UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
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                                  FORM 10-KSB/A
                                 Amendment No. 1


(Mark One)

[X]  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

     For the fiscal year ended December 31, 2002

[ ]  Transition   Report  Pursuant  to  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.
                 (Name of Small Business Issuer in Its Charter)

               Nevada                                         90-0031917
-------------------------------------------------      -------------------------
       (State or other jurisdiction of                    (I.R.S. Employer
       incorporation or organization)                     Identification Number)

7327 Oak Ridge Highway, Suite A, Knoxville, Tennessee            37931
-------------------------------------------------      -------------------------
     Address of Principal Executive Offices)                  (Zip Code)

                                  865/769-4011
--------------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:
                                      None
--------------------------------------------------------------------------------
                                (Title of Class)

Securities registered under Section 12(g) of the Exchange Act:
                    Common shares, par value $.001 per share
--------------------------------------------------------------------------------
                                (Title of Class)

     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 [ ]

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     The issuer's revenues for the most recent fiscal year were $0.

     The aggregate market value of the voting and non-voting  common equity held
by  non-affiliates of the registrant as of March 21, 2003, was $1,437,854 (based
on the average bid and ask price of $0.32).

     The number of shares  outstanding of the issuer's  stock,  $0.001 par value
per share, as of March 21, 2003 was 9,452,689.

     Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]


<PAGE>

                         Provectus Pharmaceuticals, Inc.
                          Annual Report on Form 10-KSB

                                Table of Contents
                                                                            Page
                                                                           -----
Part I........................................................ ................1

     Item 1.    Description of Business........................................1

                History........................................................1
                Description Of Business........................................1
                Intellectual Property..........................................7
                Competition....................................................7
                Federal Regulation of Therapeutic Products.....................8
                Personnel.....................................................10
                Available Information.........................................11

     Item 2.    Description of Property.......................................11

     Item 3.    Legal Proceedings.............................................11

     Item 4.    Submission of Matters to a Vote of Security Holders...........11

Part II.......................................................................12

     Item 5.    Market for Common Equity and Related Stockholder Matters......12

     Item 6.    Management's Discussion and Analysis or Plan of Operation.....14
                Going Concern.................................................14
                Plan of Operation.............................................14

     Item 7.    Financial Statements..........................................17
                Forward-Looking Statements....................................17
                Risk Factors..................................................18

     Item 8.    Changes in and Disagreements with  Accounting and
                Financial Disclosure..........................................22

Part III......................................................................23

     Item 9.    Directors, Executive Officers, Promoters and
                Control Persons; Compliance with Section 16(a)
                of the Exchange Act...........................................23

     Item 10.   Executive Compensation........................................23

     Item 11.   Security Ownership of Certain Beneficial Owners
                and Management and Related Stockholder Matters................23

     Item 12.   Certain Relationships and Related Transactions................23

     Item 13.   Exhibits, List and Reports on Form 8-K........................23

     Item 14.   Controls and Procedures.......................................24

Signatures....................................................................25


Consolidated Financial Statements............................................F-1

Exhibit Index................................................................X-1


                                       i

<PAGE>
                        PROVECTUS PHARMACEUTICALS, INC.
                          ANNUAL REPORT ON FORM 10-KSB

                                     Part I

Item 1.  Description of Business.


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  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 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,  which
we refer to as "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.  As a result,
holders  of  6,680,000  shares  of  common  stock  of  Provectus  Pharmaceutical
exchanged their shares 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 Provectus.
For accounting purposes, we treat this transaction as a recapitalization of PPI.

     On  November  19,  2002,  we  acquired  Valley  Pharmaceuticals,   Inc.,  a
privately-held  Tennessee  corporation  formerly  known as  Photogen,  Inc.,  by
merging  our  subsidiary  PPI with and into  Valley  and  naming  the  surviving
corporation "Xantech  Pharmaceuticals,  Inc." Photogen,  Inc. was separated from
Photogen  Technologies,   Inc.  in  a  non-prorata  split-off  to  some  of  its
shareholders.  The assets of Photogen, Inc. consisted primarily of the equipment
and intangibles related to its therapeutic  activity.  The majority shareholders
of Valley  were also the  majority  shareholders  of  Provectus.  Valley  had no
revenues prior to the transaction with us. By acquiring  Valley, we acquired our
most  important  intellectual  property,   including  issued  U.S.  patents  and
patentable inventions, with which we intend 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 the acquisition of Valley,  we were considered to be, and continue
to be, in the  development  stage and had not  generated  any revenues  from the
assets we acquired.

     On December 5, 2002,  we 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. We acquired the product formulations for
Pure-ific personal sanitizing sprays, along with the "Pure-ific" trademarks.  We
intend to continue  product  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

Overview


     Provectus, and its two wholly owned subsidiaries,  Xantech Pharmaceuticals,
Inc. and  Pure-ific  Corporation,  develop,  license and market and plan to sell
products in three sectors of the healthcare industry:



                                       1

<PAGE>


     o    Over-the-counter  products,  which we refer to in this  report as "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 Annual Report on Form 10-KSB,
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
portfolio of patented,  patentable,  and proprietary  technologies  that support
multiple  products in the  prescription  drug,  medical  device and OTC products
categories  (including  patented  technologies for: (a) treatment of cancer; (b)
novel therapeutic  medical devices;  (c) enhancing  contrast in medical imaging;
(d) improving signal  processing during  biomedical  imaging;  and (e) enhancing
production of biotechnology  products). Our prescription drug products encompass
the  areas of  dermatology  and  oncology  and  involve  several  types of small
molecule-based  drugs.  Our  medical  device  systems  include  therapeutic  and
cosmetic  lasers,  while our OTC products  address markets  primarily  involving
skincare applications.


     Our first commercially available products are directed into the OTC market,
as these  products pose minimal or no regulatory  compliance  barriers to market
introduction.  (For more information on these barriers,  see "Federal Regulation
of  Therapeutic  Products"  below.)  In this  fashion,  we  believe  that we can
diminish   the  risk  of   regulatory   bars  to  the   introduction   of  safe,
consumer-friendly  products and minimize the time  required to begin  generating
revenues  from  product  sales.  At  the  same  time,  we  continue  to  develop
higher-margin  prescription  pharmaceuticals  and  medical  devices,  which have
longer development and regulatory approval cycles.

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.  To develop our OTC products, we typically use compounds with
potent  antibacterial  and  antifungal  activity as building  blocks and combine
these building  blocks with  anti-inflammatory  and  moisture-absorbing  agents.
Products  with these  properties  can be used for treatment of a large number of
skin afflictions, including:

     o    hand irritation associated with use of disposable gloves

     o    eczema

     o    mild to moderate acne

     Where appropriate,  we have filed or will file patent applications and will
seek other intellectual  property  protection to protect our unique formulations
for relevant applications.

     GloveAid

     Personnel in many  occupations  and industries  now use  disposable  gloves
daily in the performance of their jobs, including:

     o    Airport security personnel;

     o    Food handling and preparation personnel;

     o    Sanitation workers;

     o    Postal and package delivery handlers and sorters;

     o    Laboratory researchers;

     o    health care workers such as hospital and blood bank personnel; and

     o    Police, fire and emergency response personnel.


                                       2

<PAGE>

     Accompanying the increased use of disposable gloves is a mounting incidence
of chronic skin irritation.  To address this market, 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  gloves.
In 2003,  we have  begun  small-scale  sales of  GloveAid  in U.S.  and  foreign
markets, and are focusing on reaching full-scale distribution of GloveAid by the
fourth quarter of 2003.


     The  chronic  skin  irritation  that   accompanies  the  long-term  use  of
disposable  gloves has been  characterized as an  allergic-like  reaction to the
glove  materials.  Currently,  physicians treat the condition using steroids and
other  immunosuppressive  therapies.  To avoid possible  regulatory bars, we are
marketing  GloveAid as a means to increase  users'  comfort,  not as a long-term
therapy for  treatment of chronic skin  irritation.  However,  as we obtain data
regarding  people  who  have  existing  chronic  skin  irritation,  we may  seek
regulatory  approval  of  GloveAid  to permit  us to market it as a therapy  for
chronic skin problems associated with wearing of disposable gloves. If we decide
to obtain this  regulatory  approval,  we anticipate that our projected sales of
GloveAid would increase significantly. Obtaining this approval would require the
completion of glove  viability tests required by the United States Food and Drug
Administration,  which we refer to as the  "FDA,"  and  responding  to the FDA's
comments  relating to these tests.  We estimate  regulatory  approval would cost
approximately $300,000 and would take from two to three years to obtain.


     Pure-ific


     Our 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. We have determined the effectiveness of Pure-rific
based on our  internal  testing and testing  performed  by Paratus  Laboratories
H.B., an independent research lab. 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.
Our  Pure-ific  sprays  have  been  designed  with  convenience  in mind and are
targeted  towards mothers,  travelers,  and anyone concerned about the spread of
sickness-causing germs. We had immaterial revenue from sales of Pure-ific during
2003.  We intend to  continue  developing  our  distribution  network  for these
products and expect to expand the Pure-ific  product line to include  additional
applications.


     Dermatology

     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. Wherever
possible, we intend to formulate these products to minimize or avoid significant
regulatory bars that might adversely impact time to market.

     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.  The ease of use and superior  performance of these products
may eventually  lead to extension into OTC  applications  currently  serviced by
less  safe,  more  expensive  alternatives.  All of  these  products  are in the
pre-clinical or clinical trial stage.

     Dermatology

     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,


                                       3

<PAGE>

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.


     Acute  psoriasis.  Psoriasis  is a  common  chronic  disorder  of the  skin
characterized  by dry  scaling  patches,  called  "plaques,"  for which  current
treatments  are few and those that are available have  potentially  serious side
effects.  According to Roenigk and Maibach  (Psoriasis,  Third  Edition,  1998),
there are approximately five million people in the United States who suffer from
psoriasis,  with an estimated  160,000 to 250,000 new psoriasis cases each year.
There is no known cure for the disease at this time.  According  to the National
Psoriasis  Foundation,  the majority of psoriasis sufferers,  those with mild to
moderate cases,  are treated with topical steroids that can have unpleasant side
effects;  none of the other  treatments  for moderate  cases of  psoriasis  have
proven completely  effective.  The 25-30% of psoriasis  patients who suffer from
more severe cases  generally are treated with more  intensive  drug therapies or
PUVA, a  light-based  therapy that  combines the drug  Psoralen with exposure to
ultraviolet  A light.  While PUVA is one of the more  effective  treatments,  it
increases a patient's risk of skin cancer.

     We  believe  that  Xantryl  activated  with green  light  offers a superior
treatment for acute psoriasis because it selectively treats diseased tissue with
negligible potential for side effects in healthy tissue;  moreover,  the therapy
has shown promise in comprehensive  Phase 1 clinical trials.  The objective of a
Phase 1 clinical  trial is to  determine if there are safety  concerns  with the
therapy.  In these studies,  involving  more than 50 test subjects,  Xantryl was
applied topically to psoriatic plaques and then illuminated with green light. In
our first study, a single-dose  treatment yielded an average reduction in plaque
thickness  of 59%  after 30  days,  with  further  response  noted at the  final
follow-up examination 90 days later. Further, no pain, significant side effects,
or evidence of  "rebound"  (increased  severity of a psoriatic  plaque after the
initial  reduction in thickness) were observed in any treated areas. This degree
of positive  therapeutic  response is  comparable  to that  achieved with potent
steroids  and other  anti-inflammatory  agents,  but without  the  serious  side
effects associated with such agents. We expect to conduct Phase 2 studies in the
near future,  in which we expect to assess the  potential  for  remission of the
disease using a regimen of weekly treatments similar to those used for PUVA.

     Actinic   Keratosis.   According  to  Schwartz  and  Stoll   (Fitzpatrick's
Dermatology in General Medicine,  1999), actinic keratosis, or "AK" (also called
solar  keratosis or senile  keratosis),  is the most common  pre-cancerous  skin
lesion  among  fair-skinned  people  and is  estimated  to  occur in over 50% of
elderly fair-skinned  persons living in sunny climates.  These experts note that
nearly half of the  approximately  five million cases of skin cancer in the U.S.
may have begun as AK.  The  standard  treatments  for AK  (primarily  comprising
excision,  cryotherapy,  and  ablation  with topical  5-fluorouracil)  are often
painful and frequently  yield  unacceptable  cosmetic  outcomes due to scarring.
Building on our experience with psoriasis,  we are assessing use of Xantryl with
green-light  activation as a possible improvement in treatment of early and more
advanced  stages of AK. We  completed an initial  Phase 1 clinical  trial of the
therapy  for this  indication  in 2001  with the  predecessor  company  that was
acquired in 2002. This study, involving 24 subjects, examined the safety profile
of a single treatment using topical Xantryl with green light photoactivation; no
significant safety concerns were identified.  We are assessing the data from the
study as a possible basis for further clinical development of Xantryl for AK.

