UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
Amendment No. 1
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003
OR
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO _______________
COMMISSION FILE NUMBER: 0-9410
PROVECTUS PHARMACEUTICALS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
NEVADA 90-0031917
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7327 OAK RIDGE HIGHWAY SUITE A, KNOXVILLE, TN 37931
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(Address of Principal Executive Offices) (Zip Code)
865/769-4011
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(Issuer's Telephone Number, Including Area Code)
N/A
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(Former Name, Former Address & Former Fiscal Year, if Changed Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes |X| No |_|
The number of shares outstanding of the issuer's stock, $0.001 par value
per share, as of August 13, 2003 was 9,487,689.
Transitional Small Business Disclosure Format (check one): Yes |_| No |X|
PROVECTUS PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS Page
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PART I FINANCIAL INFORMATION...................................................1
ITEM 1. FINANCIAL STATEMENTS...........................................1
Index To Consolidated Financial Statements............................1
Consolidated Balance Sheets...........................................2
Consolidated Statements of Operations.................................3
Consolidated Statements of Stockholders' Equity.......................4
Consolidated Statements of Cash Flows.................................5
Notes to Consolidated Financial Statements............................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION.............................................7
Overview..............................................................8
Going Concern........................................................10
Plan of Operation....................................................11
Forward-Looking Statements...........................................11
ITEM 3. CONTROLS AND PROCEDURES.......................................12
PART II OTHER INFORMATION.....................................................13
ITEM 1. LEGAL PROCEEDINGS.............................................13
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.....................14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...............................14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS......................................................14
ITEM 5. OTHER INFORMATION.............................................16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..............................16
SIGNATURES....................................................................17
EXHIBIT INDEX................................................................X-1
i
PROVECTUS PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-QSB
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
----
Consolidated Balance Sheets...............................................2
Consolidated Statements of Operations.....................................3
Consolidated Statements of Stockholders' Equity...........................4
Consolidated Statements of Cash Flows.....................................5
Notes to Consolidated Financial Statements................................6
X-1
PROVECTUS PHARMACEUTICALS, INC.
(A DEVELOPMENT-STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
JUNE 30, December 31,
2003 2002
---------------------------------------------------------------------------------------------------------------
(UNAUDITED) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 35,193 $ 717,833
Inventory 72,135 -
Prepaid expenses 20,876 35,481
Prepaid consulting expense (Note 5(c)) 84,174 -
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TOTAL CURRENT ASSETS 212,378 753,314
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EQUIPMENT AND FURNISHINGS, less accumulated depreciation of
$154,307 and $39,446 211,868 471,429
PATENTS, net of amortization of $707,843 and $133,916 19,329,718 19,903,644
OTHER ASSETS 27,000 27,000
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$ 19,780,964 $ 21,155,387
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LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable - trade $ 228,939 $ 98,874
Accrued expenses 103,170 77,781
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TOTAL CURRENT LIABILITIES 332,109 176,655
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LOAN FROM STOCKHOLDER 109,000 109,000
CONVERTIBLE LONG-TERM DEBT (net of debt discount of $89,031
and $120,344) 936,928 879,656
STOCKHOLDERS' EQUITY
Common stock; par value $.001 per share; 100,000,000 shares authorized;
9,487,689 and 9,423,689 shares issued and
outstanding, respectively 9,488 9,424
Paid-in capital 27,293,999 27,102,406
Accumulated deficit (8,900,560) (7,121,754)
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TOTAL STOCKHOLDERS' EQUITY 18,402,927 19,990,076
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$ 19,780,964 $ 21,155,387
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See accompanying notes to financial statements.
PROVECTUS PHARMACEUTICALS, INC.
(A Development-Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE Three SIX Six
MONTHS Months MONTHS Months Cumulative
ENDED ENDED ENDED ENDED THROUGH
JUNE 30, June 30, JUNE 30, June 30, June 30,
2003 2002 2003 2002 2003
----------------------------------------------------------------------------------------------------------------------------
(UNAUDITED) (Unaudited) (UNAUDITED) (Unaudited) (Unaudited)
OPERATING EXPENSES
Research and development $ 80,503 $ - $ 236,286 $ 1,000 $ 287,000
General and administrative 435,425 6,405,250 947,342 6,415,250 7,870,288
Amortization 286,964 - 573,927 - 707,843
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Total operating loss (802,892) (6,405,250) (1,757,555) (6,416,250) (8,865,131)
Gain on sale of fixed assets 55,000 - 55,000 - 55,000
Net interest (expense) income (38,230) 18 (76,251) 52 (90,429)
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NET LOSS APPLICABLE TO COMMON
STOCKHOLDERS $ (786,122) $ (6,405,232) $ (1,778,806) $ (6,416,198) $ (8,900,560)
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BASIC AND DILUTED LOSS PER COMMON
SHARE (0.08) (0.79) (0.19) (0.90)
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WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING -
BASIC AND DILUTED 9,487,689 8,060,132 9,470,033 7,142,566
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See accompanying notes to financial statements.
PROVECTUS PHARMACEUTICALS, INC.
