PROTALEX INC (Form: 10QSB, Received: 04/13/2007 16:13:35)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

(Mark One)

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

For the quarterly period ended: February 28, 2007

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

For the transition period from _______ to ______

Commission file number: 000-28385

Protalex, Inc.

(Exact Name of Small Business Issuer as Specified in its Charter)

Delaware		91-2003490
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

145 Union Square Drive
New Hope, PA		18938
(Address of Principal Executive Offices)		(Zip Code)

Issuer's telephone number: (215) 862-9720

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 o

Indicate by 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 CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 28,600,464 shares of common stock, as of April 13, 2007

Transitional Small Business Disclosure Format (check one): Yes o No x

PART I — FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

Protalex, Inc.

(A Company in the Development Stage)

BALANCE SHEETS

	February 28, 2007			May 31, 2006
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	19,141,242		$	9,992,545
Prepaid expenses		221,153			221,187

Total current assets		19,362,395			10,213,732

PROPERTY & EQUIPMENT:
Lab equipment		692,762			327,287
Office and computer equipment		195,986			157,787
Furniture & fixtures		40,701			40,701
Leasehold improvements		89,967			89,967

		1,019,416			615,742
Less accumulated depreciation		(599,132	)		(478,785	)

		420,284			136,957
OTHER ASSETS:
Deposits		7,990			7,990
Intellectual technology property, net of
accumulated amortization of $7,458 and $6,693 as
of February 28, 2007 and May 31, 2006, respectively		12,842			13,607

Total other assets		20,832			21,597

	$	19,803,511		$	10,372,286

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	861,794		$	744,732
Payroll and related liabilities		22,756			67,415
Accrued expenses		60,000			226,848

Total current liabilities		944,550			1,038,995

OTHER LIABILITIES		3,785			3,696

Total liabilities		948,335			1,042,691

STOCKHOLDERS' EQUITY
Common stock, par value $0.00001,
100,000,000 shares authorized as of February 28, 2007 and May 31, 2006; 28,600,464 and 22,389,951 shares issued and outstanding as of February 28, 2007 and May 31, 2006, respectively		286			224
Additional paid in capital		43,714,692			27,740,976
Deficit accumulated during the development stage		(24,859,802	)		(18,411,605	)

Total stockholders’ equity		18,855,176			9,329,595

	$	19,803,511		$	10,372,286

The accompanying notes are an integral part of these financial statements.

Protalex, Inc.

(A Company in the Development Stage)

STATEMENTS OF OPERATIONS

For the nine and three month periods ended February 28, 2007 and 2006, and From

Inception (September 17, 1999) through February 28, 2007

(Unaudited)

													From
	Nine			Nine			Three			Three			Inception
	Months Ended			Months Ended			Months Ended			Months Ended			Through
	February 28,			February 28,			February 28,			February 28,			February 28,
	2007			2006			2007			2006			2007

Revenues	$	-		$	-		$	-		$	-		$	-

Operating Expenses
Research and development		(4,102,055	)		(2,731,240	)		(1,757,711	)		(1,044,226	)		(15,145,271	)
Administrative		(2,670,755	)		(1,569,182	)		(861,460	)		(603,798	)		(8,660,418	)
Professional fees		(451,012	)		(336,688	)		(147,735	)		(110,394	)		(2,166,259	)
Depreciation and amortization		(4,009	)		(3,155	)		(1,257	)		(1,050	)		(154,411	)

Operating Loss		(7,227,831	)		(4,640,265	)		(2,768,163	)		(1,759,468	)		(26,126,359	)

Other income (expense)
Interest income		779,634			228,860			255,168			93,419			1,347,749
Interest expense		-			(741	)		-			(127	)		(70,612	)
Loss on disposal of equipment		-			-			-			-			(10,580	)

Net Loss	$	(6,448,197	)	$	(4,412,146	)	$	(2,512,995	)	$	(1,666,176	)	$	(24,859,802	)

Weighted average number of common
shares outstanding		27,908,754			20,013,580			28,600,464			21,173,309			14,902,795

Loss per common share - basic and diluted	$	(.23	)	$	(.22	)	$	(.09	)	$	(.08	)	$	(1.67	)

The accompanying notes are an integral part of these financial statements.

Protalex, Inc.

(A Company in the Development Stage)

STATEMENTS OF CASH FLOWS

For the nine month periods ended February 28, 2007 and 2006 and From

Inception (September 17, 1999) through February 28, 2007

(Unaudited)

	Nine			Nine			From Inception
	Months Ended			Months Ended			Through
	February 28,			February 28,			February 28,
	2007			2006			2007

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,448,197	)	$	(4,412,146	)	$	(24,859,802	)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities
Loss on disposal of equipment		-			-			10,580
Depreciation and amortization		121,112			53,365			629,111
Non cash compensation expense		1,440,483			343,046			3,506,008
Non cash expenses		-			-			16,644
(Increase) decrease in:
Prepaid expenses and deposits		34			(40,833	)		(229,143	)
Increase (decrease) in:
Accounts payable and accrued expenses		(49,786	)		(104,712	)		921,795
Payroll and related liabilities		(44,659	)		118,966			22,756
Other liabilities		89			(4,655	)		3,785

Net cash and cash equivalents used in operating activities		(4,980,924	)		(4,046,969	)		(19,978,267	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of intellectual technology license - fee portion		-			-			(20,000	)
Acquisition of equipment		(403,674	)		(84,153	)		(905,936	)
Excess of amounts paid for public shell over
assets acquired to be accounted for as a recapitalization		-			-			(250,000	)
Proceeds from disposal of equipment		-			-			6,000

