Item 9A. Controls and Procedures
ITEM 9A.
CONTROLS AND PROCEDURES
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, 2025 (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 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 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.
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. GAAP. Our ICFR are expected to include those
policies and procedures that management believes are necessary that:
(1)
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2)
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the Company are being made only in accordance with proper authorizations of management and our directors; and
(3)
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.
18
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, 2025, 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, 2025.
Material Weaknesses Identified
In connection with the preparation of our financial
statements for the year ended December 31, 2025, 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, 2025, 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.
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.
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, 2025, that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
ITEM 9B.
OTHER INFORMATION
During the Company’s fourth quarter, no director
or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement.
ITEM 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
19
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE
Except as set forth below, as of September 1, 2026, the Company’s
current officers and directors consist of the following persons:
Name
Age
Title
Year Appointed
Michael R. Guzzetta
68
Chairman, Chief Executive Officer,
Director
November 2025
Chief Financial Officer
November 2017
Keith R. Brunt
46
President
June 2026
Jason Lamp
53
Director
June 2026
Michael
W. Jones
64
Director
June 2026
Clarence E. Smith
Chairman, President & Chief Executive Officer
February 2015—November 2025
Director
June 2014—November 2025
Edward R. McDonough
Director
July 2015 – March 2026
Michael R. Guzzetta was appointed Chairman
and CEO upon the death of Clarence E. Smith, the former Chairman and CEO. Mr. Guzzetta will continue to hold the position of Chief Financial
Officer of the Company. Mr. 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. Mr. 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. Mr. 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.
Dr. Keith R. Brunt , is an Associate Professor
of the Department of Pharmacology in the Faculty of Medicine at Dalhousie University; Adjunct Professor in the Faculty of Business at
the University of New Brunswick; and a Translational Scientist at the New Brunswick Heart Centre. Dr. Brunt has served as a director and
executive on several boards in both non-profit research organizations and for-profit companies, including as a director of Routinify Inc.
from 2019-2024, and as the Chair of the Board of Directors of Heart & Stroke Foundation New Brunswick from 2021-2024. Dr. Brunt has
extensive experience in the scientific and clinical research fields across several disciplines. As a specialist in translational science
and medicine, Dr. Brunt has advanced degrees in Physiology (BSc. Hons.) from the University of Saskatchewan and a PhD in experimental
medicine for gene and cell-based therapy from Queen's University in Kingston, ON, and has completed a Fellowship in regenerative medicine
at the University Health Network in Toronto, ON. Dr. Brunt founded and, since 2014, has served as both a director and the Chief Scientific
Officer of Nota Bene BioMatrix Inc., a knowledge brokerage, served as Director of Finance for IMPART, a research network, and directs
an independent research program in the natural sciences and experimental therapeutics, where he has managed millions in research and development
grants and commercialization funds, specializing in primordial molecules and their regulatory networks. Dr. Brunt has also served as a
Medical Science Advisor to the Company since 2019. Dr. Brunt draws inspiration from nature and translates this excitement into innovation,
maintaining a passion for improving quality of life through strategic research and development .
Michael W. Jones was appointed as a director
of the Company to serve as a member of the Board on June 17, 2026. He has spent more than two decades at the helm of automotive enterprises
across Kentucky and the Southeast, partnering with owner groups, leading investment-backed start-ups, and personally building ventures
from the ground up. He is recognized as a strategic leader and trusted community figure and has consistently delivered strong organizational
and financial results. Throughout his career, Jones has served as Dealer Principal overseeing multi-franchise operations, led regional
multi-location management across Tennessee and Georgia, and operated his own successful dealership enterprises in Corbin, Kentucky. Mr.
Jones augments the Board with his experience in strategic planning, investment and corporate growth, commercialization, and market development.
His work has spanned organizations ranging from 5 to 80+ employees and operations exceeding $30 million in assets under management. Mr.
Jones attended University of the Cumberlands from 1988 through 1989.
Jason Lamp was appointed as a director
of the Company to serve as a member of the Board on June 17, 2026. Mr. Lamp is an entrepreneur, investor, and strategic advisor based
in the Atlanta, Georgia area. He graduated from the University of Northern Iowa in 1996 with a BGS and began his entrepreneurial career
by successfully building a multi-franchise group. Building on that experience, Mr. Lamp founded Triple J Construction, a high-end remodeling
and construction company that he continues to lead, providing more than 25 years of experience in operations, management, financial oversight,
and business development. Mr. Lamp is also co-founder of Core Focus Digital, where he provides strategic guidance and investment across
a portfolio of technology and data-driven marketing solutions. In addition, he has extensive experience as a private-placement investor
and strategic advisor to emerging publicly traded companies, advising on go-to-market strategy, commercialization, distribution, and business
development. Mr. Lamp brings to the Board experience in strategic planning, corporate growth, investment, commercialization, and market
development, particularly involving highly technical solutions in the biotechnology, medical, and chemical sectors. His experience with
technologies subject to FDA and other regulatory requirements provides a relevant perspective on commercialization, strategic partnerships,
market adoption, and the broader development of PKTX’s technology and business opportunities.
