What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-03-05 compared with 2020-02-19 · 317 added, 366 removed, 970 unchanged (41% of the section changed)

14 unchanged sentences

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.

our principal accounting officer concluded that these disclosure controls and procedures are not 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 not 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

65 unchanged sentences

OTHER INFORMATION

Not applicable.

Between January 1, 2021 and March 5, 2021,

the Company sold 3,528,572 Units (each Unit comprised of one common share and one warrant to purchase one common share at $0.07)

for gross proceeds of $247,000 to accredited investors in a private placement.

The warrants were immediately vested and expire

one year from the date of issuance.

No solicitation was used in the offering.

The Company relied on the exemption from registration

available under Section 4(a)(2) of the 1933 Act and Rule 506(b) of Regulation D promulgated under the 1933 Act with respect to

transactions by an issuer not involving any public offering.

No commissions were paid in connection with these issuances

of securities.

A Form D was filed on January 19, 2021 and an amended Form D was filed with the SEC on March 1, 2021.

On January 14, 2021, the Board canceled 1,600,000 options issued

to vendors pursuant to the 2017 Plan.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS

AND CORPORATE GOVERNANCE

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

directors consist of the following persons:

As of March 5, 2021, the Company’s current

officers and directors consist of the following persons:

Year Appointed

91 unchanged sentences

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.

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

Business and Scientific Advisory Board

20 unchanged sentences

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.

Smith filed one Form 4 late representing one transaction not reported on a timely basis.

EXECUTIVE COMPENSATION

15 unchanged sentences

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

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.

with the Company dated December 30, 2016 (effective January 1, 2017) (the “2017 Smith Agreement”).

The 2017 Smith Agreement provides for a one-year

60 unchanged sentences

The following table provides information as

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

as of December 31, 2019.

to option awards held by each of the named executive officers of ProtoKinetix as of December 31, 2020.

Unexercised Options

7 unchanged sentences

4,000,000 (8)

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 November 9, 2018 at $0.09 per share with 1,250,000 vesting every three months beginning March 31, 2019.

1 unchanged sentence

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 March 25, 2020 at $0.14 per share issued fully vested.

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.

Represents options granted pursuant to the Amended 2017 Plan on November 18, 2020 at $0.11 per share issued fully vested.

Represents options granted pursuant to the Amended 2017 Plan on June 12, 2020 at $0.12 per share issued fully vested.

Director Compensation

10 unchanged sentences

As of December 31, 2020, 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.

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.

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

On or about December 30, 2016, the Company

1 unchanged sentence

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

25 unchanged sentences

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 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.

The following table sets forth certain

information regarding our shares of common stock beneficially owned as of March 5, 2021, 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

(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

February 18, 2020 (1)

March 5, 2021

More than 5% Stockholders

Grant Young (2)

Alexandra Smith (3)

Directors and Named Executive Officers

All directors and executive officers as a group:

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.

on 289,483,643 shares of common stock outstanding on March 5, 2021, and, with respect to each individual holder, rights to

acquire common stock exercisable within 60 days of March 5, 2021.

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

6 unchanged sentences

Young is 6438 Rosebery Ave, West Vancouver, BC, V7W 2C6, Canada.

Consists of 27,500,000 shares of common stock owned by Alexandra Smith directly.

The principal address of Ms.

Smith is 1413 Peachtree Road, Daytona Beach, FL 32114.

Consists of 29,018,253 shares of common stock owned by Mr.

31 unchanged sentences

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.

McDonough, and Mr.

Young during 2020.

See also Item 11 for a description of the consulting

agreements with the officers and directors of the Company.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

53 unchanged sentences

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 Current Report on Form 8-K filed on November 13, 2018 with the SEC.

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

1 unchanged sentence

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 Annual Report on Form 10-K filed on February 21, 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 amended Current Report on Form 8-K filed on September 12, 2017 with the SEC.

Incorporated by reference from the Company’s Current Report on Form 8-K filed on April 10, 2020 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 Quarterly Report on Form 10-Q filed on July 10, 2020 with the SEC.

Filed herewith.

7 unchanged sentences

PROTOKINETIX, INCORPORATED

February 18, 2020

March 5, 2021

/s/ Clarence E.

Principal Executive Officer

February 18, 2020

March 5, 2021

/s/ Michael R.

3 unchanged sentences

dates indicated:

February 18, 2020

March 5, 2021

/s/ Clarence E.

1 unchanged sentence

& Chairman of the Board

February 18, 2020

March 5, 2021

/s/ Edward P.

13 unchanged sentences

of Independent Registered Public Accounting Firm

To the Shareholders and Directors of

Protokinetix, Inc.

To the Shareholders

and Directors of

Protokinetix,

Opinion on the Financial Statements

1 unchanged sentence

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.