Net cash and cash equivalents used in investing activities		(403,674	)		(84,153	)		(1,169,936	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock issuance		14,533,295			5,510,967			40,658,458
Principal payment on equipment notes payable
and capital leases		-			(16,308	)		(295,411	)
Contribution by shareholders		-			-			183,569
Principal payment on note payable to individuals		-			-			(225,717	)
Issuance of note payable to individuals		-			-			368,546
Acquisition of common stock		-			-			(400,000	)

Net cash and cash equivalents provided by financing activities		14,533,295			5,494,659			40,289,445

NET INCREASE IN CASH AND CASH EQUIVALENTS		9,148,697			1,363,537			19,141,242

Cash and cash equivalents, beginning		9,992,545			9,453,367			-

Cash and cash equivalents, end	$	19,141,242		$	10,816,904		$	19,141,242

SUPPLEMENTAL SCHEDULE OF CASH
FLOW INFORMATION:

Interest paid	$	-		$	614		$	66,770

Taxes paid	$	-		$	-		$	100

The accompanying notes are an integral part of these financial statements.

NOTE A - NOTES TO INTERIM FINANCIAL STATEMENTS

The interim financial data is unaudited; however in the opinion of management, the interim data includes all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results for the interim period. The financial statements included herein have been prepared by Protalex, Inc. (the “Company”) pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading.

Information regarding the organization and business of the Company, accounting policies followed by the Company and other important information are contained in the notes to the Company's financial statements filed as part of the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31, 2006. This quarterly report should be read in conjunction with such annual report.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions affecting the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Estimated amounts could differ from actual results.

2. Loss per Common Share

The Company follows Statement of Financial Accounting Standard No. 128, “Earnings Per Share” (“SFAS No. 128”). SFAS No. 128 provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per share includes no dilution and is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding for the period. All potentially dilutive securities have been excluded from the computations since they would be antidilutive. However, these dilutive securities could potentially dilute earnings per share in the future. As of February 28, 2007 and 2006, the Company had potentially dilutive securities representing 10,698,317 shares and 8,850,892 shares, respectively.

3. Share Based Compensation

Effective June 1, 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standard No. 123 (revised), Accounting for Share-Based Payment (“SFAS No. 123R”) using the modified prospective method. This standard requires the Company to measure the cost of employee services received in exchange for equity share options granted based on the grant-date fair value of the options. The cost is recognized as compensation expense over the vesting period of the options. Under the modified prospective method, compensation cost included in operating expenses was $1,440,483 and $413,865 for the nine and three months ended February 28 2007, respectively and included both the compensation cost of stock options granted prior to but not yet vested as of June 1, 2006 and compensation cost for all options granted subsequent to May 31, 2006. In accordance with the modified prospective application transition method of SFAS No. 123R, prior period results are not restated. Incremental compensation cost for a modification of the terms or conditions of an award is measured by comparing the fair value of the modified award with the fair value of the award immediately before the modification. No tax benefit was recorded as of February 28, 2007 in connection with these compensation costs due to the uncertainty regarding ultimate realization of certain net operating loss carryforwards. The Company has also implemented the SEC interpretations in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payments, in connection with the adoption of SFAS No. 123R.

Prior to the adoption of SFAS No. 123R, the Company accounted for stock options granted to employees using the intrinsic value method under the guidance of APB No. 25, and provided pro forma disclosure as required by SFAS No. 123. Stock options issued to non-employees were accounted for as required by SFAS No. 123. Options to non-employees were accounted for using the fair value method, which recognizes the value of the option as an expense over the related service period with a corresponding increase to additional paid-in capital.

As of February 28, 2007, there were 4,096,937 stock options outstanding. At February 28, 2007, the aggregate fair value of the remaining compensation cost of unvested options, as determined using a Black-Scholes option valuation model was approximately $1,711,000 (net of estimated forfeitures). During the nine and three months ended February 28, 2007, the Company granted 458,000 and 218,000 stock options respectively, with a fair value of $992,853 and $491,200 (net of estimated forfeitures), and 189,688 and 185,939 options were forfeited, respectively.

The following table illustrates the effect on net loss and earnings per share for periods prior to the adoption of SFAS No. 123R if the Company applied the fair value recognition provision of SFAS No. 123 to stock-based employee compensation.

	Nine			Three			From Inception
	Months Ended			Months Ended			Through
	February 28,			February 28,			February 28,
	2006			2006			2006

Net loss, as reported	$	(4,412,146	)	$	(1,666,176	)	$	(16,719,349	)

Add: Stock-based compensation expense
included in reported net loss		343,046			49,535			1,226,068

Deduct: Stock-based compensation expense
determined under fair value method
for all awards		(1,015,133	)		(196,267	)		(4,304,782	)

Pro forma net loss	$	(5,084,233	)	$	(1,812,908	)		(19,798,063	)

Loss per share, as reported - basic and diluted	$	(.22	)	$	(.08	)	$	(1.23	)

Pro forma loss per share basic and diluted	$	(.25	)	$	(.09	)	$	(1.46	)

The fair value of the options is estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions:

	Nine			Nine			From Inception
	Months Ended			Months Ended			Through
	February 28,			February 28,			February 28,
	2007			2006			2007

Dividends per year		0			0			0
Volatility percentage		94	%		107-114	%		90%-131	%
Risk free interest rate		4.80-4.88	%		3.85-4.42	%		2.07%-5.11	%
Expected life (years)		4			4			3-5
Weighted Average Fair Value	$	2.08		$	1.94		$	2.08

A summary of the common stock option activity for employees, directors, officers and consultants from inception through February 28, 2007 is as follows:

