to another at any time for various reasons, including a finding that the subjects or patients are being exposed to an unacceptable health risk. Once issued, the FDA may withdraw a prescription drug approval if we do not comply with pertinent regulatory requirements and standards or if problems are identified after the product reaches the market. If the FDA grants approval of a prescription drug candidate, the approval may impose limitations, including limits on the indicated uses for which we may market a drug product. In addition, the FDA may require additional testing and surveillance programs to monitor the safety and/or effectiveness of approved drug products that have been commercialized, and the agency has the power to prevent or limit further marketing of a product based on the results of these post-marketing programs. Further, later discovery of previously unknown problems with a drug product may result in restrictions on the product, including withdrawal from the market.

Marketing our prescription drug candidates abroad will require similar regulatory approvals by equivalent national authorities and is subject to similar risks. To expedite development, we may pursue some or all of our initial clinical testing and approval activities outside the U.S., and in particular in those countries where our prescription drug candidates may have substantial medical and commercial relevance. In some such cases, any resulting drug products may be brought to the U.S. after substantial offshore experience is gained. Accordingly, we intend to pursue any such development in a manner consistent with U.S. and ICH standards so that the resultant development data is maximally applicable for potential global approval.

### Additional Regulation

We are subject to various federal, state and local laws and regulations relating to the protection of the environment, human health and safety in the U.S. and in other jurisdictions in which we operate. If we violate these laws and regulations, we could be fined, criminally charged or otherwise sanctioned by regulators. Environmental laws and regulations are complex, change frequently and have become more stringent over time. We believe that our operations currently comply in all material respects with applicable environmental laws and regulations.

### Human Capital Resources

We have four full-time employees. We also engage independent contractors, who currently serve as COO, director of clinical operations, senior scientist, clinical research associates, project manager, information technology manager, controller, patient advocacy manager, and database manager.

We believe the Company’s success depends on its ability to attract, develop, and retain key personnel. The skills, experience and industry knowledge of key employees and contractors significantly benefit our operations and performance. The Company’s Board of Directors and management oversee various employee and contractor initiatives.

Employee health and safety in the workplace is one of the Company’s core values. The COVID-19 pandemic has underscored for us the importance of keeping our employees and contractors safe and healthy. In response to the pandemic, the Company has taken actions aligned with the World Health Organization and the Centers for Disease Control and Prevention to protect its workforce so they can more safely and effectively perform their work. During the past two years, employees have worked remotely to ensure their safety, while continuing to perform their duties as they would have.

### Available Information

Our website is located at www.provectusbio.com. We make available free of charge through this website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. Reference to our website does not constitute incorporation by reference of the information contained on the site and should not be considered part of this document.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC as we do. The website is http://www.sec.gov.

## Risk factors

As filed, 37,056 characters.

Our business and its future performance may be affected by various factors, the most significant of which are discussed below.

### Risks Related to Our Business

***We are a clinical-stage drug company, have no prescription drug products approved for commercial sale, have incurred substantial losses, and expect to incur substantial losses and negative operating cash flow for the foreseeable future.***

We are a clinical-stage drug company that has no prescription drug products approved for commercial sale. We have never generated any substantial revenues and may never achieve substantial revenues or profitability. As of December 31, 2021, we have incurred net losses of approximately $246 million in the aggregate since inception in January 2002. We may never achieve or maintain profitability, even if we succeed in developing and commercializing one or more of our prescription drug candidates. We also expect to continue to incur significant operating expenditures and anticipate that our operating and capital expenses may increase substantially in the foreseeable future as we continue to develop and seek regulatory approval for our prescription drug candidates PV-10 and PH-10, implement additional internal systems and infrastructure, and hire additional personnel.

We also expect to experience negative operating cash flow for the foreseeable future as we fund our operating losses and any future capital expenditures. As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.

***We need additional capital to conduct our operations and commercialize and/or further develop our prescription drug candidates in 2022 and beyond, and our ability to obtain the necessary funding is uncertain.***

We need additional capital in 2022 and beyond to continue developing and seeking to commercialize our drug product candidates. We intend to continue with the development of PV-10 and PH-10 on the basis of historical, ongoing, and prospective clinical study and mechanism, of action results.

We have based our estimate of capital needs on assumptions that may prove to be wrong, and we cannot assure you that estimates and assumptions will remain unchanged. On August 13, 2021, the Board approved a Financing Term Sheet (the “2021 Term Sheet”), which sets forth the terms under which the Company will use its best efforts to arrange for financing of a maximum of $5,000,000 (the “2021 Financing”), which amounts will be obtained in several tranches and evidenced by convertible promissory notes (collectively, the “2021 Notes”). As of December 31, 2021, the Company had received 2021 Notes proceeds of $1,460,000, of which $200,000 is from a related party investor.

