Edgar Filing: ProtoKinetix, Inc.

pktx10qsb093007.htm

U. S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

[ ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to _____________

Commission File Number: 0-32917

PROTOKINETIX, INC.

Nevada	94-3355026
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Suite 1500-885 West Georgia Street Vancouver, British Columbia Canada V6C3E ________________________________________________________________________ (Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (604) 687-9887

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: $.0000053 par value common stock

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant 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 a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes _ No X

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ___ No ____

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

47,808,726 common shares outstanding, $0.0000053 par value, at November 9, 2007.

Transitional Small Business Disclosure Format: Yes __ No X

PART I

ITEM 1. FINANCIAL STATEMENTS

	PROTOKINETIX, INC.	Page


Balance Sheet at September 30, 2007		3

Statements of Operations for the three and nine months ended September 30, 2007 and 2006 and for the Period from December 23, 1999 (Date of Inception) to September 30, 2007		4

Statements of Stockholder’s Equity for the Period from December 23, 1999
	(Date of Inception) to September 30, 2007	5

Statements of Cash Flows for the nine months ended September 30, 2007 and 2006 and
	for the Period from December 23, 1999 (Date of Inception) to September 30, 2007	6

Notes to Financial Statements		7

PROTOKINETIX, INC.
(A Development Stage Company)
BALANCE SHEET
September 30, 2007
(Unaudited)

		ASSETS

Current Asset
	Cash		$ 70,247
	Accounts receivable		6,391
	Prepaid expenses		226,300

		Total current assets	302,938

Computer equipment, net			681
			$ 303,619

		LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

	Due to outside management consultants		$ 6,892
	Accounts payable		72,895
	Advance payable		165,500
		Total current liabilities	245,287

Long-term Debt			300,000
		Total liabilities	545,287

Stockholders' Equity

	Common stock, $.0000053 par value; 100,000,000 common
		shares authorized; 47,558,726 shares issued and outstanding	259
	Common stock issuable; 400,000 shares		5
	Additional paid-in capital		18,169,248
	Deficit accumulated during the development stage		(18,411,180)
			(241,668)
			$ 303,619

See Notes to Financial Statements

PROTOKINETIX, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended September 30, 2007 and 2006, and for the
Period from December 23, 1999 (Date of Inception) to September 30, 2007
(Unaudited)

			Three Months Ended September 30, 2007	Three Months Ended September 30, 2006	Nine Months Ended September 30, 2007	Nine Months Ended September 30, 2006	Cumulative During the Development Stage
Revenue			$ -	$ -	$ -	$ -	$ 2,000
Expenses
	Licenses		-	-	-	-	3,379,756
	Professional fees		117,419	97,031	284,551	301,560	3,097,339
	Consulting fees		809,000	80,000	974,000	1,525,256	10,207,803
	Research and development		30,000	86,709	171,503	151,022	972,394
	General and administrative		45,412	37,105	118,363	115,497	658,260
	Interest		6,000	-	6,000	11,869	54,162
			1,007,832	300,845	1,554,417	2,105,204	18,369,714
		Loss from continuing
		operations	(1,007,832)	(300,845)	(1,554,417)	(2,105,204)	(18,367,714)
Discontinued Operations
	Loss from operations of the
	discontinued segment			-		-	(43,466)
		Net loss	$(1,007,832)	$(300,845)	$(1,554,417)	$(2,105,204)	$(18,411,180)
Net Loss per Share (basic and
	fully diluted)		$(0.02)	$(0.01)	$(0.03)	$(0.05)
Weighted average shares
	outstanding		46,157,645	42,372,996	45,405,671	42,856,661

See Notes to Financial Statements

PROTOKINETIX, INCORPORATED
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
For the Period from December 23, 1999 (Date of Inception) to September 30, 2007
(Unaudited)

							Deficit	Deficit
							Accumulated	Accumulated
				Common Stock		Additional	Stock	During the
		Common Stock		Issuable		Paid-in	Subscription	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								(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								(6,368,030)	(6,368,030)
Balance, December 31, 2004		28,793,206	$154	6,950,000	$ 37	$9,924,547	$ (330,000)	$ (10,062,590)	$(467,852)



