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Item 9A. Controls and Procedures

2020-02-19 compared with 2019-03-12 · 952 added, 540 removed, 384 unchanged (80% of the section changed)

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Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, under the direction of our Chief Executive Officer (who is our principal executive officer), and Chief Financial Officer (who is our principal accounting officer) has evaluated the effectiveness of our disclosure controls and procedures as required by 1934 Act Rule 13a-15(b) as of December 31, 2018 (the end of the period covered by this report).

Based on that evaluation, our principal executive officer and our principal accounting officer concluded that these disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms.

The Company, including its Chief Executive Officer and Chief Financial Officer, does not expect that its internal controls and procedures will prevent or detect all error and all fraud.

A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Management's Annual Report on Internal Control Over Financial Reporting

In accordance with Item 308 of SEC Regulation S-K, management is required to provide an annual report regarding internal controls over our financial reporting.

This report, which includes management's assessment of the effectiveness of our internal controls over financial reporting, is found below.

Inasmuch as the Company is neither an accelerated filer nor a large accelerated filer, the Company is not obligated to provide an attestation report on the Company's internal control over financial reporting by the Company's registered public accounting firm.

Disclosure controls and procedures are controls

and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under

the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange

Commission’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed

to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to

management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions

regarding required disclosure.

Our management, under the direction of our

Chief Executive Officer (who is our principal executive officer), and Chief Financial Officer (who is our principal accounting

officer) has evaluated the effectiveness of our disclosure controls and procedures as required by 1934 Act Rule 13a-15(b) as of

December 31, 2019 (the end of the period covered by this report).

Based on that evaluation, our principal executive officer and

our principal accounting officer concluded that these disclosure controls and procedures are effective to provide reasonable assurance

that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated

and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions

regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized

and reported within the time periods specified by the SEC’s rules and forms.

The Company, including its Chief Executive

Officer and Chief Financial Officer, does not expect that its internal controls and procedures will prevent or detect all error

and all fraud.

A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance

that the objectives of the control system are met.

Management’s Annual Report on Internal

Control Over Financial Reporting

In accordance with Item 308 of SEC Regulation

S-K, management is required to provide an annual report regarding internal controls over our financial reporting.

which includes management’s assessment of the effectiveness of our internal controls over financial reporting, is found below.

Inasmuch as the Company is neither an accelerated filer nor a large accelerated filer, the Company is not obligated to provide

an attestation report on the Company’s internal control over financial reporting by the Company’s registered public

accounting firm.

Internal Control Over Financial Reporting

Our management is also responsible for establishing and maintaining adequate internal control over financial reporting ("ICFR") as defined in Rules 13a-15(f) and 15d-15(f) under the 1934 Act.

Our ICFR are intended to be designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

Our ICFR are expected to include those policies and procedures that management believes are necessary that:

Our management is also responsible for establishing

and maintaining adequate internal control over financial reporting (“ICFR”) as defined in Rules 13a-15(f) and 15d-15(f)

under the 1934 Act.

Our ICFR are intended to be designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with U.S.

Our ICFR are expected

to include those policies and procedures that management believes are necessary that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

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GAAP, and that receipts and expenditures of the Company are being made only in accordance with proper authorizations of management and our directors;

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements.

In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

As of December 31, 2018, management (with the participation of the Chief Executive Officer and the Chief Financial Officer) conducted an evaluation of the effectiveness of the Company's ICFR based on the framework set forth in Internal Control--Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments by smaller reporting companies and non-accelerated filers.

Based on that assessment, management (with the participation of the Chief Executive Officer and the Chief Financial Officer) concluded that, during the period covered by this report, such internal controls and procedures were not effective as of December 31, 2018.

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Management recognizes that there are inherent

limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide

only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements.

effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due

to deterioration in the degree of compliance with our established policies and procedures.

As of December 31, 2019, management (with the

participation of the Chief Executive Officer and the Chief Financial Officer) conducted an evaluation of the effectiveness of the

Company’s ICFR based on the framework set forth in Internal Control--Integrated Framework (2013) issued by the Committee

of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments by smaller reporting

companies and non-accelerated filers.

Based on that assessment, management (with the participation of the Chief Executive Officer

and the Chief Financial Officer) concluded that, during the period covered by this report, such internal controls and procedures

were not effective as of December 31, 2019.

Material Weaknesses Identified

In connection with the preparation of our financial statements for the year ended December 31, 2018, certain significant deficiencies in internal control became evident to management that, in the aggregate, represent material weaknesses, which include the following:

Insufficient segregation of duties in our finance and accounting functions due to limited personnel.

During the year ended December 31, 2018, we used outside services to perform all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements.

This creates a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC.

These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected.

In connection with the preparation of our financial

statements for the year ended December 31, 2019, certain significant deficiencies in internal control became evident to management

that, in the aggregate, represent material weaknesses, which include the following:

Insufficient segregation of duties in our finance

and accounting functions due to limited personnel.

During the year ended December 31, 2019, we used outside services to perform

all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and

systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements.

This creates a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets,

calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC.

control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented

Insufficient corporate governance policies.

Although we have a code of ethics which provides broad guidelines for corporate governance, our corporate governance activities and processes are not always formally documented.

Specifically, decisions made by our Board of Directors to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding key decisions affecting our operations and management.

Although we have a code of ethics which provides broad guidelines for corporate governance, our corporate governance activities

and processes are not always formally documented.

Specifically, decisions made by our Board of Directors to be carried out

by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding

key decisions affecting our operations and management.

Plan for Remediation of Material Weaknesses

We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies provided that we have the resources to implement them.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management's report is not subject to attestation by our registered public accounting firm.

There was no change in our internal control over financial reporting that occurred during the year ended December 31, 2018, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We intend to take appropriate and reasonable

steps to make the necessary improvements to remediate these deficiencies provided that we have the resources to implement them.

This Annual Report does not include an attestation

report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report

is not subject to attestation by our registered public accounting firm.

There was no change in our internal control over financial reporting

that occurred during the year ended December 31, 2019, that has materially affected, or is reasonably likely to materially affect,

our internal control over financial reporting.

OTHER INFORMATION

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE

As of March 11, 2019, the Company's current officers and directors consist of the following persons:

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS

AND CORPORATE GOVERNANCE

As of February 18, 2020, the Company’s current officers and

directors consist of the following persons:

Year Appointed

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November 2017

Smith , age 55, was appointed President and Chief Executive Officer for the Company on February 19, 2015 and was previously appointed a member of the Board of Directors of the Company on June 1, 2014.

Smith was appointed President

and Chief Executive Officer for the Company on February 19, 2015 and was previously appointed a member of the Board of Directors

of the Company on June 1, 2014.

Prior to joining the Company as President and CEO, Mr.

Smith served and continues to serve as managing member of Tombstone Resources and Smith Equipment, LLC, a privately held company that holds operating oil and gas wells and Smith Equipment Company, a privately held company that leases out construction equipment.

Smith started Arvilla Well Service in West Virginia which provided construction services to oil and gas companies in the Appalachian Basin.

Smith served and continues to serve

as managing member of Tombstone Resources and Smith Equipment, LLC, a privately held company that holds operating oil and gas wells

and Smith Equipment Company, a privately held company that leases out construction equipment.

Smith started

Arvilla Well Service in West Virginia which provided construction services to oil and gas companies in the Appalachian Basin.

After merging Arvilla Well Service into Arvilla Pipeline Construction Co., Inc., Mr.

Smith sold the company in 2008.

Smith also purchased Arrow Oilfield Services in 2004, which was renamed Arvilla Oilfield Services, LLC and subsequently merged with Trans Energy, a publicly traded company in 2004.

Smith served as Chairman of the Board and CEO of Trans Energy, Inc.

Smith also purchased Arrow Oilfield Services in 2004, which was renamed Arvilla Oilfield Services, LLC and subsequently merged

with Trans Energy, a publicly traded company in 2004.

Smith served as Chairman of the Board and CEO of Trans Energy,

from 2005 to 2006.

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Marys High School in West Virginia in 1981.

Guzzetta , Mr.

Guzzetta, age 61, was appointed Chief Financial Officer of the Company on November 14, 2017.

Guzzetta is a Certified Public Accountant with a practice located in Central & Northeast Ohio providing services including business and individual taxation, non-profit accounting, corporate policy and procedure development, business organization and consulting.

Prior to opening his practice, he spent 20 years in corporate management in the communications and energy industries.

Guzzetta was appointed Chief

Financial Officer of the Company on November 14, 2017.

Guzzetta is a Certified Public Accountant with a practice located

in Central & Northeast Ohio providing services including business and individual taxation, non-profit accounting, corporate

policy and procedure development, business organization and consulting.

Prior to opening his practice, he spent 20 years

in corporate management in the communications and energy industries.

Between 2014 and 2015, Mr.

Guzzetta served as Treasurer and principal financial officer of Trans Energy Inc., a publicly traded energy company, where his responsibilities included corporate banking, risk management, maintaining fiscal control, budgeting, taxation and SEC reporting.

His prior positions include Midwest Region Business Manager for a Fortune 100 company and Controller for an energy marketing company.

Guzzetta also served as an Adjunct Professor at Stark State College and taught courses in accounting, finance, business management, and economics.

Guzzetta served as Treasurer

and principal financial officer of Trans Energy Inc., a publicly traded energy company, where his responsibilities included corporate

banking, risk management, maintaining fiscal control, budgeting, taxation and SEC reporting.

His prior positions include

Midwest Region Business Manager for a Fortune 100 company and Controller for an energy marketing company.

Guzzetta also

served as an Adjunct Professor at Stark State College and taught courses in accounting, finance, business management, and economics.

He is a graduate of Walsh University where he graduated Magna Cum Laude with a BA in Accounting.

He earned his MBA from Capital University in Columbus, Ohio.

Guzzetta has been a past member of both the Ohio Society of Certified Public Accountants and the American Institute of Certified Public Accountants.

He has served on the boards of the Canton Ballet, the ALS CARE Project and the Finance Committee of Stark County Board of Developmental Disabilities.

McDonough , age 66, was appointed as a member of the Board of Directors of the Company on July 1, 2015.

He earned his MBA from Capital

University in Columbus, Ohio.

Guzzetta has been a past member of both the Ohio Society of Certified Public Accountants

and the American Institute of Certified Public Accountants.

He has served on the boards of the Canton Ballet, the ALS CARE

Project and the Finance Committee of Stark County Board of Developmental Disabilities.

McDonough was appointed as

a member of the Board of Directors of the Company on July 1, 2015.

In addition to serving as a director of the Company, Mr.

McDonough is a managing shareholder and President of McDonough, Eddy, Parsons & Baylous, A.C., a certified public accountant firm in Parkersburg, West Virginia since 1985.

The firm originated in the early 1950s, employs 15 professional certified public accountants and accountants, and serves as certified public accountants for approximately 400 private corporations, firms, and individuals in various commercial, business, professional, and industrial fields.

McDonough became a Certified Public Accountant in 1978, a Certified Valuation Analyst in 1996, and a Chartered Global Management Accountant in 2012.

Since 1986, Mr.

McDonough has served as a Director and Chairman of the Board of Community Bank of Parkersburg, held by Community Bankshares, Inc.

He is also a Member of the American Institute of Certified Public Accountants (AICPA), has served as a Past President and Member of the West Virginia Board of Accountancy, is a Life Member, Past Director and Past President of the West Virginia Society of Certified Public Accountants and is a Member and Past President of the Parkersburg Chapter of the West Virginia Society of CPAs.

McDonough acquired his Bachelor of Science in Business Administration with a Major in Accounting at West Virginia University in Morgantown, West Virginia in 1973.

McDonough is a managing shareholder and President of McDonough, Eddy, Parsons & Baylous, A.C., a certified public accountant

firm in Parkersburg, West Virginia since 1985.

The firm originated in the early 1950s, employs 15 professional certified

public accountants and accountants, and serves as certified public accountants for approximately 400 private corporations, firms,

and individuals in various commercial, business, professional, and industrial fields.

McDonough became a Certified Public

Accountant in 1978, a Certified Valuation Analyst in 1996, and a Chartered Global Management Accountant in 2012.

McDonough has served as a Director and Chairman of the Board of Community Bank of Parkersburg, held by Community Bankshares,

He is also a Member of the American Institute of Certified Public Accountants (AICPA), has served as a Past President

and Member of the West Virginia Board of Accountancy, is a Life Member, Past Director and Past President of the West Virginia Society

of Certified Public Accountants and is a Member and Past President of the Parkersburg Chapter of the West Virginia Society of CPAs.

McDonough acquired his Bachelor of Science in Business Administration with a Major in Accounting at West Virginia University

in Morgantown, West Virginia in 1973.

Family Relationships

There are no family relationships among any of our executive officers and directors.

There are no family relationships among any

of our executive officers and directors.

Term of Office

Each director shall hold office until the next annual meeting of shareholders or until his successor shall have been elected and qualified, or until there is a decrease in the number of directors.

Each director shall hold office until the next

annual meeting of shareholders or until his successor shall have been elected and qualified, or until there is a decrease in the

number of directors.

Involvement in Legal Proceedings

See Item 3—Legal Proceedings.

Corporate Governance

Code of Ethics

Effective March 31, 2006, our board of directors adopted the ProtoKinetix, Inc.

