United States Securities And Exchange Commission
                              Washington, DC 20549
--------------------------------------------------------------------------------
                                   FORM 10-KSB


                                 Amendment No. 3
                                ----------------


(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, 2003; OR

[  ] 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  15,  2004,  was  $9,694,102
(computed on the basis of $1.20 per share).




     The number of shares  outstanding of the issuer's  stock,  $0.001 par value
per share, as of March 15, 2004 was 12,793,064.


     Documents incorporated by reference in Part III hereof: Proxy Statement for
2004 Annual Meeting of Stockholders

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












                         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..........................................................9
         Federal Regulation of Therapeutic Products...........................9
         Personnel...........................................................12
         Available Information...............................................13
     Item 2.    Description of Property......................................13
     Item 3.    Legal Proceedings............................................13
     Item 4.    Submission of Matters to a Vote of Security Holders..........13

Part II......................................................................14

     Item 5.    Market for Common Equity and Related Stockholder Matters.....14

     Item 6.    Management's Discussion and Analysis or Plan of Operation....16
         Going Concern.......................................................16
         Plan of Operation...................................................17

     Item 7.    Financial Statements.........................................18
         Forward-Looking Statements..........................................19
         Risk Factors........................................................19

     Item 8.    Changes in and Disagreements with Accountants on Accounting
                and Financial Disclosure.....................................26

     Item 8A.   Controls and Procedures......................................26

Part III.....................................................................27

     Item 9.    Directors, Executive Officers, Promoters and Control
                Persons; Compliance with Section 16(a) of the Exchange Act...27

     Item 10.   Executive Compensation.......................................27

     Item 11.   Security Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters...................27

     Item 12.   Certain Relationships and Related Transactions...............28

     Item 13.   Exhibits, List and Reports on Form 8-K.......................28

     Item 14.   Principal Accountant Fees and Services.......................28

Signatures...................................................................29




                                     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." Valley had minimal operations and
had no revenues prior to the transaction with the Company.  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:

     o    Over-the-counter  products,  which we refer to in this  report as "OTC
          products;"

                                       1


     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.  Because our  prescription  drug  candidates and medical
device systems are in the early stages of  development,  they are not yet on the
market  and  there is no  assurance  that  they  will  advance  to the  point of
commercialization.

     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 example,  the active  pharmaceutical  ingredient (API) in our
ethical products is already approved for other medical uses by the FDA and has a
long history of safety for use in humans.  This use of known APIs for novel uses
and in novel  formulations  minimizes  potential  adverse concerns from the FDA,
since  considerable  safety data on the API is  available  (either in the public
domain or via  license or other  agreements  with  third  parties  holding  such
information). In similar fashion, our OTC products are based on established APIs
and, when possible, utilize formulations (such as aerosol or cream formulations)
that have an established precedent.  (For more information on compliance issues,
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;

                                       2


     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.

     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.
During 2003, we ran a pilot scale run at the manufacturer of GloveAid.

     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.  During  2003,  we  identified  and  engaged  sales and
brokerage  forces for  Pure-ific.  We emphasized  getting  sales in  independent
pharmacies  and mass (chain store)  markets.  The supply chain for Pure-ific was
established  with the  ability  to  support  large-scale  sales  and a  starting
inventory  was  manufactured  and  stored  in a  contract  warehouse/fulfillment
center. In addition,  a website for Pure-ific was developed with the ability for
supporting  on-line sales of the antibacterial hand spray. 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

                                       3


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,  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 are  continuing the required Food and
Drug  Administration  reporting to support the active  Investigational  New Drug
application  for Xantryl's  Phase 2 clinical  trials on psoriasis.  The required
reporting  includes the publication of results regarding the multiple  treatment
scenario  of the active  ingredient  in  Xantryl.  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

                                       4


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. During 2003,
we have been working toward  completion of the extensive  scientific and medical
materials  necessary  for filing an  Investigational  New Drug  application  for
Provecta in  anticipation  of beginning  Phase 1 clinical  trials for breast and
liver cancer.

     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

                                       5


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 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 anticipate  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 continue to conduct
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

                                       6


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

     While we continue to actively develop  projects that are product  directed,
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.  We sold small
amounts of these  products  during 2003 but did not  recognize  the revenue from
these sales because we do not consider these sales to be material as total sales
of these  products  in 2003 was  less  than  $1,000.  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.

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:


                                                                                      

      U.S. Patent No.                     Title                          Issue Date            Expiration Date
      ---------------                     -----                          ----------            ---------------

         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

                                       7


      U.S. Patent No.                     Title                          Issue Date            Expiration Date
      ---------------                     -----                          ----------            ---------------

         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



     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.

Material Transfer Agreement


     We have entered  into a Material  Transfer  Agreement  dated as of July 31,
2003  with  Schering-Plough  Animal  Health  Corporation,  which  we refer to as
"SPAH",  the animal-health  subsidiary of Schering-Plough  Corporation,  a major
international  pharmaceutical company. We refer to this agreement in this report
as the "Material Transfer Agreement." Under the Material Transfer Agreement,  we
will  provide SPAH with access to some of our  patented  technologies  to permit
SPAH to evaluate those  technologies for use in animal-health  applications.  If
SPAH determines that it can commercialize  our  technologies,  then the Material
Transfer  Agreement  obligates  us and SPAH to enter  into a  license  agreement
providing for us to license those  technologies to SPAH in exchange for progress
payments upon the achievement of goals. The Material  Transfer  Agreement covers
four U.S.  patents that cover  biological  material  manufacturing  technologies
(i.e., biotech related). The Material Transfer Agreement continues indefinitely,
unless SPAH  terminates  it by giving us notice or  determines  that it does not
wish to secure from us a license for our  technologies.  The  Material  Transfer
Agreement  can also be  terminated  by either of us in the event the other party
breaches  the  agreement  and does not cure the breach  within 30 days of notice
from the other party. We can give you no assurance that SPAH will determine that
it can  commercialize  our  technologies  or that the goals  required  for us to
obtain progress payments from SPAH will be achieved.

                                       8


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 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 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

                                       9


     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 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.

     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

                                       10


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.

     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,  also  known as a "PMA,"  application  (for  devices)  or  accelerated
approval (for drugs).

     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.

                                       11


Personnel

Executive Officers

     As of March 25, 2004, our executive officers are:

     H. Craig Dees, Ph.D., 52, 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.,
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.,  46,  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., 41, 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.

     Peter R. Culpepper,  CPA, MBA, 44, Chief Financial  Officer.  Mr. Culpepper
was  appointed  to  serve as our  Chief  Financial  Officer  in  February  2004.
Previously,  Mr. Culpepper served as Chief Financial Officer for Felix Culpepper
International,  Inc. from 2001 to 2004; was a Registered Representative with AXA
Advisors,  LLC from 2002 to 2003;  has served as Chief  Accounting  Officer  and
Corporate  Controller for Neptec,  Inc. from 2000 to 2001; has served in various
Senior  Director  positions with  Metromedia  Affiliated  Companies from 1998 to
2000; has served in various Senior Director and other  financial  positions with
Paging Network, Inc. from 1993 to 1998; and has served in a variety of financial
roles in public  accounting  and industry from 1982 to 1993. He earned an MBA in
Finance from the  University  of Maryland - College  Park in 1992.  He earned an

                                       12


undergraduate  degree  from the  College  of  William  and Mary -  Williamsburg,
Virginia in 1982. He is a licensed Certified Public Accountant in both Tennessee
and Maryland and is a faculty member with the University of Phoenix.

Employees

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

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.  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, the Section 16 reports filed by
our executive  officers,  directors and 10% shareholders 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

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 needs currently and 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,  2003,  we did not submit any
matters to a vote of our stockholders.

                                       13


                                     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, 2002:


                                                                                   

         2002                                                            High                 Low
         ----                                                            ----                 ---

         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

         2003
         First Quarter (January 1 to March 31)                           $0.60              $0.26
         Second Quarter (April 1 to June 30)                            $ 1.01              $0.21
         Third Quarter (July 1 to September 30)                          $0.60              $0.20
         Fourth Quarter (October 1 to December 31)                       $2.00              $0.22


     The closing  price for our common  stock on March 25, 2004 was $1.69.  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 15,  2004,  we had 1,899  shareholders  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, 2003,  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 a letter  agreement  dated  January 8, 2003 between us and
          Investor-Gate.com,  we  retained  Investor-Gate  to  provide  investor
          relations services. For these services, we agreed to pay Investor-Gate
          a monthly  fee of $7,250 for the first three  months of the  agreement
          and a monthly fee of $6,000 per month thereafter.  The monthly fee for
          the first  three  months  was paid by the  issuance  and  delivery  to
          Investor-Gate  of 29,000 shares of our common stock at an  agreed-upon
          value  of  $0.75  per  share.   In   addition,   we  agreed  to  grant
          Investor-Gate  warrants for the purchase of  additional  shares of our
          common  stock.  As of the close of  business  on January 8, 2003,  the
          value of our common stock was $0.40 per share.

          On February 28, 2003, we terminated the agreement  with  Investor-Gate
          as a result of  Investor-Gate's  failure to perform the contracted-for
          investor relations services.  Investor-Gate retained the 29,000 shares
          initially  issued  to it,  as well as a  warrant  exercisable  for the
          purchase of 25,000 shares of our common stock at an exercise  price of
          $0.75  per  share.  In  addition,   we  remained  obligated  to  issue

                                       14


          additional warrants to Investor-Gate on the following terms:

                                                     

          Number of Shares    Exercise Price   Issue Date        Termination Date
          ----------------    --------------   ----------        ----------------

          25,000 shares       $2.00             April 8, 2003    September 8, 2004

          25,000 shares       $5.00             January 8, 2004  July 8, 2005


          We relied on an exemption from  registration  pursuant to Section 4(2)
          of the  Securities  Act, based on the sale of the shares and warrants,
          and the issuance 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.

     2.   Pursuant to a letter  agreement  dated January 31, 2003 between us and
          Gryffindor,  we issued  Gryffindor  an  Amended  and  Restated  Senior
          Secured  Convertible  Note  dated  January  31,  2003 in the  original
          principal amount of $1,025,959.  The amended note bears interest at 8%
          per annum, payable quarterly in arrears, is due and payable in full on
          November  26, 2004,  and amends and restated the original  note in its
          entirety. As with the original note, our obligations under the amended
          note are secured by a first priority  security  interest in all of our
          assets,  including  the  assets  held  by our  Xantech  and  Pure-ific
          subsidiaries.  Subject  to certain  exceptions,  the  amended  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  $0.73655655  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.  We relied on an exemption from
          registration  pursuant to Section 4(2) of the Securities Act, based on
          the  issuance of the amended  note,  and the issuance of the shares of
          common  stock  issuable  upon  conversion  of the amended  note,  to a
          limited  number of  purchasers  in a  transaction  not  involving  any
          general solicitation or general advertising.

     3.   Pursuant to a letter  agreement dated February 20, 2003 between us and
          Strategic Growth  International,  Inc., which we refer to as "SGI," we
          retained SGI as our investor relations consultant.  For services under
          this agreement, we issued SGI warrants on the following terms:

                                                       

          Number of Shares    Exercise Price  Issue Date           Termination Date
          ----------------    --------------  ----------           ----------------

          120,000 shares         $0.25        February 20, 2003    February 20, 2008

          120,000 shares         $0.35        February 20, 2003    February 20, 2008

          120,000 shares         $0.50        February 20, 2003    February 20, 2008


          In  addition,  at our  option,  during the first  three  months of the
          agreement we may elect to issue SGI 30,000 shares per month in lieu of
          payment of $3,000 of the monthly cash fee payable under the agreement.
          As of the close of  business  on February  18,  2003,  the last day on
          which a trade was reported  prior to the  execution  of the  agreement
          with SGI,  the value of our common  stock was $0.26 per share.  During
          the quarter  ended March 31,  2003,  we did not exercise our option to
          issue  shares in lieu of  payment of fees.  We relied on an  exemption
          from  registration  pursuant to Section  4(2) of the  Securities  Act,
          based on the sale of the shares and warrants,  and the issuance 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.

     4.   Pursuant to a letter  agreement  dated  March 27, 2003  between us and
          Josephberg Grosz & Co., Inc., which we refer to as "JGC," we issued JG
          Capital,  Inc., an affiliate of JGC,  35,000 shares of common stock as
          consideration for JGC's agreement to assist us in obtaining additional
          capital.  As of the close of business on March 21, 2003,  the last day

                                       15


          on which a trade was reported  prior to the execution of the agreement
          with JGC, the value of our common stock was $0.32 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.

     5.   Pursuant to Consulting  Agreements dated September 2, 2003 between us,
          Phil Baker, George Matin and Bruce Cosgrove,  we issued 200,000 shares
          of common stock and 100,000  warrants to each of Mssrs.  Baker,  Matin
          and  Cosgrove  as   consideration   for  their  agreement  to  provide
          consulting  services to us. The  warrants  provide for the purchase of
          our common shares at any time prior to September 2, 2008 at a price of
          $0.75 per share.  As of the close of business on August 29, 2003,  the
          last day on which a trade was reported  prior to the  execution of the
          agreements  with Mssrs.  Baker,  Matin and Cosgrove,  the value of our
          common  stock was  $0.31 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.

     6.   In November  2003, we completed a short-term  unsecured debt financing
          in the  aggregate  gross amount of $500,000.  On November 19, 2003, we
          issued in a private  placement  to  "accredited  investors"  under the
          Securities  Act of 1933,  as amended,  (i)  $500,000 in the  aggregate
          principal  amount of our 8%  unsecured  convertible  debentures;  (ii)
          warrants to purchase  up to 500,000  shares of our common  stock at an
          exercise  price of $1.00 per share;  and (iii) warrants to purchase up
          to 100,000  shares of our common  stock at an exercise  price of $1.25
          per share. We used the proceeds of the offering to provide  short-term
          working capital.

     7.   In  December   2003,   we   commenced  an  offering  for  sale  up  to
          approximately $1 million of our restricted  common stock. Net proceeds
          to  us  were  initially  expected  to  be  approximately  $400,000  to
          $600,000.  We have since  increased this offering amount to $2 million
          and have  received  proceeds of $967,750 as of March 15, 2004 and have
          sold a total of  2,228,769  shares  in this  offering.  We  engaged  a
          placement agent to assist us in the offering. Placement agent fees and
          related  expenses  totaled  $1,446,607 as of March 15, 2004. If we are
          successful  in selling the  remaining  shares,  total net proceeds are
          expected  to be  approximately  $1.0  million  to  $1.6  million.  The
          transaction is a Regulation S offering to foreign investors as defined
          by Regulation S of the Securities Act. The restricted shares cannot be
          traded for 12 months.  After the first 12 months,  sales of the shares
          are subject to restrictions under rule 144 for an additional year.



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, 2003, 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
material  revenues  from sales or  operations  and we do not expect to  generate

                                       16


sufficient revenues to enable us to be profitable for several calendar quarters.
At critical  junctures  during 2003 we obtained  $40,000 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. As of December 31, 2003, we have
borrowed a total of $149,000 from Dr. Wachter,  including  $109,000  borrowed in
2002.  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.

     Our current  plans include  continuing  to operate with our four  employees
during the immediate future,  but we anticipate adding some part-time  employees
during the next year.  Our current plans also include  minimal  purchases of new
property,  plant  and  equipment,  and  limited  research  and  development.  We
determined  research  and  development  expense  incurred  during  2003  through
specific  identification  of  expenses,  as well as an  allocation  of  salaries
expense attributed to research and development.

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 2004,  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.

     We are in the  planning  phase  for  the  major  research  and  development
projects, and therefore do not have estimated completion dates, completion costs
and  capital  requirements  for these  projects.  The reason we do not have this
information  available is because we have not  completed  our planning  process.
Since there is no defined  schedule for completing these  development  projects,
there are no defined consequences if they are not completed timely. The research
and development costs comprising a total of $724,924 incurred in 2003,  included
depreciation expense of $218,082, consulting of $49,198, lab expense of $12,800,
insurance of $10,153,  legal  expense of $130,271,  office and other  expense of
$2,008,  payroll of $252,042,  rent and utilities of $38,057, and taxes and fees
of $12,313.  Research and  development  costs  comprising a total of $50,714 for
2002 include lab expense of $250, insurance of $2,244, legal of $1,374,  payroll
of $38,996, and rent and utilities of $7,850.


Cash Flow

     As of March  15,  2004,  we held  approximately  $500,000  in cash.  At our
current cash expenditure  rate, this amount will be sufficient to meet our needs

                                       17


until the end of August 2004.  We already  have begun to reduce our  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 2004 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.

Equity Transactions

     From  time  to  time we  enter  into  consulting  agreements  with  various
providers.  The  nature of the  consulting  services  include  overall  business
strategy,   the  development  and  support  of   over-the-counter   distribution
agreements,   general  business  development,   public  relations  and  investor
relations.

     In 2003, we issued  764,000  shares to consultants in exchange for services
rendered, consisting of 29,000 shares issued in January, 35,000 shares issued in
March and  700,000  shares  issued  in  October.  Consulting  costs  charged  to
operations were $95,133.  At December 31, 2003,  $144,667 has been classified as
prepaid consulting expense as this amount represents payments for services to be
provided in the future. The shares are fully vested and non-forfeitable.

     In November and December  2003,  we  committed to issue  341,606  shares to
consultants  in exchange  for services  rendered.  Consulting  costs  charged to
operations were $49,517.  At December 31, 2003,  $231,983 has been classified as
prepaid consulting expense as this amount represents payments for services to be
provided in the future. The shares are fully vested and non-forfeitable.

     We apply  the  recognition  provisions  of SFAS No.  123,  "Accounting  for
Stock-Based  Compensation,"  in accounting for stock options and warrants issued
to nonemployees.  In January 2003, we issued 25,000 warrants to a consultant for
services rendered.  In February 2003, we issued 360,000 warrants to a consultant
180,000 of which were fully vested and  non-forfeitable  at the issuance and the
remaining  180,000 warrants were cancelled in August 2003 due to the termination
of the consulting contract. In September 2003, we issued 200,000 warrants to two
consultants  in exchange  for services  rendered.  In November  2003,  we issued
100,000  warrants to one  consultant in exchange for services  rendered.  As the
fair market value of these services was not readily determinable, these services
were valued based on the fair market value,  determined using the  Black-Scholes
option-pricing  model.  Fair market value for the warrants  ranged from $0.20 to
$0.24.  Consulting  costs charged to operations  were $101,312.  At December 31,
2003,  $44,167 has been classified as prepaid  consulting expense as this amount
represents  payments  for  services to be  provided  in the future.  The prepaid
consulting   expense   relates   to   warrants   which  are  fully   vested  and
non-forfeitable.

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

                                       18


Annual Report on Form 10-KSB indicated below.
                                                                        Page
                                                                        ----

     Report of Independent Registered Public Accounting Firm             F-1

     Consolidated  Balance  Sheets as of December 31, 2003
     and December 31, 2002                                               F-2

     Consolidated  Statements of Operations for the year
     ended December 31, 2003 and for the period from
     January 17, 2002  (inception)  to December 31, 2002                 F-3

     Consolidated Statements of Shareholders' Equity for
     the year ended December 31, 2003 and for the period
     from January 17, 2002  (inception)  to December 31, 2002            F-4

     Consolidated  Statements of Cash Flows for the year
     ended December 31, 2003 and for the period from
     January 17, 2002  (inception)  to December 31, 2002                 F-6

     Notes to Consolidated Financial Statements                          F-8

     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  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 substantial doubt about our ability
to continue as a going concern.

     Our independent public  accountants have expressed  substantial doubt about
our ability to continue as a going  concern in their  report on our December 31,
2003  financial  statements.  Currently,  our  continuance as a going concern is
dependent  upon our ability to raise capital or achieve  profitable  operations.
Our technologies are in early stages of development.  We have generated  minimal
initial  revenues  from  sales and  operations  thus far in 2004,  but we do not
expect to generate sufficient revenues to enable us to be profitable for several
calendar quarters.  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

                                       19


implement our integrated  business plan,  including execution of the next phases
in  clinical  development  of our  pharmaceutical  products  and  resumption  of
research programs currently suspended.

     Ultimately,  we must achieve profitable operations if we are to be a viable
entity.  We intend to proceed as rapidly as possible with the development of OTC
products that can be sold with a minimum of regulatory  compliance  and with the
development of revenue  sources through  licensing of our existing  intellectual
property  portfolio.  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 and 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  $1,674,959 in debt,  net of a debt discount of $499,675
and $100,021 of accrued interest on our balance sheet,  consisting of $1,025,959
in  principal  and $88,000 in accrued  but unpaid  interest  owed to  Gryffindor
pursuant to the Note;  $500,000 in principal and $4,590 in accrued interest owed
to the holders of our debentures and $149,000 in principal and $7,431 in accrued
interest owed to Dr.  Wachter.  The amounts due to Gryffindor and to the holders
of are  debentures  are due in November 2004 and the amounts due to Dr.  Wachter
are  due in  2009.  Because  of the  convertible  nature  of the  debt  owed  to
Gryffindor and to the holders of the convertible debentures,  we may not have to
repay  this  debt if the debt is  converted  into  shares of our  common  stock.
However,  we can not assure  you that this debt will be  converted  into  common
stock  and we may have to repay  this  indebtedness.  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.  Additionally,  our
creditors  could  accelerate  our  payment  obligations,   commence  foreclosure
proceedings  against our assets or force us into bankruptcy or  liquidation.  In
such events,  any proceeds may not be  sufficient to pay off our  creditors.  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 August 31, 2004, and we may need additional  capital at an earlier date.
We have based this estimate on  assumptions  that may prove to be wrong,  and we
cannot assure that estimates and assumptions will remain unchanged. For example,
we are  currently  assuming  that  we  will  continue  to  operate  without  any
significant staff or other resources expansion.  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 and our independent  auditors' going concern  qualification may
make  it  more  difficult  for us to  obtain  additional  funding  to  meet  our
objectives. 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,  and may
impair the value of our patents and other intangible assets.

Existing shareholders may face dilution from our financing efforts

                                       20


     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.  We have not  recognized  any revenue from these
products,  as the sales of these products have not been  material.  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

                                       21


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 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.

                                       22


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 believe that are current technology is adequate for our

                                       23


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.

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    Peter R. Culpepper, CPA, 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.  Also, as of December 31, 2003, we owe $352,500
in accrued but unpaid  compensation  to our employees,  most of which is owed to
Drs. Dees, Scott and Wachter.  The loss of any of these key employees 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 assure you that
we  would  be able  to hire  similarly  qualified  executives  if any of our key
employees should choose to leave.

Because  we  have  only  four  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 four employees,  all of whom are
full-time  employees.  The  greatest  burden of  succeeding  in the above  areas
therefore falls on Drs. Dees, Scott, Wachter, and Culpepper. 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.  We
anticipate  adding a part-time  regulatory  affairs  officer,  a  part-time  lab
technician and a part-time  office  manager within the next year.  While we have
not  historically  had  difficulty in attracting  employees,  our small size and
limited  operating  history may make it  difficult  for us to attract and retain
employees in the future which could further  divert  managements  attention from
the operation of our business.

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

     During the  twelve-month  period ended December 31, 2003, the sale price of
our common stock  fluctuated  from $2.00 to $0.20 per share. We believe that our

                                       24


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.

We have raised substantial amounts of capital in private placements from time to
time and if we have  failed  to  comply  with  applicable  laws and  regulations
applicable  to these  private  placements,  we could be  required  to repay this
capital to investors  and could be subject to legal action by the  investors and
by state and federal securities regulators .

     We have offered and sold securities in private  placements in reliance upon
exemptions  from the  registration  requirements  of the SEC and state agencies.
These exemptions are highly  technical in nature and if we inadvertently  failed
to comply with the  requirements of any of the exemptive  provisions,  investors
might have the right to rescind  their  purchase  of our  securities  or sue for
damages.  If one or more  investors  were to  successfully  seek  rescission  or
prevail  in any  suit,  we  could  face  severe  financial  demands  that  could
materially and adversely  affect our financial  position.  Further,  the SEC and
state  agencies  could take  action  against us that could  divert  management's
attention  from  the  operation  of our  business,  cause  us to pay  fines  and
penalties and cause us to have to repay  investors  their  original  investment,
among other things.

     Financings  that may be available  to us under  current  market  conditions
frequently  involve  sales at prices  below the prices at which our common stock
trades  on the  Over  the  Counter  Electronic  Bulletin  Board,  as well as the
issuance of warrants or  convertible  debt that require  exercise or  conversion
prices that are  calculated in the future at a discount to the then market price
of our common stock.

     Any agreement to sell, or convert debt or equity  securities  into,  common
stock at a future date and at a price  based on the then  current  market  price
will provide an  incentive  to the investor or third  parties to sell the common
stock short to  decrease  the price and  increase  the number of shares they may
receive in a future  purchase,  whether  directly from us or in the market.  For
example,  the initial conversion rate of the debentures issued during the fourth
quarter of 2003 is equal to the lower of (i) 75% of the average  market price of
our common  stock for the  twenty  (20)  trading  days  ending on the  twentieth
trading day  subsequent to the effective date of the  registration  statement or
(ii) $0.75 per share.  If the average market price of our common stock is so low
that it causes the conversion rate on the debentures to fall below approximately
$0.73, and if the debenture holders enforce this provision of our agreement with
them, we will have to issue more shares to the debenture holders upon conversion
of the debentures and the anti-dilutive  provisions  contained in our agreements
with Gryffindor will become operative. If these anti-dilutive  provisions become
operative,  we may be required to issue a significant number of shares of common
stock to Gryffindor. We will not receive any additional proceeds from Gryffindor
for the issuance of these shares of common stock.  Other  financings that we may
obtain may  contain  similar  provisions,  and the  existence  of  anti-dilutive
provisions in some of our existing  financings may make it more difficult for us
to obtain financing in the future.  These types of transactions  which cause the
issuance of our common stock in  connection  with the exercise or  conversion of
securities  may result in substantial  dilution to the remaining  holders of our
common stock.

Financings that may be available to us frequently involve high selling costs.

     Because of our limited operating history, low market  capitalization,  thin
trading volume and other factors,  we have historically had to pay high costs to

                                       25


obtain financing and expect to continue to be required to pay high costs for any
future  financings in which we may participate.  For example,  our past sales of
shares and our sale of the debentures have involved the payment of finder's fees
or placement  agent's fees.  These types of fees are typically  higher for small
companies  like us. Payment of fees of this type reduces the amount of cash that
we receive from a financing  transaction  and makes it more  difficult for us to
obtain the amount of financing that need to maintain and expand our operations.

We have not had  earnings,  but if earnings  were  available,  it is our general
policy to retain any earnings for use in our operation.

     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.

     Our stock price is below $5.00 per share and is treated as a "Penny  Stock"
which places restrictions on broker-dealers recommending the stock for purchase.

     Our common stock is defined as "penny stock" under the Exchange Act and its
rules.  The SEC has adopted  regulations  that define  "penny  stock" to include
common  stock that has a market  price of less than $5.00 per share,  subject to
certain exceptions. These rules include the following requirements:

          o    broker-dealers   must  deliver,   prior  to  the   transaction  a
               disclosure  schedule  prepared  by the SEC  relating to the penny
               stock market;

          o    broker-dealers  must  disclose  the  commissions  payable  to the
               broker-dealer and its registered representative;

          o    broker-dealers   must  disclose   current   quotations   for  the
               securities;

          o    if a broker-dealer is the sole  market-maker,  the  broker-dealer
               must disclose this fact and the  broker-dealers  presumed control
               over the market; and

          o    a   broker-dealer   must  furnish  its  customers   with  monthly
               statements  disclosing  recent  price  information  for all penny
               stocks  held in the  customer's  account and  information  on the
               limited market in penny stocks.


     Additional sales practice  requirements are imposed on  broker-dealers  who
sell penny stocks to persons other than  established  customers  and  accredited
investors.  For  these  types of  transactions,  the  broker-dealer  must make a
special  suitability  determination for the purchaser and must have received the
purchaser's  written  consent to the  transaction  prior to sale.  If our common
stock remains subject to these penny stock rules these  disclosure  requirements
may have the effect of reducing the level of trading  activity in the  secondary
market for our common stock. As a result, fewer broker-dealers may be willing to
make a market in our stock,  which could affect a shareholder's  ability to sell
their shares.



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

     The information called for by this item is incorporated by reference to our
Current  Report on Form 8-K which was filed with the SEC on January 3, 2003,  as
amended on January 9, 2003 and March 25, 2004.



Item 8A. Controls and Procedures

     (a)  Evaluation of Disclosure Controls and Procedures.  Our chief executive
          officer and chief financial  officer have evaluated the  effectiveness

                                       26


          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 the last day of the period  covered by 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 us and our 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 was no change in our  internal
          control over  financial  reporting  identified in connection  with the
          evaluation during our fourth fiscal quarter that materially  affected,
          or is reasonably  likely to materially  affect,  our internal  control
          over financial reporting.



                                    Part III



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

     Except as set forth  below,  the  information  called for by this item with
respect to our executive officers as of March 25, 2004 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 27, 2004,  which will be
filed with the SEC pursuant to Regulation 14A under the Exchange Act.

Audit Committee Financial Expert

     We do not currently have an "audit committee  financial expert," as defined
under the rules of the SEC. Because the board of directors consists of only four
members and our operations  remain  amenable to oversight by a limited number of
directors,  the board has not delegated any of its functions to committees.  The
entire board of directors acts as our audit committee as permitted under Section
3(a)(58)(B) of the Exchange Act. We believe that all of the members of our board
are qualified to serve as the committee and have the experience and knowledge to
perform the duties  required of the  committee.  We do not have any  independent
directors who would qualify as an audit committee  financial expert, as defined.
We believe that it has been, and may continue to be, impractical to recruit such
a director unless and until we are significantly larger.

Code of Ethics

     We have not  adopted a formal Code of Ethics.  Since our  company  only has
four employees,  we expect those employees to adhere to high standards of ethics
without the need for a formal policy.



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
27, 2004,  which will be filed with the SEC pursuant to Regulation 14A under the
Exchange Act.



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

                                       27


27, 2004,  which will be filed with the SEC pursuant to Regulation 14A under the
Exchange Act.


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
27, 2004,  which will be filed with the SEC pursuant to Regulation 14A under the
Exchange Act.


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, 2003, we
     filed the following Current Reports on Form 8-K:


     1.   On December 2, 2003,  we filed a Current  Report on Form 8-K reporting
          that we had completed a short-term unsecured debt financing.

     2.   On December 15, 2003, we filed a Current  Report on Form 8-K reporting
          an offering of up to $1 million of restricted common stock.



Item 14.  Principal Accountant Fees and Services.

     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
27, 2004,  which will be filed with the SEC pursuant to Regulation 14A under the
Exchange Act.

                                       28



                                   Signatures

     In accordance  with Section 13 or 15(d) of the Exchange Act, the Registrant
caused  this  Amendment  No. 3 to its annual  report on From 10-KSB for the year
ended December 31, 2003 to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                      Provectus Pharmaceuticals, Inc.


                                      By: /s/ H. Craig Dees
                                          --------------------------------------
                                          H. Craig Dees,  Ph.D.  
                                          Chief Executive Officer

Date:    November 1, 2004


                                       29



Report of Independent Registered Public Accounting Firm


Board of Directors
Provectus Pharmaceuticals, Inc.
Knoxville, Tennessee

We have  audited  the  accompanying  consolidated  balance  sheets of  Provectus
Pharmaceuticals,  Inc. a development stage company,  as of December 31, 2003 and
2002,  and the related  consolidated  statements  of  operations,  shareholders'
equity and cash flows for the year ended  December  31,  2003 and 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 the standards of the Public  Company
Accounting Oversight Board (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,  2003 and 2002 and the  results of its
operations  and its cash flows for the year ended  December 31, 2003 and 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
$10,221,449,  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.