Clarence E. Smith served as President
and Chief Executive Officer for the Company from February 19, 2015 until his death in November 2025 and served as member of the Board
of Directors of the Company June 1, 2014 until his death in November 2025. 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. In 1981, Mr. 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. Mr. 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. Mr. Smith served as Chairman of the Board and CEO of Trans Energy, Inc. from 2005 to 2006. Mr. Smith
graduated from St. Marys High School in West Virginia in 1981.
Edward
P. McDonough was appointed as a member of the Board of Directors of the Company on July 1, 2015 and served until March 2026.
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. Mr. 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.
Mr. McDonough acquired his Bachelor of Science in Business Administration with a Major in Accounting at West Virginia University in Morgantown,
West Virginia in 1973.
20
Family Relationships
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 stockholders 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
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 a related party transactions policy.
Insider Trading Policy and Related Policies
Also on July 8, 2019, the Board adopted an Insider
Trading Policy which applies to all directors, officers, employees and consultants of the Company, as well as a Policy on Trading Blackout
Periods, Benefit Plans, and Section 16 Reporting (“Blackout Policy”). The Insider Trading Policy and Blackout Policy govern
the sale, repurchase and other dispositions of our securities and applies to our directors, our officers, our employees (if any) and other
covered persons. A copy of the Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report and a copy of the Blackout Policy
is filed as Exhibit 19.2 to this Annual Report.
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 or nominating 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 Board of Directors deems it appropriate
for all directors to consider director nominees.
Independent Directors
The Board of Directors has determined that
Mr. McDonough was an independent member of the Board of Directors of the Company during his term, and Jason Lamp and Michael W.
Jones are independent members of the Board of Directors of the Company pursuant to SEC Rule 10A-3(b)(1).
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 current member on the board is:
•
Mr. Peter Jensen, former director of the Company.
21
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, 2025 our officers, directors
and 10% or more stockholders complied with all Section 16(a) filing requirements applicable to them, except for the filing of a Section
16(a) report upon the death of Clarence E. Smith.
ITEM 11.
EXECUTIVE COMPENSATION
The following table summarizes the annual compensation paid to ProtoKinetix’s
named executive officers for the two years ended December 31, 2025 and 2024:
Summary Compensation Table for Executive Officers
Name and Principal Position
Fiscal
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards(1)
($)
Non-equity
Incentive
Plan
Compensation
($)
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation
($)
Total
($)
Clarence E. Smith (2)
President & CEO
2025
—
—
—
—
—
—
—
—
2024
—
—
—
—
—
—
—
—
Michael R. Guzzetta (3)
CEO & Chief Financial Officer
2025
60,000
—
—
—
—
—
—
60,000
2024
60,000
—
—
—
—
—
—
60,000
(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.
(2)
Mr. Smith served as the Company’s President and CEO until his passing in November 2025.
(3)
Mr. Guzzetta was appointed as the Company’s CEO in November 2025 and continues to act as the Company’s CFO.
Consulting Agreements
We have entered into consulting
agreements with certain Company officers as set forth below.
Clarence E. Smith
– Mr. Smith was Chief Executive Officer and President of the Company until his passing in November 2025. He entered into a
consulting agreement with the Company dated December 30, 2016 (effective January 1, 2017) (the “2017 Smith Agreement”).
The 2017 Smith Agreement
provides for a one-year term through December 31, 2017 and for an annual salary of $1.00. Mr. 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.
Mr. Smith is also entitled
to a termination fee if the agreement is terminated for the following two reasons:
• A termination without
cause: If Mr. Smith is terminated without cause he will be entitled to a termination fee of $100,000 per year of service (including
the pro-rata amount for partial years of service);
• A termination upon
a change of control event: 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.
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.
On December 7, 2022,
in connection with Mr. Smith’s continued service to the Company, the Company cancelled, and concurrently replaced 32,350,000 stock
options previously issued to Mr. Smith pursuant to the Company’s Amended 2017 Plan between 2021 to 2022 at exercise prices between
$0.06 and $0.11 per share. The replacement options are fully vested and have a term of 6 years, exercisable at a price of $0.028 per
share, expiring on December 6, 2028.