     Severe  Acne.  According to Berson et al.  (Cutis.  72 (2003)  5-13),  acne
vulgaris affects approximately 17 million individuals in the U.S., causing pain,
disfigurement,  and social  isolation.  Moderate to severe  forms of the disease
have proven responsive to several photodynamic  regimens, and we anticipate that
Xantryl  can be used as an advanced  treatment  for this  disease.  Pre-clinical
studies  show that the active  ingredient  in  Xantryl  readily  kills  bacteria
associated  with acne.  This  finding,  coupled with our clinical  experience in
psoriasis and actinic keratosis, suggests that therapy with Xantryl will exhibit
no significant  side effects and will afford  improved  performance  relative to
other therapeutic  alternatives.  If correct, this would be a major advance over
currently available products for severe acne.


     As  noted  above,  we  are  researching  multiple  uses  for  Xantryl  with
green-light activation. Multiple-indication use by a common pool of physicians -
dermatologists,  in this  case - should  reduce  market  resistance  to this new
therapy.

     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.

                                       4

<PAGE>

     Liver  Cancer.  The current  standard of care for liver  cancer is ablative
therapy  (which  seeks to reduce a tumor by  poisoning,  freezing,  heating,  or
irradiating  it)  using  either a  localized  injection  of  ethanol  (alcohol),
cryosurgery,  radiofrequency  ablation,  or ionizing  radiation  such as X-rays.
Where  effective,  these therapies have many side effects;  selecting  therapies
with  fewer  side  effects  tends to  reduce  overall  effectiveness.  Combined,
ablative therapies have a five-year survival rate of 33% - meaning that only 33%
of those liver cancer  patients whose cancers are treated using these  therapies
survive for five years after their initial diagnoses. In pre-clinical studies we
have found that direct  injection of Provecta into liver tumors quickly  ablates
treated  tumors,  and can  trigger  an  anti-tumor  immune  response  leading to
eradication of residual tumor tissue and distant tumors.  Because of the natural
regenerative  properties  of the liver and the  highly  localized  nature of the
treatment,  this approach appears to produce no significant side effects.  Based
on these  encouraging  preclinical  results,  we are  assessing  strategies  for
initiation of clinical trials of Provecta for treatment of liver cancer.

     Breast Cancer.  Breast cancer afflicts over 200,000 U.S. citizens annually,
leading to over  40,000  deaths.  Surgical  resection,  chemotherapy,  radiation
therapy, and immunotherapy  comprise the standard treatments for the majority of
cases,  resulting  in serious  side  effects  that in many cases are  permanent.
Moreover,  current  treatments are relatively  ineffective  against  metastases,
which in many cases are the eventual  cause of patient  mortality.  Pre-clinical
studies  using  human  breast  tumors  implanted  in mice have shown that direct
injection of Provecta into these tumors ablates the tumors,  and, as in the case
of liver  tumors,  may elicit an  anti-tumor  immune  response  that  eradicates
distant  metastases.  Since  fine-needle  biopsy  is  a  routine  procedure  for
diagnosis of breast cancer, and since the needle used to conduct the biopsy also
could be used to direct an  injection  of  Provecta  into the  tumor,  localized
destruction of suspected tumors through direct injection of Provecta clearly has
the potential of becoming a primary  treatment.  We are  evaluating  options for
initiating  clinical studies of direct injection of Provecta into breast tumors,
and expect to formulate  final plans based on results from  clinical  studies of
our indication for Provecta in liver cancer.


     Prostate Cancer. Cancer of the prostate afflicts approximately 190,000 U.S.
men annually,  leading to over 30,000 deaths.  As with breast  cancer,  surgical
resection,  chemotherapy,  radiation  therapy,  and  immunotherapy  comprise the
standard  treatments  for the  majority  of cases,  and can  result in  serious,
permanent  side  effects.  We believe  that direct  injection  of Provecta  into
prostate tumors may selectively ablate such tumors, and, as in the case of liver
and breast  tumors,  may also elicit an anti-tumor  immune  response  capable of
eradicating  distant  metastases.   Since  trans-urethral   ultrasound,   guided
fine-needle biopsy and immunotherapy, along with brachytherapy implantation, are
becoming  routine  procedures for diagnosis and treatment of these  cancers,  we
believe that localized  destruction of suspected tumors through direct injection
of  Provecta  can become a primary  treatment.  We are  evaluating  options  for
initiating  clinical  studies of direct  injection  of  Provecta  into  prostate
tumors,  and expect to  formulate  final  plans based on results  from  clinical
studies of our  indications  for  Provecta in the  treatment of liver and breast
cancer.


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.

     Photoactivation.  Our clinical tests of Xantryl for dermatology have, up to
the present, utilized a number of  commercially-available  lasers for activation
of the drug. This approach has several  advantages,  including the leveraging of
an extensive base of installed devices present  throughout the pool of potential
physician-adopters  for  Xantryl;  access to such a base could play an  integral
role in early market capture.  However, since the use of such lasers, which were
designed  for  occasional  use in other  types  of  dermatologic  treatment,  is
potentially  too  cumbersome  and  costly  for  routine  treatment  of the large
population of patients with psoriasis, we have begun investigating potential use
of other types of  photoactivation  hardware,  such as light booths.  The use of
such booths


                                       5

<PAGE>

is consistent  with current care  standards in the  dermatology  field,  and may
provide  a  cost-effective  means  for  addressing  the  needs of  patients  and
physicians  alike. We anticipates  that such  photoactivation  hardware would be
developed,   manufactured,  and  supported  in  conjunction  with  one  or  more
third-party device manufacturer.

     Melanoma.  A high priority in our medical  devices field is the development
of a  laser-based  product for  treatment  of melanoma.  We initially  conducted
extensive research on ocular melanoma at the Massachusetts Eye and Ear Infirmary
(a teaching  affiliate of Harvard  Medical  School) using a new laser  treatment
that may offer significant  advantage over current treatment  options.  A single
quick  non-invasive  treatment  of  ocular  melanoma  tumors  in a rabbit  model
resulted  in  elimination  of over 90% of  tumors,  and may  afford  significant
advantage over invasive alternatives, such as surgical excision, enucleation, or
radiotherapy implantation. Ocular melanoma is rare, with approximately 2,000 new
cases annually in the U.S.  However,  we believed that our extremely  successful
results  could be  extrapolated  to treatment of primary  melanomas of the skin,
which have an incidence of over 52,000 new cases  annually in the U.S. and a 13%
five-year survival rate after metastasis of the tumor. We have performed similar
laser  treatments  on  large  (averaging   approximately  3  millimeters  thick)
cutaneous  melanoma  tumors  implanted in mice,  and have been able to eradicate
over 90% of these pigmented skin tumors with a single  treatment.  Moreover,  we
have shown that this treatment stimulates an anti-tumor immune response that may
lead to  improved  outcome  at both the  treatment  site and at sites of distant
metastasis.  From these results, we believe that a device for laser treatment of
primary  melanomas  of the skin and eye is nearly  ready for human  studies.  We
anticipate  partnering with a medical device  manufacturer to bring it to market
in  reliance on a 510(k)  notification.  For more  information  about the 510(k)
notification process, see "Federal Regulation of Therapeutic Products" below.

Research and Development


     We have placed research  activities for new product  initiatives on hold as
we attempt to conserve available capital and achieve full  capitalization of our
company  through equity and convertible  debt  offerings,  generation of product
revenues,  and other means. All ongoing research and development  activities are
directed  toward  supporting  our OTC  product  launches,  our  current  product
development  and  maintaining  our  intellectual  property  portfolio.   We  are
maintaining  our research  facilities  in  anticipation  of a resumption  of our
research programs for new product initiatives.


Production


     We have  determined that the most efficient use of our capital in producing
OTC products is to contract production with experienced entities having previous
success in economically  producing such products.  We have ongoing relationships
with two OTC product manufacturers,  EXAL, Inc. and 220 Laboratories,  Inc., and
several other OTC service vendors that will manufacture,  package, warehouse and
ship  our OTC  products.  We do not  have  written  agreements  with  any of our
manufacturers or vendors.


Sales

     Our first commercially available products are directed into the OTC market,
as these  products pose minimal or no regulatory  compliance  barriers to market
introduction.  In this  fashion,  we believe  that we can  diminish  the risk of
regulatory  bars to the  introduction of products and minimize the time required
to begin  generating  revenues from product sales. At the same time, we continue
to develop higher-margin prescription pharmaceuticals and medical devices, which
have longer development and regulatory approval cycles.

     We are commencing  limited sales of GloveAid and Pure-ific during the first
half of 2003.  We will  continue to seek  additional  markets  for our  products
through existing  distributorships  that market and distribute medical products,
ethical  pharmaceuticals,  and OTC  products for the  professional  and consumer
marketplaces.


     In  addition  to  developing  and  selling  products   ourselves,   we  are
negotiating  actively  with a number of potential  licensees  for several of our
intellectual properties, including patents and related technologies. To date, we
have not yet entered  into any  licensing  agreements;  however,  we  anticipate
consummating one or more such licenses in the future.


                                       6

<PAGE>

INTELLECTUAL PROPERTY

Patents


     We  hold a  number  of  U.S.  patents  covering  the  technologies  we have
developed  and are  continuing  to develop for the  production  of  prescription
drugs,  medical devices and OTC  pharmaceuticals,  including those identified in
the following table:

<TABLE>
<CAPTION>
        U.S. Patent No.                   Title                          Issue Date           Expiration Date
        ---------------                 --------                         ----------           ----------------
<S>     <C>               <C>                                          <C>                    <C>
        5,829,448         Method for improved selectivity in           November 3, 1998       October 30, 2016
                          photo-activation of molecular agents

        5,832,931         Method for improved selectivity in           November 10, 1998      October 30, 2016
                          photo-activation and detection of
                          molecular diagnostic agents

        5,998,597         Method for improved selectivity in           December 7, 1999       October 30, 2016
                          photo-activation of molecular agents

        6,042,603         Method for improved selectivity in           March 28, 2000         October 30, 2016
                          photo-activation of molecular agents

        6,331,286         Methods for high energy phototherapeutics    December 18, 2001      December 21, 2018

        6,451,597         Method for enhanced protein stabilization    September 17, 2002     April 6, 2020
                          and for production of cell lines useful
                          for production of such stabilized proteins

        6,468,777         Method for enhanced protein stabilization    October 22, 2002       April 6, 2020
                          and for production of cell lines useful
                          for production of such stabilized proteins

        6,493,570         Method for improved imaging and              December 10, 2002      December 10, 2019
                          photodynamic therapy

        6,495,360         Method for enhanced protein stabilization    December 17, 2002      April 6, 2020
                          and for production of cell lines useful
                          for production of such stabilized proteins

        6,519,076         Methods and apparatus for optical imaging    February 11, 2003      October 30, 2016

        6,525,862         Methods and apparatus for optical imaging    February 25, 2003      October 30, 2016

        6,541,223         Method for enhanced protein stabilization    April 1, 2003          April 6, 2020
                          and for production of cell lines useful
                          for production of such stabilized proteins
</TABLE>



     We continue to pursue patent applications on numerous other developments we
believe to be  patentable.  We consider our issued  patents,  our pending patent
applications and any patentable  inventions which we may develop to be extremely
valuable assets of our business.

Trademarks

     We own  the  following  trademarks  used  in  this  document:  Xantryl(TM),
Provecta(TM),  GloveAid(TM),  and  Pure-ific(TM)  (including  Pure-ific(TM)  and
Pure-ific(TM)  Kids).  We  also  own  the  registered  trademark   PulseView(R).
Trademark  rights are  perpetual  provided  that we continue to keep the mark in
use. We  consider  these  marks,  and the  associated  name  recognition,  to be
valuable to our business.

COMPETITION

     In  general,   the  pharmaceutical   industry  is  intensely   competitive,
characterized  by rapid  advances  in  products  and  technology.  A  number  of
companies have developed and continue to develop products that address the

                                       7

<PAGE>

areas  we have  targeted.  Some of  these  companies  are  major  pharmaceutical
companies that are  international  in scope and very large in size, while others
are niche players that may be less  familiar but have been  successful in one or
more areas we are targeting. Existing or future pharmaceutical, device, or other
competitors  may develop  products  that  accomplish  similar  functions  to our
technologies  in  ways  that  are  less  expensive,  receive  faster  regulatory
approval,  or receive greater market  acceptance than our products.  Many of our
competitors  have been in existence for  considerably  longer than we have, have
greater capital resources, broader internal structure for research, development,
manufacturing  and  marketing,  and are in many  ways  further  along  in  their
respective product cycles.


     At present,  our most direct  competitors  are smaller  companies  that are
exploiting  niches similar to ours. In the field of  photodynamic  therapy,  one
competitor,  QLT,  Inc.,  has  received  FDA  approval  for  use  of  its  agent
Photofrin(R) for treatment of several niche cancer indications, and has a second
product,  Visudyne(R),  approved  for  treatment  of  certain  forms of  macular
degeneration.  Another  competitor  in this field,  Dusa  Pharmaceuticals,  Inc.
recently   received  FDA  approval  of  its  photodynamic   product   Levulan(R)
Kerastik(R)  for treatment of actinic  keratosis.  We believe that QLT and Dusa,
among  other  competitors,  have  established  a  working  commercial  model  in
dermatology  and  oncology,  and that we can benefit from this model by offering
products  that,  when compared to our  competitors'  products,  afford  superior
safety and performance,  greatly reduced side effects, improved ease of use, and
lower cost, compared to those of our competitors.