Code of Business Conduct and Ethics.

The board of directors believes that our Code of Business Conduct and Ethics provides standards that are reasonably designed to deter wrongdoing and to promote the following:

(1) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(2) full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submits to, the Securities and Exchange Commission;

(3) compliance with applicable governmental laws, rules and regulations;

the prompt internal reporting of violations of the Code of Business Conduct and Ethics to an appropriate person or persons;

and (4) accountability for adherence to the Code of Business Conduct and Ethics.

On July 8, 2019, the Board adopted a new Code

of Business Conduct and Ethics and Whistleblower Policy (“Code of Ethics”) which replaced in its entirety the Company’s

prior code of ethics.

The Code of Ethics applies to all directors, officers, employees and consultants of the Company and amends

and restates the Company’s prior code of ethics to update certain provisions for business and regulatory developments and

to provide additional guidance and greater detail on certain issues such as conflicts of interest, reporting illegal or unethical

behavior, confidentiality and use of the Company’s assets, and hedging of Company securities.

The Board also approved an

insider trading policy, related party transactions policy, and policy on trading blackout periods, benefit plans and SEC reporting.

Committees of the Board of Directors

The Company does not currently have a separately designated audit committee.

Instead, the Board of Directors as a whole acts as the Company's audit committee.

Consequently, the Company does not currently have a designated audit committee financial expert.

The Company also does not have a separately designated compensation committee.

To date, the Company has not retained an independent compensation advisor to assist the Company review and analyze the structure and terms of the Company's executive officers.

The Company does not currently have a separately

designated audit committee.

Instead, the Board of Directors as a whole acts as the Company’s audit committee.

Consequently,

the Company does not currently have a designated audit committee financial expert.

The Company also does not have a separately

designated compensation committee.

To date, the Company has not retained an independent compensation advisor to assist the Company

review and analyze the structure and terms of the Company’s executive officers.

Independent Directors

The Board of Directors has determined that Mr.

McDonough is the only independent member of the Board of Directors of the Company pursuant to SEC Rule 10A-3(b)(1) and NYSE American Rule 802(a).

The Board of Directors has determined that

McDonough is the only independent member of the Board of Directors of the Company pursuant to SEC Rule 10A-3(b)(1) and NYSE

American Rule 803A.

Business and Scientific Advisory Board

Our Business and Scientific Advisory Board exists to assist the Board of Directors with understanding both the regulatory and business aspects of the biopharmaceutical industry are particularly valuable for the expansion and commercialization of AAGP ® applications.

The members on the board are:

Our Business and Scientific Advisory Board

exists to assist the Board of Directors with understanding both the regulatory and business aspects of the biopharmaceutical industry

are particularly valuable for the expansion and commercialization of AAGP ®

applications.

The members on the

Julia Levy, PhD, Chairman, Business and Scientific Advisory Board.

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Peter Jensen, former director of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), requires the Company's directors, executive officers and holders of more than 10% of the Company's common stock to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company.

To our knowledge, based solely on a review of copies of Forms 3, 4 and 5 and any amendments thereto filed with the Securities and Exchange Commission and stockholder reports from our transfer agent and written representations that no other reports were required, during the fiscal year ended December 31, 2018 our officers, directors and 10% or more stockholders complied with all Section 16(a) filing requirements applicable to them except that Mr.

Smith filed six Forms 4 late.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”), requires the Company’s directors, executive officers and holders of

more than 10% of the Company’s common stock to file with the Securities and Exchange Commission initial reports of ownership

and reports of changes in ownership of common stock and other equity securities of the Company.

To our knowledge, based solely

on a review of copies of Forms 3, 4 and 5 and any amendments thereto filed with the Securities and Exchange Commission and stockholder

reports from our transfer agent and written representations that no other reports were required, during the fiscal year ended December

31, 2019 our officers, directors and 10% or more stockholders complied with all Section 16(a) filing requirements applicable to

them except that:

Smith filed four Forms 4 late representing 20 transactions not reported on a timely basis;

filed one Form 4 late representing two transactions not reported on a timely basis;

and (iii) Mr.

Young filed one Form 4 late representing

seven transactions not reported on a timely basis.

A majority of Mr.

Smith’s late reported transactions were purchases on

the open market and Mr.

Smith will no longer purchase shares on the open market on a regular basis.

EXECUTIVE COMPENSATION

The following table summarizes the annual compensation paid to ProtoKinetix's named executive officers for the two years ended December 31, 2018 and 2017:

Summary Compensation Table for Executive Officers

The following table summarizes the annual compensation paid to ProtoKinetix’s

named executive officers for the two years ended December 31, 2019 and 2018:

Summary Compensation Table for Executive

Name and Principal Position

President & CEO

Chief Financial Officer

Michael R Guzzetta

Chief Financial Officer

On January 1, 2017, Ms.

Woodward was granted options to purchase 4,000,000 shares of common stock at $0.05 per share under the 2017 Plan.

On November 13, 2017, Ms.

Woodward resigned as chief financial officer of the Company pursuant to the settlement agreement as described in Item 3 and the Company paid Ms.

Woodward $110,000 to repurchase the option granted in 2017, as well as an option under the 2015 Plan to purchase 4,000,000 shares at $0.08 per share, and options to purchase 4,000,000 shares at $0.04 per share not pursuant to any plan.

On November 14, 2017, Mr.

Guzzetta was appointed as chief financial officer of the Company.

(1) Represents the grant date full fair value of compensation costs of stock options granted during the respective year for financial statement reporting purposes, using the Black-Scholes option pricing model.

Assumptions used in the calculation of these amounts are included in the Company’s consolidated financial statements.

Refer to the Outstanding Equity Awards at Fiscal Year End schedule regarding option details on an award-by-award basis.

Consulting Agreements

We have entered into consulting agreements with certain Company officers as set forth below.

We have entered into

consulting agreements with certain Company officers as set forth below.

Smith –

Smith is Chief Executive Officer and President of the Company.

He entered into a consulting agreement with the Company dated March 30, 2015 (effective January 1, 2015).

He entered into a consulting agreement

with the Company dated March 30, 2015 (effective January 1, 2015).

On December 21, 2015, Mr.

Smith and the Company entered into a new consulting agreement effective January 1, 2016, superseding the prior agreement (the "2016 Smith Agreement").

The 2016 Smith Agreement provided for a one-year term through December 31, 2016 and for an annual salary of $1.00 and a termination fee.

In connection with the 2016 Smith Agreement, the Company issued Mr.

Smith an option pursuant to the Company's 2015 Plan to purchase 5,000,000 shares of common stock of the Company at a price of $0.08 per share with 1,250,000 shares vesting every three months starting March 31, 2016.

On or about December 30, 2016, the Company entered into a new consulting agreement with Mr.

Smith, effective January 1, 2017 (the "2017 Smith Agreement") which replaced the 2016 Smith Agreement, terminating December 31, 2016.

The 2017 Smith Agreement provides for a one-year term through December 31, 2017 and for an annual salary of $1.00.

Smith is entitled to receive a bonus payment equal to 2.5% of the aggregate value of any application sale or license of any patent rights or products effected during the term of the 2017 Smith Agreement.

Smith is also entitled to a termination fee if the agreement is terminated for the following two reasons:

Smith and the Company entered

into a new consulting agreement effective January 1, 2016, superseding the prior agreement (the “2016 Smith Agreement”).

The 2016 Smith Agreement provided for a one-year term through December 31, 2016 and for an annual salary of $1.00 and a termination

In connection with the 2016 Smith Agreement,

the Company issued Mr.

Smith an option pursuant to the Company’s 2015 Plan to purchase 5,000,000 shares of common stock of

the Company at a price of $0.08 per share with 1,250,000 shares vesting every three months starting March 31, 2016.

On or about December 30, 2016, the Company

entered into a new consulting agreement with Mr.

Smith, effective January 1, 2017 (the “2017 Smith Agreement”) which

replaced the 2016 Smith Agreement, terminating December 31, 2016.

The 2017 Smith Agreement provides for a one-year

term through December 31, 2017 and for an annual salary of $1.00.

Smith is entitled to receive a bonus payment equal

to 2.5% of the aggregate value of any application sale or license of any patent rights or products effected during the term of

the 2017 Smith Agreement.

Smith is also entitled to a termination

fee if the agreement is terminated for the following two reasons:

A termination without cause:

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Following a change of control event he will be entitled to a termination fee equal to $100,000 per year of service (including the pro-rata amount for partial years of service) plus 2.5% of the aggregate transaction value of the change of control.

In connection with the 2017 Smith Agreement, the Company issued Mr.

Smith an option pursuant to the Amended 2017 Plan to purchase 5,000,000 shares of common stock of the Company at a price of $0.05 per share with 1,250,000 shares vesting every three months starting March 31, 2017.

In connection with the 2017 Smith Agreement,

the Company issued Mr.

Smith an option pursuant to the Amended 2017 Plan to purchase 5,000,000 shares of common stock of the Company

at a price of $0.05 per share with 1,250,000 shares vesting every three months starting March 31, 2017.

On September 1, 2017, Mr.

Smith and the Company entered into an amendment to the 2017 Smith Agreement (the "September Amendment"), whereby the term of the agreement was extended from December 31, 2017 to December 31, 2018 and automatically renews for one-year increments under the same terms and conditions of the 2017 Smith Agreement, unless either party gives written notice to the other party at least 30 days prior to the end of such calendar year.

In connection with the September Amendment, the Company issued Mr.

Smith an option pursuant to the Company's Amended 2017 Plan to purchase 5,000,000 shares of common stock of the Company at a price of $0.06 per share, with 1,250,000 shares vesting every three months starting December 31, 2017.

Smith and the Company

entered into an amendment to the 2017 Smith Agreement (the “September Amendment”), whereby the term of the agreement

was extended from December 31, 2017 to December 31, 2018 and automatically renews for one-year increments under the same terms

and conditions of the 2017 Smith Agreement, unless either party gives written notice to the other party at least 30 days prior

to the end of such calendar year.

In connection with the September Amendment,

the Company issued Mr.

Smith an option pursuant to the Company’s Amended 2017 Plan to purchase 5,000,000 shares of common

stock of the Company at a price of $0.06 per share, with 1,250,000 shares vesting every three months starting December 31, 2017.

In connection with Mr.

Smith’s continued service to the Company, on November 9, 2018, the Company issued options pursuant to the Amended 2017 Plan to acquire 5,000,000 shares of common stock of the Company at an exercise price of $0.09 per share with 1,250,000 shares vesting every three months starting March 31, 2019.

Prior to a change in control of the Company, the vesting schedule of the option shall immediately accelerate so that the option is fully vested and available for exercise by Mr.

Guzzetta – Mr.

Smith’s continued

service to the Company, on November 9, 2018, the Company issued options pursuant to the Amended 2017 Plan to acquire 5,000,000

shares of common stock of the Company at an exercise price of $0.09 per share with 1,250,000 shares vesting every three months

starting March 31, 2019.

Prior to a change in control of the Company, the vesting schedule of the option shall immediately accelerate

so that the option is fully vested and available for exercise by Mr.

Please refer to “Recent Sales

of Unregistered Securities and Use of Proceeds”

for a description of the option grants canceled and issued to Mr.

Guzzetta –

Guzzetta is Chief Financial Officer of the Company.

He entered into a consulting agreement with the Company dated November

The consulting agreement term is from November 14, 2017 to December 1, 2018, with automatic renewal in one-year increments with both parties having a right to terminate by giving either party notice 30 days prior to the end of the term.

It also provides for a monthly consulting fee of $5,000.

The consulting agreement term is from November 14, 2017 to December 1, 2018, with automatic renewal in one-year increments

with both parties having a right to terminate by giving either party notice 30 days prior to the end of the term.

It also provides

for a monthly consulting fee of $5,000.

In 2019, the Company paid Mr.

Guzzetta $60,000 in consulting fees, and reimbursed The Guzzetta Company LLC $12,600 in office rent.

In 2017 , he received $7,500 in consulting fees and The Guzzetta Company LLC was reimbursed $2,100 for a deposit of $1,050 on office space, and office rent of $1,050.

In connection with the consulting agreement, the Company issued Mr.

Guzzetta an option pursuant to the Amended 2017 Plan to purchase 1,000,000 shares of common stock of the Company at a price of $0.07 per share with 250,000 shares vesting every three months starting February 14, 2018.

Guzzetta $60,000 in consulting fees, and reimbursed The Guzzetta

Company LLC $12,600 in office rent.

In 2018, he received $60,000 in consulting fees and The Guzzetta Company LLC was reimbursed

$12,600 for office rent of $1,050 monthly.

In connection with the consulting agreement,

the Company issued Mr.

Guzzetta an option pursuant to the Amended 2017 Plan to purchase 1,000,000 shares of common stock of the

Company at a price of $0.07 per share with 250,000 shares vesting every three months starting February 14, 2018.

On November 9, 2018, in connection with Mr.

Guzzetta’s continued service to the Company, the Company issued options pursuant to the Amended 2017 Plan to acquire 4,000,000 shares of common stock of the Company at an exercise price of $0.09 per share with 1,000,000 shares vesting every three months starting March 31, 2019.

Prior to a change in control of the Company, the vesting schedule of the option shall immediately accelerate so that the option is fully vested and available for exercise by Mr.