As discussed in Note 8, the consolidated financial statements have been restated
to reflect the effect of a change in the valuation of the Company's patents upon
their acquisition.


/s/ BDO Seidman, LLP


Chicago, Illinois
March 12, 2004, except for Note 8 which is as of September 29, 2004

                                      F-1


                         Provectus Pharmaceuticals, Inc.
                          (A Development Stage Company)


                           Consolidated Balance Sheets

                                                                                                    
                                                                                        Restated          Restated
                                                                                        (Note 8)          (Note 8)
                                                                                        December 31,      December 31,
                                                                                        2003              2002
------------------------------------------------------------------------------------------------------------------

Assets

Current Assets
     Cash                                                                       $         164,145  $      717,833
     Prepaid expenses                                                                      26,227          35,481
     Inventory                                                                             72,578               -
     Stock subscription receivable (Note 4)                                                87,875               -
     Deferred loan costs (net of amortization of $19,569 (Note 6))                        150,961               -
     Prepaid consulting expense (Note 4)                                                  420,817               -

                                                                                ---------------------------------

Total Current Assets                                                                      922,603         753,314

Equipment and Furnishings, less accumulated depreciation of $244,760 and
     $39,446 (Note 1)                                                                     121,415         471,429

Patents, net of amortization of $749,417 and $78,297 (Notes 1 and 2)                   10,966,028      11,637,148

Other Assets                                                                               27,000          27,000
                                                                                ---------------------------------

                                                                                $      12,037,046  $   12,888,891
                                                                                =================================

Liabilities and Shareholders' Equity

Current Liabilities
     Accounts payable - trade                                                   $         100,640  $       98,874
     Accrued compensation                                                                 352,500          19,781
     Accrued expenses                                                                      57,549          50,000
     Accrued interest                                                                     100,021           8,000
     Short-term convertible debt (net of debt discount of $442,623 (Note 6))               57,377               -
     Current maturities of long-term convertible debt (net of debt discount
         of $57,052 (Note 6))                                                             968,907               -

                                                                                ---------------------------------

Total Current Liabilities                                                               1,636,994         176,655

Loan From Shareholder (Note 7)                                                            149,000         109,000

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

Shareholders' Equity (Notes 2, 4, 5, and 6)
     Common stock; par value $.001 per share; 100,000,000 shares authorized;
         10,867,509 and 9,423,689 shares issued and outstanding, respectively              10,868           9,424
     Paid-in capital                                                                   20,461,632      18,780,291
     Deficit accumulated during the development stage                                 (10,221,448)     (7,066,135)
                                                                                ---------------------------------
Total Shareholders' Equity                                                             10,251,052      11,723,580

                                                                                ---------------------------------

                                                                                $      12,037,046  $   12,888,891
                                                                                =================================


                 See accompanying notes to financial statements.

                                      F-2



                         Provectus Pharmaceuticals, Inc.
                          (A Development Stage Company)


                      Consolidated Statements of Operations


                                                                                                       
                                                                           Restated            Restated             Restated
                                                                           (Note 8)            (Note 8)             (Note 8)
                                                                                                                    Cumulative
                                                                                             For the Period        Amounts from
                                                                                            January 17, 2002     January 17, 2002
                                                                           Year Ended        (inception) to      (inception) to
                                                                          December 31,        December 31,         December 31,
                                                                             2003               2002                  2003
----------------------------------------------------------             ---------------      ---------------     -----------------

Operating Expenses
     Research and development                                          $      724,924       $       50,714      $        775,638
     General and administrative (including noncash stock
         and warrant compensation of $280,621 in 2003 and
         $6,436,000 in 2002)                                                1,582,250            6,922,946             8,505,196
     Amortization of patents                                                  671,120               78,297               749,417
                                                                       ---------------      ---------------     -----------------

Total operating loss                                                       (2,978,294)          (7,051,957)          (10,030,251)

Gain on sale of fixed assets                                                   55,000                    -                55,000

Interest expense                                                             (232,019)             (14,178)             (246,197)
                                                                       ---------------      ---------------     -----------------

Net Loss Applicable to Common Shareholders                             $   (3,155,313)      $   (7,066,135)     $    (10,221,448)
                                                                       ===============      ===============     =================

Basic and Diluted Loss Per Common Share                                $        (0.33)      $        (0.89)
                                                                       ===============      ===============
Weighted Average Number of Common Shares
     Outstanding - Basic and Diluted                                        9,706,064            7,981,876
                                                                       ===============      ===============



                 See accompanying notes to financial statements.

                                      F-3


                         Provectus Pharmaceuticals, Inc.
                          (A Development Stage Company)


                 Consolidated Statements of Shareholders' Equity


                                                                                                         
------------------------------------------------------------------------------------------------------------------------------------
                                                                        Common Stock
                                                                 ------------------------
                                                                  Number of                   Paid-in     Accumulated
                                                                   Shares       Par Value     Capital       Deficit         Total
                                                                 ----------    ----------   -----------   ----------    ------------

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 Pharmaceuticals        500,007          500      12,225,820            -     12,226,320
     Exercise of warrants                                          452,919          453               -            -            453
     Warrants issued in connection with convertible debt                 -            -         126,587            -        126,587
     Stock and warrants issued for acquisition of Pure-ific         25,000           25          26,975            -         27,000
     Net loss for the period from April 23, 2002 (date of reverse
         merger) to December 31, 2002                                    -            -               -   (5,749,937)    (5,749,937)
                                                                 ---------     --------      ----------   -----------    -----------
Balance, at December 31, 2002                                    9,423,689        9,424      18,780,291   (7,066,135)    11,723,580


                                      F-4



                                                                        Common Stock
                                                                 --------------------------
                                                                  Number of                   Paid-in     Accumulated
                                                                    Shares     Par Value      Capital       Deficit         Total
                                                                 ---------     ---------    -----------  ------------ --------------

Balance, at December 31, 2002                                    9,423,689     $  9,424     $18,780,291  $(7,066,135) $  11,723,580

     Issuance of stock for services                                764,000          764         239,036            -        239,800
     Issuance of warrants for services                                   -            -         145,479            -        145,479
     Stock to be issued for services                                     -            -         281,500            -        281,500
     Employee compensation from stock options                            -            -          34,659            -         34,659
     Issuance of stock pursuant to Regulation S                    679,820          680         379,667            -        380,347
     Issuance of convertible debt with warrants                          -            -         601,000            -        601,000
     Net loss for the year ended December 31, 2003                       -            -               -   (3,155,313)    (3,155,313)

                                                                ----------     ---------    -----------  ------------  -------------

Balance, at December 31, 2003                                   10,867,509     $ 10,868     $20,461,632  ($10,221,448) $ 10,251,052
                                                                ==========     =========    ===========  ============  =============


                 See accompanying notes to financial statements.




                                      F-5


                         Provectus Pharmaceuticals, Inc.
                          (A Development Stage Company)


                      Consolidated Statements of Cash Flows

                                                                                                      

                                                                   Restated                 Restated               Restated
                                                                   (Note 8)                 (Note 8)               (Note 8)
                                                                                                                  Cumulative
                                                                                          For the Period         Amounts from
                                                                                         January 17, 2002      January 17, 2002
                                                                   Year Ended             (inception) to        (inception) to
                                                                December 31, 2003        December 31, 2002     December 31, 2003
                                                                -----------------        -----------------     -----------------

Cash Flows From Operating Activities
     Net loss                                                   $ (3,155,313)            $ (7,066,135)         $(10,221,448)
     Adjustments to reconcile net loss to net cash used in
         operating activities
         Depreciation                                                228,315                   39,446               267,761
         Amortization of patents                                     671,120                   78,297               749,417
         Amortization of original issue discount                     120,669                    6,243               126,912
         Amortization of deferred loan costs                          19,569                        -                19,569
         Compensation through issuance of stock                            -                  932,000               932,000
         Compensation through issuance of stock options               34,659                        -                34,659
         Issuance of stock for services                              144,650                5,504,000             5,648,650
         Issuances of warrants for services                          101,312                        -               101,312
         Gain on sale of fixed assets                                (55,000)                       -               (55,000)
         (Increase) decrease in assets net of acquisitions
            Prepaid expenses                                           9,254                  (35,481)              (26,227)
            Inventory                                                (72,578)                       -               (72,578)
         Increase (decrease) in liabilities
            Accounts payable                                           1,766                   95,229                96,995
            Accrued expenses                                         432,289                   77,781               510,070
                                                                  -----------            -------------           -----------
Net cash used in operating activities                             (1,519,288)                (368,620)           (1,887,908)
                                                                  -----------            -------------           -----------
Cash Flows From Investing Activities
     Proceeds from sale of fixed asset                               180,000                        -               180,000
     Capital expenditures                                             (3,301)                       -                (3,301)

                                                                  -----------           --------------           -----------
Net cash provided by investing activities                            176,699                        -               176,699
                                                                  -----------           --------------           -----------
Cash Flows From Financing Activities
     Proceeds from loans from shareholder                             40,000                  109,000               149,000
     Proceeds from convertible debt                                  525,959                1,000,000             1,525,959
     Proceeds from sale of common stock                              292,472                   25,000               317,472
     Proceeds from exercise of warrants                                    -                      453                   453
     Cash paid for deferred loan costs                               (69,530)                       -               (69,530)
     Purchase and retirement of common stock                               -                  (48,000)              (48,000)
                                                                  -----------          ---------------           -----------
Net cash provided by financing activities                            788,901                1,086,453             1,875,354
                                                                  -----------          ---------------           -----------


                                    (Cont'd)

                                      F-6



                         Provectus Pharmaceuticals, Inc.
                          (A Development Stage Company)


                      Consolidated Statements of Cash Flows

                                                                                                         

                                                                                                                        Cumulative
                                                                                               For the Period         Amounts from
                                                                                              January 17, 2002      January 17, 2002
                                                                          Year Ended            (inception) to       (inception) to
                                                                   December 31, 2003         December 31, 2002     December 31, 2003
                                                                   ------------------        -----------------    ------------------


Net Change in Cash                                                  $       (553,688)        $         717,833    $          164,145

Cash, at beginning of period                                                 717,833                         -                     -
                                                                    -----------------        -----------------    ------------------
Cash, at end of period                                              $        164,145         $         717,833    $          164,145
                                                                    =================        =================    ==================

Supplemental Schedule of Noncash Investing and Financing
     Activities
     2003
         Issuance or commitment to issue stock and warrants for prepaid services
              of $666,779.
         Stock  subscription   receivable  recorded  of  $87,875.   
         Discount on convertible debt with warrants of
              $500,000.
         Deferred loan costs through the issuance of warrants 
              of $101,000.
     2002
         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 $12,226,320.

         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-7


                         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 previous  acquisition,  the  Company  also  intends  to  develop,
     manufacture, and distribute over-the-counter  pharmaceuticals.  To date the
     Company has no material 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 may not have sufficient working capital to
     fund  operations  for the entire  fiscal year  ending  December  31,  2004.
     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 the 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.

                                      F-8


     Estimates

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Inventory

     Inventory, consisting principally of finished goods, is stated at the lower
     of cost or market. Cost is determined using a first-in, first-out method.

     Deferred Loan Costs

     The costs related to the issuance of the convertible debt, including lender
     fees, legal fees, due diligence  costs,  escrow agent fees and commissions,
     have been recorded as deferred loan costs and are being  amortized over the
     term of the loan using the effective  interest  method.  Additionally,  the
     Company  recorded  debt  discounts   related  to  warrants  and  beneficial
     conversion features issued in connection with the debt.

     Equipment and Furnishings

     Equipment  and  furnishings  acquired  through  the  acquisition  of Valley
     Pharmaceuticals,  Inc. (Note 2) have been stated at carry over basis. 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 $228,315 in 2003 and $39,446 in 2002.

     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.

     Patent Costs

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

     Patents at December  31, 2003 were  acquired as a result of the merger with
     Valley Pharmaceuticals, Inc. ("Valley") (Note 2). The majority shareholders
     of  Provectus  also  owned all of the shares of Valley  and  therefore  the
     assets  acquired from Valley were  recorded at their carry over basis.  The
     patents are being amortized over the remaining lives of the patents,  which
     range from 12-16 years.  Annual  amortization of the patents is expected to
     be approximately $671,000 per year for the next five years.

     Research and Development

     Research and  development  costs are charged to expense when  incurred.  An
     allocation of payroll  expenses was made based on a percentage  estimate of
     time spent.  The  research and  development  costs  include the  following:
     consulting  -  IT,  depreciation,   lab  equipment  repair,  lab  supplies,
     insurance,  legal - patents,  office supplies,  payroll expenses,  rental -
     building,  repairs,  software,  taxes and fees,  and  utilities.  The total
     research and development expenses incurred in 2003 are $724,924.  The total
     research and development expenses incurred in 2002 are $50,714.

     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.

     Since  inception  of the  Company on January  17,  2002,  the  Company  has
     generated tax net operating losses of approximately $2.7 million,  expiring
     in 2022 and 2023.  The Company  has not  recorded an income tax benefit for
     the net  operating  losses as 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.

                                      F-9


     The  amortization  of  patents  and  noncash  stock   compensation  is  not
     deductible  for tax  purposes.  In addition,  the Company may have acquired
     certain net operating losses in its acquisition of Valley  Pharmaceuticals,
     Inc. (Note 2).  However,  the amount of these net operating  losses has not
     been determined and even if recorded the amount would be fully reserved.

     Basic and Diluted Loss Per Common Share

     Basic and diluted  loss per common  share and diluted loss per common share
     is computed based on the weighted Per Common Share 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, 2003 are
     356,250  options,  905,000  warrants and 2,218,741 shares issuable upon the
     conversion of  convertible  debt and accrued  interest.  Additionally,  the
     Company is  committed to issue  80,000  warrants.  Included in the weighted
     average number of common shares outstanding are 416,606 shares committed to
     be issued but not outstanding at December 31, 2003.

     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 No. 123), but applies the intrinsic value method where
     compensation  expense,  if any, is recorded as the  difference  between the
     exercise price and the market price, as set forth in Accounting  Principles
     Board Opinion No. 25 for stock options  granted to employees and directors.
     Options granted to  non-employees  are accounted for under SAS 123. SAS 123
     requires options to be accounted for based on their fair value.

     On May 29, 2003,  the Company issued 452,000 stock options to employees and
     directors.  The options vest over three years with 188,000  options vesting
     on the date of grant.  The exercise  prices range from $0.26 to $0.60.  The
     exercise price for 352,000  options  granted was less than the market price
     on the date of grant. Accordingly, compensation


                                      F-10


     expense of $34,659 has been recorded in 2003.

     For stock  options  granted to  employees  during  2003,  the  Company  has
     estimated  the fair value of each option  granted  using the  Black-Scholes
     option pricing model with the following assumptions:


                                                                          2003
                                                                        --------

         Weighted average fair value per options granted *              $ 0.60

         Significant assumptions (weighted average)
             Risk-free interest rate at grant date                         2.0%
             Expected stock price volatility                               150%
             Expected option life (years)                                   10

          * The  weighted  average  fair  value for both the  options  less than
          market  price at date of grant and  options  equal to market  price at
          date of grant was $0.60.

     If the Company had elected to recognize  compensation  expense based on the
     fair value at the grant dates,  consistent  with the method  prescribed  by
     SFAS No. 123,  net loss per share would have been  changed to the pro forma
     amount indicated below:


                                                                  For the Period
                                                                January 17, 2002
                                                Year Ended          (inception)
                                               December 31,      to December 31,
                                                     2003                 2002
                                              ---------------    ---------------

  Net loss, as reported                       $    (3,155,313)   $  (7,066,135)
  Add stock-based employee compensation
      expense included in reported net loss            34,659                -
  Less total stock-based employee compensation
      expense determined under the fair
      value based method for all awards              (132,663)               -
                                              ----------------   ---------------

  Pro forma net loss                          $    (3,253,317)   $  (7,066,135)
                                              ================   ===============

  Basic and diluted loss per common share,
       as reported                           $        (0.33)    $        (0.89)


  Basic and diluted loss per common share,
       pro forma                              $       (0.34)    $        (0.89)



     Reclassifications

     Certain  2002  amounts  have been  reclassified  to  conform  with the 2003
     presentation.

     Recent Accounting Pronouncements

     In January  2003,  FASB  issued  Interpretation  No. 46,  Consolidation  of
     Variable  Interest  Entities  ("FIN 46"). In general,  a variable  interest
     entity is a corporation,  partnership,  trust or any other legal  structure
     used for business  purposes that either (a) does not have equity  investors
     with  voting  rights  or (b)  has  equity  investors  that  do not  provide
     sufficient  financial  resources for the entity to support its  activities.
     FIN 46 requires  certain variable  interest  entities to be consolidated by

                                      F-11


     the  primary  beneficiary  of the entity if the  investors  do not have the
     characteristics  of  a  controlling  financial  interest  or  do  not  have
     sufficient equity at risk for the entity to finance its activities  without
     additional   subordinated   financial  support  from  other  parties.   The
     consolidation requirements of FIN 46 apply immediately to variable interest
     entities created after January 31, 2003. The Company adopted the provisions
     of FIN 46  effective  February  1,  2003 and such  adoption  did not have a
     material impact on its consolidated financial statements since it currently
     has no variable  interest  entities.  In December 2003, the FASB issued FIN
     46R with respect to variable  interest  entities created before January 31,
     2003,  which among other  things,  revised the  implementation  date to the
     first fiscal year or interim  period ending after March 15, 2004,  with the
     exception  of  Special  Purpose   Entities   ("SPE").   The   consolidation
     requirements  apply to all SPE's in the first fiscal year or interim period
     ending after December 15, 2003.  The Company  adopted the provisions of FIN
     46R  effective  December 31, 2003 and such adoption did not have a material
     impact on its consolidated  financial  statements since it currently has no
     SPE's.

     In April 2003, FASB issued Statement of Financial  Accounting Standards No.
     149,  Amendment  of Statement  133 on  Derivative  Instruments  and Hedging
     Activities  ("SFAS  149").  SFAS 149 amends and  clarifies  accounting  for
     derivative  instruments,  including certain derivative instruments embedded
     in other contracts,  and for hedging activities under SFAS 133. SFAS 149 is
     effective for contracts and hedging  relationships entered into or modified
     after  June 30,  2003.  The  Company  adopted  the  provisions  of SFAS 149
     effective June 30, 2003 and such adoption did not have a material impact on
     its  consolidated  financial  statements  since the Company has not entered
     into any derivative or hedging transactions.

     In May 2003, FASB issued  Statement of Financial  Accounting  Standards No.
     150, Accounting for Certain Financial  Instruments with  Characteristics of
     Both  Liabilities and Equity ("SFAS 150").  SFAS 150 establishes  standards
     for how an issuer  classifies and measures  certain  financial  instruments
     with  characteristics  of both debt and  equity and  requires  an issuer to
     classify the following instruments as liabilities in its balance sheet:

     o    a  financial   instrument  issued  in  the  form  of  shares  that  is
          mandatorily  redeemable and embodies an unconditional  obligation that
          requires  the  issuer  to redeem it by  transferring  its  assets at a
          specified  or  determinable  date or upon an event  that is certain to
          occur;

     o    a financial instrument, other than an outstanding share, that embodies
          an obligation to repurchase the issuer's equity shares,  or is indexed
          to  such  an  obligation,  and  requires  the  issuer  to  settle  the
          obligation by transferring assets; and

     o    a financial instrument that embodies an unconditional  obligation that
          the issuer  must  settle by  issuing a  variable  number of its equity
          shares if the  monetary  value of the  obligation  is based  solely or
          predominantly  on (1) a  fixed  monetary  amount,  (2)  variations  in
          something other than the fair value of the issuer's equity shares,  or
          (3) variations  inversely  related to changes in the fair value of the
          issuer's equity shares.

                                      F-12



     In November  2003,  FASB issued FASB Staff Position No. 150-3 ("FSS 150-3")
     which deferred the effective dates for applying certain  provisions of SFAS
     150 related to  mandatorily  redeemable  financial  instruments  of certain
     non-public  entities  and certain  mandatorily  redeemable  non-controlling
     interests for public and non-public  companies.  For public entities,  SFAS
     150 is effective for mandatorily  redeemable financial  instruments entered
     into or  modified  after  May  31,  2003  and is  effective  for all  other
     financial  instruments as of the first interim period  beginning after June
     15, 2003. For mandatorily redeemable  non-controlling  interests that would
     not  have  to be  classified  as  liabilities  by a  subsidiary  under  the
     exception  in  paragraph  9  of  SFAS  150,  but  would  be  classified  as
     liabilities by the parent, the classification and measurement provisions of
     SFAS 150 are deferred indefinitely.  The measurement provisions of SFAS 150
     are  also   deferred   indefinitely   for  other   mandatorily   redeemable
     non-controlling  interests  that were issued before  November 4, 2003.  For
     those  instruments,  the  measurement  guidance for  redeemable  shares and
     non-controlling  interests  in other  literature  shall  apply  during  the
     deferral period.  The adoption of FAS 150 did not have a material impact on
     the consolidated financial statements of the Company.

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  $12,226,320  and included  patents of  $11,715,445  and  equipment  and
     furnishings of $510,875.

                                      F-13



3.   Commitments

     At December 31, 2003,  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
  ------------------------------------------------------------------------------
        2004                                                      $     15,214
        2005                                                             1,242
                                                                  --------------
        Total                                                     $     16,456
                                                                  ==============

     Total rental  expense  charged to operations  for 2003 and 2002 was $36,400
     and $10,200, respectively.

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, 2003, none of
          these  targets  have  been met and  accordingly,  no costs  have  been
          recorded.

     (g)  In 2003,  the Company issued 764,000 shares to consultants in exchange
          for services rendered,  consisting of 29,000 shares issued in January,
          35,000  shares  issued in March and 700,000  shares issued in October.
          Consulting  costs charged to operations were $95,133.  At December 31,
          2003,  $144,667 has been classified as prepaid  consulting  expense as
          this amount  represents  payments  for  services to be provided in the
          future. The shares are fully vested and non-forfeitable.

     (h)  In November and December 2003, the Company  committed to issue 341,606
          shares to  consultants in exchange for services  rendered.  Consulting
          costs  charged to  operations  were  $49,517.  At December  31,  2003,
          $231,983 has been  classified  as prepaid  consulting  expense as this
          amount represents  payments for services to be provided in the future.
          The shares are fully vested and non-forfeitable.

                                      F-14


     (i)  The  Company  applies  the  recognition  provisions  of SFAS No.  123,
          "Accounting  for  Stock-Based  Compensation,"  in accounting for stock
          options and warrants  issued to  nonemployees.  In January  2003,  the
          Company issued 25,000 warrants to a consultant for services  rendered.
          In February 2003, the Company issued 360,000 warrants to a consultant,
          180,000 of which were fully vested and non-forfeitable at the issuance
          and  180,000  of  which  were  cancelled  in  August  2003  due to the
          termination of the consulting contract. In September 2003, the Company
          issued  200,000  warrants to two  consultants in exchange for services
          rendered. In November 2003, the Company issued 100,000 warrants to one
          consultant in exchange for services rendered. As the fair market value
          of these  services was not readily  determinable,  these services were
          valued  based  on  the  fair  market  value,   determined   using  the
          Black-Scholes option-pricing model. Fair market value for the warrants
          ranged from $0.20 to $0.24.  Consulting  costs  charged to  operations
          were $101,312.  At December 31, 2003,  $44,167 has been  classified as
          prepaid  consulting  expense as this amount  represents  payments  for
          services to be provided in the future.  The prepaid consulting expense
          relates to warrants which are fully vested and non-forfeitable.

     (j)  In December  2003,  the  Company  commenced  an  offering  for sale of
          restricted common stock. As of December 31, 2003, the Company had sold
          874,871  shares at an average  gross  price of $1.18 per share.  As of
          December 31,  2003,  the Company has received net proceeds of $292,472
          and has recorded a stock subscription  receivable of $87,875 for stock
          subscriptions  prior to  December  31,  2003  for  which  payment  was
          received  subsequent  to  December  31,  2003.  The  transaction  is a
          Regulation S offering to foreign  investors as defined by Regulation S
          of the Securities  Act. The restricted  shares cannot be traded for 12
          months.  After the first 12 months, sales of the shares are subject to
          restrictions  under rule 144 for an additional  year.  The Company has
          engaged a placement agent to assist the offering. Costs related to the
          placement  agent of  $651,771  have  been  off-set  against  the gross
          proceeds  of  $1,032,118  and  therefore  are  reflected  as a  direct
          reduction of equity at December 31, 2003.  Subsequent  to December 31,
          2003,  an  additional   1,353,898  shares  have  been  issued  in  the
          Regulation S offering with proceeds to the Company of $587,403.

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
2,000,000 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.


                                      F-15



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.

The following table summarizes the options granted, exercised and outstanding as
of December 31, 2003. There were no options issued in 2002.


                                                                                             
                                                                                    Exercise          Weighted
                                                               Shares              Price Per           Average
                                                                                       Share          Exercise
                                                                                                         Price
                                                              --------        --------------          --------

Outstanding at January 1, 2003                                      -                      -                 -

Granted *                                                     452,000          $0.26 - $0.60             $0.38
Exercised                                                           -                      -                 -
Forfeited                                                     (95,750)         $0.26 - $0.32             $0.30

                                                              -------          -------------          --------

Outstanding at December 31, 2003                              356,250          $0.26 - $0.60             $0.40
                                                              =======          =============          ========

Options exercisable at
    December 31, 2003                                         187,500          $0.26 - $0.60             $0.47
                                                              =======          =============          ========



* Includes  352,000  options  granted at less than market  price with a weighted
average  exercise price of $0.31 and 100,000 options granted at a price equal to
market price with a weighted average exercise price of $0.60.


The following table summarizes  information  about stock options  outstanding at
December 31, 2003.



                                                                    

                                  Options Outstanding                 Options Exercisable
                       ----------------------------------------  ----------------------------
                                         Weighted
                           Number         Average      Weighted        Number         Weighted
                       Outstanding at   Remaining      Average     Exercisable at     Average
                        December 31,    Contractual    Exercise      December 31,     Exercise
        Exercise Price     2003           Life          Price           2003           Price
        -------------- -------------    ----------     --------     -------------     --------


              $0.26           12,500    9.58 years        $0.26          12,500         $0.26
              $0.32          243,750    9.58 years         0.32          75,000          0.32
              $0.60          100,000    9.58 years         0.60         100,000          0.60
        -------------- -------------    ----------     --------     -------------     --------

                             356,250    9.58 years        $0.40         187,500         $0.47
                       =============    ==========     ========     =============     ========



                                      F-16


     The  following  table  summarizes  the  warrants  granted,   exercised  and
outstanding as of December 31, 2003.

                                                                                    

                                                                                             Weighted
                                                                            Exercise          Average
                                                                            Price Per        Exercise
                                                   Warrants                  Warrant           Price
                                                  ---------               -------------      --------

Outstanding at January 1, 2003 (Note
  4(d))                                             100,000                       $2.29         $2.29
Granted                                           1,285,000               $0.25 - $1.25         $0.78
Exercised                                          (200,000)                      $0.75         $0.75
Forfeited                                          (180,000)              $0.25 - $0.50         $0.37

                                                  ---------               -------------      --------
Outstanding at December 31, 2003                  1,005,000               $0.25 - $2.29         $1.01
                                                  =========               =============      ========
Warrants exercisable at
    December 31, 2003                               905,000               $0.25 - $1.25         $0.87
                                                  =========               =============      ========


At December 31, 2003 there were 80,000 warrants committed but not issued.

The  following  table  summarizes  information  about  warrants  outstanding  at
December 31, 2003.


                                                                          

                               Warrants Outstanding                      Warrants Exercisable
                   ---------------------------------------------    -----------------------------
                                         Weighted
                          Number          Average      Weighted         Number           Weighted
                      Outstanding at     Remaining      Average      Exercisable at       Average
                        December 31,   Contractual     Exercise      December 31,        Exercise
  Exercise Price           2003             Life        Price            2003             Price
-------------------   --------------   -----------     --------     ---------------      --------


              $0.25           60,000          4.17        $0.25              60,000         $0.25
              $0.35           60,000          4.17        $0.35              60,000         $0.35
              $0.50           60,000          4.17        $0.50              60,000         $0.50
              $0.75          125,000          4.02        $0.75             125,000         $0.75
              $1.00          500,000          1.92        $1.00             500,000         $1.00
              $1.25          100,000          2.92        $1.25             100,000         $1.25
              $2.29          100,000          0.50        $2.29                   -             -
-------------------   --------------   -----------     --------     ---------------      --------

                           1,005,000          3.29        $1.01             905,000         $0.87
                      ==============   ===========     ========     ===============      ========



6.   Convertible Debt.

     (a) 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


                                      F-17


     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 any 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 in 2002 was  allocated  between the
     long-term  debt and the  warrants  on a  pro-rata  basis.  The value of the
     warrants was determined  using a  Black-Scholes  option pricing model.  The
     allocated  fair value of these  warrants was $126,587 and was recorded as a
     discount on the related  debt and is being  amortized  over the life of the
     debt using the  effective  interest  method.  Amortization  of $63,294  and
     $6,243 has been recorded as additional  interest expense as of December 31,
     2003 and 2002, respectively.

     In  2003,  an  additional   $25,959  was  added  to  the  convertible  debt
     outstanding.

     (b) On November 19, 2003, the Company completed a short-term unsecured debt
     financing in the aggregate  amount of $500,000.  The notes bear interest of
     8% and are due in full on November 19, 2004. The notes are convertible into
     common  shares at a  conversion  rate  equal to the lower of (i) 75% of the
     average market price for the 20 trading days ending on the 20th trading day
     subsequent to the effective  date or (ii) $0.75 per share.  Pursuant to the
     note agreements, the Company also issued warrants to purchase up to 500,000
     shares of the  Company's  common  stock at an  exercise  price of $1.00 per
     share. The warrants expire November 19, 2005.

     The  $500,000  proceeds  received  was  allocated  between the debt and the
     warrants on a pro-rata  basis.  The value of the  warrants  was  determined
     using a Black-Scholes option-pricing model. The allocated fair value of


                                      F-18



     these  warrants  was $241,655 and was recorded as a discount to the related
     debt. In addition,  the conversion price was lower than the market value of
     the Company's common stock on the date of issue. As a result, an additional
     discount of $258,345 was recorded for this beneficial  conversion  feature.
     The combined debt discount of $500,000 is being  amortized over the life of
     the debt using the effective  interest method.  Amortization of $57,377 has
     been recorded as additional interest expense as of December 31, 2003.

     In conjunction  with the debt  financing,  the Company  issued  warrants to
     purchase up to 100,000 shares of the Company's  common stock at an exercise
     price of $1.25 per share in  satisfaction  of a finder's  fee. The value of
     these  warrants  was  determined  to  be  $101,000  using  a  Black-Scholes
     option-pricing model. In addition, the Company incurred debt issuance costs
     of  $69,530  which  were  payable in cash.  Total  debt  issuance  costs of
     $170,530 have been recorded as a current asset and are being amortized over
     the  life of the  debt.  Amortization  of  $19,569  has  been  recorded  as
     additional interest expense as of December 31, 2003.

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. During 2003, the
     same shareholder loaned the Company an additional $40,000.  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.
     Accrued interest and interest expense at 12/31/03 was $7,431.  There was no
     accrued interest or interest expense at 12/31/02.

