ProtoKinetix, Inc. 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless the context requires otherwise, references in this document to “ProtoKinetix”, “we”, “our”, “us” or the “Company” are to ProtoKinetix, Incorporated. The following discussion provides information regarding the results of operations for the nine-month period ended September 30, 2025 and 2024, and our financial condition, liquidity and capital resources as of September 30, 2025 and December 31, 2024. The financial statements and the notes thereto contain detailed information that should be referred to in conjunction with this discussion. Cautionary Note Regarding Forward-Looking Statements The information discussed in this Quarterly Report on Form 10-Q include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). All statements, other than statements of historical facts, included herein and therein concerning, among other things, planned capital expenditures, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, business strategy and other plans and objectives for future operations, are forward-looking statements. These forward-looking statements are identified by their use of terms and phrases such as “may,” “expect,” “estimate,” “project,” “plan,” “believe,” “intend,” “achievable,” “anticipate,” “will,” “continue,” “potential,” “should,” “could,” and similar terms and phrases. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties and are not (and should not considered to be) guarantees of future performance. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, among others: • Our capital requirements and the uncertainty of being able to obtain additional funding on terms acceptable to us; • Our plans to develop and commercialize products from the AAGP® molecule; • Ongoing testing of the AAGP® molecule; • Our intellectual property position; • Our commercialization, marketing and manufacturing capabilities and strategy; • Our ability to retain key members of our senior management and key scientific consultants; • The effects of competition; • Our potential tax liabilities resulting from conducting business in the United States and Canada; • The effect of further sales or issuances of our common stock and the price and volume volatility of our common stock; and • Our common stock’s limited trading history. Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our filings with the SEC under the Exchange Act and the Securities Act, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and our Quarterly Report on Form 10-Q for the period ended September 30, 2025. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this paragraph and elsewhere in this Quarterly Report. Other than as required under securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise Business Overview ProtoKinetix, Incorporated is a research and development stage bio-technology company focused on scientific medical research of AFGPs (Anti-Freeze Glycoproteins) or anti-aging glycoproteins, trademarked as AAGP®. The Company has recently been in the process of directing major efforts to the practical side of commercial validation. The commercial applications for AAGP® in large markets such as targeted health care solutions are numerous, and ProtoKinetix is currently working with researchers, business leaders and advisors and commercial entities to bring AAGP® to market. 14 Results of Operations The following table shows selected financial data and operating results for the periods noted. Following the table, please see management’s discussion of significant changes. For the Nine Months Ended September 30, 2025 2024 EXPENSES Amortization $ 38,189 $ 39,461 General and Administrative 45,090 43,589 Professional Fees 107,991 98,647 Research and Development 82,393 78,625 Share-Based Compensation — 1,354 Net loss for the period $ (273,663 ) (261,676 ) Gross Profit and Expenses The Company’s net loss was $273,663 for the nine-month period ended September 30, 2025 compared to $261,676 for the nine-month period ended September 30, 2024. The expenses were primarily incurred for professional fees, consulting services related to the operations of the Company’s business, research and development and other general and administrative expenses. Significant changes from the prior nine-month period ended September 30, 2025 include: General and administrative fees remained almost flat with a small increase of $1,501 from $43,589 to $45,090. There are no current year marketing projects planned that will significantly increase related expenses. Increase due to higher office expenses. Professional fees increased by $9,344 from $98,647 to $107,991 due to increases in auditing fees and legal billing associated with year- end and interim reporting. Research and development expenditures increased year over year with a change of $3,768 from $78,625 to $82,393 as the Company paid for molecule storage and consulting fees but has no current research projects underway. The company continues to pursue research partners for cost sharing and engages in institutes with grants available for continued studies on our patented AAGP molecule. Share-based compensation was $Nil for current year compared to $1,354 for the nine months ended September 2024. Liquidity and Capital Resources The following summarizes our balance sheet at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Cash $ 607 $ (4,697 ) Working Capital $ (213,539 ) $ (127,694 ) At September 30, 2025, we had $607 in cash and $1,657 in total current assets and a negative working capital equity position of $(225,539). Based upon our working capital equity as of September 30, 2025, we will require additional equity and/or debt financing in order to meet cash flow projections and carry forward our business objectives. There can be no assurance that in the future we will be able to raise capital from outside sources in sufficient amounts to fund our new business. The failure to secure adequate outside funding would have an adverse effect on our plan of operation and results therefrom and a corresponding negative impact on stockholder liquidity. Sources and Uses of Cash Net Cash Used in Operating Activities Net cash used in operating activities fell by $41,873 from $177,808 to $135,935 for the nine-months ended September 30, 2024, and 2025, respectively. With the year over year change primarily from a change in accounts payable. Net Cash Used in Investing Activities Net cash used for investing activities was $36,261 for the nine-month period ended September 30, 2025 while the Company had net cash used for investing activities of $52,910 for the comparative period. The difference is attributable to a year-to-date fluctuation in patent application billings for current year. Net Cash Provided by Financing Activities Net cash provided by financing activities fell $38,500 from $216,000 to $177,500 for the nine-months ended September 30, 2024, and 2025, respectively. The decrease of funding from private placements through the third quarter of 2025 reflects investor support for our slowing of operations and focus on finding financial partners for further research and development. Going Concern The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”), which contemplate continuation of the Company as a going concern. The history of losses and the inability for the Company to make a profit from selling a good or service has raised substantial doubt about our ability to continue as a going concern. In spite of the fact that the current cash obligations of the Company are relatively minimal, given the cash position of the Company, we have very little cash to operate. We intend to fund the Company and attempt to meet corporate obligations by selling common stock. However, the price and volume of the Company’s common stock is volatile. 15 Off-Balance Sheet Arrangements None. Contractual Obligations As a smaller reporting company, we are not required to provide the information required by paragraph (a)(5) of this Item. Critical Accounting Policies The preparation of financial statements in conformity with U.S. GAAP requires management to make a variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and (ii) the reported amounts of revenues and expenses during the reporting periods covered by the financial statements. Our management routinely makes judgments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact on our results of operation and/or financial condition. Our significant accounting policies are disclosed in Note 2 to the Financial Statements included in this Form 10-Q. While all of the significant accounting policies are important to the Company’s financial statements, the following accounting policies and the estimates derived there from have been identified as being critical. 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. 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. 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. Sales and Marketing The Company is currently not selling or marketing any products. Inflation Although management expects that our operations will be influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during the nine months ended September 30, 2025. 16 Item 3. Quantitative and Qualitative Disclosure About Market Risk As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.