     While it is possible  that  eventually  we may compete  directly with major
pharmaceutical  companies,  we believe it is more likely that we will enter into
joint  development,   marketing,  or  other  licensure  arrangements  with  such
competitors.

     We also have a number of market areas in common with  traditional  skincare
cosmetics companies,  but in contrast to these companies, our products are based
on unique,  proprietary formulations and approaches. For example, we are unaware
of any products in our  targeted  OTC  skincare  markets that our similar to our
GloveAid and Pure-ific products. Further, proprietary protection of our products
may help limit or prevent market erosion until the our patents expire.

FEDERAL REGULATION OF THERAPEUTIC PRODUCTS


     All of the prescription drugs and medical devices we currently  contemplate
developing  will  require  approval by the FDA prior to sales  within the United
States and by  comparable  foreign  agencies  prior to sales  outside the United
States.   The  FDA  and  comparable   regulatory   agencies  impose  substantial
requirements on the manufacturing  and marketing of pharmaceutical  products and
medical devices.  These agencies and other entities extensively regulate,  among
other   things,   research   and   development   activities   and  the  testing,
manufacturing, quality control, safety, effectiveness, labeling, storage, record
keeping, approval,  advertising and promotion of our proposed products. While we
attempt to minimize and avoid  significant  regulatory bars when formulating our
products,   some  degree  of  regulation  from  these  regulatory   agencies  is
unavoidable.  Some  of  the  things  we do to  attempt  to  minimize  and  avoid
significant regulatory bars include the following:

     o    Using chemicals and combinations already allowed by the FDA;

     o    Carefully  making  product  performance  claims  to avoid the need for
          regulatory approval;

     o    Using  drugs that have been  previously  approved  by the FDA and that
          have a long history of safe use;

     o    Using chemical compounds with known safety profiles; and

     o    In many cases, developing OTC products which face less regulation than
          prescription pharmaceutical products.


     The  regulatory  process  required  by the FDA,  through  which our drug or
device products must pass successfully  before they may be marketed in the U.S.,
generally involves the following:

     o    Preclinical laboratory and animal testing;

     o    Submission  of  an  application  that  must  become  effective  before
          clinical trials may begin;

     o    Adequate and  well-controlled  human clinical  trials to establish the
          safety and efficacy of the product for its intended indication; and

     o    FDA approval of the  application to market a given product for a given
          indication.

     For   pharmaceutical   products,   preclinical  tests  include   laboratory
evaluation of the product, its chemistry,  formulation and stability, as well as
animal studies to assess the potential safety and efficacy of the product. Where
appropriate  (for example,  for human disease  indications for which there exist
inadequate animal models), we will attempt to obtain preliminary data concerning
safety and efficacy of proposed  products using  carefully  designed human pilot
studies.  We will require  sponsored  work to be conducted  in  compliance  with
pertinent  local and  international  regulatory  requirements,  including  those
providing for  Institutional  Review Board approval,  national  governing agency
approval and patient informed consent,  using protocols  consistent with ethical
principles  stated in

                                       8

<PAGE>

the Declaration of Helsinki and other internationally  recognized standards.  We
expect any pilot studies to be conducted  outside the United States;  but if any
are  conducted  in the United  States,  they will  comply  with  applicable  FDA
regulations.  Data  obtained  through  pilot  studies will allow us to make more
informed decisions concerning possible expansion into traditional  FDA-regulated
clinical trials.

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

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


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

     Applicable  medical  devices  can be cleared  for  commercial  distribution
through  a  notification  to the FDA  under  Section  510(k)  of the  applicable
statute.  The 510(k) notification must demonstrate to the FDA that the device is
as safe and effective  and  substantially  equivalent  to a legally  marketed or
classified device that is currently in interstate commerce. Such devices may not
require detailed testing. Certain high-risk devices that sustain human life, are
of  substantial  importance  in preventing  impairment of human health,  or that
present a  potential  unreasonable  risk of illness or injury,  are subject to a
more comprehensive FDA approval process initiated by filing a premarket approval
("PMA") application (for devices) or accelerated approval (for drugs).

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

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


     We have established a core clinical  development team and have been working
with  outside  FDA  consultants  to  assist  us in  developing  product-specific
development and approval strategies,  preparing the required submittals, guiding
us through the regulatory  process,  and providing  input to the design and site
selection of human clinical  studies.  Historically,  obtaining FDA approval for
photodynamic  therapies has been a challenge.  Wherever  possible,  we intend to
utilize lasers or other activating systems that have been previously approved by
the FDA to mitigate the risk that our therapies will not be approved by the FDA.
The FDA has considerable experience with lasers by virtue of having reviewed and
acted upon many  510(k)  and  premarket  approval  filings  submitted  to it for
various photodynamic and non-photodynamic therapy laser applications,  including
a large number of cosmetic laser treatment systems used by dermatologists.

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

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


     OTC products are subject to  regulation  by the FDA and similar  regulatory
agencies but the regulations  relating to these products are much less stringent
than those relating to prescription drugs and medical devices.  The types of OTC
products  developed  and sold by us only require that we follow  cosmetic  rules
relating to labeling and the claims that we make about our product.  The process
for obtaining  approval of prescription drugs with the FDA does not apply to the
OTC products which we sell. The FDA can, however, require us to stop selling our
product if we fail to comply with the rules applicable to our OTC products.


                                       9

<PAGE>

PERSONNEL

Executive Officers

     As of April 15, 2003, our executive officers are:

     H. Craig Dees, Ph.D., 51, Chief Executive  Officer.  Dr. Dees has served as
our Chief  Executive  Officer and as a member of our Board of Directors since we
acquired PPI on April 23, 2002.  Before  joining us, from 1997 to 2002 he served
as  senior  member  of  the  management  team  of  Photogen  Technologies,  Inc.
("Photogen"),  the former  corporate  parent of Valley  when Valley was known as
"Photogen,  Inc.,"  including  serving as a member of the Board of  Directors of
Photogen  from 1997 to 2000.  Prior to joining  Photogen,  Dr.  Dees served as a
Group  Leader at the Oak Ridge  National  Laboratory  ("ORNL"),  and as a senior
member of the  management  teams of LipoGen Inc., a medical  diagnostic  company
which used  genetic  engineering  technologies  to  manufacture  and  distribute
diagnostic assay kits for auto-immune diseases,  and TechAmerica Group Inc., now
a  part  of  Boehringer  Ingelheim  Vetmedica,  Inc.,  the  U.S.  animal  health
subsidiary  of  Boehringer   Ingelhem  GmbH,  an   international   chemical  and
pharmaceutical  company  headquartered  in Germany.  He has  developed  numerous
products  in  a  broad  range  of  areas,  including  ethical  vaccines,   human
diagnostics,  cosmetics and OTC pharmaceuticals,  and has set several regulatory
precedents  in licensing  and  developing  biotechnology-derived  products.  For
example,  Dr. Dees  developed  and  commercialized  the world's first live viral
vaccine  produced  by  recombinant  DNA  technologies  and  licensed  the  first
recombinant antigen human diagnostic assay using a FDA Class II licensure. While
at  TechAmerica  he developed  and obtained USDA approval for the first in vitro
assay  for  releasing  "killed"  viral  vaccines.  Dr.  Dees  also has  licensed
successfully a number of proprietary  cosmetic products and formulated strategic
planning  for  developing  cosmetic  companies.  He earned a Ph.D.  in Molecular
Virology from the University of Wisconsin - Madison in 1984.

     Timothy  C.  Scott,  Ph.D.,  45,  President.  Dr.  Scott has  served as our
President  and as a member of our Board of  Directors  since we acquired  PPI on
April 23,  2002.  Prior to joining us, Dr.  Scott was as a senior  member of the
Photogen  management  team from 1997 to 2002,  including  serving as  Photogen's
Chief  Operating  Officer from 1999 to 2002, as a director of Photogen from 1997
to 2000, and as interim CEO for a period in 2000.  Before joining  Photogen,  he
served as senior  management  of Genase LLC, a  developer  of enzymes for fabric
treatment,  and held senior research and management positions at ORNL. Dr. Scott
has been involved in developing numerous high-tech  innovations in a broad range
of areas, including separations science, biotechnology, biomedical, and advanced
materials.  He has licensed  several of his  innovations  to the oil and gas and
biotechnology  industries.  As Director of the Bioprocessing R&D Center at ORNL,
Dr.  Scott  achieved  a  national  presence  in the  area  of  use  of  advanced
biotechnology  for the production of energy,  fuels, and chemicals.  He earned a
Ph.D.  in Chemical  Engineering  from the  University  of Wisconsin - Madison in
1985.

     Eric A. Wachter,  Ph.D., 40, Vice President - Pharmaceuticals.  Dr. Wachter
has served as our Vice President - Pharmaceuticals  and as a member of our Board
of Directors since we acquired PPI on April 23, 2002.  Prior to joining us, from
1997  to  2002 he was a  senior  member  of the  management  team  of  Photogen,
including serving as Secretary and a director of Photogen since 1997 and as Vice
President and Secretary and a director of Photogen since 1999.  Prior to joining
Photogen,  Dr.  Wachter  served as a senior  research  staff  member  with ORNL.
Starting during his affiliation with Photogen,  Dr. Wachter has been extensively
involved in pre-clinical development and clinical testing of pharmaceuticals and
medical device systems,  as well as with coordination and filing of patents.  He
earned a Ph.D. in Chemistry from the University of Wisconsin - Madison in 1988.

     Daniel R. Hamilton, 53, Chief Financial Officer. Mr. Hamilton has served as
our Chief  Financial  Officer  since we acquired PPI on April 23,  2002.  Before
joining us, from 1997 to 2002 he served as Manager of Finance and Administration
for Photogen.  Mr. Hamilton has diversified  professional  experience working in
all aspects of accounting  and  financial  operations  with special  emphasis on
planning and  objective  setting,  operational  and  financial  leadership,  and
administrative  management.  He has  experience  in  private  companies,  public
institutions,  and public corporations subject to SEC rules. Mr. Hamilton earned
a Bachelor of Science degree in Business  Administration  from the University of
Tennessee in 1971, and is a Certified Public Accountant.

Employees

     We currently employ five persons, all of whom are full-time employees.

                                       10

<PAGE>
AVAILABLE INFORMATION


     Provectus Pharmaceuticals, Inc. is a "public company," and therefore we are
subject to the  informational  requirements  of the  Securities  Exchange Act of
1934, as amended,  which we refer to as the "Exchange Act." To comply with those
requirements,  we file annual reports,  quarterly reports,  periodic reports and
other reports and statements with the Securities and Exchange Commission,  which
we refer to as the "SEC." You may read and copy any materials  that we file with
the  SEC at  the  SEC's  Public  Reference  Room,  at 450  Fifth  Street,  N.W.,
Washington,  D.C.  20549.  You can obtain  information  on the  operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains  an  Internet  site at  http://www.sec.gov,  from which you can access
electronic copies of materials we file with the SEC.


     Our  Internet  address  is  http://www.pvct.com.   Because  of  our  recent
reorganization,  we are undertaking an extensive  renovation of our Web site. As
part of this renovation, we have made available, through a link to the SEC's Web
site,  electronic  copies of the materials we file with the SEC  (including  our
annual reports on Form 10-KSB, our quarterly reports on Form 10-QSB, our current
reports on Form 8-K and amendments to those reports). To receive paper copies of
our SEC  materials,  please  contact us by U.S.  mail,  telephone,  facsimile or
electronic mail at the following address:

                           Provectus Pharmaceuticals, Inc.
                           Attention: President
                           7327 Oak Ridge Highway, Suite A
                           Knoxville, TN 37931
                           Telephone: 865/769-4011
                           Facsimile: 865/769-4013
                           Electronic mail: info@pvct.com

     If possible, please provide us with your electronic mail address so that we
may deliver electronic copies to you free of charge.

Item 2. Description of Property.

     We currently  lease  approximately  4,000  square feet of space  outside of
Knoxville, Tennessee for our corporate office and operations. Our monthly rental
charge for these  offices is  approximately  $2,800 per month,  and the lease is
renewed on a month-to-month  basis. We believe that these offices  generally are
adequate for our current needs and our needs in the immediate future.

Item 3. Legal Proceedings.

     From time to time, we are party to  litigation  or other legal  proceedings
that we  consider  to be a part  of the  ordinary  course  of our  business.  At
present,  we are not involved in any legal  proceedings  nor are we party to any
pending  claims that we believe could  reasonably be expected to have a material
adverse effect on our business, financial condition, or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders.

     During the three  months ended  December  31,  2002,  we did not submit any
matters to a vote of our stockholders.

                                       11

<PAGE>

                                     Part II

Item 5. Market for Common Equity and Related Stockholder Matters.


