What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-03-29 compared with 2021-03-02 · 901 added, 750 removed, 263 unchanged (86% of the section changed)

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TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

of Independent Registered Public Accounting Firm (Marcum LLP, PCAOB ID No.

Consolidated Balance Sheets as of December 31, 2021 and 2020

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Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2021 and 2020

Consolidated Statements of Changes In Stockholders’

Deficiency for the Years Ended December 31, 2020 and 2019

Consolidated Statements of Changes In Stockholders’ Deficiency for the Years Ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020

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OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

the Stockholders and Board of Directors of

Biopharmaceuticals, Inc.

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have audited the accompanying consolidated balance sheets of Provectus Biopharmaceuticals, Inc.

and Subsidiaries (the “Company”)

as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, changes in stockholders’

deficiency and cash flows for each of the two years in the period ended December 31, 2020, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations

and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally

accepted in the United States of America.

Paragraph –

Going Concern

and Subsidiaries (the “Company”)

as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, changes in stockholders’

deficiency and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material

respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows

for each of the two years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United

States of America.

Paragraph – Going Concern

accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As more fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and

needs to raise additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about

the Company's ability to continue as a going concern.

fully described in Note 2, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise

additional funds to meet its obligations and sustain its operations.

These conditions raise substantial doubt about the Company’s

ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The consolidated

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

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consolidated financial statements based on our audit s .

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

We are a public accounting firm registered with the Public Company Accounting

Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit s

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Those standards require that we plan and perform the audit s to

obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose

of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express

no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

Audit Matters are matters arising from the current period audit of the financial statements that were communicated or required

to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements

and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit

/s/ Marcum LLP

have served as the Company’s auditor since 2016.

Audit Matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

have served as the Company’s auditor since 2016.

BIOPHARMACEUTICALS, INC.

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Cash and cash equivalents

Short-term receivables - legal fees, settlement and other, net

Prepaid expenses

Restricted cash

Short-term receivables

Prepaid expenses and other current assets

Total Current Assets

Equipment and furnishings, less accumulated depreciation of $78,313 and $64,630, respectively

Equipment and furnishings, less accumulated depreciation of $ 91,178

and $ 78,313 ,

Operating lease right-of-use asset

Patents, net of accumulated amortization of $11,715,455 and $11,487,338, respectively

Liabilities and Stockholders’

Liabilities and Stockholders’ Deficiency

Current Liabilities:

Accounts payable - trade

Accounts payable

Deposit for purchase

of Series D-1 Preferred Stock

Unearned grant revenue

Other accrued expenses

Current portion of accrued interest

Current portion of accrued interest - related parties

Current portion of note payable

Current portion of convertible notes payable

Current portion of convertible notes payable - related parties

Current portion of operating lease liability

Accrued interest

Accrued interest - related parties

Notes payable

Convertible notes payable

Convertible notes payable - related parties

Operating lease liability

Total Current Liabilities

Accrued interest, non-current portion

Accrued interest, non-current portion - related parties

Note payable, non-current portion

Convertible notes payable, non-current portion

Convertible notes payable, non-current portion - related parties

Operating lease liability, non-current portion

Total Liabilities

Commitments and contingencies (Note 11)

Stockholders’

Commitments, contingencies and litigation (Note 15)

Stockholders’ Deficiency:

Preferred stock;

par value $0.001 per share;

25,000,000 shares authorized;

par value $ 0.001

25,000,000 shares

Series B Convertible Preferred Stock;

shares designated;

100 shares issued and outstanding at December 31, 2020 and December 31, 2019;

aggregate liquidation preference of $3,500 at December 31, 2020 and December 31, 2019

shares issued and outstanding at December 31, 2021 and 2020, respectively;

aggregate liquidation preference of $ 0

at December 31, 2021 and 2020, respectively

D Convertible Preferred Stock;

shares designated;

shares issued and outstanding at December

31, 2021 and 2020, respectively;

aggregate liquidation preference of $ 14,164,889

at December 31, 2021 and 2020, respectively;

Stockholders’ Deficiency – Liquidation Preference )

D-1 Convertible Preferred Stock;

shares designated;

shares issued and outstanding at December

31, 2021 and 2020, respectively;

aggregate liquidation preference of $ 105,532,804

at December 31, 2021 and 2020, respectively;

Stockholders’ Deficiency – Liquidation Preference )

Common stock;

par value $0.001 per share;

par value $ 0.001

1,000,000,000

shares authorized;

398,807,037 and 389,889,475 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

and 398,807,037 shares issued and

outstanding at December 31, 2021 and 2020, respectively

Additional paid-in capital

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( 240,494,415 )

Total Stockholders’

Total Stockholders’ Deficiency

( 4,187,280 )

( 30,206,357 )

Total Liabilities and Stockholders’

Total Liabilities and Stockholders’ Deficiency

accompanying notes to consolidated financial statements.

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Total Operating Loss

( 4,672,254 )

( 4,963,576 )

Other Income/(Expense):

Gain on settlement of lawsuits

Research and development tax credit

Investment and interest income

Gain from forgiveness of PPP Loan and interest

Interest expense

( 1,748,120 )

Total Other Expense, Net

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$ ( 5,539,543 )

$ ( 6,677,587 )

Basic and Diluted Loss Per Common Share

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BIOPHARMACEUTICALS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

THE YEARS ENDED DECEMBER 31, 2021 AND 2020

Preferred Stock

Comprehensive

Balance at January 1, 2019

at January 1, 2020

$ 209,378,835

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$ ( 24,072,112 )

Common stock issued upon exercise of warrants

Common stock issued upon exercise

Stock-based compensation:

Conversion of Series B Preferred

Stock to Common Stock

Conversion of Series B Preferred

Stock to Common Stock ,shares

Conversion of PRH Notes to

Series D Preferred Stock

Conversion of PRH Notes to

Series D Preferred Stock, shares

Conversion of PRH Notes to

Series D-1 Preferred Stock

Conversion of PRH Notes to

Series D-1 Preferred Stock, shares

Conversion of PRH Notes to

Series D-1 Preferred Stock , shares

Conversion of Note to Series

D-1 Preferred Stock

Conversion of Note to Series

D-1 Preferred Stock

Conversion of Series D-1 Preferred

Stock to Common Stock

Conversion of Series D-1 Preferred

Stock to Common Stock , shares

Comprehensive loss:

Other comprehensive loss

Balance at December 31, 2019

( 6,677,587 )

comprehensive loss

at December 31, 2020

$ 209,923,347

Common stock issued upon exercise of warrants

$ ( 240,494,415 )

$ ( 30,206,357 )

$ 209,923,347

$ ( 240,494,415 )

$ ( 30,206,357 )

Common stock issued upon exercise

Stock-based compensation:

Conversion of Series B Preferred

Stock to Common Stock

Conversion of PRH Notes to

Series D Preferred Stock

Conversion of PRH Notes to

Series D-1 Preferred Stock

Conversion of Series D-1 Preferred

Stock to Common Stock

Comprehensive loss:

Other comprehensive loss

Balance at December 31, 2020

( 5,539,543 )

comprehensive loss

at December 31, 2021

( 246,033,958 )

( 4,187,280 )

( 246,033,958 )

( 4,187,280 )

accompanying notes to consolidated financial statements.

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Stock-based compensation

Noncash lease expense

Non-cash lease expense

Amortization of patents

Gain on forgiveness of PPP Loan and interest

Changes in operating assets and liabilities

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Prepaid expenses

Accounts payable - trade

Accounts payable

Unearned grant revenue

Other accrued expenses

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Accrued interest expense

Cash Used In Operating Activities

Net Cash Used In Operating Activities

( 1,013,304 )

( 4,085,795 )

Cash Flows From Financing Activities:

Proceeds from issuance of convertible notes payable

Proceeds from issuance of convertible

notes payable - related parties

Proceeds from issuance of convertible notes payable - related parties

Repayment of short-term note payable

Proceeds from note payable

Deposit for purchase of Series D-1 Preferred Stock

Proceeds from exercise of warrants

Cash Provided By Financing Activities

of Exchange Rate Changes on Cash

Net (Decrease)/Increase

In Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Period

Cash and Cash Equivalents, End of Period

Net Cash Provided By Financing Activities

Effect of exchange rates on cash, cash equivalents,

and restricted cash

Net Increase (Decrease) In Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash, Beginning

Cash, Cash Equivalents, and Restricted Cash, End of Period

Cash, cash equivalents and restricted cash consisted of the following:

Cash and cash equivalents

Restricted cash

and cash Equivalents, restricted cash

Supplemental Disclosures of Cash Flow Information:

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Non-cash investing and financing activities:

Purchase of insurance policies financed by short-term note payable

Offset of related party receivable and payable

Purchase of insurance policies financed by short-term

Conversion of non-amended 2017 Notes to Series D Preferred

Conversion of amended 2017 Notes and 2020 Notes to Series

D-1 Preferred Stock

Conversion of Series D-1 Preferred Stock to Common stock

accompanying notes to consolidated financial statements.

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Business Organization and Nature of Operations

Biopharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, “Provectus”

or the “Company”),

is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases, with the aim of maximizing

the curative impact of these medicines and achieving immunity from treated disease.

These investigational drugs are based on an

entire, wholly-owned, family of small molecules called halogenated xanthenes (“HXs”);

our lead HX molecule

is named rose bengal disodium (“RBD”).

, an investigational autolytic cancer immunotherapy administered

by intralesional (“IL”) injection and an injectable formulation of cGMP RBD,

is undergoing clinical study for adult solid tumor cancers, such as melanoma and gastrointestinal

(“GI”) tumors (including hepatocellular carcinoma (“HCC”), colorectal

cancer metastatic to the liver (“mCRC”), neuroendocrine tumors (“NET”)

metastatic to the liver (“mNET”), and uveal melanoma metastatic to the liver

(“mUM”), among others).

Orphan drug designation (“ODD”)

status has been granted to IL PV-10 by the U.S.

Food and Drug Administration (the “FDA”)

for metastatic melanoma in 2006, HCC in 2011, and ocular melanoma (including uveal melanoma)

formulations of cGMP RBD are also undergoing preclinical study as prophylactic and therapeutic treatments for high-risk

adult solid tumor cancers, such as head and neck, breast, pancreatic, liver, and colorectal cancers.

IL PV-10 is also undergoing preclinical study for pediatric solid tumor cancers (including neuroblastoma, Ewing

sarcoma, rhabdomyosarcoma, and osteosarcoma).

ODD status has been granted to IL PV-10 by the FDA for neuroblastoma

Oral formulations of cGMP RBD are undergoing preclinical study for pediatric blood cancers (including leukemia).

Systemically-administered formulations of cGMP RBD are undergoing preclinical study for the novel strain of coronavirus

(“CoV”), severe acute respiratory syndrome (“SARS”) CoV 2 (“SARS-CoV-2”).