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		2,050,000	10	(2,050,000)	(10)				-
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
Issuance of common stock for AFGP license		1,000,000	5	(1,000,000)	(5)				-
Issuance of common stock for stock subscriptions received		1,400,000	6	(1,400,000)	(6)		90,000		90,000
Issuance of stock for options exercised		135,000	2	(135,000)	(2)				-
Issuance of common stock for services:
	April 2005	30,000	1			14,999			15,000
	May 2005	3,075,000	15			3,320,985			3,321,000
	June 2005	50,000	1			50,499			50,500
	August 2005	(250,000)	(1)			(257,499)			(257,500)
	August 2005	111,111	1	(92,593)	(1)	15,000			15,000
	October 2005	36,233	1	(36,233)	(1)	-			-
	November 2005
	November 2005	311,725	2	(245,000)	(1)	36,249			36,250
	December 2005	1,220,000	8			756,392			756,400


Common stock issuable for services rendered
	June 2005			200,000	1	149,999			150,000
	August 2005			36,233	1	21,739			21,740
	September 2005			125,000	1	74,999			75,000
	September 2005(Proteocell)			100,000	1	57,999			58,000
	December 2005			120,968	1	74,999			75,000
Net loss for the year								(4,826,540)	(4,826,540)
Balance, December 31, 2005		40,801,197	$ 220	608,375	$ 6	$14,503,079	$ -	$(14,889,130)	$(385,825)

February 2006 private placement (issued June 2006)		900,000	5			352,142			352,147
Warrants granted from private placement (450,000)						97,853			97,853

Issuance of common stock for Note payable conversion		529,279	3			158,780			158,783

Issuance of common stock for services:
	February/March 2006 services			20,000	1	10,499			10,500
	March 2006	166,359	1	(108,375)	(1)	36,750			36,750
	April 2006	(1,200,000)	(6)			6			-
	May 2006	1,266,278	7	(70,000)	(1)	792,750			792,756
	June 2006	27,056		1,200,000	6	718,244			718,250
	July 2006	1,200,000	6	(1,200,000)	(6)				-
	August 2006	100,000	1			64,999			65,000
	September 2006	369,984	2	(50,000)		209,998			210,000
	November 2006	100,000	1			48,999			49,000
	December 2006	7,000				3,010			3,010
Warrants issued (for 700,000 shares) for services						58,658			58,658

Net loss for the period								(1,967,633)	(1,967,633)

Balance, December 31, 2006		44,267,153	240	400,000	5	17,055,767	-	(16,856,763)	199,249

Issuance of common stock for services:
	January 2007	218,834	1			119,999			120,000
	March 2007	104,652	1			44,999			45,000
	April 2007	187,500	1			74,999			75,000
	June 2007	112,500	1			44,999			45,000
	July 2007	291,812	2			112,998			113,000
	August 2007	860,000	5			257,995			258,000
	Sept 2007	1,516,275	8			457,492			457,500

Net loss for the period								(1,554,417)	(1,554,417)
		47,558,726	$259	400,000	$ 5	$18,169,248		$(18,411,180)	$(241,668)

See Notes to Financial Statements

PROTOKINETIX, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2007 and 2006, and for the
Period from December 23, 1999 (Date of Inception) to September 30, 2007
(Unaudited)