Market Information and Holders

     Quotations  for our common  stock are  reported on the OTC  Bulletin  Board
under the symbol  "PVCT." The  following  table sets forth the range of high and
low bid information for the periods indicated since January 1, 2001:

       2001                                       High                 Low
       ----                                       ----                 ---
   First Quarter (January 1 to March 31)         $1.00               $1.88
   Second Quarter (April 1 to June 30)           $2.75               $1.50
   Third Quarter (July 1 to September 30)        $2.75               $1.01
   Fourth Quarter (October 1 to December 31)     $3.00               $1.00

       2002
       ----
   First Quarter (January 1 to March 31)         $2.60               $0.02
   Second Quarter (April 1 to June 30)          $10.01               $0.30
   Third Quarter (July 1 to September 30)        $1.05               $0.12
   Fourth Quarter (October 1 to December 31)     $0.55               $0.07

     High and low  quotation  information  was  obtained  from data  provided by
Yahoo! Inc.  Quotations  reflect  inter-dealer  prices,  without retail mark-up,
mark-down or commission, and may not reflect actual transactions.

     As of March 21,  2003,  we had 1,546  stockholders  of record of our common
stock.

Dividend Policy

     We have never declared or paid any cash dividends on our capital stock.  We
currently  plan to retain  future  earnings,  if any,  to finance the growth and
development of our business and do not  anticipate  paying any cash dividends in
the  foreseeable  future.  We may incur  indebtedness  in the  future  which may
prohibit or effectively  restrict the payment of dividends,  although we have no
current plans to do so. Any future  determination  to pay cash dividends will be
at the discretion of our board of directors.

Recent Sales of Unregistered Securities


     During the year ended  December  31, 2002,  we did not sell any  securities
which were not registered under the Securities Act of 1933, as amended, which we
refer to as the "Securities Act" except as follows:


     1.   Pursuant to the Agreement and Plan of Reorganization dated as of April
          22, 2002,  among the  Company,  PPI and the  shareholders  of PPI (the
          "Reorganization  Agreement"),  the Company issued  6,680,000 shares of
          common  stock to the  shareholders  of PPI in exchange  for all of the
          issued and  outstanding  shares of PPI. As of the close of business on
          April 22, 2002, the value of our common stock was $3.00 per share.  We
          relied on an exemption from  registration  pursuant to Section 4(2) of
          the  Securities  Act,  based on the sale of these  shares to a limited
          number of  purchasers  in a  transaction  not  involving  any  general
          solicitation or general advertising.


     2.   Pursuant  to the  Reorganization  Agreement,  the  Company  issued  an
          aggregate of 800,000  shares of common stock to Kelly Adams,  Justeene
          Blankenship,  Michael  Labertew  and R. Ratliff as  consideration  for
          services  performed  by  those  individuals  in  connection  with  the
          transactions  described  in the  Reorganization  Agreement.  As of the
          close of business on April 22, 2002, the value of our common stock was
          $3.00 per share. We relied on an exemption from registration  pursuant
          to  Section  4(2) of the  Securities  Act,  based on the sale of these
          shares  to  a  limited  number  of  purchasers  in a  transaction  not
          involving any general solicitation or general advertising.


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<PAGE>


     3.   Pursuant to a Consulting  Agreement  dated August 15, 2002 between the
          Company and Numark Capital Corporation ("Numark"),  the Company issued
          Numark 100,000 shares of common stock as consideration  for management
          consulting   services,   business   advisory   services,   shareholder
          information services and public relations services performed and to be
          performed  for the  Company by Numark.  As of the close of business on
          August 16, 2002, the value of our common stock was $0.23 per share. We
          relied on an exemption from  registration  pursuant to Section 4(2) of
          the  Securities  Act,  based on the sale of these  shares  to a single
          purchaser in a transaction  not involving any general  solicitation or
          general advertising.

     4.   Pursuant to a letter  agreement dated June 7, 2002 between the Company
          and Nace Pharma, LLC ("Nace Pharma"),  the Company granted Nace Pharma
          a warrant  for the  purchase  of 100,000  shares of common  stock at a
          price of  approximately  $2.29 per share.  These  warrants will become
          exercisable only when and if Nace Pharma  successfully  introduces the
          Company to one of a group of designated major pharmaceutical companies
          and that introduction results in a transaction with an estimated value
          to the  Company of at least $10  million,  and will  expire on June 7,
          2005 if not exercised before that date. We relied on an exemption from
          registration  pursuant to Section 4(2) of the Securities Act, based on
          the  issuance  of the  warrants,  and the sale of the shares of common
          stock issuable upon exercise of the warrants, to a single purchaser in
          a  transaction  not  involving  any  general  solicitation  or general
          advertising.

     5.   On November  19,  2002,  the Company  issued an  aggregate  of 500,007
          shares of common stock to the former owners of Valley as consideration
          for the acquisition of the Valley assets.  As of the close of business
          on  November  19,  2002,  the value of our common  stock was $0.40 per
          share. We relied on an exemption from registration pursuant to Section
          4(2) of the  Securities  Act,  based on the sale of these  shares to a
          limited  number of  purchasers  in a  transaction  not  involving  any
          general solicitation or general advertising.

     6.   Pursuant to a Convertible Secured Promissory Note and Warrant Purchase
          Agreement dated November 26, 2002 (the "Gryffindor Agreement") between
          the Company and  Gryffindor  Capital  Partners I,  L.L.C.,  a Delaware
          limited  liability  company  ("Gryffindor"),  the  Company  issued  to
          Gryffindor a Convertible  Secured  Promissory  Note dated November 26,
          2002 in the original principal amount of $1 million (the "Note").  The
          Note bears interest at 8% per annum, payable quarterly in arrears, and
          is due and payable in full on November 26, 2004. Our obligations under
          the Note are secured by a first priority  security  interest in all of
          our  Company's  assets,  including  the assets held by our Xantech and
          Pure-ific  subsidiaries.  Subject to certain  exceptions,  the Note is
          convertible  into shares of our common stock beginning on the November
          26, 2003; the principal  amount of the Note is convertible at the rate
          of one share of common stock for each $0.737 of  principal  converted,
          while accrued but unpaid  interest on the Note is  convertible  at the
          rate of one share of common stock for each $0.55 of accrued but unpaid
          interest converted.  Pursuant to the Purchase  Agreement,  the Company
          also issued to  Gryffindor  and to Stuart Fuchs Common Stock  Purchase
          Warrants   dated  November  26,  2002  (the   "Warrants"),   entitling
          Gryffindor and Mr. Fuchs to purchase, in the aggregate,  up to 452,919
          Common  Shares at a price of $0.001 per  share.  These  warrants  were
          exercised  immediately  upon issuance.  We relied on an exemption from
          registration  pursuant to Section 4(2) of the Securities Act, based on
          the issuance of the Note and the Warrants,  and the sale of the shares
          of common stock  issuable upon  conversion of the Note and exercise of
          the Warrant,  to a limited  number of purchasers in a transaction  not
          involving any general solicitation or general advertising.

     7.   On December 5, 2002,  the Company issued an aggregate of 25,000 shares
          of common stock to the former owners of Pure-ific as consideration for
          the acquisition of the Pure-ific  assets.  As of the close of business
          on  December  5,  2002,  the value of our  common  stock was $0.50 per
          share.  In addition to the shares issued at closing,  the Company will
          issue  the  former  owners of  Pure-ific  warrants  entitling  them to
          purchase an aggregate of 80,000  shares of common stock at an exercise
          price of $0.50 per share (the  closing  price of our  common  stock on
          December  5, 2002) upon (i) the  achievement  of certain  targets  for
          sales of Pure-ific  personal  sanitizing  sprays; and (ii) December 5,
          2003,  2004 and  2005.  We relied on an  exemption  from  registration
          pursuant to Section 4(2) of the  Securities  Act,


                                       13

<PAGE>


          based on the sale of these shares to a limited number of purchasers in
          a  transaction  not  involving  any  general  solicitation  or general
          advertising.

Item 6.  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  Annual  Report  on  Form  10-KSB.   Historical   results  and   percentage
relationships  set forth in the statement of operations,  including trends which
might appear, are not necessarily indicative of future operations.

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.


     Our technologies are in early stages of development.  We have not generated
revenues  from sales or operations  and 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  through the sale of the
Note and the Warrant. In addition, at critical junctures during 2002 we obtained
approximately $109,000 in additional funding through loans from Eric A. Wachter,
our Vice President - Pharmaceuticals,  a member of our Board of Directors, and a
major  shareholder.  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 full  resumption  of research
programs for new research initiatives that are currently delayed.


     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,  escalating  sales of OTC
products,  and issuance of debt and equity,  we plan to build on that foundation
to increase shareholder 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.

Cash Flow

         As of December 31, 2002, we held approximately $717,000 in cash. At our
current cash expenditure rate, this amount will be sufficient to meet our needs
until the end of June 2003. We already have begun to reduce our

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<PAGE>


expenditure  rate by delaying  some of our  research  programs  for new research
initiatives;  in addition, we are seeking to improve our cash flow by increasing
sales of OTC  products.  However,  we cannot  assure that we will be  successful
either  in  increasing  sales  of  OTC  products  or in  reducing  expenditures.
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 shareholders.


Market Outlook

     Our products are divided into three classes:

     o    OTC products addressing the skincare markets;

     o    Prescription  pharmaceuticals  addressing the dermatology and oncology
          markets; and

     o    Medical devices

     Our  estimates  of the size of the markets for each of these three  product
classes are set forth in the following table:


                                                      Approximate Annual Value
                  Product Area                       of Sales in U.S. Market (1)
                  ------------                      ----------------------------
                                                           (millions)

                  OTC Products

                    Personal hygiene......................        $      100

                       Disposable glove care..............               100

                       Acne (all grades)..................             1,000

                  Prescription Pharmaceuticals

                       Psoriasis..........................             1,500

                       Liver, breast and prostate cancer..             1,000

                  Medical Devices

                       Medical device systems.............               250
------------

     (1)  Our  estimates  of market  size are based on  relevant  technical  and
          scientific  literature,  published  market  analyses,  and analysis of
          publicly-available sales data for products currently directed at these
          markets.


     Skincare

     We are developing OTC products for three areas in the skincare market:

     1.   personal hygiene products;

     2.   hand care products for workers who use disposable gloves; and

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<PAGE>


     3.   products for treatment of acne.

     In the future,  we expect to develop  products for additional  areas in the
skincare market, including treatments for psoriasis,  eczema, and various fungal
infections such as dandruff and athlete's foot.

     Personal Hygiene.  Our Pure-ific brand of OTC products includes a number of
topical  antibacterial  products  that  address  the  personal  hygiene  market,
including a hand  sanitizer  that  immediately  kills germs on skin and prevents
regrowth for six hours. We believe that annual retail sales in the United States
of hand sanitizers are approximately $100 million; this figure excludes sales of
antibacterial  sprays  such as  Lysol(R),  which we  estimate  at more than $1.2
billion in annual U.S.  sales.  We anticipate  extending our Pure-ific  brand to
include  additional  products that leverage  technologies  utilized in our other
skincare products.

     Disposable   Glove  Care.  We  estimate  that  annual  wholesale  sales  of
disposable  gloves in the U.S. are over $1.2 billion,  including $530 million in
sales to the acute care or hospital market, $560 million in sales to the medical
laboratory  and  non-hospital  market,  and $100  million in sales to the dental
market. Use of gloves for protection in other areas, including airport security,
food preparation,  sanitation,  blood banks, research facilities, mail handling,
police and fire personnel, is rapidly growing as concerns over possible exposure
to biological or other hazards  increase.  We further  anticipate that consumers
will spend comparable amounts on hand care products as on the gloves themselves.


     Acne.  Acne affects an estimated 17 million people in the U.S. at any given
time. 85% of all people aged 12 to 25 will experience  acne problems,  while 59%
of women aged 25 to 39 suffer  from this  affliction.  70% percent of adult acne
sufferers,  and an even a higher fraction of teenagers,  rely on self-medication
to treat their acne. OTC products for treatment of mild- to moderate-grade  acne
generally are sold through  department  stores,  supermarkets,  and drug stores;
combined  sales of these  products are believed to have exceeded $800 million in
the year 2000 and were  expected to increase by  approximately  10% per year. In
addition  to these  OTC  products,  Frost &  Sullivan  have  estimated  the U.S.
prescription  acne care market at $1.3 billion,  with over 7.7 million visits to
physicians in 2001 for treatment of severe acne.

     Other Skincare. We anticipate that the formulations of our OTC products and
prescription drugs can be used to treat other conditions of the skin,  including
psoriasis,  eczema,  and fungal  infections such as dandruff and athlete's foot.
There are approximately 7 million  psoriasis  patients in the U.S., with between
160,000 and 250,000 new cases  diagnosed every year. In the U.S., the total cost
of psoriasis  treatment  was $2.9  billion in 1995.  The numbers are similar for
eczema and fungal infections.  We believe these represent extremely large future
opportunities for our skincare products.


     Prescription Pharmaceuticals

     We are  developing  prescription  drugs for the treatment of certain severe
dermatologic  conditions  such as  psoriasis,  and for the  treatment of serious
cancers, including those of the liver, breast, and prostate.