Biopharmaceuticals, Inc., a Delaware corporation (together with its subsidiaries, “Provectus” or the “Company”),

is a clinical-stage biotechnology company developing immunotherapy medicines for different diseases, with the aim of maximizing the curative

impact of these medicines and achieving immunity from treated disease.

These investigational drugs are based on a wholly owned class

of small molecules called halogenated xanthenes (“HXs”).

Our lead HX molecule is named rose bengal sodium (“RBS”).

PV-10 ® , an investigational cancer immunotherapy administered by intralesional (“IL”) injection and

an injectable formulation of cGMP (“current Good Manufacturing Practice”) RBS, is undergoing clinical study for adult

solid tumor cancers, such as melanoma and gastrointestinal (“GI”) tumors (including hepatocellular carcinoma (“HCC”),

colorectal cancer metastatic to the liver (“mCRC”), neuroendocrine tumors (“NET”) metastatic to the liver

(“mNET”), and uveal melanoma metastatic to the liver (“mUM”), among others).

Orphan drug designation (“ODD”)

status was granted to PV-10 by the FDA for metastatic melanoma in 2006, HCC

in 2011, and ocular melanoma (including uveal melanoma) in 2019.

formulations of cGMP RBS are also undergoing preclinical study as prophylactic and therapeutic treatments for high-risk and refractory

adult solid tumor cancers, such as head and neck, breast, colorectal, and testicular cancers.

In vivo data of a colorectal

tumor murine model that continuously promotes abnormal cell proliferation and transformation into cancer indicate increased survival

in both prophylactic and therapeutic settings.

IL PV-10 is also undergoing preclinical study for pediatric solid tumor cancers (including neuroblastoma, Ewing sarcoma,

rhabdomyosarcoma, and osteosarcoma).

ODD status was granted to PV-10 by the FDA for neuroblastoma in 2018.

Oral formulations of cGMP RBS are undergoing preclinical study for refractory and relapsed pediatric blood cancers (including

In vivo data of an acute lymphoblastic leukemia murine model indicated increased survival.

Systemically administered formulations of cGMP RBS are undergoing preclinical study for the novel strain of coronavirus (“CoV”):

severe acute respiratory syndrome (“SARS”) CoV 2 (“SARS-CoV-2”).

In silico data indicate docking-based

binding affinity to SARS-CoV-2’s main protease, spike protein, and different variants of the spike protein.

data indicate activity against SARS-CoV-2 in African green monkey kidney cell (Vero) and human lung epithelial cell (Calu-3) models,

and synergistic activity with remdesivir in a Vero cell model.

Microbiology:

Different formulations of cGMP RBD are undergoing preclinical study as potential treatments for multi-drug resistant (“MDR”)

bacteria, such as Gram-negative bacteria.

Different formulations of cGMP RBS are undergoing preclinical study as potential treatments for multi-drug resistant (“MDR”)

bacteria, such as gram-positive and gram-negative.

Ophthalmology:

Topical formulations of cGMP RBD are undergoing preclinical study as potential treatments for diseases of the eye, such

as infectious keratitis.

, an investigational immuno-dermatology agent administered as a topical gel and formulation of cGMP

RBD, is undergoing clinical study for inflammatory dermatoses (including psoriasis and atopic dermatitis).

Topical formulations of cGMP RBS are undergoing preclinical study as potential treatments for diseases of the eye, such as infectious

PH-10 ® , an investigational immuno-dermatology agent administered as a topical gel and formulation of cGMP RBS,

is undergoing monotherapy clinical study and preclinical study of combination therapy with approved drugs for inflammatory dermatoses

(including psoriasis and atopic dermatitis).

Different formulations of cGMP RBS are undergoing development as potential treatments for animal cancers and dermatological

date, the Company has not generated any revenues or profits from planned principal operations.

The Company’s activities

are subject to significant risks and uncertainties, including failing to successfully develop and license or commercialize the

Company’s prescription drug candidates.

The Company’s activities are subject

to significant risks and uncertainties, including failing to successfully develop and license or commercialize the Company’s prescription

drug candidates.

was reportedly first identified in late-2019 and subsequently declared a global pandemic by the World Health Organization on March 11,

As a result of the SARS-CoV-2 pandemic, many companies have experienced disruptions of their operations and the markets

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, 2020.

full extent of the SARS-CoV-2 pandemic impacts on the Company’s operations and financial condition is uncertain.

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.

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.

full extent of the SARS-CoV-2 pandemic impacts on the Company’s operations and financial condition is still uncertain.

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.

Liquidity and Going Concern

Company’s cash and cash equivalents were $97,231 at December 31, 2020, compared with $590,706 at December 31, 2019.

Company continues to incur significant operating losses and management expects that significant on-going operating expenditures

will be necessary to successfully implement the Company’s business plan and develop and market its products.

These circumstances

raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the

consolidated financial statements are issued.

Implementation of the Company’s plans and its ability to continue as a going

concern will depend upon the Company’s ability to develop PV-10 and PH-10 and raise additional capital.

Company plans to access capital resources through possible public or private equity offerings, including the 2020 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.

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 2020 Financing or otherwise,

it will not be able to pay its obligations as they become due.

Subsequent to December 31, 2020, the Company received an aggregate

$1,200,000 in connection with the 2020 Financing.

In addition, holders of 4,500,000 warrants to purchase the common stock of the

Company at $0.0533 per share, have exercised these warrants, resulting in aggregate proceeds to the Company in the amount of $239,850.

See Note 14 –

Subsequent Events.

Company’s cash, cash equivalents, and restricted cash were $ 3,106,942

at December 31, 2021 which includes the $ 2,423,958

of restricted cash resulting from a grant

received from the State of Tennessee.

The Company’s working capital deficiency was $ 4,258,679

and $ 30,288,035

as of December 31, 2021 and 2020, respectively.

The improvement in working capital is primarily driven by the conversion of the 2017 and 2020 Notes into Series D and D-1 Preferred Stock.

The Company continues to incur significant operating losses.

Management expects that significant on-going operating expenditures will

be necessary to successfully implement the Company’s business plan and develop and market its products.

These circumstances raise

substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated

financial statements are issued.

Implementation of the Company’s plans and its ability to continue as a going concern will depend

upon the Company’s ability to develop PV-10, PH-10, and/or any other halogenated xanthene-based drug products, and to raise additional

Company plans to access capital resources through possible public or private equity offerings, including the 2021 Financing (as defined

in Note 5), exchange offers, debt financings, corporate collaborations, or other means.

In addition, the Company continues to explore

opportunities to strategically monetize its lead drug candidates, PV-10 and PH-10, through potential co-development and licensing transactions,

although there can be no assurance that the Company will be successful with such plans.

The Company has historically been able to raise

capital through equity and debt offerings, although no assurance can be provided that it will continue to be successful in the future.

If the Company is unable to raise sufficient capital, it will not be able to pay its obligations as they become due.

primary business objective of management is to build the Company into a commercial-stage biotechnology company;

2 unchanged sentences

xanthene-based drug candidate developed by the Company or entering into any financial transaction.

Moreover, even if the Company

is successful in improving its current cash flow position, the Company nonetheless plans to seek additional funds to meet its

long-term requirements in 2021 and beyond.

The Company anticipates that these funds will otherwise come from the proceeds of private

placement transactions, including the 2020 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 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.

Moreover, even if the Company is successful

in improving its current cash flow position, the Company nonetheless plans to seek additional funds to meet its long-term requirements

in 2022 and beyond.

The Company anticipates that these funds will otherwise come from the proceeds of private placement transactions,

the exercise of existing warrants and outstanding stock options, or public offerings of debt or equity securities.

While the Company

believes that it has a reasonable basis for its expectation that it will be able to raise additional funds, the Company cannot provide

assurance that it will be able to complete additional financing in a timely manner.

In addition, any such financing may result in significant

dilution to stockholders.

Significant Accounting Policies

1 unchanged sentence

balances and transactions have been eliminated in consolidation.

preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”)

requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and

expenses during the reporting period.

The Company’s significant estimates and assumptions include the collectability of

receivables, the recoverability and useful lives of long-lived assets, stock-based compensation, accrued liabilities and the valuation

allowance related to the Company’s deferred tax assets.

preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”)

requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during

the reporting period.

The Company’s significant estimates and assumptions include the recoverability

and useful lives of long-lived assets, stock-based compensation, accrued liabilities and the valuation allowance related to the Company’s

deferred tax assets.

and Cash Equivalents

Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

As of December 31, 2020 and 2019, the Company’s cash equivalent consists of Treasury bills.

December 31, 2021 and 2020, the Company’s cash equivalents consist of Treasury bills.

cash consists of a grant award of $ 2,500,000

received in cash from the State of Tennessee less payments

to vendors for expenses and deposits in the amount of $ 76,042 .

Concentrations

and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits of $250,000,

although the Company seeks to minimize this through treasury management.

The Company has never experienced any losses related

to these balances although no assurance can be provided that it will not experience any losses in the future.

cash equivalents, and restricted cash are

maintained at financial institutions and, at times, balances may exceed federally insured limits of $250,000, although the Company seeks

to minimize this through treasury management.

The Company has never experienced any losses related to these balances although no assurance

can be provided that it will not experience any losses in the future.

As of December 31, 2021 and 2020, the Company had cash,

cash equivalent, and restricted cash balances in excess of FDIC insurance limits of $ 2,856,942

respectively.

and Furnishings, net

and furnishings are stated at cost less accumulated depreciation.

Depreciation of equipment is provided for using the straight-line

method over the estimated useful lives of the assets.

Computers, leasehold improvements and office equipment are being depreciated

over five years;

furniture and fixtures are being depreciated over ten years.

Maintenance and repairs are charged to operations

The Company capitalizes cost attributable to the betterment of property and equipment when such betterment extends

the useful life of the assets.

Company reviews the carrying values of its long-lived assets for possible impairment whenever an event or change in circumstances

indicates that the carrying amount of the assets may not be recoverable.

Any long-lived assets held for disposal are reported

at the lower of their carrying amounts or fair value less cost to sell.

Management has determined there to be no impairment during

the years ended December 31, 2020 and 2019.

Depreciation of equipment is provided for using the straight-line method

over the estimated useful lives of the assets.

Computers and office equipment are being depreciated over five years;

furniture and fixtures

are being depreciated over ten years.

Leasehold improvements are amortized over the lesser of (a) the useful life of the asset;

the remaining lease term.

Maintenance and repairs are charged to operations as incurred.

The Company capitalizes cost attributable to

the betterment of property and equipment when such betterment extends the useful life of the assets.

Company reviews the carrying values of its long-lived assets for possible impairment whenever an event or change in circumstances indicates

that the carrying amount of the assets may not be recoverable.