8.   Restatement

     During 2004, the Company  restated its historical  financial  statements to
     revise the value of its patents acquired from Valley Pharmaceuticals,  Inc.
     on November 19, 2002. During a detailed review of the accounting literature
     applicable  to the valuation of the patents upon  acquisition,  the Company
     determined that the guidance under Accounting  Principles Board Opinion No.
     29,  "Accounting  for  Nonmonetary   Transactions"   ("APB  29")  was  more
     appropriate  than the guidance  under  Statement  of  Financial  Accounting
     Standard No. 141, "Business Combinations"("SFAS 141"), which had originally
     been used by the  Company.  Under SFAS 141,  the Company used the date that
     the  transaction  was entered into to value the shares given up in exchange
     for the assets  acquired  compared  to using the date the  transaction  was
     completed as required under APB 29. Under APB 29, the restated value of the
     patents upon acquisition is $11,715,445  compared to the $20,037,560  value
     initially used by the Company.  The accompanying  financial  statements and
     notes reflect the restated amounts. The following tables detail the effects
     of the restatement:


                                                                     

                                                                  For the Period
                                                                January 17, 2002
                               Year Ended                       (inception) to
                               December 31, 2003                December 31, 2002
                               As                               As
                               Previously       As              Previously       As
                               Reported         Restated        Reported         Restated
Income Statement Data:
Amortization                    $   1,147,853    $     671,120   $     133,916    $      78,297
Total Operating Loss               (3,455,027)      (2,978,294)     (7,107,576)      (7,051,957)
Net Loss                           (3,632,046)      (3,155,313)     (7,121,754)      (7,066,135)
Basic and Diluted Loss
        Per Common Share                (0.37)           (0.33)          (0.89)           (0.89)

                                      At                                At
                               December 31, 2003                December 31, 2002
                               As                               As
                               Previously       As              Previously       As
                               Reported         Restated        Reported         Restated
Balance Sheet Data:
Patents, net of amortization       18,755,791       10,966,028      19,903,644       11,637,148
Total Assets                       19,826,809       12,037,046      21,155,387       12,888,891
Stockholders' Equity               18,040,815       10,251,052      19,990,076       11,723,580



                                      F-19


                                  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  Restated Articles of Incorporation of Provectus,  incorporated  herein
          by reference to Exhibit 3.1 to the Company's  Quarterly Report on Form
          10-QSB for the fiscal  quarter  ended June 30, 2003, as filed with the
          SEC on August 14, 2003.

     3.2  Bylaws of Provectus,  incorporated  herein by reference to Exhibit 3.2
          to the  Company's  Quarterly  Report  on Form  10-QSB  for the  fiscal
          quarter ended March 31, 2003, as filed with the SEC on May 9, 2003.

     4.1  Specimen certificate for the common shares, $.001 par value per share,
          of Provectus  Pharmaceuticals,  Inc., incorporated herein by reference
          to Exhibit 4.1 to the  Company's  Annual Report on Form 10-KSB for the
          fiscal year ended  December 31,  2002,  as filed with the SEC on April
          15, 2003.

  4.2.1+  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").

  4.2.2   Letter  Agreement  dated  January  31,  2003  between  the Company and
          Gryffindor,   incorporated  by  reference  to  Exhibit  4.2.2  to  the
          Company's  Quarterly Report on Form 10-QSB for the quarter ended March
          31, 2003, as filed with the SEC on May 9, 2003.

     4.3  Amended  and  Restated  Convertible  Secured  Promissory  Note  of the
          Company dated  January 31, 2003,  issued to  Gryffindor,  incorporated
          herein by reference to Exhibit 4.3 to the Company's  Quarterly  Report
          on Form 10-QSB dated March 31,  2003,  as filed with the SEC on May 9,
          2003.

     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.

     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.

                                      X-1

     4.6+ Stock  Pledge  Agreement  dated as of November  26,  2002  between the
          Company and Gryffindor.

     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,  incorporated  herein by reference to Exhibit 4.16 to the
          Company's  Annual  Report on Form  10-KSB  for the  fiscal  year ended
          December 31, 2002, as filed with the SEC on April 15, 2003.

     4.17+Common  Share  Purchase  Warrant  dated  January 29,  2003,  issued to
          Investor-Gate.com.

     4.18 Form of 8% Convertible  Debenture  incorporated herein by reference to
          Annex I to Exhibit  10.16 to the Company's  Registration  Statement on
          Form S-2, as filed with the SEC on February 12, 2004.

     4.19 Form of  Warrant  incorporated  herein  by  reference  to  Annex IV to
          Exhibit 10.16 to the Company's  Registration Statement on Form S-2, as
          filed with the SEC on February 12, 2004.

     4.20 Registration  Rights  Agreement  dated as of November  19, 2003 by and
          among the Company and the  investors  named  therein  incorporated  by
          reference to Annex IV to Exhibit 10.16 to the  Company's  Registration
          Statement on Form S-2, as filed with the SEC on February 12, 2004.

                                      X-2


     4.21 Registration  Rights  Agreement  dated as of  September 4, 2003 by and
          among  the  Company  and  Bruce A.  Cosgrove  and  George  F.  Martin,
          incorporated  herein by  reference  to  Exhibit  4.4 to the  Company's
          Registration  Statement on Form S-2, as filed with the SEC on February
          12, 2004.

     4.22 Form of Warrant issued to selling  shareholders  other than holders of
          8% Convertible Debentures, incorporated herein by reference to Exhibit
          4.5 to the Company's Registration Statement on Form S-2, as filed with
          the SEC on February 12, 2004.

     4.23 Registration  Rights  Agreement  dated as of December  26, 2003 by and
          between the Company and The Research Foundation of State University of
          New York,  incorporated  herein by  reference  to  Exhibit  4.6 to the
          Company's Registration Statement on Form S-2, as filed with the SEC on
          February 12, 2004.

     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.

   10.2** Provectus Pharmaceuticals,  Inc. Amended and Restated 2002 Stock Plan,
          incorporated  herein by  reference  to Exhibit  10.2 to the  Company's
          Quarterly  Report on Form 10QSB for the fiscal  quarter ended June 30,
          2003, as filed with the SEC on August 14, 2003.

     10.3 Consulting  Agreement  dated  August 15, 2002  between  Provectus  and
          Numark  Capital   Corporation   ("Numark"),   incorporated  herein  by
          reference  to  Exhibit  10.3 to the  Company's  Annual  Report on Form
          10-KSB for the fiscal year ended  December 31, 2002, as filed with the
          SEC on April 15, 2004.

     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  Agreem ent 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.,  incorporated herein by reference to Exhibit 10.7 to
          the  Company's  Annual Report on Form 10-KSB for the fiscal year ended
          December 31, 2002, as filed with the SEC on April 15, 2004.

     10.8 Confidentiality,  Inventions and Non-competition Agreement between the
          Company and H. Craig Dees, incorporated herein by reference to Exhibit
          10.8 to the Company's Annual Report on Form 10-KSB for the fiscal year
          ended December 31, 2002, as filed with the SEC on April 15, 2004.

     10.9 Confidentiality,  Inventions and Non-competition Agreement between the
          Company and  Timothy C. Scott,  incorporated  herein by  reference  to
          Exhibit  10.9 to the  Company's  Annual  Report on Form 10-KSB for the
          fiscal year ended  December 31,  2002,  as filed with the SEC on April
          15, 2004.

    10.10 Confidentiality,  Inventions and Non-competition Agreement between the
          Company  and Eric A.  Wachter,  incorporated  herein by  reference  to
          Exhibit  10.10 to the  Company's  Annual Report on Form 10-KSB for the
          fiscal year ended  December 31,  2002,  as filed with the SEC on April
          15, 2004.

  10.11.1 Letter  Agreement  dated  January  8, 2003  between  the  Company  and
          Investor  -  Gate.com,  incorporated  herein by  reference  to Exhibit
          10.11.1  to the  Company's  Quarterly  Report on Form  10-QSB  for the
          fiscal  quarter  ended March 31, 2003, as filed with the SEC on May 9,
          2003.

                                      X-3


 10.11.2  Termination  Letter  dated  February  28,  2003  from the  Company  to
          Investor-Gate.com, incorporated herein by reference to Exhibit 10.11.2
          to the  Company's  Quarterly  Report  on Form  10-QSB  for the  fiscal
          quarter ended March 31, 2003, as filed with the SEC on May 9, 2003.

   10.12  Letter  Agreement dated February 20, 2003 between the Company and SGI,
          incorporated  herein by  reference to Exhibit  10.12 to the  Company's
          Quarterly Report on Form 10-QSB for the fiscal quarter ended March 31,
          2003, as filed with the SEC on May 9, 2003.

   10.13  Letter  Agreement  dated  March  27,  2003  between  the  Company  and
          Josephberg  Grosz & Co.,  Inc.,  incorporated  herein by  reference to
          Exhibit 10.13 to the Company's Quarterly Report on Form 10-QSB for the
          fiscal  quarter  ended March 31, 2003, as filed with the SEC on May 9,
          2003.

   10.14  Settlement  Agreement  dated as of June 16,  2003 among  Kelly  Adams,
          Justeene   Blankenship,   Nicholas  Julian,   and  pacific  Management
          Services,  Inc.;  and  Provectus and Xantech,  incorporated  herein by
          reference to Exhibit 10.14 to the Company's Current Report on Form 8-K
          dated June 16, 2003, as filed with the SEC on June 26, 2003.

10.15***+ Material  Transfer  Agreement  dated  as  of  July  31,  2003  between
          Schering-Plough Animal Health Corporation and Provectus,  incorporated
          herein by reference to Exhibit 10.15 to the Company's Quarterly Report
          on Form 10-QSB for the fiscal  quarter  ended June 30, 2003,  as filed
          with the SEC on August 14, 2003.

   10.16  Securities  Purchase  Agreement  dated as of November  19, 2003 by and
          among the Company and the lenders named therein,  incorporated  herein
          by reference to Exhibit 10.16 to the Company's  Registration Statement
          on Form S-2, as filed with the SEC on February 12, 2004

   21.1   List of Subsidiaries.

   23.1   Consent of BDO Seidman, LLP.

   31.1+  Certification  of CEO pursuant to Rules 13a - 14(a) of the  Securities
          Exchange Act of 1934.

   31.2+  Certification  of CFO pursuant to Rules  13a-14(a)  of the  Securities
          Exchange Act of 1934.

     32+  Certification Pursuant to 18 U.S.C. ss. 1350.
--------------------------
     *    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.
     ***  Portions of the exhibits to this agreement have been omitted  pursuant
          to a request for confidential  treatment.  The omitted information has
          been filed separately with the SEC.
     +    Filed herewith.

                                      X-4


                                                                   Exhibit 4.2.1


                 Convertible Secured Promissory Note and Warrant
                               Purchase Agreement

     This CONVERTIBLE  SECURED  PROMISSORY NOTE AND WARRANT  PURCHASE  AGREEMENT
(the  "Agreement")  is made as of the 26th day of  November,  2002 by and  among
PROVECTUS PHARMACEUTICALS, INC., a Nevada corporation ("Provectus"),  GRYFFINDOR
CAPITAL PARTNERS I, L.L.C., a Delaware limited liability company  ("Gryffindor")
and Eric Wachter,  The Eric A. Wachter 1998 Charitable  Remainder  Trust,  Craig
Dees, The Dees Family Foundation,  Timothy C. Scott, The Scott Family Investment
Limited  Partnership,  Walter  Fisher,  The  Fisher  Family  Investment  Limited
Partnership, The Walt Fisher 1998 Charitable Remainder Trust, John T. Smolik and
The Smolik Family LLP (the "Shareholders").

                                    RECITALS

     WHEREAS, Photogen Technologies,  Inc. ("Technologies") and its wholly-owned
subsidiary  Photogen,  Inc.  ("Photogen")  have  been  involved  in two lines of
businesses since May of 1997,  namely the Therapeutic  Business  (defined in the
Separation  Agreement)  and the Diagnostic  Business  (defined in the Separation
Agreement);

     WHEREAS,  the  Shareholders  are or  were  shareholders,  directors  and/or
officers of Technologies and Photogen;

     WHEREAS, the Shareholders, Technologies and Photogen have entered into that
certain  Separation  Agreement,  dated as of July 29,  2002,  a copy of which is
attached hereto as Exhibit A (the "Separation Agreement"), pursuant to which the
Shareholders  obtained all of the capital stock of Photogen,  which entity holds
all of  the  rights,  title  and  interests  in and  to  the  assets  and  other
intellectual  property  rights  described on Schedule 1 to this  Agreement  (the
"Assets");

     WHEREAS,  pursuant to the Separation Agreement,  Technologies required that
Photogen change its name to Valley Pharmaceuticals, Inc. ("Valley");

     WHEREAS,  pursuant to (a) an Agreement and Plan of Reorganization  dated as
of  November  15,  2002 among  Provectus,  Provectus  Pharmaceuticals,  Inc.,  a
Tennessee  corporation  and  the  wholly  owned  subsidiary  of  Provectus  (the
"Subsidiary"),  Valley and the  Shareholders  and (b) an  Agreement  and Plan of
Merger dated as of November 15, 2002 among Provectus,  the Subsidiary and Valley
(collectively,  the "Reorganization Agreement"), the following transactions took
place: (i) the Subsidiary merged with and into Valley (the "Merger"),  such that
Valley  became a wholly owned  subsidiary  of  Provectus,  (ii)  Valley,  as the
surviving   corporation   in  that   merger,   changed   its  name  to   Xantech
Pharmaceuticals,  Inc.  ("Xantech"),  and (iii) upon the Merger, by operation of
law, Xantech, as a wholly owned subsidiary of Provectus,  held all of the right,
title and interest in and to the Assets;

     WHEREAS,  based on such representation and the other  representations  made
herein, Gryffindor and Provectus desire to enter into: (a) a convertible secured
promissory note in the original principal amount of $1,000,000,  a copy of which
is attached  hereto as Exhibit B (the  "Note"),  which Note shall be secured by,
among  other  things,  the Assets and the capital  stock of  Xantech,  and (b) a
warrant(s)  to purchase  shares of Provectus'  common stock,  a copy of which is
attached hereto as Exhibit C (the  "Warrant"),  all in accordance with the terms
and conditions  set forth herein and in the  Transaction  Documents  (defined in
Section 2.02(i)).

     NOW,  THEREFORE,  in consideration  of the foregoing,  the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby  acknowledged,  Gryffindor and Provectus  hereby
agree as follows:

                                    ARTICLE I
                                    ---------

                                   DEFINITIONS
                                   -----------

     1.01 Definitions.  In addition to the terms defined elsewhere herein,  when
used herein, the following capitalized terms have the meanings indicated:

                                      X-5


     "Act of  Bankruptcy"  means the  occurrence  of any of the  following  with
respect to Provectus: (a) an assignment for the benefit of its creditors; (b) an
admission  in writing of its  inability to pay its debts as they become due; (c)
filing of a voluntary  petition in bankruptcy;  (d) an adjudication a bankruptcy
or  insolvency;  (e)  filing  any  petition  or answer  seeking  for  itself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar  relief under any present or future  applicable law pertinent to such
circumstances;  (f) filing any answer  admitting or not  contesting the material
allegations  of a  bankruptcy,  insolvency  or similar  petition  filed  against
Provectus;  (g) seeking or consenting to, or acquiescing  in, the appointment of
any trustee,  receiver, or liquidator of Provectus; (h) 60 days elapse after the
commencement of an action against Provectus seeking reorganization, arrangement,
composition, readjustment,  liquidation, dissolution or similar relief under any
present or future  applicable law without such action being dismissed or without
all orders or proceedings thereunder affecting the operations or the business of
Provectus  being  stayed,  or if a stay of any  such  order  or  proceedings  is
thereafter set aside and the action setting it aside is not timely appealed;  or
(i) 60 days elapse after the appointment, without the consent or acquiescence of
Provectus  of any  trustee,  receiver  or  liquidator  thereof  or of all or any
substantial  part  of the  assets  and  properties  of  Provectus  without  such
appointment being vacated.

     "Act of Dissolution" means the occurrence of any action initiating,  or any
event that results in, the dissolution,  liquidation,  winding-up or termination
of Provectus.

     "Assets" means the assets and other intellectual  property rights described
on Schedule 1 to this Agreement.

     "Closing"  means  delivery by Provectus of the Note and Warrant in exchange
for delivery by Gryffindor of the related purchase amount following satisfaction
or waiver of all conditions  precedent to Gryffindor's  obligation to invest, as
set forth in Section 2.02.

      "Financing  Statements" means all UCC-1 Financing  Statements delivered in
connection  with this  Agreement  and any other  financing  statement  needed to
perfect a security  interest  in  Intellectual  Property  Rights (as  defined in
Section 3.14) in the U.S. Patent and Trademark Office.

     "GAAP" means the  generally  accepted  accounting  principles in the United
States of America as in effect from time to time.

     "Governmental Authority(ies)" when used in the singular, means any federal,
state or  local  governmental  or  quasi-governmental  instrumentality,  agency,
board, commission or department or any regulatory agency, bureau,  commission or
authority and, when used in the plural, means all such entities.

     "Key Employees" means Eric A. Wachter, Ph.D, Craig Dees, Ph.D., and Timothy
Scott, Ph.D.

     "Licenses"  means,   collectively,   all  rights,  licenses,   permits  and
authorizations  now  or  hereafter  issued  by  any  Governmental  Authority  in
connection with the operation or conduct of Provectus' Business.

     "Lien" means any pledge,  hypothecation,  assignment,  deposit arrangement,
lien,  security interest,  easement or encumbrance,  or preference,  priority or
other  security  agreement  or  preferential  arrangement  of any kind or nature
whatsoever (including, without limitation, any lease intended as security or any
title retention  agreement,  any financing lease having  substantially  the same
economic  effect as any of the  foregoing,  and the filing of, or  agreement  to
give, any financing  statement  perfecting a security interest under the Code or
comparable law of any jurisdiction).

     "Material  Adverse  Effect" means,  subject to any applicable cure or grace
periods,  a material  adverse  effect upon any of (a) the  financial  condition,
operations,  business or  properties of Provectus or its  Subsidiaries,  (b) the
ability of Provectus and its  Subsidiaries  to perform its material  obligations
under this  Agreement or any of the  Transaction  Documents or (c) the legality,
validity or enforceability of this Agreement, the Note, the Warrant or the other
Transaction Documents.

     "Obligations"  means,   collectively,   all  of  Provectus'   indebtedness,
liabilities  and  obligations  arising  under this  Agreement,  the  Transaction

                                      X-6


Documents and any renewals,  modifications,  and extensions thereof,  including,
but not limited to, the principal, interest, late charges and other sums due and
owing under the Note.

     "Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization,  association,  corporation, limited
liability company,  limited liability partnership,  institution,  public benefit
corporation,  entity  or  government  (whether  Federal,  state,  county,  city,
municipal or otherwise,  including,  without  limitation,  any  instrumentality,
division, agency, body or department thereof).

     "Provectus'  Business"  means the  owning  and  operating  of the  business
currently  operated  by  Provectus  and  its  Subsidiaries  including,   without
limitation, the Therapeutic Business.

     "Provectus  Constituent  Documents"  means,  Provectus'  and  each  of  its
Subsidiaries'  certificate  of  incorporation,  by-laws and all  amendments  and
supplements  thereto,   together  with  good  standing  certificates  from  each
jurisdiction  in which  Provectus and each of its  Subsidiaries  are required to
maintain good standing issued by the Secretary of State of such  jurisdiction no
earlier than ten (10) calendar days prior to the Closing.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Shares"  means the  shares of capital  stock of  Provectus  issuable  upon
conversion of the Note,  exercise of the Warrant and the conversion of any other
convertible security held by Gryffindor, its assigns or successors.

     "Subsidiary" means with respect to any Person, any corporation, association
or other entity of which  securities or other ownership  interests  representing
more than twenty percent (20%) of the ordinary  voting power are, at the time as
of which any  determination is being made, owned or controlled by such Person or
one or more  Subsidiaries  of such  Person  or by  such  Person  and one or more
Subsidiaries of such Person.  For the avoidance of doubt, the term  "Subsidiary"
shall include the Xantech Subsidiary.

     "Xantech  Subsidiary"  means the wholly-owned  subsidiary of Provectus that
contains the Therapeutic Business.

                                   ARTICLE II
                                   ----------

                       TERMS OF NOTE AND WARRANT PURCHASE
                       ----------------------------------

     2.01 The Closing.  The purchase and sale of the Note and Warrant  hereunder
shall take place at a closing (the "Closing") on November 26, 2002 (the "Closing
Date").  The  Closing  shall be held at the  offices  of Piper  Rudnick,  203 N.
LaSalle Street,  Chicago, IL, at 10:00 a.m. Central Time on the Closing Date, or
at such other time and place upon which  Provectus and  Gryffindor  shall agree.
If, at the Closing,  any of the  conditions  specified in Section 2.02 shall not
have been fulfilled,  Gryffindor,  at its election,  shall be relieved of all of
its obligations under this Agreement without thereby waiving any other rights it
may have by reason of such failure or such non-fulfillment.

     2.02 Conditions  Precedent To Gryffindor's  Obligations.  The obligation of
Gryffindor to purchase the Note and Warrant on the date hereof is subject to the
fulfillment,  or in its  sole  discretion  the  waiver,  by  Gryffindor,  of the
following conditions on or before the Closing Date:

         (a)  Accuracy  of   Representations   and   Warranties.   Each  of  the
representations  and  warranties  contained in this  Agreement  must be true and
accurate as of the Closing Date,  and Provectus  must have  performed all of its
obligations hereunder, including execution and delivery of all of the documents,
instruments,  and  certificates  required  by this  Agreement  in such forms and
substances as are satisfactory to Gryffindor and Gryffindor's counsel;

         (b)  Closing  of the  Photogen/Valley  Transactions.  The  transactions
contemplated by the Separation Agreement and the Reorganization  Agreement shall
have been completed,  and Provectus shall have delivered to Gryffindor  evidence
of the  completion  of such  transactions,  which  evidence  shall be reasonably
satisfactory  to Gryffindor  and shall include  evidence that, as of the Closing
Date (i) Xantech is a wholly owned subsidiary of Provectus,  (ii) certificate(s)
of name change and/or any other  documents  required by the United States Patent

                                      X-7


and Trademark Office have been filed to evidence the ownership by Xantech of the
Assets, and (iii) 500,007 shares of Common Stock of Provectus, in the aggregate,
have been transferred to the Shareholders in connection with the Merger.

         (c) Proprietary Information, Confidentiality,  Assignment of Inventions
and  Non-Compete  Agreements.  Each of the Key Employees shall have executed the
form of Proprietary Information,  Confidentiality,  Assignment of Inventions and
Non-Compete   Agreement  with  Provectus  attached  hereto  as  Exhibit  D  (the
"Confidentiality   Agreements"),   and  Provectus   shall  have  delivered  such
Confidentiality  Agreements to Gryffindor duly executed by the Key Employees and
Provectus.

         (d)  Board  of  Directors;  Observer  Rights.  Upon  the  Closing,  the
authorized  size of the Board of Directors  of  Provectus  shall be no less than
three but no greater than five directors, and of the Xantech Subsidiary shall be
no less than  three but no  greater  than five  directors,  and  Provectus,  the
Xantech  Subsidiary and their respective Boards of Directors and, as applicable,
shareholders  shall have granted one representative of Gryffindor to observe all
meetings  of the  Board  of  Directors  of each  of  Provectus  and the  Xantech
Subsidiary.  Upon securing directors' and officers' insurance in accordance with
Section 5.02 of this Agreement, the Major Shareholders shall cause Provectus and
the Xantech  Subsidiary to vote all of their Shares to elect one  representative
of  Gryffindor  to the Board of Directors of each of Provectus  and Xantech,  as
more fully set forth in the  Shareholders'  Agreement by and between the Company
and the Shareholders.

         (e) Budget.  Provectus  shall have  delivered  to  Gryffindor  a budget
reasonably  satisfactory  to Provectus and  Gryffindor,  which shall be attached
hereto as Schedule 2 (the "Budget").

         (f)  Certificates  and  Resolutions.  Provectus shall have delivered to
Gryffindor and counsel to Gryffindor:

             (i) Provectus Constituent Documents as in effect at Closing, by the
Secretary of Provectus and the applicable Subsidiaries;

             (ii)   Resolutions   of  the  Board  of  Directors  of   Provectus,
authorizing  and approving all matters in connection  with this  Agreement,  the
Transaction  Documents  and the  transactions  contemplated  hereby and thereby,
certified by the Secretary of Provectus as of the date hereof;

             (iii)   Resolution   of  the  Board  of  Directors  of   Provectus,
authorizing   and  reserving  for  issuance  the  Common  Shares  issuable  upon
conversion of the Note and the Common Shares exercisable under the Warrant; and

             (iv)  A  certificate,  executed  by  the  President  of  Provectus,
certifying to the fulfillment of the conditions set forth in Section 2.02 except
for the condition under subsections (h), (j), (l) and (m).

         (g) Transaction Documents. Provectus shall have delivered to Gryffindor
and counsel to Gryffindor:

             (i) the Note and Warrant, duly executed by Provectus;

             (ii) the Shareholders'  Agreement,  duly executed by Provectus, and
each of the Shareholders, a copy of which is attached hereto as Exhibit E;

             (iii)  the  Registration   Rights   Agreement,   duly  executed  by
Provectus, a copy of which is attached hereto as Exhibit F;

             (iv) the Security Agreement,  duly executed by Provectus, a copy of
which is attached hereto as Exhibit G;

             (v) the Trademark  Collateral Security Agreement,  duly executed by
Provectus, a copy of which is attached hereto as Exhibit H;

             (vi) the Patent and License  Security  Agreement,  duly executed by
Provectus, a copy of which is attached hereto as Exhibit I;

             (vii) the Copyright Security Agreement, duly executed by Provectus,
a copy of which is attached hereto as Exhibit J;

             (viii) the Guaranty,  duly executed by Xantech,  a copy of which is
attached hereto as Exhibit K;

                                      X-8


             (ix) the Security  Agreement,  duly executed by Xantech,  a copy of
which is attached hereto as Exhibit L;

             (x) the Trademark  Collateral Security Agreement,  duly executed by
Xantech, a copy of which is attached hereto as Exhibit M;

             (xi) the Patent and License  Security  Agreement,  duly executed by
Xantech, a copy of which is attached hereto as Exhibit N;

             (xii) the Copyright Security Agreement, duly executed by Xantech, a
copy of which is attached hereto as Exhibit O;

             (xiii) the Stock Pledge  Agreement,  duly executed by Provectus,  a
copy of which is attached hereto as Exhibit P;

             (xiv) the Financing Statements, duly executed by Provectus; and

             (xv) the  Confidentiality  Agreements and such other agreements and
documents necessary to consummate the transactions contemplated hereunder.

(collectively, the "Transaction Documents").

         (h) Opinion of Counsel.  Gryffindor shall have received an opinion from
Baker,  Donelson,  Bearman & Caldwell,  counsel for  Provectus,  dated as of the
Closing  Date,  addressed  to  Gryffindor,  in  form  and  substance  reasonably
satisfactory to Gryffindor.

         (i) Absence of Material  Adverse  Effect.  No events and/or  changes as
represented in Section 3.23 and Section 3.25 shall have occurred since September
30,  2002,  except as otherwise  permitted  pursuant to Section 3.23 and Section
3.25.

         (j) Due  Diligence.  Gryffindor  shall have completed its due diligence
review of Provectus and its Subsidiaries including,  without limitation,  review
of: (a) Provectus' and its Subsidiaries'  financial and accounting records;  (b)
Provectus' and its Subsidiaries'  corporate structure and corporate records; (c)
correspondence with existing and prospective customers;  (d) material contracts,
leases and license agreements; and (e) intellectual property,  including without
limitation all patents, copyrights and trademarks.

         (k) Authorizations.  As of the Closing, all notices and authorizations,
approvals or permits of, or filings with,  any  Governmental  Authority that are
required by law in connection with the lawful  consummation of the  transactions
contemplated  herein  and in the  Transaction  Documents  shall  have  been duly
obtained by Provectus and shall be effective on and as of the Closing.

         (l)  Fees  and  Expenses.  At the  Closing,  Provectus  shall  pay  (or
reimburse  Gryffindor  for) the fees and expenses of Gryffindor that are payable
in accordance with Section 6.01 of this Agreement.

         (m) Other  Matters.  All corporate and other  proceedings in connection
with the transactions  contemplated by this Agreement, the Transaction Documents
and all  documents  and  instruments  incident  to such  transactions  shall  be
reasonably  satisfactory in substance and form to Gryffindor and to its counsel,
and  Gryffindor  and its  counsel  shall  have  received  all  such  counterpart
originals or certified or other copies of such  documents as they may reasonably
request.

     2.03  Conditions  To The  Obligations  Of  Provectus.  The  obligations  of
Provectus  under this  Agreement  are subject to  fulfillment,  on or before the
Closing Date, of each of the following conditions:

         (a) Accuracy of Representations  and Warranties.  The  representations
and warranties of Gryffindor  contained in Article IV shall be true on and as of
the Closing Date.

         (b) Loan Amount.  Gryffindor  shall have  delivered  to  Provectus  the
amount to be loaned under the Note.

                                   ARTICLE III
                                   -----------

                   REPRESENTATIONS AND WARRANTIES OF PROVECTUS
                   -------------------------------------------

                                      X-9


     To induce Gryffindor to enter into this transaction,  Provectus and each of
the Shareholders,  jointly and severally, represents and warrants to Gryffindor,
as of the date hereof,  as follows (which  representations  and warranties shall
survive  the  execution  and  delivery  of this  Agreement  and the  Transaction
Documents and the funding of the original principal amount of the Note):

     3.01  Organization;  Good Standing.  Provectus and each of its Subsidiaries
are  corporations  duly formed,  validly  organized  and in good standing in the
their respective  states of incorporation and in good standing in every state in
which  Provectus  and each of its  Subsidiaries  are  required to maintain  good
standing  unless  failure  to do so will not  have a  Material  Adverse  Effect.
Provectus  has  delivered  to  Gryffindor  true and correct  copies of Provectus
Constituent  Documents,  which  documents  have not been amended and are in full
force and effect as of the date hereof.

     3.02 Power and Authority.  Provectus and each of the Shareholders have full
power and authority to enter into this Agreement and the  Transaction  Documents
to which each is a party, to incur the Obligations as contemplated  hereby,  and
to carry out the provisions of this Agreement and the  Transaction  Documents to
which each is a party.  Provectus  and each of the  Shareholders  have taken all
action  necessary  for the  execution  and  delivery of this  Agreement  and the
Transaction  Documents  and  for the  performance  by  Provectus  of each of its
obligations hereunder and thereunder.

     3.03  Enforceability.  Upon  execution  and delivery by each of the parties
hereto and thereto,  this Agreement and each of the Transaction  Documents shall
be the legal, valid and binding  obligations of Provectus,  its Subsidiaries and
the Shareholders and shall be enforceable  against  Provectus,  its Subsidiaries
and  the  Shareholders  each  in  accordance  with  its  terms  except  as  such
enforceability  may be limited by bankruptcy,  insolvency or similar laws and by
equitable principles.

     3.04  Litigation.  Neither  Provectus nor any of its  Subsidiaries has been
made a party to or threatened by any suits, actions,  claims,  investigations by
Governmental  Authorities  or legal,  administrative,  arbitration  or mediation
proceedings.  Provectus does not know of any reasonable basis or grounds for any
such suit, action, claim, investigation or proceeding.

     3.05  Orders;  Decrees;   Judgments.   There  are  no  outstanding  orders,
judgments, writs, injunctions or decrees of any court, Governmental Authority or
arbitration or mediation panel or tribunal against  Provectus,  its Subsidiaries
or any of the properties, assets or business of Provectus or its Subsidiaries.

