PROVECTUS BIOPHARMACEUTICALS, INC.

In 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. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company adopted ASU 2019-12 on January 1, 2021 and there was no material impact on the Company’s financial statements or disclosures.

The Company may, from time to time, be involved in litigation arising in the ordinary course of business or which may be expected to be covered by insurance. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Total operating expenses were $1,180,676 for the three months ended March 31, 2021, a decrease of $267,564 or 18.5% compared to the three months ended March 31, 2020. The decrease was driven primarily by our continued transformation and process improvement efforts within the Company along with slower recruitment and treatment in clinical trials due to the effects of SARS-CoV-2. Net loss for the three months ended March 31, 2021 was $1,669,950, a decrease of $157,111 or 8.6% which was primarily attributable to lower costs incurred in connection with our preclinical and clinical trial programs and general and administrative costs.

Research and development expenses were $655,144 for the three months ended March 31, 2021, a decrease of $254,302 or 28.0% compared to $909,466 for the three months ended March 31, 2020. The decrease was primarily due to (i) reduced cost on clinical trials due to slower recruitment and treatment in clinical trials due to the effects of SARS-CoV-2, (ii) lower amortization due to patents being fully amortized, and (iii) a decrease in insurance expense.

General and administrative expenses were $525,532 for the three months ended March 31, 2021, a decrease of $13,262 or 2.5% compared to $538,794 for the three months ended March 31, 2020. The decrease was primarily due to (i) lower professional fees, offset by (ii) higher legal fees, (iii) an increase in payroll and related taxes due to addition of employee, and (vi) higher other general and administrative cost.