Such additional financing may not be available on acceptable terms, or at all. As discussed in more detail below, additional equity financing could result in significant dilution to stockholders. Further, in the event that additional funds are obtained through licensing or other arrangements, these arrangements may require us to relinquish rights to some of our products, product candidates, and technologies that we would otherwise seek to develop and commercialize ourselves. If sufficient capital is not available, we may be required to delay, reduce the scope of, or eliminate one or more of our programs, any of which could have a material adverse effect on our business.

### There is substantial doubt as to our ability to continue as a going concern.

Our cash, cash equivalents, and restricted cash were $3,106,942 at December 31, 2021, which includes $2,423,958 of restricted cash resulting from a grant received from the State of Tennessee, compared with $97,231 at December 31, 2020. We continue to incur significant operating losses and management expects that significant on-going operating expenditures will be necessary to successfully implement our business plan and develop and market our products. These circumstances raise substantial doubt about our ability to continue as a going concern for a period of one year from the date that the consolidated financial statements included elsewhere in this Annual Report on Form 10-K are issued. Implementation of our plans and our ability to continue as a going concern will depend upon our ability to develop PV-10 and PH-10, and to raise additional capital.

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

***Our investigational drug product candidates are at an early to mid-stage of development and may never obtain U.S. or international regulatory approvals required for us to commercialize our investigational drug product candidates.***

We will need approval of the FDA to commercialize our investigational drug product candidates in the U.S. and approvals from FDA-equivalent regulatory authorities in international jurisdictions to commercialize our investigational drug product candidates there.

We are continuing to pursue clinical development of our most advanced drug product candidates, PV-10 and PH-10, for use as treatments for specific disease indications. The continued and further development of these drug product candidates will require significant additional research, formulation and manufacturing development, and pre-clinical and extensive clinical testing prior to their regulatory approval and commercialization. Pre-clinical and clinical studies of our drug product candidates may not demonstrate the safety and efficacy necessary to obtain regulatory approvals. Pharmaceutical and biotechnology companies have suffered significant setbacks in advanced clinical trials, even after experiencing promising results in earlier trials. Pharmaceutical products that appear to be promising at early stages of development may not reach the market or be marketed successfully for a number of reasons, including a product may be found to be ineffective or have harmful side effects during subsequent pre-clinical testing or clinical trials, a product may fail to receive necessary regulatory clearance, a product may be too difficult to manufacture on a large scale, a product may be too expensive to manufacture or market, a product may not achieve broad market acceptance, others may hold proprietary rights that will prevent a product from being marketed, and others may market equivalent or superior products.

Satisfaction of the FDA’s regulatory requirements typically takes many years, depends upon the type, complexity and novelty of the product candidate and requires substantial resources for research, development, and testing. We cannot predict whether our research and clinical approaches will result in drugs that the FDA considers safe for humans and effective for indicated uses. The FDA has substantial discretion in the drug approval process and may require us to conduct additional nonclinical and clinical testing or to perform post-marketing studies. The approval process may also be delayed by changes in government regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our regulatory review. Delays in obtaining regulatory approvals may delay commercialization of, and our ability to derive revenues from, our prescription drug candidates, impose costly procedures on us, and diminish any competitive advantages that we may otherwise enjoy.

Our research and product development efforts may not be successfully completed and may not result in any successfully commercialized drug products. Further, after commercial introduction of a new drug product, discovery of problems through adverse event reporting could result in restrictions on the product, including withdrawal from the market and, in certain cases, civil or criminal penalties.

Even if we comply with all FDA requests, we cannot be sure that we will ever obtain regulatory clearance for any of our drug product candidates. Failure to obtain FDA approval of any of our prescription drug candidates will severely undermine our business by reducing our number of salable drug products and, therefore, corresponding revenues.

In international jurisdictions, we must receive approval from the appropriate regulatory authorities before we can commercialize our prescription drug candidates. International regulatory approval processes generally include all of the risks associated with the FDA approval procedures described above.

Before obtaining regulatory approval for the sale of our drug product candidates, including PV-10 and PH-10, we must conduct additional clinical trials to demonstrate the safety and efficacy of our drug product candidates. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to timing and outcome. Competition in clinical development has made it difficult to enroll patients at an acceptable rate in some of our clinical trials. Advances in medical technology could make our prescription drug candidates obsolete prior to completion of clinical testing. A failure of one or more of our clinical trials may occur at any stage of testing. The outcome of pre-clinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, pre-clinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in pre-clinical studies and clinical trials have nonetheless failed to obtain marketing approval for their products. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy characteristics despite having progressed satisfactorily through pre-clinical studies and initial clinical testing. A number of companies in the pharmaceutical and biotechnology industries, including those with greater resources and experience, have suffered significant setbacks in Phase 3 clinical development, even after seeing promising results in earlier clinical trials.

Our research and development expenses may increase in connection with expanding clinical trials of our product candidates in existing indications and undertaking clinical trials of our product candidates in new indications. Because successful development of our drug product candidates is uncertain, we are unable to estimate the actual funds required to complete research and development and commercialize our products under development.

Negative or inconclusive results of our future clinical trials of PV-10 and PH-10, or any other clinical trial we conduct, could cause the FDA to require that we repeat or conduct additional clinical studies. Despite the results reported in earlier clinical trials for PV-10 and PH-10, we do not know whether any clinical trials we may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market our product candidates. If later stage clinical trials do not produce favorable results, our ability to obtain regulatory approval for our product candidates, may be adversely impacted.

***Delays in clinical trials are common and have many causes, and any delay could result in increased costs to us and jeopardize or delay our ability to obtain regulatory approval.***

Our planned or ongoing clinical trials may not begin on time, have an effective design, enroll a sufficient number of subjects, or be completed on schedule, if at all. Events which may result in delays or unsuccessful completion of clinical trials, including our future clinical trials, include inability to raise funding, initiate or continue a trial, delays in obtaining regulatory approval to commence a trial, delays in reaching agreement with the FDA or other regulatory authorities on final trial design, imposition of a clinical hold following an inspection of our clinical trial operations or trial sites by the FDA or other regulatory authorities, delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, delays in obtaining required institutional review board (“IRB”) approval at each site, delays in recruiting suitable patients to participate in a trial, delays in having subjects complete participation in a trial or return for post-treatment follow-up, delays caused by subjects dropping out of a trial, delays caused by clinical sites dropping out of a trial, time required to add new clinical sites or to obtain regulatory approval and open sites in geographic regions beyond the sites initially planned, and delays by our contract manufacturers to produce and deliver sufficient supply of clinical trial materials.

In addition, we may experience a number of unforeseen events during clinical trials for our prescription drug candidates, including PV-10 and PH-10, that could delay or prevent the commencement and/or completion of our clinical trials, including regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site, the clinical study protocol may require one or more amendments delaying study completion, clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us to conduct additional clinical trials or abandon product development programs, the number of subjects required for clinical trials of our product candidates may be larger than we anticipate, subjects may drop out of these clinical trials at a higher rate than we anticipate and enrollment in these clinical trials may be significantly slower than we anticipated requiring us to expand the geographic scope of enrollment of patients, clinical investigators or study subjects may fail to comply with clinical study protocols, trial conduct and data analysis errors may occur, including, but not limited to, data entry and/or processing errors, our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, we might have to suspend or terminate clinical trials of our prescription drug candidates for various reasons, including a finding that the subjects are being exposed to unacceptable health risks, regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements, the cost of clinical trials of our prescription drug candidates may be greater than we anticipate, the supply or quality of our clinical trial materials or other materials necessary to conduct clinical trials of our prescription drug candidates may be insufficient or inadequate, and our prescription drug candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators to suspend or terminate the trials.

Moreover, we or the FDA may suspend our clinical trials at any time if it appears we are exposing participants to unacceptable health risks or if the FDA finds deficiencies in our submissions or the conduct of these trials. If initiation or completion of any of our clinical trials for our product candidates, are delayed for any of the above reasons or other reasons, our development costs may increase, the approval process could be delayed, any periods during which we may have the exclusive right to commercialize our prescription drug candidates may be reduced and our competitors may bring drug products to market before us. Any of these events could impair our ability to generate revenues from drug product sales and impair our ability to generate regulatory and commercialization milestones and royalties, all of which could have a material adverse effect on our business.

***The results of our clinical trials may not support acceptable label claims concerning our prescription drug candidates.***

Even if our clinical trials are completed as planned, we cannot be certain that their results will support acceptable label claims concerning our drug product candidates. Success in pre-clinical testing and early clinical trials does not ensure that later clinical trials will be successful, and we cannot be sure that the results of later clinical trials will replicate the results of prior clinical trials and pre-clinical testing. The clinical trial process may fail to demonstrate that our prescription drug candidates are safe for humans or effective for indicated uses.

This failure could cause us to abandon a prescription drug candidate and may delay development of other prescription drug candidates. Any delay in, or termination of, our clinical trials will delay our ability to commercialize our prescription drug candidates and generate product revenues. In addition, we anticipate that our clinical trials will involve only a small patient population. Accordingly, the results of such trials may not be indicative of future results over a larger patient population.

### Physicians and patients may not accept and use our prescription drug candidates.

Even if the FDA approves our drug product candidates, physicians and patients may not accept and use them. Acceptance and use of our drug products will depend upon a number of factors including perceptions by members of the healthcare community, including physicians, about the safety and effectiveness of our drug products, availability of reimbursement for our drug products from government or other healthcare payers, and effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any.