(A Development-Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(unaudited)
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Common Stock
----------------------------------
Number Paid-in Accumulated
of Shares Par Value Capital Deficit Total
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BALANCE, at January 17, 2002 - $ - $ - $ - $ -
Issuance to founding stockholders 6,000,000 6,000 (6,000) - -
Sale of stock 50,000 50 24,950 - 25,000
Issuance of stock to employees 510,000 510 931,490 - 932,000
Issuance of stock for services 120,000 120 359,880 - 360,000
Net loss for the period from January 17,
2002 (inception) to April 23, 2002
(date of reverse merger) - - - (1,316,198) (1,316,198)
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BALANCE, at April 23, 2002 6,680,000 6,680 1,310,320 (1,316,198) 802
Shares issued in reverse merger 265,763 266 (3,911) - (3,645)
Issuance of stock for services 1,900,000 1,900 5,142,100 - 5,144,000
Purchase and retirement of stock (400,000) (400) (47,600) - (48,000)
Stock issued for acquisition of Valley
Pharmaceuticals 500,007 500 20,547,935 - 20,548,435
Exercise of warrants 452,919 453 - - 453
Warrants issued in connection with
convertible debt - - 126,587 - 126,587
Stock and warrants issued for acquisition
of Pure-ific 25,000 25 26,975 - 27,000
Net loss for the period from April 23,
2002 (date of reverse merger) to
December 31, 2002 - - - (5,805,556) (5,805,556)
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BALANCE, at December 31, 2002 9,423,689 9,424 27,102,406 (7,121,754) 19,990,076
Issuance of stock for services 64,000 64 22,736 - 22,800
Issuance of warrants for services - - 141,351 - 141,351
Employee compensation from stock options - - 27,506 - 27,506
Net loss for the six months ended June
30, 2003 - - - (1,778,806) (1,778,806)
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9,487,689 $ 9,488 $ 27,293,999 $(8,900,560) $ 18,402,927
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See accompanying notes to financial statements.
PROVECTUS PHARMACEUTICALS, INC.
(A Development-Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Period Cumulative
Six Months From January 17, Amounts From
Ended June 30, 2002 (Inception) to January 17, 2002
2003 June 30, 2002 (Inception)
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(UNAUDITED) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,778,806) $ (6,416,198) $ (8,900,560)
Adjustments to reconcile net income to net cash
used in operating activities
Depreciation 137,861 - 177,307
Amortization of patents 573,927 - 707,843
Amortization of original issue discount 31,313 - 37,556
Compensation through issuance of stock options 27,506 - 27,506
Compensation through issuance of stock - 932,000 932,000
Issuance of stock for services 22,800 5,460,000 5,526,800
Issuance of warrants for services 57,177 - 57,177
(Gain) loss on sale of fixed asset (55,000) - (55,000)
(Increase) decrease in assets
Prepaid expenses 14,605 - (20,876)
Inventory (72,135) - (72,135)
Increase (decrease) in liabilities
Accounts payable 130,065 - 225,294
Accrued expenses 25,389 - 103,170
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Net cash used in operating activities (885,298) (24,198) (1,253,918)
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of fixed asset 180,000 - 180,000
Capital expenditures (3,301) - (3,301)
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Net cash provided by investing activities 176,699 - 176,699
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans from stockholder - - 109,000
Proceeds from convertible debt 25,959 - 1,025,959
Proceeds from sale of common stock - 25,000 25,000
Proceeds from exercise of warrants - - 453
Purchase and retirement of common stock - - (48,000)
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Net cash provided by financing activities 25,959 25,000 1,112,412
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NET CHANGE IN CASH $ (682,640) $ 802 $ 35,193
CASH, at beginning of year 717,833 - -
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CASH, at end of year $ 35,193 $ 802 $ 35,193
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SUPPLEMENTAL NONCASH FINANCING ACTIVITIES
Warrants issued to consultants for prepaid services of $84,174 in 2003.
See accompanying notes to financial statements.
PROVECTUS PHARMACEUTICALS, INC.
(A Development-Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information pursuant to Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
six months ended June 30, 2003 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2003.
2. GOING CONCERN
The Company will continue to require additional capital to develop its
products and develop sales and distribution channels for its products. However,
the Company believes it lacks sufficient working capital to fund operations for
the entire fiscal year ending December 31, 2003. Management believes there are a
number of potential alternatives available to meet the Company's continuing
capital requirements, including proceeding as rapidly as possible with the
development of over-the-counter products that can be sold with a minimum of
regulatory compliance and developing revenue sources through licensing of our
existing intellectual property portfolio. In addition, the Company is pursuing
actively additional debt and/or equity capital in order to support ongoing
operations. There can be no assurance that the Company will be able to obtain
sufficient additional working capital on commercially reasonable terms or
conditions, or at all. The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. Continuing as a going
concern is dependent upon successfully obtaining additional working capital as
described above. The financial statements do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets and amounts and classifications of liabilities that might result from the
outcome of this uncertainty.
3. RECAPITALIZATION AND MERGER
On April 23, 2002, Provectus Pharmaceutical, Inc., a Nevada corporation and
a "blank check" public company, acquired Provectus Pharmaceuticals, Inc., a
privately held Tennessee corporation ("PPI"), by issuing 6,680,000 shares of
common stock of Provectus Pharmaceutical to the stockholders of PPI in exchange
for all of the issued and outstanding shares of PPI, as a result of which
Provectus Pharmaceutical changed its name to Provectus Pharmaceuticals, Inc.
(the "Company") and PPI became a wholly owned subsidiary of the Company. For
financial reporting purposes, the transaction has been reflected in the
accompanying financial statements as a recapitalization of PPI and the financial
statements reflect the historical financial information of PPI which was
incorporated on January 17, 2002. The issuance of 6,680,000 shares of common
stock of Provectus Pharmaceutical, Inc. to the stockholders of PPI in exchange
for all of the issued and outstanding shares of PPI was done in anticipation of
PPI acquiring Valley Pharmaceuticals, Inc. which owned the intellectual property
to be used in the Company's operations.
4. BASIC AND DILUTED LOSS PER COMMON SHARE
Basic and diluted loss per common share is computed based on the weighted
average number of common shares outstanding. Loss per share excludes the impact
of outstanding options, warrants, and convertible debt as they are antidilutive.
