<PAGE>


================================================================================

                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                Washington, D.C. 20549

                                     FORM 10-QSB

/x/  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 for the quarterly period ended March 31, 1999

                          Commission File Number 0-23553

                            PHOTOGEN TECHNOLOGIES, INC.
               (Exact name of registrant as specified in its charter)

               NEVADA                             36-4010347
(State or other jurisdiction of    (I.R.S. Employer Identification No.)
 incorporation or organization)

                           7327 OAK RIDGE HIGHWAY, SUITE B
                                 KNOXVILLE, TN 37931
               (Address of principal executive offices)(Zip Code)

                                    (423) 769-4012
               (Registrant's telephone number including area code)

     Check whether the issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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:  / /

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 36,875,020 SHARES OF COMMON
STOCK, $.001 PAR VALUE PER SHARE, ISSUED AND OUTSTANDING AS OF MAY 13, 1999.
NO SHARES OF PREFERRED STOCK, $.01 PAR VALUE PER SHARE, WERE ISSUED OR
OUTSTANDING AS OF THAT DATE.

     Transitional Small Business Disclosure Format:

               YES: / /          NO:  /x/

================================================================================

<PAGE>

                                      INDEX
<TABLE>
                                                                                            PAGE
PART I  -  FINANCIAL INFORMATION
        <S>                                                                                 <C>
         ITEM 1.   FINANCIAL STATEMENTS (UNAUDITED).  . . . . . . . . . . . . . . . . . . .   1

         ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                       FINANCIAL CONDITION OR PLAN OF OPERATION . . . . . . . . . . . . . .   6

PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

         ITEM 5.   OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .  12

         ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . . . . . .  16
</TABLE>




                                        i


<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                           PHOTOGEN TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  March 31, 1999       December 31, 1998
                                                                    (Unaudited)            (Audited)
                                                                  --------------       -----------------
<S>                                                               <C>                   <C>  
                               ASSETS
CURRENT ASSETS
         Cash and cash equivalents                                  $   670,068           $   652,226
         Interest receivable                                             64,225               121,471
         Prepaid expenses                                               317,598               435,395
                                                                    -----------           -----------
                                                                      1,051,891             1,209,092
                  TOTAL CURRENT ASSETS
UNITED STATES TREASURY NOTES, TOTAL
         FACE VALUE $4,710,000 and $5,660,000                         4,732,549             5,682,105

EQUIPMENT AND LEASEHOLD IMPROVEMENTS                                  1,157,836             1,169,388
                                                                    -----------           -----------
                  TOTAL ASSETS                                      $ 6,942,276           $ 8,060,585
                                                                    -----------           -----------
                                                                    -----------           -----------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
         Accounts Payable                                           $   575,238           $   804,248
         Current portion of obligations under
               capital leases                                            55,173               111,769
                                                                    -----------           -----------
                  TOTAL CURRENT LIABILITIES                             630,411               916,017
                                                                    -----------           -----------
OBLIGATION UNDER CAPITAL LEASES                                            --                  35,990
                                                                    -----------           -----------
                                                                    -----------           -----------

SHAREHOLDERS' EQUITY
         Preferred stock; par value
         $.01 per share; 5,000,000
         shares authorized; none issued                                    --                    --

         Common stock; par value $.001
         per share; 150,000,000 shares
         authorized; 36,875,020 shares issued and
         outstanding
                                                                         36,875                36,875
         Additional paid-in capital
                                                                      9,634,134             9,602,097
         Deficit accumulated during
         development stage after
         recapitalization
                                                                     (3,359,144)           (2,530,394)
                                                                    -----------           -----------
                  TOTAL SHAREHOLDERS' EQUITY
                                                                      6,311,865             7,108,578
                                                                    -----------           -----------
                                                                    $ 6,942,276           $ 8,060,585
                                                                    -----------           -----------
                                                                    -----------           -----------
</TABLE>


                                        1
<PAGE>

                           PHOTOGEN TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended          Three Months Ended      Cumulative Amounts From
                                                       March 31, 1999               March 31, 1998           November 3, 1996
                                                         (Unaudited)                 (Unaudited)               (Unaudited)
                                                     ------------------          ------------------      -----------------------
<S>                                                  <C>                          <C>                     <C>
REVENUES
      Investment Income                                $     72,020               $     55,571                 $   571,752

EXPENSES
      General and administrative                            900,770                    424,433                   3,930,896
                                                       -------------              -------------                ------------

                  NET LOSS                             $   (828,750)              $   (368,862)                $(3,359,144)
                                                       -------------              -------------                ------------
                                                       -------------              -------------                ------------

BASIC AND DILUTED NET
      LOSS PER COMMON SHARE                            $    (   .02)              $   (    .01)
                                                       -------------              ------------- 
                                                       -------------              ------------- 
WEIGHTED AVERAGE
      NUMBER OF COMMON
      SHARES OUTSTANDING                                 36,875,020                 36,184,722
                                                       -------------              ------------- 
                                                       -------------              ------------- 
</TABLE>