Please refer to “Outstanding
Equity Awards at Fiscal Year-End” for a description of the option grants held by Mr. Smith at his death.
22
Michael R. Guzzetta – Mr. Guzzetta
is Chief Financial Officer of the Company, and as of November of 2025 also serves as Chairman and CEO.
He entered into a consulting agreement with the Company
dated November 14, 2017. 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 2025, the Company paid Mr. Guzzetta $60,000 in consulting fees, and reimbursed The Guzzetta
Company LLC $6,000 for office rent of $500 monthly. In 2024, he received $60,000 in consulting fees and The Guzzetta Company LLC was reimbursed
$6,000 for office rent of $500 monthly.
On December 7, 2022, in connection with Mr. Guzzetta’s
continued service to the Company, the Company cancelled, and concurrently replaced 13,260,000 stock options previously issued
to Mr. Guzzetta pursuant to the Company’s Amended 2017 Plan between 2018 to 2021 at various exercise prices between $0.06 and $0.11
per share. The replacement options are fully vested and have a term of 6 years, exercisable at a price of $0.028 per share,
expiring on December 6, 2028.
Please refer to “Outstanding Equity
Awards at Fiscal Year-End” for a description of the option grants held by Mr. Guzzetta.
Outstanding Equity Awards at Fiscal Year-End
The following table provides information as to option
awards held by each of the named executive officers of ProtoKinetix
as of December 31, 2025.
Name
Number of
Securities
Underlying
Unexercised Options
(#)
Exercisable
Number of
Securities
Underlying
Unexercised Options
(#)
Unexercisable
Option
Exercise
Price
($)
Option
Expiration
Date
Clarence E. Smith (Estate)
32,350,000 (1)
—
0.028
12/06/2028
Michael R. Guzzetta
13,260,000 (2)
—
0.028
12/06/2028
(1)
Represents options cancelled, and subsequently regranted pursuant to the Amended 2017 Plan on December 7, 2022 at $0.028 per share, fully vested.
(2)
Represents options cancelled, and subsequently regranted pursuant to the Amended 2017 Plan on December 7, 2022 at $0.028 per share, fully vested.
Director Compensation
The following table sets forth a summary of the compensation earned
by each non-employee director who served on the Board during the fiscal year ended December 31, 2025:
Director Compensation
Fees
Earned or Paid in Cash
Bonus
Stock
Awards (1)
Option
Awards (2)
Nonequity
Incentive
Plan
Compensation
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensation
Total
($)
($)
($)
($)
($)
($)
($)
($)
Edward P. McDonough
—
—
—
—
—
—
—
—
(1)
The aggregate grant date fair value of these stock awards was computed in accordance with ASC 718.
(2)
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.
(3)
As of December 31, 2025, Mr. McDonough held options to acquire 7,500,000 shares of the Company’s common stock, all of which were vested and exercisable and expire on December 6, 2028. Mr McDonough voluntarily canceled his options March 31, 2026.
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”).
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.
On December 7, 2023, in connection with Mr. McDonough’s
continued service to the Company, the Company cancelled, and concurrently replaced 7,500,000 stock options previously issued
to Mr. McDonough pursuant to the Company’s Amended 2017 Plan between 2018 to 2020 at various exercise prices between $0.06 and $0.11
per share. The replacement options are fully vested and have a term of 6 years, exercisable at a price of $0.028 per share,
expiring on December 6, 2028.
23
ITEM 12.
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 September 3, 2026, 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.
Name & Address of Beneficial Owner
Amount and
Nature of
Beneficial
Ownership
Beneficial
Ownership
Percentage
as
of September 3, 2026 (1)
More than 5% Stockholders
Grant Young (2)
52,301,250
11.52 %
Alexandra Smith (3)
158,937,869
35.80 %
John & Edith Smith
23,458,709
5.70 %
Directors and Named Executive Officers
Michael R. Guzzetta (4)
13,996,369
3.29 %
Keith R. Brunt (5)
5,822,572
1.41 %
Jason Lamp
6,496,878
1.58 %
Michael W. Jones
6,400,000
1.55 %
All directors
and executive officers as a group (6):
32,715,819
7.83 %
(1) Based on 411,630,152
shares of common stock outstanding on September 3, 2026, and, with respect to each individual holder, rights to acquire common stock
exercisable within 60 days.
(2) Consists of 10,021,250
shares of common stock owned by Mr. Young directly; the right to acquire 6,000,000 shares of common stock upon warrant exercise; the
right to acquire 36,280,000 shares of common stock upon option exercise.
(3) Consists of 27,700,776
shares of common stock owned by Alexandra Smith directly; 83,787,093 shares held by Clarence E. Smith’s trusts; 13,250,000 shares
inherited from Clarence E. Smith; 1,850,000 shares held by Mr. Smith’s IRA; and options to purchase 32,350,000 shares.