Guzzetta’s continued service to the Company, the Company issued options pursuant to the Amended 2017 Plan to acquire 4,000,000

shares of common stock of the Company at an exercise price of $0.09 per share with 1,000,000 shares vesting every three months

starting March 31, 2019.

Prior to a change in control of the Company, the vesting schedule of the option shall immediately accelerate

so that the option is fully vested and available for exercise by Mr.

Please refer to “Recent Sales

of Unregistered Securities and Use of Proceeds”

for a description of the option grants canceled and issued to Mr.

Outstanding Equity Awards at Fiscal Year-End

The following table provides information as to option awards held by each of the named executive officers of ProtoKinetix as of December 31, 2018.

Option Awards

The following table provides information as

to option awards held by each of the named executive officers of ProtoKinetix

as of December 31, 2019.

Unexercised Options

1 unchanged sentence

Unexercisable

Represents options granted pursuant to the 2015 Plan on January 1, 2016 at $0.08 per share with 1,250,000 vesting every three months beginning March 31, 2016.

5,000,000 (1)

5,000,000 (2)

5,000,000 (3)

1,250,000 (4)

1,000,000 (6)

4,000,000 (7)

1,000,000 (8)

Represents options granted pursuant to the Amended 2017 Plan on January 1, 2017 at $0.05 per share with 1,250,000 vesting every three months beginning March 31, 2017.

Represents options granted pursuant to the Amended 2017 Plan on September 1, 2017 at $0.06 per share with 1,250,000 vesting every three months beginning December 31, 2017.

Represents options granted pursuant to the Amended 2017 Plan on September 1, 2017 at $0.09 per share with 1,250,000 vesting every three months beginning March 31, 2019.

Represents options granted pursuant to the Amended 2017 Plan on November 9, 2018 at $0.09 per share with 1,250,000 vesting every three months beginning March 31, 2019.

Represents options granted pursuant to the Amended 2017 Plan on July 15, 2019 at $0.26 per share with 1,250,000 vesting every three months beginning October 13, 2019.

Represents options granted pursuant to the Amended 2017 Plan on November 18, 2018 at $0.11 per share with 1,250,000 vesting every three months beginning February 18, 2020.

Represents options granted pursuant to the Amended 2017 Plan on November 14, 2017 at $0.07 per share with 250,000 vesting every three months beginning February 14, 2018.

Represents options granted pursuant to the Amended 2017 Plan on September 1, 2017 at $0.09 per share with 1,000,000 vesting every three months beginning March 31, 2019.

Represents options granted pursuant to the Amended 2017 Plan on July 15, 2019 at $0.26 per share with 1,000,000 vesting every three months beginning October 13, 2019.

Represents options granted pursuant to the Amended 2017 Plan on November 18, 2018 at $0.11 per share with 1,000,000 vesting every three months beginning February 18, 2020.

Director Compensation

The following table sets forth a summary of the compensation earned by each non-employee director who served on the Board during the fiscal year ended December 31, 2018:

The following table sets forth a summary of the compensation

earned by each non-employee director who served on the Board during the fiscal year ended December 31, 2019:

Director Compensation

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The aggregate grant date fair value of these stock awards was computed in accordance with ASC 718.

Represents the grant date full fair value of compensation costs of stock options granted during the respective year for financial statement reporting purposes, using the Black-Scholes Option Pricing Model.

Assumptions used in the calculation of these amounts are included in the Company's audited financial statements.

Issued pursuant to Mr.

McDonough's consulting agreement with the Company in which the Company issued him a four-year option for 1,000,000 shares of common stock subject to vesting exercisable at $0.09 per share.

On July 1, 2015, the Company entered into a consulting agreement with Mr.

Represents the grant date full fair

value of compensation costs of stock options granted during the respective year for financial statement reporting purposes, using

the Black-Scholes Option Pricing Model.

Assumptions used in the calculation of these amounts are included in the Company’s

audited financial statements.

As of December 31, 2019, Mr.

held options to acquire 7,000,000 shares of the Company’s common stock, of which 3,750,000 were vested and exercisable.

On July 1, 2015, the Company entered

into a consulting agreement with Mr.

McDonough for director services dated July 1, 2015.

On December 21, 2015, Mr.

McDonough and the Company entered into a new director consulting agreement, superseding the prior agreement (the "2016 McDonough Agreement") which provides for a one-year term through December 31, 2016.

In connection with the 2016 McDonough Agreement, the Company issued Mr.

McDonough an option pursuant to the 2015 Plan to purchase 1,000,000 shares of common stock of the Company at a price of $0.08 per share with 250,000 shares vesting every three months starting March 31, 2016.

On or about December 30, 2016, the Company entered into a new consulting agreement with Mr.

McDonough, effective January 1, 2017 (the "2017 McDonough Agreement") which replaced the 2016 McDonough Agreement, terminating December 31, 2016.

The 2017 McDonough Agreement is for a one-year term through December 31, 2017.

and the Company entered into a new director consulting agreement, superseding the prior agreement (the “2016 McDonough Agreement”)

which provides for a one-year term through December 31, 2016.

In connection with the 2016 McDonough Agreement, the Company

McDonough an option pursuant to the 2015 Plan to purchase 1,000,000 shares of common stock of the Company at a price

of $0.08 per share with 250,000 shares vesting every three months starting March 31, 2016.

On or about December 30, 2016, the Company

entered into a new consulting agreement with Mr.

McDonough, effective January 1, 2017 (the “2017 McDonough Agreement”)

which replaced the 2016 McDonough Agreement, terminating December 31, 2016.

The 2017 McDonough Agreement is for a one-year

term through December 31, 2017.

In connection with the 2017 McDonough Agreement, the Company issued Mr.

McDonough an option pursuant to the Amended 2017 Plan to purchase 1,000,000 shares of common stock of the Company at a price of $0.05 per share with 250,000 shares vesting every three months starting March 31, 2017.

On September 1, 2017, the Company entered into an amendment to the 2017 McDonough Agreement, effective immediately.

This new agreement is effective through December 31, 2018, but shall automatically renew for one-year increments under the same terms and conditions of the 2017 McDonough Agreement unless by stockholder vote or 30 days prior to the end of such calendar year written notice is given by either party to the other notifying them of a desire to terminate.

In connection with the amendment to the 2017 McDonough Agreement, the Company granted Mr.

McDonough options pursuant to the Amended 2017 Plan to purchase 1,000,000 shares of common stock of the Company at an exercise price of $0.06 per share with 250,000 shares vesting every three months starting December 31, 2017.

On November 9, 2018, in connection with continued service to the Company, the Company granted Mr.

McDonough options pursuant to the Amended 2017 Plan to purchase 1,000,000 shares of common stock of the Company at an exercise price of $0.09 per share with 250,000 shares vesting every three months starting March 31, 2019.

Prior to a change in control of the Company, the vesting schedule of the option shall immediately accelerate so that the option is fully vested and available for exercise by Mr.

McDonough an option pursuant

to the Amended 2017 Plan to purchase 1,000,000 shares of common stock of the Company at a price of $0.05 per share with 250,000

shares vesting every three months starting March 31, 2017.

On September 1, 2017, the Company entered into

an amendment to the 2017 McDonough Agreement, effective immediately.

This new agreement is effective through December 31, 2018,

but shall automatically renew for one-year increments under the same terms and conditions of the 2017 McDonough Agreement unless

by stockholder vote or 30 days prior to the end of such calendar year written notice is given by either party to the other notifying

them of a desire to terminate.

In connection with the amendment to the 2017

McDonough Agreement, the Company granted Mr.

McDonough options pursuant to the Amended 2017 Plan to purchase 1,000,000 shares of

common stock of the Company at an exercise price of $0.06 per share with 250,000 shares vesting every three months starting December

On November 9, 2018, in connection with continued

service to the Company, the Company granted Mr.

McDonough options pursuant to the Amended 2017 Plan to purchase 1,000,000 shares

of common stock of the Company at an exercise price of $0.09 per share with 250,000 shares vesting every three months starting

March 31, 2019.

Prior to a change in control of the Company, the vesting schedule of the option shall immediately accelerate so

that the option is fully vested and available for exercise by Mr.

Please refer to “Recent Sales

of Unregistered Securities and Use of Proceeds”

for a description of the option grants canceled and issued to Mr.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding our shares of common stock beneficially owned as of March 11, 2018, for (i) each stockholder known to be the beneficial owner of more than 5% of our outstanding shares of common stock (ii) each named executive officer and director, and (iii) all executive officers and directors as a group.

The following table sets forth certain information

regarding our shares of common stock beneficially owned as of February 18, 2020, for (i) each stockholder known to be the beneficial

owner of more than 5% of our outstanding shares of common stock (ii) each named executive officer and director, and (iii) all executive

officers and directors as a group.

A person is considered to beneficially own any shares:

(a) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (b) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options, warrants or convertible debt.

Shares underlying such options, warrants, and convertible promissory notes, however, are only considered outstanding for the purpose of computing the percentage ownership of that person and are not considered outstanding when computing the percentage ownership of any other person.

Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner's spouse or children.

(a) over which such person, directly

or indirectly, exercises sole or shared voting or investment power, or (b) of which such person has the right to acquire beneficial

ownership at any time within 60 days through an exercise of stock options, warrants or convertible debt.

Shares underlying such

options, warrants, and convertible promissory notes, however, are only considered outstanding for the purpose of computing the

percentage ownership of that person and are not considered outstanding when computing the percentage ownership of any other person.

Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive

officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.

Name & Address of Beneficial Owner

March 11, 2019 (1)

February 18, 2020 (1)

More than 5% Stockholders

2 unchanged sentences

All directors and executive officers as a group:

Based on 260,535,766 shares of common stock outstanding on March 11, 2019, and, with respect to each individual holder, rights to acquire common stock exercisable within 60 days of March 11, 2019.

See also Directors and Named Executive Officers in the table.

Based on our most recent list of the stockholders of record from our transfer agent dated March 11, 2019.

Based on 275,400,259 shares of common stock outstanding on February 18, 2020, and, with respect to each individual holder, rights to acquire common stock exercisable within 60 days of February 18, 2020.

Consists of 10,021,250 shares of common stock owned by Mr.

Young directly;

1,125,600 shares held by Mr.

Young’s wife;

the right to acquire 6,000,000 shares of common stock upon warrant exercise;

4 unchanged sentences

Smith directly, 13,235,160 held by Mr.

Smith's trust, 1,850,000 held by Mr.

Smith's retirement account, and the right to acquire 16,250,000 shares of common stock upon option exercise.

Smith’s trusts, 1,850,000 held by Mr.

Smith’s retirement account, the right to acquire 23,750,000 shares of common stock upon option exercise, and the right to acquire 216,666 shares upon warrant exercise.

The principal address of Mr.

9 unchanged sentences

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The following is a description of transactions during the last fiscal year in which the transaction involved a material dollar amount and in which any of the Company's directors, executive officers or holders of more than 5% of the Company's common stock had or will have a direct or indirect material interest, other than compensation which is described under "Executive Compensation." Management believes the terms obtained or consideration that was paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arms' length transactions:

As at December 31, 2018, the following amounts were due to related parties:

Clarence Smith (CEO)

Accounts payable and accrued liabilities

Amounts included in accounts payable and accrued liabilities are non-interest bearing, unsecured and repayable on demand.

Effective January 1, 2017, the Company entered into a new consulting agreement superseding the prior agreement with Mr.

Young (the "2017 Young Agreement") whereby the Company would pay Mr.

Young $7,000 per month for providing research and development services.

He was also granted a 4-year stock option to purchase 5,000,000 shares of common stock at a price of $0.05 with vesting beginning on March 31, 2017 in equal installments on a quarterly basis.

Effective September 1, 2017, the Company entered into an amendment to the 2017 Young Agreement, whereby the term of the 2017 Young Agreement was extended until December 31, 2018.

Upon the expiration of the term, the 2017 Young Agreement shall automatically renew for one-year increments under the same terms and conditions of the 2017 Young Amendment unless either party gives written notice of their desire to terminate the agreement at least 30 days prior to the end of such calendar year.

He was also granted a 4-year stock option pursuant to the Amended 2017 Plan to purchase 5,000,000 shares of common stock at a price of $0.06 with vesting beginning on December 31, 2017 with equal installments on a quarterly basis.

On October 23, 2017, the Company issued an unsecured promissory note to Clarence E.

Smith in the amount of $86,000.

The outstanding principal balance on the promissory note was due on demand by Mr.

Smith and accrued simple interest at a rate of 8% per annum from the date the principal balance was advanced.

On November 3, 2017 the Company issued a second unsecured promissory note to Mr.

Smith in the amount of $30,000.

The outstanding principal balance on the promissory note was due on demand by Mr.

Smith and accrued simple interest at a rate of 8% per annum from the date the principal balance was advanced.

On January 12, 2018, the Company issued shares of common stock pursuant to a private placement to Mr.

Smith in exchange for the two promissory notes.

Effective November 8, 2018 and for his continued service to the Company, Mr.

Young was granted a 4-year stock option pursuant to the Amended 2017 Plan to purchase 5,000,000 shares of common stock at a price of $0.09 with vesting beginning on March 31, 2019 with equal installments on a quarterly basis.

Prior to a change in control of the Company, the vesting schedule of the option shall immediately accelerate so that the option is fully vested and available for exercise by Mr.