(the “Company”) as of December 31, 2020 and 2019, and the related statements of operations, stockholder’s

equity, and cash flows for the years ended December 31, 2020, and 2019, 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 the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for

the years ended December 31, 2020 and 2019, in conformity with accounting principles generally accepted in the United States of

Going Concern

2 unchanged sentences

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.

entity 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.

Management's plans in regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The financial statements

do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

1 unchanged sentence

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”)

Our responsibility is to express an opinion on these 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.

5 unchanged sentences

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

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required

to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

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

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

that respond to those risks.

5 unchanged sentences

reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any

way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,

providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Fair value of intangible assets

As discussed in Note 4 to the financial statements,

the Company held intangible assets of $274,686 relating to patent and patent application rights.

We identified the estimation of the fair value

of intangible assets as a critical audit matter.

Subjective auditor judgment was required to evaluate management’s estimates

and assumptions used to determine the fair value of the intangible assets, including the economic useful life over which the patent

rights are being amortized and whether indicators of impairment were present.

The following are the primary procedures we

performed to address this critical audit matter.

We obtained management’s impairment analysis of intangible assets and assessment

of impairment triggers.

We assessed the consistency and reasonableness of the assumptions used by management in performing the

impairment test and whether there were any changes in the expected useful life as compared to prior years.

We discussed with management

the plans and intent for the patents and patent applications.

We reviewed the Company’s ability to fund future activities,

and reviewed any available budgets for future periods.

We confirmed title to ensure patent rights and patent application rights

remain in good standing.

We have served as the Company’s auditor

“DAVIDSON & COMPANY LLP”

Vancouver, Canada Chartered Professional Accountants

February 18, 2020

/s/ DAVIDSON & COMPANY LLP

Vancouver, Canada Chartered Professional

March 5, 2021

PROTOKINETIX, INC.

23 unchanged sentences

Commitments and Contingency

Subsequent Events (Note

See Notes to Financial Statements

21 unchanged sentences

$ (31,350,246 )

Fair value of compensatory options issued

Exchange debt for common stock

Issuance of common stock pursuant to private placement offering

Fair value of share-based compensation

Issuance of common stock pursuant to cashless option exercise

Issuance of common stock pursuant to private placement offering

9 unchanged sentences

$ (35,548,143 )

Fair value of compensatory options issued

Issuance of common stock pursuant to cashless option exercise

Fair value of share-based compensation

Issuance of common stock pursuant to private placement offering

15 unchanged sentences

Fair value of compensatory options granted

Accrued interest expense

Changes in operating assets and liabilities:

Prepaid expenses and deposits

Accounts payable and accrued liabilities

Net cash used in operating activities

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES

CASH FLOWS USED IN INVESTING ACTIVITIES

Purchase of intangible assets

Net cash used in investing activities

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Issuance of common stock for cash

7 unchanged sentences

non-cash transactions:

Intangible asset costs included in accounts payable and accrued liabilities

There were no non-cash financing or investing activities during the years presented.

See Notes to Financial Statements

28 unchanged sentences

or related party loans.

In March 2020, the World Health Organization

declared coronavirus COVID-19 a global pandemic.

This contagious disease outbreak, which has continued to spread, and any related

adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading

to an economic downturn.

It is not possible for the Company to predict the duration or magnitude of the adverse results of the

outbreak and its effects on the Company’s business or ability to raise funds.

The accompanying financial statements do not

22 unchanged sentences

Cash consists of funds held in checking accounts.

Cash balances may exceed federally insured limits from time to time.

balances may exceed federally insured limits from time to time.

Fair Value of Financial Instruments

18 unchanged sentences

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

Level 1 inputs are used to measure cash.

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

At December 31, 2020, there were no other assets

or liabilities subject to additional disclosure.

The Company accounts for income taxes following

24 unchanged sentences

to which they relate.

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

The Company capitalizes patent application costs.

All other expenditures are recognized in profit or loss

As at December 31, 2020, the Company does not

64 unchanged sentences

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 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,

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

2018-20, Leases (Topic 842):

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.

In August 2018, the FASB issued ASU No.

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

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 has assessed the impact of this statement and determined it

has no significant impact.

PROTOKINETIX, INC.

2 unchanged sentences

December 31, 2020

Summary of Significant Accounting

Policies (cont'd)

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12,

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting

for income taxes by removing certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating

income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The new ASU also

simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates.

These changes aim to improve

the overall usefulness of disclosures to financial statement users and reduce unnecessary costs to companies when preparing the

The guidance is effective for the Company beginning on January 1, 2021 and prescribes different transition methods

for the various provisions.

The Company does not expect the adoption of ASU 2019-12 to have a material impact on its financial

statements and related disclosures.

Other than the above, the Company has determined

that other significant newly issued accounting pronouncements are either not applicable to the Company’s business or that

no material effect is expected on the financial statements as a result of future adoption.

Prepaid Expenses and Deposits

30 unchanged sentences

During the year ended December 31, 2020, the Company recorded $3,000

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

(2019 - $3,000) in amortization expense associated with the Patents Rights.

During the year ended December 31, 2015, the

26 unchanged sentences

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 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.

Pursuant to an amendment on April 6, 2020,

the aggregate number of shares that may be issued under the 2017 Stock Option and Stock Bonus Plan (the “2017 Plan”)

is 85,700,000 shares, subject to adjustment as provided therein.

The 2017 Plan is administered by the Company’s Board of

Directors, or a committee appointed by the Board of Directors, and 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 that are not intended to qualify as incentive options are referred to as non-qualified options.

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.

As of December 31, 2020, there are 82,650,000

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

PROTOKINETIX, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

December 31, 2019

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

options granted and outstanding under the 2017 Plan.

PROTOKINETIX, INC.

10 unchanged sentences

(36,000,000 )

Options exercised

Options expired

Options granted

4 unchanged sentences

Outstanding, December 31, 2018

Options cancelled

(16,000,000 )

Options exercised

Options granted

Options expired

Outstanding, December 31, 2019

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:

During the year ended December 31, 2020, the

Company granted the following stock options:

a) On May 6, 2020, the Company granted 650,000 stock options to a research and development, and a

business development consultant of the Company.

The options are exercisable at $0.11 per share for a period of six years and expire

on May 5, 2026.

The options vest in equal installments starting on the date of grant with the remaining options vesting on a quarterly

basis beginning on June 30, 2020.

b) On March 26, 2020 and June 12, 2020, the Company granted 22,000,000 replacement options and 7,000,000

replacement options, respectively, to certain key management (Note 8) and a consultant (Note 9) of the Company.

c) On October 26, 2020, the Company granted 500,000 stock options to a consultant of the Company.

The options are exercisable at $0.10 per share for a period of six years and expire on October 26, 2026.

The options vest in equal

installments starting on the date of grant with the remaining options vesting on a quarterly basis beginning on January 26, 2021.

d) On November 27, 2020, the Company granted 250,000 stock options to a consultant of the Company.

The options are exercisable at $0.10 per share for a period of six years and expire on November 27, 2026.

The options vest in equal

installments starting on the date of grant with the remaining options vesting on a quarterly basis beginning on December 31, 2020.

PROTOKINETIX, INC.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

December 31, 2020

Total share-based compensation for the 30,400,000

stock options granted (2019 - 49,100,000) and vested during the year ended December 31, 2020 was $6,740,743 (2019 - $3,395,319).

The fair values of the stock options granted were estimated using the Black-Scholes Option Pricing Model, based on the following

weighted average assumptions:

December 31, 2020

December 31, 2019

Risk-free interest rate

3 unchanged sentences

Expected life

Weighted average fair value

The following non-qualified stock options were

2 unchanged sentences

Number of Options

February 25, 2020

December 31, 2020

August 31, 2021

November 14, 2021

4 unchanged sentences

November 17, 2024

March 26, 2026

June 11, 2026

October 26, 2026

November 27, 2026

As at December 31, 2020, the aggregate intrinsic

value of the Company's stock options is $393,710 (December 31, 2019 –

PROTOKINETIX, INC.

(A Development Stage Company)

1 unchanged sentence

December 31, 2020

Stock Options (cont'd)

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

Dividend yield

Expected stock price volatility

Expected forfeiture rate

Expected life

Warrant transactions are summarized as follows:

1 unchanged sentence

Outstanding, December 31, 2018

Warrants expired

Warrants cancelled

Warrants granted

Outstanding, December 31, 2019

14 unchanged sentences

December 18, 2022

December 23, 2021

December 29, 2021

December 31, 2021

PROTOKINETIX, INC.

19 unchanged sentences

Issued 3,653,077 shares of common stock to investors at $0.065 per share for gross proceeds of $237,450.

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.

Issued 2,532,143 shares of common stock to investors (one of which was the President and CEO of the Company) at $0.07 per share for gross proceeds of $177,250.

Issued 1,826,857 shares of common stock to investors at $0.07 per share for gross proceeds of $127,880 and the option to exercise a warrant for one additional share at $0.07, exercisable for one year.

During the year ended December 2019, the Company:

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

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

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 the CFO pursuant to a cashless exercise of 250,000 of stock options.

Issued 2,500,000 shares of common

1 unchanged sentence

at $0.12 per share for gross proceeds

of $300,000 and the option to exercise a warrant for one additional share at $0.12, exercisable for three years.

PROTOKINETIX, INC.

3 unchanged sentences

Related Party Transactions and Balances

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

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.

During the twelve month period ended December

31, 2020 and 2019, the Company entered into the following related party transactions:

a) Pursuant to a consulting

agreement with an effective date of November 14, 2017, a total of $60,000 (2019 - $60,000) was paid or accrued to the Company's

During the twelve months ended December 31, 2020, the Company reimbursed a company controlled by the CFO a total of $12,600

(2019 - $12,600) in office rent.

b) On March 25, 2020,

the Company cancelled and concurrently approved for issuance on March 26, 2020 10,000,000 stock options and 2,000,000 stock options

previously issued to the Company’s CEO and a Director of the Company in 2017, respectively.

The 12,000,000 replacement options

granted have a term of 6 years and are exercisable at a price of $0.14 per share, expiring on March 25, 2026.

Also on March 25,

2020, the Company cancelled an additional 5,000,000 stock options previously issued to the Company’s CEO in 2019.

no replacement options granted in connection with these cancelled options.

In accordance with

ASC 718, the 12,000,000 replacement options 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 options over the fair value of the cancelled

options at the cancellation date.

Total share-based

compensation of $282,844 was recorded in connection with the option modification, based on the following assumptions used in the

Black-Scholes Option Pricing Model:

risk-free interest rate of 1.76%;

dividend yield of 0.00%;

stock price volatility of 144.40%;

forfeiture rate of 0%;

and an expected life of 6 years.

c) On June 12, 2020,

the Company cancelled 4,000,000 stock options previously issued in July 2019 to the Company’s CFO and replaced them with

3,500,000 stock options.

The 3,500,000 replacement options granted have a term of 6 years and are exercisable at a price of $0.12

per share, expiring on June 11, 2026.

The 3,500,000 replacement

options 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 options over the fair value of the cancelled options at the cancellation date.

Total share-based

compensation of $5,704 was recorded in connection with the option modification, based on the following assumptions used in the

Black-Scholes Option Pricing Model:

risk-free interest rate of 1.76%;

dividend yield of 0.00%;

stock price volatility of 144.75%;

forfeiture rate of 0%;

and an expected life of 6 years.

c) The Company recognized

$3,474,418 (2019 - $1,704,723) in share-based compensation during the period associated with stock options granted to key management

As at December 31,

2020 and December 31, 2019, there were $nil balances owing to related parties.

PROTOKINETIX, INC.

4 unchanged sentences

As at December 31, 2020, the Company has the following commitments:

Entered into a consulting agreement

a) 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.

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.

On March 25, 2020, the Company cancelled and concurrently approved for issuance on March 26, 2020, 10,000,000

stock options previously issued to the consultant in 2017.

The 10,000,000 replacement options granted have a term of 6 years and

are exercisable at a price of $0.14 per share, expiring on March 25, 2026.

The 10,000,000 replacement options

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 options over the fair value of the cancelled options at the cancellation date.

Total share-based compensation of

$235,703 was recorded in connection with the option modification based on the following assumptions used in the Black-Scholes Option

Pricing Model:

risk-free interest rate of 0.81%;

dividend yield of 0.00%;

stock price volatility of 144.40%;

forfeiture rate of

and an expected life of 6 years.

On June 12, 2020, the Company cancelled

4,000,000 stock options previously issued in July 2019 to the consultant and a replaced them with 3,500,000 stock options.

3,500,000 replacement options granted have a term of 6 years and are exercisable at a price of $0.12 per share, expiring on June

There was no incremental cost recorded on the option modification based on the following assumptions used in the Black-Scholes

Option Pricing Model:

risk-free interest rate of 1.76%;

dividend yield of 0.00%;

stock price volatility of 144.75%;

and an expected life of 6 years.

b) 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’

c) 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 May 6, 2020, the Company granted the consultant 500,000 stock options exercisable at a price of $0.11 per share, expiring

on May 5, 2026 (Note 5).

d) Entered into a consulting agreement

effective September 1, 2020, whereby the Company would pay the consultant CAD $3,000 per month for a term of 1 year for providing

technical expertise and public relations services, unless otherwise terminated by either party with at least 30 days’

PROTOKINETIX, INC.

3 unchanged sentences

Commitments and Contingency (cont’d)

Commitments (cont’d)

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’

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.

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

26 unchanged sentences

Expected income tax recovery

$ (1,605,000 )

Non-deductible expenses

16 unchanged sentences

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.

Subsequent Events

Subsequent to the year ended December 31, 2020, the Company:

3,528,572 shares of common stock to investors at $0.07 per share for gross proceeds of $247,000.

1,600,000 options for common shares exercisable at $0.13 per share, expiring at May 6, 2023.

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