				Grant
	Options			Prices	Exercisable

Balance, September 17, 1999	—		$	—	—
Granted, April 28, 2000	40,000			0.36	—
Granted, November 26, 2001	100,000			1.25	100,000
Expired, April 28, 2002	(40,000	)		0.36	—
Granted, June 1, 2002	125,000			1.50	—
Granted, July 18, 2002	233,680			1.50	233,680
Granted, October 24, 2002	100,000			1.45	100,000
Granted, December 16, 2002	863,242			1.50	863,242
Granted, December 16, 2002	50,000			1.70	40,000
Granted, March 15, 2003	130,000			1.50	—
Granted, April 1, 2003	40,000			1.50	38,332
Granted, July 1, 2003	40,000			1.50	30,000
Granted, August 13, 2003	100,000			1.50	100,000
Granted, September 19, 2003	584,333			1.50	513,694
Granted, October 28, 2003	60,000			1.50	60,000
Granted, January 22, 2004	75,000			2.13	75,000
Granted, January 22, 2004	100,000			2.13	69,372
Granted, January 22, 2004	50,000			2.75	—
Forfeited, January 22, 2004	(130,000	)		1.50	—
Granted, March 1, 2004	150,000			2.17	—

Granted, July 22, 2004	15,000		2.60	9,687
Granted, October 26, 2004	30,000		2.70	5,833
Granted, October 26, 2004	100,000		2.30	100,000
Granted, January 13, 2005	330,000		2.55	119,694
Granted, January 13, 2005	125,000		2.55	125,000
Forfeited, January 26, 2005	(10,000	)	1.70	—
Forfeited, January 26, 2005	(10,000	)	2.13	—
Granted, February 15, 2005	100,000		2.80	100,000
Granted, April 13, 2005	50,000		2.60	22,916
Forfeited, June 1, 2005	(125,000	)	1.50	—
Granted, July 29, 2005	51,429		2.80	17,915
Granted, August 23, 2005	250,000		2.50	81,332
Forfeited, October 22, 2005	(10,000	)	2.70	—
Forfeited, October 22, 2005	(1,000	)	2.55	—
Granted, October 25, 2005	200,714		2.65	158,570
Granted, November 8, 2005	121,407		2.75	121,407
Granted, January 11, 2006	133,000		2.85	34,975
Forfeited, January 25, 2006	(50,000	)	2.75	—
Forfeited, January 25, 2006	(25,000	)	2.55	—
Forfeited, January 25, 2006	(25,000	)	2.65	—
Forfeited, February 28, 2006	(150,000	)	2.17	—
Forfeited, February 28, 2006	(50,000	)	2.55	—
Forfeited, March 13, 2006	(10,000	)	2.70	—
Forfeited, March 13, 2006	(1,500	)	2.55	—
Forfeited, March 13, 2006	(1,429	)	2.80	—
Granted, March 16, 2006	115,000		2.90	115,000
Granted, April 20, 2006	27,000		4.50	5,624
Forfeited, April 30, 2006	(16,251	)	2.80	—
Exercised, July 28, 2006	(4,000	)	2.55	—
Forfeited, July 29, 2006	(3,749	)	2.80	—
Granted, August 10, 2006	15,000		2.35	3,750
Exercised, August 14, 2006	(2,000	)	2.50	—
Granted, October 24, 2006	225,000		2.87	179,166
Forfeited, January 2, 2007	(185,939	)	2.54
Granted, January 18, 2007	150,000		2.30	3,124
Granted, February 20, 2007	68,000		2.15	35,000
	4,096,937			3,462,313

The following summarizes certain information regarding stock options at February 28, 2007:

Exercise Price Range	Number		Total Weighted Average Exercise Price	Total Weighted Average Remaining Life	Number		Exercisable Weighted Average Exercise Price	Exercisable Weighted Average Remaining Life
				(years)				(years)

$0.90 - 1.35	100,000	$	1.25	4.7	100,000	$	1.25	4.7
$1.36 - 1.80	2,061,255	$	1.50	6.0	1,978,948	$	1.50	6.0
$1.81 - 2.25	233,000	$	2.14	7.8	179,372	$	2.13	7.8
$2.26 - 2.70	970,546	$	2.50	7.8	629,906	$	2.53	7.8
$2.71 - 3.15	705,136	$	2.84	8.6	568,463	$	2.83	8.6
$3.16 - 4.50	27,000	$	4.50	9.1	5,624	$	4.50	9.1
	4,096,937	$	2.02	7.0	3,462,313	$	1.94	7.0

NOTE C - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB issued Statement No. 123 (revised) Share-Based Payment (“SFAS No. 123R”), which is a revision of Statement No. 123, Accounting for Stock-Based Compensation (“SFAS No. 123”). SFAS No. 123R supersedes APB No. 25, Accounting for Stock Issued to Employees , and amends SFAS No. 95, Statement of Cash Flows . Generally, the approach in SFAS No. 123R is similar to the approach described in SFAS No. 123. However, SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values.

Had the Company adopted SFAS No. 123R in prior periods, the impact of that standard would have approximated the impact of SFAS No. 123 as described in the disclosure of pro forma net income and earnings per share in the notes to these financial statements. SFAS No. 123R also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption. For the periods ended February 28, 2007 and 2006, the Company did not pay any taxes; therefore, there was no effect on operating cash flows for such excess tax deductions.

In July 2006, the FASB issued FASB Interpretation 48, Accounting for Uncertainty in Income Taxes: an interpretation of FASB Statement No. 109 . (“FIN 48”), which clarifies Statement 109, Accounting for Income Taxes and establishes the criterion that an individual tax position has to meet for some or all of the benefits of that position to be recognized in the Company’s financial statements. On initial application, FIN 48 will be applied to all tax positions for which the statute of limitations remains open. Only tax positions that meet the more-likely-than-not recognition threshold at the adoption date will be recognized or continue to be recognized. The cumulative effect of applying FIN 48 will be reported as an adjustment to retained earnings at the beginning of the period in which it is adopted. FIN 48 is effective for fiscal years beginning after December 15, 2006, and will be adopted by the Company on June 1, 2007. The Company has not completed its evaluation of the impact of adopting FIN 48 and as a result is not able to estimate the effect the adoption will have on its financial position, results of operations or cash flows.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (“SFAS No. 157”). This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not expect the adoption of SFAS No. 157 to have a material impact on the financial statements.