     Acute   Psoriasis.   Psoriasis  is  a  chronic   skin   disease   affecting
approximately  5 million  Americans,  with  over  150,000  new  cases  diagnosed
annually. The cause of psoriasis is unknown and there is no cure. Thus, patients
typically   undergo   prolonged   care  over  a  period  of  years  to  decades.
Approximately  2.5  million  psoriasis  patients  are  treated  annually by U.S.
physicians   (primarily   dermatologists),   comprising   an  estimated   annual
expenditure  of  $1.5  billion  for  treatment  in the  mid-1990s.  More  recent
estimates  project a $1-2 billion market  opportunity for new therapies  divided
among several multi-hundred-million dollar products.

     Liver Cancer.  Hepatocellular carcinoma, or HCC, accounts for approximately
90% of all liver  tumors and is the most  common  solid-organ  tumor  worldwide,
causing over 1 million  deaths  annually.  HCC is associated  with chronic liver
injury  from viral  hepatitis  (hepatitis  B and C), and has  attained  epidemic
proportions  among  men aged 25 to 34 in  eastern  Asia,  tropical  Africa,  and
southern Italy.  Although  currently of relatively low incidence in the U.S. and
Europe,  the rapid rise in hepatitis  infection in these regions  signifies that
this may soon change. In contrast,  the primary form of liver cancer in the U.S.
currently  is  metastatic  colorectal  carcinoma  (155,000  new cases and 60,000
deaths  annually,  with a 6% five-year  survival rate).  The current standard of
care for these forms of liver cancer is ablative therapy (via localized  ethanol
injection,  cryosurgery,  or  radiofrequency  ablation).  A

                                       16

<PAGE>

combined  five-year  survival rate of 33% for these therapies  demonstrates  the
pressing need for new therapeutic  approaches in a worldwide market estimated at
over $500 million.

     Breast Cancer.  The American  Cancer Society  estimates that  approximately
205,000 new cases of  invasive  breast  cancer,  and over 54,000 new cases of in
situ breast  cancer,  will occur in the U.S. in 2002,  leading to  approximately
40,000 deaths. Current treatments (lumpectomy,  mastectomy,  removal of regional
lymph nodes, radiation therapy, chemotherapy, and hormone therapy) are expensive
and associated with  unacceptable side effects.  While five-year  survival rates
are excellent for  localized  tumors (96%),  this rate drops to 21% once distant
metastasis has occurred.  This illustrates  that surgical  excision and standard
adjuvant  treatments  (such as  chemotherapy  and radiation) are  ineffective at
eliminating metastatic cells that have migrated from the primary treatment site.
New,  minimally-invasive  treatment  modalities for breast cancer may have broad
applicability to this therapeutic market estimated at well over $1 billion.

     Prostate Cancer.  The American Cancer Society estimates that  approximately
190,000 U.S. men are afflicted annually with cancer of the prostate,  leading to
over 30,000 deaths.  As with breast cancer,  surgical  resection,  chemotherapy,
radiation therapy,  and immunotherapy  comprise the standard  treatments for the
majority of cases, and can result in serious, permanent side effects. We believe
that  new,  minimally-invasive  modalities  - such as  direct  injection  of our
prescription  drug Provecta into prostate tumors - may have broad  applicability
to this therapeutic market as an adjuvant or primary form of therapy,  providing
an entry into a therapeutic market estimated at well over $500 million.

     Medical Device Systems


     This  market area  comprises  two  sectors:  cosmetic  treatments,  such as
non-ablative  wrinkle reduction,  elimination of spider veins and other cosmetic
blemishes,  and laser hair reduction; and therapeutic uses, including activation
of certain of our light-activated  drugs.  Additional areas include non-surgical
destruction   of  skin   cancers  and  removal  of  unwanted   moles  and  other
hyperpigmented  features. The U.S. medical laser market exceeded $1.6 billion in
2000, while the market for wrinkle reduction and hair reduction systems alone is
currently in excess of $100 million annually. We believe that we can develop new
markets for laser devices,  significantly  in addition to the current market for
these  devices,  as a result  of the  development  of  therapies  consisting  of
photoactivation of the our prescription drug products.


Item 7.  Financial Statements.


     Our consolidated financial statements,  together with the report thereon of
BDO Seidman  LLP,  independent  accountants,  are set forth on the pages of this
Annual Report on Form 10-KSB indicated below.


                                                                            Page
Provectus Pharmaceuticals, Inc. Consolidated Financial Statements
   Report of Independent Certified Public Accountant.........................F-1

   Consolidated Balance Sheet at December 31, 2002 ..........................F-2

   Consolidated Statement of Operations for the period from
    January 17, 2002 (inception) to December 31, 2002........................F-3

   Consolidated Statements of Shareholders' Equity for the
    period from January 17, 2002 (inception) to December 31, 2002............F-4

   Consolidated Statements of Cash Flows for the period from
    January 17, 2002 (inception) to December 31, 2002........................F-5

   Notes to Consolidated Financial Statements................................F-6

FORWARD-LOOKING STATEMENTS

     This  Annual  Report on Form  10-KSB  contains  forward-looking  statements
regarding,  among other things, our anticipated financial and operating results.
Forward-looking   statements  reflect  our  management's   current

                                       17

<PAGE>

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  below under the heading  "Risk  Factors"  and  elsewhere in this
Annual Report on Form 10-KSB.  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
Annual  Report on Form 10-KSB 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.

RISK FACTORS

     Our business is subject to various risks,  including those described below.
You should carefully consider these risk factors, together with all of the other
information  included in this Annual  Report on Form 10-KSB.  Any of these risks
could materially adversely affect our business,  operating results and financial
condition:

Our independent auditors have expressed doubt about our ability to continue as a
going concern.

     Our independent  public  accountants have expressed doubt about our ability
to  continue  as a going  concern  in their  report  on our  December  31,  2002
financial statements. Currently, our continuance as a going concern is dependent
upon our ability to raise  capital.  There can be no  assurance  that we will be
able to raise sufficient capital or generate  sufficient cash from operations to
continue as a going concern.


Because of our limited operations and the fact that we are currently  generating
limited revenue, we may be unable to pay our debts when they become due.


     We currently have approximately $1,117,000 in debt outstanding,  consisting
of $1 million in  principal  and $8,000 in accrued but unpaid  interest  owed to
Gryffindor  pursuant to the Note and $109,000 in principal,  plus a small amount
of accrued  interest,  owed to Dr. Wachter.  We are trying to secure  additional
financing,  but have not yet  succeeded  in doing so. Our ability to satisfy our
current debt service  obligations and any additional  obligations we might incur
will depend upon our future financial and operating performance, which, in turn,
is  subject  to  prevailing   economic   conditions  and  financial,   business,
competitive,  legislative and regulatory  factors,  many of which are beyond our
control.  If our cash flow and capital resources  continue to be insufficient to
fund our debt service  obligations,  we may be forced to reduce or delay planned
acquisitions, expansion and capital expenditures, sell assets, obtain additional
equity capital or restructure  our debt. We cannot assure you that our operating
results,  cash flow and capital  resources will be sufficient for payment of our
debt service and other obligations in the future.

We will need  additional  capital to conduct  our  operations  and  develop  our
products, and our ability to obtain the necessary funding is uncertain.


     We will  require  substantial  capital  resources  in order to conduct  our
operations  and develop our  products.  We estimate  that our  existing  capital
resources  will be  sufficient to fund our current and planned  operations  only
through  June 2003,  and we cannot  guarantee  that we will not need  additional
capital at an earlier  date.  We intend to acquire  additional  funding  through
public or private  equity  financings  or other  financing  sources  that may be
available.  Additional financing may not be available on acceptable terms, or at
all. As discussed in more detail below, additional equity financing could result
in significant  dilution to shareholders.  Further, in the event that additional
funds are obtained through licensing or other  arrangements,  these arrangements
may  require  us to  relinquish  rights  to  some of our  technologies,  product
candidates or products that we would otherwise seek to develop and commercialize
ourselves.  If sufficient capital is not available, we may be required to delay,
reduce the scope of or eliminate one or more of our programs, any of which could
have a material adverse effect on our business.


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<PAGE>


Existing shareholders may face dilution from our financing efforts

     We must raise  additional  capital  from  external  sources to execute  our
business plan. We plan to issue debt securities, capital stock, or a combination
of these securities.  We may not be able to sell these securities,  particularly
under current market conditions. Even if we are successful in finding buyers for
our  securities,  the buyers could demand high  interest  rates or require us to
agree to onerous  operating  covenants,  which could in turn harm our ability to
operate our business by reducing  our cash flow and  restricting  our  operating
activities.  If we were to sell our  capital  stock,  we might be forced to sell
shares at a depressed market price,  which could result in substantial  dilution
to our existing  shareholders.  In addition,  any shares of capital stock we may
issue may have  rights,  privileges,  and  preferences  superior to those of our
common shareholders.

The prescription  drug and medical device products in our internal  pipeline are
at an early stage of development, and they may fail in subsequent development or
commercialization.

     We are  continuing  to pursue  clinical  development  of our most  advanced
pharmaceutical  drug products,  Xantryl and Provecta,  for use as treatments for
specific  conditions.  These products and other  pharmaceutical drug and medical
device  products  that we are  currently  developing  will  require  significant
additional research,  formulation and manufacture development,  and pre-clinical
and   extensive   clinical   testing   prior   to   regulatory   licensure   and
commercialization.  Pre-clinical and clinical studies of our pharmaceutical drug
and medical device products under development may not demonstrate the safety and
efficacy   necessary  to  obtain  regulatory   approvals.   Pharmaceutical   and
biotechnology  companies have suffered significant setbacks in advanced clinical
trials,   even  after   experiencing   promising   results  in  earlier  trials.
Pharmaceutical  drug and medical device  products that appear to be promising at
early stages of development may not reach the market or be marketed successfully
for a number of reasons, including the following:

     o    a product may be found to be  ineffective or have harmful side effects
          during subsequent pre-clinical testing or clinical trials;

     o    a product may fail to receive necessary regulatory clearance;

     o    a product may be too difficult to manufacture on a large scale;

     o    a product may be too expensive to manufacture or market;

     o    a product may not achieve broad market acceptance;

     o    others may hold  proprietary  rights that will  prevent a product from
          being marketed; or

     o    others may market equivalent or superior products.

     We do not  expect  any  pharmaceutical  drug  products  or  medical  device
products we are  developing  to be  commercially  available for at least several
years,  if at all.  Our  research  and  product  development  efforts may not be
successfully  completed  and may not result in any  successfully  commercialized
products.  Further, after commercial introduction of a new product, discovery of
problems  through  adverse event  reporting  could result in restrictions on the
product,  including  withdrawal from the market and, in certain cases,  civil or
criminal penalties.


Our OTC  products are at an early stage of  introduction,  and we cannot be sure
that  they  will be  widely  accepted  in the  marketplace  or that we will have
adequate  capital to market and distribute these products which are an important
factor in the future success of our business.


     We recently have begun marketing GloveAid and Pure-ific,  our first two OTC
products, on a limited basis. In order for these products to become commercially
successful,  we must increase significantly our distribution of them. Increasing
distribution  of  these  products  requires,  in turn,  that we or  distributors
representing  us increase  marketing of these  products.  In view of our limited
financial  resources,  we may be unable to afford  increases in our marketing of
our OTC products sufficient to improve our distribution of our products. Even if
we can and do increase our marketing of our OTC products, we cannot give you any
assurances that we can successfully increase our distribution of our products.

     If we do begin  increasing our  distribution  of our OTC products,  we must
increase  our  production  of these  products in order to fill our  distribution
channels. Increased production will require additional financial resources

                                       19

<PAGE>

that we do not have at  present.  Additionally,  we may  succeed  in  increasing
production  without  succeeding in increasing  sales,  which could leave us with
excess, possibly unsaleable, inventory.


     If we are unable to  successfully  introduce,  market and distribute  these
products,  our business,  financial  condition,  results of operations  and cash
flows could be materially adversely affected.


Competition in the  prescription  drug,  medical device and OTC  pharmaceuticals
markets is intense, and we may be unable to succeed if our competitors have more
funding or better marketing.

     The pharmaceutical and biotechnology  industries are intensely competitive.
Other  pharmaceutical  and  biotechnology  companies and research  organizations
currently  engage in or have in the past engaged in research  efforts related to
treatment of dermatological conditions or cancers of the skin, liver and breast,
which could lead to the  development of products or therapies that could compete
directly with the prescription drug, medical device and OTC products that we are
seeking to develop and market.

     Many companies are also  developing  alternative  therapies to treat cancer
and dermatological conditions and, in this regard, are out competitors.  Many of
the pharmaceutical  companies  developing and marketing these competing products
have significantly greater financial resources and expertise than we do in:

     o    research and development;

     o    manufacturing;

     o    preclinical and clinical testing;

     o    obtaining regulatory approvals; and

     o    marketing.

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

     In  addition to the above  factors,  we expect to face  competition  in the
following areas:

     o    product efficacy and safety;

     o    the timing and scope of regulatory consents;

     o    availability of resources;

     o    reimbursement coverage;

     o    price; and

     o    patent position,  including  potentially  dominant patent positions of
          others.

     As a result of the foregoing, our competitors may develop more effective or
more affordable  products or achieve earlier product  commercialization  than we
do.