(4) Consists of 736,369
shares of common stock owned by Mr. Guzzetta directly, and 13,260,000 shares of common stock issuable upon the exercise of stock options.
(5) Consists of 2,042,572
shares of common stock owned by Mr. Brunt directly; 1,030,000 held by NBBM Inc., controlled by Mr. Brunt; and 2,750,000 shares of common
stock issuable upon the exercise of stock options.
(6) Consists of 16,705,819
shares of common stock and options to purchase 16,010,000 shares of common stock.
24
ITEM 13.
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:
Pursuant to a consulting agreement with an effective
date of November 14, 2017, a total of $60,000 (2024 - $60,000) was paid or accrued to the Company’s CFO. During the year ended
December 31, 2025, the Company reimbursed a company controlled by the CFO a total of $6,000 (2024 - $6,000) in office rent.
Please refer to “Recent Sales of Unregistered
Securities and Use of Proceeds” for a description of the securities purchased by Mr. Smith during 2025.
Please refer to “Outstanding Equity
Awards at Fiscal Year-End” for a description of the option grants held by Mr. Smith and Mr. Guzzetta.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
For the years ended December 31, 2025 and 2024, Davidson
& Company LLP, Chartered Professional Accountants (“Davidson”) the Company’s principal accountants billed the Company
$35,427 and $32,390, respectively for fees for the audit of the Company’s annual financial statements. All amounts are in
U.S. dollars.
Audit-Related Fees
For the years ended December 31, 2025 and 2024, 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.”
Tax Fees
For the years ended December 31, 2025 and 2024, Davidson
billed $4,620 in 2025 and $4,100 in 2024 for professional services for tax compliance, tax advice, and tax planning.
All Other Fees
For the years ended December 31, 2025 and 2024, 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, 2025 and 2024, Davidson
billed the Company $28,847 and $25,811 for fees for the review of the Company’s quarterly financial statements. All amounts
are in U.S. dollars.
Audit Committee Pre-Approval Policies
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 Michael Guzzetta as the responsible director to review all financial information
of the Company and correspond with the independent auditors regarding the same.
25
PART IV
ITEM 15.
EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULE
EXHIBIT INDEX
The following documents are being filed with
the Commission as exhibits to this Annual Report on Form 10-K.
Incorporated by Reference
Filed or
Furnished
No.
Exhibit Description
Form
Date Filed
Number
Herewith
3.1
Amended and Restated Articles of Incorporation as filed on February 16, 2022
8-K
2/14/2022
3.1
3.2
Amended and Restated Bylaws of the Company as approved on December 20, 2021
8-K
12/23/2021
3.2
4.1
Amended 2017 Stock Option and Stock Bonus Plan
8-K
11/13/2018
4.1
4.2
Amendment to Amended 2017 Stock Option and Stock Bonus Plan as approved on July 15, 2019
8-K
7/17/2019
4.1
4.3
Amendment to Amended 2017 Stock Option and Stock Bonus Plan as approved on April 6, 2020
8-K
4/10/2020
4.1
4.4
Consultant Warrant
10-K
3/17/2023
4.4
4.5
Form of Warrant
10-K
3/17/2023
4.5
4.6
Description
of Capital Stock of the Company
10-K
3/28/2025
4.6
10.1
Royalty Agreement between the Company and The Governors of the University of Alberta, dated April 8, 2015
10-K
4/14/2015
10.6
10.2
Collaborative Research Agreement between the Company and the University of British Columbia, dated May 31, 2016
10-Q
8/15/2016
10.10
10.3
Consulting Agreement between the Company and Clarence E. Smith, dated December 30, 2016
10-K
2/21/2017
10.9
10.4
Director Consulting Agreement between the Company and Edward P. McDonough, dated December 30, 2016
10-K
2/21/2017
10.11
10.5
Consulting Agreement between the Company and Grant Young, dated December 30, 2016
10-Q
11/13/2017
10.5
10.6
First Amendment to Consulting Agreement between Clarence E. Smith and the Company dated September 1, 2017
8-K/A
9/12/2017
10.1
10.7
First Amendment to Consulting Agreement between Grant Young and the Company dated September 1, 2017
8-K/A
9/12/2017
10.3
10.8
First Amendment to Consulting Agreement between Edward P. McDonough and the Company dated September 1, 2017
8-K/A
9/12/2017
10.2
10.9
Consulting Agreement between ProtoKinetix Incorporated and Michael Guzzetta, dated November 14, 2017
8-K
11/15/2017
10.1
14.1
Code of Business Conduct and Ethics and Whistleblower Policy adopted July 8, 2019
8-K
7/17/2019
14.1
19.1
Insider
Trading Policy adopted July 8, 2019
10-K
3/28/2025
19.1
19.2
Policy
on Trading Blackout Periods adopted July 8, 2019
10-K
3/28/2025
19.2
31.1
Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed
31.2
Certification of the Principal Financial Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Furnished, not filed herewith
32.1
Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Furnished, not filed herewith
101.INS
XBRL Instance Document
Filed
101.SCH
XBRL Schema Document
Filed
101.CAL
XBRL Calculation Linkbase Document
Filed
101.DEF
XBRL Definition Linkbase Document
Filed
101.LAB
XBRL Label Linkbase Document
Filed
101.PRE
XBRL Presentation Linkbase Document
Filed
104
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)
Filed
ITEM 16. Form
10-K Summary
This Item is optional and the registrant is not
required to furnish this information.
26
SIGNATURES
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
Dated: September 3, 2026
By:
/s/ Michael R. Guzzetta
Michael R. Guzzetta
Principal Executive Officer
Dated: September 3, 2026
By:
/s/ Michael R. Guzzetta
Michael R. Guzzetta
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:
Dated: September 3, 2026
By:
/s/ Michael R. Guzzetta
Michael R. Guzzetta
Director
Dated: September 3, 2026
By:
/s/ Keith R. Brunt
Keith R. Brunt
President & Director
Dated: September 3, 2026
By:
/s/ Jason Lamp
Jason Lamp
Director
Dated: September 3, 2026
By:
/s/ Michael
W. Jones
Michael
W. Jones
Director
27
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
FINANCIAL STATEMENTS
December 31, 2025
(Stated in US Dollars)
C O N T E N T S
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID # 731 ) DAVIDSON & COMPANY LLP, VANCOUVER, BC, CANADA
F-2
FINANCIAL STATEMENTS
BALANCE SHEETS
F-4
STATEMENTS OF OPERATIONS
F-5
STATEMENT OF STOCKHOLDERS' EQUITY
F-6
STATEMENTS OF CASH FLOWS
F-8
NOTES TO FINANCIAL STATEMENTS
F-9
F- 1
Report of
Independent Registered Public Accounting Firm
To the Shareholders and Directors of
ProtoKinetix, Incorporated
Opinion on the Financial Statements
We have audited the accompanying balance sheets of ProtoKinetix, Incorporated
(the “Company”) as of December 31, 2025 and 2024, and the related statements of operations, stockholders’
equity, and cash flows for the years then ended 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, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025, 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 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 of $48,621,796 and a working capital deficiency of $183,266 as December 31, 2025. These factors raise substantial doubt about
the Company’s ability to continue as a going concern. Management’s plan 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.
Basis for Opinion
These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our 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. 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
misstatement 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.
F- 2
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 $481,206 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.
· We discussed with management the plans and intent for the patents and
patent applications.
· We confirmed title to ensure patent rights and patent application rights
remain in good standing.
We have served as the Company’s auditor since 2008.
/s/ DAVIDSON & COMPANY LLP
Chartered Professional Accountants
Vancouver, Canada
September 3, 2026
F- 3
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
BALANCE SHEETS
As of December 31, 2025 and 2024
2025
2024
ASSETS
Current Assets
Cash
$
1,118
$
( 4,697
)
Prepaid expenses and deposits (Note 3)
1,050
1,050
Total current assets
2,168
( 3,647
)
Intangible assets (Note 4)
481,206
469,784
Total assets
$
483,374
$
466,137
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities (Note 8)
$
185,434
$
124,047
Total liabilities
185,434
124,047
Stockholders' Equity
Common stock, $ 0.0000053 par value; 500,000,000 common shares authorized; 406,830,152 and 371,880,152 shares issued and outstanding for 2025 and 2024 respectively (Note 7)
2,177
1,987
Additional paid-in capital
48,917,559
48,568,249
Accumulated deficit
( 48,621,796
)
( 48,228,146
)
Total stockholders' equity
297,940
342,090
Total liabilities and stockholders' equity
$
483,374
$
466,137
Basis of Presentation – Going
Concern Uncertainties (Note 1)
Commitments and Contingency (Note
9)
See Notes to Financial Statements
F- 4
PROTOKINETIX, INCOPORATED
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2025 and 2024
2025
2024
EXPENSES
Amortization – intangible assets (Note 4)
$
51,292
$
52,870
General and administrative
58,135
61,470
Professional fees (Note 8)
177,610
144,806
Research and development
106,613
99,625
Share-based compensation (Note 5)
—
5,417
Operating Income (Expenses)
( 393,650
)
( 364,188
)
Net loss for the year
$
( 393,650
)
$
( 364,188
)
Net loss per common share (basic and diluted)
$
( 0.00
)
$
( 0.00
)
Weighted average number of common shares outstanding (basic and diluted)
386,284,947
358,557,930
See Notes to Financial Statements
F- 5
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 2024 and 2023
Common Stock
Additional
Paid-in
Accumulated
Shares
Amount
capital
deficit
Total
Balance, December 31, 2023
346,213,485
$
1,850
$
48,297,969
$
( 47,863,958
)
$
435,861
Issuance of common stock pursuant to private placement offering
25,666,667
137
264,863
—
265,000
Fair-value of share based compensation
—
—
5,417
—
5,417
Net loss for the period
—
—
—
( 364,188
)
( 364,188
)
Balance, December 31, 2024
371,880,152
$
1,987
$
48,568,249
$
( 48,228,146
)
$
342,090
See Notes to Financial Statements
F- 6
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Years Ended December 31, 2025 and 2024
Common Stock
Additional
Paid-in
Accumulated
Shares
Amount
capital
deficit
Total
Balance, December 31, 2024
371,880,152
$ 1,987
$ 48,568,249
$ ( 48,228,146 )
$ 342,090
Issuance of common stock pursuant to private placement offering
19,750,000
108
197,392
—
197,500
Issuance of common stock in exchange for consulting services
1,950,000
12
19,488
—
19,500
Issuance of common stock in exchange for debt
13,250,000
70
132,430
132,500
Net loss for the period
—
—
—
( 393,650 )
( 393,650 )
Balance, December 31, 2025
406,830,152
$ 2,177
$ 48,917,559
$ ( 48,621,796 )
$ 297,940
See Notes to Financial Statements
F- 7
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2025 and 2024
2025
2024
CASH FLOWS USED IN OPERATING ACTIVITIES
Net loss for the year
$ ( 393,650 )
$ ( 364,188 )
Adjustments to reconcile net loss to cash used in operating activities:
Amortization – intangible assets
51,292
52,870
Fair value of compensatory options granted
—
5,417
Changes in operating assets and liabilities:
Prepaid expenses and deposits
—
—
Accounts payable and accrued liabilities
206,981
82,851
Net cash provided by (used in) operating activities
( 135,377 )
( 223,050 )
CASH FLOWS USED IN INVESTING ACTIVITIES
Purchase of intangible assets
( 56,308 )
( 58,055 )
Net cash used in investing activities
( 56,308 )
( 58,055 )
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash
197,500
256,000
Issuance of common stock for shareholder advance
—
—
Net cash from financing activities
197,500
256,000
Net change in cash
5,815
( 25,105 )
Cash, beginning of year
( 4,697 )
20,408
Cash, end of year
$ 1,118
$ ( 4,697 )
Cash paid for interest
$ —
$ —
Cash paid for income taxes
$ —
$ —
Supplementary information – non-cash transactions:
Shares issued in exchange for consulting services and settlement of debt
$ 152,000
$ 9,000
Intangible asset costs remaining in account payable
23,840
17,434
See Notes to Financial Statements
F- 8
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 1. Basis of Presentation – Going
Concern Uncertainties
ProtoKinetix, Incorporated. (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 in
accordance with accounting principles generally accepted in the United States of America 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
of $ 48,621,796 and a working capital deficiency of $ 183,266 at December 31, 2025. 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. In addition, any
significant disruption of global financial markets, reducing our ability to access capital, could negatively affect our liquidity and
ability to continue operations. The exact impact is and will remain unknown and is largely dependent upon future developments, including
but not limited to changes in customer demand, additional mitigation strategies proposed by governmental authorities (including federal,
state, or local stay at home or similar orders), restrictions on the activities of our domestic and international suppliers and shipment
of goods.
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.
Note 2. Summary of Significant Accounting Policies
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 (U.S. GAAP) and are expressed
in United States dollars.
F- 9
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 2. 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. 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.
Cash
Cash consists of funds held in checking accounts. Cash
balances may exceed federally insured limits from time to time.
Fair Value of Financial Instruments
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 value. 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).
At December 31, 2025, there were no other assets or
liabilities subject to additional disclosure.
Income Taxes
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.
F- 10
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 2. 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. 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.
All other expenditures are recognized in profit or loss as incurred.
As at December 31, 2025, 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 not yet
approved patent application costs at December 31, 2025.
Research and Development Costs
Research and development costs are expensed as incurred.
This includes all research consultant’s fees and costs of contract research organizations.