Potential common shares excluded from the calculation at June 30, 2003 are
385,000 warrants, 352,000 options and 1,481,322 shares issuable upon conversion
of convertible debt and interest. Additionally, the Company is committed to
issue 80,000 warrants.
5. EQUITY TRANSACTIONS
(a) In 2003, the Company issued 64,000 shares to consultants in exchange
for services rendered, consisting of 29,000 shares issued in January 2003 and
35,000 shares issued in March 2003. Consulting costs charged to operations were
$22,800.
PROVECTUS PHARMACEUTICALS, INC.
(A Development-Stage Company)
(b) The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock Based Compensation
(SFAS No. 123), but applies the intrinsic value method set forth in Accounting
Principles Board Opinion No. 25 for stock options granted to employees and
directors.
On May 29, 2003, the Company issued 352,000 stock options to employees. The
options vest over three years with 88,000 options vesting on the date of grant.
The exercise prices range from $0.26 to $0.32 and all options were outstanding
at June 30, 2003. The exercise price for all options is less than the market
price on the date of grant. Accordingly, compensation expense of $27,506 has
been recorded in the second quarter of 2003.
For stock options granted to employees during the second quarter of 2003,
the Company has estimated the fair value of each option granted using the
Black-Scholes option pricing model with the following assumptions:
2003
---------------
Weighted average fair value per options granted $ 0.60
Significant assumptions (weighted average)
Risk-free interest rate at grant date 2.0%
Expected stock price volatility 150%
Expected option life (years) 10
If the Company had elected to recognize compensation expense based on the
fair value at the grant dates, consistent with the method prescribed by SFAS No.
123, net loss per share would have been changed to the pro forma amount
indicated below:
2003
----------------------
Net loss, as reported $ (1,778,806)
Add stock based employee compensation expense
included in reported net loss 27,506
Less total stock-based employee compensation
expense determined under the fair value
based method for all awards (57,200)
-----------------------------------------------------------------------
Pro forma net loss $ (1,808,500)
-----------------------------------------------------------------------
Basic and diluted loss per common share, as
reported $ (0.19)
Basic and diluted loss per common share, pro
forma $ (0.19)
(c) The Company applies the recognition provisions of SFAS No. 123,
Accounting for Stock-Based Compensation, in accounting for stock options and
warrants issued to nonemployees. In 2003, the Company issued 385,000 warrants in
exchange for consulting services rendered, consisting of 25,000 warrants issued
in January 2003 and 360,000 warrants issued in February 2003. As the fair market
value of these services was not readily determinable, these services were valued
based on the fair market value, determined using the Black-Scholes option
pricing model. Fair market value for warrants ranged from $0.21 to $0.51.
Consulting costs charged to operations were $57,177. At June 30, 2003, $84,174
has been classified as prepaid consulting expense as this amount represents
payments for services to be provided in the future.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The following discussion is intended to assist in the understanding and
assessment of significant changes and trends related to our results of
operations and our financial condition together with our consolidated
subsidiaries. This discussion and analysis should be read in conjunction with
the consolidated financial statements and notes thereto included elsewhere in
this Quarterly Report on Form 10-QSB. Historical results and percentage
relationships set forth in the statement of operations, including trends which
might appear, are not necessarily indicative of future operations.
OVERVIEW
HISTORY
Provectus Pharmaceuticals, Inc., formerly known as "Provectus
Pharmaceutical, Inc." and "SPM Group, Inc.," was incorporated under Colorado law
on May 1, 1978. SPM Group, Inc. ceased operations in 1991, and became a
development-stage company effective January 1, 1992, with the new corporate
purpose of seeking out acquisitions of properties, businesses, or merger
candidates, without limitation as to the nature of the business operations or
geographic location of the acquisition candidate.
On April 1, 2002, SPM Group, Inc. changed its name to "Provectus
Pharmaceutical, Inc." and reincorporated in Nevada in preparation for a
transaction with Provectus Pharmaceuticals, Inc., a privately-held Tennessee
corporation ("PPI"). On April 23, 2002, an Agreement and Plan of Reorganization
between Provectus Pharmaceutical and PPI was approved by the written consent of
a majority of the outstanding shares of Provectus Pharmaceutical, pursuant to
which 6,680,000 shares of common stock of Provectus Pharmaceutical were
exchanged for all of the issued and outstanding shares of PPI. As part of the
acquisition, Provectus Pharmaceutical changed its name to "Provectus
Pharmaceuticals, Inc." and PPI became a wholly owned subsidiary of the Company.
For accounting purposes, this transaction was treated as a recapitalization of
PPI and the issuance of shares of PPI for Provectus Pharmaceutical, Inc. The
historical financial information set forth in this report is PPI's historical
financial statements from the date of PPI's incorporation, January 17, 2002.
On November 19, 2002, Provectus Pharmaceuticals acquired Valley
Pharmaceuticals, Inc. ("Valley"), a privately-held Tennessee corporation
formerly known as Photogen, Inc., by merging its subsidiary PPI with and into
Valley and naming the surviving corporation "Xantech Pharmaceuticals, Inc." By
acquiring Valley, we acquired our most important intellectual property,
including issued U.S. patents and patentable inventions, which we intend to use
to develop:
o prescription drugs, medical and other devices (including laser
devices) and over-the-counter pharmaceutical products in the fields of
dermatology and oncology, and
o technologies for the preparation of human and animal vaccines,
diagnosis of infectious diseases and enhanced production of
genetically engineered drugs.
Prior to its acquisition, Valley was considered to be in the development
stage and had not generated any revenues from the assets we acquired.