See also Item 1, page 8 for a description of the patent rights assignments made by Mr.

Young to the company in 2016 as well as Item 11 for a description of the consulting agreements with the officers and directors of the Company.

The following is a description of transactions

during the last fiscal year in which the transaction involved a material dollar amount and in which any of the Company’s

directors, executive officers or holders of more than 5% of the Company’s common stock had or will have a direct or indirect

material interest, other than compensation which is described under “Executive Compensation.”

Management believes the

terms obtained or consideration that was paid or received, as applicable, in connection with the transactions described below were

comparable to terms available or the amounts that would be paid or received, as applicable, in arms’

length transactions:

As at December 31, 2019, there is no amount due to or due

from a related party.

Please refer to “Recent Sales

of Unregistered Securities and Use of Proceeds”

for a description of the option grants canceled and issued to Mr.

2019 as well as securities purchased by Mr.

Smith directly from the Company.

Please refer to “Recent Sales

of Unregistered Securities and Use of Proceeds”

for a description of the option grants canceled and issued to Mr.

See also Item 1, page 8 for a description of

the patent rights assignments made by Mr.

Young to the company in 2016 as well as Item 11 for a description of the consulting agreements

with the officers and directors of the Company.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

For the years ended December 31, 2018 and 2017, Davidson & Company LLP, Chartered Professional Accountants ("Davidson") the Company's principal accountants billed the Company $25,000 and $23,000, respectively for fees for the audit of the Company's annual financial statements.

For the years ended December 31, 2019 and 2018,

Davidson & Company LLP, Chartered Professional Accountants (“Davidson”) the Company’s principal accountants

billed the Company $25,000 and $24,293, respectively for fees for the audit of the Company’s annual financial statements.

All amounts are in U.S.

Audit-Related Fees

For the years ended December 31, 2011 and 2016, Davidson did not provide the Company with any assurances or related services reasonably related to the performance of the audit or review of the Company's financial statements and are not reported above under "Audit Fees."

For the years ended December 31, 2018 and 2017, Davidson billed $4,300 in 2018 and $3,000 in 2017 for professional services for tax compliance, tax advice, and tax planning.

For the years ended December 31, 2011 and 2016,

Davidson did not provide the Company with any assurances or related services reasonably related to the performance of the audit

or review of the Company’s financial statements and are not reported above under “Audit Fees.”

For the years ended December 31, 2019 and 2018,

Davidson billed $3,500 in 2019 and $4,300 in 2018 for professional services for tax compliance, tax advice, and tax planning.

All Other Fees

For the years ended December 31, 2018 and 2017, Davidson did not bill the Company for fees associated with the preparation and filing of the Company's registration statements, the creation of pro forma financial statements and other related matters.

For the years ended December 31, 2018 and 2017, Davidson billed the Company $14,550 and $14,550 for fees for the review of the Company's quarterly financial statements.

For the years ended December 31, 2019 and 2018,

Davidson did not bill the Company for fees associated with the preparation and filing of the Company’s registration statements,

the creation of pro forma financial statements and other related matters.

For the years ended December 31, 2019 and 2018,

Davidson billed the Company $19,282 and $14,550 for fees for the review of the Company’s quarterly financial statements.

All amounts are in U.S.

Audit Committee Pre-Approval Policies

The Company currently does not have a formal audit committee.

The Company' Board of Directors currently approves in advance all audit and non-audit related services performed by the Company's principal accountants and appointed Ed McDonough as the responsible director to review all financial information of the Company and correspond with the independent auditors regarding the same.

EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE

The Company currently does not have a formal

audit committee.

The Company’s Board of Directors currently approves in advance all audit and non-audit related services

performed by the Company’s principal accountants and appointed Ed McDonough as the responsible director to review all financial

information of the Company and correspond with the independent auditors regarding the same.

EXHIBITS, FINANCIAL STATEMENTS

EXHIBIT INDEX

The following documents are being filed with the Commission as exhibits to this Annual Report on Form 10-K.

The following documents are being filed

with the Commission as exhibits to this Annual Report on Form 10-K.

Certificate of Incorporation(1)

2015 Stock Option and Stock Bonus Plan 2

2017 Stock Option and Stock Bonus Plan 3

Amended 2017 Stock Option and Stock Bonus Plan(2)

Amendment to Amended 2017 Stock Option and Stock Bonus Plan as approved on July 15, 2019(5)

Royalty Agreement between the Company and The Governors of the University of Alberta, dated April 8, 2015(3)

2 unchanged sentences

Smith, dated December 30, 2016(2)

Consulting Agreement between the Company and Susan M.

Woodward, dated December 30, 2016 3

Director Consulting Agreement between the Company and Edward P.

7 unchanged sentences

Consulting Agreement between ProtoKinetix Incorporated and Michael Guzzetta, dated November 14, 2017(6)

Settlement Agreement and General Release between ProtoKinetix, Incorporated and Susan M.

Woodward, dated November 3, 2017 7

Unsecured Promissory Note issued by ProtoKinetix, Incorporated to Clarence E.

Smith dated October 23, 2017.

Unsecured Promissory Note issued by ProtoKinetix, Incorporated to Clarence E.

Smith dated November 3, 2017.

Code of Ethics 6

Code of Business Conduct and Ethics and Whistleblower Policy as approved on July 8, 2019(5)

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

7 unchanged sentences

XBRL Presentation Linkbase Document

Incorporated by reference from the Company's registration statement on Form 10-SB filed on June 22, 2001 with the SEC.

Incorporated by reference from the Company's Quarterly Report on Form 10-Q filed on August 14, 2015 with the SEC.

Incorporated by reference from the Company's Annual Report on Form 10-K filed on February 21, 2017 with the SEC.

Incorporated by reference from the Company's Annual Report on Form 10-K filed on April 14, 2015 with the SEC.

Incorporated by reference from the Company's Quarterly Report on Form 10-Q filed on August 15, 2016 with the SEC.

Incorporated by reference from the Company's Annual Report on Form 10-K filed on April 13, 2006 with the SEC.

Incorporated by reference from the Company's Current Report on Form 8-K filed on November 9, 2017 with the SEC.

Incorporated by reference from the Company's Current Report on Form 8-K filed on November 15, 2017 with the SEC.

Incorporated by reference from the Company's amended Current Report on Form 8-K filed on September 12, 2017 with the SEC.

Incorporated by reference from the Company's Quarterly Report on Form 10-Q filed on November 13, 2017 with the SEC.

Incorporated by reference from the Company’s registration statement on Form 10-SB filed on June 22, 2001 with the SEC.

Incorporated by reference from the Company’s Annual Report on Form 10-K filed on February 21, 2017 with the SEC.

Incorporated by reference from the Company’s Annual Report on Form 10-K filed on April 14, 2015 with the SEC.

Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on August 15, 2016 with the SEC.

Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 17, 2019 with the SEC.

Incorporated by reference from the Company’s Current Report on Form 8-K filed on November 15, 2017 with the SEC.

Incorporated by reference from the Company’s amended Current Report on Form 8-K filed on September 12, 2017 with the SEC.

Incorporated by reference from the Company’s Quarterly Report on Form 10-Q filed on November 13, 2017 with the SEC.

Filed herewith.

1 unchanged sentence

Form 10-K Summary

This Item is optional and the registrant is not required to furnish this information.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

This Item is optional and the registrant

is not required to furnish this information.

Pursuant to the requirements of Section

13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf

by the undersigned, thereunto duly authorized.

PROTOKINETIX, INCORPORATED

March 11, 2019

February 18, 2020

/s/ Clarence E.

Principal Executive Officer

March 11, 2019

February 18, 2020

/s/ Michael R.

Principal Financial Officer & Principal Accounting Officer

Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

March 11, 2019

Pursuant to the requirement of the Securities Exchange Act

of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the

dates indicated:

February 18, 2020

/s/ Clarence E.

Chief Executive Officer (principal executive officer) & Chairman of the Board

March 11, 2019

Chief Executive Officer (principal executive officer)

& Chairman of the Board

February 18, 2020

/s/ Edward P.

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NOTES TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

of Independent Registered Public Accounting Firm

To the Shareholders and Directors of

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Opinion on the Financial Statements

We have audited the accompanying balance sheets of Protokinetix, Inc.

(the “Company”), as of December 31, 2018 and 2017, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2018 and 2017 and the related notes and schedules (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of Protokinetix, Inc.

as of December 31, 2018 and 2017, and the results of its operations and its cash flows for the years ended December 31, 2018 and 2017, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying balance sheets

of Protokinetix, Inc.

(the “Company”), as of December 31, 2019 and 2018, and the related statements of operations,

stockholders’

equity, and cash flows for the years ended December 31, 2019 and 2018, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of Protokinetix, Inc.

as of December 31, 2019 and 2018, and the results of its operations and

its cash flows for the years ended December 31, 2019 and 2018 in conformity with accounting principles generally accepted in the

United States of America.

Going Concern

The accompanying 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 suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern.

The accompanying 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 not generated any significant revenues to date and has suffered recurring losses from operations.

This raises substantial

doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note

1 unchanged sentence

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2008.

"DAVIDSON & COMPANY LLP"

Vancouver, Canada

Chartered Professional Accountants

March 11, 2019

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to

assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a

reasonable basis for our opinion.

We have served as the Company’s auditor

“DAVIDSON & COMPANY LLP”

Vancouver, Canada Chartered Professional Accountants

February 18, 2020

PROTOKINETIX, INC.

3 unchanged sentences

Current Assets

Prepaid expenses and deposits (Notes 3 and 9)

Prepaid expenses and deposits (Note 3)

Total current assets

3 unchanged sentences

Accounts payable and accrued liabilities

Promissory notes payable (Note 8)

Total current liabilities

5 unchanged sentences

Accumulated deficit

(35,548,143 )

(31,350,246 )

Total stockholders' equity

Total liabilities and stockholders' equity

Basis of Presentation – Going Concern Uncertainties (Note 1)

Commitments and Contingency (Note 9)

Subsequent Events (Note 11)

Basis of Presentation –

Going Concern Uncertainties (Note 1)

Commitments and Contingency

See Notes to Financial Statements

2 unchanged sentences

STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2018 and 2017

Amortization – intangible assets (Note 4)

For the Years Ended December 31, 2019

Amortization –

intangible assets (Note 4)

General and administrative

3 unchanged sentences

Net loss for the year

$ (4,197,897 )

$ (1,216,343 )

Net loss per common share (basic and diluted)

6 unchanged sentences

Balance, December 31, 2017

$ (30,133,903 )

Fair value of compensatory options issued

Compensatory options repurchased

Exchange debt for common stock

Issuance of common stock pursuant to private placement offering

3 unchanged sentences

Balance, December 31, 2018

$ (31,350,246 )

See Notes to Financial Statements

4 unchanged sentences

Balance, December 31, 2018

$ (31,350,246 )

Fair value of compensatory options issued

Exchange debt for common stock

Issuance of common stock pursuant to private placement offering

Issuance of common stock pursuant to cashless option exercise

Issuance of common stock pursuant to private placement offering

1 unchanged sentence

Balance, December 31, 2019

$ (35,548,143 )

See Notes to Financial Statements

2 unchanged sentences

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2018 and 2017

For the Years Ended December 31, 2019

CASH FLOWS USED IN OPERATING ACTIVITIES

Net loss for the year

$ (4,197,897 )

$ (1,216,343 )

Adjustments to reconcile net loss to cash used in operating activities:

Amortization – intangible assets

Amortization –

intangible assets

Fair value of compensatory options granted

5 unchanged sentences

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES

Promissory notes received

Purchase of intangible assets

Net cash from (used in) investing activities

Net cash used in investing activities

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

Repurchase of compensatory options

Issuance of common stock for cash

5 unchanged sentences

Cash paid for income taxes

Supplementary information – non-cash transactions:

Supplementary information –

non-cash transactions:

Intangible asset costs included in accounts payable and accrued liabilities

4 unchanged sentences

December 31, 2019

Basis of Presentation – Going Concern Uncertainties

Basis of Presentation –

Going Concern Uncertainties

ProtoKinetix, Inc.

(the "Company"), a development stage company, was incorporated under the laws of the State of Nevada on December 23, 1999.

The Company is a medical research company whose mission is the advancement of human health care.

The Company is currently researching the benefits and feasibility of synthesized Antifreeze Glycoproteins ("AFGP") or anti-aging glycoproteins, trademarked AAGP.

During the year ended December 31, 2015, the Company acquired certain patents and rights for cash consideration of $30,000 (25,000 Euros), as well as additional patent applications for cash consideration of $10,000 and 6,000,000 share purchase warrants with a fair value of $25,000 (Note 4).

The Company's financial statements are prepared consistent with accounting principles generally accepted in the United States applicable to a going concern.

The Company has not developed a commercially viable product, has not generated any significant revenue to date, and has incurred losses since inception, resulting in a net accumulated deficit at December 31, 2018.

These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company needs additional working capital to continue its medical research or to be successful in any future business activities and continue to pay its liabilities.

Therefore, continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to accomplish its objective.

Management is presently engaged in seeking additional working capital through equity financing or related party loans.

The accompanying financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above objectives and is unable to operate for the coming year.

Summary of Significant Accounting Policies

(the "Company"),

a development stage company, was incorporated under the laws of the State of Nevada on December 23, 1999.

The Company is

a medical research company whose mission is the advancement of human health care.