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 94,790,000 stock options (December 31, 2024 – 94,790,000 ) and 23,700,000 warrants (December 31, 2024 – 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.
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.
F- 11
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 2. Summary of Significant Accounting Policies
(cont'd)
Share-Based Compensation (cont'd)
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
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.
Recent Accounting Pronouncements
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.
Note 3. Prepaid Expenses and Deposits
The following summarizes the Company's prepaid expenses
and deposits outstanding as at December 31, 2025 and 2024:
Schedule of prepaid expenses
and deposits outstanding
2025
2024
Rental deposit
$
1,050
$
1,050
F- 12
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 4. Intangible Assets
Intangible asset transactions are summarized as follows:
Schedule of intangible asset transactions
Intangible asset transactions
Patent Rights
Patent Application
Rights
Total
Cost
Balance, December 31, 2023
$ 30,000
$ 555,308
$ 585,308
Additions
—
63,555
63,555
Balance, December 31, 2024
$ 30,000
$ 618,863
$ 648,863
Additions
—
62,714
62,714
Balance, December 31, 2025
$ 30,000
$ 681,577
$ 711,577
Accumulated amortization
Balance, December 31, 2023
$ 25,500
$ 100,709
$ 126,209
Amortization
3,000
49,870
52,870
Balance, December 31, 2024
$ 28,500
$ 150,579
$ 179,079
Amortization
1,500
49,792
51,292
Balance, December 31, 2025
$ 30,000
$ 200,371
$ 230,371
Net carrying amounts
December 31, 2024
$ 1,500
$ 468,284
$ 469,784
December 31, 2025
$ —
$ 481,206
$ 481,206
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, 2025, the Company recorded $ 51,292
(2024 - $ 52,870 ) in amortization expense associated with the Patents Rights.
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 $681,577 in direct costs relating to the Patent Application Rights, $ 62,714 of which were incurred during
the year ended December 31, 2025.
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 of 5% from any product
developed as a result of research done at the University.
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.
The Company amortizes patents and licenses that have
been filed over their useful lives which range between 18.5 to 20 years. The costs of provisional patents and pending applications is
not amortized until the patent is filed and is reviewed each reporting period. No amortization was recorded on the New Patent Application
Rights to December 31, 2025.
F- 13
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 5. Stock Options
Pursuant to an amendment on March 15, 2022, the aggregate
number of shares that may be issued under the 2017 Stock Option and Stock Bonus Plan (the “2017 Plan”) is 97,700,000 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, 2025, there are 94,790,000 options
granted and outstanding under the 2017 Plan.
Stock option transactions are summarized as follows:
Schedule of stock option transactions
Number of
Stock Options
Weighted Average Exercise Price
Weighted Average Remaining Life
Outstanding, December 31, 2024
94,790,000
0.03
3.93
Options granted
—
—
—
Outstanding, December 31, 2025
94,790,000
0.03
2.93
During the year ended December 31, 2025, there were
no stock options granted by Company.
Total share-based compensation for year ended
December 31, 2025 was $nil 0 (2024 – $ 5,417 ), no stock options were granted or vested during year ended December 31, 2025
(2024 – 500,000 ). The weighted – average fair value of stock options granted during the year ended December 31, 2025 was
$nil 0 (2024 – $ 0.01 ).
Schedule of valuation assumptions for options
December 31, 2025
December 31, 2024
Risk-free interest rate
— %
1.76 %
Dividend yield
0.00 %
0.00 %
Expected stock price volatility
0.00 %
140.70 %
Expected forfeiture rate
— %
0.00 %
Expected life
—
6
The following non-qualified stock options were outstanding
and exercisable at December 31, 2025:
Schedule of non-qualified stock options were outstanding
and exercisable
Expiry date
Exercise Price
Number of Options
Outstanding
Number of
Options
Exercisable
$
October 26, 2026
0.10
500,000
500,000
November 26, 2026
0.10
250,000
250,000
December 6, 2028
0.028
93,540,000
93,540,000
August 6, 2030
0.01
500,000
500,000
94,790,000
94,790,000
As at December 31, 2025, the aggregate intrinsic value
of the Company's stock options is $nil 0 .