On December 5, 2002, Provectus Pharmaceuticals acquired the assets of
Pure-ific L.L.C., a Utah limited liability company, and created a wholly owned
subsidiary, Pure-ific Corporation, to operate that business. By acquiring
Pure-ific L.L.C., we acquired the product formulations for Pure-ific personal
sanitizing sprays, along with the "Pure-ific" trademarks. With this acquisition,
we intend to continue development and begin to market a line of personal
sanitizing sprays and related products to be sold over the counter under the
"Pure-ific" brand name.
DESCRIPTION OF BUSINESS
Provectus Pharmaceuticals, Inc., a Nevada corporation ("Provectus"), and
its two wholly owned subsidiaries, Xantech Pharmaceuticals, Inc. ("Xantech") and
Pure-ific Corporation ("Pure-ific"), develop, license and market and plan to
sell products in three sectors of the healthcare industry:
o Over-the-counter ("OTC") products;
o Prescription drugs; and
o Medical device systems
We manage Provectus, Xantech and Pure-ific on an integrated basis, and when
we refer to "we" or "us" or "the Company" in this Quarterly Report on Form
10-QSB, we refer to all three corporations considered as a single unit. Our
principal executive offices are located at 7327 Oak Ridge Highway, Suite A,
Knoxville, Tennessee 37931, telephone 865/769-4011.
Through discovery and use of state-of-the-art scientific and medical
technologies, the founders of our pharmaceutical business have developed a suite
of core technologies that support multiple products in the prescription drug,
medical device and OTC products categories. Our prescription drug products
encompass the areas of dermatology and oncology and involve several types of
drugs, including those produced by advanced biotechnology methods. Our medical
device systems include therapeutic and cosmetic lasers, while our OTC products
address markets primarily involving skincare applications. Because our
prescription drug candidates and medical device systems are in the early stages
of development, they are not yet on the market and there is no assurance that
they will advance to the point of commercialization.
Over-the-Counter Pharmaceuticals
Our OTC products are designed to be safer and more specific than competing
products. Our technologies offer practical solutions for a number of intractable
maladies, using ingredients that have limited or no side effects compared with
existing products.
We have developed GloveAid, a hand cream with both antiperspirant and
antibacterial properties, to increase the comfort of users' hands during and
after the wearing of disposable glovesOur Pure-ific line of products includes
two quick-drying sprays, Pure-ific and Pure-ific Kids, that immediately kill up
to 99.9% of germs on skin and prevent regrowth for 6 hours. Pure-ific products
help prevent the spread of germs and thus complement our other OTC products
designed to treat irritated skin or skin conditions such as acne, eczema,
dandruff and fungal infections. We began limited distribution of Pure-ific
during the first half of 2003. During this time our Pure-ific website has been
successfully launched enabling fulfillment of online orders. We also have begun
limited distribution of Pure-ific in Mexico and Central America. We intend to
continue developing our distribution network for these products and expect to
expand the Pure-ific product line to include additional applications.
A number of dermatological conditions, including psoriasis, eczema, and
acne, result from a superficial infection which triggers an overwhelming immune
response. We anticipate developing OTC products similar to the GloveAid line for
the treatment of mild to moderate cases of psoriasis, eczema, and acne.
Prescription Drugs
We are developing a number of prescription drugs which we expect will
provide minimally invasive treatment of chronic severe skin afflictions such as
psoriasis, eczema, and acne; and several life-threatening cancers such as those
of the liver, breast and prostate. We believe that our products will be safer
and more specific than currently existing products. Use of topical or other
direct delivery formulations allows these potent products to be conveniently and
effectively delivered only to diseased tissues, thereby enhancing both safety
and effectiveness. All of these products are in the pre-clinical or clinical
trial stage.
Our most advanced prescription drug candidate for treatment of topical
diseases on the skin is Xantryl, a topical gel. PV-10, the active ingredient in
Xantryl, is "photoactive": it reacts to light of certain wavelengths, increasing
its therapeutic effects. PV-10 also concentrates in diseased or damaged tissue
but quickly dissipates from healthy tissue. By developing a "photodynamic"
treatment regimen (one which combines a photoactive substance with activation by
a source emitting a particular wavelength of light) around these two properties
of PV-10, we can deliver a higher therapeutic effect at lower dosages of active
ingredient, thus minimizing potential side effects including damage to nearby
healthy tissues. PV-10 is especially responsive to green light, which is
strongly absorbed by the skin and thus only penetrates the body to a depth of
about three to five millimeters. For this reason, we have developed Xantryl
combined with green-light activation for topical use in surface applications
where serious damage could result if medicinal effects were to occur in deeper
tissues. We are researching the use of Xantryl with green-light activation to
treat multiple dermatological conditions, including acute psoriasis, actinic
keratosis, and severe acne.
Oncology
Oncology is another major market where our planned products may afford
competitive advantage compared to currently available options. We are developing
Provecta, a sterile injectible form of PV-10, for direct injection into tumors.
Because PV-10 is retained in diseased or damaged tissue but quickly dissipates
from healthy tissue, we believe we can develop therapies that confine treatment
to cancerous tissue and reduce collateral impact on healthy tissue. We are
researching the use of PV-10 for the treatment of cancers of the liver, breast
and prostate.
Medical Devices
We are developing medical devices to address two major markets:
o cosmetic treatments, such as reduction of wrinkles and
elimination of spider veins and other cosmetic blemishes; and
o therapeutic uses, including photoactivation of Xantryl other
prescription drugs and non-surgical destruction of certain skin
cancers.
We expect to develop medical devices through partnerships with third-party
device manufacturers or, if appropriate opportunities arise, through acquisition
of one or more device manufacturers.