In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108 (“SAB No. 108”), Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , or SAB No. 108. SAB No. 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of determining whether the current year’s financial statements are materially misstated. SAB No. 108 is effective for fiscal years ending after November 15, 2006. The Company will initially apply the provisions of SAB No. 108 in connection with the preparation of the annual financial statements for the year ending May 31, 2007. The Company has evaluated the potential impact that SAB No. 108 may have on the financial statements and does not believe the impact of the application of this guidance will be material.

In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115 (“SFAS No. 159”) which provides companies with an option to measure, at specified election dates, many financial instruments and certain other items at fair value that are not currently measured at fair value. A company will report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective as of the beginning of an entity's fiscal year that begins after November 15, 2007. The Company has not completed its evaluation of the potential impact, if any, of the adoption of SFAS No. 159 on its results of operations and cash flows.

NOTE D - RELATED PARTIES

For the nine and three month periods ended February 28, 2007, the Company incurred $66,924 and $31,298 respectively, of expenses related to air travel to a partnership principally owned by the Chief Executive Officer of the Company. For the nine and three month periods ended February 28, 2006, the Company incurred $64,432 and $43,715, respectively, of expenses related to air travel to a partnership principally owned by the Chief Executive Officer of the Company.

The Company has an agreement with its Chairman to pay $12,500 per month as a director fee. For the nine and three month periods ended February 28, 2007, the Company incurred $112,500 and $37,500 respectively, for this director’s fee. For the nine and three month periods ended February 28, 2006 the Company incurred $112,500 and $37,500 respectively, for this director’s fee.

The Company has an agreement with Carleton A. Holstrom, Eugene A. Bauer, MD and Peter G. Tombros to pay each $1,667 per month payable on a quarterly basis in arrears as a director fee. For the nine and three month periods ended February 28, 2007, the Company incurred $45,000 and $15,000 respectively for these directors’ fees. For the nine and three month periods ended February 28, 2006, the Company incurred $35,000 and $15,000, respectively, for these directors’ fees. As of February 28, 2007, $3,334, is included within Accrued Expenses and was subsequently paid on March 15, 2007.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with the Company’s unaudited financial statements and related notes included in Item 1, “Financial Statements,” of this Quarterly Report on Form 10-QSB, as well as the Company’s Annual Report on Form 10-KSB for the fiscal year ended May 31, 2006. This discussion, as well as the remainder of this Quarterly Report on Form 10-QSB, may contain forward-looking statements that are not historical facts and that are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward looking statements can be identified by the use of words such as “believe,” “expect,” “may,” “will,” “should,” “intend”, “anticipate” or the negative thereof or comparable terminology, and include discussions of matters such as anticipated financial performance, liquidity and capital resources, business prospects, technological developments, new and existing products, regulatory approvals and research and development activities. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expected. Please see the Company’s Annual Report on Form 10-KSB for the fiscal year ended May 31, 2006 and other documents filed with the Securities and Exchange Commission for additional disclosures regarding potential risk factors that may cause the Company’s actual results and experience to differ materially from those contained in such forward-looking statements.

Plan of Operations

Favorable pre-clinical safety and efficacy studies for our lead compound, PRTX-100, laid the foundation for the Investigational New Drug Application or IND, for treating Rheumatoid Arthritis or RA. We submitted the IND application to the United States Food and Drug Administration or FDA on March 4, 2005 and on March 31, 2005 the FDA verbally disclosed to us that it had placed our IND on clinical hold, pending additional product characterization. On August 10, 2005, we formally replied to the FDA and on September 9, 2005, the FDA notified us that it had lifted the clinical hold on our IND and that our proposed study could proceed. We commenced with the Phase I clinical trial on December 5, 2005 and completed the Phase I clinical trial in March 2006. This Phase I trial was performed in healthy volunteers, and was designed primarily to assess the safety and tolerability of PRTX-100. In November 2006, we received preliminary feedback from the FDA expressing concern related to data on certain subjects who participated in our Phase I clinical trial for PRTX-100. Based on this feedback, we conducted additional analyses of data from the Phase I clinical trial and we anticipate the submission of an IND in Idiopathic Thrombocytopenic Purpura (ITP), during the second calendar quarter of 2007.

We expect that clinical trial-related activities will occur during the next 12 months, including preparation for additional filings with the FDA, manufacturing activities, arranging for packaging and distribution, and commencing toxicology studies utilizing our manufactured drug. Additionally, we intend to conduct research and pre-clinical activities with PRTX-100 in other autoimmune indications.

In the area of intellectual property and derivative drug development, our patent application was filed in April 2002. In July 2006, we received an Office Action Summary (rejection) of our initial usage patent application from the United States Patent and Trademark Office or PTO. In August 2006, we met with the patent examiner and his supervisor and as a result of that meeting, the rejection was retracted. In October 2006, the PTO notified the Company of the allowance of the patent. At this time, the patent is being processed by the PTO’s publication department. Additionally, patent applications relating to the manufacturing process of PRTX-100 and new compounds are currently in process.

Staffing plans for fiscal 2007 include hiring additional clinical and laboratory support personnel. Continued growth in staffing is anticipated in our business plan, and specialized staffing requirements in the areas of scientific and FDA regulatory affairs will call for competitive salaries to attract and retain qualified personnel.