F- 14
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 6. Warrants
Warrant transactions are summarized as follows:
Schedule of warrant transactions
Number of
Warrants
Weighted Average Exercise Price
$
Outstanding, December 31, 2024
6,000,000
0.028
Warrants granted
17,700,000
0.010
Outstanding, December 31, 2025
23,700,000
0.015
The following warrants were outstanding
and exercisable as at December 31, 2025:
Schedule of warrants were outstanding and exercisable
Number of Warrants
Exercise Price
Expiry Date
500,000
0.01
February 17, 2026
1,500,000
0.01
February 20, 2026
500,000
0.01
February 21, 2026
2,000,000
0.01
February 28, 2026
1,200,000
0.01
March 15, 2026
7,500,000
0.01
March 27, 2026
1,000,000
0.01
April 02, 2026
2,000,000
0.01
April 08, 2026
500,000
0.01
April 11, 2026
500,000
0.01
June 26, 2026
500,000
0.01
July 25, 2026
6,000,000
0.028
December 12, 2028
23,700,000
F- 15
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 7. Stockholders' Equity
The Company is authorized to issue 500,000,000 (December
31, 2024 – 500,000,000 ) 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, 2025 (December 31, 2024 - $nil).
During the year ended December 2025, the Company:
a)
Issued 19,750,000 shares of common stock ( 19,750,000 shares issued at $ 0.01 ) as part of a private placement for total proceeds of $ 197,500 . The Company issued 17,700,000 warrants as part of private placement transactions.
b)
Issued 1,950,000 shares of common stock ( 1,950,000 shares issued at $ 0.01 ) in exchange for consulting services of $ 19,500 .
c)
Issued 13,250,000 shares
of common stock ( 13,250,000 shares issued at $ 0.01 ) in exchange for settlement of debt of $ 132,500 .
During the year ended December 2024, the Company:
a)
Issued 1,666,667 shares of common stock ( 1,666,667 shares issued at $ 0.015 ) as part of a private placement for total proceeds of $ 25,000 .
b)
Issued 19,100,000 shares of common stock ( 19,100,000 shares issued at $ 0.01 ) as part of a private placement for total proceeds of $ 191,000 .
c)
Issued 4,900,000 shares of common stock ( 4,900,000 shares issued at $ 0.01 ) as part of a private placement for total proceeds of $ 49,000 .
F- 16
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 8. Related Party Transactions and Balances
During the years ended December 31, 2025 and 2024, 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 (2024 - $ 60,000 ) was paid or accrued to the Company's CFO. During the year
ended December 31, 2025, the Company reimbursed a company controlled by the CFO a total of $ 6,000 (2024 - $ 6,000 ) in office rent.
As at December 31,2025 there was a balance of $ 31,700 (2024 - $ 15,000 )
owed to the CEO of the Company, and $ 500 (2024 - $ 9,500 ) owed to a company controlled by the CFO of the Company.
Note 9. Commitments and Contingency
Commitments
As at December 31, 2025, the Company has the following commitments:
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.
b) 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. Agreement renews annually unless otherwise terminated by either party with at least 30 days’ notice.
Contingency
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.
F- 17
PROTOKINETIX, INCORPORATED
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2025
Note 10. Income Taxes
As a Nevada corporation,
the Company is liable for taxes in the United States. As of December 31, 2025, 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, 2024 – $nil).
A reconciliation of
income taxes at statutory rates with the reported taxes is as follows:
Schedule of income taxes reconciliation
2025
2024
Net loss for the year
$ ( 393,650 )
$ ( 364,188 )
Expected income tax recovery
$ ( 82,667 )
$ ( 76,479 )
Adjustment to prior years provision versus statutory tax returns
$ 1,136
$ 2
Expiration of losses
$ 1,171,978
281,976
Change in valuation allowance
( 1,090,448 )
$ ( 205,499 )
Total income tax expense (recovery)
$ —
$ —
The Company’s deferred tax assets that have not been recognized are
as follows:
Schedule of deferred tax assets
Schedule of Deferred Tax Assets
Tax benefit of net operating loss carry forward
$ 5,438,741
$ 6,529,189
Valuation allowance
$ ( 5,438,741 )
$ ( 6,529,189 )
$ —
$ —
The Company has net operation
loss carryforwards of approximately $ 23,131,000 (December 31, 2024 - $ 30,500,000 ) to reduce future taxable income. The
valuation allowance has not changed during the year ended December 31,2025. Tax losses expire in years starting from 2024.
The deferred tax asset associated
with the tax loss carry forward is approximately $ 5,438,741 (December 31, 2024 - $ 6,296,352 ). 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.
Note 11. Subsequent Events
Subsequent to the year ended December 31, 2025, the Company:
a)
Between January and March 2026 issued 2,700,000 shares of common stock ( 2,700,000 shares issued at $ 0.01 ) as part of a private placement for total proceeds of $ 27,000 .
b)
Between April and June 2026, 2,100,000 shares of common stock ( 2,100,000 shares issued at $ 0.01 ) as part of a private placement for total proceeds of $ 21,000 .
c)
All warrants expired after year end 2025 with the exception of 6,000,000 warrants for shares that will expire December 12, 2028 .
F-18
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.