Research and Development
We have placed most research activities on hold as we attempt to conserve
available capital and achieve full capitalization of the Company through equity
and convertible debt offerings, generation of product revenues, and other means.
In the interim, we are maintaining our research facilities in anticipation of a
resumption of our research programs. All ongoing research and development
activities are directed toward supporting our OTC product launches and
maintaining our intellectual property portfolio.
GOING CONCERN
In connection with their audit report on our consolidated financial
statements as of December 31, 2002, BDO Seidman LLP, our independent certified
public accountants, expressed substantial doubt about our ability to continue as
a going concern because such continuance is dependent upon our ability to raise
capital or achieve profitable operations.
Our technologies are in early stages of development. We have generated
minimal initial revenues from sales and operations but we do not expect to
generate sufficient revenues to enable us to be profitable for several calendar
quarters. In November 2002, we obtained $1 million from Gryffindor Capital
Partners I, L.L.C., a Delaware limited liability company ("Gryffindor") through
the sale, pursuant to a Convertible Secured Promissory Note and Warrant Purchase
Agreement dated November 26, 2002 (the "Gryffindor Agreement") between the
Company and Gryffindor, of our Convertible Secured Promissory Note dated
November 26, 2002 in the original principal amount of $1 million (the "Note")
and Common Stock Purchase Warrants dated November 26, 2002 (the "Warrants"). In
addition, at critical junctures during 2002 and 2003 we have obtained
approximately $129,000 in additional funding through short-term loans from Eric
A. Wachter, our Vice President - Pharmaceuticals, a member of our Board of
Directors, and a major stockholder. These funds allowed us to complete our
planned corporate reorganization and acquisitions, complete initial production
runs for several of our OTC products, and maintain our facilities and
intellectual property portfolio. We require additional funding to continue
initial production and distribution of OTC products in order to achieve
meaningful sales volumes. In addition, we must raise substantial additional
funds in order to fully implement our integrated business plan, including
execution of the next phases in clinical development of our pharmaceutical
products and resumption of research programs currently suspended.
Ultimately, we must achieve profitable operations if we are to be a viable
entity. We intend to proceed as rapidly as possible with the development of OTC
products that can be sold with a minimum of regulatory compliance and with the
development of revenue sources through licensing of our existing intellectual
property portfolio. Although we believe that there is a reasonable basis for our
expectation that we will successfully raise the needed funds, we cannot assure
you that we will be able to raise sufficient capital to sustain operations
before we can commence revenue generation or that we will be able to achieve, or
maintain, a level of profitability sufficient to meet our operating expenses.
PLAN OF OPERATION
With the reorganization of Provectus and PPI and the acquisition and
integration into the Company of Valley and Pure-ific, we believe we have
obtained a unique combination of OTC products and core intellectual properties.
This combination represents the foundation for a successful operating company
that we believe will provide both short-term profitability and long-term growth.
In 2003, through careful control of expenditures, commencing sales of OTC
products, and issuance of debt and equity, we plan to build on that foundation
to increase stockholder value.
In the short term, we intend to develop our business by marketing,
manufacturing, and distributing our existing OTC products, principally GloveAid
and Pure-ific. In the longer term, we expect to continue the process of
developing, testing and obtaining FDA approval of prescription drugs and medical
devices. Additionally, we intend to restart our research programs that will
identify additional conditions that our intellectual properties may be used to
treat and additional treatments for those and other conditions.
Research and development costs in comprising the total of $80,503 for the
three months ending June 30, 2003 include depreciation expense of $53,815,
consulting of $11,535, insurance of $4,956, office and other expense of $373,
payroll of $1,424, and rent and utilities of $8,400. Research and development
costs comprising the total of $236,286 for the six months ending June 30, 2003
include depreciation expense of $137,656, consulting of $26,423, insurance of
4,956, office and other expense of $828, payroll of $48,435, rent and utilities
of $16,800, and taxes and fees of $1,188.
CASH FLOW
As of June 30, 2003, we held approximately $35,193 in cash. We have reduced
our cash expenditure rate by suspending payment of salaries and most of our
research programs; in addition, we are seeking to improve our cash flow by
commencing sales of OTC products. Even with these reductions, however, at our
current expenditure rate this amount will be sufficient to meet our needs only
until the end of August 2003. Moreover, even if we are successful in improving
our current cash flow position, we nonetheless will require additional funds to
meet our short-term and long-term needs. We anticipate these funds will come
from the proceeds of private placements or public offerings of debt or equity
securities, but we cannot assure you that we will be able to obtain such funds.
CAPITAL RESOURCES
As noted above, our present cash flow is not sufficient to meet our
short-term operating needs for initial production and distribution of OTC
products in order to achieve meaningful sales volumes, much less to meet our
longer-term needs for investment in our business through execution of the next
phases in clinical development of our pharmaceutical products and resumption of
our currently suspended research programs. We anticipate that the majority of
the funds for our operating and development needs in 2003 will come from the
proceeds of private placements or public offerings of debt or equity securities.
We are currently in discussions with multiple funding sources and feel confident
adequate operating funding and development funding will result. While we believe
that we have reasonable basis for our expectation that we will be able to raise
additional funds, we cannot give you an assurances that we will be able to do so
on commercially reasonable terms. In addition, any such financing may result in
significant dilution to stockholders.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-QSB contains forward-looking statements
regarding, among other things, our anticipated financial and operating results.