Research and Development Expenses - Research and Development expenses were $4,102,055 and $1,757,711 for the nine and three months ended February 28, 2007 compared with $2,731,240 and $1,044,226 for the nine and three months ended February 28, 2006. The year-to date increase of $1,370,815 or 50% was primarily the result of increased clinical personnel, preparation for clinical trials, on-going product manufacturing and product qualification related costs. On January 2, 2007, the Company terminated the employment of Victor S. Sloan, MD, former Senior Vice President and Chief Medical Officer, under the terms of his employment agreement, which resulted in an expense of approximately $290,000 in this period. Also, included in Research & Development expenses was $302,625 for stock option compensation expense subsequent to the adoption of SFAS No. 123R.

Administrative Expenses - Administrative expenses were $2,670,755 and $861,460 for the nine and three months ended February 28, 2007 compared with $1,569,182 and $603,798 for the nine and three months ended February 28, 2006. The year-to-date increase of $1,101,573 or 70% was due to wage increases for existing personnel, travel and stock option compensation expense. Included in Administrative expenses was $1,137,858 for stock option compensation expense subsequent to the adoption of SFAS No. 123R, compared to $343,046 for the same nine month period in fiscal 2006.

Professional Fees - Professional expenses were $451,012 and $147,735 for the nine and three months ended February 28, 2007, compared with $336,688 and $110,394 for the nine and three months ended February 28, 2006. The year-to-date increase of $114,324 or 34% was primarily due to our Sarbanes-Oxley project and investor relations related activity.

Liquidity and Capital Resources

Since 1999, we have incurred significant losses, and we expect to experience operating losses and negative cash flow for the foreseeable future. Our primary source of cash to meet short-term and long-term liquidity needs is the sale of shares of our common stock. We issue shares in private placements at a discount to the current market price, as such the resale of privately-placed shares are restricted under the Securities Act, which reduces their liquidity and, accordingly, their value as compared to freely-tradable shares on the open market.

On September 18, 2003, we raised $12,657,599 through the sale of 7,445,654 shares of our common stock at $1.70 per share, with warrants to purchase an additional 3,164,395 shares of our common stock, at an exercise price of $2.40 per share. The warrants expire on September 18, 2008. Net of transaction costs of $1,301,536, our proceeds were $11,356,063.

On May 25, 2005, we raised $5,057,885 through the sale of 2,593,788 shares of our common stock at $1.95 per share, with warrants to purchase an additional 920,121 shares of our common stock, at an exercise price of $2.25 per share. The warrants expire on May 25, 2010. As part of this transaction, the exercise price for the warrants from the September 2003 transaction were lowered from $2.40 per share to $2.25 per share. Net of transaction costs of $206,692, our proceeds were $4,851,193.

On December 30, 2005, we raised $5,839,059 through the sale of 2,595,132 shares of our common stock at $2.25 per share, with warrants to purchase an additional 648,784 shares of our common stock, at an exercise price of $2.99 per share. The warrants expire on December 30, 2010. Net of transaction costs of approximately $328,000, our proceeds were $5,510,967.

In the fourth fiscal quarter of 2006, existing investors exercised 351,598 warrants which resulted in $786,538 in cash proceeds. In the first fiscal quarter of 2007, existing investors and option holders exercised 133,500 warrants and 6,000 options which resulted in $315,575 in cash proceeds.

On July 7, 2006, we raised $15,177,534 through the sale of 6,071,013 shares of our common stock at $2.50 per share, with warrants to purchase an additional 1,517,753 shares of our common stock, at an exercise price of $3.85 per share. The warrants expire on July 7, 2011. Net of transaction costs of approximately $960,000, our proceeds were $14,217,658.

As of February 28, 2007, our net working capital was $18,417,845 and our total cash and cash equivalents were $19,141,242. We have no significant payments due on long-term obligations or other demands or commitments to be incurred beyond the next 12 months. However, we anticipate entering into significant contracts to perform product manufacturing and clinical trials in fiscal year 2007 that will extend into future fiscal years. With the completion of the $15.2 million financing transaction in July 2006, we anticipate that we will need to raise additional capital in fiscal year 2009 to fund the ongoing FDA approval process. If we are unable to obtain approval of our future IND applications or otherwise advance in the FDA approval process, our ability to sustain our operations would be significantly jeopardized.

Off-Balance Sheet Arrangements

We have entered into the following off-balance sheet arrangements:

Employee Agreements-Officers. To attract and retain qualified management personnel, we have entered into employment agreements with three executive officers: Steven H. Kane, president and chief executive officer, Marc L. Rose, CPA, vice president of finance, chief financial officer, treasurer and corporate secretary.

Directors Agreements. To attract and retain qualified candidates to serve on the board of directors, we have entered into agreements with G. Kirk Raab, Chairman of the Board, Carleton A. Holstrom, Chairman of the Audit Committee, Eugene A. Bauer, MD and Peter G. Tombros, under which Messrs. Raab, Holstrom, Dr. Bauer and Mr. Tombros receive aggregate annual cash payments aggregating $150,000, $20,000, $20,000 and $20,000, respectively, as directors’ fees.

Operating Lease - Office Space. We have entered into a three year operating lease in New Hope, PA for 3,795 square feet of office and laboratory space. The lease commenced on January 9, 2004 and was originally to expire on February 28, 2007. On November 18, 2005, the company modified the existing lease which added an additional 2,147 square feet and extended the lease term to January 31, 2008.

Operating Lease - Copier. We have entered into a sixty-three month operating lease for a multi-function copier. The lease commenced on December 16, 2004 and will expire on March 16, 2010.