                                        2

<PAGE>

                           PHOTOGEN TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                              Three Months          Three Months           Cumulative
                                                                  Ended                Ended              Amounts From
                                                             March 31, 1999        March 31, 1998       November 3, 1996
                                                              (Unaudited)            (Unaudited)           (Unaudited)
                                                            ---------------        --------------       ----------------
<S>                                                         <C>                     <C>                 <C>
OPERATING ACTIVITIES
      Net income (loss)                                     $    (828,750)            (368,862)          $  (3,359,144)
      Depreciation                                                 27,431                7,425                 193,708
      United States Treasury Notes
              Amortization                                          2,986                 -                     34,615
      Loss on Securities                                               -                 3,826                 (20,499)
      Stock Option Compensation                                    32,037                 -                     77,483
Changes in operating assets and liabilities:
      Prepaid expense                                             117,797                4,082                  51,047
      Interest receivable                                          57,246             (135,569)               (432,870)
      Accounts payable                                           (229,010)              52,231                 575,238
                                                            -------------       --------------          --------------
      NET CASH PROVIDED (USED) BY
      OPERATING ACTIVITIES                                       (820,263)            (436,867)             (2,880,422)
                                                            -------------       --------------          --------------
INVESTING ACTIVITIES
      Sale of marketable securities                                    -               200,000               2,164,464
      Purchase of marketable securities                                -                  -                 (2,182,967)
      Purchase of United States Treasury Notes                   (555,478)          (7,076,213)            (17,117,108)
      Sale of United States Treasury Notes                      1,502,048              619,580              13,485,596
      Purchase of capital assets                                  (15,879)             (56,882)             (1,022,505)
      Patent cost                                                      -              ( 17,562)                (37,335)
                                                            -------------       --------------          --------------
                  NET CASH PROVIDED (USED)
                  BY INVESTING ACTIVITIES                         930,691           (6,331,077)             (4,709,855)
                                                            -------------       --------------          --------------
FINANCING ACTIVITIES
      Proceeds from issuance of common stock                           -             7,000,000               6,956,313
      Proceeds from capital contributions by
         stockholders                                                  -                   -                 1,911,674
      Cost of recapitalization                                         -                   -                  (371,111)
      Principal payments on capital lease
         obligations                                              (92,586)              (5,362)               (236,531)
                                                            -------------       --------------          --------------
      NET CASH PROVIDED (USED) BY
      FINANCING ACTIVITIES                                        (92,586)           6,994,638               8,260,345
                                                            -------------       --------------          --------------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                                            17,842              226,694                 670,068

CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD                                            652,226               82,631                   -
                                                            -------------       --------------          --------------
CASH AND CASH
   EQUIVALENTS AT END OF PERIOD                             $     670,068       $      309,325          $      670,068
                                                            -------------       --------------          --------------
                                                            -------------       --------------          --------------
</TABLE>


                                        3
<PAGE>
                           PHOTOGEN TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                Deficit
                                                                                              Accumulated
                                           Common Stock                          Additional   During The
                                   ---------------------------      Members       Paid-In     Development
                                     Shares            Amount        Capital       Capital        Stage            Total
                                   -----------       ---------     ----------    ----------   ------------     -----------

<S>                                 <C>              <C>            <C>           <C>          <C>             <C>
CONTRIBUTION OF CAPITAL                                          $     7,268                                   $     7,268

NET LOSS FOR THE PERIOD                   --              --          (1,779)          --            --             (1,779)
                                   -----------       ---------     ----------    ----------   ------------     -----------
BALANCE AT
   DECEMBER 31, 1996                      --              --           5,489           --            --              5,489

NET LOSS AND CAPITAL
   CONTRIBUTIONS FOR THE
   PERIOD JANUARY 1, 1997
   TO MAY 15, 1997                        --              --           3,511           --          (3,511)            --
                                   -----------       ---------     ----------    ----------   ------------     -----------
BALANCE AT MAY 15, 1997                   --         $    --           9,000     $     --     ($    3,511)     $     5,489

ISSUANCE OF STOCK FOR
   CASH                              6,312,833           6,313          --        1,797,137          --          1,803,450

EFFECT OF
   RECAPITALIZATION
   AND MERGER                       29,687,167          29,687        (9,000)     1,181,500         1,732        1,203,919

COST ASSOCIATED WITH
   RECAPITALIZATION
   AND MERGER                             --              --            --         (371,111)         --           (371,111)

NET LOSS FOR THE
   PERIOD MAY 16, 1997
   TO DECEMBER 31, 1997                   --              --            --             --     ($  554,702)        (554,702)
                                   -----------       ---------     ----------    ----------   ------------     -----------

BALANCE AT
   DECEMBER 31, 1997                36,000,000          36,000          --        2,607,526      (556,481)       2,087,045


ISSUANCE OF COMMON
STOCK                                  875,020             875          --        6,999,125          --          7,000,000

COST ASSOCIATED WITH
COMMON STOCK ISSUANCE                     --              --            --          (50,000)         --            (50,000)

OPTIONS ISSUED TO
CONSULTANTS                               --              --            --           45,446          --             45,446

NET LOSS FOR THE YEAR
ENDED DECEMBER 31, 1998                   --              --            --             --      (1,973,913)      (1,973,913)
                                   -----------       ---------     ----------    ----------   ------------     -----------
BALANCE AT DECEMBER 31,
1998                                36,875,020          36,875          --        9,602,097    (2,530,394)       7,108,578

OPTIONS ISSUED TO
CONSULTANTS                               --              --            --           32,037          --             32,037

NET LOSS FOR THREE
   MONTHS ENDED
   MARCH 31, 1999                         --              --            --             --        (828,750)        (828,750)
                                   -----------       ---------     ----------    ----------   ------------     -----------
BALANCE AT
   MARCH 31, 1999                   36,875,020       $  36,875     $    --       $9,634,134   ($3,359,144)     $ 6,311,865
                                   -----------       ---------     ----------    ----------   ------------     -----------
                                   -----------       ---------     ----------    ----------   ------------     -----------
</TABLE>

                                        4
<PAGE>

                           PHOTOGEN TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                                 March 31, 1999

1.   BASIS OF PRESENTATION

      The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information pursuant to Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three months ended March 31, 1999 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1999.


                                        5

<PAGE>

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION OR PLAN OF OPERATION

      UNCERTAINTIES RELATING TO PHOTOGEN. Photogen Technologies, Inc. and its
wholly-owned subsidiary Photogen, Inc. are collectively referred to as
"Photogen," the "Company," "we," or "us." Portions of the discussion in this
Item 2 contain forward-looking statements and are subject to the Risk Factors
described in Item 5 below.