Forward-looking statements reflect our management's current assumptions,
beliefs, and expectations. Words such as "anticipate," "believe, "estimate,"
"expect," "intend," "plan," and similar expressions are intended to identify
forward-looking statements. While we believe that the expectations reflected in
our forward-looking statements are reasonable, we can give no assurance that
such expectations will prove correct. Forward-looking statements are subject to
risks and uncertainties that could cause our actual results to differ materially
from the future results, performance, or achievements expressed in or implied by
any forward-looking statement we make. Some of the relevant risks and
uncertainties that could cause our actual performance to differ materially from
the forward-looking statements contained in this report are discussed under the
heading "Risk Factors" and elsewhere in our Annual Report on Form 10-KSB, which
was filed with the SEC on April 15, 2003. We caution investors that these
discussions of important risks and uncertainties are not exclusive, and our
business may be subject to other risks and uncertainties which are not detailed
there.
Investors are cautioned not to place undue reliance on our forward-looking
statements. We make forward-looking statements as of the date on which this
Quarterly Report on Form 10-QSB is filed with the SEC, and we assume no
obligation to update the forward-looking statements after the date hereof
whether as a result of new information or events, changed circumstances, or
otherwise, except as required by law.
ITEM 3. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures. Our chief executive
officer and chief financial officer have evaluated the effectiveness of
the design and operation of our "disclosure controls and procedures"
(as that term is defined in Rule 13a-14(c) under the Exchange Act) as
of June 30, 2003, the end of the fiscal quarter covered by this
Quarterly Report on Form 10-QSB. Based on that evaluation, the chief
executive officer and chief financial officer have concluded that our
disclosure controls and procedures are effective to ensure that
material information relating to the Company and the Company's
consolidated subsidiaries is made known to such officers by others
within these entities, particularly during the period this Quarterly
Report on Form 10-QSB was prepared, in order to allow timely decisions
regarding required disclosure.
(b) Changes in Internal Controls. There has been no change in our internal
control over financial reporting that occurred during the fiscal
quarter covered by this Quarterly Report on Form 10-QSB that has
materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
As previously reported, on April 17, 2003, during the fiscal quarter
covered by this Quarterly Report on Form 10-QSB, a suit was filed in the Third
Judicial District Court, Salt Lake County, Utah (the "Court") by Kelly Adams, on
behalf of himself and "as representative of certain Stockholders of Provectus
Pharmaceuticals, Inc., a Nevada corporation." The suit named PPI and Michael L.
Labertew, an attorney in Salt Lake City, Utah, as defendants, and sought to
rescind the Agreement and Plan of Reorganization dated April 22, 2002 by which
we acquired PPI and PPI's former stockholders acquired majority ownership of our
common stock. (This transaction is discussed in more detail in Part I above
under the heading "Management's Discussion and Analysis or Plan of
Operation.-Overview-History.")
As previously reported, on April 29, 2003, without giving the Company or
PPI notice of the motion or an opportunity to respond to it, the Court granted
Mr. Adams's ex parte motion for a temporary restraining order (the "TRO")
preventing PPI from issuing additional shares of stock for a 10-day period
commencing on April 29, 2003. Mr. Adams also moved for a preliminary injunction
that, if granted, would have imposed the same restrictions until the completion
of the proceedings.
As previously reported, on May 12, 2003 PPI filed its Consolidated
Memorandum in Opposition to Plaintiff's Motion for Preliminary Injunction and
Memorandum in Support of Motion to Dismiss in response to the entry of the TRO
and Mr. Adams's motion for a preliminary injunction; and on May 13, 2003, the
Court conditionally lifted the TRO against the Company pending a hearing
scheduled for May 16, 2003. On May 16, 2003, the Court held a hearing on Mr.
Adams's motion for a preliminary injunction, at which the Court denied the
motion for a preliminary injunction, citing Mr. Adam's failure to meet his
burden under Utah law.
As previously reported, on May 21, 2003, the Court entered a written order
memorializing its May 16, 2003 ruling dissolving the TRO and denying Mr. Adams's
preliminary injunction motion. In dissolving the TRO and refusing to grant the
preliminary injunction, the Court cited Mr. Adams's inability to establish any
significant harm that would result to Mr. Adams if the preliminary injunction
were not granted, the significant harm that would result to the Company if the
preliminary injunction were granted, and Mr. Adams's failure to show a
substantial likelihood that he would prevail on the merits of his lawsuit, The
Court specifically cited Mr. Adams's failure to show a substantial likelihood
that he would prevail on the issues of (i) whether he had standing as a proper
plaintiff to assert his alleged cause of action and (ii) whether rescission was
an available and appropriate remedy in this case. The Court's order allows Mr.
Adams to amend his complaint.
As previously reported, on June 16, 2003 the Company and its subsidiary
Xantech Pharmaceuticals, Inc., a Tennessee corporation and the successor by
merger to PPI ("Xantech"), executed a Settlement Agreement (the "Settlement
Agreement") with the plaintiff, Mr. Adams, and with Justeene Blankenship,
Nicholas Julian, and Pacific Management Services, Inc., the corporation formerly
operated by Mr. Julian and Ms. Blankenship ("Pacific"). Pursuant to the
Agreement, Mr. Adams agreed to dismiss the litigation pending in the Court with
prejudice and, in connection therewith, to file the Settlement Agreement with
the Court to govern the future relations between the parties. In addition, the
parties to the Settlement Agreement entered into mutual releases and certain
other covenants and agreements. A copy of the Settlement Agreement was filed as
Exhibit 10.14 to the Company's Current Report on Form 8-K dated June 16, 2003,
as filed with the SEC on June 26, 2003, and is incorporated herein by reference.
As previously reported, on June 18, 2003 Mr. Adams and PPI submitted to the
Court a Stipulated Order of Dismissal with Prejudice and Release of Stock
Certificates (the "Order"). The Court entered the Order, thereby dismissing the
litigation with prejudice, on June 25, 2003.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
RECENT SALES OF UNREGISTERED SECURITIES
During the three months ended June 30, 2003, we did not sell any securities
which were not registered under the Securities Act of 1933, as amended (the
"Securities Act").