				Payments due by period
Contractual Obligations		Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Employment Agreements-Officers	$	681,900	$	681,900	$	0	$	0	$	0
Directors Agreements		210,000		210,000		0		0		0
Operating Lease - Office Space		168,500		168,500		0		0		0
Operating Lease - Copier		9,213		2,490		6,723		0		0
Total	$	1,069,613	$	1,062,890	$	6,723	$	0	$	0

Critical Accounting Policies and Estimates

The Company's significant accounting policies are more fully described in Note B to the financial statements included in this Quarterly Report and in Note B to the financial statements included in the Company's Annual Report on Form 10-KSB for the fiscal year ended May 31, 2006 filed with the Securities and Exchange Commission. Certain accounting policies are particularly important to the portrayal of the Company's financial position and results of operations and require the application of significant judgment by management. As a result, these policies are subject to an inherent degree of uncertainty. In applying these policies, management makes estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and related disclosures. The Company bases its estimates and judgments on historical experience, terms of existing contracts, observance of trends in the industry, information received from outside sources, and on various other assumptions that management believes to be reasonable and appropriate under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The Company has reviewed and determined that those policies remain the Company's critical accounting policies as of and for the nine months ended February 28, 2007. The Company did not make any changes to those policies during the period.

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed and implemented to ensure that all material information relating to the Company is made known to its Chief Executive Officer and Chief Financial Officer and such other persons who are responsible for preparing and filing periodic reports with the Securities and Exchange Commission. As of February 28, 2007, Steven H. Kane, President and Chief Executive Officer, and Marc L. Rose, Vice President of Finance, Chief Financial Officer, Treasurer and Corporate Secretary, representing all of the officers and directors of the Company, evaluated the Company’s disclosure controls and procedures and concluded that such controls were adequate as of that date.

Changes in Internal Control

There have been no changes in the Company’s internal controls over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses

PART II — OTHER INFORMATION

ITEM 6. EXHIBITS

2.1	Stock Purchase Agreement among the Company, Don Hanosh and Enerdyne Corporation, dated December 6, 1999	Incorporated by reference, to Exhibit 2.1 to the Company’s 10-SB filing on December 6, 1999

2.2	Merger Agreement and Plan of Re-organization between the Company and Enerdyne Corporation	Incorporated by reference, to Exhibit 2.2 to the Company’s 10-SB filing on December 6, 1999

2.3	Plan of Merger and Agreement between Protalex, Inc., a New Mexico corporation and Protalex, Inc. a Delaware Corporation	Incorporated by reference, to Exhibit 2.1 to the Company’s 8K filing on December 6, 2004

3.1	Certificate of Incorporation of the Company	Incorporated by reference, to Exhibit 3.1 to the Company’s 8-K filing on December 6, 2004

3.2	Bylaws of the Company	Incorporated by reference, to Exhibit 3.2 to the Company’s 8-K filing on December 6, 2004

3.3	State of Delaware, Certificate of Amendment of Certificate of Incorporation	Incorporated by reference, to Exhibit 3.3 to the Company 10-QSB filed on January 13, 2006

4.1	Letter Agreement with Pembroke Financial Ltd. Dated July 9, 2001	Incorporated by reference, to Exhibit 10.9 to the Company’s 10-KSB/A filed on September 24, 2003

4.2	Securities Purchase Agreement dated September 18, 2003 between the Company and certain of the Selling Stockholders	Incorporated by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20, 2003.

4.3	Investor Rights Agreement dated September 18, 2003 between the Company and certain of the Selling Stockholders	Incorporated by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20, 2003.

4.4	Form of Common Stock Purchase Warrant issued by the Company to the Selling Stockholders	Incorporated by reference, to Exhibit 4.4 to Company’s SB-2 filed on October 20, 2003.

4.5	Warrant and Common Stock Purchase Agreement dated May 25, 2005 among the Company and the several purchasers thereunder	Incorporated by reference to Exhibit 4.5 to the Company’s Form SB-2 filed on June 16, 2005

4.6	Registration Rights Agreement dated May 25, 2005 among the purchasers under the Warrant and Common Stock Purchase Agreement of even date therewith	Incorporated by reference to Exhibit 4.6 to the Company’s Form SB-2 filed on June 16, 2005

4.7	Addendum 1 to Subscription Agreement and Questionnaire of vSpring SBIC, LP dated May 25, 2005	Incorporated by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-KSB filed on August 26, 2005

4.8	Warrant and Common Stock Purchase Agreement dated December 22, 2005 among the Company and the several purchasers thereunder	Incorporated by reference, to Exhibit 4.5 to the Company’s SB-2 filed on January 27, 2006

4.9	Registration Rights Agreement dated December 22, 2005 among the purchasers under the Warrant and Common Stock Purchase Agreement of even date therewith	Incorporated by reference, to Exhibit 4.6 to the Company’s SB-2 filed on January 27, 2006

4.10	Form of Warrant issued by the Company to the Selling Stockholders dated December 22, 2005 of even date therewith	Incorporated by reference, to Exhibit 4.7 to the Company’s SB-2 filed on January 27, 2006

4.11	Warrant and Common Stock Purchase Agreement dated June 30, 2006 among the Company and the several purchasers thereunder	Incorporated by reference, to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on July 10, 2006.

4.12	Registration Rights Agreement dated June 30, 2006 among the purchasers under the Warrant and Common Stock Purchase Agreement of even date therewith	Incorporated by reference, to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on July 10, 2006

4.13	Form of Warrant issued by the Company to the Selling Stockholders dated June 30, 2006 of even date therewith	Incorporated by reference, to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on July 10, 2006

10.1	Employment offer letter executed by Steven H. Kane	Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-QSB filed on January 13, 2006.