      RESULTS OF OPERATIONS. We are a development stage company engaged in the
development of advanced photodynamic therapies using drugs and medical devices.
We have not completed development of any product or process at this time and 
have no revenues from operations. We have not generated revenues from the sale
of any proposed products or other operations, and we continue to experience 
losses. Our net loss for the three month period ended March 31, 1999 was 
$828,750, compared to a loss of $368,862 for the three month period ended  
March 31, 1998. The increase in losses is attributable primarily to expenses 
related to designing and acquiring equipment, conducting studies pursuant to 
pre-clinical research agreements and other research, and other general and 
administrative costs.

      We expect to continue to incur increasing losses for at least the next
several years as we intensify research and development, clinical testing,
regulatory approval activities and engage in the manufacture and/or sale of any
products that we may develop. In particular, we are presently a party to four
research contracts with various third parties that will require an expenditure
of a total of $233,000 over the remaining terms of those contracts for the
protocols currently under investigation. See "Plan of Operation," below.

      Our revenue for the three month period ended March 31, 1999 was $72,020,
compared to $55,571 of revenue for the three month period ended March 31, 1998.
The revenue resulted primarily from investment income on the proceeds from the
sale of common stock in our 1998 private placement and 1997 restructuring. The
proceeds of the sales of our common stock are invested primarily in United
States Government obligations. Because we have no revenues from operations at
this time, investment of such funds in that manner is necessary to avoid
becoming subject to the Investment Company Act of 1940.

      LIQUIDITY; CAPITAL RESOURCES. We have used, and expect over the next 12
months to use, the gross proceeds from the March 13, 1998 private placement and
from the sale of stock in our 1997 restructuring for corporate overhead and
operating expenses, animal trials, the purchase or lease of scientific and
laboratory equipment and related facilities, legal and regulatory consulting
fees and for other working capital purposes, assuming we have no revenues during
that period. Our use of cash and capital resources is presently about $330,000
per month. At that rate, we will exhaust our current funds by approximately May
2000.

      PATENT, RESEARCH AND OPERATIONAL MATTERS.   We are continuing to pursue 
patent protection for our proprietary technologies with the U.S. Patent and 
Trademark Office, and in various foreign jurisdictions.  We recently filed 
patent applications covering inventions in the following areas:

              -     Radiocontrast (x-ray contrast) agents and methods for 
                    treating tissue using those agents

                                      6

<PAGE>

              -     Radiosensitizer, agents and methods for treating tissue 
                    using a radiosensitizer
              -     Multiphoton activation technology
              -     Methods and apparatus for imaging and treating tissue 
                    using photodynamic therapies
              -     Additional photodynamic therapy methods and apparatus for 
                    topical treatment of disease
              -     Methods and appartus for treatment of tissue containing 
                    an endogenous pigment (for example, melanoma destruction)

      We continue to pursue development of proprietary technologies as a result
of our research in chemistry, photochemistry, and biochemistry. We are currently
working on the following research projects:

      1. MACULAR DEGENERATION OF THE EYE. In October 1998, we executed a 
research agreement with Massachusetts Eye and Ear Infirmary ("MEEI"), a 
teaching affiliate of Harvard Medical School. Joan W. Miller, M.D. is the 
Principal Investigator. This agreement has a term ending in June 1999 and 
covers preclinical research that will evaluate the technology for treatments 
of age-related macular degeneration ("AMD") of the eye (additional research 
may be undertaken under the agreement by consent of the parties). According 
to the American Academy of Ophthalmology and the International Association of 
Online Ophthalmologists, AMD affects up to 13 million Americans by 
progressively damaging the center portion of the retina. AMD is a leading 
cause of reduced eyesight in the senior population, rarely seen before age 
55. Patients lose the ability to see straight ahead and distinguish fine 
detail or read small print, and must eventually rely on peripheral vision. 
Eighty percent of the AMD cases are the "dry" form, which cannot be treated 
and cause gradual vision loss. The remaining cases are the more severe "wet" 
form, in which abnormal blood vessels grow under the retina. It is the "wet" 
form that our research with MEEI aims to address. Subject to the terms of the 
agreement, MEEI has the right to patent any new inventions arising out of the 
agreement, and we have the right to obtain an exclusive license concerning 
any such invention.

      2. OCULAR MELANOMA. In December 1998, we executed a second research 
agreement with MEEI. This agreement covers preclinical research to evaluate 
our technology for the treatment of ocular melanoma. Lucy H. Young, Ph.D., 
M.D., is the Principal Investigator. While ocular melanoma is a relatively 
rare disease (about 2,000 cases per year in the United States), it is the 
most prominent primary cancer of the eye in adults and there are few 
treatments for this condition. This research agreement will evaluate our 
technology as a basis for an alternative treatment that we believe could 
offer advantages over current radiotherapy or surgical treatment options. We 
intend to use the data gained through this evaluation to determine whether 
our technology is effective in the destruction of ocular melanoma. This 
agreement, currently set for a term ending in August 1999, also provides that 
research extensions may be undertaken by MEEI by agreement with us. Subject 
to the terms of the agreement, MEEI has the right to patent any new 
inventions arising out of this agreement, and we have the right to obtain an 
exclusive license concerning any invention.

      3. PROSTATE AND LUNG CANCER. In October 1998, we executed an agreement
with Massachusetts General Hospital for work to be carried out at its Center for
Imaging and Pharmaceutical Research ("CIPR") which will initially involve
preclinical research on the treatment of prostate and lung cancer using our
simultaneous two-photon excitation technology. Gerald L. Wolf, Ph.D., M.D., is
the Principal Investigator. The research under the first protocol is expected to
be completed in 1999. This agreement has a term ending in September 2003 and
contemplates that additional projects may be performed as agreed by the parties.


                                        7
<PAGE>

      Prostate cancer is a malignancy that develops in the prostate gland, a
gland that is important for the proper function of the male reproductive tract.
Cancer of the prostate is the most common cancer among American men, affecting
about one in five men during the course of a lifetime. Although incidence
increases with age, this cancer can occur in younger men as well. This form of
cancer very often occurs without symptoms. This research project will look
at treatments for prostate cancer using simultaneous two-photon excitation
technology.

      This research agreement will also look at possible treatments for lung 
cancer using simultaneous two-photon excitation technology. Most types of 
lung cancer can be categorized as small cell and non-small cell. In general, 
the small cell type is usually spread by the time of diagnosis and is treated 
by chemotherapy and/or radiation therapy. The non-small cell type may not 
have spread at the time of diagnosis and surgical resection of this type may 
be possible. Lung cancer can spread to almost any area of the body, with 
common sites being the brain, bones, bone marrow and liver. The incidence is 
one out of every 1,000 people, with a peak incidence occurring when a person 
is between 55 and 65 years old. Subject to the terms of the agreement, 
Massachusetts General Hospital has the right to patent any new inventions 
arising out of the research agreement and we have the right to obtain an 
exclusive license concerning any such invention.

      4. CUTANEOUS MELANOMA. In our laboratory, we performed research assessing 
the use of ultra-short pulsed light to directly activate melanin and its 
precursors to kill melanoma cells. We announced preliminary results of that 
research in September 1998. Tumors produced in mice were treated by scanning 
the affected area with light from an ultra-short pulsed laser. Tumors ranging 
in size from 6 to 10 millimeters (mm) in diameter and up to 3 mm deep, when 
treated with ultra-short pulsed laser light using simultaneous two photon 
excitation, produced a visible "blanching" effect, resulting from the 
interaction between melanin and the light. After treatment, tumor volume was 
reduced by 100 percent with little or no scarring. We are completing work to 
identify the optimum wavelength for use in treating melanoma. We have conducted
experiments at 730 nanometers (nm), 800 nm and 1047 nm. To date, results at 
1047 nm appear superior to 800 nm and 730 nm. We will be comparing performance 
at 1047 nm to 800 nm during our pre-clinical ocular-melanoma study at MEEI.

      5. TREATMENT SYSTEMS. We have been working with a laser manufacturer to
design ultra-short pulsed laser systems for photodynamic treatment of melanoma
and age-related macular degeneration. Two prototype systems have been assembled
that include a beam scanning and focusing device. In addition, we have 
developed laser control software. Our scientists are working on a third 
prototype system to be used for surface treatments such as hair removal.

      6. NATIONAL INSTITUTES OF HEALTH STUDY. We have been working on 
research pursuant to a Phase I Small Business Innovation Research ("SBIR") 
Project grant of $99,927 from the National Institutes of Health National 
Cancer Institute. We announced the results of this research project in March 
1998. During the course of the SBIR project, we demonstrated successful 
multiphoton activation of an FDA approved photoactive drug in a living 
organism. That study also indicated that our simultaneous two-photon laser 
beam could be directed at a target area in a mouse liver with little or no 
collateral damage to other tissues outside the target area. In contrast, 
conventional single-photon excitation produced damage on the laser beam line 
of flight and in some cases severely damaged non-targeted organs. This 
research was performed primarily in our laboratory, with some additional 
assistance through a research contract with the University of Tennessee 
School of Veterinary Medicine. We have prepared and submitted our application 
for a $900,000

                                        8

<PAGE>

Phase II SBIR grant from the National Institutes of Health National Cancer 
Institute to conduct additional studies regarding the efficacy of our 
technologies.

      7. BARRETTS ESOPHAGUS. Barretts esophagus is a precancerous condition of
the esophagus created by chronic acid reflux. The esophagus is the thin-walled
tube that conveys food to the stomach. Because of its thin walls and multiple
tissue structures, successful photodynamic therapy must avoid penetrating the
esophagus and damaging deeper tissue layers. Problems with conventional
photodynamic therapy have included burning of the esophageal wall caused by 
the laser light, and deep tissue damage creating post treatment strictures. 
In our laboratory, we demonstrated selective targeting of a drug topically 
applied in murine esophageal tissue. The potential benefits of this approach 
in humans may be reduced treatment cost and improved safety and efficacy. In 
June 1999, we plan to begin preclinical trials in canines for treatment of 
Barretts esophagus through our research agreement with the University of 
Tennessee School of Veterinary Medicine.

      8. RADIOSENSITIZER STUDY. We recently demonstrated that a new class of
photodynamic therapy agents may potentially be successful radiosensitizers. A
drug injected directly into a tumor grown on the side of a laboratory mouse was
retained in the tumor for many days with small amounts of leakage and produced
enough x-ray contrast to clearly identify the tumor images on a conventional CT
scan. We believe these early results indicate that the drug may be sufficient
for use in imaging tumor margins and as a radiosensitizer. Ideally, use of this
agent should enable significant reduction in the x-ray dosage required to kill
the target tissue. Availability of such an agent would allow redefinition of
radiation therapy. The safety risks of radiation would be significantly reduced
with reduced dosage, and efficacy may be improved through the use of the
radiosensitizer. These developments could expand the use of radiation therapy
and, when used as a contrast agent that more clearly identifies tumor margins,
could allow surgeons to improve surgical removal of tumors.

      9. HAIR REMOVAL STUDY. In our laboratory, we are investigating the use of
ultra-short pulsed laser light to remove hair. We believe the mechanism is the
same as that for treating melanoma: the melanin in the hair follicle and
melanocytes become photoactivated and destroy the hair follicle. We are 
utilizing a mouse model to show technical feasibility and may work toward 
commencing further preclinical and human clinical trials.

      10. DIAGNOSTIC EXPERIMENTS. In our laboratory, we are experimenting with
the diagnostic capabilities of simultaneous two-photon excitation. We conducted
initial experiments on a chicken breast (used to simulate tissue). We
demonstrated the capability to retrieve signals through 5 mm of chicken breast
using the common dye fluorescein. We are attempting to improve the
signal-to-noise ratio, through the use of our proprietary modulation
technologies. If successful, this improvement could result in faster imaging,
better resolution and increased depth at which diagnosis could be conducted.

      We cannot guarantee that our research will lead to the development of 
new patentable technology, or that commercial products will be developed from 
our technologies and successfully sold. We plan to continue to pursue 
preclinical and clinical testing of proposed products in the areas of 
chemistry, photochemistry and biochemistry. However, we cannot assure 
investors that we will receive any grant monies, will be able to successfully 
develop and obtain proprietary protection for new

                                        9

<PAGE>

technologies, or that we can develop products from these technologies that can 
be commercialized. We have not entered into any collaborative agreements for the
development of any specific product and we do not expect to do so until further
research and clinical trials are concluded.

      We are occupying approximately 4,000 square feet of office and 
laboratory space in Knoxville, Tennessee. We pay a monthly rental of $4,680 
for the facility (including certain equipment) plus charges for utilities and 
similar items. We are proceeding to equip our laser research and development 
laboratory with certain laser equipment systems made available by a large 
laser manufacturer. We have received, installed and started-up three 
ultra-short pulsed laser systems required for conduct of animal studies for 
use in the photodynamic treatment of melanoma and age-related macular 
degeneration. We anticipate taking delivery of another laser system for use 
in hair removal in mid-1999. We have completed development of a software 
package for use in the control and operation of these laser systems.

      PLAN OF OPERATION. During the next twelve months, we will continue with 
animal studies and evaluation of proprietary photoactive agent candidates, 
pursuing patent protection and seeking potential research and development and 
collaboration candidates. During the three months ended March 31, 1999, we 
spent approximately $191,234 to acquire equipment necessary to support animal 
clinical trials, and on development of our proprietary photoactive agent and 
targeting systems. During the first quarter of 1999, we purchased 
approximately $87,582 of laboratory equipment. We anticipate increased 
spending during the second quarter for clinical equipment and clinical work 
provided by third-party researchers. During the next twelve months we expect 
to spend approximately $685,000 to acquire new equipment. The four research 
contracts to which we are currently a party in the aggregate will require us 
to spend $233,000 during the next twelve months for the projects presently 
contemplated under those agreements. Additional projects may be undertaken 
with those institutions for compensation to be agreed upon at that time.

      We are evaluating our future needs for laboratory and office space and for
scientific, managerial and support personnel. See "Risk Factors" in Item 5,
below. We may exercise our renewal option under our lease, which will involve an
increase in rent of about $.50 per square foot; and we intend to link expansion
of facilities and staff to completion of technical and financial milestones. We
presently anticipate slowly adding additional personnel to support our current
activities, while deferring any substantial growth in hiring and acquisition of
space and equipment until the final results of preclinical and human trials are
known. However, we will consider faster growth if that would present
opportunities to increase our product pipeline, or opportunities for more rapid
FDA approval or to attain licensing revenues. We intend to structure our
research and development and collaborative arrangements to make the fullest
possible use of personnel and facilities provided by the parties with whom we
may contract.

      For the reasons stated above, we believe we have enough cash resources for
our current commitments during the next 12 months and will not be required to
raise additional funds. However, as we progress toward human clinical trials,
our use of capital will increase and will continue to do so at an accelerating
pace. Greater capital resources would enable us to quicken and expand our
research and development activities over that 12-month period; and our failure
to raise additional capital will (absent a suitable collaborative agreement
providing for a third party to take over these functions) significantly impair
our ability to conduct further research and


                                       10

<PAGE>

development activities beyond those currently contracted for and our ability 
to seek regulatory approval for any possible product resulting from that 
research. Under the present circumstances, we expect to exhaust our current 
capital by approximately May 2000. In any event, complete development and 
commercialization of our technology will require substantial additional 
funds. Accordingly, we are continuously evaluating capital formation 
activities and opportunities, either as part of collaborative arrangements 
with third parties or through offerings of equity or debt unrelated to 
collaborations. See "Risk Factors" in Item 5, below.

      YEAR 2000 ISSUES. The "Year 2000 issue" is the problem resulting from the
use of a two-digit date to identify the year in computer software. Consequently,
computer programs may not accurately reflect the appropriate date, confusing
"00" as the year 1900 rather than the year 2000. Year 2000 is a pervasive
problem affecting many information technology systems and embedded technologies
(operating and control systems that rely on embedded chip systems such as
microprocessors in communication systems) in all companies and in all
industries.

      We have completed assessment of the impact of Year 2000 on our operations
and important systems. We also inquired about the Year 2000 readiness of our
material vendors, research institutions under contract with us, and other
material third parties on which we rely.

      With respect to our information technology systems, we believe that with
upgrades to our existing computer software, all of which should be readily
available in the market, the Year 2000 issue will not have a material adverse
affect on our financial position or results of operations. We expect to have
these upgrades completed by the end of 1999 and do not expect the cost of the
upgrades to be material (less than $5,000). With respect to embedded
technologies, we believe they are either Year 2000 compliant or will not be
materially effected by the Year 2000 problem because they do not significantly
rely upon date sensitive software.

      To date, we do not believe most third parties' Year 2000 issues will have
a material adverse impact on our operations. However, we have not been able to
verify that the Massachusetts Eye and Ear Infirmary ("MEEI"), with which we have
two research agreements, will have addressed its own Year 2000 issues. If the
Year 2000 issue causes an interruption in the research MEEI is performing for
us, we may (depending on the circumstances) agree to delay some or all of the
research or transfer the research to another institution. This could delay the
progress of research on those projects for as much as six to nine months and
would correspondingly delay the commencement of human clinical trials and any
resulting product. However, much of MEEI's research may be completed before the
end of 1999 and would not be affected by the Year 2000 issue.

      We believe that a "worst case" scenario would result where the systems of
third parties are not timely converted and a third party fails to remediate its
own Year 2000 issues. In a worst case scenario, we could incur an adverse affect
due to interruption of third party systems. However, we currently believe that 
any adverse effect would involve primarily disruption to sponsored research 
operations which we believe could be transferred to alternative third parties 
who were Year 2000 compliant. Any such transfer could result in a delay of 
research operations. At present we cannot estimate the likelihood or potential 
cost of such third party failures.


                                       11

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 5.           OTHER INFORMATION

                                  RISK FACTORS

      Photogen and its business involve a high degree of risk. You should
carefully consider the risks listed below and all of the information contained
in this From 10-QSB and our other filings with the Securities and Exchange
Commission. The risks listed below are not all of the risks facing Photogen.
There may be additional risks and uncertainties that we currently are not aware
of or have deemed not material, all of which could have a negative impact on our
business, financial condition and results of operations. "We" and "our" refer to
Photogen Technologies, Inc. and its wholly owned subsidiary Photogen, Inc.

      This Form 10-QSB and other filings, announcements and documents of
Photogen and oral statements of our representatives contain "forward-looking
statements," within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements involve risks, uncertainties and other
factors that may cause our actual results or performance to differ materially
from any results or performance expressed or implied by those statements.
Examples of forward-looking statements include predictive statements, statements
that depend on or refer to future events or conditions, which include words such
as "expects," "anticipates," "intends," "plans," "believes," "estimates,"
"should," "may" or similar expressions, or statements that involve hypothetical
events.

      Forward-looking statements discuss future events or circumstances,
including future revenues, earnings or growth rates, ongoing business strategies
or prospects, and our possible future actions. These statements are based on
current expectations and projections about future events and are subject to
risks, uncertainties, and assumptions about Photogen, economic and market
factors and the industries in which we do business, and other factors.
Forward-looking statements are not guaranties of future performance and actual
events and results may differ materially from those expressed or forecasted in
forward-looking statements. We have no specific intention to update these
statements.

      The following are some of the key risk factors that may affect Photogen's
future results:

WE ARE A DEVELOPMENT STAGE COMPANY AND DO NOT HAVE ANY PRODUCTS OR REVENUES FROM
SALES.

             Our company and our technology are in an early stage of 
      development. We have not generated revenues from sales or operations, and
      we do not expect to generate any revenues for at least several years. The
      products we currently contemplate developing will require significant
      additional research and development, preclinical and clinical testing and
      regulatory approval before they can be manufactured and sold. As a result
      of changing economic considerations, market, clinical or regulatory
      conditions, or clinical trial results, we may shift our focus or determine
      not to continue one or more of the projects we are currently pursuing.


                                     12

<PAGE>

WE HAVE A HISTORY OF LOSSES AND MAY NOT ACHIEVE OR MAINTAIN FUTURE PROFITS OR 
PAYMENT OF DIVIDENDS.

             We have incurred losses since the beginning of our operations.
      As of March 31, 1999, we have incurred total losses of $3,359,144. We
      expect our losses to increase in the future as our financial resources are
      used for research and development, preclinical and clinical testing,
      regulatory activities, manufacturing, marketing and other related
      expenses. We may not be able to achieve or maintain profitability in the
      future. We have never declared or paid any cash dividends to stockholders,
      and do not expect to do so in the foreseeable future.

WE MUST OBTAIN SIGNIFICANT ADDITIONAL FINANCING.

             Under the present circumstances, we will exhaust our available
      capital by approximately May 2000. We will need substantial additional
      financing for our research, clinical testing, product development and
      marketing programs. We cannot accurately estimate the amount of additional
      financing required; however, the amount could be at least an additional
      $50 million. Depending on market conditions, we will attempt to raise
      additional capital through stock and debt offerings, collaborative
      relationships and other available sources. Additional funds may not be
      available on acceptable terms, if at all, and existing stockholders may be
      diluted as a result of those offerings.

WE ARE HIGHLY DEPENDENT UPON A SMALL NUMBER OF EMPLOYEES AND CONSULTANTS WHO
PROVIDE SCIENTIFIC AND MANAGEMENT EXPERTISE.

             These individuals have entered into employment or consulting
      agreements, confidentiality and/or non-competition agreements. We could
      suffer competitive disadvantage, loss of intellectual property rights or
      other material adverse effects on our business and results of operations
      if any employee or consultant violates or terminates these agreements or
      terminates their association with us.

OUR PROPOSED PRODUCTS ARE SUBJECT TO EXTENSIVE TESTING AND GOVERNMENT REGULATION
AND APPROVAL, INCLUDING BY THE FOOD AND DRUG ADMINISTRATION.

             Our proposed drug and device products have not begun or
      completed the FDA's extensive approval process which must be completed
      before proposed products can be manufactured or sold. This process
      includes preclinical and clinical testing for effective use and safety in
      animals and humans. The time frame necessary to perform these tasks for
      any individual product is long and uncertain, and we may encounter
      problems or delays which we cannot predict at this time. Even if clinical
      trials are successful, our proposed products may not demonstrate
      sufficient effectiveness or safety to warrant approval by the FDA or other
      domestic or foreign regulatory authorities. Any regulatory approval may
      not cover the clinical symptoms or circumstances that we may seek.

BECAUSE WE DO NOT HAVE, AND DO NOT INTEND TO DEVELOP, INTERNAL RESEARCH,
MANUFACTURING OR CLINICAL TESTING FACILITIES OR MARKETING RESOURCES FOR OUR
PROPOSED PRODUCTS, WE WILL HAVE TO RELY ON THIRD PARTIES AND COLLABORATIVE
RELATIONSHIPS.


                                    13

<PAGE>

             We must enter into collaborative relationships with third
      parties for research and development, preclinical and clinical testing,
      manufacturing, marketing and distribution of our proposed products. We
      will also be dependent on third parties for the supply of laser products
      and for supplies of photodynamic drugs. We have several research
      agreements with third parties. However, we may not be able to negotiate
      other acceptable collaborative and supply arrangements in the future.

             Collaborative relationships may limit or restrict our
      operations or may not result in an adequate supply of necessary resources.
      Our collaborative partners could also pursue alternative technologies as a
      means of developing or marketing products for the diseases targeted by our
      collaborative programs. Failure of a collaborative partner to perform
      under its agreement or its failure to meet regulatory standards could
      delay or prematurely terminate clinical testing of our proposed products.

LOSS OF PATENT AND OTHER INTELLECTUAL PROPERTY PROTECTION WOULD HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

             Our success will depend, in part, on our ability to obtain,
      assert and defend our patents, protect trade secrets and operate without
      infringing upon the intellectual property of others. Our patent
      applications may not result in issued patents. Moreover, any issued
      patents may not provide us with adequate protection of our intellectual
      property or competitive advantages. Patented inventions may be "reverse
      engineered" by our competitors, and third parties may challenge our
      existing patents and seek to hold them invalid or unenforceable. Existing
      or future patents or patent applications of our competitors may 
      interfere, invalidate, conflict or infringe with our patents or patent 
      applications. Similarly, our use of the methods or technologies 
      contained in our patents and other intellectual property may conflict or
      infringe the rights of others.

             Litigation over patents and other intellectual property rights
      occurs frequently in our industry, and there is a risk that we may not
      prevail in that litigation. Those disputes can be expensive and time
      consuming, even if we win. Intellectual property disputes are often
      settled through licensing arrangements that could be costly to us. In any
      intellectual property litigation, it is possible that licenses necessary
      to settle the dispute would not be available, or that we would not be able
      to redesign our technologies to avoid any claimed infringement.

             Confidentiality agreements covering our intellectual property
      may be violated and we may not have adequate remedies for any violation.
      Also, our intellectual property may in other ways become known or be
      independently discovered by competitors.

OUR POTENTIAL MARKETS ARE EXTREMELY COMPETITIVE.

             We face substantial competition from competitors with greater
      financial, technical and human resources and with greater experience in
      developing products, conducting preclinical or clinical testing, obtaining
      regulatory approvals, manufacturing and marketing. Our competitors include
      firms in the field of photodynamic therapy as well as other fields
      generally relating to the diagnosis and treatment of disease using
      different technologies or scientific and medical approaches. Examples of
      those technologies are novel drugs, hyperthermic and ultrasound
      procedures. Some of these firms have drugs or devices that have completed
      or are in advanced stages of clinical trials and regulatory approvals.


                                       14

<PAGE>

             Our competitors may develop technologies and obtain patent
      protection that could render our technologies or products obsolete or less
      competitive or our patents unenforceable. Due to the inherent risk of 
      failure associated with the testing, development and production of new and
      innovative technologies, our technologies and products may be found to be 
      ineffective, have unanticipated limitations or otherwise be unsuccessful 
      in the marketplace.

A SMALL GROUP OF STOCKHOLDERS CONTROLS PHOTOGEN.

             A small group of our officers, directors and others control
      approximately 85% of our outstanding common stock. Several of our
      principal stockholders are also parties to a Voting Agreement concerning
      the election of certain designees to the Board of Directors of Photogen
      Technologies, Inc. and Photogen, Inc. This group of stockholders can
      significantly influence Photogen and the direction of our business and
      affairs. This concentration of ownership may delay or prevent a change in
      control of Photogen, and may also result in a small supply of shares
      available for purchase in the public securities markets. These factors may
      affect the market and the market price for our common stock in ways that
      do not reflect the intrinsic value of the stock.

OUR STOCK PRICE IS VOLATILE.

             Our stock price and trading volume has fluctuated and is
      likely to continue to fluctuate significantly for reasons that may not
      have any relationship to our operating performance or other factors that
      traditionally determine a company's value. The following factors may have
      an impact on the price of our stock:

                  -        announcements by us or others regarding scientific
                           discoveries, technological innovations, commercial
                           products, patents or proprietary rights;

                  -        the progress of preclinical or clinical trials;

                  -        changes in government regulation;

                  -        public concern about the safety of devices or drugs;
                           and

                  -        changes in our financial performance from period to
                           period; securities analysts' reports; and general
                           market conditions.

             Our stock trades in the over-the-counter bulletin board market
      but is not listed or traded on any stock exchange at this time. State 
      securities laws may also limit the extent to which brokers in a number 
      of states may solicit transactions in our stock.

COMPUTER PROBLEMS RESULTING FROM THE YEAR 2000 ISSUE PRESENT POTENTIAL
UNCERTAINTIES.

             We may incur delays in research and other material problems if
      the computer systems and other information technology systems that we use
      or that are used by certain third parties upon whom we rely for services
      do not accurately and adequately address the


                                       15
<PAGE>

      Year 2000 issue. We many not be able to identify and address all Year 2000
      issues, including those of third parties. Failure to identify and correct
      unknown Year 2000 issues by us or important third parties on whom we rely
      could have a material adverse effect on our business, results of
      operations and financial condition. See "Management's Discussion and
      Analysis of Financial Condition or Plan of Operation -- Year 2000 Issues,"
      above.

WE CANNOT PREDICT THE EFFECT OF CHANGES IN HEALTH CARE REIMBURSEMENT AND
LEGISLATIVE REFORM ON OUR BUSINESS.

             Our success will depend, in part, on the extent to which
      health insurers, managed care entities and similar organizations, provide
      coverage or reimbursement for the medical procedures and devices we plan
      to develop. These third party payors are increasingly challenging the
      price of medical procedures and services and establishing guidelines that
      may limit physicians' selections of innovative products and procedures. We
      also cannot predict the effect of any current or future legislation or
      regulations relating to third party coverage or reimbursement on our
      business. We may not be able to achieve market acceptance of our proposed
      products or maintain price levels sufficient to achieve or maintain any
      profits on our proposed products if adequate reimbursement coverage is not
      available.


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits. The following is a list of exhibits filed as part of this Form
10-QSB. Exhibits that were previously filed are incorporated by reference. For
exhibits incorporated by reference, the location of the exhibit in the previous
filing is indicated in parenthesis.


<TABLE>
<CAPTION>

    EXHIBIT NO.   DESCRIPTION
    ----------    -----------
     <S>           <C>
       3.1       Restated Articles of Incorporation of Photogen Technologies,
                 Inc.  (Filed as exhibit 3.1 to the Company's Current Report on
                 Form 8-K dated June 17, 1998 and incorporated herein by
                 reference.)

       3.2       Bylaws of Photogen Technologies, Inc. (Filed as exhibit 3.2 to
                 the Company's Registration Statement on Form 10-SB dated
                 December 24, 1997 and incorporated herein by reference.)

       3.3       Charter of Photogen, Inc.  (Filed as exhibit 3.3 to the
                 Company's Registration Statement on Form 10-SB dated December
                 24, 1997 and incorporated herein by reference.)

       3.4       Amended and Restated Bylaws of Photogen, Inc. (Filed as
                 exhibit 3.4 to the Company's Form 10-KSB dated March 30, 1999
                 and incorporated herein by reference.)

      10.1       Photogen Technologies, Inc. 1998 Long Term Incentive 
                 Compensation Plan

      10.2       Form of Non-Qualified Stock Option Award Agreement entered 
                 into by the Company and each of Lester McKeever, Jr., Daniel 
                 Tosteson, Ph.D., M.D., Mark Peterson, Harry Morrison, Ph.D. 
                 and Merrill Biel, Ph.D., M.D. (Filed as exhibit 10.7 to the 
                 Company's Form 10-KSB dated March 30, 1999 and incorporated 
                 herein by reference.)

      10.3       Form of Consulting Agreement entered into by the Company and 
                 each of Daniel Tosteson, Ph.D., M.D., Harry Morrison, Ph.D. 
                 and Merrill Biel, Ph.D., M.D. (Filed as exhibit 10.12 to the 
                 Company's Form 10-KSB dated March 30, 1999 and incorporated 
                 herein by reference.)

       27        Financial Data Schedule of Photogen Technologies, Inc.

</TABLE>

                                      16

<PAGE>

(b)               Reports on Form 8-K.

      The following reports on Form 8-K were filed in the three month period
ended March 31, 1999:

      1.    Report on Form 8-K dated March 23, 1999, disclosing the announcement
            of Photogen's initiation of pre-clinical testing for two complex eye
            disorders.














                                       17

<PAGE>

                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                   Photogen Technologies, Inc.


                                                   /s/ John T. Smolik
                                                   ---------------------------
Date:   May 14, 1999                               John T. Smolik, President











                                       18

<PAGE>

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>

      <S>                <C>
     EXHIBIT NO.   DESCRIPTION
     ----------    -----------
     <S>          <C>
      +3.1       Restated Articles of Incorporation of Photogen Technologies,
                 Inc.  (Filed as exhibit 3.1 to the Company's Current Report on
                 Form 8-K dated June 17, 1998 and incorporated herein by
                 reference.)

      +3.2       Bylaws of Photogen Technologies, Inc. (Filed as exhibit 3.2 to
                 the Company's Registration Statement on Form 10-SB dated
                 December 24, 1997 and incorporated herein by reference.)

      +3.3       Charter of Photogen, Inc.  (Filed as exhibit 3.3 to the
                 Company's Registration Statement on Form 10-SB dated December
                 24, 1997 and incorporated herein by reference.)

      +3.4       Amended and Restated Bylaws of Photogen, Inc. (Filed as
                 exhibit 3.4 to the Company's Form 10-KSB date March 30, 1999
                 and incorporated herein by reference.)

      *10.1      Photogen Technologies, Inc. 1998 Long Term Incentive 
                 Compensation Plan

      +10.2      Form of Non-Qualified Stock Option Award Agreement entered 
                 into by the Company and each of Lester McKeever, Jr., Daniel 
                 Tosteson, Ph.D., M.D., Mark Peterson, Harry Morrison, Ph.D. 
                 and Merrill Biel, Ph.D., M.D. (Filed as exhibit 10.7 to the 
                 Company's Form 10-KSB dated March 30, 1999 and incorporated 
                 herein by reference.)

      +10.3      Form of Consulting Agreement entered into by the Company and 
                 each of Daniel Tosteson, Ph.D., M.D., Harry Morrison, Ph.D. 
                 and Merrill Biel, Ph.D., M.D. (Filed as exhibit 10.12 to the 
                 Company's Form 10-KSB dated March 30, 1999 and incorporated 
                 herein by reference.)

      *27        Financial Data Schedule of Photogen Technologies, Inc.

</TABLE>

+     Incorporated by reference from the filing indicated.
*     Filed herewith.




                                       19