The Company is currently researching the benefits

and feasibility of synthesized Antifreeze Glycoproteins ("AFGP") or anti-aging glycoproteins, trademarked AAGP.

During the year ended December 31, 2015, the Company acquired certain patents and rights for cash consideration of $30,000 (25,000

Euros), as well as additional patent applications for cash consideration of $10,000 and 6,000,000 share purchase warrants with

a fair value of $25,000 (Note 4).

The Company's financial statements are prepared

consistent with accounting principles generally accepted in the United States applicable to a going concern.

The Company has not developed a commercially

viable product, has not generated any significant revenue to date, and has incurred losses since inception, resulting in a net

accumulated deficit at December 31, 2019.

These factors raise substantial doubt about the Company's ability to continue as

a going concern.

The Company needs additional working capital

to continue its medical research or to be successful in any future business activities and continue to pay its liabilities.

Therefore, continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary

to accomplish its objective.

Management is presently engaged in seeking additional working capital through equity financing

or related party loans.

The accompanying financial statements do not

include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above

objectives and is unable to operate for the coming year.

Summary of Significant Accounting

Basis of Presentation

The accompanying financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("US GAAP") and are expressed in United States dollars.

The accompanying financial statements have

been prepared by the Company in accordance with accounting principles generally accepted in the United States of America ("US

GAAP") and are expressed in United States dollars.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

Summary of Significant Accounting Policies (cont'd)

Summary of Significant Accounting

Policies (cont'd)

Use of Estimates

Preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period.

Preparation of financial statements in conformity

GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses

during the reporting period.

Actual results could differ from those estimates.

The more significant accounting estimates inherent in the preparation of the Company's financial statements include estimates as to valuation of equity related instruments issued, deferred income taxes and the useful life and impairment of intangible assets.

The more significant accounting estimates

inherent in the preparation of the Company's financial statements include estimates as to valuation of equity- related instruments

issued, deferred income taxes and the useful life and impairment of intangible assets.

Cash consists of funds held in checking accounts.

1 unchanged sentence

Fair Value of Financial Instruments

Financial instruments, which includes cash, accounts payable and accrued liabilities and promissory notes payable, are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments.

The Company measures the fair value of financial assets and liabilities pursuant to ASC 820 "Fair Value Measurements and Disclosures" which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Financial instruments, which includes cash,

accounts payable and accrued liabilities are carried at amortized cost, which management believes approximates fair value due to

the short-term nature of these instruments.

The Company measures the fair value of financial

assets and liabilities pursuant to ASC 820 "Fair Value Measurements and Disclosures"

which defines fair value, establishes

a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 establishes a fair value hierarchy,

which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair

The policy describes three levels of inputs that may be used to measure fair value:

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions).

Level 1 –

quoted prices in

active markets for identical assets or liabilities.

Level 2 –

quoted prices for

similar assets and liabilities in active markets or inputs that are observable.

Level 3 –

inputs that are unobservable

(for example cash flow modeling inputs based on assumptions).

Level 1 inputs are used to measure cash.

At December 31, 2018, there were no other assets or liabilities subject to additional disclosure.

The Company accounts for income taxes following the assets and liability method in accordance with the ASC 740 "Income Taxes." Under such method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

The Company applies the accounting guidance issued to address the accounting for uncertain tax positions.

This guidance clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years that the asset is expected to be recovered or the liability settled.

December 31, 2019, there were no other assets or liabilities subject to additional disclosure.

The Company accounts for income taxes following

the assets and liability method in accordance with the ASC 740 "Income Taxes."

Under such method, deferred tax

assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases.

The Company applies the accounting guidance

issued to address the accounting for uncertain tax positions.

This guidance clarifies the accounting for income taxes, by

prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements

as well as provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods,

disclosure and transition Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable

income in the years that the asset is expected to be recovered or the liability settled.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

Summary of Significant Accounting Policies (cont'd)

Intangible assets – patent and patent application costs

The Company owns intangible assets consisting of certain patents and patent applications.

Summary of Significant Accounting

Policies (cont'd)

Intangible assets –

patent application costs

The Company owns intangible assets consisting

of certain patents and patent applications.

Intangible assets acquired separately are measured on initial recognition at cost.

Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses.

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate.

Following initial recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset

to which they relate.

All other expenditures are recognized in profit or loss as incurred.

As at December 31, 2018, the Company does not hold any intangible assets with indefinite lives.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

As at December 31, 2019, the Company does not

hold any intangible assets with indefinite lives.

Intangible assets with finite lives are amortized

over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The amortization method and amortization period of an intangible asset with a finite life is reviewed at least annually.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the Company's patents, whereas no amortization has been recognized on the patent application costs at December 31, 2018.

Changes in the expected useful life or the

expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization

period or method, as appropriate, and are treated as changes in accounting estimates.

Amortization is recognized in profit or loss

on a straight-line basis over the estimated useful lives of the Company's patents, whereas no amortization has been recognized

on the patent application costs at December 31, 2019.

Research and Development Costs

Research and development costs are expensed as incurred.

Research and development costs are expensed

Loss per Share and Potentially Dilutive Securities

Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding in the period.

Diluted loss per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities.

The effect of 58,600,000 stock options (December 31, 2017 – 44,100,000) and 6,000,000 warrants (December 31, 2017 – 6,500,000) were not included in the computation of diluted earnings per share for all periods presented because it was anti-dilutive due to the Company's losses.

Basic loss per share is computed by dividing

the net loss available to common stockholders by the weighted average number of common shares outstanding in the period.

Diluted loss per share takes into consideration common shares outstanding (computed under basic earnings per share) and potentially

dilutive securities.

The effect of 91,450,000 stock options (December 31, 2018 –

58,600,000) and 8,500,000 warrants

(December 31, 2018 –

6,000,000) were not included in the computation of diluted earnings per share for all periods presented

because it was anti-dilutive due to the Company's losses.

Share-Based Compensation

The Company has granted warrants and options to purchase shares of the Company's common stock to various parties for consulting services.

The fair values of the warrants and options issued have been estimated using the Black-Scholes Option Pricing Model.

The Company accounts for stock compensation with persons classified as employees for accounting purposes in accordance with ASC 718 "Compensation – Stock Compensation", which recognizes awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest.

The Company has granted warrants and options

to purchase shares of the Company's common stock to various parties for consulting services.

The fair values of the warrants

and options issued have been estimated using the Black-Scholes Option Pricing Model.

The Company accounts for stock compensation

with persons classified as employees for accounting purposes in accordance with ASC 718 "Compensation –

Stock Compensation",

which recognizes awards at fair value on the date of grant and recognition of compensation over the service period for awards expected

Cliff Vesting is used and awards vest on the last day of the vesting period.

The fair value of stock options is determined using the Black-Scholes Option Pricing Model.

The fair value of common shares issued for services is determined based on the Company's stock price on the date of issuance.

The fair value of stock options is

determined using the Black-Scholes Option Pricing Model.

The fair value of common shares issued for services is determined based

on the Company's stock price on the date of issuance.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

Summary of Significant Accounting Policies (cont'd)

Summary of Significant Accounting

Policies (cont'd)

Share-Based Compensation (cont'd)

The Company accounts for stock compensation arrangements with persons classified as non-employees for accounting purposes in accordance with ASC 505-50 "Stock-Based Transactions with Nonemployees", which requires that such equity instruments are recorded at their fair value on the measurement date.

The measurement of share-based compensation is subject to periodic adjustment as the underlying instruments vest.

The fair value of stock options is estimated using the Black-Scholes Option Pricing Model and the compensation charges are amortized over the vesting period.

Common stock issued for non-monetary consideration are recorded at their fair value on the measurement date and classified as equity.

The measurement date is defined as the earliest of the date at which the commitment for performance by the counterparty to earn the common shares is reached or the date at which the counterparty's performance is complete.

Transaction costs directly attributable to the issuance of common stock, units and stock options are recognized as a deduction from equity, net of any tax effects.

Share-based compensation for non-employees

in exchange for goods and services used or consumed in an entity’s own operations are also recorded at fair value on the

measurement date and accounted for in accordance with ASC 718.

The measurement of share-based compensation is subject to periodic

adjustment as the underlying instruments vest.

The fair value of stock options is estimated using the Black-Scholes Option Pricing

Model and the compensation charges are amortized over the vesting period.

Common stock issued for non-monetary consideration

are recorded at their fair value on the measurement date and classified as equity.

The measurement date is defined as the earliest

of the date at which the commitment for performance by the counterparty to earn the common shares is reached or the date at which

the counterparty's performance is complete.

Transaction costs directly attributable to the issuance of common stock, units and

stock options are recognized as a deduction from equity, net of any tax effects.

Related Party Transactions

A related party is generally defined as (i) any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company.

A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

A related party is generally defined as (i)

any person that holds 10% or more of the Company's securities and their immediate families, (ii) the Company's management, (iii)

someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who

can significantly influence the financial and operating decisions of the Company.

A transaction is considered to be a related

party transaction when there is a transfer of resources or obligations between related parties.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , or “ASU 2016-02”, to increase transparency and comparability among organizations by requiring the recognition of a right-of-use assets and lease liabilities for most lease arrangements on the balance sheet.

Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

The new standard is effective for fiscal years beginning after December 15, 2018, with early adoption permitted.

The standard permits two transition methods, (1) to apply the new lease requirements at the beginning of the earliest period presented, or (2) to apply the new lease requirements at the effective date.

Under both transition methods, there is a cumulative effect adjustment.

ASU 2016-02 was originally required to be adopted on a modified retrospective basis, meaning the new leasing model would need to be applied to the earliest year presented in the financial statements and thereafter.

In February 2016, the FASB issued ASU 2016-02,

Leases (Topic 842) , or “ASU 2016-02”, to increase transparency and comparability among organizations by requiring

the recognition of right-of-use assets and lease liabilities for most lease arrangements on the balance sheet.

Under the standard,

disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty

of cash flows arising from leases.

ASU 2016-02 was originally required to be adopted

on a modified retrospective basis, meaning the new leasing model would need to be applied to the earliest year presented in the

financial statements and thereafter.

However, in July 2018, the FASB issued ASU No.

2018-11, Leases (Topic 842):

Targeted Improvements ("ASU 2018-11") which permits companies to apply the transition provisions of the lease accounting standard at its effective date (i.e.

Targeted Improvements,

or “ASU 2018-11"

which permits companies to apply the transition provisions of the lease accounting standard at

its effective date (i.e.

comparative financial statements are not required).

Furthermore, in December 2018, the FASB issued ASU No.

Furthermore, in December 2018, the FASB issued ASU

2018-20, Leases (Topic 842):

Narrow Scope Improvements for Lessors ("ASU 2018-20").

ASU 2018-20 clarifies that lessor costs paid directly to a third-party by a lessee on behalf of the lessor, are no longer required to be recognized in the lessor's financial statements.

The Company intends to apply the new lease requirements at the effective date.

It also intends to elect the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows us to carry forward the historical lease classification.

Additionally, the right-of-use asset is subject to an impairment analysis under ASC 360, Property, Plant, and Equipment , at each reporting period, to evaluate asset recoverability.

The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial statements.

Narrow Scope Improvements for Lessors or "ASU 2018-20", which clarifies that

lessor costs paid directly to a third-party by a lessee on behalf of the lessor, are no longer required to be recognized in the

lessor's financial statements.

The Company adopted this standard on January

The adoption did not have any impact on the Company’s financial statements.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

Summary of Significant Accounting Policies (cont'd)

Recent Accounting Pronouncements (cont'd)

In August 2016, the FASB issued ASU No.

2016-15, Classification of Certain Cash Receipts and Cash Payments , a Consensus of the FASB Emerging Issues Task Force, or “ASU 2016-15”, to address how certain cash receipts and cash payments are presented and classified in the statement of cash flows, in an effort to reduce existing diversity in practice.

The update includes eight specific cash flow issues and provides guidance on the appropriate cash flow presentation for each.

ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within each annual reporting period.

The Company adopted this standard on January 1, 2018.

The adoption did not have any impact on the Company’s financial statements.

In May 2017, the FASB issued ASU No.

2017-09, Compensation—Stock Compensation (Topic 718):

Scope of Modification Accounting , or “ASU 2017-09”, to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification.

Under this new guidance, modification accounting is required if the fair value, vesting conditions, or classification of the award changes due to a change in terms or conditions.

ASU 2017-09 is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within each annual reporting period.

The Company adopted this standard on January 1, 2018.

The adoption did not have any impact on the Company’s financial statements.

In June 2018, the FASB issued ASU No.

2018-07, Compensation—Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting , or “ASU 2018-07”.

The guidance in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees.

The new standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within each annual reporting period.

The Company is currently evaluating the impact of the adoption of this ASU on the financial statements.

In August 2018, the FASB issued ASU No.

2018-03, Fair Value Measurement (Topic 820):

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement , or “ASU 2018-03”.

The guidance in this ASU modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement.

Under the new guidance, transfers between asset classes and the valuation related to level 3 assets is modified.

The new standard is effective for annual reporting periods beginning after December 15, 2019, including interim reporting periods within each annual reporting period.

The Company is currently evaluating the impact of the adoption of this ASU on the financial statements.