Product  Competition.  Additionally,  since our currently  marketed products are
generally  established and commonly sold,  they are subject to competition  from
products with similar qualities.

     Our OTC product Pure-ific competes in the market with other hand sanitizing
products, including in particular, the following hand sanitizers:

     o    Purell (manufactured by GOJO Industries),

     o    Avagard D (manufactured by 3M) and

     o    a large  number of  generic  and  private-label  equivalents  to these
          market leaders.

     Our OTC product  GloveAid  represents  a new product  category  that has no
direct  competitors;  however,  other types of  products,  such as  AloeTouch(R)
disposable gloves  (manufactured by Medline  Industries)  target the same market
niche.

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

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

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

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

     If we are  unable to secure or enforce  patent  rights,  trademarks,  trade
secrets or other  intellectual  property,  our  business,  financial  condition,
results of operations and cash flows could be materially adversely affected.

If we infringe on the  intellectual  property of others,  our business  could be
harmed.

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



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


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


                                       20

<PAGE>


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

     Our business is presently managed by four key employees:

     o    H. Craig Dees, Ph.D., our Chief Executive Officer;

     o    Timothy C. Scott, Ph.D., our President;

     o    Eric A. Wachter, Ph.D. our Vice President - Pharmaceuticals; and

     o    Daniel R. Hamilton, our Chief Financial Officer.


     In  addition  to  their  responsibilities  for  management  of our  overall
business strategy, Drs. Dees, Scott and Wachter are our chief researchers in the
fields in which we are  developing  and planning to develop  prescription  drug,
medical device and OTC products. If we lose any of these four key employees,  it
could have a  material  adverse  effect on our  operations,  and our  ability to
execute  our  business  plan  might be  negatively  impacted.  Any of these  key
employees  may leave  their  employment  with us if they choose to do so, and we
cannot guarantee that they will not choose to do so, or that we would be able to
hire similarly qualified executives if any of our key employees should choose to
leave.


Because we have a limited  number of employees,  our management may be unable to
successfully manage our business.

     In order to  successfully  execute our business plan,  our management  must
succeed in all of the following critical areas:

     o    Researching   diseases  and   possible   therapies  in  the  areas  of
          dermatology and skin care, oncology, and biotechnology;

     o    Developing prescription drug, medical device and OTC products based on
          our research;

     o    Marketing and selling developed products;

     o    Obtaining   additional  capital  to  finance  research,   development,
          production and marketing of our products; and

     o    Managing our business as it grows.

     As discussed above, we currently have only five employees,  all of whom are
full-time  employees.  The  greatest  burden of  succeeding  in the above  areas
therefore falls on Drs. Dees,  Scott and Wachter and Mr.  Hamilton.  Focusing on
any one of these  areas may  divert  their  attention  from our  other  areas of
concern and could affect our ability to manage other aspects of our business. We
cannot  assure you that our  management  will be able to succeed in all of these
areas or, even if we do so succeed,  that our business  will be  successful as a
result.

Our common stock price can be volatile because of several  factors,  including a
limited public float.

     During the  twelve-month  period ended December 31, 2002, the sale price of
our common stock fluctuated from $10.012 to $0.07 per share. We believe that our
common stock is subject to wide price  fluctuations  because of several factors,
including:

     o    absence meaningful earnings and external financing,

     o    a relatively  thin trading  market for our common stock,  which causes
          trades of small  blocks of stock to have a  significant  impact on our
          stock price,

     o    general volatility of the stock markets and the market prices of other
          publicly traded companies, and

     o    investor  sentiment  regarding  equity  markets  generally,  including
          public  perception of corporate ethics and governance and the accuracy
          and transparency of financial reporting.

                                       21

<PAGE>


It is our policy not to pay dividends.

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

Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

     On January 3, 2003 we filed a Current  Report on Form 8-K reporting that on
December 20, 2002 we engaged BDO Seidman, LLP to audit our books and records for
2002 and dismissed Bierwolf,  Nilson & Associates,  formerly Crouch,  Bierwolf &
Associates, as our independent auditors.




























                                       22
<PAGE>


                                    Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

     The  information  called  for by this item with  respect  to our  executive
officers as of March 15, 2003 is  furnished  in Part I of this report  under the
heading Personnel--Executive Officers." The information called for by this item,
to the extent it relates to our directors or to certain  filing  obligations  of
our directors  and  executive  officers  under the federal  securities  laws, is
incorporated  herein by reference to the Proxy  Statement for our Annual Meeting
of  Stockholders  to be held on May 15,  2003,  which will be filed with the SEC
pursuant  to  Regulation  14A  under the  Securities  Exchange  Act of 1934,  as
amended.

Item 10. Executive Compensation.

     The information called for by this item is incorporated herein by reference
to the Proxy  Statement for our Annual Meeting of Stockholders to be held on May
15, 2003,  which will be filed with the SEC pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended.

Item 11. Security  Ownership of Certain  Beneficial  Owners and  Management and
         Related Stockholder Matters.

     The information called for by this item is incorporated herein by reference
to the Proxy  Statement for our Annual Meeting of Stockholders to be held on May
15, 2003,  which will be filed with the SEC pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended.

Item 12. Certain Relationships and Related Transactions.

     The information called for by this item is incorporated herein by reference
to the Proxy  Statement for our Annual Meeting of Stockholders to be held on May
15, 2003,  which will be filed with the SEC pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended.

Item 13. Exhibits, List 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 Annual Report on Form 10-KSB.

(b)  Reports on Form 8-K.  During the fiscal quarter ended December 31, 2002, we
     filed the following Current Reports on Form 8-K:

     1.   On November 27, 2002, we filed a Current  Report on Form 8-K reporting
          that on November 19, 2002, we had completed the  acquisition of Valley
          by merging our wholly  owned  subsidiary  PPI with and into Valley and
          naming the surviving corporation "Xantech Pharmaceuticals, Inc."

     2.   On December 10, 2002, we filed a Current  Report on Form 8-K reporting
          that  on  November  26,  2002,  we had  entered  into  the  Gryffindor
          Agreement  and  issued  the Note to  Gryffindor  and the  Warrants  to
          Gryffindor and Mr. Fuchs,  and had appointed Mr. Fuchs to our Board of
          Directors.

     3.   On December 20, 2002, we filed a Current  Report on Form 8-K reporting
          that  on  December  5,  2002,  we had  completed  the  acquisition  of
          Pure-ific.

     4.   On January 3, 2003 we filed,  and on  January  9, 2003 we  amended,  a
          Current  Report on Form 8-K  reporting  that on  December  20, 2002 we
          engaged BDO  Seidman,  LLP to audit our books and records for 2002 and
          dismissed Bierwolf,  Nilson & Associates,  formerly Crouch, Bierwolf &
          Associates, as our independent auditors.

                                       23


<PAGE>

Item 14. 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 a date
     within 90 days of the filing  date of this  Annual  Report on Form  10-KSB.
     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 Annual
     Report on Form  10-KSB was  prepared,  in order to allow  timely  decisions
     regarding required disclosure.

(b)  Changes in Internal Controls.  There have not been any significant  changes
     in our  internal  controls  or in other  factors  that could  significantly
     affect these controls subsequent to the date of their evaluation.
























                                       24

<PAGE>


                                   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, Ph.D.
                                   ---------------------------------------------
                                   H. Craig Dees, Ph.D.
                                   Chief Executive Officer


Date:    March 30, 2004




     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  Registrant and in the capacities and on
the dates indicated.

    Signature                         Title                          Date
    ---------                         -----                          -----


/s/ H. Craig Dees        Chief Executive Officer (principal      March 30, 2004
----------------------   executive officer)
H. Craig Dees, Ph.D.

/s/ Peter R. Culpepper   Chief Financial Officer (principal      March 30, 2004
----------------------   financial officer and principal
Peter R. Culpepper       accounting officer)

/s/ Timothy C. Scott    President and Director                   March 30, 2004
----------------------
Timothy C. Scott, Ph.D.

/s/ Eric A. Wachter      Vice President - Pharmaceuticals and    March 30, 2004
----------------------   Director
Eric A. Wachter, Ph.D.

/s/ Stuart Fuchs         Director                                March 30, 2004
----------------------
Stuart Fuchs





                                       25

<PAGE>

                         PROVECTUS PHARMACEUTICALS, INC.
                          (A Development-Stage Company)

                        CONSOLIDATED FINANCIAL STATEMENTS


                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT



Board of Directors
Provectus Pharmaceuticals, Inc.
Knoxville, Tennessee


     We have audited the  accompanying  consolidated  balance sheet of Provectus
Pharmaceuticals,  Inc. a development stage company, as of December 31, 2002, and
the related consolidated statements of operations, shareholders' equity and cash
flows for the period from  January 17, 2002  (inception)  to December  31, 2002.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audit.

     We conducted our audit in  accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

     In our opinion,  the consolidated  financial  statements  referred to above
present fairly, in all material  respects,  the financial  position of Provectus
Pharmaceuticals, Inc. at December 31, 2002 and the results of its operations and
its cash flows for the period from January 17, 2002  (inception) to December 31,
2002, in conformity with accounting  principles generally accepted in the United
States.

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial  statements,  the Company has reported  accumulated losses of
$7,121,754 and without additional financing, lacks sufficient working capital to
fund  operations  for the entire year ending  December  31,  2003,  which raises
substantial doubt about its ability to continue as a going concern. Management's
plans in  regard  to  these  matters  are  described  in Note 1.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.





/s/ BDO Siedman LLP

Chicago, Illinois
March 5, 2003





                                       F-1


<PAGE>

                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)

                           Consolidated Balance Sheet

December 31,                                                               2002
--------------------------------------------------------------------------------

Assets

Current Assets
     Cash                                                       $       717,833
     Prepaid expenses                                                    35,481
                                                                ----------------
Total Current Assets                                                    753,314

Equipment and Furnishings, less accumulated depreciation of $39,446     471,429

Patents, net of amortization of $133,916 (Note 2)                    19,903,644

Other Assets                                                             27,000
                                                                ----------------
                                                                $    21,155,387
                                                                ================
Liabilities and Shareholders' Equity

Current Liabilities
     Accounts payable - trade                                   $        98,874
     Accrued expenses                                                    77,781
                                                                ----------------

Total Current Liabilities                                               176,655

Loan From Shareholder (Note 7)                                          109,000

Convertible Long-Term Debt (net of debt discount of $120,344 (Note 6))  879,656

Shareholders' Equity (Notes 2, 4 and 6)
     Common stock; par value $.001 per share; 100,000,000 shares
     authorized; 9,423,689 shares issued and outstanding                  9,424
     Paid-in capital                                                 27,102,406
     Deficit accumulated during the development stage                (7,121,754)
                                                                ----------------
Total Shareholders' Equity                                           19,990,076
                                                                ----------------

                                                                $    21,155,387
                                                                ================


                                 See accompanying notes to financial statements.



                                      F-2

<PAGE>

                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)


                      Consolidated Statement of Operations

For the period January 17, 2002 (inception) to December 31, 2002
--------------------------------------------------------------------------------

Operating Expenses
     Research and development                                 $          50,714
     General and administrative
       (including noncash stock compensation of $6,436,000)           6,922,946
     Amortization                                                       133,916
                                                              ------------------

Total operating loss                                                 (7,107,576)

Interest expense                                                        (14,178)
                                                              ------------------

Net Loss Applicable to Common Shareholders                    $      (7,121,754)
                                                              ==================

Basic and Diluted Loss Per Common Share                       $           (0.89)
                                                              ==================

Weighted Average Number of Common Shares Outstanding
     - Basis and Diluted                                              7,981,876
                                                              ==================

                                 See accompanying notes to financial statements.



















                                      F-3
<PAGE>
                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)

                 Consolidated Statement of Shareholders' Equity

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                               Common Stock
                                                       ------------------------------
                                                           Number of                        Paid-in     Accumulated
                                                              Shares       Par Value        Capital         Deficit           Total
--------------------------------------------------------------------   -------------   ------------   --------------   -------------
<S>                                                        <C>          <C>            <C>            <C>              <C>
Balance, at January 17, 2002                                       -    $          -   $          -   $           -    $          -

     Issuance to founding shareholders                     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)
                                                           ---------    ------------   ------------   --------------   -------------

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                  500,007
Pharmaceuticals                                                                  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             25,000
Pure-ific                                                                         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)
                                                           ---------    ------------   ------------   --------------   -------------

Balance, at December 31, 2002                              9,423,689    $      9,424   $ 27,102,406   $  (7,121,754)   $ 19,990,076
                                                           =========    ============   ============   ==============   =============
</TABLE>


                                 See accompanying notes to financial statements.