Because we expect sales or licensure of our prescription drug candidates, if approved, to generate substantially all of our revenues if they are approved, the failure of any of these drugs to find market acceptance would harm our business and could require us to seek additional financing.

***We have no sales, marketing or distribution capabilities for our prescription drug candidates.***

We currently have no sales, marketing or distribution capabilities. Our future success depends, in part, on our ability to enter into and maintain collaborative relationships, the collaborator’s strategic interest in the prescription drug products under development and such collaborator’s ability to successfully market and sell any such drug products. There can be no assurance that we will be able to establish or maintain relationships with third party collaborators or develop in-house sales and distribution capabilities. To the extent that we depend on third parties for marketing and distribution, any revenues we receive will depend upon the efforts of such third parties, and there can be no assurance that such efforts will be successful. In addition, there can also be no assurance that we will be able to market and sell our prescription drug candidates in the U.S. or internationally.

***Competition in the prescription pharmaceutical and biotechnology industries is intense.***

Other pharmaceutical and biotechnology companies and research organizations currently engage in or have in the past engaged in research efforts related to treatment of cancer and dermatological conditions, which may compete with our clinical trials for patients and investigator resources, cause lower enrollment than anticipated, and could lead to the development of drug products or treatment therapies that could compete directly with our drug product candidates that we are seeking to develop and market.

Many companies are also developing novel therapies to treat cancer and dermatological conditions and, in this regard, are our competitors. Many of the pharmaceutical companies developing and marketing these competing products have greater financial resources and expertise than we do in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals, and marketing.

Smaller companies may also prove to be competitors, particularly through collaborative arrangements with larger and more established companies that may compete with our efforts to establish similar collaborative arrangements. Academic institutions, government agencies, and other public and private research organizations may also conduct research, seek patent protection, and establish collaborative arrangements for research, clinical development, and marketing of prescription drug candidates similar to ours. These companies and institutions compete with us in recruiting and retaining qualified scientific and management personnel as well as in acquiring technologies complementary to our drug development programs.

In addition to the above factors, we expect to face competition in product efficacy and safety, the timing and scope of regulatory consents, availability of resources, reimbursement coverage, price, and patent position, including potentially dominant patent positions of others.

Since our prescription drug candidates PV-10 and PH-10 have not yet been approved by the FDA or introduced to the marketplace, we cannot estimate what competition these prescription drug candidates might face when they are finally introduced, if at all. We cannot assure you that these prescription drug candidates will not face significant competition for other approved drug products, investigational drug products, and generic equivalents.

***If we lose any of our key personnel, we may be unable to successfully execute our business plan.***

Our business is presently managed by key employees, independent contractors, and Board members: (i) Bruce Horowitz, our COO, who is an independent contractor, (ii) Heather Raines, CPA, our CFO, (iii) Dominic Rodrigues, who is vice chair of the Board, and (iv) Eric Wachter, Ph.D., our Chief Technology Officer (“CTO”).

In order to successfully execute our business plan, our management and Board must succeed in all of the following critical areas: researching diseases and possible therapies in the areas of oncology and dermatology, developing our prescription drugs candidates, marketing and selling developed prescription drug candidates, obtaining additional capital to finance research and development production, and marketing of our drug products, and managing our business as it grows.

Disruption resulting from management transition may have a detrimental impact on our ability to implement our strategy. The reduction in role and/or loss of key employees, contractors, and/or Board members could have a material adverse effect on our operations, and limit or constrain our ability to execute our business plan.

### Our business and operations are subject to risks related to climate change.

The long-term effects of global climate change present risks to our business. Extreme weather or other conditions caused by climate change could adversely impact our supply chain and the operation of our business. Such conditions could also result in physical damage to our leased property, clinical trial materials, clinical sites, or the facilities of our contract manufacturers. These events could adversely affect our operations and our financial performance.

***Our business and operations are vulnerable to computer system failures, cyber-attacks or deficiencies in our cyber-security, which could increase our expenses, divert the attention of our management and key personnel away from our business operations and adversely affect our results of operations.***

Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from: computer viruses; malware; natural disasters; terrorism; war; telecommunication and electrical failures; cyber-attacks or cyber-intrusions over the Internet; attachments to emails; persons inside our organization; or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, and damage to our reputation, and the further development of our product candidates could be delayed. We could be forced to expend significant resources in response to a cyber security breach, including repairing system damage, increasing cyber security protection costs by deploying additional personnel and protection technologies, paying regulatory fines and resolving legal claims and regulatory actions, all of which would increase our expenses, divert the attention of our management and key personnel away from our business operations and adversely affect our results of operations.

### Risks Related to Our Intellectual Property

***If we are unable to secure or enforce patent rights, trademarks, trade secrets or other IP, our business could be harmed.***

We may not be successful in securing or maintaining proprietary patent protection for our prescription drug candidates and technologies we develop or license. In addition, our competitors may develop prescription drug candidates similar to ours using methods and technologies that are beyond the scope of our IP protection, which could reduce our anticipated sales. While some of our drug product candidates have proprietary patent protection, a challenge to these patents can subject us to expensive litigation. Litigation concerning patents, other forms of IP, and proprietary technology is becoming more widespread and can be protracted and expensive and can distract management and other personnel from performing product development duties.

We also rely upon trade secrets, unpatented proprietary knowledge and continuing technological innovation to develop a competitive position. We cannot assure you that others will not independently develop substantially equivalent proprietary technology and techniques or otherwise gain access to our trade secrets and technology, or that we can adequately protect our trade secrets and technology.

If we are unable to secure or enforce patent rights, trademarks, trade secrets, or other IP, our business, financial condition, results of operations and cash flows could be materially adversely affected. If we infringe on the IP of others, our business could be harmed.

We could be sued for infringing patents and other IP that purportedly cover prescription drug candidates and/or methods of using such prescription drug candidates held by persons other than us. Litigation arising from an alleged infringement could result in removal from the market, or a substantial delay in, or prevention of, the introduction of our prescription drug candidates, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

### If we do not update and enhance our technologies, they will become obsolete.

The pharmaceutical market is characterized by technological change, and our future success will depend on our ability to conduct successful research in our fields of expertise, discover new technologies as a result of that research, develop products based on our technologies, and commercialize those products. While we believe that our current technology is adequate for our present needs, if we fail to stay at the forefront of technological development, we will be unable to compete effectively. Our competitors may use greater resources to develop new pharmaceutical technologies and to commercialize products based on those technologies. Accordingly, our technologies may be rendered obsolete by advances in existing technologies or the development of different technologies by one or more of our current or future competitors.

### Risks Related to Our Governing Documents and Securities

***Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent a change of control, even if an acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.***

Our certificate of incorporation and bylaws contain provisions that could delay or prevent a change of control of our company or changes in our board of directors that our stockholders might consider favorable. Among other things, these provisions will (i) permit our Board to issue up to 25,000,000 shares of preferred stock which can be created and issued by the Board without prior stockholder approval, with rights senior to those of the common stock, (ii) provide that all vacancies on our Board, including as a result of newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, (iii) require that any action to be taken by our stockholders must be affected at a duly called annual or special meeting of stockholders and not be taken by written consent, (iv) provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s notice, (v) not provide for cumulative voting rights, and (vi) provide that special meetings of our stockholders may be called only by the Board or by such person or persons requested by a majority of the Board to call such meetings.

These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our Board or initiate actions that are opposed by our then-current Board, including delaying or impeding a merger, tender offer, or proxy contest involving our company. Any delay or prevention of a change of control transaction or changes in our Board could cause the market price of our common stock to decline.

***Our stock price is below $5.00 per share and is treated as a “penny stock,” which places restrictions on broker-dealers recommending the stock for purchase.***

Our common stock is defined as “penny stock” under the Exchange Act and its rules. The SEC has adopted regulations that define “penny stock” to include common stock that has a market price of less than $5.00 per share, subject to certain exceptions. These rules include the following requirements: (i) broker-dealers must deliver, prior to the transaction, a disclosure schedule prepared by the SEC relating to the penny stock market, (ii) broker-dealers must disclose the commissions payable to the broker-dealer and its registered representative, (iii) broker-dealers must disclose current quotations for the securities, and (iv) a broker-dealer must furnish its customers with monthly statements disclosing recent price information for all penny stocks held in the customer’s account and information on the limited market in penny stocks.

Additional sales practice requirements are imposed on broker-dealers who sell penny stocks to persons other than established customers and accredited investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and must have received the purchaser’s written consent to the transaction prior to sale. If our common stock remains subject to these penny stock rules these disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for our common stock. As a result, fewer broker-dealers may be willing to make a market in our stock, which could affect a shareholder’s ability to sell their shares.

***Future sales by our stockholders may adversely affect our stock price and our ability to raise funds in new stock offerings.***

Sales of our common stock in the public market following any prospective offering could lower the market price of our common stock. Sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price that our management deems acceptable.

### It is our general policy to retain any earnings for use in our operation.

We have never declared or paid cash dividends on our common stock. We currently intend to retain all of our future earnings, if any, for use in our business and therefore do not anticipate paying any cash dividends on our common stock in the foreseeable future.

***In the event of the liquidation, winding-up or dissolution of the Company or certain mergers, corporate reorganizations or sales of our assets, holders of Series D and Series D-1 Preferred Stock will be entitled to a preference of a multiple of their investment amount, which will reduce the proceeds to be received by holders of our common stock.***

In connection with the 2021, 2020 and 2017 Financings, we have issued convertible notes that converted or are convertible into shares of Series D and Series D-1 Preferred Stock. The Series D and Series D-1 Preferred Stock will have a first priority right to receive proceeds from the liquidation, winding-up or dissolution of us or certain mergers, corporate reorganizations or sales of our assets (each, a “Company Event”). If a Company Event occurs within two (2) years of the date of issuance of the Series D and Series D-1 Preferred Stock (the “Date of Issuance”), the holders of Series D and Series D-1 Preferred Stock will 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 and Series D-1 Preferred Stock will receive a preference of six times (6x) their respective investment amount. As a result, upon the occurrence of a Company Event, the holders of Series D and Series D-1 Preferred Stock would have the right to receive proceeds from any such transaction before our common stockholders. The payment of this preference could result in our common stockholders not receiving any consideration in connection with a Company Event.

### Risks Related to SARS-CoV-2

***We are subject to risks associated with a pandemic, epidemic or outbreak of a contagious disease, such as the ongoing SARS-CoV-2 pandemic, which may affect our future access to liquidity and materially adversely affect our business operations, results of operations and financial condition.***

SARS-CoV-2 was reportedly first identified in late-2019 and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the SARS-CoV-2 pandemic, many companies have experienced disruptions of their operations and the markets they serve. The Company has taken several temporary precautionary measures intended to help ensure the well-being of its employees and contractors and to minimize business disruption. The Company considered the impact of SARS-CoV-2 pandemic on its business and operational assumptions and estimates, and determined there were no material adverse impacts on the Company’s results of operations and financial position at December 31, 2021.

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

## Properties

As filed, 243 characters.

We currently lease approximately 4,500 square feet of space for operations in Century Park, Knoxville, TN. Our monthly rental charge for these offices is approximately $6,100 per month. The lease is for five years and expires on June 30, 2022.

## Legal proceedings

As filed, 230 characters.

The information required by this item is incorporated by reference from Part II, Item 8. Financial Statements and Supplementary Data, Notes to Consolidated Financial Statements, Note 15 – Commitments, contingencies and litigation.

## Management's discussion and analysis

As filed, 20,248 characters.

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 consolidated financial statements and notes thereto included in this Annual Report on Form 10-K. 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 Biopharmaceuticals, Inc. is a clinical-stage biotechnology company developing immunotherapy medicines based on a family of small molecules called halogenated xanthenes (“HXs”). The Company’s lead HX molecule is rose bengal sodium (“RBS”).

### Recent Developments

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

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

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

#### 2021 Financing

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

As of December 31, 2021, the Company had received 2021 Notes proceeds of $1,460,000, as defined below, of which $200,000 is from a related party investor.

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

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

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

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

(iii) The outstanding principal amount and interest payment under the 2021 Notes may be paid back at maturity at the investors’ option;

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

(v) In the event the Company conducts a qualified equity or debt financing and the Company receives gross proceeds in the aggregate amount of $20 million, the 2021 Notes may be converted into the equity securities and/or debt instruments of such financing at the same terms as those investors.

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On an as-converted basis, the Series D-1 Preferred Stock carries the right to ten (10) votes per share. The Series D-1 Preferred Stock does not have any dividend preference but will 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-1 Preferred Stock do not have anti-dilution protection.

#### Warrants

In 2021, holders of 18,052,966 warrants to purchase the common stock of the Company at $0.053 per share, have exercised these warrants. The Company has received proceeds in the aggregate amount of $962,223. On August 30, 2021, a total of 68,723,698 of August 2016 warrants expired.

### Components of Operating Results

#### Research and Development Expenses

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

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

We expense research and development costs as incurred.

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

#### General and Administrative Expenses

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

### Comparison of the Years Ended December 31, 2021 and 2020

#### Overview

Total operating expenses were $4,672,254 for the year ended December 31, 2021, a decrease of $291,322 or 5.9% compared to the year ended December 31, 2020. The decrease was driven by our continued transformation and process improvement efforts within the Company, along with lower amortization expense and reduced professional service fees. Net loss for the year ended December 31, 2021 was $5,539,543, a decrease of $1,138,044 or 17.0% compared to the year ended December 31, 2020, which resulted from reduced costs incurred in connection with our preclinical and clinical trial programs, general and administrative costs, and interest expense due to the conversion of the 2017 and 2020 Notes, plus the gain associated with the extinguishment of the Company’s PPP loan.