Any long-lived assets held for disposal are reported at the lower of their

carrying amounts or fair value less cost to sell.

Management has determined there to be no impairment during the years ended December

31, 2021 and 2020.

patent costs are expensed in the period incurred.

Patents purchased are capitalized and amortized over the remaining estimated

useful life of the patent.

patents are fully amortized.

Annual amortization of the patents was $228,000 in 2020.

Patents purchased are capitalized and amortized over the remaining estimated useful

life of the patent.

patents are fully amortized as of December 31, 2021 and 2020.

Patent amortization was $ 0 and $ 228,107

during the years ended December 31, 2021 and

2020, respectively.

Party Receivables

estimates the reserve for uncollectibility based on existing economic conditions, the financial conditions of the current and

former employees, and the amount and age of past due receivables.

Receivables are considered past due if full payment is not received

by the contractual due date.

Past due amounts are generally written off against the reserve for uncollectibility only after all

collection attempts have been exhausted.

See Note 7 –

Short-term Receivables.

estimates the reserve for uncollectibility based on existing economic conditions, the financial conditions of the current and former

employees, and the amount and age of past due receivables.

Receivables are considered past due if full payment is not received by the

contractual due date.

Past due amounts are generally written off against the reserve for uncollectibility only after all collection attempts

have been exhausted.

See Note 8 – Short-term Receivables.

income is recognized when qualifying costs are incurred and there is reasonable assurance that conditions of the grant have been met.

Cash received from grants in advance of incurring qualifying costs is recorded as unearned grant revenue and recognized as other income

when qualifying costs are incurred.

and Development

and development costs are charged to expense when incurred.

An allocation of payroll expenses to research and development is made

based on a percentage estimate of time spent.

An allocation of payroll expenses to research and development is made based

on a percentage estimate of time spent.

The research and development costs include the following:

payroll, consulting and

contract labor, lab supplies and pharmaceutical preparations, insurance, rent and utilities, and depreciation and amortization.

February 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard related to leases to increase

transparency and comparability among organizations by requiring the recognition of operating lease right-of-use (“ROU”)

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 recognition of ROU assets and lease liabilities by lessees for those leases classified as operating

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 modified retrospective

approach, with certain practical expedients available.

payroll, consulting and contract labor,

lab supplies and pharmaceutical preparations, insurance, rent and utilities, and depreciation and amortization.

February 2016, the Financial Accounting Standards Board (“FASB”) issued a new standard related to leases to increase transparency

and comparability among organizations by requiring the recognition of operating lease right-of-use (“ROU”) 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 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 modified retrospective approach, with certain practical expedients available.

Company adopted ASC 842 effective January 1, 2019 and elected to apply the available practical expedients.

The standard had an

impact on the Company’s consolidated balance sheets but did not have a material impact on the Company’s consolidated

statements of operations or cash flows upon adoption.

The most significant impact was the recognition of ROU assets and lease

liabilities for operating leases.

Company accounts for income taxes under the liability method in accordance with Accounting Standards Codification (“ASC”)

740 “Income Taxes”.

Under this method, deferred income tax assets and liabilities are determined based on differences

between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that

will be in effect when the differences are expected to reverse.

A valuation allowance is established if it is more likely than

not that all, or some portion, of deferred income tax assets will not be realized.

The Company has recorded a full valuation allowance

to reduce its net deferred income tax assets to zero.

In the event the Company were to determine that it would be able to realize

some or all its deferred income tax assets in the future, an adjustment to the deferred income tax asset would increase income

in the period such determination was made.

Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon

an examination.

Any recognized income tax positions would be measured at the largest amount that is greater than 50% likely of

being realized.

Changes in recognition or measurement would be reflected in the period in which the change in judgment occurs.

The Company would recognize any corresponding interest and penalties associated with its income tax positions in income tax expense.

There were no income taxes, interest or penalties incurred in 2020 or 2019.

The standard had an impact

on the Company’s consolidated balance sheets but did not have a material impact on the Company’s consolidated statements

of operations or cash flows upon adoption.

The most significant impact was the recognition of ROU assets and lease liabilities for operating

Company accounts for income taxes under the liability method in accordance with Accounting Standards Codification (“ASC”)

740 “Income Taxes”.

Under this method, deferred income tax assets and liabilities are determined based on differences between

financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect

when the differences are expected to reverse.

A valuation allowance is established if it is more likely than not that all, or some portion,

of deferred income tax assets will not be realized.

The Company has recorded a full valuation allowance to reduce its net deferred income

tax assets to zero.

In the event the Company were to determine that it would be able to realize some or all its deferred income tax assets

in the future, an adjustment to the deferred income tax asset would increase income in the period such determination was made.

Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination.

Any recognized income tax positions would be measured at the largest amount that is greater than 50 % likely of being realized.

in recognition or measurement would be reflected in the period in which the change in judgment occurs.

The Company would recognize any

corresponding interest and penalties associated with its income tax positions in income tax expense.

There were no income taxes, interest

or penalties incurred in 2021 or 2020.

Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative

financial instruments to be separately accounted for in accordance with ASC Topic 815:

Derivatives and Hedging .

The accounting

treatment of derivative financial instruments requires that the Company record qualifying embedded conversion options and any related

freestanding instruments at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance

Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance

The Company reassesses the classification of its derivative instruments at each balance sheet date.

If the classification

changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

Embedded conversion options classified as derivative liabilities and any related equity classified freestanding instruments are recorded

as a discount to the host instrument.

the instrument is determined to not be a derivative liability, the Company then evaluates for the existence of a beneficial conversion

feature by comparing the commitment date fair value to the effective conversion price of the instrument.

Company applies the accounting standards for distinguishing liabilities from equity when determining the classification and measurement

of its preferred stock.

Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at

Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within

the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control)

are classified as temporary equity.

At all other times, preferred shares are classified as stockholders’ deficiency.

and Diluted Loss Per Common Share

loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during

Diluted earnings per share reflects the potential dilution that could occur if securities or other instruments to

issue common stock were exercised or converted into common stock.

The following securities are excluded from the calculation of

weighted average dilutive common shares because their inclusion would have been anti-dilutive:

loss per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the

Diluted earnings per share reflects the potential dilution that could occur if securities or other instruments to issue common

stock were exercised or converted into common stock.

The following securities are excluded from the calculation of weighted average dilutive

common shares because their inclusion would have been anti-dilutive:

Schedule of Securities Excluded from Calculation of Weighted Average Dilutive Common Shares

Convertible preferred stock

Total potentially dilutive shares

potential dilutive effect of the conversion of the Company’s convertible notes payable has been excluded from this table

since the Company’s Series D Preferred Stock has yet to be designated by the Board.

Value of Financial Instruments

Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements

and Disclosures”

(“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and

expands disclosures about fair value measurements.

The Company determines the estimated fair value of amounts presented in these

consolidated financial statements using available market information and appropriate methodologies.

However, considerable judgment

is required in interpreting market data to develop the estimates of fair value.

The estimates presented in the financial statements

are not necessarily indicative of the amounts that could be realized in a current exchange between buyer and seller.

different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

fair value estimates were based upon pertinent information available as of December 31, 2020 and 2019.

The carrying amounts of

the Company’s financial assets and liabilities, such as cash and cash equivalents, receivables, other current assets, accounts

payable, and accrued expenses approximate fair values due to the short-term nature of these instruments.

carrying amounts of our credit obligations approximate fair value because the effective yields on these obligations, which include

contractual interest rates are comparable to rates of returns for instruments of similar credit risk.

820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price)

in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants

on the measurement date.

ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable

inputs and minimize the use of unobservable inputs when measuring fair value.

ASC 820 describes three levels of inputs that may

be used to measure fair value:

Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and

Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures

about fair value measurements.

The Company determines the estimated fair value of amounts presented in these consolidated financial statements

using available market information and appropriate methodologies.

However, considerable judgment is required in interpreting market data

to develop the estimates of fair value.

The estimates presented in the financial statements are not necessarily indicative of the amounts

that could be realized in a current exchange between buyer and seller.

The use of different market assumptions and/or estimation methodologies

may have a material effect on the estimated fair value amounts.

These fair value estimates were based upon pertinent information available

as of December 31, 2021 and 2020.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash

equivalents, restricted cash, receivables, other current assets, accounts payable, unearned grant income, and accrued expenses approximate

fair values due to the short-term nature of these instruments.

carrying amounts of our credit obligations approximate fair value because the effective yields on these obligations, which include contractual

interest rates are comparable to rates of returns for instruments of similar credit risk.

820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the

principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement

ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize

the use of unobservable inputs when measuring fair value.

ASC 820 describes three levels of inputs that may be used to measure fair value:

use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

use directly or indirectly observable inputs.

These inputs include quoted prices for similar assets and liabilities in active

markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity

for the related asset or liability.

These inputs include quoted prices for similar assets and liabilities in active markets

as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the

related asset or liability.

instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements

in their entirety are categorized based on the lowest level input that is significant to the valuation.

The Company’s assessment

of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to

each asset or liability.

observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3

As a result, the unrealized gains and losses for assets within the Level 3 category may include changes in fair value

that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in historical

company data) inputs.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted

cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The Company’s assessment

of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset

or liability.

observable and unobservable inputs may be used to determine the fair value of positions that are classified within the Level 3 category.

As a result, the unrealized gains and losses for assets within the Level 3 category may include changes in fair value that were attributable

to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in historical company data) inputs.

assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar

techniques and at least one significant model assumption or input is unobservable.

Currency Translation

Company’s reporting currency is the United States Dollar.

The functional currencies of the Company’s operating subsidiaries

Company’s reporting currency is the United States Dollar.

The functional currencies of the Company’s operating subsidiaries

are their local currencies (United States Dollar and Australian Dollar).

Australian Dollar denominated assets and liabilities

are translated into the United States Dollar at the balance sheet date ($10,552 and $332,446 at December 31, 2020 and $61,380

and $308,915 at December 31, 2019, respectively), and expense and other income accounts are translated at a weighted average

exchange rate for the years then ended ($44,994 and $53,210 for the years ended December 31, 2020 and 2019, respectively).

is translated at historical rates and the resulting foreign currency translation adjustments are included as a component of accumulated

other comprehensive loss (“AOCL”), which is a separate component of shareholders’

Australian Dollar denominated assets and liabilities are translated

into the United States Dollar at the balance sheet date ($ 22,053

and $ 407,851

at December 31, 2021 and $ 10,552

and $ 332,446

at December 31, 2020, respectively), and expense

and other income accounts are translated at a weighted average exchange rate for the years then ended ($ 85,052

for the years ended December 31, 2021 and 2020,

respectively).