                                      F-4



<PAGE>
                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)

                      Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>

For the period January 17, 2002 (inception) to December 31, 2002
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                                 <C>
Cash Flows From Operating Activities
     Net loss                                                                                       $  (7,121,754)
     Adjustments to reconcile net loss to net cash used in operating activities
         Depreciation                                                                                      39,446
         Amortization of patents                                                                          133,916
         Amortization of original issue discount                                                            6,243
         Compensation through issuance of stock                                                           932,000
         Issuance of stock for services rendered                                                        5,504,000
         Increase in assets net of acquisitions
              Prepaid expenses                                                                            (35,481)
         Increase (decrease) in liabilities
              Accounts payable                                                                             95,229
              Accrued expenses                                                                             77,781
                                                                                                    -------------

Net cash used in operating activities                                                                    (368,620)
                                                                                                    -------------

Cash Flows From Financing Activities
     Proceeds from loans from shareholder                                                                 109,000
     Proceeds from convertible debt                                                                     1,000,000
     Proceeds from sale of common stock                                                                    25,000
     Proceeds from exercise of warrants                                                                       453
     Purchase and retirement of common stock                                                              (48,000)
                                                                                                    -------------

Net cash provided by financing activities                                                               1,086,453
                                                                                                    -------------

Net Change in Cash                                                                                        717,833

Cash, at January 17, 2002                                                                                       -
                                                                                                    -------------

Cash, at end of year                                                                                $     717,833
                                                                                                    =============
</TABLE>

Supplemental Disclosures of Cash Flow Information
     Acquisition of Valley Pharmaceuticals, Inc. through the issuance of 500,007
         shares of the Company's common stock. The value of the assets purchased
         was $20,548,435

     Acquisition  of  Pure-ific  through  the issuance of common stock valued at
         $12,500  and  warrants valued at $14,500. Assets valued at $27,000 were
         acquired.

     Discount recorded on convertible debt with warrants of $126,587.


                                 See accompanying notes to financial statements.

















                                      F-5

<PAGE>

                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)

                   Notes to Consolidated Financial Statements

1.   ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

     Provectus  Pharmaceuticals,  Inc.  (together  with  its  subsidiaries,  the
"Company") is a development-stage  biopharmaceutical company that is focusing on
developing  minimally invasive products for the treatment of psoriasis and other
topical diseases, cancer, and certain laser device technology.  Through a recent
acquisition,  the Company also intends to develop,  manufacture,  and distribute
over-the-counter pharmaceuticals. To date the Company has no revenues.

Liquidity and Basis of Presentation

     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.

Principles of Consolidation

     Intercompany   balances   and   transactions   have  been   eliminated   in
consolidation.

Estimates

     The financial statements include estimated amounts and disclosures based on
management's  assumptions  about future  events.  Actual results may differ from
those estimates.

Equipment and Furnishings

     Equipment  and  furnishings  acquired  through  the  acquisition  of Valley
Pharmaceuticals,  Inc.  (Note 2) have been  stated at fair market  value.  Other
equipment  and  furnishings  are stated at cost.  Depreciation  of  equipment is
provided for using the  straight-line  method over the estimated useful lives of
the assets.  Computers and laboratory  equipment are being depreciated over five
years,   furniture  and  fixtures  are  being   depreciated  over  seven  years.
Depreciation expense was $39,446 for the year.

Long-Lived Assets

     The  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.


                                      F-6

<PAGE>

                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)


Patent Costs

     Internal  patent  costs  are  expensed  in  the  period  incurred.  Patents
purchased are capitalized and amortized over the remaining life of the patent.


     Purchased  patents at December  31,  2002 were  acquired as a result of the
merger with  Valley  Pharmaceuticals,  Inc.  ("Valley")  (Note 2). The  majority
shareholders  of Provectus  also owned the majority of Valley and  therefore the
acquisition  was treated as an acquisition of an entity under common control and
the assets of Valley were  recorded  at their carry over basis.  The patents are
being amortized over the remaining lives of the patents,  which range from 13-17
years.  Annual  amortization  of the  patents is  expected  to be  approximately
$1,148,000 per year for the next five years.


Research and Development

     Research and development costs are charged to expense when incurred.

Income Taxes

     The Company recognizes deferred tax assets and liabilities for the expected
future tax  consequences  of  temporary  differences  between  the tax basis and
financial reporting basis of certain assets and liabilities based upon currently
enacted tax rates  expected to be in effect  when such  amounts are  realized or
settled.

     The Company has not recorded an income tax benefit for net operating losses
incurred of  approximately  $550,000,  expiring  in 2022.  The Company is in the
development  stage and  realization of the losses is not considered  more likely
than not. An income tax  valuation  allowance  has been  provided for the losses
realized to date. The amortization of patents and noncash stock  compensation is
not deductible for tax purposes.

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 December 31, 2002 are
1,371,398  shares  issuable  upon  conversion  of  convertible  debt and accrued
interest.  Additionally, the Company is committed to issue 30,000 warrants (Note
4(e)).

Financial Instruments

     The carrying amounts reported in the consolidated  balance sheets for cash,
accounts  payable and accrued  expenses  approximate  fair value  because of the
short-term  nature of these amounts.  The Company believes the fair value of its
fixed-rate borrowings approximates the market value.

Stock Options

     The Company has adopted the  disclosure-only  provisions  of  Statement  of
Financial   Accounting   Standards   No.  123,   "Accounting   for  Stock  Based
Compensation"  (SFAS 123),  and applies the intrinsic  value method set forth in
Accounting  Principles  Board  Opinion  No.  25 for  stock  options  granted  to
employees and  directors.  The Company  expenses the fair value of stock options
granted to nonemployees. As of December 31, 2002, the Company has not issued any
stock options.

Recent Accounting Pronouncements

     In June 2002,  the FASB issued  Statement  No. 146,  "Accounting  for Costs
Associated with Exit or Disposal Activities." The standard requires companies to
recognize  costs  associated  with  exit or  disposal  activities  when they are
incurred  rather than at the date of  commitment  to an exit or  disposal  plan.
Examples of costs  covered by the standard  include lease  termination  cost and
certain  employee  severance  costs that are  associated  with a  restructuring,
discontinued  operation,  plant  closing,  or other exit or  disposal  activity.
Previous accounting guidance provided by

                                      F-7

<PAGE>

                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)


EITF Issue No. 94-3,  "Liability  Recognition for Certain  Employee  Termination
Benefits and Other Costs to Exit an Activity  (including  Certain Costs Incurred
in a  Restructuring)"  is replaced  by this  Statement.  Statement  146 is to be
applied  prospectively to exit or disposal  activities  initiated after December
31, 2002.  Management  does not  anticipate  that the adoption of this Statement
will have a significant effect on the Company's financial statements.

     In November  2002,  the FASB  issued  Interpretation  No. 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  including  Indirect
Guarantees of Indebtedness of Others"  ("Interpretation").  This  Interpretation
elaborates  on  the  existing  disclosure   requirements  for  most  guarantees,
including loan guarantees  such as standby letters of credit.  It also clarifies
that at the time a company  issues a guarantee,  the company  must  recognize an
initial  liability for the fair market value of the obligations it assumes under
that  guarantee  and must disclose  that  information  in its interim and annual
financial statements.  The initial recognition and measurement provisions of the
Interpretation  apply on a prospective  basis to  guarantees  issued or modified
after  December  31,  2002.  The  Company  does not expect the  adoption of this
interpretation will have any impact on the financial statements.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition  and  Disclosure."  SFAS No.  148 amends  SFAS No.  123,
"Accounting for Stock-Based  Compensation."  SFAS No. 148 provides,  among other
things,  alternative  methods of transition  for a voluntary  change to the fair
value method of accounting for stock-based  compensation  and requires pro forma
disclosures  of the  effect on net income  and  earnings  per share had the fair
value  method been used in annual and  interim  reports  and  disclosure  of the
effect of the transition method used if the accounting method was changed.  SFAS
No. 148  disclosures  are  effective  for annual  reports of fiscal years ending
after December 15, 2002 and interim  reports ending after December 15, 2002. The
Company plans to use the intrinsic  value method of accounting  for  stock-based
compensation if and when it issues stock options to its employees or directors.

2.   RECAPITALIZATION AND MERGER


On April 23, 2002,  Provectus  Pharmaceutical,  Inc., a Nevada corporation and a
Merger "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.  Prior
to the transaction,  PPI had no significant operations and had not generated any
revenues.

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. Therefore, for accounting purposes, the shares
recorded  as  issued in the  reverse  merger  are the  265,763  shares  owned by
Provectus Pharmaceuticals, Inc. shareholders prior to the reverse merger.

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.

On  November  19,  2002,  the  Company  acquired  Valley  Pharmeceuticals,  Inc,
("Valley") a privately-held  Tennessee  corporation by merging PPI with and into
Valley and naming the surviving company Xantech Pharmaceuticals, Inc. Valley had
no significant operations and had not generated any revenues.  Valley was formed
to hold certain  intangible  assets which were  transferred from an entity which
was majority owned by the  shareholders of Valley.  Those  shareholders  gave up
their  shares of the other  company in exchange for the  intangible  assets in a
non-pro  rata split off. The  intangible  assets were valued based on the market
price of the stock given up in the split-off.  The  shareholders  of Valley also
owned the majority of the shares of the Company at the time of the  transaction.
The Company  issued  500,007  shares of stock in exchange  for the net assets of
Valley which were valued at $20,548,435 and included  patents of $20,037,560 and
equipment and furnishings of $510,875.


3.   COMMITMENTS

     At December 31, 2002,  the Company  leases office and  laboratory  space in
Knoxville,  Tennessee, on a month-by-month basis. The Company also has equipment
operating leases. Minimum future rental payments under noncancellable  equipment
operating leases are as follows:

           Year ending December 31,                             Leases
           -------------------------------------------------------------

           2003                                           $     25,527
           2004                                                 15,214
           2005                                                  1,242
                                                          ------------
           Total                                          $     41,983
                                                          ============

                                      F-8

<PAGE>

     Total rental expense  charged to operations for the year ended December 31,
2002 was $10,200.

4.   EQUITY TRANSACTIONS

     (a) During 2002, the Company issued  2,020,000  shares of stock in exchange
for  consulting  services.  These  services were valued based on the fair market
value of the stock  exchanged  which  resulted in  consulting  costs  charged to
operations of $5,504,000.

     (b) During 2002, the Company issued 510,000 shares of stock to employees in
exchange for services  rendered.  These  services  were valued based on the fair
market value of the stock exchanged which resulted in compensation costs charged
to operations of $932,000.

     (c) In February  2002, the Company sold 50,000 shares of stock to a related
party in exchange for proceeds of $25,000.

     (d) In June 2002,  the  Company  issued a warrant to a  consultant  for the
purchase of 100,000 shares at $2.29 per share.  The warrant is only  exercisable
upon the successful  introduction of the Company to a designated  pharmaceutical
company.

     (e) In October 2002, the Company  purchased 400,000  outstanding  shares of
stock from one shareholder for $48,000. These shares were then retired.

     (f) On December  5, 2002,  the Company  purchased  the assets of  Pure-ific
L.L.C, a Utah limited liability  company,  and created a wholly owned subsidiary
called Pure-ific  Corporation,  to operate the Pure-ific business which consists
of product formulations for Pure-ific personal sanitizing sprays, along with the
Pure-ific trademarks. The assets of Pure-ific were acquired through the issuance
of 25,000  shares of the  Company's  stock with a fair market value of $0.50 and
the issuance of various  warrants.  These warrants included warrants to purchase
10,000 shares of the Company's  stock at an exercise  price of $0.50 issuable on
the first,  second and third anniversary dates of the acquisition.  Accordingly,
the fair  market  value of these  warrants  of  $14,500,  determined  using  the
Black-Scholes  option pricing model,  was recorded as additional  purchase price
for the acquisition of the Pure-ific assets.  In addition,  warrants to purchase
80,000  shares of stock at an  exercise  price of $0.50 will be issued  upon the
achievement of certain sales targets of the Pure-ific  product.  At December 31,
2002,  none of these targets have been met and  accordingly,  no costs have been
recorded.

5.   STOCK INCENTIVE PLAN

     The Company  maintains  one  long-term  incentive  compensation  plan,  the
Provectus Pharmaceuticals, Inc. 2002 Stock Plan, which provides for the issuance
of up to  1,000,000  shares of common  stock  pursuant to stock  options,  stock
appreciation  rights,  stock purchase  rights and long-term  performance  awards
granted to key employees and directors of and consultants to the Company.

     Options  granted under the 2002 Stock Plan may be 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, 2002, no options have been granted under this plan.


                                      F-9

<PAGE>
                        PROVECTUS PHARMACEUTICALS, INC.
                         (A Development-Stage Company)

6.   LONG-TERM CONVERTIBLE DEBT

     Pursuant to a  Convertible  Secured  Promissory  Note and Warrant  Purchase
Agreement dated November 26, 2002 (the "Purchase Agreement") between the Company
and Gryffindor  Capital Partners I, L.L.C., a Delaware limited liability company
("Gryffindor"),  Gryffindor  purchased  the  Company's  $1  million  Convertible
Secured  Promissory  Note dated  November 26, 2002 (the "Note").  The Note bears
interest at 8% per annum,  payable quarterly in arrears,  and is due and payable
in full on  November  26,  2004.  Subject  to  certain  exceptions,  the Note is
convertible  into shares of the Company's  common stock on or after November 26,
2003, at which time the principal  amount of the Note is convertible into common
stock at the rate of one share for each $0.737 of  principal  so  converted  and
accrued but unpaid  interest on the Note is convertible at the rate of one share
for each $0.55 of accrued but unpaid interest so converted.