Prepaid Expenses and Deposits

The following summarizes the Company's prepaid expenses and deposits outstanding as at December 31, 2018 and 2017:

Deposit on research agreement (Note 9(c)), (RP Note 8)

Other prepaid expenses and deposits

The following summarizes the Company's prepaid

expenses and deposits outstanding as at December 31, 2019 and 2018:

Rental deposit

PROTOKINETIX, INC.

3 unchanged sentences

Intangible Assets

Intangible asset transactions are summarized as follows:

Intangible asset transactions are summarized

Patent Rights

11 unchanged sentences

December 31, 2019

During the year ended December 31, 2015, the Company entered into an Assignment of Patents and Patent Application (effective January 1, 2015) (the "Patent Assignment") with the Institut National des Sciences Appliquees de Rouen ("INSA") for the assignment of certain patents and all rights associated therewith (the "Patents").

The Company and INSA had previously entered into a licensing agreement for the Patents in August 2004.

The Patent Assignment transfers all of the Patents and rights associated therewith to the Company upon payment to INSA in the sum of $30,000 (25,000 Euros) (paid).

During the year ended December 31, 2018, the Company recorded $3,000 (2017 - $3,000) in amortization expense associated with the Patents.

During the year ended December 31, 2015, the Company entered into a Technology Transfer Agreement with Grant Young for the assignment of his 50% ownership of certain patents and all rights associated therewith (the "Patent Application Rights").

In exchange for the Patent Application Rights, the Company agreed to pay $10,000 (paid) and to issue 6,000,000 warrants (issued) to purchase shares of the Company's common stock at an exercise price of $0.10 per share for a period of five years.

The Patent Application Rights had a total fair value of $35,000, which was allocated as $10,000 to the cash consideration paid, with the remaining $25,000 being allocated to the warrant component of the overall consideration.

The Company incurred an additional $133,271 in direct costs relating to the Patent Application Rights, $37,743 of which were incurred during the year ended December 31, 2018.

During the year ended December 31, 2015, the

Company entered into an Assignment of Patents and Patent Application (effective January 1, 2015) (the "Patent Assignment")

with the Institut National des Sciences Appliquees de Rouen ("INSA") for the assignment of certain patents and all rights

associated therewith (the "Patents").

The Company and INSA had previously entered into a licensing agreement for the

Patents in August 2004.

The Patent Assignment transfers all of the Patents and rights associated therewith to the Company upon

payment to INSA in the sum of $30,000 (25,000 Euros) (paid).

During the year ended December 31, 2019, the Company recorded $3,000

(2018 - $3,000) in amortization expense associated with the Patents based on a 10-year useful life.

During the year ended December 31, 2015, the

Company entered into a Technology Transfer Agreement with Grant Young for the assignment of his 50% ownership of certain patents

and all rights associated therewith (the "Patent Application Rights").

In exchange for the Patent Application Rights,

the Company agreed to pay $10,000 (paid) and to issue 6,000,000 warrants (issued) to purchase shares of the Company's common stock

at an exercise price of $0.10 per share for a period of five years.

The Patent Application Rights had a total fair value of $35,000,

which was allocated as $10,000 to the cash consideration paid, with the remaining $25,000 being allocated to the warrant component

of the overall consideration.

The Company incurred an additional $156,008 in direct costs relating to the Patent Application Rights,

$22,737 of which were incurred during the year ended December 31, 2019.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

Intangible Assets (cont’d)

The remaining 50% ownership of the Patent Application Rights was acquired from the Governors of the University of Alberta in exchange for a future gross revenue royalty.

During the year ended December 31, 2016, the Company entered into a Universal Assignment with Grant Young for the assignment of his ownership of certain new and useful improvements in an invention entitled "Use of Anti-Aging Glycoprotein for Enhancing Survival of Neurosensory Precursor Cells" (the "New Patent Application Rights").

In exchange for the New Patent Application Rights, the Company agreed to pay $1 (paid).

The Company incurred $2,415 in direct costs relating to the New Patent Application Rights during the year ended December 31, 2016.

No amortization was recorded on the Patent Application Rights or the New Patent Application Rights to December 31, 2018.

Intangible Assets (cont’d)

The remaining 50% ownership of the Patent Application

Rights was acquired from the Governors of the University of Alberta in exchange for a future gross revenue royalty.

During the year ended December 31, 2016, the

Company entered into a Universal Assignment with Grant Young for the assignment of his ownership of certain new and useful improvements

in an invention entitled "Use of Anti-Aging Glycoprotein for Enhancing Survival of Neurosensory Precursor Cells"

"New Patent Application Rights").

In exchange for the New Patent Application Rights, the Company agreed to pay

The Company incurred $2,415 in direct costs relating to the New Patent Application Rights during the year ended

December 31, 2016.

No amortization was recorded on the Patent

Application Rights or the New Patent Application Rights to December 31, 2019.

Stock Options

On December 30, 2016, the Board of Directors of the Company adopted the 2017 Stock Option and Stock Bonus Plan (the "2017 Plan", as amended on November 9, 2018).

The Board of Directors adopted the 2017 Plan as it anticipates utilizing equity compensation as part of its ongoing standard corporate operations and in connection with its contemplated activities going forward.

The aggregate number of shares that may be issued under the 2017 Plan is 50,000,000 shares subject to adjustment as provided therein.

The 2017 Plan includes two types of options.

Options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended are referred to as incentive options.

Options which are not intended to qualify as incentive options are referred to as non-qualified options.

As of December 31, 2018, there are 40,600,000 options and no shares of common stock granted and outstanding under the 2017 Plan.

On December 30, 2016, the Board of Directors

of the Company adopted the 2017 Stock Option and Stock Bonus Plan (the "2017 Plan", as amended on November 9, 2018).

The Board of Directors adopted the 2017 Plan as it anticipates utilizing equity compensation as part of its ongoing standard

corporate operations and in connection with its contemplated activities going forward.

The aggregate number of shares that may be

issued under the 2017 Plan is 89,700,000 shares subject to adjustment as provided therein.

The 2017 Plan includes two types

Options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986,

as amended are referred to as incentive options.

Options which are not intended to qualify as incentive options are referred

to as non-qualified options.

As of December 31, 2019, there are 89,450,000

options and no shares of common stock granted and outstanding under the 2017 Plan.

PROTOKINETIX, INC.

3 unchanged sentences

Stock Options (cont'd)

The 2017 Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors.

In addition to determining who will be granted options or stock bonuses, the committee has the authority and discretion to determine when options and bonuses will be granted and the number of options and bonuses to be granted.

The committee also may determine a vesting and/or forfeiture schedule for bonuses and/or options granted, the time or times when each option becomes exercisable, the duration of the exercise period for options and the form or forms of the agreements, certificates or other instruments evidencing grants made under the 2017 Plan.

The committee may determine the purchase price of the shares of common stock covered by each option and determine the fair market value per share.

The committee also may impose additional conditions or restrictions not inconsistent with the provisions of the 2017 Plan.

The committee may adopt, amend and rescind such rules and regulations as in its opinion may be advisable for the administration of the 2017 Plan.

The committee also has the power to interpret the 2017 Plan, and the provisions in the instruments evidencing grants made under it and is empowered to make all other determinations deemed necessary or advisable for the administration of it.

Participants in the 2017 Plan may be selected by the committee from employees, officers, consultants and advisors (including board members) of the Company.

The committee may take into account the duties of persons selected, their present and potential contributions to the success of the Company and such other considerations as the committee deems relevant to the purposes of the 2017 Plan.

In the event that a change, such as a stock split, is made in the Company's capitalization which results in an exchange or other adjustment of each share of common stock for or into a greater or lesser number of shares, appropriate adjustments will be made to unvested bonuses and in the exercise price and in the number of shares subject to each outstanding option.

The committee also may make provisions for adjusting the number of bonuses or underlying outstanding options in the event the Company effects one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of shares of its outstanding common stock.

Options and bonuses may provide that in the event of the dissolution or liquidation of the Company, a corporate separation or division or the merger or consolidation of the Company, the holder may exercise the option on such terms as it may have been exercised immediately prior to such dissolution, corporate separation or division or merger or consolidation;

or in the alternative, the committee may provide that each option granted under the 2017 Plan shall terminate as of a date fixed by the committee.

The exercise price of any option granted under the 2017 Plan must be no less than 100% of the "fair market value" of the Company's common stock on the date of grant.

Any incentive stock option granted under the 2017 Plan to a person owning more than 10% of the total combined voting power of the common stock must be at a price of no less than 110% of the fair market value per share on the date of grant.

The exercise price of an option may be paid in cash, in shares of the Company's common stock or other property having a fair market value equal to the exercise price of the option, or in a combination of cash, shares, other securities and property.

The committee determines whether or not property other than cash or common stock may be used to purchase the shares underlying an option and shall determine the value of the property received.

The 2017 Plan is administered by the Board

of Directors, or a committee appointed by the Board of Directors.

In addition to determining who will be granted options

or stock bonuses, the committee has the authority and discretion to determine when options and bonuses will be granted and the

number of options and bonuses to be granted.

The committee also may determine a vesting and/or forfeiture schedule for bonuses

and/or options granted, the time or times when each option becomes exercisable, the duration of the exercise period for options

and the form or forms of the agreements, certificates or other instruments evidencing grants made under the 2017 Plan.

The committee may determine the purchase price

of the shares of common stock covered by each option and determine the fair market value per share.

The committee also may

impose additional conditions or restrictions not inconsistent with the provisions of the 2017 Plan.

The committee may adopt,

amend and rescind such rules and regulations as in its opinion may be advisable for the administration of the 2017 Plan.

The committee also has the power to interpret

the 2017 Plan, and the provisions in the instruments evidencing grants made under it and is empowered to make all other determinations

deemed necessary or advisable for the administration of it.

Participants in the 2017 Plan may be selected

by the committee from employees, officers, consultants and advisors (including board members) of the Company.

The committee

may take into account the duties of persons selected, their present and potential contributions to the success of the Company and

such other considerations as the committee deems relevant to the purposes of the 2017 Plan.

In the event that a change, such as a stock

split, is made in the Company's capitalization which results in an exchange or other adjustment of each share of common stock for

or into a greater or lesser number of shares, appropriate adjustments will be made to unvested bonuses and in the exercise price

and in the number of shares subject to each outstanding option.

The committee also may make provisions for adjusting the

number of bonuses or underlying outstanding options in the event the Company effects one or more reorganizations, recapitalizations,

rights offerings, or other increases or reductions of shares of its outstanding common stock.

Options and bonuses may provide

that in the event of the dissolution or liquidation of the Company, a corporate separation or division or the merger or consolidation

of the Company, the holder may exercise the option on such terms as it may have been exercised immediately prior to such dissolution,

corporate separation or division or merger or consolidation;

or in the alternative, the committee may provide that each option

granted under the 2017 Plan shall terminate as of a date fixed by the committee.

The exercise price of any option granted under

the 2017 Plan must be no less than 100% of the "fair market value"

of the Company's common stock on the date of grant.

Any incentive stock option granted under the 2017 Plan to a person owning more than 10% of the total combined voting power of the

common stock must be at a price of no less than 110% of the fair market value per share on the date of grant.

The exercise price of an option may be paid

in cash, in shares of the Company's common stock or other property having a fair market value equal to the exercise price of the

option, or in a combination of cash, shares, other securities and property.

The committee determines whether or not property

other than cash or common stock may be used to purchase the shares underlying an option and shall determine the value of the property

PROTOKINETIX, INC.

3 unchanged sentences

Stock Options (cont'd)

Stock option transactions are summarized as follows:

Stock option transactions are summarized as

Stock Options

Weighted Average Exercise Price

Weighted Average

Weighted Average Remaining Life

Outstanding, December 31, 2018

Options cancelled

(16,000,000 )

Options exercised

Options granted

Options repurchased

Options expired

Outstanding, December 31, 2019

Stock Options

Weighted Average Exercise Price

Weighted Average Remaining Life

Outstanding, December 31, 2017

Options granted

1 unchanged sentence

Outstanding, December 31, 2018

The fair values of the stock options granted during the years ended December 31, 2018 and 2017 were estimated using the Black-Scholes Option Pricing Model.

The weighted average assumptions used in the pricing model for these options are as follows:

Total share-based compensation for stock options

granted during the year ended December 31, 2019 was $3,156,694 (2018 - $648,773).

The fair values of the stock options granted

during the years ended December 31, 2019 and 2018 were estimated using the Black-Scholes Option Pricing Model.

average assumptions used in the pricing model for these options are as follows:

December 31, 2019

5 unchanged sentences

Expected life

The following non-qualified stock options were outstanding and exercisable at December 31, 2018:

The following non-qualified stock options were

outstanding and exercisable at December 31, 2019:

Exercise Price

1 unchanged sentence

February 25, 2020

February 28, 2020

December 31, 2020

August 31, 2021

3 unchanged sentences

November 08, 2023

PROTOKINETIX , INC.

July 14, 2024

November 17, 2024

(A Development Stage Company)

2 unchanged sentences

Stock Options (cont'd)

As at December 31, 2018, the aggregate intrinsic value of the Company's stock options is $572,000 (December 31, 2017 – $272,000).

The weighted average fair value of stock options granted during the year ended December 31, 2018 is $0.07 (2017 - $0.05), and the weighted average exercise price of exercisable stock options is $0.06 (2017 - $0.06).

