Budget Protokinetix Inc.,
March 1, 2007 to February 28, 2008 Research budget: 1. Funding of Chemistry work in Rouen $255,000.00 2. Scale up manufacture of 550 grams AAGP™ (estimate) $575,000.00 3. Cardiac reperfusion ischemia testing $ 20,000.00 4. Endothelial inflammatory inhibition study $ 30,000.00 5. Solid organ transplant research $ 17,000.00 6. Islet cell transplantation studies (estimate) $250,000.00 7. Ongoing research by ITTEC ($15,000.00/month) $180,000.00 8. Blood and blood product preservation (Strasburg, Fr.) funded 9. Protection against UVA and UVB (U of Bordeaux, Fr.) funded 10. Cardiac research work at Baker Heart Institute funded Total budget for research in next year: $1,327,000.00 Administration and promotion 1. Office rent $ 600.00/month 2. Secretarial salary $2,500.00/month 3. Telephone, Fax, internet $1,500.00/month 4. Courier fees $ 500.00/month 5. Travel& accommodations $5,500.00/month 6. Transfer agent $ 375.00/month 7. Office Supplies $ 300.00/month 8. Bank Charges $ 250.00/month 9. Miscellaneous $ 550.00/month 10. Book Keeper $ 580.00/month 11. Auditor $4,500.00/month 12. Legal $5,000.00/month 13. Investor Relations $7,000.00/month Total monthly expenses $29,155.00 Annual administration budget $349,860.00 Budget for 12 months $ 1,676, 860.00 Business Plan: Primary expenses will be in the research and development area. As this is where the greatest expenses are incurred, it is the area which must be watched most closely. The research will be done, but should there be evidence that a given research project is failing, then funds will be quickly withdrawn from it. Yet, just as the funds will be quickly withdrawn is there is evidence that a projected use of AAGP is not being confirmed, if the molecule is working well in a given area, then additional funds may be required to continue the development of the science in that area. Research costs will be divided according to the following: 1. Ongoing projects a. Chemistry research in Rouen to support the development of the family of AAGP™ molecules. This includes the funding to cover the expenses of equipment, material and salaries for the research lab in Rouen, France. b. Funding of research work by ITTEC. This is the small research firm that has been hired to conduct ongoing testing of the AAGP™ molecules to determine its effect in different biologic applications as well; they are attempting to determine the mechanism of action of the molecule. They also test each of the new batches of the molecule to confirm biologic activity before we proceed to additional testing. In addition, they conduct test on newly synthesized molecules to determine if they have is biologic activity. c. Scale up of the molecule. We have the quote from ALMAC to scale up the production of the molecule. We could choose to have Dr. Deliencourt do the production, but this cannot be classified as “scale up”. Scale up production of AAGP™ is important for the following reasons: i. We must confirm that scale up production is possible. Dr. Caille of Pitsburg Paint and Glass (PPG), an international chemical company, as well as both Dr. Quirion and Dr. Deliencourt are all confident that there will be no difficulty in doing this. While it is reassuring that they feel confident in their ability to scale up the production, we must confirm this by actually doing it. ii. Research on AAGP™ in medical applications requires a consistency in the molecule that they work with. This will only be achieved through the production of a large batch by a scale up process. iii. We are facing an increasing demand from a variety of different industries for AAGP™ so they can work with it to determine if it will be of benefit to them. iv. We have requests from a variety of Universities and Research Facilities that want to trial and then purchase AAGP™ to preserve the valuable cells they are working on. e.g.: stem cell preservation, preservation of hepatocytes (used in toxicology testing) etc. v. There is at this time interest from 4 cosmetic companies, two of which have been conducting research on AAGP™ to assess its anti-aging properties. It is necessary to confirm to them that we are able to manufacture the molecule in bulk. vi. Finally, Protokinetix has met with a Biotechnical Research Analyst from New York. She has done her assessment of the company and has stated that quite impressed with the data that she had reviewed. Her only reservation is the scale up production of the molecule. She noted that the scientists have claimed that scale up manufacturing of the molecule can be readily done, but she wanted to see this task completed. Once this has been successfully done, she has stated that she will publish her research report. vii. We are still awaiting the quote from BASF. 2. Proposed research work
a. Cardiac reperfusion ischemia testing is a very important research project that will be conducted at the University of Calgary in Alberta. This project will assess the ability of AAGP™ to protect heart muscle from the ischemic conditions that develop during a myocardial infarction (heart attack) or during prolonged cardiac bypass surgery.
b. The endothelial inflammatory inhibition study is being designed to determine if the AAGP™ molecule stops or inhibits the inflammatory response. (ITTEC Inc. in Montreal was able to show that AAGP™ did have significant anti-inflammatory properties.) If Dr. Tibbles of the University of Calgary is able to confirm this effect, she will conduct research to determine the mechanism of action.
c. The research that will eventually lead to the transplantation of solid organs will start once initial results from a. and b. are confirmed. The successful preservation of solid organs for transplantation would have very significant implications for medicine and for Protokinetix, Inc. ITTEC was able to preserve rat heart tissue for 21 hours at 3 degrees Celsius. This is a major improvement over the 6 to 8 hours that transplant organizations are presently able to achieve.
3. Developmental Research
a. Islet cell transplant research is ongoing at the University of Alberta. We had conducted an initial research project with 12 mice which were transplanted with150 islet cells, some of which were preserved using AAGP™. Initial results on this small sample were very significant with the mice that had received AAGP™ treated islet cells controlling their blood sugars significantly better than did the control mice. The study is now being repeated on a large scale. If the results are confirmed, the University of Alberta will announce the results and then proceed with additional testing to confirm the protective effect on human islet cells and to take steps to achieve regulatory approval to use AAGP™ for the preservation of human islet cells for transplantation into diabetic patients. The funds for this research would not be required until after we had good results from the mouse experiments (and presumably a significant rise in the share price after the announcement.)
Funds required by Protokinetix Inc.:
1. Immediate requirements:
a. Six months administrative funds: $174,730.00
b. Funding of Chemistry work in Rouen $200,000.00
c. Scale up manufacture of AAGP™ (estimate) $575,000.00
d. Cardiac reperfusion ischemia testing $ 20,000.00
e. Endothelial inflammatory inhibition study $ 30,000.00
f. Solid organ transplant research $ 17,000.00
g. Research by ITTEC ($15,000.00/month) $ 90,000.00
Immediate funding requirements $1,106,730.00
Benchmarks that are to be met include the following:
1. Scale up of the manufacturing process to produce AAGP™.
2. Positive results from the University of Alberta on islet cell preservation
Funding Requirements once benchmarks are met:
Once Protokinetix has completed the scale up and has had good results from research on the preservation of islet cells, then additional funding will be required to cover expenses associated with the research in a variety of medically related areas:
Funding requirement
Funding once the scale up is completed, and
positive results from the University of Alberta $569,665.00
Total funding for the year $ 1,676, 860.00
Note: funding requirements will change once Protokinetix Inc. has signed a contract with a cosmetic firm and also once we begin to sell AAGP™ to companies that want to preserve their valuable cells.