			Nine Months Ended September 30, 2007	Nine Months Ended September 30, 2006	Cumulative During the Development Stage
Cash Flows from Operating Activities
	Net loss for period		$ (1,554,417)	$ (2,105,204)	$(18,411,180)
	Adjustments to reconcile net loss to net cash
	provided by (used in) operating activities
	Depreciation expense		763	763	2,707
	Issuance of common stock for services
	and expenses		1,113,500	1,833,256	14,614,315
	Warrants issued for consulting services		-	-	1,716,253
	Stock options issued for consulting services		-	-	212,734
	Changes in operating assets and liabilities
		Accounts receivable	-	(2,610)	(6,391)
		Prepaid expenses	213,700	6,000	(226,300)
		Due to outside management consultants	(300,000)	-	6,892
		Accounts payable	130,586	(10,285)	237,561
		Accrued interest payable	-	-	36,294
	Net cash flows used in
	operating activities		(395,868)	(278,080)	(1,817,115)
Cash Flows from Investing Activities
	Purchase of computer equipment			-	(3,388)
	Net cash flows used in investing
	activities		-	-	(3,388)
Cash Flows from Financing Activities
	Warrants exercised		-	-	705,000
	Stock options exercised		-	-	100,500
	Issuance of common stock for cash			450,000	470,250
	Loan proceeds		300,000	-	615,000
	Net cash flows provided by
	financing activities		300,000	450,000	1,890,750
	Net change in cash		(95,868)	(171,920)	70,247
Cash, beginning of period			166,115	96,571
Cash, end of period			$ 70,247	$ (268,490)	$ 70,247
Cash paid for interest			$ 6,000	$ 12,703	$ 12,703
Cash paid for income taxes			$ -	$ -	$ -

Supplementary information - Non-cash Transactions:
	Common stock issuable for acquisition of intangible assets		$ -	$ -	$ 934,000
	Stock subscriptions received		-	-	330,000
	Note payable converted to common stock		-	158,783	350,460

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.

In 2004, the Company purchased the world-wide rights to the family of synthetic antifreeze glycoproteins. Since that time, the Company has patented and researched the medical, pharmaceutical and cosmetic applications for the family of molecules (AAGP™).

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, 2006 and 2005. 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 significant revenues to date and has incurred losses since inception, resulting in a net accumulated deficit at September 30, 2007. 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 September 30, 2007 and 2006, 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.

Stock Based Compensation

Prior to January 1, 2006, the Company accounted for stock-based awards under the intrinsic value method, which followed the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations. The intrinsic value method of accounting resulted in compensation expense for stock options to the extent that the exercise prices were set below the fair market price of the Company’s stock at the date of grant.

As of January 1, 2006, the Company adopted SFAS No. 123(R) Share-Based Payment (as amended) using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes valuation model, which is consistent with the Company’s valuation techniques previously utilized for options in footnote disclosures required under SFAS No. 123, “Accounting for Stock-Based Compensation”, as amended by SFAS No. 148, “Accounting for Stock-Based Compensation Transition and Disclosure”.

Since the Company did not issue stock options to employees during the nine months ended September 30, 2007 or 2006, there is no effect on net loss or earnings per share had the Company applied the fair value recognition provisions of SFAS No. 123(R) to stock-based employee compensation. When the Company issues shares of common stock to employees and others, the shares of common stock are valued based on the market price at the date the shares of common stock are approved for issuance.

New Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements(as amended) ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements but does not require any new fair value measurements. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has not yet determined the impact of applying FAS 157.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans(as amended), ("FAS 158"). FAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. FAS 158 is effective for financial statements issued for fiscal years ending after December 31, 2006. The Company does not expect any material impact from applying FAS 158.

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115”, (“FAS 159”) which permits entities to choose to measure many financial instruments and certain other items at fair value at specified election dates. A business entity is required to report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. This statement is expected to expand the use of fair value measurement. FAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company has not yet determined the impact of applying FAS 159.

In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities, (“EITF 07-3”) which is effective for fiscal years beginning after December 15, 2007. EITF 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized. Such amounts will be recognized as an expense as the goods are delivered or the related services are performed. The Company does not expect the adoption of EITF 07-3 to have a material impact on the financial results of the Company.

Note 2. Prepaid Expenses

Amounts included in prepaid expenses represent the unamortized portion of advance payments made to consultants under agreements generally over extended service periods.

Note 3. Convertible Note Payable

On July 1, 2007, the Company executed a subscription agreement under which the Company issued to a corporation an 8% convertible promissory note in exchange for $300,000. The note is due June 30, 2012, and is convertible into shares of the Company's common stock at $.25 per share. No beneficial conversion feature was applicable to this convertible 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.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The below discussion is furnished in accordance with Item 303 of Regulation S-B.