| Operating Expenses: | For the Years Ended December 31, 2021 | 2020 | Increase/(Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $2,608,357 | $2,812,760 | $(204,403) | -7.3% |
| General and administrative | 2,063,897 | 2,150,816 | (86,919) | -4.0% |
| Total Operating Expenses | 4,672,254 | 4,963,576 | (291,322) | -5.9% |
| Total Operating Loss | (4,672,254) | (4,963,576) | (291,322) | 5.9% |
| Other Income/(Expense): |  |  |  |  |
| EIDL grant | - | 3,000 | (3,000) | -100.0% |
| Research and development tax credit | 31,315 | 27,694 | 3,621 | 13.1% |
| Investment and interest income | 4 | 3,415 | (3,411) | -99.9% |
| Gain from forgiveness of PPP Loan and interest | 63,094 | - | 63,094 | 0.0% |
| Interest expense | (961,702) | (1,748,120) | 786,418 | -45.0% |
| Total Other Expense, Net | (867,289) | (1,714,011) | 846,722 | -49.4% |
| **Net Loss** | $(5,539,543) | $(6,677,587) | $(1,138,044) | 17.0% |

#### Research and Development

Research and development expenses were $2,608,357 for the year ended December 31, 2021, a decrease of $204,403 or 7.3% compared to the year ended December 31, 2020. The decrease was due to (i) lower amortization due to patents being fully amortized, and (ii) lower insurance cost, partially offset by (iii) increased clinical trial costs as sites resumed enrollment and treatments.

The following table summarizes our research and development expenses incurred during the years ended December 31, 2021 and 2020:

| Operating Expenses: Research and development: | For the Years Ended December 31, 2021 | 2020 | Increase/(Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Clinical trial and research expenses | $2,064,125 | $1,983,498 | $80,627 | 4.1% |
| Depreciation/amortization | 8,647 | 236,754 | (228,107) | -96.3% |
| Insurance | 207,556 | 263,074 | (55,518) | -21.1% |
| Payroll and taxes | 266,514 | 264,983 | 1,531 | 0.6% |
| Rent and utilities | 61,515 | 64,451 | (2,936) | -4.6% |
| Total research and development | $2,608,357 | $2,812,760 | $(204,403) | -7.3% |

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#### General and Administrative

General and administrative expenses were $2,063,897 for the year ended December 31, 2021, a decrease of $86,919 or 4.0% compared to the year ended December 31, 2020. The decrease was due to (i) lower insurance cost, (ii) lower professional fees, and (iii) lower other general and administrative cost, partially offset by (iv) higher legal fees from conversion of 2017 and 2020 Notes and addition of 2021 Notes, and (v) higher payroll and related taxes due to an additional employee.

The following table summarizes our general and administrative expenses incurred during the years ended December 31, 2021 and 2020:

| Operating Expenses: General and administrative: | For the Years Ended December 31, 2021 | 2020 | Increase/(Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Depreciation | $4,218 | $5,036 | $(818) | -16.2% |
| Directors’ fees | 385,000 | 383,065 | 1,935 | 0.5% |
| Insurance | 161,992 | 185,516 | (23,524) | -12.7% |
| Legal and litigation | 590,779 | 485,569 | 105,210 | 21.7% |
| Other general and administrative cost | 63,679 | 190,577 | (126,898) | -66.6% |
| Payroll and taxes | 230,898 | 168,448 | 62,450 | 37.1% |
| Professional fees | 591,356 | 698,577 | (107,221) | -15.3% |
| Rent and utilities | 31,055 | 32,755 | (1,700) | -5.2% |
| Foreign currency translation | 4,920 | 1,273 | 3,647 | 286.5% |
| Total general and administrative | $2,063,897 | $2,150,816 | $(86,919) | -4.0% |

#### Other Income/(Expense)

Other income increased by $60,304 from $34,109 for the year ended December 31, 2020 to $94,413 for the year ended December 31, 2021, mainly due to the forgiveness of the PPP Loan.

Interest expense decreased by $786,418 from $1,748,120 for the year ended December 31, 2020 to $961,702 for the year ended December 31, 2021. The decrease was due to the conversion of the 2017 and 2020 Notes into shares of Series D and Series D-1 Convertible Preferred Stock.