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
No response is required to this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
We held our 2003 Annual Meeting of Stockholders on May 29, 2003 (the
"Annual Meeting"). Proposals presented for a vote of our stockholders at the
Annual Meeting were:
1. Election of four directors to serve on the Company's Board of
Directors for a one-year term;
2. Action on a proposal to approve and adopt the following four
amendments to the Articles of Incorporation of Provectus
Pharmaceuticals, Inc.:
A. An amendment authorizing the future issuance of up to 25
million shares of preferred stock;
B. An amendment revising and improving the provisions of the
Articles of Incorporation regarding indemnification of our
directors, officers, employees and agents for costs they may
incur if sued individually as a result of their service to
us;
C. An amendment requiring the affirmative vote of 75% of the
voting power of our outstanding stock for
stockholder-initiated changes to our Bylaws and continuing
to permit the Board to adopt, amend or repeal the Bylaws;
D. An amendment eliminating unnecessary and archaic verbiage in
our Articles of Incorporation; and
3. Action on a proposal to approve and adopt the Provectus
Pharmaceuticals, Inc. Amended and Restated 2002 Stock Plan.
Election of Directors
Each of the incumbent Directors was elected, with the following
results:
ABSTENTIONS AND
VOTES FOR VOTES AGAINST BROKER NON-VOTES
--------- ------------- ----------------
H. Craig Dees, Ph.D. 7,775,565 700 0
Timothy C. Scott, Ph.D. 7,775,665 600 0
Eric A. Wachter, Ph.D. 7,775,665 600 0
Stuart Fuchs 7,775,665 600 0
Approval of Amendments to the Company's Articles of Incorporation
In accordance with SEC rules, we presented as separate matters for voting
the four proposed amendments to the Articles of Incorporation of Provectus
Pharmaceuticals, Inc., as amended. Stockholder voting on each of the four
amendments was independent from stockholder voting on any of the others;
stockholders were permitted to vote for or against, or abstain from voting on,
any one or more of them. We presented all four amendments together since we
believed that all four matters would be desirable for governance of the Company
following the Annual Meeting.
The proposed amendment to the Articles of Incorporation authorizing the
future issuance of up to 25 million shares of preferred stock was approved, with
the following results:
ABSTENTIONS AND
VOTES FOR VOTES AGAINST BROKER NON-VOTES
--------- ------------- ----------------
7,312,531 12,310 602
The proposed amendment to the Articles of Incorporation revising and
improving the provisions regarding indemnification of directors, officers,
employees and agents was approved, with the following results:
ABSTENTIONS AND
VOTES FOR VOTES AGAINST BROKER NON-VOTES
--------- ------------- ----------------
7,763,139 12,321 805
The proposed amendment to the Articles of Incorporation requiring the
affirmative vote of 75% of the voting power of the outstanding stock for
stockholder-initiated changes to the Bylaws was approved, with the following
results:
ABSTENTIONS AND
VOTES FOR VOTES AGAINST BROKER NON-VOTES
--------- ------------- ----------------
7,312,920 12,012 502
The proposed amendment to the Articles of Incorporation eliminating
unnecessary and archaic verbiage was approved, with the following results:
ABSTENTIONS AND
VOTES FOR VOTES AGAINST BROKER NON-VOTES
--------- ------------- ----------------
7,774,657 1,000 608
Approval of 2002 Stock Plan
The Provectus Pharmaceuticals, Inc. Amended and Restated 2002 Stock Plan
was approved and adopted, with the following results:
ABSTENTIONS AND
VOTES FOR VOTES AGAINST BROKER NON-VOTES
--------- ------------- ----------------
6,503,118 11,813 502
No other matters came before the Annual Meeting.
ITEM 5. OTHER INFORMATION.
The Company has entered into a Material Transfer Agreement dated as of
July 31, 2003 (the "Material Transfer Agreement") with Schering-Plough
Animal Health Corporation ("SPAH"), the animal-health subsidiary of
Schering-Plough Corporation, a major international pharmaceutical
company. Under the Material Transfer Agerement, we will provide SPAH
with access to certain of our patented technologies, to permit SPAH to
evaluate those technologies for use in animal-health applications. If
SPAH determines that it can commercialize our technologies, then the
Material Transfer Agreement obligates us and SPAH to enter into a
license agreement providing for us to license those technologies to
SPAH in exchange for certain progress payments upon the achievement of
certain goals. We can give you no assurance that SPAH will determine
that it can commercialize our technologies or that the goals required
for the Company to obtain progress payments from SPAH will be
achieved.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits. Exhibits required by Item 601 of Regulation S-B are
incorporated herein by reference and are listed on the attached
Exhibit Index, which begins on page X-1 of this Quarterly Report on
Form 10-QSB.
(b) Reports on Form 8-K. During the fiscal quarter ended June 30, 2003, we
filed the following Current Reports on Form 8-K:
1. On May 22, 2003, we filed a Current Report on Form 8-K reporting,
with respect to the litigation filed by Mr. Adams against PPI
(which is discussed in more detail above under the heading "Legal
Proceedings."), that, among other things: (i) on May 16, 2003 the
Court had held its hearing on PPI's Consolidated Memorandum in
Opposition to Plaintiff's Motion for Preliminary Injunction and
Memorandum in Support of Motion to Dismiss in response to the
entry of the TRO and Mr. Adams's motion for a preliminary
injunction; (ii) following the hearing, the Court had dissolved
the TRO and denied Mr. Adams's motion for a preliminary
injunction; and (iii) on May 21, 2003 the Court had entered a
written order memorializing its May 16, 2003 ruling dissolving
the TRO and denying Mr. Adams's preliminary injunction motion.