FORWARD-LOOKING STATEMENTS

This discussion and analysis in this Quarterly Report on Form 10-QSB 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. We review our estimates and assumptions on an on-going basis. Our estimates are 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” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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, but not limited to, 1) our ability to obtain necessary regulatory approvals for our products; and 2) our ability to increase 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. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance. 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. Forward-looking statements are only predictions. The forward-looking events discussed in this Quarterly Report, the documents to which we refer you, and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us. For these statements, we claim the protection of the “bespeaks caution” doctrine. The forward-looking statements speak only as of the date hereof, and we expressly disclaim any obligation to publicly release the results of any revisions to these forward-looking statements to reflect events or circumstances after the date of this filing.

Critical Accounting Policies

Our critical and significant accounting policies, including the assumptions and judgments underlying them, are disclosed in the Notes to the Financial Statements. These policies have been consistently applied in all material respects and address such matters as revenue recognition and depreciation methods. The preparation of the financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. The accounting treatment of a particular transaction is specifically dictated by accounting principles, generally accepted in the United States of America, with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any viable alternative would not produce a materially different result. See our audited financial statements and notes thereto which contain accounting policies and other disclosures required by accounting principles, generally accepted in the United States of America.

Overview

We are a biotechnical company headquartered in Vancouver, British Columbia that owns the world-wide rights to a family of synthetic anti-freeze glycoproteins (trademarked by us as AAGP™). We are dedicated to the commercial development of AAGP™ for use in human and veterinary medicine, food additives and supplements, and the biotechnology and cosmetic industry. We are making rapid and meaningful progress in this domain by coordinating a team of world recognized intellectual talent in a networked environment. This team has been able to use previously published research on native antifreeze proteins and antifreeze glycoproteins as a guide to the expansion and development of markets for this valuable family of molecules.

The ProtoKinetix business plan is based primarily on the furtherance of certain intellectual property rights obtained by way of "sub-licenses" of technology from other companies. At present, we have engaged the patent law firm of Cabinet-Moutard of Versaille, France, and have filed a number of international patent applications. These patent applications include:

WO 2004/014928 A2 (19 February 2004)

PCT Int. Appl. (2006), 87 pp. WO2006059227 A1 20060608 AN 2006:538719

Patent application: Fr 03 May 2006, 06 03952

Consistent with our agreements with the licensors of various technologies we license, we have no finished commercial product or products, nor FDA approvals for any product or diagnostic procedures. We are focused on the research and development of one primary compound known as AFGP, which we have filed a trademark application for.

Employees

We currently have no full time employees.

Our Main Project

We are currently developing and testing synthetic antifreeze glycoproteins (“AFGP”). We have entered into agreements which give the exclusive right to develop products derived from patent pending technologies related to synthetic AFGPs. Our intellectual property rights were developed by Dr. Geraldine Castelot-Deliencourt.

Background on our 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. There has also been research done on the membrane stabilizing characteristics of native AFGP.

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 Celsius. 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.

Sugar based molecules have long been known to be biologically active. Yet, the oxygen-glycosidic link is readily cleaved by glycosidases, resulting in a low bio-availability of these glycoconjugate based molecules. Dr. Geraldine Castelot-Deliencourt, along with Dr. Jean-Charles Quirion at the Research Institute of Organic Chemistry in Rouen, France, has developed a patented process to stabilize the oxygen-glycosidic bond in these sugar based molecules. This patented process replaces the weaker oxygen bond with a C-F2 mimetic. The resultant molecules are biologically active, are stable over a pH range of 2 to 13, and are not broken down by glycosidases. It is by using this patented process that the active repeating segment of native antifreeze glycoproteins has been synthesized to produce the synthetic antifreeze glycoprotein molecules (AAGP™). Protokinetix Inc. has produced and tested a variety of the molecules from the family of AAGP™ molecules. The experimental work which we have conducted confirms the following:

·	The molecules are stable over a pH of 1.8 to 13

·	There is no toxicity demonstrated in 2 separate trials

·	There is excellent preservative effect upon cells, protecting them from harsh environmental stimuli. This was confirmed using Ultraviolet C radiation and 1 molar solution of Hydrogen Peroxide

·	There is no interference with cell growth rate

·	Cells appear morphologically normal in the presence of AAGP™

·	Cells function normally in the presence of AAGP™

·	There is a reduced COX-2 induction following an inflammatory stimulus (Interleukin 1-B). The IL1-B/COX2 pathways is a well known pathway involved in many pathologies.

·	There is strong evidence to show that AAGP™ is involved in cellular repair at the molecular level

·	AAGP™ has been shown to enhance cell viability after cryopreservation

·	Cells live significantly longer in the presence of AAGP™ over a temperature range of minus 3 degrees C to plus 37 degrees C

·	AAGP enables the preservation of Platelets at minus 3 degrees C.

We are continuing our research to determine additional characteristics of AAGP™ as well as the mechanism of action of this very interesting and valuable family of molecules. The work is being conducted not only through our contracted researchers but also through a number of universities. The results of our work to date suggest that AAGP™ may have a very large market in the following areas:

Skin Care

a.	Anti-aging

b.	Reparative

c.	Protective

d.	Solar Block

2.	Cell culture protection

a.	Short term preservation

b.	Cryopreservation

3.	Organ Preservation for Transplantation

a.	Cells – Islet cell transplantation

b.	Solid organ

4.	Tissue preservation

a.	Cardioplegic solution additive

b.	Tissue damage reduction following CVA and MI

c.	Tissue protection following trauma and ischemia secondary to edema

5.	Blood and blood product preservation

a.	Platelet storage

b.	Long term storage of packed red cells

Intellectual Property

As of the date of this Report, our development agents, including the parties we have licensed AFGP technologies from, have applied to receive patents for technologies we have licensed and continue to primarily base our research efforts on. At present, we have engaged the patent law firm of Cabinet-Moutard of Versaille, France, and have filed a number of international patent applications. These patent applications include:

WO 2004/014928 A2 (19 February 2004)

PCT Int. Appl. (2006), 87 pp. WO2006059227 A1 20060608 AN 2006:538719

Patent application: Fr 03 May 2006, 06 03952

Consistent with our agreements with the licensors of various technologies we license, we have no finished commercial product or products, nor any FDA approvals for any product or diagnostic procedures. We are focused on the research and development of one primary compound known as AFGP, which has been trademarked as AAGP™.

Subject to our available financial resources, our intellectual property strategy is: (1) to pursue licenses, trade secrets, and know-how within our primary research areas, and (2) to develop and acquire proprietary positions to reagents and new platforms for the development of products related to these technologies.

Trade Secrets and Know-How

We believe that even if our intellectual property position is ultimately diminished as a result of our development agents and licensors to receive patent protection for the licenses ProtoKinetix has contracted to access, we have developed a substantial body of trade secrets and know-how relating to the development of AAGP™, including but not limited to the optimization of materials for efforts, and how to maximize sensitivity, speed-to-result, specificity, stability and reproducibility.

Competition

The markets that we are attempting to enter are multi-billion dollar international industries. They are intensely competitive. Many of our competitors (from every perspective) are substantially larger and have greater financial, research, manufacturing, and marketing resources.

Industry competition in general is based on the following:

·	Scientific and technological capability;

·	Proprietary know-how;

·	The ability to develop and market products and processes;

·	The ability to obtain FDA or other required regulatory approvals;

·	The ability to manufacture products that meet applicable FDA requirements, (i.e. FDA’s Quality System Regulations) see Governmental Regulation section;

·	Access to adequate capital;

·	The ability to attract and retain qualified personnel; and

·	The availability of patent protection.

We believe our scientific and technological capabilities are significant. Some of the results of our research are available at our website located at www.protokinetix.com.

Our ability to develop our research is in large measure dependent on our having additional resources and/or collaborative relationships, particularly where we can have our product development efforts funded on a project or milestone basis. We believe that our know-how with our AFGP project, in spite of not yet receiving any patent protected rights, has been instrumental in our obtaining the collaborations we have developed.

Although there is no such immediate need to make any regulatory filing in the United States or abroad, you should be aware that we have limited experience with regard to obtaining FDA or other required regulatory approvals, and no experience with obtaining pre-marketing approval of a biologic product. For this reason, should our research efforts continue to show promise, we will likely need to hire consultants to assist us with such governmental regulations.

Our access to capital is more challenging, relative to most of our competitors. This is a competitive disadvantage. We believe, however, that our access to capital may increase as we get closer to the development of a commercially viable product.

To date, we believe our research has enabled us to attract and retain qualified consultants. Because of the greater financial resources of many of our competitors, we may not be able to complete effectively for the same individuals to the extent that a competitor uses its substantial resources to attract any such individuals.

As is discussed above, with respect to the availability of patent protection, we do not have our own portfolio of patents or the financial resources to develop and/or acquire a portfolio of patents similar to those of our larger competitors. We have been able to obtain access to patent-pending technology by entering into licensing arrangements. However, there can be no certainty that any of the patent-pending technologies we have licensed will ever receive final approval by any patent office.

Plan of Operation

Our current operations are centered around our relationships with various research and development consultants who are conducting research on our behalf at discrete and established laboratories in various parts of the world. We intend to continue these efforts for the next 12 months and believe, that due to our relatively minimal cash obligations, that we can satisfy our cash requirements during this period. We intend to help meet our corporate obligations by selling our common stock. However our common stock is at a low price and is not actively traded.

Recent Developments

On August 1, 2007, Mark L. Baum, Esq. resigned from his positions as interim President, Chief Executive Officer and Director of the Corporation. Mr. Baum’s resignation was not because of any disagreements with the Corporation on matters relating to its operations, policies or practices.

On August 1, 2007, Dr. Maximilien Arella was appointed to the position of Director of the Corporation.. Dr. Arella is one of our Directors. He is not a full time employee and has other outside commitments. For the past twenty years, Dr. Arella has acted as a private consultant advising clients and businesses with technological and scientific development, innovative technology transfer and commercial development from university benchtop to commercial developments. Since 1993, Dr. Arella has carried out two mandates as chairman of the Virology Research Center of the Armand-Frappier Institute/University of Quebec (the “IAF”) during which he held the responsibility of managing both the research and the teaching programs (M.Sc. and Ph.D.) consisting of a team of 20 researchers combined with approximately 100 students and support employees. From 1984 to 1993 Dr. Arella was scholar, assistant professor and professor of Virology at IAF as well as adjunct professor at the School of Graduate Studies of the University of Montreal. He also served as president of the professor association from 1989 to 1992. His academic research is mainly based in the fields of molecular biology, fundamental aspects and applications of the double-stranded RNA virus, as well as amplification systems for the analysis of human and animal viruses, and cancer markers. Throughout his career, he has written 76 scientific publications, 24 scientific reports for research contracts as well as 28 chapters in books and summaries of techniques. He has been invited to give 49 conferences, has presented 198 scientific communications and has submitted 3 patents. Mr. Arella is fluent in English, French and Italian. In addition to his position with ProtoKinetix, Dr. Arella sits on the scientific advisory boards of two addition publicly traded companies, Biophage, Inc. and Viropro, Inc.

On August 1, 2007, Ross L. Senior was appointed to the positions of Chief Executive Officer, Secretary and Treasurer of the Corporation. Mr. Senior is our President and Chief Executive Officer. In 2005, Mr. Senior co-founded Rowan All Natural Skin Care, Inc., a Canadian-based provider of skin care products. In 1988, Mr. Senior founded Ross L. Senior and Associates, a business consulting firm, where he maintained his position as principal of the firm from 1988 to 2005. Mr. Senior brings to ProtoKinetix a combination of business, organizational and legal experience through consultation roles in technology research and development institutions and a wide range of businesses including health care, property development, electronics distribution, manufacturing, natural resources, educational institutions and social enterprises.

On September 14, 2007, we filed our Post Effective Amendment No.1 to our Form S-8 originally filed with the Securities Exchange Commission on June 15, 2005. 4,000,000 shares were originally authorized under the 2005 Stock Incentive Plan and were registered on Form S-8 on June 15, 2005 pursuant to the original Registration Statement (File No. 333-125844). The Post Effective Amendment No.1 to Form S-8 pertains to the registration of an additional 5,000,000 shares authorized under the First Amended 2005 Stock Incentive Plan. Currently, the total number of shares registered under the Plan is 9,000,000 common shares.

Sales and Marketing

We are not currently selling or marketing any products.

Expenses

Expenses for the three month period ending September 30, 2007 were comprised primarily of professional and consulting fees. We incurred professional fees relating to research and development, administrative costs and costs associated with our being a reporting company under the Securities Exchange Act of 1934, as amended. We also incurred consulting fees which contributed to a net loss of $1,554,417 during the nine month period ended September 30, 2007.

Liquidity and Capital Resources

At September 30, 2007, we had $70,247 in cash and $302,938 in total current assets. As of the date of this report, we do not believe that we require additional capital investments or borrowed funds to meet cash flow projections and carry forward our business objectives. In the event that we need to raise additional capital, there can be no assurance that we will be able to raise capital from outside sources in sufficient amounts to fund our new business.

The failure to secure adequate outside funding would have an adverse affect on our plan of operation and results therefrom and a corresponding negative impact on shareholder liquidity.

Inflation

Although management expects that our operations will be influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations for the period ending September 30, 2007.

Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate our continuation as a going concern. The history of losses and our inability to make a profit from selling a good or service has raised substantial doubt about our ability to continue as a going concern.

Results of Operations for the Period Ending September 30, 2007

We had $0 in net revenues and a net loss of $1,007,832 for the three month period ending September 30, 2007.

Operating expenses were $1,007,832 for the three month period ending September 30, 2007. These expenses were primarily incurred for professional fees, consulting services related to the operations of the Company's business, specifically, research and development related expenses, and other general and administrative expenses.

ITEM 3. CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (“Exchange Act”) we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2007, being the date of our most recently completed fiscal quarter. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to them to allow timely decisions regarding required disclosure.

During our most recently completed quarter ended September 30, 2007, there were no changes in our internal control over financial reporting that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

ITEM 1. LEGAL PROCEEDINGS

We are not party to any legal proceedings and to our knowledge, no such proceedings are threatened or contemplated against us.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On July 11, 2007, we issued 100,000 shares of our common stock registered on Form S-8 to a consultant in connection with a consultant agreement.

On July 18, 2007, we issued 95,906 restricted shares of our common stock and 95,906 shares of our common stock registered on Form S-8 to consultants in connection with a consultant agreement.

On August 15, 2007, we issued 400,000 restricted shares of our common stock to our board of directors as compensation for their services to the Company as board members.

On August 15, 2007, we issued 400,000 restricted shares of our common stock to our former CEO as compensation for past services rendered to the Company.

On August 15, 2007, we issued 60,000 restricted shares of our common stock to our CEO as compensation for services to the Company.

On August 15, 2007, we issued a total of 1,516,275 shares of our common stock registered on Form S-8 to consultants in connection with a consultant agreement.

Pursuant to Item 3.02 of Form 8-K, because the Company is a small business issuer and all of the above 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.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to our security holders for a vote during our first quarter ended September 30, 2007.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS

Ex. #		Description

3(i).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(ii).1		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.

14.1		ProtoKinetix, Inc. Code of Ethics filed as an exhibit to our annual report on Form 10-KSB filed on April 13, 2006.

31.1		Rule 13a-12(a)/15d-14(a) 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.

Signatures

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ProtoKinetix, Inc.

/s/ Ross L. Senior

____________________________

By: Ross L. Senior

Its: President and CEO

In accordance with the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signatures	Title	Date
/s/ Ross L. Senior Ross L. Senior	Chief Executive Officer and President	November 13, 2007