     3.06 Non-Contravention. To the best of its knowledge, neither Provectus nor
any of its  Subsidiaries  is in breach of, in default under, or in violation of,
in any manner  that could  reasonably  be  expected  to have a Material  Adverse
Effect:  (a) any applicable law, decree,  or order, or (b) any deed, lease, loan
agreement, commitment, bond, note, deed of trust, restrictive covenant, license,
indenture,  contract,  or other  agreement,  instrument  or  obligation to which
Provectus  or  its  Subsidiaries  is a  party  or  by  which  Provectus  or  its
Subsidiaries  is bound or to which any of their  respective  assets are subject.
Neither the execution and delivery of this Agreement,  the Transaction Documents
nor  the  performance  by  Provectus  or its  Subsidiaries  of  the  obligations
hereunder  and  thereunder  will cause any such breach,  default or violation or
will require the consent,  approval or notification of any court or Governmental
Authority.

     3.07 Taxes.  Provectus and each of its Subsidiaries have filed all federal,
state and local tax returns  which are required to be filed,  and  Provectus and
each of its  Subsidiaries  have  duly  paid or fully  reserved  for all taxes or
installments  thereof  (including  any  interest or  penalties)  as and when due
pursuant to the filed returns or pursuant to any levy or assessment  received by
Provectus or any of its Subsidiaries unless the failure to do so will not have a
Material  Adverse  Effect.  Proper and accurate  amounts  have been  withheld by
Provectus  from its  employees  for all periods in full and complete  compliance
with the  tax,  social  security  and  unemployment  withholding  provisions  of
applicable  federal,  state,  local and foreign law, and such  withholdings have
been timely paid to the respective Governmental  Authorities.  Provectus and its
Subsidiaries  have provided to Gryffindor copies of all of each entity's Federal
tax returns for the last three (3) years, if any.  Federal income tax returns of
Provectus  and its  Subsidiaries  have not been audited by the Internal  Revenue
Service,  and no controversy with respect to taxes of any type is pending or, to
the knowledge of Provectus,  threatened. Neither Provectus, its Subsidiaries nor

                                      X-10


any of its  stockholders (or the stockholders of any Subsidiary) have ever filed
(a) an election  pursuant to Section 1362 of the Internal  Revenue Code of 1986,
as amended (the "Code"),  that  Provectus or its  Subsidiaries  be taxed as an S
Corporation or (b) a consent  pursuant to Section 341(f) of the Code relating to
collapsible corporations.

     3.08 Licenses.  Provectus and each of its  Subsidiaries  have good title to
all of the Licenses currently needed to properly operate Provectus' Business.

     3.09 Capitalization.

         (a) The authorized  capital stock of Provectus  consists of 100,000,000
shares of common stock, par value $0.001 per share (the "Common Stock") of which
8,945,770  shares of Common Stock are issued and  outstanding.  Of the 8,945,770
shares of Common Stock that are issued and outstanding, 7,773,694 are restricted
and 1,172,076 are unrestricted. The authorized capital stock of Xantech consists
of: (i)  10,000,000  shares of common stock,  no par value,  of which  6,680,000
shares are issued and outstanding, all of which are owned by Provectus; and (ii)
5,000,000  shares of common  stock,  no par value,  of which none are issued and
outstanding.

         (b) All of the issued and outstanding  shares of Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable.  Except
as set forth on Schedule 3.09, (i) no subscription, warrant, option, convertible
security or other right  (contingent  or  otherwise)  to purchase or acquire any
shares of capital stock of Provectus is authorized or outstanding, (ii) there is
no  commitment  of  Provectus  to  issue  any  subscription,   warrant,  option,
convertible security or other such right or to issue or distribute to holders of
any shares of its  capital  stock any  evidences  of  indebtedness  or assets of
Provectus,  and (iii)  Provectus has no obligation  (contingent or otherwise) to
purchase,  redeem or  otherwise  acquire any shares of its capital  stock or any
interest  therein  or to pay any  dividend  or make any  other  distribution  in
respect  thereof.  No person or entity is entitled to any  preemptive or similar
right with respect to the  issuance of any capital  stock of  Provectus,  or any
rights with respect to the  registration of any capital stock of Provectus under
the  Securities  Act. All of the issued and  outstanding  shares of Common Stock
have been offered,  issued and sold by Provectus in compliance  with  applicable
Federal and state  securities  laws.  To the best of  Provectus'  knowledge,  no
stockholder  of  Provectus  has granted  options or other rights to purchase any
shares of Common Stock from such stockholder.

         (c) All of the issued and  outstanding  shares of capital  stock of the
Xantech  Subsidiary  are owned by Provectus  free and clear of any and all Liens
and other encumbrances.

     3.10 Stockholder List and Agreements. Attached hereto as Schedule 3.10 is a
true and complete list of: (a) those equity holders of Provectus and each of its
Subsidiaries  that own five percent  (5%) or more of the issued and  outstanding
capital stock of Provectus and each Subsidiary as of the Closing;  and (b) those
equity  holders of  Provectus  and each of its  Subsidiaries  that are  officers
and/or directors of Provectus and each of its  Subsidiaries,  as applicable,  in
each case under (a) and (b),  showing  the  number of shares of Common  Stock or
other securities (or rights to purchase the Common Stock or other securities) of
Provectus and each  Subsidiary  held by each such  stockholder as of the date of
this  Agreement.  Except  as  contemplated  by  this  Agreement,  there  are  no
agreements, written or oral, between Provectus or a Subsidiary and any holder of
its capital stock, or, to the best knowledge of Provectus,  among any holders of
its capital stock, relating to the acquisition  (including,  without limitation,
rights of first  refusal or  preemptive  rights),  disposition  or voting of the
capital stock of Provectus or one of its Subsidiaries.

     3.11  Minute  Books.  The  minute  books  of  Provectus  and  each  of  its
Subsidiaries contain complete and correct summaries of all meetings of the Board
of Directors of Provectus and its Subsidiaries,  their respective committees and
their respective stockholders since 1995 with respect to Provectus and since the
time of incorporation with respect to each of its Subsidiaries, as applicable.

     3.12 Shares.  The Shares have been reserved by  Provectus,  will be validly
issued,  fully  paid  and  non-assessable  at such  time as they are  issued  to
Gryffindor  and will  constitute a portion of the capital  stock  authorized  by
Provectus.  Upon  conversion  of the Note or exercise of the Warrant,  Provectus
shall convey to Gryffindor all of the Shares free and clear of any and all Liens
or other  encumbrances  or  charges  of any kind not  created  by any  action of
Gryffindor.

                                      X-11


     3.13  Property  and Assets.  Schedule  3.13 sets forth all of the  material
assets  and  Intellectual   Property  Rights  necessary  to  operate  Provectus'
Business.  Provectus  and its  Subsidiaries  have  good  title  to all of  their
material  properties  and assets,  including the Assets and all  properties  and
assets reflected in the Financial Statements, except those disposed of since the
date thereof in the ordinary course of business,  and none of such properties or
assets is subject to any Lien other than those the  material  terms of which are
described in the Financial Statements or in Schedule 3.13. Set forth on Schedule
3.13 is a true  and  complete  list of all  leases  to which  Provectus  and its
Subsidiaries are a party,  and Provectus and its  Subsidiaries  have provided to
Gryffindor  copies  of all such  leases.  Provectus  and each  Subsidiary  is in
compliance with all material terms of each lease to which it is a party.

     3.14 Patents and Trademarks.

         (a) Set forth on Schedule  3.14 is a complete and accurate  list of all
patents, patent applications,  trademarks,  service marks, trademark and service
mark applications,  trade names, copyrights, licenses, internet domain names and
registrations  presently owned or held by Provectus and each of its Subsidiaries
or  necessary  for the  conduct  of  Provectus'  Business  as  conducted  and as
currently  proposed  to be  conducted,  as well  as any  agreement  under  which
Provectus or any of its Subsidiaries has access to any confidential  information
used by  Provectus  or its  Subsidiaries  in their  respective  businesses  (the
"Intellectual Property Rights"). Provectus and its Subsidiaries own, or have the
right to use,  free and clear of all Liens,  charges,  claims and  restrictions,
under the agreements  and upon the terms  described in Schedule 3.14, all of the
Intellectual Property Rights. Except as set forth on Schedule 3.14, there are no
outstanding  options,  licenses  or  agreements  of  any  kind  relating  to the
foregoing,  nor is  Provectus  or its  Subsidiaries  bound  by or a party to any
options,  licenses  or  agreements  of any kind  with  respect  to the  patents,
trademarks,  service marks, trade names,  copyrights,  trade secrets,  licenses,
information  and other  proprietary  rights and processes of any other person or
entity other than such licenses or agreements  arising from the purchase of "off
the shelf" or standard  products.  Except as set forth on Schedule 3.14, neither
Provectus nor any of its Subsidiaries has received any  communications  alleging
that Provectus or any of its  Subsidiaries  has violated or, by conducting their
respective  businesses as currently proposed,  would violate any of the patents,
trademarks,  service marks, trade names, copyrights,  licenses, trade secrets or
other   proprietary   rights  of  any  other  person  or  entity   ("Third-Party
Intellectual  Property  Rights"),  and  to the  best  of  Provectus'  knowledge,
Provectus' Business shall not cause Provectus or its Subsidiaries to infringe or
violate any Third Party Intellectual Property Rights.  Provectus is not aware of
any  violation  by any  third  party  of any  Intellectual  Property  Rights  of
Provectus or its Subsidiaries or of any defects therein or in the title thereto.
No Person or entity (including,  without  limitation,  any prior employer of any
employee of Provectus or its  Subsidiaries)  has any right to or interest in any
Intellectual  Property Rights,  inventions,  improvements,  discoveries or other
information   assigned  to  Provectus  or  its  Subsidiaries  by  any  employee,
consultant or contractor.

         (b)  Provectus  and  each  of its  Subsidiaries  has  taken  reasonable
security  measures  to protect  the  secrecy,  confidentiality  and value of all
Intellectual  Property  Rights and all  Inventions (as defined  below).  Each of
Provectus'  and its  Subsidiaries'  employees and other Persons or entities who,
either  alone  or in  concert  with  others,  developed,  invented,  discovered,
derived,  programmed or designed Intellectual Property Rights or Inventions,  or
who have  knowledge  of or access to  information  about  Intellectual  Property
Rights or  Inventions,  have entered into a written  agreement with Provectus or
its  Subsidiaries  that provides that (i) these  Intellectual  Property  Rights,
other  information and Inventions are proprietary to Provectus and are not to be
divulged,  misused  or  misappropriated,  and (ii) these  Intellectual  Property
Rights,  other  information and Inventions are to be disclosed by such employees
and such persons to Provectus and transferred by them to Provectus,  without any
further  consideration  being given therefor by Provectus,  together with all of
such  employee's  or other  person's  right,  title and  interest in and to such
Intellectual  Property Rights, other information and Inventions and all patents,
trademarks,  service marks,  trade names,  copyrights,  licenses and rights with
respect to such Intellectual  Property Rights, other information and Inventions.
As used herein, "Inventions" means all inventions,  developments and discoveries
which during the period of an employee's or other person's  service to Provectus
or a Subsidiary  he or she makes or conceives  of, either solely or jointly with
others,  that  relate  to any  subject  matter  with  which  his or her work for
Provectus or a Subsidiary  may be concerned,  or relate to or are connected with
the business,  products,  services or projects of Provectus or a Subsidiary,  or
relate to the actual or  demonstrably  anticipated  research or  development  of

                                      X-12


Provectus or a Subsidiary  or involve the use of  Provectus'  or a  Subsidiary's
time, material, facilities or trade secret information.

         (c) Each of the  Shareholders  have  assigned to Xantech all of his/its
right,  title and  interest in and to the  technologies  and other  intellectual
property  rights  associated  with the  Therapeutic  Business (as defined in the
Separation Agreement) as set forth in Schedule B to the Separation Agreement.


     3.15 Interested Party Transactions.  No officer, director or stockholder of
Provectus,  its  Subsidiaries  or any affiliate or "associate"  (as this term is
defined  in  Rule  405 of the  Securities  and  Exchange  Commission  under  the
Securities Act) of any such person or Provectus or its  Subsidiaries  has or has
had,  either  directly  or  indirectly,  (a) an interest in any person or entity
which (i) furnishes or sells services or products which are furnished or sold or
are proposed to be furnished or sold by Provectus or its  Subsidiaries,  or (ii)
purchases from or sells or furnishes to Provectus or its  Subsidiaries any goods
or services,  or (b) except as set forth on Schedule 3.15, a beneficial interest
in any  transaction,  contract or  agreement  to which  Provectus  or one of its
Subsidiaries is a party or by which it may be bound or affected.

     3.16 Financial Statements. Provectus has furnished to Gryffindor a complete
and  correct  copy  of  the  unaudited   balance  sheet  of  Provectus  and  its
Subsidiaries  (the "Balance Sheet") as of September 30, 2002 (the "Balance Sheet
Date") and the related  statements  of income and cash flows for the period then
ended, compiled by Provectus  (collectively,  the "Financial  Statements").  The
Financial  Statements have been prepared in accordance  with generally  accepted
accounting  principles,  except that the Financial Statement may not contain all
footnotes required by generally accepted accounting principles,  and are subject
to normal year-end audit adjustments that in the aggregate will not be material.
The Financial  Statements present fairly the financial  condition and results of
operations  of  Provectus  and its  Subsidiaries,  as at the  dates  and for the
periods indicated therein.

     3.17 Business  Plan.  The Business  Plan of Provectus and its  Subsidiaries
provided to  Gryffindor  is a complete  and correct  statement  of the  existing
business plans of Provectus and its Subsidiaries as of the Closing Date.

     3.18 Compliance.  To Provectus'  knowledge,  Provectus and its Subsidiaries
have, in all material respects,  complied with all laws,  regulations and orders
applicable to its business and have all material  permits and licenses  required
thereby.  There is no term or  provision of any  material  mortgage,  indenture,
contract,  agreement or instrument to which Provectus or a Subsidiary is a party
or by which it is bound, or, to the best of Provectus'  knowledge,  of any state
or Federal judgment, decree, order, statute, rule or regulation applicable to or
binding  upon  Provectus,   that  materially  adversely  affects  the  business,
prospects,  condition,  affairs or operations of Provectus,  its Subsidiaries or
any of their  respective  properties  or assets.  To  Provectus'  knowledge,  no
employee  of  Provectus  or a  Subsidiary  is in  violation  of any  contract or
covenant  (either with Provectus,  a Subsidiary or with another entity) relating
to   employment,    patent,    other   proprietary    information    disclosure,
non-competition, or non-solicitation.

     3.19  Subsidiaries.  Except for the Xantech Subsidiary and as otherwise set
forth  on  Schedule  3.19,  Provectus  has no  Subsidiaries  and does not own or
control,  directly  or  indirectly,   shares  of  capital  stock  of  any  other
corporation,  or any  interest  in  any  partnership,  joint  venture  or  other
non-corporate business entity or enterprise.

     3.20  Officers  and  Directors.  Schedule  3.20 sets forth a  complete  and
accurate  list of all  officers  and  directors  of  Provectus  and  each of its
Subsidiaries.

     3.21 Debt Owed by Provectus.  Except as set forth on Schedule 3.21, neither
Provectus nor any of its  Subsidiaries  owe any debt,  including any outstanding
interest,  to any Person or to any members of management,  directors,  officers,
principals,  founders,  or employees of Provectus or any Subsidiary,  other than
that debt  occurring  in the  ordinary  course of  business.  Provectus  and its
Subsidiaries  are not in default on all the  indebtedness  set forth on Schedule
3.22.

     3.22  Absence  of  Liabilities.  Except  as  disclosed  in  Schedule  3.22,
Provectus  and its  Subsidiaries  did not have,  as of September  30, 2002,  any
liabilities of any type which in the aggregate  exceed $5,000,  whether absolute

                                      X-13


or contingent, which were not fully reflected on the Financial Statements. Since
September  30,  2002,  Provectus  and its  Subsidiaries  have  not  incurred  or
otherwise  become  subject to any  liabilities  or  obligations  (contingent  or
otherwise).  Provectus and its Subsidiaries  are current on all debts,  accounts
payable and lease obligations.

     3.23 Material  Contracts and  Obligations.  Set forth on Schedule 3.23 is a
true  and  complete  list of all of the  following  written  and  material  oral
contractual obligations of Provectus and its Subsidiaries:

         (a) All employment and consulting agreements,  employee benefit, bonus,
pension,  profit-sharing,  stock  option,  stock  purchase and similar plans and
arrangements;

         (b) All agreements relating to the Intellectual Property Rights;

         (c)  All   contractual   obligations   under  which  Provectus  or  its
Subsidiaries is or may become obligated to pay any legal, accounting, brokerage,
finder's or similar  fees or expenses in  connection  with,  or has incurred any
severance pay or special  compensation  obligations that would become payable by
reason of, this Agreement or the consummation of the  transactions  contemplated
hereby;

         (d) All  contractual  obligations  to sell or otherwise  dispose of any
assets of  Provectus  and its  Subsidiaries  having a value in excess of $5,000,
except in the ordinary course of Provectus' or a Subsidiary's business;

         (e) All material  agreements with any stockholder,  officer or director
of Provectus or its  Subsidiaries,  or any  "affiliate"  or  "associate" of such
persons (as such terms are defined in the Securities  Act),  including,  without
limitation,  any agreement or other arrangement  providing for the furnishing of
services by, rental or real or personal  property  from, or otherwise  requiring
payments to, any such person or entity;

         (f)  All   contractual   obligations   under  which  Provectus  or  its
Subsidiaries  have any liability or obligation  constituting or giving rise to a
guarantee of any liability or obligation of any person or entity, or under which
any person or entity has any liability or obligation constituting or giving rise
to a guarantee of any liability or  obligation of Provectus or its  Subsidiaries
(including, without limitation, partnership and joint venture agreements);

         (g)  All   contractual   obligations   under  which  Provectus  or  its
Subsidiaries  are or may  become  obligated  to pay any  amount  in  respect  of
indemnification   obligations,   purchase  price   adjustment  or  otherwise  in
connection with any (i) acquisition or disposition of assets or securities, (ii)
merger, consolidation or other business combination, or (iii) series or group of
related transactions or events of a type specified in subclauses (i) and (ii);

         (h) All  material  distributorship  agreements,  agreements  with sales
representatives and all other contractual obligations and oral agreements (other
than  purchase  orders and sales orders  entered into in the ordinary  course of
business) with distributors,  suppliers, vendors, or other suppliers of goods or
services;

         (i) All purchase  obligations (whether or not in the ordinary course of
business) that require  minimum  purchases by Provectus or its  Subsidiaries  in
excess of $5,000;

         (j) All non-terminable  contractual obligations involving consideration
to or liabilities of Provectus or its Subsidiaries in excess of $5,000; and

         (k) All  contractual  obligations not required to be listed on Schedule
3.23  pursuant  to  clauses  (a)  through  (j) above that  individually  involve
liabilities of Provectus or its Subsidiaries in excess of $5,000.

     Provectus has delivered to Gryffindor and counsel for Gryffindor a true and
complete copy of each of the contracts and  agreements  listed on Schedule 3.23,
including,  without limitation, all amendments thereto (the "Listed Contracts").
All of the Listed  Contracts  are valid,  binding  and in full force and effect.
There are no written or oral "side  agreements"  with any individual or business
whereby  Provectus  or any  Subsidiary  has  agreed to do  anything  beyond  the
requirements  of  formal  written  contracts   executed  by  Provectus  and  its
Subsidiaries.

                                      X-14


     Each  contractual  obligation  in respect of the Listed  Contracts  is, and
after  giving  effect  to the  Closing  hereunder  and the  consummation  of the
transactions  contemplated  hereby will be,  enforceable  by  Provectus  and its
Subsidiaries  except for such failures to be so  enforceable  as do not and will
not, individually or in the aggregate, have a Material Adverse Effect. No breach
or  default  by  Provectus  or any  Subsidiary  under  any  of  the  contractual
obligations  in respect of the Listed  Contracts has occurred and is continuing,
and no event has  occurred  that with  notice or lapse of time would  constitute
such a breach or default or permit termination,  modification or acceleration by
any other person or entity under any of the contractual obligations,  other than
such  breaches,  defaults  and  events  as  have  not  had and  will  not  have,
individually or in the aggregate, a Material Adverse Effect. To the knowledge of
Provectus,  no breach or default by any other  person or entity under any of the
contractual  obligations  has  occurred  and is  continuing,  and no  event  has
occurred  that with  notice or lapse of time would  constitute  such a breach or
default or permit termination,  modification or acceleration by Provectus or any
Subsidiary  under any of such  contractual  obligations,  other  than  breaches,
defaults and events that have not had and will not have,  individually or in the
aggregate, a Material Adverse Effect.

         3.24 Absence of Changes.  Except as set forth on Schedule  3.24,  since
September 30, 2002, there has not been:

             (a) Any change in the assets,  liabilities,  financial condition or
operations of Provectus or any Subsidiary,  other than changes  occurring in the
ordinary  course of  business,  none of which has had or is  expected  to have a
Material Adverse Effect;

             (b) Any  damage,  destruction  or loss,  whether or not  covered by
insurance, which has, or could have a Material Adverse Effect;

             (c) Any waiver by Provectus or any  Subsidiary of a valuable  right
or of a material debt owed to it;

             (d)  Any  direct  or  indirect  loans  made  by  Provectus  or  any
Subsidiary to any shareholder, employee, officer or director of Provectus or any
Subsidiary, other than advances made in the ordinary course of business;

             (e)  Any  material  change  in  any  compensation   arrangement  or
agreement with any employee, officer, director or shareholder;

             (f)  Any   declaration   or  payment  of  any   dividend  or  other
distribution of the assets of Provectus;

             (g) Any satisfaction or discharge of any lien, claim or encumbrance
or payment of any  obligation  of  Provectus  or any  Subsidiary,  except in the
ordinary course of business;

             (h)  Any  debt,  obligation  or  liability  incurred,   assumed  or
guaranteed by Provectus or any Subsidiary,  except those for immaterial  amounts
and for current liabilities incurred in the ordinary course of business;

             (i) Any sale,  assignment  or transfer of any patents,  trademarks,
copyrights, trade secrets or other intangible assets;

             (j) Any change or  amendment  to any  material  agreement  to which
Provectus or a Subsidiary is a party or by which it is bound;

             (k) To  Provectus'  knowledge,  any other event or condition of any
character  that,  either  individually  or  cumulatively,  has,  or could have a
Material Adverse Effect; or

             (l) Any arrangement or commitment by Provectus or any Subsidiary to
do any of the acts described in Section 3.24(a) through (k) above.

     3.25  erisa.  Provectus  and its  Subsidiaries  do not  have  or  otherwise
contribute  to or  participate  in any  employee  benefit  plan  subject  to the
Employee  Retirement  Income  Security Act of 1974 other than a medical  benefit
plan and a 401(k) plan,  with respect to which all required  contributions  have
been made and all applicable laws have been complied with.

     3.26  Conduct.  Within  the past five (5)  years,  none of the  members  of
management,   directors,  officers,  principals,   founders,  key  employees  of

                                      X-15


Provectus  or any  Subsidiary  have been  arrested,  charged or convicted of any
felony  or  other  crime of  moral  turpitude  or  plead  guilty  or plead  nolo
contendere to any felony or other crime of moral turpitude, nor are they engaged
in  criminal  activity,  nor have any of them been  bankrupt  or an  officer  or
director of a bankrupt company.

     3.27 Environmental Matters. To Provectus' knowledge,  neither Provectus nor
its  Subsidiaries  are in  violation  of any  applicable  Environmental  Law (as
defined  below)  or any  applicable  statute,  law  or  regulation  relating  to
occupational health and safety, and, to its knowledge,  no material expenditures
are or will be required in order to comply with any such existing  statute,  law
or regulation or  Environmental  Law.  Except as set forth on Schedule  3.27, no
Hazardous  Materials (as defined below) are used or have been used,  stored,  or
disposed of by Provectus or any Subsidiary or, to Provectus'  knowledge,  by any
other person or entity on any property owned, leased or used by Provectus or any
Subsidiary.  For  purposes  of this  Agreement,  "Environmental  Law"  means any
federal,  state or local  law,  statute,  rule or  regulation  or the common law
relating  to the  protection  of human  health  or the  environment,  including,
without  limitation,  CERCLA (as defined below),  the Resource  Conservation and
Recovery  Act of  1976,  any  statute,  regulation  or order  pertaining  to (i)
treatment, storage, disposal, generation and transportation of industrial, toxic
or hazardous  materials or  substances  or solid or hazardous  waste;  (ii) air,
water and noise pollution;  (iii) groundwater and soil  contamination;  (iv) the
release or  threatened  release into the  environment  of  industrial,  toxic or
hazardous  materials  or  substances,  or solid or  hazardous  waste,  including
without  limitation,  emissions,  discharges,  injections,  spills,  escapes  or
dumping of pollutants, contaminants, chemicals; (v) the protection of wild life,
marine life and  wetlands,  including  without  limitation  all  endangered  and
threatened species; (vi) storage tanks vessels,  abandoned or discarded barrels,
containers  and other closed  receptacles;  (vii) health and safety of employees
and other  persons;  and  (viii)  manufacture,  processing,  use,  distribution,
treatment,   storage,  disposal,   transportation  or  handling  of  pollutants,
contaminants,  toxic or hazardous  materials or  substances  or oil or petroleum
products  or  solid  or  hazardous  waste.  For the  purposes  of the  preceding
sentence,  "Hazardous  Materials"  shall mean (a) materials  which are listed or
otherwise  defined as "hazardous" or "toxic" under any  Environmental Law or (b)
any petroleum products or nuclear  materials.  As used in this Section 3.28, the
terms  "release"  and  "environment"  shall  have the  meaning  set forth in the
federal Comprehensive Environmental Response,  Compensation and Liability Act of
1980 ("CERCLA").

     3.28 Real Property.  Neither  Provectus nor its  Subsidiaries  own any real
property.  Except as  provided  on  Schedule  3.28,  neither  Provectus  nor its
Subsidiaries  lease any real property or hold any leasehold interest in any real
property. To the extent Provectus or its Subsidiaries lease any real property or
hold any  leasehold  interest in any real  property,  neither  Provectus nor its
Subsidiaries  are in breach of any agreement  with respect to such real property
or leasehold interest.

     3.29 No Brokers.  No broker or finder  acting on behalf of Provectus or its
Subsidiaries brought about the obtaining,  making or closing of the transactions
contemplated  by this  Agreement  and the  Transaction  Documents,  and  neither
Provectus nor its  Subsidiaries  have any obligation to any Person in respect of
any finder's or brokerage fees in connection with the transactions  contemplated
by this Agreement and the Transaction Documents.

     3.30 Disclosures; No Untrue Statements Or Material Omissions. Provectus has
provided  Gryffindor with all information  requested in writing by Gryffindor in
connection with its decision to enter into the transactions contemplated by this
Agreement and the Transaction  Documents,  including all  information  Provectus
believes is reasonably necessary to make such investment decision.  Neither this
Agreement,  the Schedules and Exhibits hereto, the Transaction Documents nor any
other  document  delivered by Provectus to Gryffindor or its attorneys or agents
in connection herewith or therewith or with the transactions contemplated hereby
or thereby,  contain any untrue statement of a material fact nor omit to state a
material  fact  necessary in order to make the  statements  contained  herein or
therein not misleading. To Provectus' knowledge following due inquiry, there are
no facts  (individually  or in the aggregate) that would have a Material Adverse
Effect that have not been set forth in the Agreement, the Schedules and Exhibits
hereto, the Transaction  Documents or in other documents delivered to Gryffindor
or its attorneys or agents in connection herewith.

                                   ARTICLE IV
                                   ----------

                                      X-16


                   REPRESENTATIONS & WARRANTIES OF GRYFFINDOR
                   ------------------------------------------

     Gryffindor hereby represents and warrants to Provectus as follows:

     4.01  Organization;  Good  Standing.  Gryffindor  is duly  formed,  validly
organized  and in good standing in the State of Delaware and in good standing in
every state in which  Gryffindor is required to maintain  good  standing  unless
failure to do so will not have a Material Adverse Effect.

     4.02  Authority.  Gryffindor has full power and authority to enter into and
to perform this Agreement in accordance  with its terms.  Gryffindor  represents
that it has not been organized,  reorganized or  recapitalized  specifically for
the purpose of investing in Provectus.

     4.03  Enforceability.  Upon  execution  and delivery by each of the parties
hereto and thereto,  this Agreement and each of the Transaction  Documents shall
be the  legal,  valid  and  binding  obligations  of  Gryffindor  and  shall  be
enforceable  against Gryffindor each in accordance with its terms except as such
enforceability  may be limited by bankruptcy,  insolvency or similar laws and by
equitable principles.

     4.04 Acquisition of the Shares

         (a)  Gryffindor  is  acquiring  the Note,  the  Warrant  and the Shares
issuable  upon  conversion  of the  Note and the  exercise  of the  Warrant  for
Gryffindor's  own account for  investment and not with a view to, or for sale in
connection with, any  distribution  thereof,  nor with any present  intention of
distributing  or selling the same; and Gryffindor has no present or contemplated
agreement,  undertaking,  arrangement,  obligation,  indebtedness  or commitment
providing for the disposition thereof.

         (b) Gryffindor has reviewed  carefully the  representations  concerning
Provectus,  its Subsidiaries and their business contained in this Agreement, has
made detailed inquiry concerning Provectus, its Subsidiaries, their business and
their personnel; the officers of Provectus have made available to Gryffindor any
and all  written  information  which they have  requested  and have  answered to
Gryffindor's  satisfaction  all  inquiries  made  by  Gryffindor  or  any of its
representatives;  and  Gryffindor  has  sufficient  knowledge and  experience in
investing  in  companies  similar to  Provectus so as to be able to evaluate the
risks and merits of its investment in Provectus and is able  financially to bear
the  risks  thereof.  Gryffindor  is an  "accredited  investor"  as that term is
defined  in Rule  501(a) of  Regulation  D  promulgated  by the  Securities  and
Exchange Commission under the Securities Act of 1933, as amended.

                                    ARTICLE V
                                    ---------

                                    COVENANTS
                                    ---------

     Until such time as (i) all  principal  and interest due and owing under the
Note is paid in full or (ii)  the  Shares  issued  upon  conversion  of the Note
(including any accrued but unpaid  interest) and the Shares issued upon exercise
of the Warrant are  registered,  and for as long as Gryffindor owns at least ten
percent (10%) of the Shares issued upon  conversion of the Note  (including  any
accrued but unpaid  interest),  Provectus and the  Shareholders  shall take such
steps,  and  shall  cause  each of its  Subsidiaries  to  take  such  steps,  as
appropriate to do the following:

     5.01 Notice Of Defaults Or Judgments. Provide to Gryffindor, within fifteen
(15)  calendar  days of receipt  thereof,  a copy of notice of any (a)  defaults
under  any  of the  Transaction  Documents,  (b)  Act  of  Bankruptcy  or Act of
Dissolution  with respect to Provectus  or any  Subsidiary,  (c) default that is
declared  (after giving effect to any  applicable  notice and/or grace  periods)
under  any  material  loan,  lease,  debt  or  obligation  of  Provectus  or any
Subsidiary,  including  but not limited to the  Obligations,  and the failure to
cure such  default  could  reasonably  be  expected  to have a Material  Adverse
Effect,  or (d) judgment  obtained  against  Provectus or any  Subsidiary  that,
singly,  or in the aggregate,  exceeds $20,000 and remains unpaid for over sixty
(60) days without Provectus obtaining a stay of execution, release, discharge or
appropriate surety bond.

     5.02  Insurance.  Within thirty (30)  calendar  days  following the Closing
Date,  obtain  for  Provectus  and  each of its  Subsidiaries  and,  thereafter,

                                      X-17


maintain in full force and effect,  one or more policies of insurance  issued by
insurers of recognized responsibility,  insuring Provectus, its Subsidiaries and
their respective properties and businesses against losses and risks,  including,
but not limited to, directors' and officers',  comprehensive  general liability,
product  liability,  automobile and errors and omissions  insurance  coverage in
amount(s) and on terms and conditions reasonably satisfactory to Gryffindor.