During the year ended December 31, 2017, the Company repurchased a total of 12,000,000 stock options from its former CFO for proceeds of $110,000.

In accordance with ASC 718, the Company first calculated the fair value of the stock options as of the repurchase date ($604,350) in order to determine the appropriate allocation between equity and profit or loss.

As the fair value of the stock options as of the repurchase date was in excess of the consideration paid, the full amount of the consideration was allocated against equity.

The fair values of the stock options repurchased during the year ended December 31, 2017 were estimated using the Black-Scholes Option Pricing Model.

The weighted average assumptions used in the pricing model for these options are as follows:

December 31, 2017

As at December 31, 2019, the aggregate intrinsic

value of the Company's stock options is $1,005,350 (December 31, 2018 –

The weighted average fair value of stock

options granted during the year ended December 31, 2019 is $0.18 (2018 - $0.07), and the weighted average exercise price of exercisable

stock options is $0.10 (2018 - $0.06).

On July 15, 2019, the Company cancelled and

concurrently replaced 6,000,000 warrants previously issued to a consultant in 2015.

The replacement warrants granted have a term

of 5 years and are exercisable at a price of $0.26 per share, expiring July 15, 2024.

In accordance with ASC 718, the 6,000,000 replacement

warrants were accounted for as a modification of the terms of the cancelled award, with the incremental cost being measured as

the excess of the fair value of the replacement warrants over the fair value of the cancelled warrants at the cancellation date.

Total share-based compensation of $238,625 was recorded in connection with the warrant modification, based on the following assumptions

used in the Black-Scholes Option Pricing Model:

Warrants on cancellation

Warrants replaced

Risk-free interest rate

4 unchanged sentences

Warrant transactions are summarized as follows:

Weighted Average

Exercise Price

Outstanding, December 31, 2016 and 2017

Weighted Average Exercise Price

Outstanding, December 31, 2017

Warrants expired

Outstanding, December 31, 2018

The following warrants were outstanding and exercisable as at December 31, 2018:

Warrants cancelled

Warrants granted

Outstanding, December 31, 2019

The following warrants were outstanding

and exercisable as at December 31, 2019:

Number of Warrants

Exercise Price ($)

April 22, 2020

July 14, 2024

October 15, 2022

October 21, 2022

November 1, 2022

November 12, 2022

December 1 , 2022

December 18, 2022

PROTOKINETIX, INC.

3 unchanged sentences

Stockholders' Equity

The Company is authorized to issue 400,000,000 (December 31, 2017 – 400,000,000) shares of $0.0000053 par value common stock.

Each holder of common stock has the right to one vote but does not have cumulative voting rights.

Shares of common stock are not subject to any redemption or sinking fund provisions, nor do they have any preemptive, subscription or conversion rights.

Holders of common stock are entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends.

No dividends have been declared or paid as of December 31, 2018 (December 31, 2017 - $nil).

The Company is authorized to issue 400,000,000

(December 31, 2018 –

400,000,000) shares of $0.0000053 par value common stock.

Each holder of common stock has the

right to one vote but does not have cumulative voting rights.

Shares of common stock are not subject to any redemption or sinking

fund provisions, nor do they have any preemptive, subscription or conversion rights.

Holders of common stock are entitled to receive

dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders

of all classes of stock outstanding having priority rights as to dividends.

No dividends have been declared or paid as of December

31, 2019 (December 31, 2018 - $nil).

During the year ended December 31, 2019, the Company:

Issued 750,000 shares of common stock to investors at $0.06 per share for gross proceeds of $45,000.

Issued 2,359,240 shares of common stock to President and CEO of the Company at $0.05 per share in exchange for debt to President and CEO of $117,962.

Issued 10,000,000 shares of common stock to investors at $0.05 per share for gross proceeds of $500,000.

Issued 1,240,760 shares of common stock to investors (one of which was the President and CEO of the Company) at $0.05 per share for gross proceeds of $62,038.

Issued 1,833,333 shares of common stock to investors (one of which was the President and CEO of the Company)

at $0.06 per share for gross proceeds of $110,000.

Issued 2,266,667 shares of common stock to investors at $0.12 per share for gross proceeds of $272,000.

Issued 97,826 shares of common stock to its CFO pursuant to a cashless exercise of 250,000 stock options.

Issued 2,500,000 shares of common

stock to investors (one of which was the President and CEO of the Company)

at $0.12 per share for gross proceeds

of $300,000 and warrants to purchase 2,500,000 shares of common stock exercisable at $0.12 per share for three years.

During the year ended December 31, 2018, the Company:

Issued 8,000,000 shares of common stock to investors (which included both the President and CEO as well as the CFO of the Company) at $0.04 for gross proceeds of $320,000.

Issued 4,400,000 shares of common stock to investors at $0.05 for gross proceeds of $220,000.

Issued 1,000,000 shares of common stock to investors at $0.05 for gross proceeds of $50,000.

Issued 2,359,240 shares of common stock to the President and CEO of the Company at $0.05 per share in exchange for debt to the President and CEO of $117,962.

Issued 1,000,000 shares of common stock to investors at $0.05 per share for gross proceeds of $50,000.

Issued 3,240,760 shares of common stock to investors (one of which was the President and CEO of the Company) at $0.05 per share for gross proceeds of $162,038.

Issued 1,833,333 shares of common

stock to investors (one of which was the President and CEO of the Company)

at $0.06 per share for gross proceeds

PROTOKINETIX, INC.

4 unchanged sentences

During the year ended December 31, 2019, the Company:

Settled two promissory notes on January 16, 2018 (the "Notes") with the Company's President and CEO for a total of $117,962.

A total of $116,000 was loaned to the Company and the Notes bear interest at a rate of 8% per annum.

As at the time of settlement, the Notes had accrued interest of $1,962.

The Company issued a total of 2,359,240 shares of common stock to its President and CEO as settlement of principal and interest owing on the Notes.

There was no gain or loss recorded on settlement.

Entered into a consulting agreement with an effective date of January 1, 2017 with the Company's President and CEO whereby he will be compensated at a nominal amount of $1 for services through to December 31, 2017.

The agreement also stipulates a termination fee that would pay the Company's President and CEO $100,000 per year of service if terminated without cause or, in the case of termination upon a change of control event, the termination fee would be equal to $100,000 per year of service plus 2.5% of the aggregate transaction value of the change of control.

In addition, the agreement stipulates that he would be entitled to a bonus payment equal to 2.5% of the aggregate transaction value of a sale or license of any Patent Rights, Patent Application Rights or products effected during the term of his agreement.

Pursuant to the agreement, he was also granted 5,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share.

The options vested in equal instalments on a quarterly basis beginning March 31, 2017.

On September 1, 2017, the consulting agreement was amended to continue the term of the agreement until December 31, 2018 and thereafter to automatically renew.

The consulting agreement was also amended to grant an additional 5,000,000 stock options exercisable into common shares of the Company until August 31, 2021 at a price of $0.06 per share (Note 5).

The options vested quarterly in equal installments beginning December 31, 2017.

On November 9, 2018, the President and CEO was granted an additional 5,000,000 stock options for continued service.

The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019.

Entered into a directorship agreement with an effective date of January 1, 2017 with a director of the Company.

Pursuant to the agreement, the director was issued 1,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share (Note 5).

The options vested in equal installments on a quarterly basis beginning March 31, 2017.

On September 1, 2017, the consulting agreement was amended to continue the term of the agreement until December 31, 2018 and thereafter to automatically renew.

The consulting agreement was also amended to grant an additional 1,000,000 stock options exercisable into common shares of the Company until August 31, 2021 at a price of $0.06 per share (Note 5).

The options vested quarterly in equal installments beginning December 31, 2017.

On November 9, 2018, the director was granted an additional 1,000,000 stock options for continued service.

The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019.

Entered into a consulting agreement with an effective date of November 14, 2017 with the Company's CFO whereby he will be compensated at a monthly fee of $5,000 for services through to November 30, 2018.

Pursuant to the agreement, he was also granted 1,000,000 stock options exercisable into common shares of the Company until November 14, 2021 at a price of $0.07 per share (Note 5).

The options vested in equal instalments on a quarterly basis beginning February 14, 2018.

On November 9, 2018, the CFO was granted an additional 4,000,000 stock options for continued service.

The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019.

In 2018 the Company paid Mr.

Guzzetta $60,000 in consulting fees, and reimbursed The Guzzetta Company LLC $12,600 in office rent.

In 2017 he received $7,500 in consulting fees and The Guzzetta Company LLC was reimbursed $2,100 for a deposit of $1,050 on office space, and office rent of $1,050.

Recognized $310,962 in share-based compensation associated with stock options granted to key management personnel.

PROTOKINETIX, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

December 31, 2018

Related Party Transactions and Balances (cont'd)

During the year ended December 31, 2017, the Company:

Pursuant to the agreement, he was also granted 5,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share.

The options vest in equal instalments on a quarterly basis beginning March 31, 2017.

On September 1, 2017, the consulting agreement was amended to continue the term of the agreement until December 31, 2018 and thereafter to automatically renew.

The consulting agreement was also amended to grant an additional 5,000,000 stock options exercisable into common shares of the Company until August 31, 2021 at a price of $0.06 per share (Note 5).

The options vest quarterly in equal installments beginning December 31, 2017.

Entered into a consulting agreement with an effective date of January 1, 2017 with the Company's former CFO whereby she will be compensated at a monthly fee of $6,000 for services through to December 31, 2017.

The agreement also stipulates a termination fee that would pay the Company's CFO $72,000 per years of service (including the pro-rata amount for partial years of service) if terminated without cause or upon termination due to a change of control event.

Pursuant to the agreement, she was also granted 4,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share (Note 5).

The options vest in equal instalments on a quarterly basis beginning March 31, 2017.

A total of $72,000 was paid or accrued to the Company's former CFO during the year ended December 31, 2017 and is included in professional fees.

Entered into a directorship agreement with an effective date of January 1, 2017 with a director of the Company.

Pursuant to the agreement, the director was issued 1,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share (Note 5).

The options vest in equal installments on a quarterly basis beginning March 31, 2017.

On September 1, 2017, the consulting agreement was amended to continue the term of the agreement until December 31, 2018 and thereafter to automatically renew.

The consulting agreement was also amended to grant an additional 1,000,000 stock options exercisable into common shares of the Company until August 31, 2021 at a price of $0.06 per share (Note 5).

The options vest quarterly in equal installments beginning December 31, 2017.

Entered into two promissory notes (the "Notes") with the Company's President and CEO whereby a total of $116,000 was loaned to the Company.

The Notes bear interest at a rate of 8% per annum, are unsecured and are repayable on demand.

As at December 31, 2017, accrued interest totaled $1,656.

The Notes were settled through the issuance of common stock of the Company subsequent to the year ended December 31, 2017.

Entered into a settlement agreement with the Company's former CFO whereby she left her position as CFO effective upon the filing of the Company's quarterly report for the nine-month period ended September 30, 2017.

Pursuant to the settlement agreement, the Company paid the former CFO $6,000 for December 2017 consulting services and $110,000 in exchange for the return of stock options to purchase up to 12,000,000 shares of the Company's common stock (Note 5), which were then cancelled.

Entered into a consulting agreement

with an effective date of January 1, 2017 with the Company's President and CEO whereby he will be compensated at a nominal amount

of $1 for services.

The agreement also stipulates a termination fee that would pay the Company's President and CEO $100,000 per

year of service if terminated without cause or, in the case of termination upon a change of control event, the termination fee

would be equal to $100,000 per year of service plus 2.5% of the aggregate transaction value of the change of control.

the agreement stipulates that he would be entitled to a bonus payment equal to 2.5% of the aggregate transaction value of a sale

or license of any Patent Rights, Patent Application Rights or products effected during the term of his agreement.

On November 9,

2018, the President and CEO was granted an additional 5,000,000 stock options for continued service.

The options are exercisable

until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019.

On July 15, 2019, pursuant to a mutual

agreement, the CEO’s vested options for 5,000,000 shares at $0.08 per share, expiring December 31, 2019, were cancelled.

New stock options were granted for 5,000,000 shares of common stock at a price of $0.26 per share and expiring July 14, 2024.

options vest in equal installments quarterly starting October 13, 2019.

On July 15, 2019, the CEO was also granted stock options

for continued service for 5,000,000 shares of common stock at a price of $0.26 per share, expiring July 14, 2024.

The options vest

in equal installments quarterly starting October 13, 2019.

On November 18, 2019, the CEO was granted additional stock options for

5,000,000 stock options at a price of $0.11 per share, expiring November 17, 2024.

The options vest in equal installments quarterly

starting February 18, 2020.

Pursuant to a consulting agreement

with an effective date of November 14, 2017, a total of $60,000 (2018 - $60,000) was paid or accrued to the Company's CFO.

9, 2018, the CFO was granted 4,000,000 stock options for continued service.

The options are exercisable until November 8, 2023

at a price of $0.09 per stock option (Note 5) and vest quarterly in equal installments beginning March 31, 2019.

On July 15, 2019,

the CFO was granted an additional 4,000,000 stock options for continued service.

The options are exercisable until July 14, 2024

at a price of $0.26 per share.

On November 18, 2019, the CFO was granted 4,000,000 stock options at a price of $0.11 per share,

expiring November 17, 2024.

The options vest in equal installments quarterly starting February 18, 2020.

