ProtoKinetix, Inc. 10-K

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is currently quoted on OTCQB tier of the OTC Markets under the symbol “PKTX”. The table below sets forth the high and low bid prices of the Company’s common stock during the periods indicated as reported on OTC Markets Inc. (www.otcmarkets.com). The quotations are inter-dealer prices without retail markups, markdowns or commissions, and may not necessarily represent actual transactions. 2021 Low High First Quarter $ 0.081 $ 0.225 Second Quarter 0.115 0.270 Third Quarter 0.092 0.160 Fourth Quarter 0.055 0.140 2020 Low High First Quarter $ 0.100 $ 0.213 Second Quarter 0.058 0.319 Third Quarter 0.080 0.289 Fourth Quarter 0.081 0.143 Holders As of March 9, 2022, there were approximately 113 stockholders of record of the Company’s common stock. This does not include an indeterminate number of persons who hold our Common Stock in brokerage accounts and otherwise in “street name.” Dividends We have never paid cash dividends and have no plans to do so in the foreseeable future. Our future dividend policy will be determined by our board of directors and will depend upon a number of factors, including our financial condition and performance, our cash needs and expansion plans, income tax consequences, and the restrictions that applicable laws, our current preferred stock instruments, and our future credit arrangements may then impose. Adoption of the 2015 Stock Option and Stock Bonus Plan On July 1, 2015, the Board of Directors of the Company adopted the 2015 Stock Option and Stock Bonus Plan (the “2015 Plan”). All awards granted under the 2015 Plan will continue forward under the 2015 Plan until expired or exercised pursuant to the terms of each individual award agreement, however, no new awards shall be granted under the 2015 Plan. As of both December 31, 2021, and March 9, 2022, no options and 2,000,000 shares of fully vested common stock remained as granted under the 2015 Plan. 11 Adoption and Amendment of the 2017 Stock Option and Stock Bonus Plan On December 30, 2016, the Board of Directors of the Company the (“Board”) adopted the 2017 Stock Option and Stock Bonus Plan (the "“2017 Plan”). The Board 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. On November 9, 2018, the Board amended the 2017 Stock Option and Stock Bonus Plan to increase the aggregate number of shares that may be issued under the 2017 Plan from 30,000,000 to 50,000,000 shares subject to adjustment as provided therein to continue to incentivize contractors and future employees (if any) of the Company (the amended 2017 Plan is hereinafter referred to as the “Amended 2017 Plan”). On July 15, 2019, the Board again amended the Amended 2017 Plan to increase the aggregate number of shares that may be issued under the 2017 Plan from 50,000,000 to 89,700,000 shares. On April 6, 2020, the Board approved an amendment to the 2017 Plan to reduce the number of shares of common stock of the Company available for issuance pursuant to the 2017 Plan from 89,700,000 shares to 85,700,000 shares. The Amended 2017 Plan also provides for the ability of the Board to extend the exercise period of an option and provides for flexibility in the event of a change in control of the Company or consolidation or merger. The Amended 2017 Plan is administered by the Board, or a committee appointed by the Board. In addition to determining who will be granted options or 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 Amended 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 Amended 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 Amended 2017 Plan. 12 The committee also has the power to interpret the Amended 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 Amended 2017 Plan may be selected by the committee from employees, officers, consultants and advisors (including board members) of ProtoKinetix. The committee may take into account the duties of persons selected, their present and potential contributions to the success of ProtoKinetix and such other considerations as the committee deems relevant to the purposes of the Amended 2017 Plan. In the event of 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 ProtoKinetix, a corporate separation or division or the merger or consolidation of ProtoKinetix, 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 Amended 2017 Plan must be no less than 100% of the “fair market value” of ProtoKinetix’s common stock on the date of grant. Any incentive stock option granted under the Amended 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 ProtoKinetix 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. As of both December 31, 2021 and March 9, 2022, 84,690,000 options remain as granted under the Amended 2017 Plan. 13 Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth securities authorized for issuance under equity compensation plans, including but not limited to the the Amended 2017 Plan and individual compensation arrangements as of December 31, 2021: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (a) (b) (c) Equity compensation plans approved by security holders — — — Equity compensation plans not approved by security holders 96,771,143 $ 0.15 10,000 Total 96,771,143 $ 0.15 10,000 During the year ended December 31, 2021, warrants to purchase 12,081,143 shares of common stock of the Company were outstanding (see Note 8 of the notes to the financial statements). As of the year ended December 31, 2021, there were warrants and options outstanding representing a total of 12,081,143 and 84,690,000 shares of common stock respectively to be issued upon exercise, of which: (i) options to purchase no shares of common stock were outstanding under the 2015 Plan; (ii) options to purchase 84,690,000 shares of common stock were outstanding under the Amended 2017 Plan; and (iii) warrants outstanding to purchase 12,081,143 shares of common stock not pursuant to any plan. Recent Sales of Unregistered Securities and Use of Proceeds Between January 1, 2021 and March 1, 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 (one of which was Clarence E. Smith, CEO of the Company, who invested $10,000) 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 on March 1, 2021. On April 13, 2021, one of the officers of the Company acquired 555,556 shares of common stock of the Company through a cashless exercise of stock options. 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. Between May 3, 2021 and May 25, 2021, the Company issued 2,000,000 shares of common stock upon the exercise of warrants for gross proceeds of $190,000 to accredited investors in a private placement. 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 on March 1, 2021. 14 On July 1, 2021, the Company issued 200,000 shares to an accredited investor in a private placement for gross proceeds of $24,000. 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. The Company filed a Form D with the SEC on August 2, 2021. Also on July 1, 2021, the Company issued 1,000,000 shares of common stock upon the exercise of warrants for gross proceeds of $70,000 to an accredited investor in a private placement. 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 on March 1, 2021. Between August 23, 2021 and September 30, 2021, the Company issued 1,440,000 units to accredited investors in a private placement for gross proceeds of $144,000. Each unit consists of one common share and one warrant immediately exercisable to purchase one common share at an exercise price of $0.10 expiring January 31, 2022. 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. On September 21, 2021 a Form D was filed and an amended Form D was filed on October 8, 2021. On November 29, 2021, the Company issued 250,000 shares to an accredited investor in a private placement for gross proceeds of $20,000. 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. On December 10, 2021 a Form D was filed. On December 28, 2021 a Form D was filed and an amended Form D was filed on January 12, 2022. On December 3, 2021, the Company issued 214,286 shares of common stock upon the exercise of warrants for gross proceeds of $15,000 to an accredited investor in a private placement. 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. Between December 22, 2021 and December 23, 2021, the Company issued 2,250,000 shares of common stock to accredited investors in a private placement for gross proceeds of $135,000, of which Mr. Smith invested $50,000. 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. On December 10, 2021 a Form D was filed. On December 28, 2021 a Form D was filed and an amended Form D was filed on January 12, 2022. 15 ITEM 6. SELECTED FINANCIAL DATA As a smaller reporting company, we are not required to provide the information required by this item.