Equity is translated at historical rates and the resulting foreign currency translation adjustments are included as a

component of accumulated other comprehensive loss (“AOCL”), which is a separate component of stockholders’ deficiency.

Therefore, the U.S.

dollar value of the non-equity translated items in the Company’s consolidated financial statements will fluctuate from period

to period, depending on the changing value of the U.S.

dollar value of the non-equity translated items in the Company’s consolidated financial statements will

fluctuate from period to period, depending on the changing value of the U.S.

dollar versus these currencies.

Company engages in foreign currency denomination transactions with its Australian subsidiary.

At the date that the transaction

is recognized, each asset, liability, revenue, expense, gain or loss arising from the transaction is measured and recorded in

the functional currency of the recording entity using the exchange rate in effect at that date.

At each balance sheet date, recorded

monetary balances denominated in a currency other than the functional currency are adjusted using the exchange rate at the balance

sheet date, with gains or losses recorded in other income or other expense.

Company engages in foreign currency denominated transactions with its Australian subsidiary.

At the date that the transaction is recognized,

each asset, liability, revenue, expense, gain or loss arising from the transaction is measured and recorded in the functional currency

of the recording entity using the exchange rate in effect at that date.

At each balance sheet date, recorded monetary balances denominated

in a currency other than the functional currency are adjusted using the exchange rate at the balance sheet date, with gains or losses

recorded in other income or other expense.

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 be provided in exchange for 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 determined by reviewing its historical public market closing prices.

fair value of the award is measured on the grant date and then is recognized over the period during which services are required to be

provided in exchange for 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 determined by reviewing its

historical public market closing prices.

Issued Accounting Pronouncements

December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes.

The amendments in ASU 2019-12

simplify the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification

(“ASC”) Topic 740, Income Taxes .

The amendments also improve consistent application of and simplify GAAP for

other areas of Topic 740 by clarifying and amending existing guidance.

ASU 2019-12 will be effective for the Company’s fiscal

year beginning after December 15, 2020, with early adoption permitted.

The transition requirements are dependent upon each

amendment within this update and will be applied either prospectively or retrospectively.

The Company does not expect this ASU

to have a material impact on its consolidated financial statements.

January 2020, the FASB issued ASU 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint

Ventures (Topic 323), and Derivatives and Hedging (Topic 815).”

ASU 2020-01 states any equity security transitioning from

the alternative method of accounting under Topic 321 to the equity method, or vice versa, due to an observable transaction will

be remeasured immediately before the transition.

In addition, the ASU clarifies the accounting for certain non-derivative forward

contracts or purchased call options to acquire equity securities stating such instruments will be measured using the fair value

principles of Topic 321 before settlement or exercise.

The ASU is effective for fiscal years beginning after December 15, 2020,

and will be applied on a prospective basis.

Early adoption is permitted.

The Company is still evaluating the impact this standard

will have on its consolidated financial statements and related disclosures.

March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2020-03, “Codification Improvements to Financial Instruments”

(“ASU 2020-03”).

There are seven issues

addressed in this update.

Issues 1 –

5 were clarifications and codifications of previous updates.

Issue 3 relates only to

depository and lending institutions and therefore would not be applicable to the Company.

Issue 6 was a clarification on determining

the contractual term of a net investment in a lease for purposes of measuring expected credit losses, an issue not applicable

to the Company.

Issue 7 relates to the regaining control of financial assets sold and the recordation of an allowance for credit

The amendment related to issues 1, 2, 4 and 5 became effective immediately upon adoption of the update.

Issue 3 becomes

effective for fiscal years beginning after December 15, 2019.

Issues 6 and 7 become effective on varying dates that relate to

the dates of adoption of other updates.

Management’s initial analysis is that it does not believe the new guidance will

substantially impact the Company’s consolidated financial statements.

The Company adopted certain provisions which have

become effective during fiscal 2020 within ASU 2020-03 and its adoption did not have a material impact on the Company’s

condensed consolidated financial statements and financial statement disclosures.

The Company is currently evaluating the effect

that adopting the remaining new accounting guidance will have on its consolidated financial statements and related disclosures.

August 2020, FASB issued ASU No.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts

in an Entity’s Own Equity”

(“ASU 2020-06”).

Under ASU 2020-06, the embedded conversion features are no

longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted

for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital.

Consequently,

a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other

features require bifurcation and recognition as derivatives.

The new guidance also requires the if-converted method to be applied

for all convertible instruments.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim

periods within those fiscal years, with early adoption permitted.

August 2020, FASB issued Accounting Standards Update (“ASU”) No.

2020-06, “Debt—Debt with Conversion

and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”).

Under ASU 2020-06,

the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features

that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for

as paid-in capital.

Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized

cost, as long as no other features require bifurcation and recognition as derivatives.

The new guidance also requires the if-converted

method to be applied for all convertible instruments.

ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including

interim periods within those fiscal years, with early adoption permitted.

Adoption of the standard requires using either a modified retrospective

or a full retrospective approach.

The Company is currently evaluating the effect of the adoption of ASU 2020-06 will have on its

consolidated financial statements and related disclosures.

October 2020, the FASB issued ASU 2020-10 “Codification Improvements”, which improves consistency by amending the

The Company is currently evaluating the effect of the adoption of ASU 2020-06 will have on its consolidated

financial statements and related disclosures.

October 2020, the FASB issued ASU 2020-10 “Codification Improvements” , which improves consistency by amending the

Codification to include all disclosure guidance in the appropriate disclosure sections and clarifies application of various provisions

1 unchanged sentence

The guidance is effective for the Company beginning in the first quarter of fiscal year 2022 with early adoption permitted.

Company is currently assessing the impact that this pronouncement will have on its consolidated financial statements.

adopted this standard on January 1, 2022 and it did not have a material effect on its consolidated financial statements.

May 3, 2021, the FASB issued ASU

2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock

Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options.

This new standard provides

clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified

written call options (such as warrants) that remain equity classified after modification or exchange.

This standard is effective for

fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Issuers should apply the new standard

prospectively to modifications or exchanges occurring after the effective date of the new standard.

Early adoption is permitted, including

adoption in an interim period.

If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied

as of the beginning of the fiscal year that includes that interim period.

The Company adopted this standard on January 1, 2022 and

it did not have a material effect on its consolidated financial statements.

Adopted Accounting Pronouncements

August 2018, the FASB issued ASU No.

2018-13, “Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to

the Disclosure Requirements for Fair Value Measurement”

(“ASU 2018-13”).

The amendments in ASU 2018-13 modify

the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration

of costs and benefits.

The amendments on changes in unrealized gains and losses, the range and weighted average of significant

unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty

should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption.

All other amendments should be applied retrospectively to all periods presented upon their effective date.

The amendments are

effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.

Early adoption is permitted, including adoption in an interim period.

The Company adopted ASU

effective January 1, 2020 and it did not have a material impact on the Company’s consolidated

financial statements.

Reclassifications

Certain prior period amounts have been

reclassified for comparative purposes to conform with the fiscal 2020 presentation.

These reclassifications have no impact on

the previously reported net loss.

December 2019, the FASB issued ASU 2019-12,

Simplifying the Accounting for Income Taxes.

The amendments in ASU 2019-12 simplify the accounting for income taxes by removing

certain exceptions to the general principles in Accounting Standards Codification (“ASC”) Topic 740, Income Taxes .

The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing

The Company adopted ASU 2019-12 on January 1, 2021 and there was no material impact on the Company’s consolidated

financial statements or disclosures.

January 2020, the FASB issued ASU 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures

(Topic 323), and Derivatives and Hedging (Topic 815).” ASU 2020-01 states any equity security transitioning from the alternative

method of accounting under Topic 321 to the equity method, or vice versa, due to an observable transaction will be remeasured immediately

before the transition.

In addition, the ASU clarifies the accounting for certain non-derivative forward contracts or purchased call options

to acquire equity securities stating such instruments will be measured using the fair value principles of Topic 321 before settlement

20 The Company adopted ASU 2020-01 on a prospective basis on January 1, 2021 and there was no material impact on the Company’s

consolidated financial statements or disclosures.

March 2020, the FASB issued ASU No.

2020-03, “Codification Improvements to Financial Instruments” (“ASU 2020-03”).

There are seven issues

addressed in this update.

Issues 1 – 5 were clarifications and codifications of previous updates.

Issue 3 relates only to depository

and lending institutions and therefore would not be applicable to the Company.

Issue 6 was a clarification on determining the contractual

term of a net investment in a lease for purposes of measuring expected credit losses, an issue not applicable to the Company.

relates to the regaining control of financial assets sold and the recordation of an allowance for credit losses.

The amendment related

to issues 1, 2, 4 and 5 became effective immediately upon adoption of the update.

Issue 3 becomes effective for fiscal years beginning

after December 15, 2019.

Issues 6 and 7 become effective on varying dates that relate to the dates of adoption of other updates.

Company adopted the applicable provisions within ASU 2020-03 which became effective during fiscal 2020 and 2021 and this adoption did

not have a material impact on the Company’s consolidated financial statements and financial statement disclosures.

Other Accrued Expenses

following table summarizes the other accrued expenses at December 31, 2021 and 2020:

of Other Accrued Expenses

For The Years Ended

Accrued payroll and taxes

Accrued vacation

Accrued directors’ fees

Accrued PPP interest

Accrued other expenses

Total Other Accrued Expenses

Convertible Notes Payable

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 “2017 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”).

of December 31, 2020, the Company had received aggregate 1st Loans, as defined below, of $20,067,000 in connection with

the 2017 Financing.

2017 Financing is in the form of a secured convertible loan (the “1 st Loan”) from the PRH Group or other

investors in the 2017 Financing (the “1 st Loan Investors”).

The 1 st Loan is evidenced by secured

convertible promissory notes (individually a “2017 Note”

and collectively, the “2017 Notes”) from the

Company to the PRH Group or the 1 st Loan Investors.

In addition to the customary provisions, the 2017 Notes contains

following summarizes convertible note activity during the years ended December 31, 2021 and 2020:

of Convertible Notes Payable

Balance at January 1, 2020

Balance at December 31, 2020

( 20,067,000 )

( 5,025,000 )

( 25,092,000 )

Balance at December 31, 2021

August 13, 2021, the Board approved a Financing Term Sheet (the “2021 Term Sheet”), which set 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.

to the 2021 Term Sheet, the 2021 Notes will either 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.

2021 Financing is 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:

is secured by a first priority security interest on the Company’s IP,

1 st Loan bears interest at the rate of 8% per annum on the outstanding principal amount of the 2017 Notes that

has been funded to the Company,

1 st 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,

2017 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 2017 Notes, (ii) upon a change of control of the Company, or (iii) dates ranging from May 15, 2021

to the 18-month anniversary of the funding of the Final Tranche.