10.2	Board appointment executed by G. Kirk Raab	Incorporated by reference, to Exhibit 10.4 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.3	Form of Option Agreement	Incorporated by reference, to Exhibit 10.6 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003

10.4	Frame Contract between the Company and Eurogentec S.A.	Incorporated by reference, to Exhibit 10.5 to the Company’s 10-KSB/A filed on September 24, 2003

10.5	Assignment of Intellectual Property from Alex LLC to the Company	Incorporated by reference, to Exhibit 10.8 to the Company’s 10-KSB/A filed on September 24, 2003.

10.6	Assignment of Intellectual Property from Dr. Paul Mann to the Company	Incorporated by reference, to Exhibit 10.8 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.7	Stock Redemption Agreement dated August 15, 2003, by and between the Company, Paul L. Mann, Leslie A. McCament-Mann, Gail Stewe and Elizabeth Sarah Anne Wiley	Incorporated by reference, to Exhibit 10.10 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.8	Letter dated August 21, 2003 from Paul L. Mann to the Company	Incorporated by reference, to Exhibit 10.11 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.9	Technology License Agreement dated November 17, 1999, between the Company and Alex, LLC	Incorporated by reference, to Exhibit 10.4 to the Company’s Registration of Securities on Form 10-SB filed on December 6, 1999.

10.10	Letter Agreement, dated March 16, 2005, effective October 26, 2004, between the Company and Carleton A. Holstrom	Incorporated by reference, to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-QSB/A filed on April 14, 2005.

10.11	Description of the verbal agreement between the Company and Eugene A. Bauer, M.D.	Incorporated by reference to the Company’s Current Report on Form 8K filed on February 22, 2005.

10.12	Protalex, Inc. 2003 Stock Option Plan Amended and Restated as of July 29, 2005	Incorporated by reference to Appendix B to the Company’s Proxy Statement filed with the SEC on September 23, 2005.

10.13	Description of the verbal agreement between the Company and Peter G. Tombros	Incorporated by reference to the Company’s Current Report on Form 8K filed on November 14, 2005.

10.14	Modified lease agreement with Union Square LP, dated November 18, 2005	Incorporate by reference to Exhibit 99.1 to the Company’s Current Report Form 8-K filed with the Securities and Exchange Commission on November 22, 2005.

10.15	Employment offer letter executed by Marc L. Rose	Incorporated by reference, to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-QSB filed on January 14, 2005.

10.16	Employment offer letter executed by Victor S. Sloan, M.D	Incorporated by reference, to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-QSB filed on October 14, 2005.

10.17†	Clinical Study Agreement executed October 19, 2005 between the Company and PAREXEL International LLC	Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-QSB filed on January 13, 2006.

10.18†	Service Contract with AAIPharma Inc., dated January 29, 2007	Filed herewith

31.1	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith

31.2	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith

†Portions of the exhibit have been omitted pursuant to a request for confidential treatment. The confidential portions have been filed with the SEC.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: April 13, 2007	PROTALEX, INC.

	By:	/s/ Steven H. Kane
		Steven H. Kane, President and Chief Executive Officer


Date: April 13, 2007

	By:	/s/ Marc L. Rose
		Marc L. Rose, Vice President of Finance, Chief Financial Officer, Treasurer and Corporate Secretary

EXHIBIT INDEX

2.1	Stock Purchase Agreement among the Company, Don Hanosh and Enerdyne Corporation, dated December 6, 1999	Incorporated by reference, to Exhibit 2.1 to the Company’s 10-SB filing on December 6, 1999

2.2	Merger Agreement and Plan of Re-organization between the Company and Enerdyne Corporation	Incorporated by reference, to Exhibit 2.2 to the Company’s 10-SB filing on December 6, 1999

2.3	Plan of Merger and Agreement between Protalex, Inc., a New Mexico corporation and Protalex, Inc. a Delaware Corporation	Incorporated by reference, to Exhibit 2.1 to the Company’s 8K filing on December 6, 2004

3.1	Certificate of Incorporation of the Company	Incorporated by reference, to Exhibit 3.1 to the Company’s 8-K filing on December 6, 2004

3.2	Bylaws of the Company	Incorporated by reference, to Exhibit 3.2 to the Company’s 8-K filing on December 6, 2004

3.3	State of Delaware, Certificate of Amendment of Certificate of Incorporation	Incorporated by reference, to Exhibit 3.3 to the Company 10-QSB filed on January 13, 2006

4.1	Letter Agreement with Pembroke Financial Ltd. Dated July 9, 2001	Incorporated by reference, to Exhibit 10.9 to the Company’s 10-KSB/A filed on September 24, 2003

4.2	Securities Purchase Agreement dated September 18, 2003 between the Company and certain of the Selling Stockholders	Incorporated by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20, 2003.

4.3	Investor Rights Agreement dated September 18, 2003 between the Company and certain of the Selling Stockholders	Incorporated by reference, to Exhibit 4.3 to the Company’s SB-2 filed on October 20, 2003.

4.4	Form of Common Stock Purchase Warrant issued by the Company to the Selling Stockholders	Incorporated by reference, to Exhibit 4.4 to Company’s SB-2 filed on October 20, 2003.