     The Company's  obligations  under the Note are secured by a first  priority
security interest in all of the Company's assets, including the capital stock of
the Company's wholly owned subsidiary Xantech Pharmaceuticals, Inc., a Tennessee
corporation  ("Xantech").  In addition,  the Company's obligations to Gryffindor
are  guaranteed  by  Xantech,  and  Xantech's  guarantee  is  secured by a first
priority security interest in all of Xantech's assets.

     Pursuant to the Purchase  Agreement,  the Company also issued to Gryffindor
and to another individual Common Stock Purchase Warrants dated November 26, 2002
(the "Warrants"),  entitling these parties to purchase, in the aggregate,  up to
452,919  shares of common  stock at a price of $0.001 per share.  Simultaneously
with the completion of the transactions described in the Purchase Agreement, the
Warrants were exercised in their entirety.

     The  $1,000,000 in proceeds  received was  allocated  between the long-term
debt and the  warrants  on a  pro-rata  basis.  The  value of the  warrants  was
determined to be $126,587 using a Black-Scholes  option pricing model.  The fair
value of these  warrants  was  recorded as a discount on the related debt and is
being  amortized  over  the  life  of  the  debt  using  the  interest   method.
Amortization  of $6,243 has been recorded as additional  interest  expense as of
December 31, 2002.

7.   LOAN FROM SHAREHOLDER

     During  2002,  a  shareholder  who is also an  employee  and  member of the
Company's board of directors,  loaned the Company $109,000. Interest on the loan
is 5%, compounded monthly. Principal is due on December 31, 2009 and interest is
payable quarterly in arrears beginning on June 30, 2003.



                                      F-10

<PAGE>

                                  EXHIBIT INDEX

   Exhibit No.                          Description
  ------------                         ------------

     2.1*      Agreement and Plan of Reorganization  dated April 23, 2002, among
               Provectus    Pharmaceutical,    Inc.,   a   Nevada    corporation
               ("Provectus"),   Provectus  Pharmaceuticals,  Inc.,  a  Tennessee
               corporation  ("PPI"),  and  the  stockholders  of PPI  identified
               therein,  incorporated  herein by  reference to Exhibit 99 to the
               Company's  Current  Report on Form 8-K dated April 23,  2002,  as
               filed with the SEC on April 24, 2002.

     2.2*      Agreement  and Plan of  Reorganization  dated as of November  15,
               2002 among the  Company,  PPI,  Valley  Pharmaceuticals,  Inc., a
               Tennessee corporation formerly known as Photogen,  Inc., H. Craig
               Dees, Ph.D., Dees Family Foundation, Walter Fisher, Ph.D., Fisher
               Family   Investment   Limited   Partnership,   Walt  Fisher  1998
               Charitable  Remainder  Unitrust,  Timothy C. Scott,  Ph.D., Scott
               Family Investment  Limited  Partnership,  John T. Smolik,  Smolik
               Family LLP,  Eric A.  Wachter,  Ph.D.,  and Eric A.  Wachter 1998
               Charitable  Remainder Unitrust,  incorporated herein by reference
               to Exhibit 2.1 to the Company's  Current Report on Form 8-K dated
               November 19, 2002, as filed with the SEC on November 27, 2002.

     2.3*      Asset  Purchase  Agreement  dated as of  December  5, 2002  among
               Pure-ific  Corporation,   a  Nevada  corporation   ("Pure-ific"),
               Pure-ific,  L.L.C., a Utah limited  liability  company,  and Avid
               Amiri and Daniel  Urmann,  incorporated  herein by  reference  to
               Exhibit  2.1 to the  Company's  Current  Report on Form 8-K dated
               December 5, 2002, as filed with the SEC on December 20, 2002.

     2.4*      Stock Purchase  Agreement  dated as of December 5, 2002 among the
               Company,   Pure-ific,   and  Avid   Amiri  and   Daniel   Urmann,
               incorporated  herein by reference to Exhibit 2.2 to the Company's
               Current  Report on Form 8-K dated December 5, 2002, as filed with
               the SEC on December 20, 2002.

     3.1.1     Articles of  Incorporation of Provectus,  incorporated  herein by
               reference to Exhibit 3.i.2 to the Company's Annual Report on Form
               10-KSB for the fiscal year ended December 31, 2001, as filed with
               the SEC on April 17, 2002.

     3.1.2     Articles  of  Merger  of  Provectus   Pharmaceuticals,   Inc.,  a
               Colorado  corporation,  with  and  into  Provectus,  incorporated
               herein by  reference  to Exhibit  3.i.3 to the  Company's  Annual
               Report on Form  10-KSB for the fiscal  year  ended  December  31,
               2001, as filed with the SEC on April 17, 2002.

     3.1.3+    Certificate   of   Amendment  of  Articles  of  Incorporation  of
               Provectus.

     3.2       Bylaws of Provectus,  incorporated herein by reference to Exhibit
               3.ii to the Company's Annual Report on Form 10-KSB for the fiscal
               year ended  December 31, 2001, as filed with the SEC on April 17,
               2002.

     4.1+      Specimen  certificate for the common shares,  $.001 par value per
               share, of Provectus Pharmaceuticals, Inc.

     4.2*      Convertible   Secured   Promissory  Note  and  Warrant   Purchase
               Agreement  dated as of November  26, 2002 between the Company and
               Gryffindor    Capital   Partners   I,   L.L.C.    ("Gryffindor"),
               incorporated  herein by reference to Exhibit 4.1 to the Company's
               Current Report on Form 8-K dated November 26, 2002, as filed with
               the SEC on December 10, 2002.

     4.3       Convertible Secured Promissory Note of the Company dated November
               26, 2002, issued to Gryffindor,  incorporated herein by reference
               to Exhibit 4.2 to the Company's  Current Report on Form 8-K dated
               November 26, 2002, as filed with the SEC on December 10, 2002.

     4.4       Common Stock Purchase Warrant dated November 26, 2002,  issued to
               Gryffindor,  incorporated  herein by  reference to Exhibit 4.3 to
               the Company's Current Report on Form 8-K dated November 26, 2002,
               as filed with the SEC on December 10, 2002.

                                      X-1

<PAGE>



     4.5       Common Stock Purchase Warrant dated November 26, 2002,  issued to
               Stuart Fuchs,  incorporated herein by reference to Exhibit 4.4 to
               the Company's Current Report on Form 8-K dated November 26, 2002,
               as filed with the SEC on December 10, 2002.

     4.6*      Stock Pledge  Agreement dated as of November 26, 2002 between the
               Company  and  Gryffindor,  incorporated  herein by  reference  to
               Exhibit  4.5 to the  Company's  Current  Report on Form 8-K dated
               November 26, 2002, as filed with the SEC on December 10, 2002.

     4.7       Guaranty  dated  November 26, 2002 from Xantech  Pharmaceuticals,
               Inc., a Tennessee  corporation  and a wholly owned  subsidiary of
               Provectus  ("Xantech"),  to  Gryffindor,  incorporated  herein by
               reference to Exhibit 4.6 to the Company's  Current Report on Form
               8-K dated  November 26,  2002,  as filed with the SEC on December
               10, 2002.

     4.8       Form of Security  Agreement  between the Company and  Gryffindor,
               incorporated  herein by reference to Exhibit 4.7 to the Company's
               Current Report on Form 8-K dated November 26, 2002, as filed with
               the SEC on December 10, 2002.

     4.9       Form of Patent and License Security Agreement between the Company
               and Gryffindor,  incorporated  herein by reference to Exhibit 4.8
               to the Company's  Current  Report on Form 8-K dated  November 26,
               2002, as filed with the SEC on December 10, 2002.

     4.10      Form of Trademark  Collateral  Assignment and Security  Agreement
               between  the  Company  and  Gryffindor,  incorporated  herein  by
               reference to Exhibit 4.9 to the Company's  Current Report on Form
               8-K dated  November 26,  2002,  as filed with the SEC on December
               10, 2002.

     4.11      Form of  Copyright  Security  Agreement  between  the Company and
               Gryffindor,  incorporated  herein by reference to Exhibit 4.10 to
               the Company's Current Report on Form 8-K dated November 26, 2002,
               as filed with the SEC on December 10, 2002.

     4.12      Registration  Rights  Agreement  dated as of  November  26,  2002
               between  the  Company  and  Gryffindor,  incorporated  herein  by
               reference to Exhibit 4.11 to the Company's Current Report on Form
               8-K dated  November 26,  2002,  as filed with the SEC on December
               10, 2002.


     4.13*     Shareholders'  Agreement  dated as of  November  26,  2002  among
               Provectus,   Gryffindor,   H.  Craig  Dees,  Ph.D.,  Dees  Family
               Foundation,   Walter  Fisher,  Ph.D.,  Fisher  Family  Investment
               Limited  Partnership,   Walt  Fisher  1998  Charitable  Remainder
               Unitrust,  Timothy  C.  Scott,  Ph.D.,  Scott  Family  Investment
               Limited Partnership,  John T. Smolik,  Smolik Family LLP, Eric A.
               Wachter,  Ph.D.,  and Eric A. Wachter 1998  Charitable  Remainder
               Unitrust, incorporated herein by reference to Exhibit 4.12 to the
               Company's  Current Report on Form 8-K dated November 26, 2002, as
               filed with the SEC on December 10, 2002.

     4.14*     Warrant  Agreement dated as of December 5, 2002 among  Provectus,
               Avid Amiri and Daniel Urmann, incorporated herein by reference to
               Exhibit  4.1 to the  Company's  Current  Report on Form 8-K dated
               December 5, 2002, as filed with the SEC on December 20, 2002.

     4.15      Form of  Warrant  issuable  pursuant  to the  Warrant  Agreement,
               incorporated  herein by reference to Exhibit 4.2 to the Company's
               Current  Report on Form 8-K dated December 5, 2002, as filed with
               the SEC on December 20, 2002.

     4.16*+    Promissory Note of the Company dated December 31, 2002, issued to
               Eric A. Wachter.

     10.1      Consultant  Compensation  Agreement  dated  April 23,  2002 among
               Provectus and Russell Ratliff,  Justeene Blankenship,  Michael L.
               Labertew, and Phillip Baker,  incorporated herein by reference to
               Exhibit 99.1 to the Company's  Registration Statement on Form S-8
               (Registration No. 333-86896),  as filed with the SEC on April 24,
               2002.

                                      X-2

<PAGE>

Exhibit No.                Description
-----------                -----------

     10.2**    Provectus  Pharmaceuticals,  Inc. 2002  Stock  Plan, incorporated
               herein by reference to Exhibit 99.3 to the Company's Registration
               Statement on Form S-8 (Registration No. 333-86896), as filed with
               the SEC on April 24, 2002.

     10.3+     Consulting  Agreement dated August 15, 2002 between Provectus and
               Numark Capital Corporation ("Numark").

     10.4      Consulting  Agreement dated August 28, 2002 between Provectus and
               Robert S. Arndt,  incorporated herein by reference to Exhibit 4.1
               to the Company's Registration Statement on Form S-8 (Registration
               No. 333-99639), as filed with the SEC on September 17, 2002.

     10.5      Consulting  Agreement dated August 28, 2002 between Provectus and
               Nunzio Valerie,  Jr., incorporated herein by reference to Exhibit
               4.2  to  the  Company's   Registration   Statement  on  Form  S-8
               (Registration No. 333-99639),  as filed with the SEC on September
               17, 2002.

     10.6*+    Letter  Agreement  dated June 7, 2002 between  Provectus and Nace
               Pharma, LLC.

     10.7+     Letter Agreement dated August 29,2002 between  Provectus and Nace
               Resources, Inc.

     10.8+     Confidentiality, Inventions and Non-competition Agreement between
               the Company and H.   Craig   Dees.

     10.9+     Confidentiality,   Inventions   and   Non-competition   Agreement
               between the Company and Timothy C. Scott.

    10.10+     Confidentiality,   Inventions   and   Non-competition   Agreement
               between the Company and Eric A. Wachter.

    16.1       Letter of Bierwolf  Nilson &  Associates  dated  January 8, 2003,
               pursuant to Item 304(a)(3) of Regulation S-B, regarding change of
               certifying  accountant,   incorporated  herein  by  reference  to
               Exhibit 16.1 to the  Company's  Current  Report on Form 8-K dated
               December 20, 2003.

    21.1+      List of  Subsidiaries.

    23.1+      Consent of BDO Seidman,  LLP.



    31.1++     Certification   Pursuant   to    Rule   13a-14(a)   (Section  302
               Certification),  dated March 29, 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   March  29, 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  March 29, 2004, executed by H. Craig Dees,
               Ph.D.,  Chief  Executive  Officer  of the  Company,  and Peter R.
               Culpepper,    Chief    Financial    Officer   of   the   Company.
    -------------------------------------

     *        The Company agrees by this filing to supplementally furnish to the
              SEC, upon request, a copy of the exhibits and/or schedules to this
              agreement.

     **       Management compensation contract or plan.

     +        Previously filed.

     ++       Filed herewith.

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