In the event there is a change of control of the Company’s

Board as proposed by any person or group other than the 1 st Loan Investors,

the term of the 2017 Notes will be accelerated and all amounts due under the 2017 Notes will be immediately due and payable,

plus interest at the rate of 8% per annum, plus a penalty in the amount equal to 10 times the outstanding principal amount

of the 1 st Loan that has been funded to the Company,

outstanding principal amount and interest payable under the 1 st Loan will become convertible at the sole discretion

of the 1 st Loan Investors into shares of the Company’s Series

D Preferred Stock, a new series of preferred stock, that the Company’s Board may designate in the future, at a price

per share equal to $0.2862, and

Notwithstanding

(v) above, the principal amount of the 2017 Notes and the interest payable under the 1 st 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

18-month anniversary of the funding of the final tranche of the 2017 Financing subject to certain exceptions if the Company’s

Board designates such series of preferred stock in the future.

to the 2017 Term Sheet, the PRH Group concluded its best-efforts activity to arrange for a financing of $20,000,000, which amounts

were provided in a number of tranches, between the first tranche on April 4, 2017 and the Final Tranche, on December 20, 2019.

As a result, the 2017 Notes under the 1 st Loan will convert into shares of Series D Preferred Stock (once designated)

of the Company on or before June 20, 2021, which is the 18-month anniversary of the funding of the Final Tranche of the 2017 Financing,

subject to certain exceptions.

conversion of the 2017 Notes, the 1 st Loan Investors will release their first lien on the Company’s IP.

December 31, 2019, the Board approved a Definitive Financing Term Sheet (the “2020 Term Sheet”), which sets forth

the terms under which the Company will use its best efforts to arrange for financing of a maximum of $20,000,000 (the “2020

Financing”).

The 2020 Financing will be in the form of secured convertible loans from investors that

will be evidenced by convertible promissory notes (the “2020 Notes”).

The 2020 Term Sheet is similar to the 2017 Term

Subject to the terms and conditions of the 2020 Term Sheet, the Company will use its best efforts to arrange for the 2020

Financing, which amounts will be obtained in several tranches.

The proceeds from the 2020 Financing will be used to fund the Company’s

clinical development program, as currently constituted and envisioned, and to fund the Company’s general and administrative

to the 2020 Term Sheet, the 2020 Notes (defined below) will convert into shares of the Company’s Series D Preferred Stock

on or before June 20, 2021, subject to certain exceptions.

As of December 31, 2019, and through the date of filing, the Series

D Preferred Stock had not been designated by the Board.

2020 Financing will be in the form of a secured convertible loan (the “2 nd Loan”) from the Investors (the

“2 nd Loan Investors”) that will be evidenced by convertible promissory notes (individually, a “2020

and collectively, the “2020 Notes”) subordinate to the 2017 Notes in right of payment and to the security

interests granted to holders of the 2017 Notes.

In addition to customary provisions, the 2020 Notes contains the following provisions:

It will be secured by a second priority security interest on the Company’s IP subordinate to the first priority security

interest of the 2017 Notes;

The 2 nd Loan will bear interest at the rate of eight percent (8%) per annum on the outstanding principal amount of

the 2 nd Loan that has been funded to the Company;

In the event there is a change of control of the Company’s Board, the term of the 2020 Notes will be accelerated and all

amounts due under the 2020 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 2 nd Loan that has been

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;

The outstanding principal amount and interest payable under the 2 nd Loan will become convertible at the sole discretion

of the 2 nd Loan Investors into shares of the Company’s Series D Preferred Stock, a series of preferred stock

to be designated by the Board, at a price per share equal to $2.8620;

Notwithstanding (iv) above, the principal amount of the 2020 Notes and the interest payable under the 2 nd Loan will

automatically convert into shares of the Company’s Series D Preferred Stock at a price per share equal to $2.8620 effective

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;

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

outstanding principal amount and interest payable under the 2021 Notes may be convertible at the investors’ option into shares

of Series D-1 Preferred Stock at a price per share equal to $ 2.8620 .

The Series D-1 Preferred Stock is convertible into ten ( 10 )

shares of common stock;

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.

embedded conversion options associated with the 2021 Notes do not require bifurcation and treatment as a derivative liability and they

do not represent a beneficial conversion feature because the effective conversion price is not at a discount to the commitment date market

of December 31, 2021, the Company had received 2021 Notes (defined above) proceeds of $ 1,460,000 , of which $ 200,000

is from a related party investor (an officer

of the Company).

On December 31, 2019, the Board approved a Definitive

Financing Term Sheet (the “2020 Term Sheet”), which sets forth the terms of a financing in the form of secured convertible

loans from investors that were evidenced by convertible promissory notes (the “2020 Notes”), which bear interest at the rate

of eight percent ( 8 %) per annum.

outstanding principal amount and interest payable under the 2020 was convertible into shares of a new series of preferred stock

at a price per share equal to $ 2.8620 ,

either (a) at any time after the new series of preferred stock is designated, at the sole discretion of the investors;

or (b) automatically

on June 20, 2021, subject to certain exceptions.

conversion of the 2 nd Loan, the 2 nd Loan Investors will release their second lien on the IP.

Loan Investors in the 2020 Financing will hold Series D Preferred Stock pari passu with the Series D Preferred Stock of

1 st Loan Investors in the 2017 Financing.

the 2020 Financing was launched and through December 31, 2020, the Company had received aggregate 2 nd Loans

of $3,325,000.

Notes Payable –

Related Parties

the year ended December 31, 2019, the Company entered into 2017 Notes with related parties in the aggregate principal amount of

$50,000 offset by the application of the 2017 Note in the principal amount of $250,000 that the Company entered into with Timothy

Scott (former President) and Leigh Anne Scott on February 28, 2018 that was applied to Dr.

Scott’s Kleba Settlement agreement.

As of December 31, 2020 and 2019, the Company had borrowed $6,670,000 of 2017 Notes from related parties which

were outstanding.

the year ended December 31, 2020, the Company entered into 2020 Notes with related parties in the aggregate principal amount of

As of December 31, 2020, the Company had borrowed $100,000 of 2020 Notes from related parties which were outstanding.

Notes Payable –

Non-Related Parties

the year ended December 31, 2019, the Company entered into 2017 Notes with accredited investors in the aggregate principal amount

of $6,335,000.

As of December 31, 2020 and 2019, the Company had borrowed $13,397,000 under these notes, all of which

were outstanding as of that date.

During the year ended December 31, 2019, the Company entered into a 2020 Note with an accredited

investor in the principal amount of $100,000.

As of December 31, 2019, the Company had borrowed $100,000 under this note.

the year ended December 31, 2020, the Company entered into 2020 Notes with accredited investors in the aggregate principal amount

of $3,125,000.

As of December 31, 2020, the Company had borrowed $3,225,000 under these notes, all of which were outstanding

as of that date.

Series D Preferred Stock

of December 31, 2020, and through the date of filing, the Series D Preferred Stock had not been designated by the Board.

terms of the notes issued in connection with the 2017 and 2020 Financings, if the Company has not designated the Series D Preferred

Stock or if an insufficient number of Series D Preferred shares exist upon a conversion by a note holder, then the outstanding

loans will continue to accrue interest at a rate of 8% per annum until which time the Company has designated a sufficient number

of Series D Preferred shares.

As a result, the Company did not analyze the notes for a potential beneficial conversion feature

as the definition of a firm commitment has not been met since the notes were not convertible as of their respective dates of issuance

or as of December 31, 2020.

See 2021 Conversions of Notes into Preferred Stock below.

time, the Company received 2020 Notes proceeds of $ 5,025,000 , of which $ 100,000 is from a related party investor, an officer of the Company.

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 “2017 Term Sheet”)

that set forth the terms of a financing in the form of secured convertible loans from the PRH Group or other investors that were evidenced

by convertible promissory notes (the “2017 Notes”), which bore interest at the rate of eight percent ( 8 %)

outstanding principal amount and interest payable under the 2017 Notes were convertible into shares of a new series of preferred

stock at a price per share equal to $ 0.2862 ,

either (a) at any time after the new series of preferred stock is designated, at the sole discretion of the investors;

or (b) automatically

at the eighteen-month anniversary of the funding of the final tranche of 2017 Notes, subject to certain exceptions.

See 2021 Conversions

of Notes into Preferred Stock below.

time, the Company received 2017 Notes proceeds of $ 20,067,000 , of which $ 6,670,000 is from related party investors.

Officers of the Company

invested $ 3,050,000 and Board of Director members invested $ 3,620,000 .

the Company had not designated the new series of preferred stock into which the 2017 Notes and the 2020 Notes (collectively the “Notes”)

were convertible into.

As a result, the Company did not analyze the Notes for a potential beneficial conversion feature, as the definition

of a firm commitment had not been met since the Notes were not yet convertible.

On June 17, 2021, the required Certificates of Designation

were filed with the Delaware Secretary of State.

Accordingly, a firm commitment was achieved.

The Company analyzed the Notes for a beneficial

conversion feature and determined that there was none because the Notes have an effective conversion price of $ 0.2862 per share of underlying

common stock, which exceeds the $ 0.07 per share commitment date closing market price of the common stock.

Conversions of Notes into Preferred Stock

following summarizes the conversion activity during the year ended December 31, 2021:

of Conversion of Notes into Preferred Stock

2021 Conversions Into Preferred

Principal converted

Accrued interest converted

Total converted

Conversion price

fractional shares issuable pursuant to the formula were rounded up to the next whole share of Series D and Series D-1 Preferred Shares.

2017 Notes originally provided that they were convertible into a new series of preferred stock at a price per share equal to $ 0.2862

(the “Original Conversion Price”).

order to ensure that the Company had sufficient authorized shares of preferred stock into which the 2017 Notes would convert, yet keep

the economic terms of the 2017 Notes substantially equivalent, on February 26, 2019, the Company entered into amendments (the

“Amendments”) to the 2017 Notes (as amended, the “Amended 2017 Notes”) with a large majority of the holders of

2017 Notes to increase the conversion price by 10 times from $ 0.2862

(the “New Conversion Price”) and

to change the conversion ratio by providing that one share of Preferred Stock would be convertible into 10 shares of common stock (the

“New Conversion Ratio”).

The impact of the Amendments was to reduce by 10 times the number of shares of preferred stock into

which the 2017 Notes would convert, while keeping the economic terms the same.

The 2020 Notes had substantially similar terms to the

Amended 2017 Notes, including being convertible into preferred stock at the New Conversion Price, with the Preferred Stock being convertible

into Common Stock at the New Conversion Ratio.

order to (i) address the fact that a small minority of the holders of 2017 Notes did not execute the Amendments and (ii) ensure economic

fairness for all of the holders of the 2017 Notes and 2020 Notes, on June 17, 2021, the Company designated two separate series

of preferred stock into which the 2017 Notes and 2020 Notes would convert:

(i) the Company’s Series D Convertible Preferred Stock,

par value $ 0.001

per share was designated for the holders of 2017

Notes who did not execute the Amendments and (ii) the Company’s Series D-1 Convertible Preferred Stock, par value $ 0.001

per share was designated for the holders of Amended

2017 Notes and the holders of the 2020 Notes.

June 20, 2021, principal and interest in the aggregate amount of $ 3,541,222 ,

representing all of the outstanding non-amended 2017 Notes, was converted into 12,373,247

shares of Series D Convertible Preferred Stock

at the Original Conversion Price of $ 0.2862 .

Further on June 20, 2021, principal and interest in the aggregate amount of $ 27,031,858 ,

representing all of the outstanding Amended 2017 Notes and outstanding 2020 Notes was converted into 9,440,594

shares of Series D-1 Convertible Preferred Stock

at the New Conversion Price of $ 2.862 .

Any fractional shares issuable pursuant to the formula were rounded up to the next whole share of Series D and Series D-1 Preferred

Stockholders’ Deficiency for additional information on the Series D and Series D-1 Convertible Preferred

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.

Notes Payable

April 20, 2020, the Company received a $62,500 loan under the CARES Act PPP (the “PPP Loan”).

The PPP provides for

loans to qualifying businesses for amounts of up to 2.5 times certain of the borrower’s average monthly payroll expenses.

The loan principal and accrued interest are forgivable, as long as the borrower uses loan proceeds for eligible uses during a

specified period following disbursement, such as payroll, benefits, rent, and utilities, and maintains specified headcount and

payroll thresholds.

If any portion of a PPP Loan is not forgiven, the unforgiven portion is payable over two years at an interest

rate of 1%, with a deferral of payments for the first seven months.

The Company intends to use PPP Loan proceeds in a manner that

it believes presently qualifies for full forgiveness.

We cannot provide assurance that the PPP Loan will be forgiven in full.

As of December 31, 2020, the Company had not applied for forgiveness of the PPP Loan.

Once an amount is forgiven under the PPP

Loan, the Company will recognize a gain on forgiveness of note payable in the period in which it obtained forgiveness.

On April 20, 2020, the

Company received a $ 62,500

loan under the CARES Act PPP (the “PPP Loan”).

PPP provides for loans to qualifying businesses for amounts of up to 2.5 times certain of the borrower’s average monthly payroll

On May 20, 2021, the Company applied for forgiveness of the PPP Loan.

On June 2, 2021, the Company was awarded full

forgiveness of the PPP Loan and accrued interest.

During the year ended December 31, 2021, the Company recognized a gain on forgiveness

of the PPP loan of $ 62,500

and interest of $ 594 .

Company obtained short-term financing from AFCO Insurance Premium Finance for our commercial insurance policies.

As of December 31, 2021

31, 2020 and 2019, the balance of the note payable was $212,790 and $228,424, respectively.

and December 31, 2020, the balance of the note payable was $ 238,452 and $ 212,790 , respectively.

Related Party Transactions

1 unchanged sentence

Bruce Horowitz (Capital Strategists) consulting fees of $ 169,600

and $277,200, respectively, for services rendered.

and $ 254,400 ,

respectively, for services rendered.

Director fees for Mr.

Horowitz for the year ending December 31, 2021 and 2020 were

and $ 75,000 ,

respectively.

Accrued director fees for Mr.

Horowitz as of December 31, 2021 and 2020 were $ 281,250

$75,000 and $75,000, respectively.

Horowitz serves as both COO and a Director.

and $ 206,250 ,

respectively.

Total amount owed to Capital Strategist as of December 31, 2021 and 2020 were $ 127,200

and $ 42,400 ,

respectively.

Horowitz serves as both COO and

Note 5 and Note 8 for details of other related party transactions.

fees during the years ended December 31, 2021 and 2020 were $ 385,000 and $ 383,065 , respectively.

Accrued directors’

as of December 31, 2020 and 2019 were $1,175,589 and $792,524, respectively.

Accrued directors’ fees as of

December 31, 2021 and 2020 were $ 1,560,589 and $ 1,175,589 , respectively.

Short-term Receivables

following table summarizes the receivables at December 31, 2020 and 2019:

December 31, 2020

Provectus Australia tax credit

Gross receivable

Reserve for uncollectibility

Net receivable

December 31, 2019

Provectus Australia tax credit

Gross receivable

Reserve for uncollectibility

Net receivable

the year ended December 31, 2019, officers of the Company offset their settlement amounts owed to the Company against accrued

payroll and other payables totaling $535,361.

This offset reduced the amount of the settlement and was approved by the Company’s

Stockholders’

of December 31, 2020, the Company was authorized to issue 1,000,000,000 shares of common stock, $0.001 par value, and 25,000,000

shares of preferred stock, $0.001 par value.

The holders of the Company’s common stock are entitled to one vote per share.

The preferred stock is designated as follows:

240,000 shares to Series B Convertible Preferred Stock (the “Series B Preferred

Stock”) and 24,760,000 shares undesignated.

B Convertible Preferred Stock

at December 31, 2021 and 2020, include the Australian VAT tax credit and approximately $ 2,100,000

is owed from Peter Culpepper.

The Company has established a reserve of approximately $ 2,100,000

as of December 31, 2021 and 2020,

which represents the amount 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).

Stockholders’ Deficiency

of December 31, 2021, the Company was authorized to issue 1,000,000,000 shares of common stock, $ 0.001 par value, and 25,000,000 shares

of preferred stock, $ 0.001 par value.

The holders of the Company’s common stock are entitled to one vote per share .

The preferred

stock is designated as follows:

240,000 shares to Series B Convertible Preferred Stock (the “Series B Preferred Stock”),

12,374,000 shares to Series D Convertible Preferred Stock (the “Series D Preferred Stock”), and 9,441,000 shares of Series

D-1 Convertible Preferred Stock (the “Series D-1 Preferred Stock”) and 2,945,000 shares undesignated.

B Preferred Stock

August 25, 2016, the Company filed the Series B Certificate of Designation with the Delaware Secretary of State.

Certificate of Designation provides for the issuance of the Series B Preferred Stock, par value $0.001 per share.

of the Company’s liquidation, dissolution, or winding up, holders of Series B Preferred Stock will be entitled to receive

the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares

of Series B Preferred Stock if such shares had been converted to common stock immediately prior to such event (without giving

effect for such purposes to any beneficial ownership limitation), subject to the preferential rights of holders of any class or

series of the Company’s capital stock specifically ranking by its terms senior to the Series B Preferred Stock as to distributions

of assets upon such event, whether voluntarily or involuntarily.

The Series B Certificate

of Designation provides for the issuance of the Series B Preferred Stock with a par value $ 0.001 per share and a stated value of $ 25.00

The Series B Preferred Stock has no voting rights.

holders of Series B Preferred Stock will be entitled to receive cumulative dividends at the rate per share of 8% per annum of

the stated value per share, until the fifth anniversary of the date of issuance of the Series B Preferred Stock.

The dividends

become payable, at the Company’s option in either cash, out of any funds legally available for such purpose, or in shares

of common stock, (i) upon any conversion of the Series B Preferred Stock, (ii) on each such other date as the Board may determine,

subject to written consent of the holders of Series B Preferred Stock holding a majority of the then issued and outstanding Series

B Preferred Stock, (iii) upon the Company’s liquidation, dissolution or winding up, and (iv) upon occurrence of a fundamental

transaction, which includes any merger or consolidation, sale of all or substantially all of the Company’s assets, exchange

or conversion of all of the common stock by tender offer, exchange offer or reclassification;

provided, however, that if Series

B Preferred Stock is converted into shares of common stock at any time prior to the fifth anniversary of the date of issuance

of the Series B Preferred Stock, the holder will receive a make-whole payment in an amount equal to all of the dividends that,

but for the early conversion, would have otherwise accrued on the applicable shares of Series B Preferred Stock being converted

for the period commencing on the conversion date and ending on the fifth anniversary of the date of issuance, less the amount

of all prior dividends paid on such converted Series B Preferred Stock before the date of conversion.

Make-whole payments are

payable at the Company’s option in either cash, out of any funds legally available for such purpose, or in shares of common

With respect to any dividend payments and make-whole payments paid in shares of common stock, the number of shares of common

stock to be issued to a holder of Series B Preferred Stock will be an amount equal to the quotient of (a) the amount of the dividend

payable to such holder divided by (b) the conversion price then in effect.

The holders of Series B Preferred Stock are entitled to receive cumulative

dividends at the rate of 8 % per annum of the stated value per share, until the fifth anniversary of the date of issuance of the Series

B Preferred Stock, at which time the Series B Preferred Stock automatically converts into common stock at the adjusted conversion price

of $ 0.0533 .

the year ended December 31, 2021, 100

shares of outstanding Series B Preferred Stock

automatically converted, at the fifth-year anniversary of their issuance, into 65,666

shares of common stock, which represents $ 3,500

of stated value plus $ 1,000

of cumulative dividends) divided by the adjusted

conversion price.

D and Series D-1 Preferred Stock

rights, preferences and privileges of the Series D Preferred Stock and Series D-1 Preferred Stock (collectively, the “D-Series

Preferred Stock”) are set forth in their respective Certificates of Designation.

The Board of Directors of the Company approved

each of the Certificates of Designation on June 14, 2021, and each Certificate of Designation was filed with the Delaware Secretary

of State on June 17, 2021.

The Series D Certificate of Designation established and designated 12,374,000

shares of Series D Preferred Stock.

D-1 Certificate of Designation established and designated 9,441,000

shares of Series D-1 Preferred Stock.

June 20, 2021, the Company issued 12,373,247

shares of Series D Preferred Stock upon the conversion

of all of the outstanding 2017 Notes at the Original Conversion Price of $ 0.2862

issued 9,440,594

shares of Series D-1 Preferred Stock upon the

conversion of all outstanding Amended 2017 Notes and 2020 Notes at the New Conversion Price of $ 2.862 .

Convertible Notes Payable for additional information on the conversion.

the year ended December 31, 2021, the Company received consideration of $ 150,000

from an investor in exchange for an aggregate

shares of restricted Series D-1 Preferred Stock

that have not yet been issued.

the year ended December 31, 2021, a holder of 222,145 shares of Series D-1 Preferred Stock voluntarily converted the Preferred Stock

into 2,221,450 shares of common stock.

Series D Preferred Stock and the Series D-1 Preferred Stock rank pari passu with each other.

The D-Series Preferred Stock rank

senior to the Common Stock and any other class or series of the Company’s capital stock, the terms of which do not provide that

shares of such class rank senior to, or pari passu with, the D-Series Preferred as to dividends and distributions upon a change

of control transaction, or the liquidation, winding-up and dissolution of the Company.

D-Series Preferred Stock does not have any dividend preference but are entitled to receive, on a pari passu basis, dividends,

if any, that are declared and paid on the common stock and any other class of the Company’s capital stock that ranks junior or

on par to the D-Series Preferred Stock.

the occurrence of the liquidation, winding-up or dissolution of the Company or certain mergers, corporate reorganizations or sales of

the Company’s assets (each, a “Company Event”), holders of D-Series Preferred Stock will be entitled to receive a liquidation

preference before any distributions are made to holders of any other class or series of the Company’s capital stock junior to the

D-Series Preferred Stock.

If a Company Event occurs within two years of June 20, 2021 (the “Date of Issuance”), the holders

of D-Series D Preferred Stock will receive, for each share of D-Series Preferred Stock, an amount in cash equal to the Original Issue

Price (as defined in the respective Certificates of Designation) multiplied by four.

If a Company Event occurs from and after the second

anniversary of the Date of Issuance, the holders of D-Series Preferred Stock will receive, for each share of D-Series Preferred Stock,

an amount in cash equal to the Original Issue Price multiplied by six.

The Original Issue Price for the Series D Preferred Stock is $ 0.2862 ,

and the Original Issue Price for the Series D-1 Preferred Stock is $ 2.862 .

of shares of D-Series Preferred Stock will vote together with the holders of common stock as a single class.

Each share of Series D Preferred

Stock carries the right to one vote per share.

Each share of Series D-1 Preferred Stock carries the right to ten votes per share.

Company is not permitted to amend, alter or repeal its Certificate of Incorporation or Bylaws in a manner adverse to the relative rights,

preferences, qualifications, limitations or restrictions of the D-Series Preferred Stock without the affirmative vote of a majority of

the votes entitled to be cast by holders of outstanding shares of D-Series Preferred Stock, voting together as a single class with each

share of D-Series Convertible Preferred Stock having a number of votes equal to the number of shares of common stock then issuable upon

conversion of such share of D-Series Preferred Stock.

Series D Preferred Stock is convertible at the option of the holders thereof into shares of common stock based on a one-for-one conversion

The Series D-1 Preferred Stock is convertible at the option of the holders thereof into shares of common stock based on a one-for-ten

conversion ratio.

The conversion ratio of the D-Series Preferred Stock is subject to adjustment for stock splits and combinations, recapitalizations,

reclassifications, reorganizations, mergers, and consolidations.

The D-Series Preferred Stock will automatically convert into shares

of common stock upon the fifth anniversary of the date of issuance.

Stock Issuances

the year ended December 31, 2019, the Company issued 229,090 shares of immediately vested restricted common stock as payment of

services, with an aggregate issuance date fair value of $11,538, which was recognized immediately as stock compensation within

general and administrative expenses on the accompanying consolidated statement of operations.

the year ended December 31, 2020, the Company issued 1,062,500 shares of immediately vested restricted common stock with an aggregate

issuance date value of $69,088, which was recognized immediately as stock compensation within general and administrative

expenses on the accompanying consolidated statement of operations.

the year ended December 31, 2020, the Company issued 1,062,500

shares of immediately vested restricted common

stock with an aggregate issuance date value of $ 69,088 ,

which was recognized immediately as stock compensation within general and administrative expenses on the accompanying consolidated statements

of operations.

following summarizes the Common Stock Issuances activity during the year ended December 31, 2020:

of Common Stock Issuance Activity

Stock Issuance

Grant Date Value

Advisory Board Member

Board of Director

Board of Director/Officer

the year ended December 31, 2021, the Company issued an aggregate of 300,000

shares of immediately vested restricted common

stock with a grant date fair value of $ 23,199

for services.

the year ended December 31, 2021, the Company issued 2,221,450 shares of common stock upon the voluntary conversion of Series D-1 Convertible

Preferred Stock.

Stock Incentive Plan and Warrants

2017 Amendment and Restatement of the Provectus Biopharmaceuticals, Inc.

2014 Equity Compensation Plan (the “2017

Equity Compensation Plan”) provides for the issuance of up to 20,000,000 shares of common stock pursuant to stock options

for the benefit of eligible employees and directors of the Company.

Options granted under the 2017 Equity Compensation

Plan are either “incentive stock options”

within the meaning of Section 422 of the Internal Revenue Code or options

which are not incentive stock options.

The stock options are exercisable over a period determined by the Board of Directors (through

its Compensation Committee), but generally no longer than 10 years after the date they are granted.

As of December 31, 2020, there

were 15,312,500 shares available for issuance under the 2017 Equity Compensation Plan.

2014 Equity Compensation Plan (the “2017 Equity Compensation

Plan”) provides for the issuance of up to 20,000,000 shares of common stock pursuant to stock options for the benefit of eligible

employees and directors of the Company.

Options granted under the 2017 Equity Compensation Plan are either “incentive stock options”

within the meaning of Section 422 of the Internal Revenue Code or options which are not incentive stock options.

The stock options are

exercisable over a period determined by the Board of Directors (through its Compensation Committee), but generally no longer than 10

years after the date they are granted.

As of December 31, 2021, there were 16,437,500 shares available for issuance under the 2017 Equity

Compensation Plan.

were no stock options granted during the year ended December 31, 2021.

the year ended December 31, 2020, the Company issued 2,425,000 five-year immediately vested stock options to an officer/director

to purchase an aggregate of 2,425,000 shares of common stock with exercise price of $0.12 per share.

The stock options had an

aggregate grant date fair value of $62,880, which was recognized immediately as stock compensation within general and administrative

expenses on the accompanying statement of operations.

the year ended December 31, 2020, the Company issued 100,000 five-year immediately vested stock options to a director to purchase

an aggregate of 100,000 shares of common stock with an exercise price of $0.2862 per share.

the year ended December 31, 2020, the Company issued 2,425,000

immediately vested stock options to an officer/director to purchase an aggregate of 2,425,000

shares of common stock with an exercise price

The stock options had an aggregate

grant date fair value of $1,414, which was recognized immediately as stock compensation within general and administrative expenses

on the accompanying statement of operations.

Options granted during the year ended December 31, 2020 were valued using the Black Scholes Model, with the following assumptions

For the Years Ended

grant date fair value of $ 62,880 ,

which was recognized immediately as stock compensation within general and administrative expenses on the accompanying consolidated

statements of operations.

the year ended December 31, 2020, the Company issued 100,000

immediately vested stock options to a director to purchase an aggregate of 100,000

shares of common stock with an exercise price

The stock options had an aggregate

grant date fair value of $ 1,414 ,

which was recognized immediately as stock compensation within general and administrative expenses on the accompanying consolidated

statements of operations.

options granted during the year ended December 31, 2020 were valued using the Black Scholes Model, with the following assumptions used:

Schedule of Stock Options Granted Valued Using Black Scholes Model

Expected terms (years)

3 unchanged sentences

following table summarizes option activity during the year ended December 31, 2021 and 2020:

Summary of Option Activity

Weighted Average

2 unchanged sentences

Outstanding and exercisable at December 31, 2020

( 1,175,000 )

Outstanding and exercisable at December 31, 2021

of December 31, 2021, the intrinsic value of outstanding and exercisable options was $ 0 .

following table summarizes information about stock options outstanding at December 31, 2021:

Number Outstanding

Weighted Average

Remaining Contractual

Number Exercisable

Summary of Stock Options Outstanding

Options Outstanding

Options Exercisable

Exercise Price

at December 31, 2020

of December 31, 2020, the intrinsic value of outstanding and exercisable options was $0.

the year-ended December 31, 2019, holders of warrants exercised warrants to purchase 5,045,857 shares of common stock at a price

of $0.053 per share.

In connection with the exercises, the Company received cash proceeds of $268,943 and issued 5,045,857 shares

of common stock.

the year ended December 31, 2020, holders of warrants exercised warrants to purchase 7,855,062 shares of common stock at a price

of $0.053 per share.

In connection with the exercises, the Company received cash proceeds of $418,676 and issued 7,855,062

shares of common stock.

the year ended December 31, 2020, the Company issued 62,500 three-year immediately vested warrants to board members to purchase

an aggregate of 62,500 shares of common stock with an exercise price of $0.2862 per share.

Outstanding Number of Options

Weighted Average Remaining Life In Years

Exercisable Number of Options

the year ended December 31, 2020, holders of warrants exercised warrants to purchase 7,855,062 shares of common stock at a price of $ 0.053

In connection with the exercises, the Company received cash proceeds of $ 418,677 and issued 7,855,062 shares of common stock.

the year ended December 31, 2021, holders of warrants exercised warrants to purchase 18,052,966 shares of common stock at a price of

$ 0.053 per share.

In connection with the exercises, the Company received cash proceeds of $ 962,223 and issued 18,052,966 shares of common

On August 30, 2021, a total of 68,723,698 of August 2016 warrants expired.

the year ended December 31, 2020, the Company issued 62,500

three-year immediately vested warrants to board

members to purchase an aggregate of 62,500

shares of common stock with an exercise price

The warrants had an aggregate grant

date fair value of $1,372, which was recognized immediately as stock compensation within general and administrative expenses on

the accompanying statement of operations.

date fair value of $ 1,372 ,

which was recognized immediately as stock compensation within general and administrative expenses on the accompanying consolidated

statements of operations.

the year ended December 31, 2021, the Company issued 25,000

three-year immediately vested warrants to an

advisory board member to purchase an aggregate of 25,000

shares of common stock with exercise price of

The warrants had an aggregate

grant date fair value of $ 488 ,

which was recognized immediately within stock compensation in general and administrative expenses.

applying the Black-Scholes option pricing model to warrants granted, the Company used the following assumptions:

Schedule of Assumptions of Warrants

For the Years Ended

2 unchanged sentences

Risk-free interest rate

.011 %- 0.18 %

Expected dividend

following table summarizes warrant activity during the year ended December 31, 2021 and 2020:

Summary of Warrant Activity

Weighted Average

1 unchanged sentence

Outstanding and exercisable at January 1, 2020

( 7,855,062 )

( 31,052,806 )

Outstanding and exercisable at December 31, 2020

( 18,052,966 )

( 68,723,698 )

Outstanding and exercisable at December 31, 2021

As of December 31, 2021, the intrinsic value of

outstanding and exercisable warrants was $ 0 .

following table summarizes information about warrants outstanding at December 31, 2021:

Number Outstanding

Weighted Average

Number Exercisable

Intrinsic Value

at December 31,

Remaining Contractual

at December 31,

Summary of Warrants Outstanding

Warrants Outstanding

Warrants Exercisable

Exercise Price

Outstanding Number of Warrant

Weighted Average Remaining Life In Years

Exercisable Number of Warrants

of the outstanding warrants are not entitled to vote and the exercise prices of such warrants are subject to customary anti-dilution

domestic and foreign components of loss before income taxes from operations for the years ended December 31, 2020 and 2019 are