During the year ending

December 31, 2019, the Company reimbursed a company controlled by the CFO a total of $12,600 (2018 - $12,600) in office rent.

Entered into a directorship agreement

with an effective date of January 1, 2017 with a director of the Company.

On November 9, 2018, the director was granted 1,000,000

stock options for continued service.

The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5)

and vest quarterly in equal installments beginning March 31, 2019.

On July 15, 2019, pursuant to a mutual

agreement, the director’s vested options for 1,000,000 shares at $0.08 per share, expiring December 31, 2019, were cancelled.

New stock options were granted for 1,000,000 shares of common stock at a price of $0.26 per share and expiring July 14, 2024.

options vest in equal installments quarterly starting October 13, 2019.

On July 15, 2019, the director was also granted stock options

for continued service for 2,000,000 shares of common stock at a price of $0.26 per share, expiring July 14, 2024.

The options vest

in equal installments quarterly starting October 13, 2019.

On November 18, 2019, the director was granted additional stock options

for 1,000,000 stock options at a price of $0.11 per share, expiring November 17, 2024.

The options vest in equal installments quarterly

starting February 18, 2020.

The Company recognized $1,704,723 (2018 - $310,962)

in share-based compensation associated with stock options granted to key management personnel.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

Related Party Transactions and Balances (cont'd)

Entered into a consulting agreement with an effective date of November 14, 2017 with the Company's newly appointed CFO whereby he will be compensated at a monthly fee of $5,000 for services through to November 30, 2018.

Pursuant to the agreement, he was also granted 1,000,000 stock options exercisable into common shares of the Company until November 14, 2021 at a price of $0.07 per share (Note 5).

The options vest in equal instalments on a quarterly basis beginning February 14, 2018.

A total of $7,500 was paid or accrued to the Company's new CFO during the year ended December 31, 2017.

Recognized $481,644 in share-based compensation associated with stock options granted to key management personnel.

As at December 31, 2018 and December 31, 2017, the following amounts are due to related parties:

Clarence Smith (CEO)

Promissory notes payable (and interest)

Amounts included in accounts payable and accrued liabilities are non-interest bearing, unsecured and repayable on demand.

Commitments and Contingency

As at December 31, 2019, the Company has the following commitments:

Entered into a consulting agreement with an effective date of January 1, 2017 whereby the Company would pay the consultant $7,000 per month for providing research and development services.

Pursuant to the agreement, the consultant was also granted 5,000,000 stock options exercisable into common shares of the Company until December 31, 2020 at a price of $0.05 per share (Note 5).

The options vested in equal instalments on a quarterly basis beginning March 31, 2017.

On September 1, 2017 the consulting agreement was amended to continue the term of the agreement until December 31, 2018 and thereafter to automatically renew.

The consulting agreement was also amended to grant an additional 5,000,000 stock options exercisable into common shares of the Company until August 31, 2021 at a price of $0.06 per share (Note 5).

The options vested quarterly in equal installments beginning December 31, 2017.

Entered into a consulting agreement

with an effective date of January 1, 2017 whereby the Company would pay the consultant $7,000 per month for providing research

and development services.

On November 9, 2018, the consultant was granted an additional 5,000,000 stock options for continued service.

The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments beginning March 31, 2019.

Entered into a consulting agreement for research and investor relation consulting services effective January 1, 2018.

The consultant was granted 400,000 stock options exercisable into common shares of the Company at a price of $0.06 per share until December 31, 2022 (Note 5).

The options vest in equal instalments on a quarterly basis beginning March 31, 2018.

On September 1, 2018, the consultant was granted an additional 600,000 stock options exercisable into common shares of the Company at a price of $0.08 per share until August 31, 2023 (Note 5).

The options vest in equal instalments on a quarterly basis beginning December 31, 2018.

The options are exercisable until November 8, 2023 at a price of $0.09 per share (Note 5) and vest quarterly in equal installments

beginning March 31, 2019.

On July 15, 2019, pursuant to a mutual

agreement, the consultant’s vested options for 5,000,000 shares at $0.04 per share, expiring February 28, 2020, and vested

options for 5,000,000 shares at $0.08 per share, expiring December 31, 2019, were cancelled.

New stock options were granted for

10,000,000 shares of common stock at a price of $0.26 per share and expiring July 14, 2024.

The options vest in equal installments

quarterly starting October 13, 2019.

On July 15, 2019, the consultant was also granted stock options for continued service for

5,000,000 shares of common stock at a price of $0.26 per share, expiring July 14, 2024.

The options vest in equal installments

quarterly starting October 13, 2019.

On November 18, 2019, the consultant was granted additional stock options for 5,000,000 stock

options at a price of $0.11 per share, expiring November 17, 2024.

Entered into a consulting agreement

for research and investor relations consulting services effective January 1, 2018.

The consultant was granted 400,000 stock options

exercisable into common shares of the Company at a price of $0.06 per share until December 31, 2022 (Note 5).

The options vest

in equal instalments on a quarterly basis beginning March 31, 2018.

On September 1, 2018, the consultant was granted an additional

600,000 stock options exercisable into common shares of the Company at a price of $0.08 per share until August 31, 2023.

vest in equal instalments on a quarterly basis beginning December 31, 2018.

On June 29, 2018, the Company entered

into an amendment to a Collaborative Research Agreement (the “CREA”) initially entered into with the University of

British Columbia during fiscal 2016 which required two additional instalments of CAD $54,600 ($41,369) due on June 30, 2018 and

CAD $54,600 ($41,392) due on December 1, 2018.

The CREA can be terminated by either party with 30 days’

written notice.

of December 31, 2019, a total of $nil is included in prepaid expenses and deposits (December 31, 2018 - $nil) pertaining to the

On January 4, 2018, the Company entered

into an additional agreement with the University of British Columbia, making a payment of CAD $50,001 ($40,140) for research services

to be provided over a term of 1 year.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

Commitments and Contingency (cont’d)

Commitments (cont’d)

Entered into a Collaborative Research Agreement (the “CREA”) effective May 31, 2016 with the University of British Columbia (“UBC”) for a term of 2 years.

Pursuant to the CREA, the Company paid a total of CAD $169,000 ($131,448) in advance for services to be provided by UBC in the first year, and an additional CAD $201,500 ($146,585) which was due within 12 months from the effective date of the CREA in advance of services to be provided by UBC in the second year.

On June 29, 2018, the Company entered into an amendment to the CREA, requiring two additional instalments of CAD $54,600 ($41,369 paid) on June 30, 2018 and CAD $54,600 (paid subsequently) on December 1, 2018.

The CREA can be terminated by either party with 30 days’ written notice.

As of December 31, 2018, a total of $nil is included in prepaid expenses and deposits (December 31, 2017 - $61,077) pertaining to the CREA.

On January 4, 2018, the Company entered into an additional agreement with UBC, making a payment of CAD $50,001 ($40,140) for research services to be provided over a term of 1 year.

Entered into a consulting agreement effective January 1, 2018, whereby the Company would pay the consultant $1,000 per month for a term of 1 year for providing public relations services, unless otherwise terminated by either party with at least 30 days’ notice.

Commitments and Contingency (cont’d)

Commitments (cont’d)

The consultant was also granted 400,000 stock options exercisable into common shares of the Company until December 31, 2022 at a price of $0.06 per share (Note 5).

The options vest quarterly in equal installments beginning March 31, 2018.

Entered into a consulting agreement effective May 1, 2015, whereby the Company would pay the consultant $4,000 per month for providing research and development services for an initial term of 1 year, continued on a year-to-year basis thereafter unless otherwise terminated by either party with at least 30 days’ notice.

During the year ended December 31, 2017, the contract was revised whereby the Company would pay the consultant CAD $4,000 per month retroactively beginning January 1, 2017.

The Company was delinquent in filing certain income tax returns with the U.S.

Internal Revenue Service and reports disclosing its interest in foreign bank accounts on form TDF 90-22.1, "Report of Foreign Bank and Financial Accounts" ("FBARs").

In September 2015, the Company filed the delinquent income tax returns and has sought waivers of any penalties under the IRS Offshore Voluntary Disclosure Program for late filing of the returns and FBARs.

Under the program, the IRS has indicated that it will not impose a penalty for the failure to file delinquent income tax returns if there are no under reported tax liabilities.

On November 30, 2017, the Company received a letter from the IRS concluding their review of the Company's tax returns under the program and accepting the returns as filed.

No penalties have been assessed by the IRS to date, and management does not believe that the Company will incur any penalties relating to the tax years submitted under the program.

On May 1, 2019, entered into consulting agreements for investor relations consulting services with two firms.

The consultants were granted 800,000 stock options each (for a total of 1,600,000) exercisable into common shares of the Company at a price of $0.13 per share until May 6, 2023.

The options vest 400,000 shares to each of the two consultants on May 6, 2019 and 400,000 each, one on July 17, 2019 and one on August 1, 2019.

The agreements also call for monthly payments of $5,000 to each of the two consultants over a term of 1 year.

The agreements can be cancelled at any time with 30 days’

Entered into a consulting agreement

effective April 1, 2019, whereby the Company would pay the consultant $1,500 per month minimum plus travel expenses for a term

of 1 year for providing research consulting services, unless otherwise terminated by either party with at least 30 days’

On July 15, 2019, the consultant was also granted 500,000 stock options exercisable into common shares of the Company until

July 14, 2024 at a price of $0.26 per share.

The options vest quarterly in equal installments beginning October 13, 2019.

Entered into a Collaborative Research Agreement (the “CREA”) on February 20, 2019 with the University of Dalhousie until March 31, 2020.

Pursuant to the CREA, the Company will pay a total of CAD $112,000.

Dalhousie agrees to invoice the Company in four installments of CAD $28,000 ($20,982 USD) as research services progress.

The CREA can be terminated by either party with 30 days’

written notice.

As of December 31, 2019, a total of $nil is included in prepaid expenses and deposits (December 31, 2018 - $nil) pertaining to the CREA.

The Company was delinquent in filing certain

income tax returns with the U.S.

Internal Revenue Service and reports disclosing its interest in foreign bank accounts on form

TDF 90-22.1, "Report of Foreign Bank and Financial Accounts"

("FBARs").

In September 2015, the Company filed

the delinquent income tax returns and has sought waivers of any penalties under the IRS Offshore Voluntary Disclosure Program for

late filing of the returns and FBARs.

Under the program, the IRS has indicated that it will not impose a penalty for the

failure to file delinquent income tax returns if there are no under reported tax liabilities.

On November 30, 2017, the Company

received a letter from the IRS concluding their review of the Company's tax returns under the program and accepting the returns

No penalties have been assessed by the IRS to date, and management does not believe that the Company will incur

any penalties relating to the tax years submitted under the program.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2019

As a Nevada corporation, the Company is liable for taxes in the United States.

As of December 31, 2018, the Company did not have any income for tax purposes and therefore, no tax liability or expense has been recorded in these financial statements (December 31, 2017 – none).

The Company has tax losses of approximately $28,360,000 (December 31, 2017 - $27,800,000) to reduce future taxable income.

The tax losses expire in years starting from 2028.

The deferred tax asset associated with the tax loss carry forward is approximately $6,000,000 (December 31, 2017 - $9,500,000).

The Company has provided a full valuation allowance against the deferred tax asset since it is more likely than not that the asset will not be realized.

The difference between the Company's statutory income tax rate of (21%) and its effective rate of zero is primarily attributable to the valuation allowance provided on deferred taxes arising from net operating loss carry forwards.

Subsequent Events

Subsequent to the year ended December 31, 2018, the Company:

On January 22, 2019 the Company entered into a private placement subscription agreement with an investor in the amount of $15,000.

The subscription agreement allowed for the purchase of 250,000 shares of common stock at $.06 per share.

As a Nevada corporation,

the Company is liable for taxes in the United States.

As of December 31, 2019, the Company did not have any income for tax

purposes and therefore, no tax liability or expense has been recorded in these financial statements (December 31, 2018 –

A reconciliation

of income taxes at statutory rates with the reported taxes is as follows:

Net loss for the year

$ (4,197,897 )

$ (1,216,343 )

Expected income tax recovery

Non-deductible expenses

Impact of change of future tax rate

Adjustment to prior years provision versus statutory tax returns

Change in valuation allowance

Total income tax expense (recovery)

The Company’s deferred tax assets that have not been recognized are as follows:

Tax benefit of net operating loss carry forward

Valuation allowance

The Company has tax

losses of approximately $29,000,000 (December 31, 2018 - $28,360,000) to reduce future taxable income.

The tax losses expire

in years starting from 2028.

The deferred tax asset

associated with the tax loss carry forward is approximately $6,100,000 (December 31, 2018 - $6,000,000).

The Company has

provided a full valuation allowance against the deferred tax asset since it is more likely than not that the asset will not be

The difference between the Company's statutory income tax rate of (21%) and its effective rate of zero is primarily

attributable to the valuation allowance provided on deferred taxes arising from net operating loss carry forwards.

Subsequent Event

Entered into a

Clinical Supply Agreement (the “CSA”) on January 14, 2020 with Alberta Health Services and the Governors of the

University of Alberta (the “Institution”) and Dr.

James Shapiro.

The agreement requires Protokinetix to supply

PKX-001 free of charge and in sufficient quantity to conduct the clinical study by Dr.

James Shapiro.

The delivery date is

estimated to be late February 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures