SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-QSB/A
[ X ]
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 2005
or
[
] Transitional Report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______________ to
________________.
____________________________________________
Commission
File No. 0-32917
|
PROTOKINETIX,
INC.
(Name
of small business issuer in its
charter)
|
_____________________________________________
Nevada
|
94-3355026
|
(State
or other Jurisidiction
of
Incorporation or Organization)
|
(IRS
Employer
Identification
Number)
|
_____________________________________________
Suite
1500-885 West Georgia Street
Vancouver,
British Columbia Canada
|
V6C
3E8
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Issuer's
Telephone Number (604) 687-9887
|
|
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Company was required to file such reports), and
(2) has been subject to such filing requirements for the past 90
days:
Yes [ X ]
No [ ]
Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act):
Yes
[ ] No [ X ]
State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: As of July 12, 2005, there were 38,122,128
shares of the Company's USD $0.0000053 par value common stock issued and
outstanding.
Transitional
Small Business Disclosure Format: Yes [ ] No [ X
].
This form
10-QSB/A for the three and six months ended June 30, 2005 is being filed in
order to amend incorrect financial statementsin the original filing of form
10-QSB for the three and six months ending June 30, 2005
TABLE OF
CONTENTS
FORM
10-QSB/A
QUARTERLY
REPORT
_________________________
PROTOKINETIX,
INC.
(formerly
known as RJV NETWORK, INC.)
Section
|
Heading
|
|
Highlights
|
|
|
Part
I
|
Financial
Information
|
|
|
Item
1
|
Financial
Statements
|
|
Balance
Sheet at June 30, 2005 (Unaudited)
|
|
Statements
of Operations (Unaudited) for the three and six months ended June 30, 2005
and 2004 and for the period from December 23,
1999 (Date of Inception) to June 30, 2005
|
|
Statements
of Shareholders' Equity (Deficit) (Unaudited)
for
the six months ended June 30, 2005 and for the period from
December 23, 1999 (Date of Inception) to June 30,
2005
|
|
Statements
of Cash Flows (Unaudited) for the six months ended June 30, 2005 and 2004
and for the period from December 23, 1999 (Date of
Inception) to June 30, 2005
|
|
Notes
to Financial Statements
|
Item
2
|
Management's
Plan of Operation
|
Item
3
|
Controls
and Procedures
|
|
|
Part
II
|
Other
Information
|
|
|
Item
1
|
Legal
Proceedings
|
5Item
2
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
Item
3
|
Defaults
Upon Senior Securities
|
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
Item
5
|
Other
Information
|
Item
6
|
Exhibits
and Reports on Form 8-K
|
|
|
|
Signatures
|
|
Sarbanes-Oxley
Certification
|
Second
Quarter Highlights
·
|
On
April 22, 2005, we announced that we received a report from ProteoCell
Biotechnologies, Inc. confirming the maintenance of cell integrity and
survivability in the presence of our synthesized AFGP molecules at
temperatures ranging from 22 degrees Celsius to 0 degrees
Celsius.
|
·
|
On
May 5, 2005, we announced that we received a report from ProteoCell
Biotechnologies, Inc. stating that after 21 days of evaluation of blood
platelet cells in the presence of our synthesized AFGP molecule, that
blood platelets treated with our molecule were "healthier over time" with
"less aggregation," Samer Husein, the lead scientist at ProteoCell on this
project, also observed that the structural integrity of these blood
platelets was "vastly superior" to those which were not treated with our
AFGP molecule.
|
·
|
On
May 12, 2005, we announced that we had engineered a dimeric class of our
AFGP molecule. This is significant because it provides two "active" sites,
thus increasing the characteristics of the molecule, as opposed to the one
that exists in the native AFGP
molecule.
|
·
|
On
May 17, Charles Fred Whittaker joined our Board of Directors. Mr.
Whittaker, a certified accountant, brings a wealth of accounting and
compliance experience to the Company and will most likely be the
cornerstone of what will become our audit and compensation committees. Mr.
Whittaker is also working to create a Code of Ethics for our
Board.
|
·
|
On
May 19, 2005, Dr. Geraldine Deliencourt reported to us from the University
of Rouen, that our dimeric AFGP molecule exhibited the same stable and
non-toxic qualities as our monomeric synthesized AFGP
molecule.
|
Additional
Highlights
·
|
On
July 12, 2005, we announced that after using only 1 milligram of our
synthetic AFGP molecules per milliliter, 85% of heart cells tested at
temperatures of negative 3 degrees Celsius for 16 hours, survived. Based
on these results, we believed that higher doses would increase the
survivability of these cells. This belief was confirmed on July 18, 2005,
when we announced that we had the same survivability with five times the
solution concentration, except that the cells were exposed to the freezing
temperatures for four additional
hours.
|
·
|
On
July 14, 2005, we announced a major collaborative agreement with
Etablissment Francais du Sang-Alsace ("EFS"). EFS, which is affiliated
with the Louis Pasteur University in Strasbourgone (one of the world's
most prestigious blood specialty institutions), is one of the premier
research facilities in the field of hematology. EFS agreed to deploy their
considerable physical and intellectual resources to the testing of
synthesized AFGP characteristics as they apply to the preservation of
blood products.
|
·
|
On
July 28, 2005, we announced our commercialization strategy as it relates
to our synthetic AFGP molecules.
|
PART
I - FINANCIAL INFORMATION
ProtoKinetix,
Inc.
(formerly
known as RJV NETWORK, INC.)
Financial
Statements
at
June 30,
2005
__________________________
Balance
Sheet
|
Statements
of Operations
|
Statements
of Shareholders' Equity (Deficit)
|
Statements
of Cash Flows
|
Notes
to Financial Statements
|
PROTOKINETIX,
INC.
(formerly
known as RJV Network, Inc.)
(A
Development Stage Company)
BALANCE
SHEET
June 30,
2005
(Unaudited)
(Restated)
ASSETS
|
|
|
|
|
|
Current Asset, as
restated
|
|
|
|
Cash
|
|
|
|
|
$
|
331,133
|
|
Computer
Equipment, net
|
|
1,178
|
|
|
|
|
|
|
|
|
|
|
$
|
332,311
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
Due
to outside management consultants
|
|
|
|
|
$
|
393,850
|
|
Accounts
payable
|
|
|
|
|
|
39,568
|
|
Accrued
interest
|
|
|
|
|
|
31,361
|
|
Total
current liabilities
|
|
|
|
|
|
464,779
|
|
Convertible
Note Payable
|
|
123,323
|
|
Total
liabilities
|
|
|
|
|
|
588,102
|
|
Stockholders'
Equity
|
|
|
|
Common
stock, $.0000053 par value; 100,000,000 common
|
|
|
|
|
|
|
|
shares authorized; 38,222,128 shares issued and
outstanding
|
|
|
|
|
|
204
|
|
Common
stock issuable; 1,750,000 shares
|
|
|
|
|
|
11
|
|
Additional
paid-in capital
|
|
|
|
|
|
13,723,200
|
|
Stock
subscriptions receivable
|
|
|
|
|
|
(90,000
|
)
|
Deficit
accumulated during the development stage, as restated
|
|
|
|
|
|
(13,889,206
|
)
|
|
|
|
|
|
|
(255,791)
|
|
|
|
|
|
|
$
|
332,311
|
|
See Notes
to Financial Statements
PROTOKINETIX,
INC.
(formerly
known as RJV Network, Inc.)
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
For the
Three and Six Months Ended June 30, 2005 and 2004, and for the
Period
from December 23, 1999 (Date of Inception) to June 30, 2005
(Unaudited)
(Restated)
|
|
|
|
|
Three
Months
Ended
June
30, 2005
|
|
Three
Months
Ended
June
30, 2004
|
|
Six
Months
Ended
June
30, 2005
|
|
Six
Months
Ended
June
30, 2004
|
|
Cumulative
During the Development Stage
|
Revenues
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
|
$
-
|
General
and administrative
|
|
|
|
|
|
|
|
|
|
|
expenses
|
|
|
|
|
|
|
|
|
|
|
Licenses,
as restated
|
|
|
|
|
|
|
45,756
|
|
3,379,756
|
|
Professional
fees
|
95,496
|
|
23,593
|
|
171,186
|
|
1,033,667
|
|
2,264,693
|
|
Consulting
fees
|
3,381,500
|
|
515,000
|
|
3,392,976
|
|
522,626
|
|
7,514,979
|
|
Research
and development
|
24,466
|
|
100,001
|
|
167,268
|
|
109,533
|
|
376,800
|
|
General
and administrative
|
34,514
|
|
42,710
|
|
86,925
|
|
68,274
|
|
278,151
|
|
Interest
|
|
2,533
|
|
6,300
|
|
8,261
|
|
12,600
|
|
31,361
|
|
|
|
|
|
3,538,509
|
|
687,604
|
|
3,826,616
|
|
1,792,456
|
|
13,845,740
|
|
|
|
|
Loss
from continuing
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations, as restated
|
(3,538,509)
|
|
(687,604)
|
|
(3,826,616)
|
|
(1792,456)
|
|
(13,845,740)
|
Discontinued
Operations
|
|
|
|
|
|
|
|
|
|
|
Loss
from operations of the
|
|
|
|
|
|
|
|
|
|
|
discontinued segment
|
|
|
-
|
|
|
|
-
|
|
(43,466)
|
|
|
|
|
Net
loss, as restated
|
$ (3,538,509)
|
|
$ (687,604)
|
|
$ (3,826,616)
|
|
$ (1,792,456)
|
|
$
(13,889,206)
|
Net
Loss per Share (basic and
|
|
|
|
|
|
|
|
|
|
fully
diluted), as restated
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
(0.10)
|
$
(0.02)
|
$
(0.11)
|
$
(0.06)
|
|
Discontinued
operations
|
0.00
|
|
0.00
|
|
0.00
|
|
0.00
|
|
|
|
|
|
|
Net
loss per common
|
|
|
|
|
|
|
|
|
|
|
|
|
Share, as restated
|
$
(0.10)
|
|
$
(0.02)
|
|
$
(0.11)
|
|
$
(0.06)
|
|
|
Weighted
average number of
|
|
|
|
|
|
|
|
|
|
|
common
shares outstanding
|
38,260,911
|
|
28,665,281
|
|
37,113,014
|
|
27,854,793
|
|
|
See Notes
to Financial Statements
PROTOKINETIX, INC.
(formerly
known as RJV Network, Inc.)
(A
Development Stage Company)
STATEMENTS
OF STOCKHOLDERS' EQUITY (DEFICIT)
For the
Six Months Ended June 30, 2005, and for the Period From
December
23, 1999 (Date of Inception) to June 30, 2005
(Unaudited)
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Additional
|
|
Stock
|
|
During
the
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Issuable
|
|
Paid-in
|
|
Subscriptions
|
|
Development
|
|
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Receivable
|
|
Stage
|
|
Total
|
Issuance
of common stock, December 1999
|
9,375,000
|
|
$
50
|
|
-
|
|
$
-
|
|
$
4,950
|
|
$
-
|
|
$
-
|
|
$
5,000
|
Net
loss for period
|
|
|
|
|
|
|
|
|
|
|
|
|
(35)
|
|
(35)
|
Balance,
December 31, 2000
|
9,375,000
|
|
50
|
|
-
|
|
-
|
|
4,950
|
|
|
|
(35)
|
|
4,965
|
Issuance
of common stock, April 2001
|
5,718,750
|
|
30
|
|
|
|
|
|
15,220
|
|
|
|
|
|
15,250
|
Net
loss for year
|
|
|
|
|
|
|
|
|
|
|
|
|
(16,902)
|
|
(16,902)
|
Balance,
December 31, 2001
|
15,093,750
|
|
80
|
|
-
|
|
-
|
|
20,170
|
|
|
|
(16,937)
|
|
3,313
|
Net
loss for year
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,878)
|
|
(14,878)
|
Balance,
December 31, 2002
|
15,093,750
|
|
80
|
|
-
|
|
-
|
|
20,170
|
|
|
|
(31,815)
|
|
(11,565)
|
Issuance
of common stock for services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
July
2003
|
2,125,000
|
|
11
|
|
|
|
|
|
424,989
|
|
|
|
|
|
425,000
|
|
August
2003
|
300,000
|
|
2
|
|
|
|
|
|
14,998
|
|
|
|
|
|
15,000
|
|
September
2003
|
1,000,000
|
|
5
|
|
|
|
|
|
49,995
|
|
|
|
|
|
50,000
|
|
October
2003
|
1,550,000
|
|
8
|
|
|
|
|
|
619,992
|
|
|
|
|
|
620,000
|
Issuance
of common stock for licensing rights
|
14,000,000
|
|
74
|
|
|
|
|
|
2,099,926
|
|
|
|
|
|
2,100,000
|
Common
stock issuable for licensing rights
|
|
|
|
|
2,000,000
|
|
11
|
|
299,989
|
|
|
|
|
|
300,000
|
Shares
cancelled on September 30, 2003
|
(9,325,000)
|
|
(49)
|
|
|
|
|
|
49
|
|
|
|
|
|
-
|
Net
loss for year, as restated
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,662,745)
|
|
(3,662,745)
|
Balance,
December 31, 2003
|
24,743,750
|
|
131
|
|
2,000,000
|
|
11
|
|
3,530,108
|
|
-
|
|
3,694,560)
|
|
(164,310)
|
Issuance
of common stock for services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
2004
|
1,652,300
|
|
9
|
|
|
|
|
|
991,371
|
|
|
|
|
|
991,380
|
|
May
2004
|
500,000
|
|
3
|
|
|
|
|
|
514,997
|
|
|
|
|
|
515,000
|
|
July
2004
|
159,756
|
|
1
|
|
|
|
|
|
119,694
|
|
|
|
|
|
119,695
|
|
August
2004
|
100,000
|
|
1
|
|
|
|
|
|
70,999
|
|
|
|
|
|
71,000
|
|
October
2004
|
732,400
|
|
4
|
|
|
|
|
|
479,996
|
|
|
|
|
|
480,000
|
|
November
2004
|
650,000
|
|
4
|
|
|
|
|
|
454,996
|
|
|
|
|
|
455,000
|
|
December
2004
|
255,000
|
|
1
|
|
|
|
|
|
164,425
|
|
|
|
|
|
164,426
|
Common
stock issuable for AFGP license
|
|
|
|
|
1,000,000
|
|
5
|
|
709,995
|
|
|
|
|
|
710,000
|
Common
stock issuable for Recaf License
|
|
|
|
|
400,000
|
|
2
|
|
223,998
|
|
|
|
|
|
224,000
|
Warrants
granted (for 3,450,000 shares) for services,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October
2004
|
|
|
|
|
|
|
|
|
1,716,253
|
|
|
|
|
|
1,716,253
|
Options
granted for services, October 2004
|
|
|
|
|
|
|
|
|
212,734
|
|
|
|
|
|
212,734
|
Stock
subscriptions receivable
|
|
|
|
|
1,800,000
|
|
10
|
|
329,990
|
|
(330,000)
|
|
|
|
-
|
Warrants
exercised:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
August
2004
|
|
|
|
|
50,000
|
|
|
|
15,000
|
|
|
|
|
|
15,000
|
|
October
2004
|
|
|
|
|
600,000
|
|
3
|
|
134,997
|
|
|
|
|
|
135,000
|
|
December
2004
|
|
|
|
|
1,000,000
|
|
5
|
|
224,995
|
|
|
|
|
|
225,000
|
Options
exercised, December 2004
|
|
|
|
|
100,000
|
|
1
|
|
29,999
|
|
|
|
|
|
30,000
|
Net
loss for period, as restated
|
|
|
|
|
|
|
|
|
|
|
-
|
|
(6,368,030)
|
|
(6,368,030)
|
Balance,
December 31, 2004, as restated
|
28,793,206
|
|
154
|
|
6,950,000
|
|
37
|
|
9,924,547
|
|
(330,000)
|
|
(10,062,590)
|
|
(467,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Additional
|
|
Stock
|
|
During
the
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
Issuable
|
|
Paid-in
|
|
Subscriptions
|
|
Development
|
|
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Receivable
|
|
Stage
|
|
Total
|
Issuance
of stock subscriptions receivable
|
|
|
|
|
|
|
|
|
|
|
240,000
|
|
|
|
240,000
|
Issuance
of common stock for licensing rights
|
2,000,000
|
|
11
|
|
(2,000,000)
|
|
(11)
|
|
|
|
|
|
|
|
-
|
Issuance
of stock for warrants exercised
|
1,650,000
|
|
8
|
|
(1,650,000)
|
|
(8)
|
|
|
|
|
|
|
|
-
|
Options
exercised:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February
2005
|
|
|
|
|
35,000
|
|
1
|
|
10,499
|
|
|
|
|
|
10,500
|
|
May
2005
|
200,000
|
|
1
|
|
|
|
|
|
59,999
|
|
|
|
|
|
60,000
|
Note
payable conversion, February 2005
|
|
|
|
|
285,832
|
|
1
|
|
85,749
|
|
|
|
|
|
85,750
|
Issuance
of common stock for Note payable conversion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
2005
|
285,832
|
|
1
|
|
(285,832)
|
|
(1)
|
|
|
|
|
|
|
|
-
|
|
May
2005
|
353,090
|
|
2
|
|
|
|
|
|
105,925
|
|
|
|
|
|
105,927
|
Common
stock issuable for legal services
|
|
|
|
|
200,000
|
|
1
|
|
149,999
|
|
|
|
|
|
150,000
|
Issuance
of common stock for AFGP license
|
250,000
|
|
1
|
|
(250,000)
|
|
(1)
|
|
|
|
|
|
|
|
-
|
Issuance
of common stock for stock subscriptions received
|
1,400,000
|
|
7
|
|
(1,400,000)
|
|
(7)
|
|
|
|
|
|
|
|
-
|
Issuance
of stock for options exercised
|
135,000
|
|
1
|
|
(135,000)
|
|
(1)
|
|
|
|
|
|
|
|
-
|
Issuance
of common stock for services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
2005
|
30,000
|
|
1
|
|
|
|
|
|
14,999
|
|
|
|
|
|
15,000
|
|
May
2005
|
3,075,000
|
|
16
|
|
|
|
|
|
3,320,984
|
|
|
|
|
|
3,321,000
|
|
June
2005
|
50,000
|
|
1
|
|
|
|
|
|
50,499
|
|
|
|
|
|
50,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Net
loss for period
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,826,616)
|
|
(3,826,616)
|
Balance,
June 30, 2005, as restated
|
38,222,128
|
|
$
204
|
|
1,750,000
|
|
$
11
|
|
$
13,723,200
|
|
$
(90,000)
|
|
$(13,889,206)
|
|
$
(255,791)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes
to Financial Statements
PROTOKINETIX,
INC.
(formerly
known as RJV Network, Inc.)
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS
For
the Six Months Ended June 30, 2005 and 2004, and for the Period
From
December
23, 1999 (Date of Inception) to June 30, 2005
(Unaudited)
(Restated)
|
|
|
|
|
Six
Months Ended
June
30, 2005
|
|
Six
Months Ended
June
30, 2004
|
|
Cumulative
During the Development Stage
|
Cash
Flows from Operating Activities
|
|
|
|
|
|
|
Net
loss for the period, as restated
|
$
(3,826,616)
|
|
$
(1,792,456)
|
|
$
(13,889,206)
|
|
Adjustments
to reconcile net loss to net cash flows
|
|
|
|
|
|
|
|
used
in operating activities
|
|
|
|
|
|
|
|
Depreciation
expense
|
252
|
|
|
|
505
|
|
|
Issuance
of common stock for services
|
|
|
|
|
|
|
|
|
and
expenses,as restated
|
3,536,500
|
|
1,506,380
|
|
10,777,001
|
|
|
Warrants
issued for consulting services
|
-
|
|
-
|
|
1,716,253
|
|
|
Stock
options issued for consulting services
|
-
|
|
-
|
|
212,734
|
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
|
(Decrease)
increase in amounts due to outside
|
|
|
|
|
|
|
|
|
|
management
consultants
|
-
|
|
(15,717)
|
|
393,850
|
|
|
|
Increase
in accounts payable
|
18,680
|
|
25,415
|
|
39,568
|
|
|
|
Increase
in interest payable
|
8,261
|
|
12,600
|
|
31,361
|
|
|
|
|
Net
cash flows used in
|
|
|
|
|
|
|
|
|
|
operating
activities, as restated
|
(262,923)
|
|
263,778)
|
|
(717,934)
|
Cash
Flows from Investing Activities, as restated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
of computer equipment
|
-
|
|
(1,683)
|
|
(1,683)
|
|
|
|
|
Net
cash flows used in investing
|
|
|
|
|
|
|
|
|
|
activities
|
-
|
|
(1,683)
|
|
(1,683)
|
Cash
Flows from Financing Activities, as restated
|
|
|
|
|
|
|
Warrants
exercised
|
240,000
|
|
-
|
|
615,000
|
|
Stock
options exercised
|
70,500
|
|
-
|
|
100,500
|
|
Issuance
of common stock for cash
|
|
|
-
|
|
20,250
|
|
Convertible
note payable
|
|
|
315,000
|
|
315,000
|
|
|
|
|
Net
cash flows provided by financing
|
|
|
|
|
|
|
|
|
|
activities
|
310,500
|
|
315,000
|
|
1,050,750
|
|
|
|
|
Net
change in cash
|
47,577
|
|
49,539
|
|
331,133
|
Cash,
beginning of period
|
283,556
|
|
104
|
|
|
Cash,
end of period
|
$
331,133
|
|
$
49,643
|
|
$
331,133
|
Supplementary
information - Noncash Transactions
|
|
|
|
|
|
|
Common
stock issuable and issued for acquisition of
|
|
|
|
|
|
|
|
intangible
assets
|
$
-
|
|
$
-
|
|
$
3,334,000
|
|
Stock
subscriptions received
|
|
|
-
|
|
90,000
|
|
Note
payable converted to common stock
|
191,677
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes
to Financial Statements
NOTES
TO FINANCIAL STATEMENTS
Note
1. Organization and Significant Accounting Policies
Organization
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.
In 2003,
the Company entered into an assignment of license agreement (the "Agreement")
with BioKinetix, Inc., an Alberta, Canada corporation. The Agreement
provided the Company with an exclusive assignment of all of the rights (the
"Rights") that BioKinetix possessed relating to two proprietary technologies
that are being developed for the creation and commercialization of
"superantibodies," an enhancement of antibody technology that makes ordinary
antibodies much more lethal. In consideration, the Company's Board of
Directors authorized the Company to issue 16,000,000 shares of its common stock
to the shareholders of BioKinetix.
The
Company is also currently researching the benefits and feasibility of
proprietary synthesized Antifreeze Glycoproteins ("AFGP"). In preliminary
studies, AFGP has demonstrated an ability to protect and preserve human cells at
temperatures below freezing.
Interim Period Financial
Statements
The
interim period financial statements have been prepared by the Company pursuant
to the rules and regulations of the U.S. Securities and Exchange Commission (the
"SEC"). Certain information and footnote disclosure normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States have been condensed or omitted pursuant to such
SEC rules and regulations. The interim period financial statements should
be read together with the audited financial statements and accompanying notes
included in the Company's audited financial statements for the years ended
December 31, 2004 and 2003. In the opinion of the Company, the unaudited
financial statements contained herein contain all adjustments (consisting of a
normal recurring nature) necessary to present a fair statement of the results of
the interim periods presented.
Going
Concern
As shown
in the financial statements, the Company has not developed a commercially viable
product, has not generated any revenues to date and has incurred losses since
inception, resulting in a net accumulated deficit at June 30, 2005. 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.
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.
Earnings per
Share
Basic
loss per share is computed by dividing the net loss available to common
shareholders by the weighted average number of common shares outstanding in the
period. The Company's stock split 1:75 on August 24, 2001. In
April 2002, the Board of Directors approved a 2.5 for 1 split of the Company's
stock. The accompanying financial statements are presented on a post-split
basis. The loss per share for the periods ended June 30, 2005 and 2004,
have been adjusted accordingly. Diluted earnings per share takes into
consideration common shares of outstanding (computed under basic earnings per
share) and potentially dilutive securities. The effect of debt convertible
into common shares was 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. Common stock issuable is considered outstanding as of
the original approval date for purposes of earnings per share
computations.
Note 2.
Restatement
During
2003 and 2004, the Company acquired license rights to proprietary medical
research technologies, which were capitalized at the time of acquisition as
intangible assets having indefinite lives. While the Company's management
continues to believe the license rights are of probable future benefit to the
Company in its continuing efforts to pursue the development of commercially
viable products, it was appropriate for accounting purposes to expense the cost
of the acquisition of the license rights. Accordingly, the accompanying
financial statements have been restated to correct the error and recognize as
expense the cost of those acquired license rights at the time of their
acquisition.
The
effects of the restatement on the six and three months ended June 30, 2005
financial statements are as follows:
Intangible
assets decreased by $3,379,756 and the Accumulated Deficit increased by
$3,379,756.
The
effects of the restatement on the six months ended June 30, 2004 financial
statements are as follows:
Intangible
assets decreased by $2,445,756 and the Accumulated Deficit increased by
$2,445,756
Expenses,
specifically Licenses, increased by $45,756 to $45,756, increasing the Loss from
Continuing Operations and the Net Loss by the same amount to ($1,792,456) for
each. The loss per share did not change from ($0.02) for the three
months ended June 30, 2004 and from ($0.06) for the six months ended
June 30, 2004. There was no effect on the three months ended June 30,
2004
For
purposes of the Statement of Cash Flows, the Net Loss for the Period increased
to ($1,792,456) and the Acquisition of Intangible Assets for $45,756 was
eliminated.
The
effect of the restatement on the amounts in the Cumulative During the
Development Stage period are as follows:
Expenses,
specifically Licenses, increased by $3,379,756 to $3,379,756, increasing total
expenses to $13,845,740. The Loss from Continuing Operations increased by
$3,379,756 to ($13,845,740) and the Net Loss increased by $3,379,756 to
($13,889,206).
For
purposes of the Statement of Cash Flows, the Net Loss for the Period increased
to ($13,889,206) and the Issuance of Common Stock for Services and Expenses
increased by $3,334,000 to $10,777,001, and the Acquisition of Intangible Assets
for $45,756 was eliminated.
Note
3. Convertible Note Payable
On
February 1, 2004, the Company executed a subscription agreement under which
the Company issued to a corporation an 8% secured convertible note in exchange
for $315,000. The note is due February 1, 2006, and is convertible
into shares of the Company's common stock at the lower of $0.30 per share or 70%
of the average of the three lowest trading prices for the 30 days prior to the
conversion date. No beneficial conversion feature was applicable to this
convertible note.
In April
and May 2005, 285,832 and 353,090 common shares, respectively, were issued in
lieu of partial payment on this note.
Note
4. Discontinued Operations
In 2003,
the Company signed the licensing agreement described in Note 1. This
agreement changed the Company's business plan to that of a medical research
company. Accordingly, the operating results related to the Company's
research prior to the licensing agreement have been presented as discontinued
operations in these financial statements for all periods presented.
Note
5. Subsequent Event
In July
2005, the Company issued 111,111 shares of its common stock for
services.
ITEM 2.
MANAGEMENT'S PLAN OF
OPERATION
This
discussion and analysis should be read in conjunction with the accompanying
Consolidated Financial Statements and related notes. Our discussion and analysis
of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of financial statements in conformity with accounting principles generally
accepted in the United States of America requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of any contingent liabilities at the financial statement date and
reported amounts of revenue and expenses during the reporting period. On an
on-going basis we review our estimates and assumptions. Our estimates were based
on our historical experience and other assumptions that we believe to be
reasonable under the circumstances. Actual results are likely to differ from
those estimates under different assumptions or conditions, but we do not believe
such differences will materially affect our financial position or results of
operations. Our critical accounting policies, the policies we believe are most
important to the presentation of our financial statements and require the most
difficult, subjective and complex judgments, are outlined below in "Critical
Accounting Policies," and have not changed significantly.
In
addition, certain statements made in this report may constitute “forward-looking
statements”. These forward-looking statements involve known or unknown risks,
uncertainties and other factors that may cause the actual results, performance,
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking
statements. Specifically, 1) our ability to obtain necessary regulatory
approvals for our products; and 2) our ability to create revenues and
operating income, is dependent upon our ability to develop and sell our
products, general economic conditions, and other factors. You can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continues" or the negative of these terms or other
comparable terminology. Although we believe that the expectations reflected-in
the forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance or achievements.
The
Company has not had revenues from operations since inception. Therefore, the
Company is required to report under Regulation SB, Section 228.303(a) and (c) in
this Form 10-QSB.
Plan
of Operation
Our
current operations are centered around the Company's relationships with various
research and development consultants who are conducting research on behalf of
the company at discrete and established laboratories in various parts of the
world. The Company intends to continue these efforts throughout
2005.
The
Company currently has no full time employees. The Company operates with a
skeletal management team headed by John Todd, M.D. In addition to Dr. Todd, the
Company receives advice and counsel from its Scientific Advisory Board. A short
biography of Dr. Todd may be found within the document, and the biographies of
other members of the ProtoKinetix Scientific Advisory Board may be found within
the "Mgmt & Bios" section of the Company's website located at
www.protokinetix.com. The Company does not expect to add more than 1 to 2 full
time employees during the balance of the calendar 2005 year.
There are
two areas of research the Company is currently focused on. Below is a brief
discussion of these efforts. Additionally, in order to assist you in better
understanding the concepts of the Company's research, here are three definitions
of some of the terms used below:
Super-Antibody
|
This
is an industry-adopted term used to describe genetically-engineered
antibodies, isolated from a single blood cell, which have been expanded in
the laboratory to attack or have a desired effect on certain targeted
antigens, such as cancer cells.
|
"RECAF"
or Receptor Alpha Fetaprotein
|
This
is a carbohydrate molecule that is located on the surface of cancer
cells.
|
"Receptor"
|
A
structure exposed on the cell surface used for signaling or transport of
molecules into the cell.
|
RECAF
Antibody Project
The
Company's first project, the development of a cancer chemotherapeutic agent
based upon RECAF, a receptor for Alphafeta protein which is found on the cell
surface of many types of malignant cells. The RECAF is a site which the Company
believes exists on many cancer cells. Think of the RECAF site as a "lock on a
door". Cancer cells by their very nature are antigens or foreign invaders to the
way the body functions normally. The body has cells which create what are called
antibodies. Antibodies are the way in which the human body attacks antigens and
to cause them to die. The problem with cancer cells is that in an effort to
destroy the cancer cell, it is difficult for an antibody to gain access to and
bind to a cancer cell. The Company believes that should the RECAF receptor site
exist, it will be able to design a superantibody (or enhanced daisy chain
antibody) which will bind to the RECAF receptor site (like a key going into the
lock of the door) and destroy the cancer cell.
The
Company has a license from Biocurex, Inc. to develop superantibody therapies for
the RECAF receptor site. As of the date of this report, the Company is engaged
in efforts to validate the existence of the RECAF receptor site.
The
Company has an agreement with BioCurex which provides us the exclusive rights to
develop biologic therapies against cancer cells using: (i) the patented platform
developed by InNexus; and (ii) the "conjugate approach" from
Perigene.
During
this past year ProtoKinetix Inc. has contracted with Dr. Dianne Damotte to
conduct tests on the RECAF antibody at the George Pompidou Hospital in Paris
France. The RECAF antibody was used to determine its efficacy in tagging onto
cancer cells and not on to normal healthy cells. This was done to have a third
party validate the claims of BioCurex and to determine the suitability of RECAF
for the development of a therapeutic antibody against a variety of
malignancies.
The
testing by Dr. Diane Damotte demonstrated some interesting results that are
still being assessed. At this time, the Company has not yet made a decision as
to its methodology with respect to the development of a catalytic antibody.
Further, if the Company does proceed to develop a catalytic antibody, we have
not yet decided which platform to use.
In terms
of creating an antibody, the Company's efforts are being led by Professor Max
Arella (please see the Company's press release dated September 4, 2003). Once an
antibody is created, it must be enhanced or converted into a superantibody. In
order to create a superantibody, the Company has acquired access to various
technologies from (a) Innexus Corporation; and (b) Perigene
Corporation.
AFGP
Project (the "AFGP Project")
The
second project that the Company has undertaken is to develop and test synthetic
antifreeze proteins (AFP) and antifreeze glycoproteins (AFGP).
The AFGP
Project is where the Company believes it will focus much of its research efforts
and resources over the foreseeable future.
ProtoKinetix
has entered into agreements to acquire the exclusive right to develop products
derived from patent pending technologies related to synthetic AFGPs. The
ProtoKinetix intellectual property rights were developed by Dr. Jean-Charles
Quirion.
As of the
date of this report, although the Company's development agents, including the
parties the Company has licensed AFGP technologies from, have applied to receive
patents for technologies ProtoKinetix has licensed and continues to primarily
base it's research efforts on,
no
patents have been
issued
by a
governmental, quasi-governmental or recognized regulatory agency.
Below is
a further general discussion of the Company's AFGP Project
:
One of
many accomplishments from pioneering research of the U.S. Antarctic Program was
the discovery, in the early sixties, that fish living year-long in subzero
temperature are extremely resistant to freezing. The substances that prevent
these fish from freezing were isolated, characterized and designated as
antifreeze glycoproteins or AFGP. Over the years, various kinds of AFGP were
isolated from many species of fishes, and in some amphibians, plants and
insects. All of the AFGPs share a common characteristic that prevents ice
crystals from growing and connecting to each other.
A review
of the scientific literature will confirm that there has been a great deal of
interest around the world in these natural antifreeze glycoproteins which are
able to protect a great many creatures which are subjected to freezing
temperatures. A further review will also confirm that the natural antifreeze is
able to preserve mammalian cells tissue and organs. The metabolic rate in living
cells is reduced as the temperature is lowered. Keeping cells and tissue at a
low temperature enables their preservation for a longer time than cells can be
preserved for at a higher temperature. Yet, when cells are exposed to sub zero
temperatures, they are destroyed by the formation of ice crystals which disrupts
the cell membrane.
Scientists
have conducted many experiments in which they extracted naturally occurring AFGP
from a variety of fish and then used these naturally occurring antifreeze
glycoproteins to reduce the temperature at which ice crystals are formed. It has
been determined in experiments by many scientists that mammalian cells in a
solution containing natural AFGP could be successfully preserved at temperatures
several degrees below zero C (see attached). At this temperature the metabolic
rate of the cells is very low, and these cells can be preserved for a longer
period of time at sub zero temperatures as long as the cells are not destroyed
by the formation of ice crystals. However, until today, applications of AFGP
were limited since researchers were unable to produce sufficient quantities or
stable enough copies of these antifreeze glycoproteins for commercial
applications, and the use of naturally occurring compounds extracted from fish
is too labor and cost-intensive to be practical.
Researchers,
headed by Dr. Jean Charles Quirion in Rouen, France, have developed an
innovative and patented chemical synthesis protocol for manufacturing and
stabilizing AFGP molecules using a chemical bond that protects these compounds
from degradation by naturally occurring enzymes. Dr. Quirion and his team have
produced several synthetic antifreeze glycoproteins and have the ability to
produce many more different types of these molecules. The synthetic AFGP which
has been made have been tested and we were able to show:
·
|
The
molecules are stable down to a pH of 1.8
|
·
|
There
is no toxicity demonstrated in 2 separate trials
|
·
|
The
molecules tested have shown that they reduce the freezing point to minus
18 degrees celsius
|
·
|
We
have been able to preserve red cells at temperatures below zero Celsius
using 1 mg per ml of the synthetic
antifreeze
|
Current
research is being conducted to confirm the efficacy of these chemically
synthesized new molecules and applications are being sought for the use of the
synthetic AFGP to prolong the shelf-life of human blood and blood products as
well as for other cell types, live vaccines, tissue and organs. The market for
the preservation of blood and blood products is very large, as is the market for
the preservation of human and animal cells for research purposes. The subzero
cryopreservation of organs using our synthetic AFGP will be a major milestone in
transplantation medicine
ProtoKinetix
will continue to conduct research on the synthetic AFGP which are being
manufactured. This work will be conducted by government agencies as well as by
contract with private laboratory facilities.
The
Company believes that should the AFGP research continue to produce successful
results, there are many viable commercial applications for its AFGP technology,
ranging from medical applications in terms of cell and organ preservation, to
consumer cosmetic applications in terms of producing AFGP-based creams, lotions
and other cosmetics.
Expenses
and Cash Requirements
As of
June 30, 2005, the Company had US $331,133 in available cash.
Expenses
for the quarter ending June 30, 2005, arose primarily from professional and
consulting fees. We incurred professional fees relating to costs associated with
our being a reporting company under the Securities Exchange Act of 1934, as
amended. We also incurred consulting fees related to the AFGP research that is
being conducted on an ongoing basis. All-in-all, we experienced a net loss of
$3,538,509 during the quarterly period ending June 30, 2005 (or approximately
$.09 per share).
Many of
the persons and companies that perform services for the Company are paid in
Company common shares or warrants to acquire Company common shares. This method
of payment, although it causes dilution to the Company common stock
shareholders, allows us to conduct the Company's business with very little cash
outflow. There is no guarantee however, that our consultants will continue to
accept common stock as payment for services rendered. If there is a change in
the Company's need for cash, we may be forced to access some form of debt or
equity-based financing in order to continue operations. Obviously, there is no
guarantee that the Company will be successful in accessing the cash it requires
to operate, should the need arise. And should we be successful in selling some
of the Company's equity or debt in a financing, there is no guarantee that such
a financing would not be more dilutive to the Company common stock shareholders
than our current method of paying consultants with common stock and warrants to
acquire or common stock.
Sales
and Marketing
The
Company is currently not selling or marketing any products.
Going
Concern
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, 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.
Off-Balance
Sheet Arrangements
None
ITEM 3.
CONTROLS AND
PROCEDURES
As of the
end of the period covered by this report, the Company, led by Chief Executive
Officer Dr. John Todd, conducted an evaluation of the Company’s disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation,
the principal executive officer and principal financial officer concluded that
the Company’s disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act are recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.
There was
no change in the Company’s internal controls over financial reporting during the
Company’s most recently completed fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control
over financial reporting.
Presently,
the Company does not have an audit committee.
PART
II - OTHER INFORMATION
ITEM 1.
LEGAL
PROCEEDINGS.
None
ITEM 2.
UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF
PROCEEDS
During
the quarter ending June 30, 2005, the Company made the following common share
issuances:
·
|
On
April 4, 2005, the Company issued 3,050,000 restricted common shares
Å
. These shares were issuable in
2004.
|
·
|
On
April 5, 2005, the Company issued 285,832 common shares
Å
to Thunderbird Global Corporation in consideration of the conversion of
$85,750 of the outstanding debentures Thunderbird Global Corporation
holds. These shares were issuable on February 1,
2005.
|
·
|
On
May 10, 2005, the Company authorized the issuance of 1,150,000 restricted
common shares
Å
to three consultants.
|
·
|
On
April 30, 2005, the Company issued 30,000 common shares to two
consultants.
|
·
|
On
May 9, 2005, the Company issued 353,090 common shares
Å
to Thunderbird Global Corporation in consideration of the conversion of
$105,927 of the outstanding debentures Thunderbird Global Corporation
holds.
|
·
|
On
May 20, 2005, the Company issued 1,750,000 restricted common shares to six
consultants, 350,000 of these shares were authorized and recorded as
issuable in the previous quarter.
|
·
|
On
June 23, 2005, the Company issued 810,000 restricted common shares to five
consultants and Dr. John Todd (whose 200,000 common shares were issued as
affiliate shares). These shares were issuable as follows, 725,000 on May
10, 2005, 50,000 on June 16, 2005 and 35,000 in the previous
quarter.
|
Å
Pursuant to Item 3.02 of Form 8-K, because the Company is a small
business issuer and these issuances, in the aggregate, equal less than 5%
of the number of common shares issued and outstanding (based on the
number of issued and outstanding shares identified in the Company's last
periodic report), these sales were not reported in a Form 8-K.
All of
the aforementioned shares were issued pursuant to Section (4)2 of the Securities
Act of 1933.
Disclosure
Related to Form S-8 Issuances
Prior to
issuing any common shares under Form S-8, the Company requests and receives an
executed verification from all issuees stating that the issuee is a natural
person and that: (a) the shares being issued are not being provided to create or
sustain a market for the Company's securities, and (b) that the shares are not
being issued as a part of a capital raising transaction. All consultants to the
Company are required to provide work product as a part of and condition to their
relationship with the Company. Consultant work product is delivered in
accordance with the terms and conditions of each respective Consultants'
agreement.
Securities
Offered for Sale and Securities Purchased
None
ITEM 3.
DEFAULTS UPON SENIOR
SECURITIES
None.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
None
ITEM 5.
OTHER INFORMATION
ITEM 6.
EXHIBITS AND REPORTS FILED ON FORM
8-K
(a)
Exhibits.
*3.1
Certificate of Incorporation filed as an exhibit to the Company's
registration statement on Form 10SB/A filed on July 24, 2001 and incorporated
herein by reference.
*3.2
By-Laws filed as an exhibit to the Company's registration statement on
Form 10SB/A filed on July 24, 2001 and incorporated herein by
reference.
31.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to
18 U.S.C Section 1350, as adopted pursuant to Section 302 the Sarbanes-Oxley Act
of 2002.
32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to
18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
*
Previously filed
·
|
A
Form 8-K was filed by the Company during August 27, 2001, disclosing a
1:75 forward split of the Company's common shares.
|
·
|
On
July 5, 2003 (SEC Film Number 03769335), the Company disclosed that it had
withdrawn its 14(c) Information Statement with the SEC and that it was
however committed to the effect of the transaction with
BioKinetix.
|
·
|
On
July 7, 2003 (SEC Film Number 03777407), the Company disclosed that it had
rescinded its merger agreement with BioKinetix, and that it had instead
executed an assignment of license agreement in order to effect the
principles of the previously executed BioKinetix-RJV Merger Agreement. In
this disclosure, the company additionally disclosed that its entire board
of directors had resigned and that a new board had been installed for a
one year term.
|
·
|
On
August 21, 2003 (SEC Film Number 03859209), the Company filed a Form 8-K
that disclosed that the articles of incorporation had been amended and
that the name of the Company had changed to ProtoKinetix,
Incorporated.
|
·
|
On
September 23, 2004, the Company filed an 8-K announcing the execution of
the License Agreement with Perigene.
|
·
|
On
May 17, 2005, we filed an amended Form 8-K announcing that Charles Fred
Whittaker had joined the Company's Board of
Directors.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report, for the period ending June 30, 2005, to be signed on
its behalf by the undersigned thereunto duly authorized.
|
|
|
|
PROTOKINETIX,
INC.
(Registrant)
|
|
|
|
|
|
|
|
Date: April
30, 2008
|
|
|
|
By:
|
|
/s/ Ross Senior
|
|
|
|
|
|
|
|
|
|
|
|
Ross
Senior
|
|
|
|
|
President,
CEO and CFO
|
|
|
|
|
(Principal
Accounting
Officer)
|
Protokinetix (PK) (USOTC:PKTX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Protokinetix (PK) (USOTC:PKTX)
Historical Stock Chart
From Jul 2023 to Jul 2024