     5.03  Access  To  Information.   Permit   Gryffindor,   or  any  authorized
representative  thereof,  to visit and inspect the  properties  of Provectus and
each of its  Subsidiaries,  including their  respective  corporate and financial
records,  to make copies and abstracts  thereof and to discuss their  respective
business and finances with officers,  employees and  independent  accountants of
Provectus  and  its   Subsidiaries,   during  normal  business  hours  following
reasonable notice and as often as may be reasonably requested.

     5.04  Maintain  Existence.  Preserve  and  keep in full  force  and  effect
Provectus'  and  its  Subsidiaries'  respective  corporate  existences  in  good
standing and their respective rights to conduct their respective businesses in a
prudent and lawful  manner in all  jurisdictions  in which it conducts  business
except to the extent that the failure to do so would not have a Material Adverse
Effect on Provectus.

     5.05  Licenses.  Keep all Licenses  needed to properly  operate  Provectus'
Business valid and in full force and effect.

     5.06 Non-Disclosure,  Developments and Non-Competition  Agreement.  Require
all persons now or hereafter employed by Provectus or any of its Subsidiaries to
enter into the form of Proprietary Information,  Confidentiality,  Assignment of
Inventions and Non-Compete  Agreement with Provectus  attached hereto as Exhibit
D. Provectus will not make any material  change to such form or such  agreements
signed by the  Shareholders  without the prior  written  consent of  Gryffindor,
which consent shall not be unreasonably withheld.

     5.07  Expenses of  Directors.  Promptly  reimburse in full each  Gryffindor
Director for all of his or her  reasonable  out-of-pocket  expenses  incurred in
attending  each  meeting  of the Board of  Directors  of  Provectus  and/or  its
Subsidiaries  or any committee  thereof or incurred in connection with any other
travel  requested by or on behalf of Provectus  and/or its  Subsidiaries,  which
expenses shall be consistent with the travel policies of Provectus.

     5.08 Reservation of Common Stock.  Reserve and maintain a sufficient number
of shares of Provectus  Common Stock for issuance upon  conversion of all of the
outstanding Shares.

     5.09 Board of Directors Meetings.  Initially require the Board of Directors
to meet monthly until such time as the Board of Directors  unanimously  votes to
schedule  such meetings  less  frequently,  provided that the Board of Directors
shall meet at least twice each quarter  unless  waived by  Gryffindor  Director.
Provectus and each of its  Subsidiaries  shall provide  Gryffindor  with advance
written  notice of all  meetings of their  respective  Boards of  Directors  and
committees  thereof and copies of all meeting  minutes  thereto,  regardless  of
whether Gryffindor is represented on the applicable Board of Directors.

     5.10 Auditor.  Retain a firm of certified public accountants  acceptable to
Provectus' board of directors (including Gryffindor Director) to audit its books
and records at least annually.

     5.11 No Liens.  Upon  conversion  of the Note or exercise  of the  Warrant,
convey to Gryffindor all of the applicable  Shares free and clear of any and all
Liens or other  encumbrances or charges of any kind not created by any action of
Gryffindor.

     5.12 Financial Statements and Other Information.

         (a) Provectus shall maintain books and records of account in which full
and correct entries shall be made of all of its business  transactions  pursuant
to a system of accounting  established and  administered in accordance with GAAP
consistently  applied, and shall set aside on its books all such proper accruals
and reserves as shall be required under GAAP, consistently applied.

         (b) Provectus shall deliver to Gryffindor:

             (i) within  sixty (60)  calendar  days after the end of each fiscal
quarter,  unaudited  consolidated  financial  statements of Provectus (including

                                      X-18


balance sheet,  statement of earnings,  stockholder's equity and cash flows) for
such quarter,  year-to-date and compared to budget and the comparable  period of
the prior year,  prepared in accordance  with GAAP,  with the exception  that no
notes need be attached to such statements and year-end audit adjustments may not
have been made;

             (ii) within  ninety (90) calendar days after the fiscal year's end,
audited  annual  consolidated  financial  statements  prepared  by a  nationally
recognized  independent  public accounting firm or such other independent public
accounting firm  reasonably  acceptable to Gryffindor and prepared in accordance
with GAAP, consistently applied;

             (iii) not less than sixty (60) calendar days prior to the beginning
of each fiscal year an annual  operating plan and budget,  prepared on a monthly
basis for the ensuing fiscal year, and on a basis  consistent with prior periods
(including, among other items, appropriate reserves, accruals and provisions for
income  taxes)  and  representing  the best  estimate  of  Provectus  based upon
available  information.  Provectus  also shall furnish to  Gryffindor,  within a
reasonable  time of its  preparation,  amendments to the annual budget,  if any.
Such  budget  shall  include  underlying  assumptions  and a  brief  qualitative
description of Provectus' plan by the Chief Executive Officer or Chief Financial
Officer in support of that budget;

             (iv) within  forty-five (45) days of the close of any fiscal year a
revised/updated three (3)-year business plan of Provectus;

             (v) any  management  letters and other any reports to management of
Provectus  by  accounting  firms  concerning   internal  controls  or  operating
procedures; and

             (vi)  such  other  information   respecting   Provectus'  business,
financial  condition or prospects as Gryffindor may reasonably request from time
to time.

         (c)  The  foregoing  financ  ial  statements  shall  be  prepared  on a
consolidated basis if Provectus then has any Subsidiaries.

         (d) The financial  statements  delivered pursuant to  subsections(b)(i)
and (ii) shall be  accompanied by a certificate  of Provectus'  Chief  Executive
Officer and Chief  Financial  Officer  stating  that such  statements  have been
prepared in  accordance  with GAAP  consistently  applied  (except as noted) and
fairly  present the  financial  condition and results of operations of Provectus
and its Subsidiaries at the date thereof and for the periods covered thereby.

         (e) If Provectus  fails to provide the reports or financial  statements
required by this Section 5.12,  within  thirty (30) days after  written  request
therefore,  Gryffindor  shall have the right and authority,  at Provectus'  sole
expense,  to request an audit by an accounting firm of its or their choice, such
that the  reports or  financial  statements  are  produced  to its or their sole
satisfaction.

     5.13 Material Adverse Changes.  Provectus shall notify Gryffindor,  as soon
as practicable,  and in any event within ten (10) days of discovery, of: (a) any
event  (including  pending or threatened  litigation)  which could reasonably be
expected  to  involve  an amount in excess of  $10,000  or could have a Material
Adverse Effect; (b) a material default or any event or occurrence which with the
lapse of time or notice or both could become a default  under any of  Provectus'
Material  Agreements;  (c) a default or any event or  occurrence  which with the
lapse of time or  notice or both  could  become a  default  under  the  Purchase
Agreement;  and (d) any change in any material fact or circumstance  represented
or warranted in this Agreement.  Such notice shall contain a reasonably detailed
statement outlining such default or event, and Provectus' proposed response.

     5.14  Directors'   Liability  and   Indemnification.   Provectus'  and  its
Subsidiaries'  Certificate  of  Incorporation  and Bylaws shall provide for: (a)
elimination  of the  liability of directors to the maximum  extent  permitted by
law; and (b) indemnification of directors for acts on behalf of Provectus to the
maximum extent permitted by law.

     5.15  Compliance  with Law.  Provectus  shall (and shall  cause each of its
Subsidiaries,  if any) to comply  with all  federal,  state  and local  laws and
regulations  applicable  to it,  including,  without  limitation,  ERISA,  those
regarding the collection, payment and deposit of employees' income, unemployment
and Social Security taxes and those relating to environmental  matters where the

                                      X-19


failure to comply  could  reasonably  be  expected  to have a  Material  Adverse
Effect.

     5.16  Agreements.  Provectus shall and shall cause each of its Subsidiaries
to  perform,  within  any  required  time  period  (after  giving  effect to any
applicable grace periods),  all of its obligations and enforce all of its rights
under each  agreement  to which it is a party,  including,  without  limitation,
collective  bargaining  agreements  and  leases to which any such  company  is a
party,  where the failure to so perform and enforce could reasonably be expected
to have a Material  Adverse Effect.  Provectus shall not and shall cause each of
its  Subsidiaries  not to terminate or modify in any manner  adverse to any such
company any provision of any agreement to which it is a party which  termination
or modification could reasonably be expected to have a Material Adverse Effect.

     5.17  Payment  of  Taxes.  Provectus  agrees to pay or cause to be paid all
taxes,  assessments and other governmental charges levied upon any of its assets
or  those  of  its  Subsidiaries  or in  respect  of  its  or  their  respective
franchises,  businesses,  income or  profits,  all  trade  accounts  payable  in
accordance  with usual and customary  business  terms,  and all claims for work,
labor or  materials,  which if  unpaid  might  become a Lien  upon any  asset of
Provectus  or any  Subsidiary,  before the same become  delinquent,  except that
(unless and until foreclosure, sale or other similar proceedings shall have been
commenced)  no such charge need be paid if being  contested in good faith and by
appropriate  measures  promptly  initiated and diligently  conducted if (a) such
reserve or other  appropriate  provision,  if any, as shall be required by sound
accounting  practice  consistent with GAAP shall have been made therefor and (b)
such contest does not have a Material Adverse Effect.

     5.18 Preservation of Intellectual Property Rights. Possess and maintain all
material  Intellectual  Property  Rights  necessary  to  the  conduct  of  their
respective businesses and own all right, title and interest into and to, or have
a valid license for, all material Intellectual Property Rights used by Provectus
and its  Subsidiaries in the conduct of their respective  businesses.  Provectus
will not take any action or fail to take any action,  and will  prevent  each of
its  Subsidiaries  from taking any action or failing to take any  action,  which
would  result  in the  invalidity,  abuse,  misuse or  unenforceability  of such
Intellectual  Property  Rights or which would  infringe upon any rights of other
Persons.

     5.19 Use of Proceeds. Use the net proceeds received from the loan under the
Note in accordance with the terms set forth in the Note.

                                   ARTICLE VI
                                   ----------

                       FEES, EXPENSES AND INDEMNIFICATION
                       ----------------------------------

     6.01 Fees And  Expenses Of  Provectus  and  Gryffindor.  Provectus  and the
Shareholders,  jointly and  severally,  shall pay, and hold  Gryffindor  and all
subsequent  holders of the Note,  the  Warrant and the Shares  harmless  against
liability for the payment of (a) the reasonable fees and out-of-pocket  expenses
of  Piper  Rudnick,  counsel  to  Gryffindor,  arising  in  connection  with the
negotiation  and  execution  of  this  Agreement  and  the  consummation  of the
transactions  contemplated  by this  Agreement,  which  shall be  payable at the
Closing to the extent then known; provided, however, that Provectus shall not be
required to pay more than an aggregate of $10,000; and (b) stamp and other taxes
which may be payable in respect of the execution and delivery of this  Agreement
or the  issuance,  delivery  or  acquisition  of any  Shares  pursuant  to  this
Agreement,  the Transaction Documents or any Common Stock upon conversion of the
Shares.

     6.02  Indemnification by Provectus and the Shareholders.  Provectus and the
Shareholders,  jointly and severally,  shall defend (at  Gryffindor  Indemnified
Parties'  sole  option  and at  Provectus'  sole  expense),  indemnify  and hold
Gryffindor,  its officers,  directors,  members,  managers,  employees,  agents,
representatives,   successors   and  assigns   (collectively   the   "Gryffindor
Indemnified  Parties")  harmless  from and against  any and all losses,  claims,
damages,  liabilities and related expenses, including reasonable attorney's fees
and expenses, incurred by the Indemnified Parties arising out of or relating to:
(a) any action or inaction of Provectus  or a  Subsidiary  that gives rise to or
results in the occurrence of any claim; (b) any breach of any  representation or
warranty  made by  Provectus  and/or the  Shareholders  in or  pursuant  to this
Agreement,  the  Transaction  Documents  or any other  certificate  or  document
delivered by them pursuant to this  Agreement;  (c) any breach or default by the

                                      X-20


Provectus  and/or the Shareholders of any covenant or obligation of them in this
Agreement or any of the  Transaction  Documents;  (d) any claim or proceeding of
any kind whatsoever,  whether instituted or commenced prior to or after the date
hereof,  which relates to,  arises from,  or occurs in connection  with facts or
circumstances  relating to (i) the  Separation  Agreement,  (ii) the Assets,  or
(iii) the  conduct  of  Provectus'  business,  or its  assets,  or any  services
provided on or prior to the date hereof; (e) any liabilities of Provectus and/or
the  Shareholders;  or (f) any  violations  of,  or  obligations  under any laws
relating to acts, omissions, circumstances or conditions existing on or prior to
the  date  hereof,  whether  or  not  such  acts,  omissions,  circumstances  or
conditions  constituted a violation of such laws,  as then in effect;  provided,
however, any such indemnity shall not apply to any such losses, claims, damages,
liabilities  or related  expenses  arising from the gross  negligence or willful
misconduct of the Gryffindor Indemnified Parties.

     6.03  Indemnification  By  Gryffindor.  Gryffindor  shall  defend  (at  the
Provectus  Indemnified  Parties' sole option and at Gryffindor's  sole expense),
indemnify  and hold  Provectus,  its  officers,  directors,  members,  managers,
shareholders (including the Shareholders),  employees, agents,  representatives,
successors  and  assigns  (collectively  the  "Provectus  Indemnified  Parties")
harmless from and against any and all losses, claims,  damages,  liabilities and
related expenses, including reasonable attorney's fees and expenses, incurred by
the  Indemnified  Parties  arising out of or relating  to: (a) any breach of any
representation  or warranty made by Gryffindor in or pursuant to this Agreement,
the  Transaction  Documents or any other  certificate  or document  delivered by
Gryffindor  pursuant  to  this  Agreement;  or (b)  any  breach  or  default  by
Gryffindor of any covenant or obligation of them in this Agreement or any of the
Transaction Documents;  provided, however, any such indemnity shall not apply to
any such losses, claims,  damages,  liabilities or related expenses arising from
the gross negligence or willful misconduct of the Provectus Indemnified Parties.

                                   ARTICLE VII
                                   -----------

                                  MISCELLANEOUS
                                  -------------

     7.01  Non-Waiver.  No course of dealing  between  Gryffindor  and any other
party hereto or any failure or delay on the part of Gryffindor in exercising any
rights or remedies under this Agreement,  the Note or the Warrant  operates as a
waiver of any rights or remedies of Gryffindor under any Agreement,  the Note or
the Warrant.  No single or partial exercise of any rights or remedies  hereunder
operates as a waiver or  precludes  the exercise of any other rights or remedies
hereunder.

     7.02 Successors and Assigns. Except as otherwise expressly provided herein,
all covenants and agreements  contained in this Agreement by or on behalf of any
of the  parties  hereto  will bind and inure to the  benefit  of the  respective
successors  and  assigns of the parties  hereto,  whether so  expressed  or not,
provided,  however,  that  Provectus  shall not assign (by  operation  of law or
otherwise)  this  Agreement,  the  Transaction  Documents  or any part hereof or
thereof or any  obligation  hereunder or  thereunder  without the prior  written
consent of Gryffindor. Gryffindor may assign, transfer, sell or otherwise convey
or  hypothecate  all or any  portion of the Note,  the  Warrant or the Shares in
Gryffindor's  (or such other holder's) sole and absolute  discretion  subject to
compliance with the applicable securities laws. In addition,  and whether or not
any express assignment has been made, the provisions of this Agreement which are
for the benefit of Gryffindor or any holder of all or any part of the Note,  the
Warrant or the  Shares are also for the  benefit  of,  and  enforceable  by, any
subsequent holders of all or any part of the Note, the Warrant or the Shares.

     7.03  Remedies  Non-Exclusive.   None  of  Gryffindor's  rights,  remedies,
privileges or powers  expressly  provided for herein are exclusive,  but each of
them is  cumulative  with,  and in  addition  to,  every  other  right,  remedy,
privilege and power now or hereafter  existing in  Gryffindor's  favor,  whether
pursuant to this Agreement,  the Transaction Documents,  at law or in equity, by
statute or otherwise.

     7.04  Notices.  All  notices,  requests,  demands and other  communications
required or  permitted  under this  Agreement  or by law shall be in writing and
given to the parties at the address  listed  below (or to such other  address as
shall at any time be designated  by any party in writing to the other  parties):
(a) by certified U.S. mail, return receipt  requested,  postage prepaid;  (b) by
facsimile   transmission  (provided  confirmation  of  the  receipt  thereof  is

                                      X-21


obtained);  (c) by recognized overnight courier service (e.g., Federal Express);
or (d) by hand-delivery:


         To Gryffindor:     Gryffindor Capital Partners I, L.L.C.
                            150 North Wacker Drive, Suite 800
                            Chicago, Illinois 60606
                            Facsimile: (312) 499-1935
                            Attention: Stuart Fuchs

         with a copy to:    Piper Rudnick
                            203 N. LaSalle Street
                            Suite 1800
                            Chicago, IL  60504
                            Attn: Deborah Gersh

         To Provectus:      Provectus Pharmaceuticals, Inc.
                            7327 Oak Ridge Highway, Suite A
                            Knoxville, TN 37931
                            Attention:  Timothy C. Scott, Ph.D., President

         with a copy to:    Baker, Donelson, Bearman & Caldwell
                            2200 Riverview Tower
                            900 South Gay Street
                            Knoxville, TN 37902
                            Attn: David L. Morehous

     All such notices shall be deemed  effective (a) when actually  delivered or
when sent by facsimile (upon electronic confirmation of receipt), (b) three days
after being deposited in the United States mail,  first class,  postage prepaid,
or (c) one day after being delivered to a reputable overnight delivery service.

     7.05  Entire  Agreement;   Integration   Clause.  This  Agreement  and  the
Transaction  Documents set forth the entire agreements and understandings of the
parties hereto with respect to this  transaction,  and any prior  agreements are
hereby merged herein and terminated.  The recitals appearing at the beginning of
this Agreement are hereby incorporated herein by this reference.

     7.06 No Oral  Modification Or Waivers.  The terms of this Agreement may not
be modified or waived orally, but only by an instrument in writing signed by the
party against which  enforcement of the  modification or waiver (as the case may
be) is sought.

     7.07  Governing  Law.  The laws of the State of  Illinois  (other  than its
conflicts of law principles) govern this Agreement and the Transaction Documents
except with respect to the following matters which will be governed by the state
of  incorporation  of  Provectus  and/or its  Subsidiaries  as  applicable:  due
incorporation and qualifications for good standing, the issuance of Common Stock
and other  capital  stock of  Provectus  and its  Subsidiaries  and the Board of
Directors of Provectus and its Subsidiaries.

     7.08 Headings.  The headings of the paragraphs and  sub-paragraphs  of this
Agreement and the Transaction Documents are inserted for convenience only and do
not constitute a part of this Agreement or the Transaction Documents.

     7.09  Severability.  To  the  extent  any  provision  herein  violates  any
applicable  law, that provision shall be considered void and the balance of this
Agreement shall remain unchanged and in full force and effect.

     7.10  Counterparts.  This  Agreement may be executed in  counterparts.  The
signature  of,  or on  behalf  of,  each  party  does not need to appear on each
counterpart,  so long as it  appears  on one or  more of the  counterparts.  All
counterparts shall collectively constitute one original document.

                                      X-22


     IN WITNESS  WHEREOF,  the  undersigned  have  executed and  delivered  this
Agreement as of the date first above written.

                                   GRYFFINDOR CAPITAL PARTNERS I, L.L.C.
                                   By:

                                   By:/s/ Stuart Fuchs
                                      ---------------------------------
                                   Name:Stuart Fuchs
                                   Title:Managing Principal


                                   PROVECTUS PHARMACEUTICALS, INC.
                                   a Nevada corporation


                                   By:/s/ Craig Dees
                                      ---------------------------------
                                   Craig Dees, Ph.D., Chief Executive Officer



                                   /s/ Craig Dees
                                   ------------------------------------
                                   Craig Dees, Ph.D.


                                   THE DEES FAMILY FOUNDATION


                                   By:/s/ Craig Dees
                                      ---------------------------------
                                   Name: Craig Dees
                                   Its:President



                                   /s/ Eric A. Wachter
                                   ------------------------------------
                                   Eric A. Wachter, Ph.D.


                                   THE ERIC A. WACHTER 1998
                                   CHARITABLE REMAINDER UNITRUST


                                   By:/s/ Eric A. Wachter
                                      ---------------------------------
                                   Name:/s/ Eric A. Wachter
                                        -------------------------------
                                   Its: Trustee

                                      X-23




                                   /s/ Timothy C. Scott
                                   ------------------------------------
                                   Timothy C. Scott, Ph.D.


                                   THE SCOTT FAMILY INVESTMENT
                                   LIMITED PARTNERSHIP


                                   By: /s/ Timothy C. Scott
                                      ---------------------------------
                                   Name: Timothy C. Scott
                                   Its: General Partner


                                   
                                   /s/ Walter Fisher
                                   ------------------------------------
                                   Walter Fisher, Ph.D.


                                   THE FISHER FAMILY INVESTMENT
                                   LIMITED PARTNERSHIP


                                   By: /s/ Walter Fisher
                                      ---------------------------------
                                   Name: Walter Fisher
                                   Its: General Partner


                                   THE WALT FISHER 1998
                                   CHARITABLE REMAINDER UNITRUST


                                   By: /s/ Walter Fisher
                                      --------------------------------
                                   Name: Walter Fisher
                                   Its: Trustee



                                   /s/ John T. Smolik
                                   ----------------------------------
                                   John T. Smolik


                                   THE SMOLIK FAMILY LLP


                                   By: /s/ John T. Smolik
                                      -------------------------------
                                   Name: John T. Smolik
                                   Its: General Partner

                                      X-24


                                  SCHEDULE 3.09


                     CONVERTIBLE SECURITIES AND COMMITMENTS



1.   Note and Warrants to be issued pursuant to the Purchase Agreement.

2.   2,000,000  shares of Common Stock have been  reserved for issuance upon the
exercise of options to be granted pursuant to Provectus's  employee stock option
plan (the "Plan").  No options have been granted pursuant to the Plan;  however,
Provectus  plans to grant options to employees as shown in the  "Employee  Stock
Options  Schedule"  beginning on the following  page.  Grants are expected to be
made annually in the spring following the release of Provectus's  audited annual
financial  statements for the preceding fiscal year, with the first grants to be
made in the spring of 2003.

3.   Upon the  consummation  of the pending  acquisition  of  Pure-ific,  L.L.C.
("Pure-ific"),  Provectus will issue the following  securities to the members of
Pure-ific:

     a. 25,000  shares of Common Stock,  which will not be registered  under the
        Securities Act; and 
     b. Warrants for the purchase of an aggregate of 80,000 shares of Common 
        Stock.



                                      X-25


                         Employee Stock Options Schedule

                                 Options Awarded

                                                                                          

Position                                  Year 1       Year 2       Year 3       Year 4       Year 5        Totals

Senior Execs.
CEO                                        75,000       75,000       75,000       75,000       75,000       375,000
President                                  75,000       75,000       75,000       75,000       75,000       375,000
Vice President-Research                    75,000       75,000       75,000       75,000       75,000       375,000
CFO                                        75,000       75,000       75,000       75,000       75,000       375,000

Administration
AP Clerk                                    2,000        2,000        2,000        2,000        2,000        10,000
Secretary                                   2,000        2,000        2,000        2,000        2,000        10,000

Marketing & Sales
VP Marketing Sales                         15,000       15,000       15,000       15,000       15,000        75,000
Sales Manager                                            5,000        5,000        5,000        5,000        20,000
Sales Specialist                                         2,000        2,000        2,000        2,000         8,000
Sales Specialist                                         2,000        2,000        2,000        2,000         8,000
Sales Specialist                                         2,000        2,000        2,000        2,000         8,000
Product Manager                                          2,000        2,000        2,000        2,000         8,000
Product Manager                                          2,000        2,000        2,000        2,000         8,000
Product Manager                                          2,000        2,000        2,000        2,000         8,000
Product Manager                                          2,000        2,000        2,000        2,000         8,000
Secretary                                                2,000        2,000        2,000        2,000         8,000
Secretary                                                2,000        2,000        2,000        2,000         8,000
Secretary                                                             2,000        2,000        2,000         6,000
Secretary                                                                          2,000        2,000         4,000
Clerk                                                    2,000        2,000        2,000        2,000         8,000
Clerk                                                    2,000        2,000        2,000        2,000         8,000
Clerk                                                                 2,000        2,000        2,000         6,000
Clerk                                                                              2,000        2,000         4,000

Research/Reg Affairs
Secretary                                   2,000        2,000        2,000        2,000        2,000        10,000
Secretary                                                             2,000        2,000        2,000         6,000
Reg Affairs Director                                     5,000        5,000        5,000        5,000        20,000
Scientist                                                5,000        5,000        5,000        5,000        20,000
Scientist                                                             5,000        5,000        5,000        15,000
Scientist                                                             5,000        5,000        5,000        15,000
Technician                                               3,000        3,000        3,000        3,000        12,000
Technician                                                            3,000        3,000        3,000         9,000
Technician                                                            3,000        3,000        3,000         9,000



                                      X-26



                                  SCHEDULE 3.10


                                STOCKHOLDER LIST


                                                                                          

                                                                                                    Percentage
                      Stockholder Name                                Number of Shares             Ownership (1)
------------------------------------------------------------     ---------------------------       -------------
Blankenship, Justeene.......................................                         493,666             5.52%
Dees, H. Craig (2)..........................................     1,397,323
Dees Family Foundation......................................           536
    Dees total:.............................................                       1,397,859            15.62%
Fisher, Walter G............................................       831,880
Fisher Family Investment Limited Partnership................        55,577
Walt Fisher 1998 Charitable Remainder Unitrust..............         9,734
    Fisher total:...........................................                         897,191            10.03%
Hamilton, Daniel R. (2).....................................                         300,000
Scott, Timothy C. (2).......................................     1,341,553
Scott Family Investment Limited Partnership.................        55,966
    Scott total:............................................                       1,397,519             3.35%
Smolik, John T..............................................       848,673
Smolik Family LLP...........................................        48,666
    Smolik total:...........................................                         897,339            10.03%
Wachter, Eric A. (2)........................................     1,405,232
Eric A. Wachter 1998 Charitable Remainder Unitrust..........         4,867
    Wachter total:..........................................                       1,410,099            15.76%

Depository Trust Company (CEDE & Co.) (3)                                            566,283             6.33%

-----------------------------------------------

(1)      Calculated by dividing the total number of shares by 8,945,770, the number of shares outstanding pursuant to 
         Section 3.09 of the Purchase Agreement.

(2)      Ownership shown for Messrs. Dees, Hamilton, Scott and Wachter does not include options that may be granted to 
         them pursuant to the Plan.  See Item 2 of Schedule 3.09.
                                                   -------------

(3)      Provectus does not believe that any single person who holds shares in "street name," for whom CEDE & Co. is the record
         holder, holds more than 5% of the Common Stock.



                                      X-27


                                  SCHEDULE 3.13

                               PROPERTY AND ASSETS


1. Intellectual Property Rights are identified on Schedule 3.14.
                                                  -------------

2. Tangible assets are identified on Annex 3.13a attached hereto.
                                     -----------






                                      X-28


                                  SCHEDULE 3.14

                          INTELLECTUAL PROPERTY RIGHTS

1.   Intellectual Property Rights

a.   Patents,   patent   applications,   drafts,   and   disclosures,   US   and
     international:

     i.   PHO-0001  Method  for  Improved  Selectivity  in  Photo-Activation  of
          Molecular Agents (Fisher,  Wachter and Dees),  including the following
          US patents: A. 5,829,448 B. 5,998,597 C. 6,042,603

     ii.  PHO-0002  Method for  Improved  Selectivity  in  Photo-Activation  and
          Detection of Molecular  Diagnostic Agents (Wachter,  Fisher and Dees),
          including the following US patents: A. 5,832,931

     iii. PHO-0003 Method and Apparatus for Treating Biological  Contaminants in
          the Blood Supply (Dees, Smolik and Wachter). Prepared as a first draft
          in 1998; not forwarded since.

     iv.  PHO-101  Universal  Activator  for Laser Medical  Treatment  (Wachter,
          Smolik and Fisher).  Prepared as a first draft in 1997;  not forwarded
          since.

     v.   PHO-102  Treatment of Pigmented Tissues Using Optical Energy (Dees and
          Wachter)

     vi.  PHO-103  Injectable  Collagen and Protein Gels Containing  Photoactive
          Agents (Dees). Prepared as a first draft in 1998; not forwarded since.

     vii. PHO-104    Improved    Methods   and   Apparatus   for    Multi-Photon
          Photo-Activation of Therapeutic Agents (Wachter, Fisher and Smolik)

    viii. PHO-105  Improved  Method for  Targeted  Topical  Treatment of Disease
          (Dees,  Scott,  Smolik,  Wachter and Fisher)  ix.  PHO-106  Method for
          Improved Imaging and Photodynamic  Therapy (Dees and Scott) x. PHO-107
          High Energy Phototherapeutic Agents (Dees, Scott, Smolik and Wachter),
          including the following US patents: A. 6,331,286

     xi.  PHO-108  Method and Agents for Improved  Radiation  Therapy  (Wachter,
          Smolik and Dees); abandoned April 15, 2002

     xii. PHO-109    Improved    Methods   and   Apparatus   for    Multi-photon
          Photo-activation  and Detection of Molecular Agents (Fisher,  Wachter,
          Smolik and Dees)

    xiii. PHO-110 Method for Enhanced Protein  Stabilization  and for Production
          of Cell Lines Useful for Production of such Stabilized  Proteins (Dees
          and Smolik), including the following US patents: A. 6,451,597,  issued
          September 17, 2002 B. 6,468,777, issued October 22, 2002

     xiv. PHO-113  Improved  Topical  Medicaments  and Methods for  Photodynamic
          Treatment of Disease (Dees, Scott, Smolik, Wachter and Fisher)

     xv.  PHO-119 Improved Intracorporeal Medicaments for Photodynamic Treatment
          of Disease (Dees, Scott, Wachter, Fisher and Smolik)

     xvi. PHO-120   Improved   Intracorporeal   Medicaments   for  High   Energy
          Phototherapeutic  Treatment of Disease (Dees, Scott,  Wachter,  Fisher
          and Smolik)

    xvii. PHO-121 Improved Methods and Apparatus for Optical Imaging (Fisher and
          Wachter) 

   xviii. PHO-122  Improved  Medicaments  for  Chemotherapeutic Treatment of 
          Disease (Scott and Dees) 

     xix. PHO-123  Phototherapeutic Vaccination and Immunotherapy Against Tumors
          (Dees, Scott and Wachter)

      xx. PRO-201 Combination  Antiperspirant and Antimicrobial Compositions
          (Dees) 

     xxi. Method and Apparatus for Permanent Hair Removal (Wachter and Dees)

    xxii. Treatment for Colon Cancer (Dees)

   xxiii. Spatially-Localized  Sequential  Two-Photon  PDT and Imaging  (Fisher,
          Wachter and Smolik)

    xxiv. Method for  Delivery of  Ultrashort  Pulses  through an Optical  Fiber
          (Wachter and Fisher)

    xxv.  Biospecific Targeting of Molecules (Dees)

    xxvi. A  Macromolecular  Carrier to  Preferentially  Deliver  Imaging Agents
          (Dees)

   xxvii. Materials and Method for Localizing Immunomodulation (Dees)

  xxviii. Treatment of Autoimmune Disorders (Dees)

                                      X-29


   xxix.  Iodinated and Esterified Rhodamine Derivatives (Dees and Besharat)

   xxx.   Ultrasound  Contrast  Using  Halogenated  Xanthenes  (Dees,  Scott and
          Wachter)

b.   Trademarks,  service  marks and  applications  for same;  trade  names:  

     i. PHO-118 PulseView
        
c.   Copyrights:      

     i. None 

d.   Licenses:
     None pursuant to which Provectus or Xantech have acquired Intellectual 
     Property Rights

e.   Internet domain names and registrations:

     i. www.provectuscorp.com

2.   Pursuant to the Patent and Know How License Agreement  identified in Item 3
     of Schedule  3.24,  Photogen  Technologies  has rights to use the following
     Intellectual Property Rights in connection with "the research, development,
     manufacture and  commercialization of nanoparticulate  x-ray, CT and/or MRI
     diagnostic  imaging agents using radio-opaque  molecules  containing Iodine
     that passively  target to lymph nodes involved in a disease state following
     parenteral  administration  to a mammal to locate,  diagnose,  and/or treat
     cancer or other diseases":

     a. PHO-106;  see Item a.ix. above. 

     b. PHO-107;  see Item a.x. above. 

     c. PHO-108; see Item a.xi. above. 

     d. PHO-120; see Item a.xvi. above.












                                      X-30


                                  SCHEDULE 3.16


                          INTERESTED PARTY TRANSACTIONS



1.   Pursuant to the Stock  Ownership and Agency  Agreement dated as of November
15, 2002 (the "Ownership  Agreement")among  Valley,  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 (the "Valley Shareholders"), the issued and outstanding stock
of  Valley  was  held by  Timothy  C.  Scott,  Ph.D.  as  Agent  for the  Valley
Shareholders. Upon the consummation of the Merger, Provectus issued an aggregate
of  500,007  shares  of its  Common  Stock to the  Valley  Shareholders,  in the
following amounts:

                                                           

                         Name of Valley Shareholder              Number of Provectus Shares Issued
                         --------------------------              ---------------------------------
       Craig Dees, Ph.D.                                                       97,323
       Dees Family Foundation                                                     536
       Walter Fisher, Ph.D.                                                    31,880
       Fisher Family Investment Limited Partnership                            55,577
       Walt Fisher 1998 Charitable Remainder Unitrust                           9,734
       Timothy C. Scott, Ph.D.                                                 41,553
       Scott Family Investment Limited Partnership                             55,966
       John T. Smolik                                                          48,673
       Smolik Family LLP                                                       48,666
       Eric A. Wachter, Ph.D.                                                 105,232
       Eric A. Wachter 1998 Charitable Remainder Unitrust                       4,867
                                                                      --------------------------
                     Total for All Valley Shareholders:                       500,007


       H. Craig Dees is the Chief Executive Officer of Provectus.  Timothy C.
       Scott is the President of Provectus.  Eric A. Wachter is the Executive
       Vice President of Provectus.



                                      X-31


                                  SCHEDULE 3.20


                                  SUBSIDIARIES



               Name                    Jurisdiction           % Ownership
               ----                    ------------           -----------
1.  Xantech Pharmaceuticals, Inc.       Tennessee                 100%










                                      X-32




                                  SCHEDULE 3.21


                             OFFICERS AND DIRECTORS


1. Directors and officers of Provectus:

          Name                      Title                  Member of Board?
          ----                      -----                  ----------------
H. Craig Dees                Chief Executive Officer            Yes 
Timothy C. Scott                   President                    Yes 
Daniel R. Hamilton           Chief Financial Officer            No 
Eric A. Wachter              Executive Vice President           Yes


2. Directors and officers of Xantech:

        Name                        Title                  Member of Board?
        ----                        -----                  ----------------
H. Craig Dees                Chief Executive Officer            Yes 
Timothy C. Scott             President                          Yes 
Daniel R. Hamilton           Chief Financial Officer            No 
Eric A. Wachter              Executive Vice President           Yes






                                      X-33



                                  SCHEDULE 3.22


                             DEBT OWED BY PROVECTUS



Nothing other than debts identified on the Financial Statements.











                                      X-34




                                  SCHEDULE 3.23


                             UNDISCLOSED LIABILITIES



  None.












                                      X-35



                                  SCHEDULE 3.24


                       MATERIAL CONTRACTS AND OBLIGATIONS



1. Consulting and financial services agreements:

Financial Consulting Services Agreement dated April 23, 2002 between Provectus
 and Phillip C. Baker
Consulting Agreement dated as of August 15, 2002 between Provectus and Numark
 Capital Corp.
Consulting Agreement dated as of August 15, 2002 between Provectus and Nunzio  
 Valerie.
Consulting Agreement dated as of August 28, 2002 between Provectus and Robert
  S. Arndt.

2. Marketing and distribution agreements:

Consulting Contract dated June 1, 2002 between Provectus and Avid Amiri.
Consulting Agreement dated June 7, 2002 between Provectus and Nace Pharma, L.L.C
Financial Services Agreement dated August 29, 2002 between Provectus and Nace 
 Resources, Inc. 
Marketing Agreement dated as of November 15, 2002 between Provectus and Vertical
 Investments Corp.

3. The  Separation  Agreement  (as defined in the Purchase  Agreement),  and the
following agreements entered into in connection therewith:

In connection with the Separation  Agreement,  Xantech assumed the obligation to
pay  certain  royalties  to Dr. Wolf  pursuant to Section 4.1 of the  Settlement
Agreement and Mutual  Release of Claims dated as of June 13, 2002 among Photogen
Technologies,  Inc., a Nevada corporation  ("Technologies"),  Photogen,  Inc., a
Tennessee corporation (now known as Xantech Pharmaceuticals,  Inc. ("Xantech")),
The General Hospital  Corporation  d/b/a  Massachusetts  General  Hospital,  and
Gerald L. Wolf, Ph.D.

Patent and Know How  License  Agreement  dated as of November  12, 2002  between
Technologies and Xantech.
Non-Competition  Agreement  dated as of November 12, 2002 among  Xantech,  Craig
Dees,  Eric A.  Wachter,  Timothy C. Scott,  Walter  Fisher,  and John T. Smolik
(collectively,  the "Tennessee Stockholders"),  and Technologies,  pertaining to
the "Therapeutic Business" (as defined in the Separation Agreement).

Non-Competition  Agreement  dated as of  November  12, 2002 among  Xantech,  the
Tennessee Stockholders, and Technologies, pertaining to PH-10.

4. The Reorganization Agreement (as defined in the Purchase Agreement).



                                      X-36



                                  SCHEDULE 3.25


                                MATERIAL CHANGES



  None.
















                                      X-37



                                  SCHEDULE 3.28


                              ENVIRONMENTAL MATTERS


     In the ordinary course of its business, Provectus operates a laboratory and
similar  research  facilities.  In the  course  of these  operations,  Provectus
handles  chemicals  which may be  classified as Hazardous  Materials.  Chemicals
presently in  Provectus's  inventory  are  identified on Annex 3.13a to Schedule
3.13;  some  of  these  chemicals  may be  classified  as  Hazardous  Materials.
Provectus handles all chemicals,  including Hazardous  Materials,  in compliance
with all applicable  Environmental Laws and other legal requirements.  Provectus
has not 1. entered into or been subject to any consent decree, compliance order,
or  administrative  order with respect to any environmental or health and safety
matter  relating to its  business  or any of its  currently  or formerly  owned,
operated or managed  properties  or  facilities,  2.  received  notice under the
citizen suit provision of any  Environmental Law in connection with its business
or any of its  currently or formerly  owned,  operated or managed  properties or
facilities,  3. received any written  request for  information,  demand  letter,
administrative inquiry, or formal or informal complaint or claim with respect to
any environmental or health and safety matter relating to its business or any of
its properties or facilities or 4. been subject to any  governmental  or citizen
enforcement action with respect to any environmental or health and safety matter
relating to its  business or any of its  properties  or  facilities,  and has no
knowledge that any matters  described in clauses 1-4 above will be  forthcoming;
in any such case as would  have or  reasonably  be  expected  to have a material
adverse effect on Provectus or its operations.







                                      X-38



                                  SCHEDULE 3.29


                      LEASEHOLD INTERESTS IN REAL PROPERTY


     Provectus leases its offices at 7327 Oak Ridge Highway, Suite A, Knoxville,
Tennessee  37932 from the owner of the property  pursuant to a verbal  agreement
providing for a month-to-month lease at a rent of $2800 per month.










                                      X-39



                                                                     Exhibit 4.6

                             STOCK PLEDGE AGREEMENT
                             ----------------------


     STOCK PLEDGE  AGREEMENT,  dated as of November 26, 2002,  between PROVECTUS
PHARMACEUTICALS, INC. (the "Pledgor"), and GRYFFINDOR CAPITAL PARTNERS I, L.L.C.
("Lender").


                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS,  Pledgor is the record and  beneficial  owner of all of the issued
and outstanding shares of stock of Xantech Pharmaceuticals, Inc. ("Xantech") and
the other stock described in Schedule I hereto (the "Pledged  Shares") issued by
the corporations named therein; and

     WHEREAS,  Pledgor has entered into a Senior Secured Convertible Note, dated
as of even date herewith (as at any time amended, modified or supplemented,  the
"Note")  with  Lender  pursuant  to which  Lender  has  agreed to make a loan to
Pledgor (the  "Loan"),  the proceeds of which are to be used as set forth in the
Note; and

     WHEREAS, in connection with the making of the Loan as evidenced by the Note
and as security for all of the Obligations of Pledgor under the Note, the Lender
is requiring  that Pledgor shall have  executed and delivered  this Stock Pledge
Agreement and granted the security interest contemplated hereby;

     NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  covenants
hereinafter  contained  and to induce  Lender to make the Loan  evidenced by the
Note, it is agreed as follows:

     1. Definitions.  Unless otherwise defined herein, terms defined in the Note
are used  herein as  therein  defined,  and the  following  shall  have  (unless
otherwise  provided  elsewhere in this Stock  Pledge  Agreement)  the  following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):

     "Act" shall have the meaning assigned to such term in Section 8(d) hereof.

     "Agreement"  shall  mean  this  Stock  Pledge   Agreement,   including  all
amendments,  modifications  and supplements and any exhibits or schedules to any
of the foregoing,  and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.

     "Default"  shall  mean an  Event of  Default  under  the Note or any  other
Transaction Document.

     "Pledged  Collateral"  shall  have the  meaning  assigned  to such  term in
Section 2 hereof.

     "Pledged  Shares" shall have the meaning assigned to such term in the first
"Whereas" clause hereof.

     "Secured  Obligations"  shall  have the  meaning  assigned  to such term in
Section 3 hereof.

     "Stock" shall mean all shares, options, interests,  participations or other
equivalents  (howsoever  designated) of or in a  corporation,  whether voting or
non-voting,  including without  limitation,  common stock,  warrants,  preferred
stock,  convertible  debentures and all  agreements,  instruments  and documents
convertible, in whole or in part, into any one or more or all of the foregoing.

     "Subsidiaries"   means  with  respect  to  any  Person,   any   corporation
association  or other entity of which  securities  or other  ownership  interest
representing more than twenty percent (20%) of the ordinary voting power are, at
the time as of which any  determination  is being made,  owned or  controlled by
such Person or one or more Subsidiaries of such Person or by such person and one
or more Subsidiaries of such Person.

                                      X-40


     2. Pledge.  Pledgor  hereby  pledges and grants to Lender a first  priority
security interest in all of the following (the "Pledged Collateral"),  except as
otherwise provided in Section 7(b):

         (a) the Pledged Shares and the  certificates  representing  the Pledged
Shares, and all dividends,  cash instruments and other property or proceeds from
time to time received,  receivable or otherwise  distributed in respect of or in
exchange for any or all of the Pledged Shares;

         (b) all additional  shares of stock of any issuer of the Pledged Shares
from time to time  acquired  by  Pledgor in any manner  (which  shares  shall be
deemed to be part of the Pledged Shares) and the certificates  representing such
shares, and all dividends, cash, instruments and other property or proceeds from
time to time received,  receivable or otherwise  distributed in respect of or in
exchange for any or all of such shares; and

         (c) all shares of any  Person  who,  after the date of this  Agreement,
becomes,  as a result of any occurrence,  a directly owned Subsidiary of Pledgor
(which  shares  shall  be  deemed  to be part  of the  Pledged  Shares)  and the
certificates representing such shares, and all dividends,  cash, instruments and
other property or proceeds from time to time  received,  receivable or otherwise
distributed in respect of or in exchange for any or all of such shares.

     3.  Security  for  Obligations.  This  Agreement  secures,  and the Pledged
Collateral  is security  for,  the prompt  payment in full when due,  whether at
stated  maturity,   by  acceleration  or  otherwise,   and  performance  of  the
Obligations, whether for principal, premium, interest, fees, costs and expenses,
and all  obligations  of Pledgor now or hereafter  existing under this Agreement
and under the Note (collectively, the "Secured Obligations").

    4.  Delivery  of  Pledged  Collateral.   All  certificates  representing  or
evidencing  the Pledged Shares shall be delivered to and held by or on behalf of
Lender pursuant hereto and shall be accompanied by duly executed  instruments of
transfer or  assignment  in blank,  all in form and  substance  satisfactory  to
Lender. Subject to Section 7 hereof, Lender shall have the right, at any time in
its discretion and without notice to the Pledgor,  to transfer to or to register
in the name of Lender or any of its nominees  any or all of the Pledged  Shares.
In addition,  also  subject to Section 7 hereof,  Lender shall have the right at
any time to exchange  certificates  or  instruments  representing  or evidencing
Pledged   Shares  for   certificates   or   instruments  of  smaller  or  larger
denominations.

     5.  Representations  and  Warranties.  Pledgor  represents  and warrants to
Lender that:

         (a) Pledgor  is, and at the time of  delivery of the Pledged  Shares to
Lender  pursuant  to Section 4 hereof will be, the sole holder of record and the
sole  beneficial  owner of the Pledged  Collateral  pledged by Pledgor  free and
clear of any lien thereon or  affecting  the title  thereto  except for the lien
created by this Agreement.

         (b) All of the Pledged Shares have been duly authorized, validly issued
and are fully paid and non-assessable.

         (c) Pledgor has the right and requisite  corporate authority to pledge,
assign,  transfer,  deliver, deposit and set over the Pledged Collateral pledged
by Pledgor to Lender as provided herein.

         (d) None of the  Pledged  Shares  has been  issued  or  transferred  in
violation of the securities registration,  securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject.

         (e) The  authorized  Stock of each of the issuers  listed on Schedule I
hereto consists of the number of shares of common and preferred stock,  with the
number of shares  issued  and  outstanding,  that are  described  in  Schedule I
hereto. As of the date hereof, there are no existing options, warrants, calls or
commitments  of any  character  whatsoever  relating to any Stock of any of such
issuers.

         (f) No consent,  approval,  authorization  or other order of any Person
and no consent, authorization, approval, or other action by, and no notice to or
filing with, any  governmental  authority or regulatory  body is required either
(i) for the  pledge  by  Pledgor  of the  Pledged  Collateral  pursuant  to this
Agreement or for the  execution,  delivery or  performance  of this Agreement by
Pledgor  or (ii) for the  exercise  by  Lender  of the  voting  or other  rights

                                      X-41


provided  for in this  Agreement  or the  remedies  in  respect  of the  Pledged
Collateral  pursuant to this Agreement,  except as may be required in connection
with such  disposition  by laws  affecting  the offering and sale of  securities
generally.

         (g) The pledge,  assignment  and  delivery  of the  Pledged  Collateral
pursuant to this  Agreement  will create a valid  first  priority  lien on and a
first priority  perfected security interest in the Pledged Collateral pledged by
Pledgor,  and  the  proceeds  thereof,  securing  the  payment  of  the  Secured
Obligations.

         (h) This Agreement has been duly authorized,  executed and delivered by
Pledgor  and  constitutes  a legal,  valid and  binding  obligation  of  Pledgor
enforceable in accordance with its terms.

         (i) The Pledged  Shares  constitute  one hundred  percent (100%) of the
issued and outstanding shares of Stock of the issuers thereof.

     The  representations  and  warranties  set  forth in this  Section  5 shall
survive the execution and delivery of this Agreement.

     6. Covenants. Pledgor covenants and agrees that until the Obligations under
the Note have been repaid in full or Lender has  otherwise  converted all of the
outstanding  Obligations  thereunder  in  accordance  with the  terms  set forth
therein:

         (a) Without the prior written consent of Lender, Pledgor will not sell,
assign,  transfer,  pledge, or otherwise encumber any of its rights in or to the
Pledged  Collateral  pledged  by  Pledgor  or  any  unpaid  dividends  or  other
distributions  or payments  with respect  thereto or grant a lien in any therein
except as otherwise permitted by the Note.

         (b) Pledgor will, at its expense,  promptly  execute,  acknowledge  and
deliver  all such  instruments  and take all such  action as Lender from time to
time may  request in order to ensure to Lender the  benefits of the liens in and
to the Pledged Collateral intended to be created by this Agreement.

         (c) Pledgor has and will defend the title to the Pledged Collateral and
the liens of Lender  thereon  against the claim of any Person and will  maintain
and preserve such liens.

         (d)  Pledgor  will,  upon  obtaining  any  additional   shares  of  any
Subsidiaries  or of any new indirectly  owned  Subsidiary,  which shares are not
already Pledged Collateral, promptly (and in any event within three (3) Business
Days)  deliver  to Lender a Pledge  Amendment,  duly  executed  by  Pledgor,  in
substantially the form of Schedule II hereto (a "Pledge Amendment"),  in respect
of the  additional  Pledged  Shares  which are to be  pledged  pursuant  to this
Agreement. Pledgor hereby authorizes Lender to attach each such Pledge Amendment
to this  Agreement  and  agrees  that all  Pledged  Shares  listed on any Pledge
Amendment  delivered to Lender shall for all  purposes  hereunder be  considered
Pledged Collateral.

     7.  Pledgors'  Rights.  As long as no Default  shall have  occurred  and be
continuing and until written notice shall be given to Pledgor in accordance with
Section 8(a) hereof:

         (a) Pledgor  shall have the right,  from time to time, to vote and give
consents  with  respect to the Pledged  Collateral  or any part  thereof for all
purposes not inconsistent  with the provisions of this Agreement,  the Note, and
any other agreement  except as otherwise  provided in the Purchase  Agreement of
any of the other  Transaction  Documents  (defined in the  Purchase  Agreement);
provided,  however, that no vote shall be cast, and no consent shall be given or
action taken,  which would have the effect of impairing the position or interest
of Lender in respect of the  Pledged  Collateral  or which  would  authorize  or
effect (i) the  dissolution or  liquidation,  in whole or in part, of any of its
Subsidiaries, (ii) the consolidation or merger of Xantech with any other Person,
(iii) the sale,  disposition or encumbrance of all or  substantially  all of the
assets of any of its  Subsidiaries,  (iv) any change in the authorized number of
shares,  the  stated  capital  or the  authorized  share  capital  of any of its
Subsidiaries  or the issuance of any additional  shares of its Stock, or (v) the
alteration  of  the  voting  rights  with  respect  to the  Stock  of any of its
Subsidiaries;

         (b) (i)) Pledgor  shall be entitled,  from time to time, to collect and
receive for its own use all cash dividends paid in respect of the Pledged Shares

                                      X-42


to the extent not in violation of the Note other than any and all (A)  dividends
paid or  payable  other than in cash in respect  of, and  instruments  and other
property  received,  receivable  or otherwise  distributed  in respect of, or in
exchange for, any Pledged Collateral, (B) dividends and other distributions paid
or payable in cash in respect of any Pledged  Collateral  in  connection  with a
partial or total  liquidation  or  dissolution,  and (C) cash  paid,  payable or
otherwise  distributed  in  redemption  of,  or in  exchange  for,  any  Pledged
Collateral;  provided,  however,  that  until  actually  paid all rights to such
dividends shall remain subject to the lien created by this  Agreement;  and (ii)
all  dividends  (other than such cash  dividends as are  permitted to be paid to
Pledgor in  accordance  with  clause (i) above) and all other  distributions  in
respect of any of the Pledged Shares of Pledgor, whenever paid or made, shall be
delivered  to Lender to hold as Pledged  Collateral  and shall,  if  received by
Pledgor,  be received in trust for the benefit of Lender, be segregated from the
other  property or funds of Pledgor,  and be  forthwith  delivered  to Lender as
Pledged  Collateral  in  the  same  form  as so  received  (with  any  necessary
endorsement).

     8. Defaults and Remedies.

         (a) Upon the occurrence of a Default and during the  continuation  of a
Default  (provided  that such  Default is not waived by  Lender)  and  following
written  notice to Pledgor,  Lender  (personally  or through an agent) is hereby
authorized and empowered, to transfer and register in its name or in the name of
its  nominee the whole or any part of the Pledged  Collateral,  to exercise  the
voting rights with respect  thereto,  to collect and receive all cash  dividends
and other  distributions  made  thereon,  to sell in one or more sales after ten
(10) days'  notice of the time and place of any public sale or of the time after
which  a  private  sale  is to  take  place  (which  notice  Pledgor  agrees  is
commercially reasonable), but without any previous notice or advertisement,  the
whole or any part of the Pledged Collateral and to otherwise act with respect to
the Pledged Collateral as though Lender was the outright owner thereof,  Pledgor
hereby  irrevocably   constituting  and  appointing  Lender  as  the  proxy  and
attorney-in-fact of Pledgor, with full power of substitution to do so; provided,
however,  Lender  shall  not  have  any duty to  exercise  any such  right or to
preserve  the same and shall not be liable  for any  failure to do so or for any
delay in doing  so.  Any sale  shall  be made at a  public  or  private  sale at
Lender's place of business, or at any public building in Chicago or elsewhere to
be named in the  notice of sale,  either  for cash or upon  credit or for future
delivery at such price as Lender may deem fair,  and Lender may be the purchaser
of the  whole or any part of the  Pledged  Collateral  so sold and hold the same
thereafter  in its own right free from any claim of such Pledgor or any right of
redemption.  Each sale shall be made to the highest bidder,  but Lender reserves
the right to reject any and all bids at such sale which, in its  discretion,  it
shall  deem  inadequate.  Demands of  performance,  except as  otherwise  herein
specifically  provided for, notices of sale,  advertisements and the presence of
property at sale are hereby waived and any sale hereunder may be conducted by an
auctioneer or any officer or agent of Lender.

         (b) If, at the  original  time or times  appointed  for the sale of the
whole or any part of the Pledged  Collateral,  the highest  bid, if there be but
one sale, shall be inadequate to discharge in full all the Secured  Obligations,
or if the  Pledged  Collateral  be offered  for sale in lots,  if at any of such
sales, the highest bid for the lot offered for sale would indicate to Lender, in
its  discretion,  the  unlikelihood of the proceeds of the sales of the whole of
the  Pledged   Collateral   being   sufficient  to  discharge  all  the  Secured
Obligations,  Lender  may,  on  one or  more  occasions  and in its  discretion,
postpone  any of said  sales by public  announcement  at the time of sale or the
time of previous  postponement of sale, and no other notice of such postponement
or  postponements  of sale need be given,  any other notice being hereby waived;
provided,  however, that any sale or sales made after such postponement shall be
after ten (10) days' notice to Pledgor.

         (c) In the event of any sales hereunder,  Lender shall, after deducting
all costs or expenses of every kind  (including  reasonable  attorneys' fees and
disbursements) for care, safekeeping,  collection,  sale, delivery or otherwise,
apply the  residue of the  proceeds  of the sales to the  payment or  reduction,
either in whole or in part, of the Secured  Obligations  in accordance  with the
agreements and  instruments  governing and  evidencing the Secured  Obligations,
returning the surplus, if any, to Pledgor.

         (d) If, at any time when Lender shall  determine to exercise its rights
to sell the whole or any part of the Pledged Collateral hereunder,  such Pledged
Collateral or the part thereof to be sold shall not, for any reason  whatsoever,
be effectively  registered  under the Securities Act of 1933, as amended (or any

                                      X-43


similar  statute  then in effect)  (the  "Act"),  Lender may, in its  discretion
(subject only to applicable  requirements of law), sell such Pledged  Collateral
or part thereof by private sale in such manner and under such  circumstances  as
Lender may deem necessary or advisable, but subject to the other requirements of
this  Section 8, and shall not be  required to effect  such  registration  or to
cause the same to be effected. Without limiting the generality of the foregoing,
in any  such  event  Lender  in its  discretion  (i)  may,  in  accordance  with
applicable  securities laws,  proceed to make such private sale  notwithstanding
that a  registration  statement  for the  purpose of  registering  such  Pledged
Collateral  or part thereof  could be or shall have been filed under the Act (or
similar  statute),  (ii) may  approach  and  negotiate  with a  single  possible
purchaser to effect such sale,  and (iii) may restrict  such sale to a purchaser
who will  represent  and agree that such  purchaser  is  purchasing  for its own
account,  for investment and not with a view to the distribution or sale of such
Pledged  Collateral or part  thereof.  In addition to a private sale as provided
above in this  Section 8, if any of the Pledged  Collateral  shall not be freely
distributable  to the  public  without  registration  under the Act (or  similar
statute)  at the time of any  proposed  sale  pursuant  to this  Section 8, then
Lender shall not be required to effect such registration or cause the same to be
effected but, in its  discretion  (subject only to  applicable  requirements  of
law),  may  require  that any sale  hereunder  (including  a sale at auction) be
conducted  subject to restrictions (iv) as to the financial  sophistication  and
ability of any Person  permitted to bid or purchase at any such sale,  (v) as to
the  content of  legends to be placed  upon any  certificates  representing  the
Pledged Collateral sold in such sale, including  restrictions on future transfer
thereof,  (vi) as to the  representations  required  to be  made by each  Person
bidding or purchasing at such sale relating to that Person's access to financial
information about Pledgor and such Person's  intentions as to the holding of the
Pledged Collateral so sold for investment,  for its own account,  and not with a
view of the distribution  thereof,  and (vii) as to such other matters as Lender
may, in its  discretion,  deem  necessary or appropriate in order that such sale
(notwithstanding  any failure so to register) may be effected in compliance with
the Code and other laws affecting the  enforcement of creditors'  rights and the
Act and all applicable state securities laws.

         (e) Pledgor acknowledges that notwithstanding the legal availability of
a  private  sale  or a sale  subject  to the  restrictions  described  above  in
paragraph (d), Lender may, in its  discretion,  elect to register any or all the
Pledged  Collateral  under the Act (or any applicable  state  securities law) in
accordance with its rights hereunder.  Pledgor, however,  recognizes that Lender
may be unable to effect a public sale of any or all the Pledged  Collateral  and
may be compelled to resort to one or more private  sales  thereof.  Pledgor also
acknowledges  any such  private sale  (conducted  in a  commercially  reasonable
manner for private sales) may result in prices and other terms less favorable to
the  seller  than if such sale  were a public  sale  and,  notwithstanding  such
circumstances,  agrees that any such  private  sale shall be deemed to have been
made in a commercially reasonable manner. Lender shall be under no obligation to
delay a sale of any of the Pledged  Collateral  for the period of time necessary
to permit the  registrant to register such  securities for public sale under the
Act, or under applicable state securities laws, even if Pledgor or issuer of the
Pledged Collateral would agree to do so.

         (f)  Pledgor  agrees  that  following  the  occurrence  and  during the
continuance  of a  Default  it will  not at any  time  plead,  claim or take the
benefit of any appraisal,  valuation, stay, extension,  moratorium or redemption
law now or  hereafter in force in order to prevent or delay the  enforcement  of
this  Agreement,  or the  absolute  sale of the whole or any part of the Pledged
Collateral or the possession thereof by any purchaser at any sale hereunder, and
Pledgor waives the benefit of all such laws to the extent it lawfully may do so.
Pledgor  agrees that it will not interfere  with any right,  power and remedy of
Lender provided for in this Agreement or now or hereafter  existing at law or in
equity or by statute or otherwise,  or the exercise or beginning of the exercise
by Lender of any one or more of such rights,  powers, or remedies. No failure or
delay on the part of Lender to exercise  any such right,  power or remedy and no
notice or  demand  which may be given to or made  upon  Pledgor  by Lender  with
respect to any such  remedies  shall  operate as a waiver  thereof,  or limit or
impair  Lender's  right to take any  action or to  exercise  any power or remedy
hereunder,  without notice or demand, or prejudice its rights as against Pledgor
in any respect.

         (g)  Pledgor  further  agrees  that a  breach  of any of the  covenants
contained in this Section 8 will cause irreparable injury to Lender, that Lender
has no adequate  remedy at law in respect of such breach and, as a  consequence,
agrees  that  each and  every  covenant  contained  in this  Section  8 shall be
specifically  enforceable against Pledgor,  and Pledgor hereby waives and agrees

                                      X-44


not to assert any defenses  against an action for specific  performance  of such
covenants except for a defense that the Secured Obligations are not then due and
payable  in  accordance  with  the  agreements  and  instruments  governing  and
evidencing such obligations.

     9. Application of Proceeds.  Any cash held by Lender as Pledged  Collateral
and all cash proceeds received by Lender in respect of any sale of,  liquidation
of, or other realization upon all or any part of the Pledged Collateral shall be
applied by Lender as follows:

         (a)  First,  to the  payment  of the costs and  expenses  of such sale,
including reasonable  compensation to Lender and its agents and counsel, and all
expenses,  liabilities  and  advances  made or incurred by Lender in  connection
therewith;

         (b) Next, to the payment of the Secured Obligations; and

         (c) Finally,  after payment in full of all Secured Obligations,  to the
payment to Pledgor,  or its  successors  or  assigns,  or to  whomsoever  may be
lawfully  entitled to receive the same or as a court of  competent  jurisdiction
may direct, of any surplus then remaining from such proceeds.

     10.  Waiver.  No delay on Lender's  part in  exercising  any power of sale,
lien,  option or other  right  hereunder,  and no notice or demand  which may be
given to or made upon Pledgor by Lender with respect to any power of sale, lien,
option or other right hereunder,  shall constitute a waiver thereof, or limit or
impair Lender's right to take any action or to exercise any power of sale, lien,
option,  or any other right  hereunder,  without notice or demand,  or prejudice
Lender's rights as against Pledgor in any respect.

     11.  Assignment.  Lender may  assign,  indorse or transfer  any  instrument
evidencing  all or any part of the Secured  Obligations  as provided  in, and in
accordance  with, the Note, and the holder of such instrument  shall be entitled
to the benefits of this Agreement.

     12.  Termination.   Immediately   following  the  payment  of  all  Secured
Obligations,  Lender shall deliver to Pledgor the Pledged  Collateral pledged by
Pledgor at the time subject to this Agreement and all  instruments of assignment
executed in connection  therewith,  free and clear of the liens hereof,  and any
assignment  required to be executed  by Lender to effect  such  redelivery  and,
except as otherwise  provided  herein,  all of Pledgor's  obligations  hereunder
shall at such time terminate.

     13. Lien Absolute.  All rights of Lender hereunder,  and all obligations of
Pledgor hereunder, shall be absolute and unconditional irrespective of:

         (a) any lack of validity or  enforceability  of the Note,  any Security
Document or any other  agreement  or  instrument  governing  or  evidencing  any
Secured Obligations;

         (b) any change in the time,  manner or place of  payment  of, or in any
other  term  of,  all or any  part  of the  Secured  Obligations,  or any  other
amendment  or waiver  of or any  consent  to any  departure  from the Note,  any
Transaction   Document  or  any  other  agreement  or  instrument  governing  or
evidencing any Secured Obligations;

         (c) any exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the Secured Obligations; or

         (d) any other circumstance  which might otherwise  constitute a defense
available to, or a discharge of, Pledgor.

     14.  Release.  Pledgor  consents and agrees that Lender may at any time, or
from time to time, in its discretion  exchange,  release and/or surrender all or
any of the Pledged  Collateral,  or any part thereof,  by whomsoever  deposited,
which is now or may hereafter be held by Lender in connection with all or any of
the  Secured  Obligations;  all in such manner and upon such terms as Lender may
deem proper,  and without  notice to or further  assent from  Pledgor,  it being
hereby  agreed  that  Pledgor  shall be and remain  bound  upon this  Agreement,
irrespective  of the  existence,  value  or  condition  of  any  of the  Pledged
Collateral,   and  notwithstanding  any  such  change,   exchange,   settlement,
compromise,  surrender,  release, renewal or extension, and notwithstanding also
that the Secured  Obligations  may, at any time exceed the  aggregate  principal
amount  thereof  set forth in the Note,  or any other  agreement  governing  any

                                      X-45


Secured  Obligations.  Pledgor  hereby  waives  notice  of  acceptance  of  this
Agreement,  and also presentment,  demand, protest and notice of dishonor of any
and all of the Secured  Obligations,  and promptness in commencing  suit against
any party hereto or liable hereon,  and in giving any notice to or of making any
claim or demand  hereunder upon such Pledgor.  No act or omission of any kind on
Lender's part shall in any event affect or impair this Agreement.

     15.  Indemnification.  Pledgor agrees to indemnify and hold Lender harmless
from  and  against  any  taxes,  liabilities,   claims  and  damages,  including
reasonable  attorney's fees and  disbursements,  and other expenses  incurred or
arising by reason of the taking or the failure to take action by Lender, in good
faith,  in respect  of any  transaction  effected  under  this  Agreement  or in
connection with the lien provided for herein, including, without limitation, any
taxes  payable in  connection  with the delivery or  registration  of any of the
Pledged  Collateral  as provided  herein  (collectively  "Indemnified  Claims").
Whether  or not  the  transactions  contemplated  by  this  Agreement  shall  be
consummated,  Pledgor  agrees  to pay to  Lender  all  out-of-pocket  costs  and
expenses  incurred in connection  with this Agreement and all  reasonable  fees,
expenses  and  disbursements,  including  registration  costs  under the Act (or
similar statute) and the reasonable fees of Lender's agents or  representatives,
incurred in connection with the execution and delivery of this Agreement and the
performance   by  Lender  of  the  provisions  of  this  Agreement  and  of  any
transactions  effected in connection  with this  Agreement.  The  obligations of
Pledgor under this Section 15 shall survive the  termination of this  Agreement.
The foregoing notwithstanding, the indemnity provided for herein shall not apply
to any  Indemnified  Claim  of  Lender  if a  court  of  competent  jurisdiction
determines that such Indemnified  Claim is the result of the gross negligence or
willful misconduct of Lender.

     16. Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective  should any petition be filed by or against Pledgor for
liquidation  or  reorganization,  should  Pledgor  become  insolvent  or make an
assignment  for the  benefit of  creditors  or should a  receiver  or trustee be
appointed  for  all or any  significant  part of  Pledgor's  assets,  and  shall
continue to be  effective or be  reinstated,  as the case may be, if at any time
payment and  performance of the Secured  Obligations,  or any part thereof,  is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned,  and in any such case,  the Secured  Obligations  shall be
reinstated  and deemed  reduced  only by such amount paid and not so  rescinded,
reduced, restored or returned.

     17. Miscellaneous.

         (a)   Lender  may  execute  any of its duties  hereunder  by or through
agents or employees  and shall be entitled to advice of counsel  concerning  all
matters pertaining to its duties hereunder.

         (b)   Pledgor   agrees  to   promptly   reimburse   Lender  for  actual
out-of-pocket expenses, including, without limitation,  reasonable counsel fees,
incurred by Lender in connection with the administration and enforcement of this
Agreement.

         (c)  Neither  Lender  nor any of its  officers,  directors,  employees,
agents or counsel shall be liable for any action lawfully taken or omitted to be
taken by it or them hereunder or in connection herewith, except for its or their
own gross negligence or willful misconduct.

         (d) This Agreement shall be binding upon Pledgor and its successors and
assigns,  and shall inure to the benefit of, and be  enforceable  by, Lender and
its respective  successors and assigns,  and shall be governed by, and construed
and enforced in  accordance  with,  the internal  laws in effect in the State of
Illinois  without  giving effect to principles of choice of law, and none of the
terms or  provisions  of this  Agreement  may be waived,  altered,  modified  or
amended except in writing duly signed for and on behalf of Lender and Pledgor.

     18. Severability.  If for any reason any provision or provisions hereof are
determined  to be invalid  and  contrary to any  existing  or future  law,  such
invalidity  shall not impair the  operation of or effect those  portions of this
Agreement which are valid.

     19. Notices.  Except as otherwise provided herein,  whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication  shall or may be given to or  served  upon any of the  parties  by
another,  or whenever  any of the parties  desires to give or serve upon another
any  communication  with respect to this  Agreement,  each such notice,  demand,

                                      X-46


request,  consent,  approval,  declaration  or other  communication  shall be in
writing, addressed as follows:

        If to Lender, at:         Gryffindor Capital Partners I, L.L.C.
                                  150 North Wacker Drive, Suite 800
                                  Chicago, Illinois 60606
                                  Attn:  Stuart Fuchs
                                  Facsimile No.: (312) 499-1935

                                  With a copy to:

                                  Piper Rudnick
                                  203 North LaSalle Street
                                  Chicago, Illinois 60601
                                  Attn: Deborah Gersh, Esq.
                                  Facsimile No. (312) 630-5371

        If to Pledgor, at:        Provectus Pharmaceuticals, Inc.
                                  7327 Oak Ridge Highway, Suite A
                                  Knoxville, TN  37931
                                  Attention: Timothy C. Scott, Ph.D., President
                                  Facsimile No. (865) 539-9654

                                  With a copy to:

                                  Baker, Donelson, Bearman & Caldwell
                                  2200 Riverview Tower
                                  900 South Gay Street
                                  Knoxville, TN  37902
                                  Attn:  David L. Morehous, Esq.
                                  Facsimile No. (865) 633-7120

     or at such other  address as may be  substituted  by notice given as herein
     provided.  The giving of any  notice  required  hereunder  may be waived in
     writing by the party entitled to receive such notice. Every notice, demand,
     request,  consent,  approval,  declaration or other communication hereunder
     shall be  deemed  to have  been  duly  given or served on the date on which
     personally  delivered,  in person,  by  delivery  service  or by  overnight
     courier  service,  with  receipt  acknowledged,  on the  date  of  telecopy
     transmission  or three (3) days after the same shall have been deposited in
     the United  States mail,  postage  prepaid.  Failure or delay in delivering
     copies of any notice, demand, request,  consent,  approval,  declaration or
     other communication to the persons designated above to receive copies shall
     in no way  adversely  affect  the  effectiveness  of such  notice,  demand,
     request, consent, approval, declaration or other communication.

     20. Section Titles.  The Section titles contained in this Agreement are and
shall be without  substantive  meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.

     21.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts,   which  shall,   collectively  and  separately,   constitute  one
agreement.

     22.  Conflict of Terms.  Except as  otherwise  explicitly  provided in this
Agreement,  if any provision  contained in this Agreement is in conflict with or
inconsistent with any provision in the Note, the provision contained in the Note
shall govern and control, to the extent of such conflict or inconsistency.

                          [Signature Page(s) to Follow]

                                      X-47



     IN WITNESS  WHEREOF,  the parties  hereto  have  caused  this Stock  Pledge
Agreement to be duly executed as of the date first written above.

                                         PLEDGOR:

                                         PROVECTUS PHARMACEUTICALS, INC.


                                         By: /s/ Timothy C. Scott
                                            ------------------------------
                                         Name:  Timothy C. Scott
                                         Title: President


     Accepted  and  agreed  to in  Chicago,  Illinois  as of  this  26th  day of
     November, 2002

                                         GRYFFINDOR CAPITAL PARTNERS I, L.L.C.


                                         By: /s/ Stuart Fuchs
                                            ------------------------------
                                         Name:  Stuart Fuchs
                                         Title: Managing Principal




                                      X-48



                                   SCHEDULE I
                                   ----------
                          to the Stock Pledge Agreement





                                   Class of       Certificate      Number of
          Issuer                    Stock            No(s).         Shares
          ------                   --------       -----------      ---------
Xantech Pharmaceuticals, Inc.








                                      X-49



                                   SCHEDULE II
                                   -----------
                          to the Stock Pledge Agreement


                                PLEDGE AMENDMENT
                                ----------------


     This Pledge  Amendment,  dated  ______________________,  2002 is  delivered
pursuant to Section 6(d) of the Stock Pledge  Agreement  referred to below.  The
undersigned  hereby  agrees that this Pledge  Amendment  may be attached to that
certain  Stock  Pledge  Agreement,  dated  as  of  November  26,  2002,  by  the
undersigned,  as Pledgor,  to Gryffindor Capital Partners I, L.L.C. and that the
Pledged Shares listed on this Pledge Amendment shall be and become a part of the
Pledged  Collateral  referred to in said Stock Pledge Agreement and shall secure
all Secured Obligations referred to in said Stock Pledge Agreement.



                                        -----------------------------------




                                               Certificate        Number of
        Issuer          Class of Stock            No(s).            Shares
        ------          --------------         -----------        ---------








                                      X-50



                                                                    Exhibit 4.17


Neither this Warrant  represented  by this  certificate  nor this Warrant Shares
issuable  upon the  exercise  of this  Warrant  have been  registered  under the
Securities  Act of 1933,  as  amended  (the  "Securities  Act"),  and may not be
offered, sold or otherwise transferred, pledged or hypothecated unless and until
such shares are registered  under the Securities Act or an opinion of counsel or
other evidence,  in either case reasonably  satisfactory to the Corporation,  is
obtained to the effect that such registration is not required.

                          Common Share Purchase Warrant

                             Date: January 29, 2003
--------------------------------------------------------------------------------
                  Transfer Restricted - See Section Article IX

     Provectus Pharmaceuticals,  Inc., a Nevada corporation (the "Corporation"),
hereby certifies that, for value received,  Investor-Gate.com (the "Holder"), is
entitled,  on the terms and  subject  to the  conditions  set forth  herein,  to
purchase  from the  Corporation,  up to  Twenty-Five  Thousand  (25,000)  of the
Corporation's  Common Shares, as defined in Section 6.4 (the "Warrant  Shares"),
at a price of  Seventy-Five  Cents  ($0.75)  per  Warrant  Share (the  "Exercise
Price").  This Warrant  shall be  exercisable  at any time and from time to time
during the period  beginning  on the date set forth above and ending on the date
which is 18 months  thereafter  (the  "Exercise  Period").  The number of Common
Shares  issuable  upon the exercise of this  Warrant and the Exercise  Price per
share shall be subject to adjustment from time to time as set forth herein.

1. CERTAIN DEFINITIONS

     Whenever used in this Warrant, the following terms shall have the following
meanings:

     (a)  "Affiliate"  means  any  Person  who  now or  hereafter,  directly  or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, another Person.

     (b)  "Business  Day"  means a day other than  Saturday,  Sunday or a day on
which banks are not open for business in Knoxville, Tennessee.

     (c)  "Combination"  means an event in which  the  Corporation  consolidates
with,  merges with or into, or sells all or  substantially  all of its assets to
another Person.

     (d) "Common Shares" means the Corporation's common shares, $.001 par value.

     (e) "Control" means the possession, directly or indirectly, of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether  through the  ownership  of voting  stock or  interests,  by contract or
otherwise.

     (f) "Exchange Act" means the Securities Exchange Act of 1934.

     (g)  "Person"  means  an  individual,  partnership,   corporation,  limited
liability  company,  trust,  unincorporated  organization,   association,  joint
venture or a government or agency or political subdivision thereof.

     (h) "Securities Act" means the Securities Act of 1933.

2. EXERCISE OF WARRANT

     (a) This Warrant may be exercised,  in whole or in part, at any time during
the Exercise  Period,  by the Holder  providing  written  notice  thereof to the
Corporation,  in  the  form  attached  hereto  as  Exhibit  A  (the  "Notice  of
Exercise"),  in  accordance  with  Section  Article XII hereof,  accompanied  by
payment of the aggregate  Warrant  Price for the number of Warrant  Shares to be
purchased (i) in cash or by check,  payable to the order of the  Corporation  or
(ii)  by  wire  transfer  in  accordance  with  instructions   provided  by  the
Corporation.

     (b)  Subject to  Section  Article IX  hereof,  upon the  surrender  of this
Warrant and payment of the aggregate  Exercise Price in accordance  with Section
2(a),  the  Corporation  shall issue,  and shall  deliver to or upon the written
order of the Holder and in such name or names as the  Holder  may  designate,  a



                                      X-51


certificate or certificates  for the number of whole Warrant Shares so purchased
(or the other securities or property to which the Holder is entitled pursuant to
Section 3 of this  Warrant),  together  with cash as provided in Section 2(d) in
respect of any fractional Warrant Shares otherwise issuable upon such exercise.

     (c)Certificates for Warrant Shares shall be deemed to have been issued, and
any Person so  designated  to be named  therein shall be deemed to have become a
holder of record of the Warrant  Shares,  as of the date of the surrender of the
Warrant  Certificate and payment of the aggregate Exercise Price in Shares shall
be closed,  certificates  for Warrant Shares shall be issuable as of the date on
which such books next shall be opened, and until such date the Corporation shall
be  under  no  duty  to  deliver  any  certificates  for  Warrant  Shares.  Each
certificate  representing Warrant Shares shall bear the Private Placement Legend
except as otherwise provided in Section 4(c).

     (d) The  Corporation  shall not be  required  to issue  fractional  Warrant
Shares on the  exercise  of  Warrants.  If,  except for the  provisions  of this
Section  2(d),  any fraction of a Warrant  Share would be  exercisable  upon the
exercise of any Warrant or specified portion thereof,  the Corporation shall pay
at the time of  exercise  an amount in cash equal to such  fraction of a Warrant
Share, multiplied by the fair market value of a Common Share on the Business Day
prior to the date of exercise, computed to the nearest whole cent.

3. ANTIDILUTION PROVISIONS

     (a) In the event that, at any time or from time to time after the Effective
Date, the  Corporation  (i) shall pay a dividend or make a  distribution  on the
Common  Shares  payable in Common  Shares or other  shares of the  Corporation's
capital stock, (ii) shall subdivide the outstanding  Common Shares into a larger
number of Common  Shares or other equity  securities of the  Corporation,  (iii)
shall  combine the  outstanding  Common  Shares into a smaller  number of Common
Shares or other equity securities of the Corporation,  or (iv) shall increase or
decrease the number of Common  Shares  outstanding  by  reclassification  of the
Common Shares; then:

          (A) the number of Common  Shares  issuable  upon the  exercise  of any
     Warrant  shall be a number of shares equal to the product of (I) the number
     of Common  Shares that the Holder of this Warrant  would have been entitled
     to receive if this  Warrant  had been  exercised  immediately  prior to the
     event (or, in the case of a dividend or  distribution  described  in clause
     (i)  above,  immediately  prior to the  record  date  therefor)  and (II) a
     fraction, the numerator of which shall be the total number of Common Shares
     outstanding  immediately  after the completion of the event described above
     and the  denominator  of which shall be the total  number of Common  Shares
     outstanding  immediately  prior to the  happening  of the  event  described
     above; and

          (B) subject to Section 3(e),  the Exercise  Price shall be a price per
     share equal to the Exercise Price in effect immediately prior to the event,
     divided by the fraction calculated in accordance with clause (A)(II) above.

     An  adjustment  made  pursuant to this Section 3(a) shall become  effective
immediately  after the effective  date of the event,  retroactive  to the record
date for the event in the case of a dividend or distribution in Common Shares or
other shares of the Corporation's capital stock.

     (b) Except as provided in Section 3(c), in the event of a Combination,  the
Holder shall have the right to receive,  upon exercise of this Warrant, the kind
and amount of shares of capital stock or other securities or property which such
Holder  would  have  been  entitled  to  receive  upon  or as a  result  of such
Combination   had  this  Warrant  been  exercised   immediately   prior  to  the
Combination.  Unless Section 3(c) applies to the  Combination,  the  Corporation
shall provide that the  surviving or acquiring  Person in the  Combination  (the
"Successor  Corporation")  will  confirm the  Holder's  rights  pursuant to this
Section 3(b) and provide for adjustments, which shall be as nearly equivalent as
may be  practicable  to the  adjustments  provided  for in this  Section  3. The
provisions of this Section 3(b) shall apply to successive Combinations involving
any Successor Corporation.

     (c) In the event of (i) a Combination in which  consideration is to be paid
to the holders of Common  Shares in exchange for their shares  solely in cash or
(ii) the dissolution, liquidation or winding-up of the Corporation, Holder shall
be  entitled  to  receive,   upon  surrender  of  their  Warrant   Certificates,

                                      X-52


distributions  on an equal  basis with the  holders of Common  Shares,  or other
securities issuable upon the exercise of this Warrants,  as if this Warrants had
been exercised immediately prior to the event, less the aggregate Exercise Price
payable by the Holder.

     (d) In the event of a Combination  pursuant to which Holder become entitled
to receive,  upon exercise of this Warrants,  capital stock,  other  securities,
property,  cash or other distributions pursuant to Sections 3(b) or 3(c), Holder
thereafter  shall not be entitled to receive Common Shares upon exercise of this
Warrants.

     (e) The  adjustments  required by this Section 3 shall be made whenever and
as often as any specified event requiring an adjustment shall occur, except that
no adjustment of the Exercise Price or the number of Common Shares issuable upon
the  exercise of Warrants  that  otherwise  would be required to made unless and
until such adjustment, either by itself or with other adjustments not previously
made,  increases or decreases by at least 1% of the Exercise Price or the number
of Common Shares issuable upon the exercise of Warrants as in effect immediately
prior  to  the  making  of  such  adjustment  (the  "Minimum  Adjustment").  Any
adjustment smaller than the Minimum Adjustment shall be carried forward and made
as soon as such  adjustment,  together with other  adjustments  required by this
Section 3 and not  previously  made,  would result in an  adjustment at least as
large as the Minimum  Adjustment.  For the purpose of any adjustment,  except as
specified  in the final  paragraph  of  Section  3(a),  any event  requiring  an
adjustment shall be deemed to have occurred at the close of business on the date
of its  occurrence.  In computing  adjustments  under this Section 3, fractional
interests  in  Common  Shares  shall  be  taken  into  account  to  the  nearest
one-hundredth of a share.

     (f) Whenever the  Exercise  Price or the number of Common  Shares and other
securities  or property,  if any,  issuable upon the exercise of this Warrant is
adjusted pursuant to this Section 3, the Corporation shall deliver to the Holder
a certificate describing in reasonable detail the event requiring the adjustment
and the method by which the  adjustment  was  calculated  and setting  forth the
Exercise  Price and the number of Common  Shares  issuable  upon the exercise of
this Warrant after giving effect to such adjustment.

     (g) In the event that the  Corporation  shall propose (i) to pay a dividend
or make a  distribution  on the Common Shares  payable in Common Shares or other
shares  of the  Corporation's  capital  stock,  (ii) to  subdivide,  combine  or
reclassify the outstanding Common Shares, (iii) effect any reorganization of the
Corporation  or any  Combination,  (iv) to effect the  voluntary or  involuntary
dissolution,  liquidation or winding-up of the  Corporation,  or (v) to make any
tender  offer or  exchange  offer with  respect to the Common  Shares,  then the
Corporation  shall  give the  Holder  notice of such  proposed  action or offer,
specifying the record date for the action or offer and the date of participation
therein by the holders of Common  Shares,  if any such date is to be fixed,  and
briefly  describing  the effect of such  action on the Common  Shares and on the
Exercise  Price and the  number  and kind of any  other  shares of stock and the
other  property,  if any,  issuable  upon  exercise of this Warrant after giving
effect to any  adjustment  pursuant to this Section 3 that will be required as a
result of such action. Notice in accordance with the foregoing shall be given as
promptly as  possible  and in any event (A) at least 10 days prior to the record
date for the action, in the case of an action described in clause (i); or (B) at
least 20 days  prior  to the date of the  taking  of the  action  or the date of
participation therein by the holders of Common Shares,  whichever is earlier, in
the case of any other action.

4. TRANSFER; LEGENDS

     (a) This Warrant  shall not be  transferable,  nor may it be the subject of
any sale, assignment, pledge or other conveyance.

     (b) The Warrant Shares may not be offered or sold except (i) pursuant to an
effective  registration  statement  under  the  Securities  Act or  (ii)  if the
Corporation  first shall have been furnished with an opinion of legal counsel or
other evidence,  in either case reasonably  satisfactory to the Corporation,  to
the  effect  that  such  sale  or  transfer  is  exempt  from  the  registration
requirements of the Securities Act.

     (c)  Notwithstanding  the  provisions of Section 4(b) of this  Warrant,  no
registration  or opinion of counsel  shall be required for a transfer of Warrant
Shares made in accordance with Rule 144 under the Securities Act.

     (d) Except as provided in Section 9.5 of this Warrant,  this  Warrant,  any

                                      X-53


Warrant issued in replacement of this Warrant and each certificate  representing
Warrant  Shares  issued upon  exercise of this Warrant  shall bear the following
legend (the "Private Placement Legend") on the face thereof:

     Neither  the  Warrants  represented  by this  certificate  nor  the  shares
     issuable upon the exercise of these Warrants have been registered under the
     Securities Act of 1933, as amended (the  "Securities  Act"), and may not be
     offered, sold or otherwise transferred,  pledged or hypothecated unless and
     until such shares are registered  under the Securities Act or an opinion of
     counsel or other evidence,  in either case  reasonably  satisfactory to the
     Corporation,  is  obtained  to the  effect  that such  registration  is not
     required.

     (e) Upon the exchange or  replacement of Warrants or Warrant Shares bearing
the Private  Placement  Legend,  the Corporation  shall deliver only Warrants or
Warrant Shares, as applicable,  that bear the Private Placement Legend,  unless:
(i) such transfer or exchange is effected pursuant to an effective  registration
statement under the Securities Act; or (ii) in the case of Warrant Shares,  such
Warrant  Shares were acquired  pursuant to an effective  registration  statement
under the  Securities  Act; or (iii) there is  delivered to the  Corporation  an
opinion  of  legal  counsel  or  other  evidence,   in  either  case  reasonably
satisfactory  to the  Corporation,  to the effect  that such sale or transfer is
exempt from the registration requirements of the Securities Act.

     (f) By its  acceptance  of this  Warrant or any Warrant  Share  bearing the
Private Placement Legend,  the Holder  acknowledges the restrictions on transfer
of this Warrant and the Warrant Shares, as applicable, set forth in this Warrant
and agrees  that it shall  transfer  this  Warrant  or the  Warrant  Shares,  as
applicable, only as provided in this Warrant.

5. RIGHTS OF HOLDER

     Prior to the exercise of this Warrant, the Holder shall not be entitled (i)
to receive dividends or other  distributions  payable on Common Shares,  (ii) to
receive  notice of or vote at any  meeting  of the  Corporation's  stockholders,
(iii) to consent to any action of the  stockholders,  (iv) to receive  notice as
stockholders of the Corporation of any other proceedings of the Corporation, (v)
to  exercise  any  preemptive  rights,  or (vi) to  exercise  any  other  rights
whatsoever as stockholders of the Corporation.

6. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

     The Corporation is a corporation duly incorporated, validly existing and in
good  standing  under the laws of the State of Nevada,  and has the full  right,
power and  authority to execute and deliver this Warrant and to  consummate  the
transactions contemplated hereby. The execution and delivery of this Warrant and
the  consummation  of the  transactions  contemplated  hereby have been duly and
validly authorized by all necessary action on the part of the Corporation and no
other proceedings on the part of the Corporation are necessary to authorize this
Warrant or the consummation of the transactions contemplated hereby.

7. NOTICES

     All notices, requests, consents and other communications hereunder shall be
in writing and shall be deemed to have been made (x) upon actual  receipt,  when
given by hand or confirmed  facsimile or electronic mail  transmission,  (y) one
day after delivery to the carrier,  when given by overnight  delivery service or
(z) two days after mailing,  when given by  first-class  registered or certified
mail, postage prepaid,  return receipt  requested;  in any case to the following
address,  or to such other  address as a party,  by notice to the other  parties
given pursuant to this Section 7, may designate from time to time:

 (a) If to the Holder, to:

      Investor-Gate.com
      Attention: Kevin Leigh, President
      18533 Roscoe Blvd #142
      Northridge CA 91324
      Facsimile:
      email:

                                      X-54


 (b) If to the Corporation, to:             With a copy to:

      Provectus Pharmaceuticals, Inc.       Baker, Donelson, Bearman & Caldwell
      Attention: President                  Attention: David L. Morehous, Esq.
      7327 Oak Ridge Highway, Suite A       Riverview Tower, Suite 2200
      Knoxville, TN 37931                   900 South Gay Street
      Facsimile: 865.539.9654               Knoxville, TN 37902
      email: scott@provectuscorp.com        Facsimile: 865.525.8569
                                            Email: dmorehous@bdbc.com

8. GOVERNING LAW; VENUE OF ACTIONS

     (a) This Warrant  shall be governed and  construed in  accordance  with the
internal laws of the State of Nevada as applied to contracts  made and performed
within the State of Nevada,  without regard to the principles  thereof regarding
resolution of conflicts of law.

     (b)  The  Corporation  and  the  Holder  each  hereby  (i)  submit  to  the
jurisdiction  of any  state  court  of  competent  jurisdiction  in and for Knox
County,  Tennessee,  or in the  United  States  District  Court for the  Eastern
District of Tennessee  sitting at Knoxville in any action or proceeding  arising
out of or relating  to this  Warrant and agree that all claims in respect of the
action or proceeding may be heard and  determined in any such court;  (ii) agree
not to bring any action or proceeding arising out of or relating to this Warrant
in any  other  court;  (iii)  waive any  defense  of  inconvenient  forum to the
maintenance  of any action or proceeding so brought and waive any bond,  surety,
or other  security  that  might be  required  of any other  Party  with  respect
thereto;  and (iv) agree that a final  judgment in any action or  proceeding  so
brought  shall be  conclusive  and may be enforced by suit on the judgment or in
any other manner provided by law or in equity.

9. GENERAL PROVISIONS

     (a) This Warrant  embodies the entire agreement and  understanding  between
the parties  hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter.

     (b)  Except as  otherwise  expressly  set forth in this  Warrant,  any term
hereof  may be  amended  and the  observance  of any term  hereof  may be waived
(either  generally  or in a  particular  instance  and either  retroactively  or
prospectively), with the written consent of the parties hereto. No waivers of or
exceptions to any term,  condition or provision of this  Warrant,  in any one or
more instances,  shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.

     (c) The invalidity or  unenforceability  of any provision  hereof shall not
affect the validity or enforceability of any other provision hereof.


                     * Signatures appear on following page *



                                      X-55



                                   SIGNATURES


     IN WITNESS  WHEREOF,  the  Corporation  has caused this  Warrant to be duly
executed and delivered as of the date first set forth above.


                                          PROVECTUS PHARMACEUTICALS, INC.,
                                          a Nevada corporation

                                            By:

                                            Name:

                                            Title:


ACCEPTED AND AGREED to as of the date first set forth above:

INVESTOR-GATE.COM

     By:                                             
         --------------------------------------------

     Name:                                           
           ------------------------------------------

     Title:                                          
            -----------------------------------------




                                      X-56



                                    EXHIBIT A


                           NOTICE OF WARRANT EXERCISE


     Pursuant to the Warrant  dated  January __, 2002 for the  purchase of up to
Twenty-Five  Thousand  (25,000)  common  shares,  $.001 par value (the  "Warrant
Shares"),  of  Provectus  Pharmaceuticals,   Inc.,  a  Nevada  corporation  (the
"Corporation"),  issued by the Corporation to the undersigned, the Holder hereby
irrevocably elects to exercise the Warrant as to ______________  Warrant Shares,
and herewith  tenders  payment for such Warrant Shares to the order of Provectus
Pharmaceuticals,    Inc.    (or    its    successor)    in   the    amount    of
_______________________________  Dollars ($__________.00) in accordance with the
terms of the Warrant.


Dated:                       ,              
       ----------------------  -------------

                                                -------------------------------
                                                    Signature of Owner

      The signature must correspond with the name as written upon the face
            of the Warrant in every particular, without alteration or
                      enlargement or any change whatsoever.

Securities and/or checks should be issued to:

         Please insert social security or identifying number:

         Name: 

         Street Address: 

         City, State and Zip Code: 



A new Warrant the number of Warrant  Shares as to which the Warrant has not been
exercised should be issued to:

         Please insert social security or identifying number:

         Name: 

         Street Address: 

         City, State and Zip Code: 




                                      X-57


                                                                    Exhibit 10.6

                                                 Nace Pharma, llc
                                                 69 MacArthur Loop
                                                 Highland Park, Il 60035

June 7, 2002

Craig Dees, Ph.D.
Chief Executive Officer
Provectus Pharmaceuticals, Inc.
7327 Oak Ridge Highway, Suite B
Knoxville, TN 37931

Dear Craig:

     Thank you for your prompt responses to earlier versions of our proposal. As
discussed, Nace Pharma, LLC ("Nace") is prepared to enter into an agreement with
Provectus  Pharmaceuticals,  Inc. ("Provectus") to represent your company as its
agent authorized to solicit offers to license or options to license its products
to the  pharmaceutical  companies listed in Exhibit A. In order to strike a fair
balance  between  your  reasonable  desire  not  to be  tied  to an  "exclusive"
representation  arrangement  with Nace  Pharma  and our  objective  to be fairly
compensated  for an  initiative  of our which  results in a license or option to
license agreement of Provectus new chemical entity, we agree as follows:

     If Nace introduces  Provectus to one or more of the companies on Exhibit A,
and if our  introduction  leads to a meeting between  Provectus and the prospect
and the execution of a Provectus  CDA by the prospect,  then and only then would
we be "protected"  with respect to that  particular  company for a period of two
years from the date of the CDA, or until the Nace Pharma  contact  declines  the
technology, whichever is sooner.

     The intention of the parties is to leverage the relationships  developed by
Dr. Michael H. Davidson and Stuart Fuchs, the members of Nace, to the benefit of
Provectus.  As founder and CEO of the Chicago Center for Clinical Research,  one
of the  largest  site  management  organizations,  Dr.  Davidson  has  developed
professional and social ties to a large number of CEOs and research  director of
Big  Pharmas  and other  ethical  drug  companies,  and has served as  Principal
Investigator or advised on numerous clinical trials. Stuart Fuchs has since 1995
been involved in funding several biotech companies, particularly in the field of
cancer  therapeutics.  Formed in 1997,  Nace  Pharma  seeks to bridge  the chasm
between the  innovative  biotech  companies  like  Provectus and  pharmaceutical
companies  interested in augmenting  their  pipeline of drugs in  development by
in-licensing promising new chemical entities.

     The  subject of our  agreement  is  XANTRYL  and  PROVECTA,  pharmaceutical
compositions  based on a  common  halogenated  xanthene,  and  related  chemical
entities  ("XANTRYL" and  "PROVECTA")  which employ one or more of the following
techniques:

     1. Photodynamic Therapy: Topical Application of XANTRYL with Green Light or
other means of photonic excitation to treat psoriasis,  actinic keratosis, basal
cell carcinoma, and other forms of skin cancer.

     2.  Radiosensitization:  Injection,  ingestion or intratumoral injection of
doses of PROVECTA  using  ionizing  radiation to produce  photolysis in targeted
cancer cells.

     3.   Chemoablation:   Lightly   concentrated  doses  of  PROVECTA  injected
intratumorally,  which without  activation by light or ionizing radiation effect
chemoablation of targeted lesions of hepatocellular carcinoma, breast cancer and
other "focal" cancers.

     Other new chemical  entities  discovered by Provectus  could be included in
our agreement by mutual agreement of the parties.

     Provectus  agrees  to  reimburse  Nace  for  travel  and  other  reasonable
out-of-pocket  expenses  actually  incurred in connection with our  solicitation
efforts on behalf of Provectus  pursuant to this agreement;  provided,  however,
that any reimbursable  expense in excess of $1,000 are subject to prior approval
in writing by Craig Dees or other duly authorized officer of Provectus.

                                      X-58


     Nace's fees would consist of the following:

Upfront Warrants

     In order to  provide  Nace with the  incentive  to get  started,  Provectus
agrees to grant  Nace upon the  signing of this  Agreement  3 year  warrants  to
purchase 100,000 shares of restricted common stock at an exercise price equal to
the weighted  average price of the stock over the preceding 30 trading days. The
warrants would include "piggyback" registration rights, but would vest only upon
the  signing of the  initial  transaction  with one of the  companies  listed on
Exhibit  A in an  estimated  amount  of no less than $10  million  dollars.  For
purposes of this  paragraph  only,  the estimated  value of the contract will be
based upon revenues of any kind, including all fees, joint development expenses,
payments in kind and work in kind.

Cash Fees

     In  addition,  Nace  would  earn  2.5%  of the  first  $50  million  of any
cumulative  revenues paid to Provectus by any of the potential  licensees listed
on  Exhibit  A, and 5.0% of any  cumulative  revenues  above  $50  million.  For
purposes of this paragraph, "revenues" are defined to include milestone payments
and exclude any work in kind or payments in kind, as well as any amounts paid to
Provectus pursuant to joint development contracts.  The case fees earned by Nace
are due and payable  within thirty (30) days of the actual  receipt by Provectus
of revenues as defined in this paragraph.

     If this  proposal is  acceptable  to you,  please  sign in the  appropriate
space.  In order to introduce you and other members of the Provectus  management
team  to Dr.  Michael  Davidson,  I'd be  delighted  to  arrange  a  meeting  or
conference call at a mutually convenience time and place.

     Thanks again for your kind  consideration.  Michael and I look forward to a
long and mutually profitable association with Provectus Pharmaceuticals.

Sincerely,

/s/  STUART FUCHS
---------------------------------------------



 Stuart Fuchs

cc: Dr. Michael H. Davidson

AGREED:                                          

Provectus Pharmaceuticals, Inc.
                                                 

/s/  CRAIG DEES
---------------------------------------------



Craig Dees, Ph.D.
Chief Executive Officer


                                      X-59


                Exhibit A to Letter Agreement dated June 7, 2002

                                     between

               Nace Pharma llc and Provectus Pharmaceuticals, Inc.


Amersham plc

Amgen Inc.

Astra Zeneca

Bristol Meyers Squibb

Relaint

Pfizer

Abbott

Medline

Novartis

Aventis

Bayer

Pharmacia

Wyeth

Varian




                                      X-60



                                                                   Exhibit 10.15
                                                                   -------------


                           MATERIAL TRANSFER AGREEMENT
                           ---------------------------
                               (SCHERING RECEIPT)
                               ------------------

     THIS MATERIAL TRANSFER AGREEMENT  ("Agreement") is made as of this 31st day
of  , ,  ("Effective  Date"),  by  and  between  SCHERING-PLOUGH  ANIMAL  HEALTH
CORPORATION  (hereinafter,  referred to as "Schering"),  a Delaware corporation,
having its principal  office  located at 1095 Morris Avenue,  Union,  New Jersey
07083,  and  (hereinafter,  referred to as  "Supplier"),  , having its principal
office located at .

                                   WITNESSETH:
                                   -----------

     WHEREAS,  Schering and Supplier  desire to contract for the exchange of the
Information  (as hereinafter  defined)  relating to the Material (as hereinafter
defined) on the terms and conditions set forth herein.

     NOW, THEREFORE,  in consideration of the premises and the mutual agreements
and covenants set forth in this Agreement, Schering and Supplier hereby agree as
follows:


     1. Definitions.  For purposes of this Agreement,  the following terms shall
     have the following meanings (such meanings to be equally applicable to both
     the singular and plural forms of the terms defined):

          1.01 "Agents" shall mean any officer, director, employee, and agent of
          a Party.

          1.02 "Commercial Purpose" shall mean (a) the sale, lease,  license, or
          other  transfer  of the  Material or  Modifications  or (b) use of the
          Material or  Modifications  by any Person,  including  Schering to (i)
          perform  contract  research,  (ii) screen  compound  libraries,  (iii)
          produce or  manufacture  products  for general  sale;  or (iv) conduct
          research  activities  that  result in any  sale,  lease,  license,  or
          transfer of the Material or Modifications.

          1.03  "Developments"  shall  mean all  ideas,  concepts,  discoveries,
          inventions,   developments,   know-how,  trade  secrets,   techniques,
          methodologies,  modifications,  innovations,  improvements,  writings,
          documentation,  data and  rights  (whether  or not  protectable  under
          state,  federal,  or foreign patent,  trademark,  copyright or similar
          laws),  incorporating  or requiring the use of the Material,  that are
          discovered,  developed,  created, conceived, or reduced to practice by
          Schering,  independently or in conjunction with any Person, during the
          term of this Agreement,  including, without limitation, New Substances
          and New Uses.

          1.04  "Effective  Date"  shall  have  the  meaning  set  forth  in the
          introductory paragraph to this Agreement.

          1.05  "Field"  shall mean the  veterinary  field,  including,  without
          limitation, any and all applications for non-human animals.

          1.06 "Findings" shall mean any observations,  studies, conclusions, or
          Results arising out of Schering's evaluation of the Material.

          1.07 "Information" shall mean all tangible and intangible information,
          including, without limitation,  technical,  financial,  commercial and
          proprietary   information,   know-how,   and  trade   secrets  of  any
          description, whether created or produced by Schering, Supplier, or any
          Person on behalf of Schering and/or Supplier, that concerns or relates
          to the Material or is otherwise  acquired in anticipation  of, during,
          or as a result of, or in any way connected with,  this Agreement,  and
          (a) if  disclosed in writing,  graphically,  or by any means or way of
          sample or specimen, is marked "Confidential" when disclosed, or (b) if
          disclosed  orally,  is reduced to writing within thirty (30) days from
          the date of such oral disclosure and is marked "Confidential."

                                      X-61


          1.08 "Material" shall mean the eukaryotic  expression  vector with the
          HSP70 gene running off a B-actin  promoter,  with the usual antibiotic
          resistance  inserts for cloning  purposes  (ampicillin  and  geneticin
          resistance),  resulting in an HSP70 increase in Schering's  Vero cells
          of about 4-16x over  normal  levels,  and any  Progeny and  Unmodified
          Derivatives  (including,  without  limitation,   expression  products,
          subclones, sub-units or fractionations).

          1.09  "Modifications"  shall mean any  substances  created by Schering
          which  contain or  incorporate  the  Material  or derived by  chemical
          modification of the Material.

          1.10  "New  Substance"  shall  mean any  material  first  produced  or
          isolated by Schering with or by the use of the Material.

          1.11  "New Use"  shall  mean any new use of the  Material,  including,
          without  limitation,  new  therapeutic  uses or methods  of  treatment
          discovered by Schering.

          1.12 "Party"  shall mean  Schering or Supplier;  "Parties"  shall mean
          Schering and Supplier.

          1.13  "Patent  Rights"  shall mean the  following  patents  and patent
          applications:  (a) Patent No. US  6,495,360  B1 (issued  December  17,
          2002), (b) Patent No. US 6,451,597 B2 (issued September 17, 2002), (c)
          Patent No. US 6,541,233 B2 (issued April 1, 2003),  and (d) Patent No.
          US  6,468,777  B2 (issued  October 22,  2002),  including  all foreign
          counterparts  thereof,  and  any  and  all  divisions,  continuations,
          continuation-in-part,   patents  of  addition,   reissues,   renewals,
          extensions,   registrations,   confirmations,   re-examinations,   any
          provisional  applications,  supplementary protection certificates,  or
          the  like,  of any  such  patents,  patent  applications  and  foreign
          equivalents  thereof,  which,  during the term of this Agreement,  are
          owned by Supplier or to which Supplier,  through license or otherwise,
          has or acquires rights.

          1.14  "Person"  shall  mean (a) any  corporation,  partnership,  joint
          venture,  joint stock company,  association,  trust,  business  trust,
          estate, unincorporated organization, or other business entity, (b) any
          government  or agency,  division or  subdivision  thereof,  or (c) any
          individual.

          1.15 "Progeny" shall mean an unmodified  descendent generated from the
          Material, such as a virus, cell from cell, or organism from organism.

          1.16 "Purpose" shall have the meaning set forth in Section 2 hereof.

          1.17 "Results" shall mean any and all results, know-how, Findings, and
          knowledge related to the Material achieved or obtained by or on behalf
          of Schering.

          1.18 "Territory" shall mean all of the countries in the world.

          1.19 "Unmodified  Derivative"  shall mean any substance created by the
          Supplier which constitutes an unmodified functional subunit or product
          expressed by or generated from the original Material,  including,  but
          not limited  to,  subclones  of  unmodified  cell  lines,  purified or
          fractionated  subsets of the original Material,  proteins expressed by
          DNA/RNA supplied by Supplier,  or monoclonal  antibodies secreted by a
          hybridoma cell lines.

     2. Scope. During the term of this Agreement,  Schering shall have the right
     to use the Material in  accordance  with the terms and  conditions  of this
     Agreement for the sole and limited  purpose of evaluating  the Material and
     determining  if the  Material  may be used for  Commercial  Purposes or any
     other  purpose  agreed to by the  Parties  ("Purpose").  Within a period of
     thirty (30) days from the completion of the Purpose,  Schering shall notify
     Supplier in writing of its  intention to use the  Material  for  Commercial
     Purposes,  and the Parties agree to enter into a license  agreement,  under
     which Supplier shall grant to Schering an exclusive  license (with right to
     grant  sublicenses)  to develop the  Material  under the Patent  Rights for
     Commercial  Purposes  in the  Field  within  the  Territory.  Such  license
     agreement shall include,  without  limitation,  the milestone  payments set
     forth on Exhibit A hereof.

                                      X-62


     3. Obligations of Schering.
        ------------------------

          3.01  During the term of this  Agreement  and for a period of five (5)
          years from the date of expiration or  termination  of this  Agreement,
          Schering shall:  (a) protect and hold in confidence the Information of
          Supplier;  (b) not  disclose or use, or cause to be disclosed or used,
          such  Information  to or by any Person  except with the prior  written
          consent of Supplier and in accordance with this Agreement; (c) handle,
          preserve,  and protect such  Information with at least the same degree
          of care Schering affords its own confidential information; and (d) use
          diligent  efforts  to ensure  that each of its  Agents  preserves  and
          protects the confidentiality of such Information.

          3.02 Schering's duty of confidentiality under this Section 3 shall not
          apply to any Information of Supplier that:

               (a) was  demonstrably  known to  Schering  prior to the date such
               Information was disclosed by Supplier;

               (b) was known or  available  generally to the public prior to the
               date such Information was disclosed by Supplier;

               (c)  becomes   known  or  available   generally  to  the  public,
               subsequent  to  the  date  such   Information  was  disclosed  by
               Supplier,  through  no act  of  Schering  in  violation  of  this
               Agreement;

               (d) is or was  disclosed  by  Supplier  to any Person  without an
               obligation to maintain confidentiality;

               (e) is or was developed  independently  by Schering or its Agents
               without any breach of this Agreement;

               (f) is received  by Schering  from a Person and is not subject to
               any  obligation  of  confidentiality   owed  by  such  Person  to
               Supplier; or

               (g) subject to Section 3.04  hereof,  is required to be disclosed
               by  Schering  pursuant  to  any  applicable  law or  judicial  or
               governmental order.

          3.03  Failure by  Schering  to disclose  the  existence  of any of the
          conditions  set forth in  Section  3.02  hereof  shall not be deemed a
          representation  that  such  conditions  do  not  exist  or  that  such
          conditions have been waived.

          3.04  Schering  shall  notify  Supplier  of  receipt  of any  process,
          subpoena,  demand, or request by any Person to disclose Information of
          Supplier, and shall, as soon as practicable but in no event later than
          five (5)  business  days  from the date of such  receipt,  furnish  to
          Supplier a copy of such  process,  subpoena,  demand,  or request  and
          inform Supplier of the circumstances relating thereto. Schering shall,
          at its cost and  expense,  take all  reasonable  steps to maintain and
          protect the confidentiality of the Information of Supplier;  provided,
          however,  that  nothing in this  Agreement  shall be deemed to require
          Schering to violate any law or court order.  Supplier  also shall have
          the  right to take any  legal  action  to  prevent  disclosure  of its
          Information,  including,  without  limitation,  the right to appear on
          behalf of Schering,  to represent  Schering,  and to employ counsel of
          its choice for these  purposes.  If Supplier  elects to  exercise  its
          rights under this Section 3.04, it shall do so at its cost and expense
          and shall hold  harmless,  defend,  and  indemnify  Schering  from and
          against  any  and all  legal  responsibility  or  liability  from  the
          exercise of these rights.  If Supplier elects not to exercise any such
          rights or Schering is  nonetheless  legally  compelled to disclose the
          Information of Supplier,  then Schering may,  without  liability under
          this Agreement, disclose only that portion of such Information that it
          is legally  compelled to disclose and shall furnish to Supplier a copy
          of the Information disclosed and all correspondence and communications
          relating to such disclosure.

                                      X-63


          3.05 Except as provided in  Sections  3.02 and 3.04  hereof,  Schering
          shall:  (a) limit  disclosure of any Information  received by it under
          this  Agreement to only those of its Agents who are directly  involved
          in the evaluation of the Information; (b) upon such disclosure, advise
          such Agents of the  proprietary  nature of such  Information;  and (c)
          subject to Section 3.06 hereof,  be responsible for any breach of this
          Agreement by its Agents.

          3.06 Schering shall,  within five (5) days from the date of receipt of
          notice or knowledge,  notify  Supplier of, and provide all information
          and  documents  relating to, any breach of this Section 3,  including,
          without limitation, conditions or circumstances that indicate that the
          Information  of Supplier  has been or may have been  disclosed or used
          without the written  consent of Supplier;  provided,  however,  that a
          disclosure  of the  Information  of  Supplier  shall  not be  deemed a
          violation of this Agreement,  if such  Information (a) is disclosed by
          Schering  or  its  Agents,  inadvertently,  accidentally,  or  without
          Schering's  informed  authorization  despite  the degree of care which
          Schering  affords its own  confidential  information or (b) subject to
          Section  3.04  hereof,  is  produced in any  judicial or  governmental
          action, whether or not pursuant to a protective order. Schering shall,
          upon the request of Supplier  and at the cost and expense of Schering,
          take  all  steps  reasonably  necessary  to  recover  any and all such
          Information  that has been or may have been  improperly  disclosed  or
          used.

     4. Representations and Warranties.
        -------------------------------

          4.01 Supplier  represents  and warrants to Schering that Supplier has,
          as of the date of this  Agreement,  no obligation or  commitment,  and
          will not, during the term of this  Agreement:  (a) assume or undertake
          any  obligation  or  commitment,   that  is   inconsistent   with  its
          obligations  under,  or the terms and conditions  of, this  Agreement,
          including,  without  limitation,  Sections  3  through 9 hereof or (b)
          enter into negotiations with any Person regarding the Material.

          4.02 Supplier  represents  and warrants that it is the lawful owner or
          licensee of the  Material  and all  Information  to be disclosed by it
          under this  Agreement,  and that it has the right to disclose all such
          Information to Schering.

          4.03 Schering  represents and warrants to Supplier that Schering shall
          comply with all laws, rules and regulations applicable to the handling
          and storage of the Material.

     5. Ownership of Patents.
        ---------------------

          5.01 All rights,  title,  and  interest to and in the  Information  of
          Supplier shall be and remain the property of Supplier, and no license,
          right,  title,  or  interest  to or in any such  Information  shall be
          granted or created by this Agreement,  except the right to receive the
          Information for the Purpose,  or may be granted or created,  except by
          written  agreement  signed  by a  duly  authorized  representative  of
          Supplier. Schering shall not use the Material for Commercial Purposes.

          5.02 All rights,  title, and interest to the  Developments,  Findings,
          Modifications,  New Substances,  New Uses, Results or the non-modified
          parental  Schering  Vero  cells  and any  modified  cell  lines  based
          thereon, shall be and remain the property of Schering, and no license,
          right,  title,  or  interest  shall  be  granted  or  created  by this
          Agreement,  except by written  agreement  signed by a duly  authorized
          representative of Schering.

     6. Term and Termination.
        ---------------------

          6.01 This Agreement  shall become  effective as of the Effective Date,
          and,  except as provided in this  Section 6, shall  continue in effect
          until such time as: (a) Schering  terminates  this  Agreement,  in its
          reasonable discretion, with or without cause, by notice to Supplier in
          accordance with Section 12 hereof;  (b) Schering  notifies Supplier in
          writing that it has  completed the Purpose and does not wish to secure
          from Supplier a license to use the Material for  Commercial  Purposes;

                                      X-64


          or (c) a Party  fails to  remedy  or  otherwise  cure a breach  of any
          material  obligation under this Agreement within thirty (30) days from
          the date of receipt of notice of such breach given by the other Party;
          provided,  however,  that,  if such  breach was outside the control of
          such Party or such Party cures such breach within such thirty (30)-day
          period,  then there shall be no termination of this Agreement pursuant
          to Section 6.01(c) hereof.

          6.02 Upon Supplier's  written request,  Schering shall,  within twenty
          (20)  days  from  the  date  of  expiration  or  termination  of  this
          Agreement,   return  to  Supplier  or  destroy  all  Material  in  its
          possession and all extant copies of Supplier's Information, except one
          (1) copy which may be retained for legal purposes. Notwithstanding any
          return of Supplier's Information in accordance with this Section 6.02,
          the other  duties and  obligations  of Schering  under this  Agreement
          that,  by  their  nature,  are  to  be  performed  or  observed  after
          expiration  or  termination  of  this  Agreement,  including,  without
          limitation,  Schering's duties and obligations under Section 3 hereof,
          shall continue in effect.

     7.  Independent  Contractor.  Nothing  contained in this Agreement shall be
     construed  to  constitute  either  Party as a partner or agent of the other
     Party or to create any other form of legal  association  that would  impose
     liability  upon a Party  for any act or  omission  of the  other  Party  or
     provide a Party with the right, power, or authority to create or impose any
     duty or  obligation on the other Party,  it being  intended that each Party
     shall remain an independent  contractor  acting in its own name and for its
     own account.

     8. Headings,  Counterparts and Ambiguities.  The division of this Agreement
     into  sections  and  the  insertion  of  headings  are for  convenience  of
     reference only and shall not affect the construction or  interpretation  of
     this   Agreement.   This  Agreement  may  be  executed  in  any  number  of
     counterparts,  each of which shall be deemed an  original  but all of which
     taken  together  shall   constitute  one  and  the  same   instrument.   In
     interpreting any provision of this Agreement,  no weight shall be given to,
     nor shall any  construction  or  interpretation  be influenced by, the fact
     that  counsel for one of the Parties  drafted  this  Agreement,  each Party
     recognizing  that it and its counsel have had an opportunity to review this
     Agreement and have contributed to the final form of the same.

     9. Assignment and Amendment. Neither Party shall assign this Agreement, any
     portion hereof, or any obligation hereunder,  except with the prior written
     consent of the other  Party.  Neither this  Agreement  nor any of the terms
     hereof  may be  amended,  supplemented,  waived,  or  modified  except in a
     specific writing signed by each of the Parties.

     10. Waiver.  A Party's  failure to exercise or enforce any right  conferred
     upon it  hereunder  shall not be  deemed a waiver of any such  right or any
     other right or operate to bar the  exercise or  performance  thereof at any
     time or times thereafter; nor shall a Party's waiver of any right hereunder
     at any time be deemed a waiver thereof for any other time.

     11.  Governing  Law.  This  Agreement and all issues  arising  hereunder or
     relating hereto, including, without limitation, its construction, validity,
     breach,  and  damages for breach,  shall be  governed by and  construed  in
     accordance  with the laws of the State of New Jersey (without regard to its
     conflict  of laws  principles).  Any  action,  cause of action,  or dispute
     arising  under or relating to this  Agreement  shall be brought only in the
     courts  of the  State of New  Jersey  or the  federal  court of the  United
     States,  located in Newark,  New Jersey,  and each of the Parties expressly
     consents to personal  jurisdiction  in the State of New Jersey with respect
     to such action, cause of action, or dispute.

     12. Notices. Any notice required or permitted under this Agreement shall be
     in writing  and shall be deemed to have been duly given when (a)  delivered
     by hand,  courier,  or express mail service (with written  confirmation  of
     receipt), (b) sent by facsimile (with provision for assurance of receipt in
     a manner  typical  with  respect to  communications  of that type),  or (c)
     mailed  by  registered  or  certified  first  class  mail,  return  receipt
     requested,  at the address or facsimile  number set forth below (or to such
     other person,  address, or facsimile (fax) number as a Party may, from time
     to time, designate by written notice):

                                      X-65


                      (i) if to Schering:

                          Schering-Plough Animal Health Corporation
                          21401 West Center Road
                          Elkhorn, Nebraska 68022
                          Attention: Michael J. Bartkoski, Jr.
                          Fax: 402.289.6200;


                     (ii) if to Supplier:

                          Provectus Pharmaceuticals, Inc.
                          7327 Oak Ridge Highway, Suite A
                          Knoxville, Tennessee 37931
                          Attention: Craig Dees, Ph.D.
                          Fax:  865.769.4013.

     13. Publicity.  Neither Party shall,  except with the prior written consent
     of the other Party, use,  disclose,  or otherwise  identify the name of the
     other Party or any of its affiliates or the nature of this  Agreement,  the
     Material,  or the Information in any advertising,  promotional material, or
     publication.

     14. Entire Agreement.  This Agreement  represents and contains the full and
     complete  understanding  and  agreement  of the Parties with respect to the
     subject  matter  hereof,  and  supersedes  all  prior  and  contemporaneous
     agreements,  understandings, and statements, including any specific legends
     or statements associated with the Information when received.

     IN WITNESS  WHEREOF,  the Parties  have caused  this  Agreement  to be duly
executed as of the date first above written.


                         PROVECTUS PHARMACEUTICAL, INC.

                         By:     /s/ H. Craig Dees
                                 ---------------------------------------
                         Name:   H. Craig Dees, Ph.D.
                         Title:  CEO


                         SCHERING-PLOUGH ANIMAL HEALTH CORPORATION

                         By:     /s/ Kanwal J. Varma
                                 ----------------------------------------
                         Name:   Kanwal J. Varma
                         Title:  Vice President, Research & Development



                                      X-66


                                    EXHIBIT A
                               MILESTONE PAYMENTS
                               ------------------

A.  Schering  shall  pay  to  Supplier  a  one-time  fee  of +  upon  Schering's
notification  to Supplier of  Schering's  synthesis of such  Material  following
Schering's  notification  to Supplier that Schering  intends to use the Material
for Commercial Purposes.

B. For the first  antigen or vaccine  developed by Schering with a Schering cell
line modified with a particular Material, Schering shall pay to Supplier:

1. A sum of + upon  Schering's  reasonable  satisfaction  that the Material will
enhance  titers  of  specific  viruses  when  inoculated,   wherein   Schering's
reasonable satisfaction, shall be considered achieved when Schering or its Agent
is able to grow three (3) lots of virus with meaningfully  elevated titers* with
the modified cell line;

2. A sum of + upon  Schering's  notification  to Supplier of the  licensing  and
approval by the USDA (or its  equivalent  regulatory  agency) of the use of such
Material in the manufacture of a Product;

3.  A sum  of + upon  Schering's  notification  to  Supplier  of the  successful
completion of an immunogenicity  test  demonstrating the efficacy of the Product
for host animals at the current immunogenicity level; and

4. A sum of + upon  Schering's  notification to Supplier of the licensure by the
USDA (or its equivalent regulatory agency) of the Product containing virus grown
with such Material.

*Specific cell lines and target titer values shall be agreed upon by the Parties
at the start of the testing of each Material.

Notwithstanding the foregoing,  if Schering shall develop additional antigens or
vaccines  using the same  Material,  Schering shall only be obligated to pay the
sum set forth in item. #4 upon the first occurrence of such milestone.

The Company has entered into a Material Transfer  Agreement dated as of July 31,
2003 with a major  international  pharmaceutical  company.  Under  the  Material
Transfer  Agreement,  we will provide SGP with access to certain of our patented
technologies,   to  permit  SGP  to  evaluate  those  technologies  for  use  in
animal-health  applications.  If SGP determines  that it can  commercialize  our
technologies, then the Material Transfer Agreement obligates us and SGP to enter
into a license agreement  providing for us to license those  technologies to SGP
in exchange for certain progress payments upon the achievement of certain goals.
We can give you no assurance that SGP will  determine that it can  commercialize
our  technologies  or that the goals required for the Company to obtain progress
payments from SGP will be achieved.

The current  contract is worth + per animal cell line there are several  hundred
animal cell lines that are to be developed  over the next several  years so `the
contract has an upper end for animal  trials of $10 million.  In the very likely
event  that this  virus  defining  development  goes into  human  cell lines the
contract value is at least worth 10 times the animal cell line effort. Provectus
gets paid for every cell line they  develop as well as a separate  contract  for
doing the actual  work.  The work  contract  is still  being  defined but has to
happen since Provectus is under a license agreement.

+ This  material  has  been  omitted  pursuant  to a  request  for  confidential
treatment and has been filed separately with the SEC.


                                      X-67


                                                                    EXHIBIT 21.1

                              LIST OF SUBSIDIARIES



     SUBSIDIARY                               STATE OF INCORPORATION
     ----------                               ------------------------

Xantech Pharmaceuticals, Inc.                 Tennessee

Pure-ific Corporation                         Nevada









                                      X-68




                                                                    EXHIBIT 23.1

                             Consent of Independent
                          Certified Public Accountants





Provectus Pharmaceuticals, Inc.
Knoxville, Tennessee

We  hereby  consent  to the  incorporation  by  reference  in  the  Registration
Statements on Form S-8 (Nos. 333-99639,  333-86896,  333-73994 and 333-109354)of
Provectus Pharmaceuticals,  Inc. of our report dated March 12, 2004, relating to
the consolidated  financial  statements,  which appears in this Form 10-KSB. Our
report  contains an  explanatory  paragraph  regarding the Company's  ability to
continue as a going concern.



/s/ BDO Seidman, LLP


BDO Seidman, LLP
Chicago, Illinois

March 29, 2004






                                      X-69



                                                                    EXHIBIT 31.1

                                302 Certification



I, H. Craig Dees, Ph.D., certify that:

1)  I  have   reviewed   this  annual   report  on  Form  10-KSB  of   Provectus
Pharmaceuticals, Inc. (the "Small Business Issuer");

2) Based on my  knowledge,  this  annual  report  does not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3)  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
Small  Business  Issuer as of, and for,  the  periods  presented  in this annual
report;

4) The Small Business  Issuer's other  certifying  officer and I are responsible
for establishing and maintaining  disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Small Business Issuer and
we have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
     disclosure control and procedures to be designed under our supervision,  to
     ensure that material  information  relating to the Small  Business  Issuer,
     including  its  consolidated  subsidiaries,  is made  known to us by others
     within those entities,  particularly during the period in which this annual
     report is being prepared; and

     b) evaluated the  effectiveness of the Small Business  Issuer's  disclosure
     controls and procedures and presented in this report our conclusions  about
     the effectiveness of the disclosure controls and procedures,  as of the end
     of the  period  covered by this  annual  report  based on such  evaluation,
     disclosed in this report any change in the Small Business Issuer's internal
     control over financial  reporting  that occurred  during the Small Business
     Issuer's most recent fiscal  quarter (the Small  Business  Issuer's  fourth
     fiscal  quarter  in the  case of an  annual  report)  that  has  materially
     affected,  or is reasonably likely to materially affect, the Small Business
     Issuer's internal control over financial reporting; and

5) The Small Business  Issuer's other  certifying  officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to the Small Business  Issuer's  auditors and the audit committee of
the Small  Business  Issuer's  board of  directors  (or persons  performing  the
equivalent function):

     a) all  significant  deficiencies  in the design or  operation  of internal
     control over financial  reporting which are reasonably  likely to adversely
     affect the Small Business  Issuer's ability to record,  process,  summarize
     and report financial data; and

     b) any fraud,  whether or not material,  that involves  management or other
     employees  who  have a  significant  role in the  Small  Business  Issuer's
     internal controls over financial reporting.


Date:   November 1, 2004               /s/ H. Craig Dees, Ph.D.
                                       -----------------------------------------
                                       H. Craig Dees
                                       Chief Executive Officer



                                      X-70



                                                                   EXHIBIT 31.2

                                302 Certification


I, Peter R. Culpepper, CPA, certify that:

1)  I  have   reviewed   this  annual   report  on  Form  10-KSB  of   Provectus
Pharmaceuticals, Inc. (the "Small Business Issuer");

2) Based on my  knowledge,  this  annual  report  does not  contain  any  untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3)  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
Small  Business  Issuer as of, and for,  the  periods  presented  in this annual
report;

4) The Small Business  Issuer's other  certifying  officer and I are responsible
for establishing and maintaining  disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Small Business Issuer and
we have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
     disclosure control and procedures to be designed under our supervision,  to
     ensure that material  information  relating to the Small  Business  Issuer,
     including  its  consolidated  subsidiaries,  is made  known to us by others
     within those entities,  particularly during the period in which this annual
     report is being prepared; and

     b) evaluated the  effectiveness of the Small Business  Issuer's  disclosure
     controls and procedures and presented in this report our conclusions  about
     the effectiveness of the disclosure controls and procedures,  as of the end
     of the  period  covered by this  annual  report  based on such  evaluation,
     disclosed in this report any change in the Small Business Issuer's internal
     control over financial  reporting  that occurred  during the Small Business
     Issuer's most recent fiscal  quarter (the Small  Business  Issuer's  fourth
     fiscal  quarter  in the  case of an  annual  report)  that  has  materially
     affected,  or is reasonably likely to materially affect, the Small Business
     Issuer's internal control over financial reporting; and

5) The Small Business  Issuer's other  certifying  officer and I have disclosed,
based  on  our  most  recent  evaluation  of  internal  control  over  financial
reporting,  to the Small Business  Issuer's  auditors and the audit committee of
the Small  Business  Issuer's  board of  directors  (or persons  performing  the
equivalent function):

     a) all  significant  deficiencies  in the design or  operation  of internal
     control over financial  reporting which are reasonably  likely to adversely
     affect the Small Business  Issuer's ability to record,  process,  summarize
     and report financial data; and

     b) any fraud,  whether or not material,  that involves  management or other
     employees  who  have a  significant  role in the  Small  Business  Issuer's
     internal controls over financial reporting.


Date:   November 1, 2004            /s/ Peter R. Culpepper, CPA
                                     -------------------------------------------
                                     Peter R. Culpepper
                                     Chief Financial Officer



                                      X-71





                                                                    EXHIBIT 32.1

                                  CERTIFICATION

                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002


     Pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, and in connection with the annual report on Form
10-KSB of Provectus  Pharmaceuticals,  Inc. (the  "Company")  for the year ended
December 31, 2003, as filed with the Securities  and Exchange  Commission on the
date hereof (the "Report"),  the  undersigned,  H. Craig Dees,  Ph.D., the Chief
Executive  Officer  of the  Company,  and  Peter R.  Culpepper,  CPA,  the Chief
Financial  Officer of the  Company  hereby  certify  that (1) the  Report  fully
complies  with the  requirements  of  Section  13(a) or 15(d) of the  Securities
Exchange Act of 1934,  and (2) the  information  contained in the Report  fairly
presents,  in all material  respects,  the  financial  condition  and results of
operations of the Company.

     This Certification is signed on November 1, 2004.


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

                                                 /s/  Peter R. Culpepper, CPA
                                                 -------------------------------
                                                 Peter R. Culpepper, CPA
                                                 Chief Financial Officer

                                      X-72