2. On June 26, 2003, we filed a Current Report on Form 8-K
reporting, with respect to the litigation filed by Mr. Adams
against PPI, that, among other things: (i) the Company and
Xantech had executed the Settlement Agreement with Mr. Adams,
Justeene Blankenship, Nicholas Julian, and Pacific; and (ii) the
Court had dismissed the litigation with prejudice on June 25,
2003.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Provectus Pharmaceuticals, Inc.
By: /s/ H. Craig Dees
----------------------------
H. Craig Dees, Ph.D.
Chief Executive Officer
Date: October 7, 2004
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
3.1 Restated Articles of Incorporation of Provectus Pharmaceuticals,
Inc., a Nevada corporation ("Provectus"), incorporated herein by
reference to Exhibit 3.1 to the Company's Quarterly Report on
Form 10-QSB dated June 30, 2003 as filed with the SEC on
August 14, 2003.
10.2** Provectus Pharmaceuticals, Inc. Amended and Restated 2002 Stock
Plan, incorporated herein by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-QSB dated June 30, 2003
as filed with the SEC on August 14, 2003.
10.15* Material Transfer Agreement dated as of July 31, 2003 between
Schering-Plough Animal Health Corporation, a Delaware
corporation, and Provectus, incorporated herein by reference to
Exhibit 10.15 to the Company's Annual Report on Form 10-KSB
dated December 31, 2004 as filed with the SEC on October 7,
2004.
31.1+ Certification Pursuant to Rule 13a-14(a) (Section 302
Certification), dated October 7, 2004, executed by H. Craig Dees,
Ph.D., Chief Executive Officer of the Company.
31.2+ Certification Pursuant to Rule 13a-14(a) (Section 302
Certification), dated October 7, 2004, executed by Peter R.
Culpepper, Chief Financial Officer of the Company.
32.1+ Certification Pursuant to 18 U.S.C.ss. 1350 (Section 906
Certification), dated October 7, 2004, executed by H. Craig Dees,
Ph.D., Chief Executive Officer of the Company, and Peter R.
Culpepper, Chief Financial Officer of the Company.
----------------------------------
* Portions of the exhibits to this agreement have been omitted
pursuant to a request for confidential treatment. The omitted
information has been filed separately with the SEC.
** Management compensation contract or plan.
+ Filed herewith.
Exhibit 31.1
------------
Provectus Pharmaceuticals, Inc.
Certification Pursuant to Rule 13a-14(a)
Section 302 Certification
I, H. Craig Dees, Ph.D., the Chief Executive Officer of Provectus
Pharmaceuticals, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Provectus
Pharmaceuticals, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the small business issuer as of, and for, the periods
presented in this quarterly report;
4. The small business issuer's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
(b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this
quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter
(the small business issuer's fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably
likely to materially affect, the small business issuer's internal
control over financial reporting; and.
5. The small business issuer's other certifying officers and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the small business issuer's auditors and
the audit committee of small business issuer's board of directors (or
persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to
record, process, summarize and report financial data and have
identified for the small business issuer's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal controls.
Date: October 7, 2004
/s/ H. Craig Dees
----------------------------------
H. Craig Dees, Ph.D.
Chief Executive Officer
Exhibit 31.2
------------
Provectus Pharmaceuticals, Inc.
Certification Pursuant to Rule 13a-14(a)
Section 302 Certification
I, Peter R. Culpepper, the Chief Financial Officer of Provectus
Pharmaceuticals, Inc., certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Provectus
Pharmaceuticals, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the small business issuer as of, and for, the periods
presented in this quarterly report;
4. The small business issuer's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
small business issuer, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly
during the period in which this quarterly report is being
prepared;
(b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this
quarterly report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred
during the small business issuer's most recent fiscal quarter
(the small business issuer's fourth fiscal quarter in the case of
an annual report) that has materially affected, or is reasonably
likely to materially affect, the small business issuer's internal
control over financial reporting; and.
5. The small business issuer's other certifying officers and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the small business issuer's auditors and
the audit committee of small business issuer's board of directors (or
persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to
record, process, summarize and report financial data and have
identified for the small business issuer's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the small business
issuer's internal controls.
Date: October 7, 2004
/s/ Peter R. Culpepper
------------------------------------
Peter R. Culpepper
Chief Financial Officer
Exhibit 32.1
------------
Provectus Pharmaceuticals, Inc.
Certification Pursuant to 18 U.S.C. ss. 1350
Section 906 Certifications
Pursuant to 18 U.S.C.ss. 1350, as enacted by Section 906 of the
Sarbanes-Oxley Act of 2002 (Public Law 107-204), the undersigned, H. Craig Dees,
Ph.D., the Chief Executive Officer of Provectus Pharmaceuticals, Inc., a Nevada
corporation (the "Company"), and Peter R. Culpepper, the Chief Financial Officer
of the Company, hereby certify that:
1. The Company's Quarterly Report on Form 10-QSB for the quarter ended March
31, 2003, as filed with the U.S. Securities and Exchange Commission on the
date hereof (the "Report"), fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
This Certification is signed on October 7, 2004.
/s/ H. Craig Dees
-------------------------------------
H. Craig Dees, Ph.D.
Chief Executive Officer
Provectus Pharmaceuticals, Inc.
/s/ Peter R. Culpepper
-------------------------------------
Peter R. Culpepper
Chief Financial Officer
Provectus Pharmaceuticals, Inc.
A signed original of this written statement required by Section 906 has
been provided to Provectus Pharmaceuticals, Inc. and will be retained by
Provectus Pharmaceuticals, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.