Year ended December 31

domestic and foreign components of loss before income taxes from operations for the years ended December 31, 2021 and 2020 are as follows:

Schedule of Domestic and Foreign Loss Before Income Taxes

Years ended December 31

$ ( 5,454,489 )

$ ( 6,632,593 )

Net Pre-Tax Loss

$ ( 5,539,542 )

$ ( 6,677,587 )

income tax provision (benefit) consists of the following:

Year ended December 31

Summary of Income Tax Provision (Benefit)

Years ended December 31

State and local:

1 unchanged sentence

Income tax provision (benefit)

reconciliations between the statutory federal income tax rate and the Company’s effective tax rate are as follows:

Year Ended December 31

reconciliations between the statutory federal income tax rate and the Company’s effective tax rate are as follows:

Schedule of Statutory Federal Income Tax Rate and Effective Tax Rate

Years Ended December 31

Tax benefit at federal statutory rate

5 unchanged sentences

Expiration of warrants and options

Conversion of accrued interest to preferred stock

Miscellaneous

Effective income tax rate

components of the Company’s deferred income taxes are summarized below:

Schedule of Components of Deferred Income Taxes

Deferred Tax Assets:

1 unchanged sentence

Stock-based compensation

Intangible assets

Research and development credit carryovers

Contribution carryovers

Intangible assets

Accrued liabilities

9 unchanged sentences

Change in valuation allowance

$ (1,694,521 )

valuation allowance against deferred tax assets is required if, based on the weight of available evidence, it is more likely than

not that some or all of the deferred tax assets may not be realized.

The Company is in the early stages of development and realization

of the deferred tax assets is not considered more likely than not.

As a result, the Company has recorded a full valuation allowance

for the net deferred tax asset.

inception of the Company on January 17, 2002, the Company has generated federal, state and Australian tax net operating

losses of approximately $166 million, $153 million, and $326 thousand.

Under the Tax Cuts and Jobs Act, net

operating loss incurred after December 31, 2017 may be carried forward indefinitely.

The tax loss carry-forwards of the

Company may be subject to limitation by Section 382 of the Internal Revenue Code with respect to the amount utilizable each

This limitation reduces the Company’s ability to utilize net operating loss carry-forwards.

operating losses (“NOL”) totaling $151.4 million expire in various amounts between 2022 and 2037.

Federal NOL totaling

$14.5 million do not expire.

valuation allowance against deferred tax assets is required if, based on the weight of available evidence, it is more likely than not

that some or all of the deferred tax assets may not be realized.

The Company is in the early stages of development and realization of

the deferred tax assets is not considered more likely than not.

As a result, the Company has recorded a full valuation allowance for

the net deferred tax asset.

inception of the Company on January 17, 2002, the Company has generated federal, state, and Australian tax net operating losses

of approximately $ 170

million, $ 150

million, and $ 139

respectively.

Under the Tax Cuts and Jobs Act, federal net operating losses incurred after December 31, 2017 may be carried forward

indefinitely.

The tax loss carryforwards of the Company may be subject to limitation by Section 382 of the Internal Revenue Code

with respect to the amount utilizable each year.

This limitation could reduce the Company’s ability to utilize net operating loss

carryforwards.

Federal net operating losses (“NOLS”) totaling $ 151.4

million expire in various amounts between 2022

Federal NOLS totaling $ 18.6 million

do not expire.

Schedule of Net Operating Loss

$ 170,074,959

NOL totaling $153 million expire in various years between 2021 and 2035.

NOLS totaling $ 150 million expire in various years between 2022 and 2036.

$ 149,793,556

NOL totaling $326,000 do not expire.

NOLS totaling $ 138,540

do not expire.

Year Generated

Year of Expiration

Company has determined that there are no uncertain tax positions as of December 31, 2021 or 2020.

1 unchanged sentence

federal jurisdiction and the state of Tennessee.

The Company intends to permanently

reinvest earnings in its foreign subsidiary.

date, the Company’s operations conducted by its Australian subsidiary consist primarily of research and development activities.

As of December 31, 2020, there were no accumulated earnings and profits in the Company’s foreign subsidiary.

tax rates, no additional Federal income taxes (net of available tax credits) would be payable if such earnings were to be repatriated.

The Company currently leases 4,500 square

feet of corporate office space in Knoxville, Tennessee through an operating lease agreement for a term of five years ending on

June 30, 2022.

Payments are approximately $7,900 per month.

expense for operating leases for the year ended December 31, 2020 was $90,821, of which, $60,547 was included within

research and development and $30,274 was included within general and administrative expenses on the consolidated statement of

Total expense for operating leases for the year ended December 31, 2019 was $102,378, of which, $68,252 was included

within research and development and $34,126 was included within general and administrative expenses on the consolidated statement

of operations.

The Company intends to permanently reinvest

earnings in its foreign subsidiary.

date, the Company’s operations conducted by its Australian subsidiary consist primarily of research and development activities.

As of December 31, 2021, there were no accumulated earnings and profits in the Company’s foreign subsidiary.

At current tax rates,

no additional Federal income taxes (net of available tax credits) would be payable if such earnings were to be repatriated.

Company currently leases 4,500

square feet of corporate office space in Knoxville,

Tennessee through an operating lease agreement for a term of five

years ending on June

Payments are approximately $ 6,100

August 13, 2021, the Company negotiated a reduced rent from July 1, 2021 through December 31, 2021 in the amount of $ 6,100 per month.

expense for operating leases for the year ended December 31, 2021 was $ 86,545 ,

of which, $ 57,697

was included within research and development

was included within general and administrative

expenses on the consolidated statements of operations.

Total expense for operating leases for the year ended December 31, 2020

was $ 90,821 ,

of which, $ 60,547

was included within research and development

was included within general and administrative

expenses on the consolidated statements of operations.

of December 31, 2021, the Company had no leases that were classified as a financing lease.

As of December 31, 2020, the Company

did not have additional operating and financing leases that have not yet commenced.&emsp;

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

As of December 31, 2021, the Company did not

have additional operating and financing leases that have not yet commenced.

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

Schedule of Right-of-use Assets and Liabilities

For The Years Ended

8 unchanged sentences

minimum payments under non-cancellable lease as of December 31, 2021 were as follows:

Schedule of Future Minimum Payments Under Non-cancellable Lease

Total future minimum lease payments

2 unchanged sentences

Company maintains a retirement plan under Section 401(k) of the Internal Revenue Code, which covers all eligible employees.

employees with U.S.

All employees

source income are eligible to participate in the plan immediately upon employment.

There was no contribution

made by the Company in 2020 or 2019.

Travel Expenses and Related Collection Efforts

December 27, 2016, the then-Board of Directors (the “then-Board”) unanimously voted to terminate 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, “for cause,”

in accordance

with the terms of the Amended and Restated Executive Employment Agreement entered into by Culpepper and the Company on April 28,

2014 (the “Culpepper Employment Agreement”), based on the results of the investigation conducted by the Audit Committee

of the then-Board regarding improper expense reimbursements to Culpepper.

Company took the position that under the terms of the Culpepper Employment Agreement, Culpepper is owed no severance payments

as a result of his termination “for cause”

as that term is defined in the Culpepper Employment Agreement.

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 Culpepper pursuant

to the Derivative Lawsuit Settlement plus 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 Culpepper a notice of

default in January 2017 for the total amount he owes the Company and is in the process of pursuing these claims in accordance

with the alternative dispute resolution provision of the Culpepper Employment Agreement.

The Company has established a reserve

of $2,104,543 as of December 31, 2020 and December 31, 2019, which amount represents the amount the Company currently believes

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.

disputed that he was terminated “for cause”

under the Culpepper Employment Agreement.

On June 28, 2017, pursuant to

the alternative dispute resolution provisions of that agreement, the Company and Culpepper participated in a mediation of their

Having reached no resolution during the mediation, the parties participated in arbitration under the commercial rules

of the American Arbitration Association, arbitrating Culpepper’s claim against the Company for severance and the Company’s

claims against Culpepper for improper expense reimbursements and amounts Culpepper owed the Company under the Derivative Lawsuit

On September 12, 2018, the arbitrator issued his final award in favor of the Company.

October 4, 2018, the Company filed a petition with the Chancery Court for Davidson County, Tennessee to confirm the arbitration

On January 23, 2019, the Chancery Court entered an order confirming the arbitrator’s award.

On February 20, 2019,

Culpepper filed a motion to alter or amend the Chancery Court’s judgment.

On March 22, 2019, the Chancery Court upheld the

arbitration award in favor of the Company.

April 16, 2019, Culpepper filed a Notice of Appeal with the Tennessee Court of Appeals regarding the Chancery Court’s judgment.

The Company and Culpepper submitted their respective court of appeal briefs on November 12, 2019 and December 3, 2019, respectively.

Oral arguments were held on January 7, 2020.

On April 14, 2020, the Court of Appeals affirmed the Chancery Court’s judgment

and awarded court costs to the Company.

June 16, 2020, Culpepper filed an application to the Supreme Court of Tennessee for permission to appeal the Court of Appeals’

final decision.

On June 30, 2020, the Company filed an answer to the Supreme Court in opposition to Culpepper’s application

for permission to appeal.

On August 5, 2020, the Supreme Court of Tennessee denied Culpepper’s application.

November 3, 2020, Culpepper filed a petition for writ of certiorari to the Supreme Court of the United States “SCOTUS”).

The petition for writ of certiorari was denied by the Supreme Court on January 11, 2021.

There are no further avenues for

appeal for Culpepper.

There was no contribution made by the Company

in 2021 or 2020.

October 25, 2021, the Company received a grant award of $ 2,500,000

from the State of Tennessee for the study of

animal cancers and dermatological disorders for the period October 15, 2021 to June 30, 2022.

As of December 31, 2021, the grant award is recorded as unearned grant revenue liability on the accompanying consolidated balance sheets.

Commitments, Contingencies and Litigation

Company may, from time to time, be involved in litigation arising in the ordinary course of business or which may be expected to be covered

by insurance.

The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material

adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Subsequent Events

Notes Payable

to December 31, 2020, the Company entered into a 2020 Note with a non-related party accredited investor in the aggregate principal

amount of $1,200,000 in connection with 2 nd Loans received by the Company for the same amount.

None of the proceeds

were received from a related party.

addition, holders of 4,500,000 warrants to purchase the common stock of the Company at $0.0533 per share, have exercised these

The Company has received proceeds in the aggregate amount of $239,850.

Company has evaluated events that have occurred after the balance sheet date and through the date the financial statements were

Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required

adjustment or disclosure in the financial statements, except as disclosed below.

On February 23,

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

IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data