The following table summarizes our Other Income/(Expenses) incurred during the years ended December 31, 2021 and 2020:

| Other Income/(Expense): | For the Years Ended December 31, 2021 | 2020 | Increase/(Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| EIDL grant | $- | 3,000 | $(3,000) | -100.0% |
| Research and development tax credit | 31,315 | 27,694 | 3,621 | 13.1% |
| Investment and interest income | 4 | 3,415 | (3,411) | -99.9% |
| Gain from forgiveness of PPP Loan and interest | 63,094 | - | 63,094 | 0.0% |
| Interest expense | (961,702) | (1,748,120) | 786,418 | -45.0% |
| Total Other Expenses, Net | $(867,289) | $(1,714,011) | $846,722 | -49.4% |

### Liquidity and Going Concern

Our cash, cash equivalents, and restricted cash were $3,106,942 at December 31, 2021, which includes the $2,423,958 of restricted cash associated with the grant received from the State of Tennessee, compared with $97,231 at December 31, 2020. The consolidated financial statements and notes thereto included in this Annual Report on Form 10-K 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 $246,033,958 as of December 31, 2021. These conditions raise substantial doubt about our ability to continue as a going concern for a period of at least one year from the date that the consolidated financial statements included elsewhere in this Annual Report on Form 10-K are issued. Our financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on our ability to obtain additional financing as may be required to fund current operations.

Management’s plans include selling our equity securities and obtaining other financing to fund our capital requirement and on-going operations, including the 2021 Financing discussed above; however, there can be no assurance we will be successful in these efforts. Significant funds will be needed to continue and complete our ongoing and planned clinical trials.

As of December 31, 2021 and 2020, we had cash and cash equivalents of $3,106,942, including $2,423,958 of restricted cash, and $97,231, respectively, and a working capital deficit of $4,258,679 and $30,288,035, respectively. Cash requirements for our current liabilities include approximately, $3,352,184 for accounts payable and accrued expenses (including lease liabilities) and a $238,452 note payable related to our short-term financing of our commercial insurance policies. Also, if not converted prior to maturity, convertible debt in the amount of $1,460,000 plus accrued interest will mature one year from the date of the notes. There are no cash requirements for long term liabilities at December 31, 2021. The Company intends to meet these cash requirements from its current cash balance and from future financing.

#### Access to Capital

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

The primary business objective of management is to build the Company into a commercial-stage biotechnology company; however, we cannot assure you that management will be successful in implementing the Company’s business plan of developing, licensing, and/or commercializing our prescription drug candidates. Moreover, even if we are successful in improving our current cash flow position, we nonetheless plan to seek additional funds to meet our current and long-term requirements in 2022 and beyond. We anticipate that these funds will otherwise come from the proceeds of private placement transactions, including the 2021 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.

During the years ended December 31, 2021 and 2020, our sources and uses of cash were as follows:

#### Net Cash Used in Operating Activities

We experienced negative cash flow from operating activities for the years ended December 31, 2021 and 2020 in the amounts of $1,013,304- and $4,085,795, respectively. The net cash used in operating activities for the year ended December 31, 2021 was primarily due to cash used to fund a net loss of $5,539,543, adjusted for non-cash expenses in the aggregate amount of $54,717, plus $4,471,522 of cash generated from changes in the levels of operating assets and liabilities. The net cash used in operating activities for the year ended December 31, 2020 was primarily due to cash used to fund a net loss of $6,677,587, adjusted for non-cash expenses in the aggregate amount of $450,123, plus $2,141,669 of cash generated from changes in the levels of operating assets and liabilities.

#### Net Cash Provided by Financing Activities

Net cash provided by financing activities during the years ended December 31, 2021 and 2020 was $4,024,046 and $3,600,191, respectively. During the year ended December 31, 2021, $3,160,000 were proceeds from the issuance of convertible notes payable, $962,223 were from the exercise of warrants and, $150,000 was from the investment to purchase Series D-1 Preferred Stock, less $248,177 for repayment of short-term note payable. During the year ended December 31, 2020, $3,225,000 were proceeds from the issuance of convertible notes payable, $418,676 were from the exercise of warrants, less $105,985 for repayment of short-term note payable, and $62,500 was proceeds received through the PPP loan.

### Critical Accounting Estimates

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

The following is not intended to be a comprehensive list of all of our accounting policies or estimates. Our accounting policies are more fully described in Note 3 – Summary of Significant Accounting Policies, in our financial statements included at the end of this Annual Report.

#### Stock-Based Compensation

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

#### Research and Development

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

### Recent Accounting Pronouncements

Recently issued accounting standards are included in Note 3 – Significant Accounting Policies of our consolidated financial statements included within this annual report.

## Controls and procedures

As filed, 5,285 characters.

#### Management’s Annual Report on Internal Control over Financial Reporting

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.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of the period covered by this report based on the criteria for effective internal control described in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of management’s assessment and evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2021.

#### Evaluation of Disclosure Controls and Procedures

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 Exchange Act. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

#### Inherent Limitations on Effectiveness of Controls

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

#### Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the fourth quarter of 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Filed Mar 29, 2022.
Source: SEC EDGAR, the filing index for accession 0001493152-22-008016. Last ingested by Listed: Oct 30, 2026, 11:33 ET. No prices; not investment advice.