4.5	Warrant and Common Stock Purchase Agreement dated May 25, 2005 among the Company and the several purchasers thereunder	Incorporated by reference to Exhibit 4.5 to the Company’s Form SB-2 filed on June 16, 2005

4.6	Registration Rights Agreement dated May 25, 2005 among the purchasers under the Warrant and Common Stock Purchase Agreement of even date therewith	Incorporated by reference to Exhibit 4.6 to the Company’s Form SB-2 filed on June 16, 2005

4.7	Addendum 1 to Subscription Agreement and Questionnaire of vSpring SBIC, LP dated May 25, 2005	Incorporated by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-KSB filed on August 26, 2005

4.8	Warrant and Common Stock Purchase Agreement dated December 22, 2005 among the Company and the several purchasers thereunder	Incorporated by reference, to Exhibit 4.5 to the Company’s SB-2 filed on January 27, 2006

4.9	Registration Rights Agreement dated December 22, 2005 among the purchasers under the Warrant and Common Stock Purchase Agreement of even date therewith	Incorporated by reference, to Exhibit 4.6 to the Company’s SB-2 filed on January 27, 2006

4.10	Form of Warrant issued by the Company to the Selling Stockholders dated December 22, 2005 of even date therewith	Incorporated by reference, to Exhibit 4.7 to the Company’s SB-2 filed on January 27, 2006

4.11	Warrant and Common Stock Purchase Agreement dated June 30, 2006 among the Company and the several purchasers thereunder	Incorporated by reference, to Exhibit 10.1 to the Company’s Current Report on Form 8K filed on July 10, 2006.

4.12	Registration Rights Agreement dated June 30, 2006 among the purchasers under the Warrant and Common Stock Purchase Agreement of even date therewith	Incorporated by reference, to Exhibit 10.2 to the Company’s Current Report on Form 8K filed on July 10, 2006

4.13	Form of Warrant issued by the Company to the Selling Stockholders dated June 30, 2006 of even date therewith	Incorporated by reference, to Exhibit 10.3 to the Company’s Current Report on Form 8K filed on July 10, 2006

10.1	Employment offer letter executed by Steven H. Kane	Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-QSB filed on January 13, 2006.

10.2	Board appointment executed by G. Kirk Raab	Incorporated by reference, to Exhibit 10.4 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.3	Form of Option Agreement	Incorporated by reference, to Exhibit 10.6 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003

10.4	Frame Contract between the Company and Eurogentec S.A.	Incorporated by reference, to Exhibit 10.5 to the Company’s 10-KSB/A filed on September 24, 2003

10.5	Assignment of Intellectual Property from Alex LLC to the Company	Incorporated by reference, to Exhibit 10.8 to the Company’s 10-KSB/A filed on September 24, 2003.

10.6	Assignment of Intellectual Property from Dr. Paul Mann to the Company	Incorporated by reference, to Exhibit 10.8 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.7	Stock Redemption Agreement dated August 15, 2003, by and between the Company, Paul L. Mann, Leslie A. McCament-Mann, Gail Stewe and Elizabeth Sarah Anne Wiley	Incorporated by reference, to Exhibit 10.10 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.8	Letter dated August 21, 2003 from Paul L. Mann to the Company	Incorporated by reference, to Exhibit 10.11 to the Company’s Annual Report on Form 10-KSB/A filed on September 24, 2003.

10.9	Technology License Agreement dated November 17, 1999, between the Company and Alex, LLC	Incorporated by reference, to Exhibit 10.4 to the Company’s Registration of Securities on Form 10-SB filed on December 6, 1999.

10.10	Letter Agreement, dated March 16, 2005, effective October 26, 2004, between the Company and Carleton A. Holstrom	Incorporated by reference, to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-QSB/A filed on April 14, 2005.

10.11	Description of the verbal agreement between the Company and Eugene A. Bauer, M.D.	Incorporated by reference to the Company’s Current Report on Form 8K filed on February 22, 2005.

10.12	Protalex, Inc. 2003 Stock Option Plan Amended and Restated as of July 29, 2005	Incorporated by reference to Appendix B to the Company’s Proxy Statement filed with the SEC on September 23, 2005.

10.13	Description of the verbal agreement between the Company and Peter G. Tombros	Incorporated by reference to the Company’s Current Report on Form 8K filed on November 14, 2005.

10.14	Modified lease agreement with Union Square LP, dated November 18, 2005	Incorporate by reference to Exhibit 99.1 to the Company’s Current Report Form 8-K filed with the Securities and Exchange Commission on November 22, 2005.

10.15	Employment offer letter executed by Marc L. Rose	Incorporated by reference, to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-QSB filed on January 14, 2005.

10.16	Employment offer letter executed by Victor S. Sloan, M.D	Incorporated by reference, to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-QSB filed on October 14, 2005.

10.17†	Clinical Study Agreement executed October 19, 2005 between the Company and PAREXEL International LLC	Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-QSB filed on January 13, 2006.

10.18†	Service Contract with AAIPharma Inc., dated January 29, 2007	Filed herewith

31.1	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith

31.2	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act	Filed herewith

32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith

†Portions of the exhibit have been omitted pursuant to a request for confidential treatment. The confidential portions have been filed with the SEC.

January 29, 2007

John Stockmal

Director of Project Management

Protalex, Inc.

145 Union Square Drive

New Hope, PA 18938

Telephone: 215.862.9720

Fax: 215. 862.6614

Email: jstockmal@protalex.com

PREX8000 : This service estimate is executable if signed and returned within 30 days.

Service Estimate

Process Transfer and Manufacture of Two Clinical Batches of PRTX-100

Objective:

Protalex, Inc. (“Protalex” or “Client”) has requested that AAIPharma Inc. (“AAIPharma”) manufacture two (2) batches of lyophilized PRTX-100 in a 5-mL vial for Phase I clinical studies according to the formulation, process and specifications provided by Protalex. Protalex is responsible for release of the batches for clinical use. The AAIPharma Safety Department has assigned a level 2 safety rating for PRTX-100.

Summation of Services:

Process Transfer and Manufacture of Engineering Batch
Manufacture of Two (2) Clinical Batches
Stability Program for Two (2) Clinical Batches
Project Management

Total Estimated Cost	$	XXXX*

* Note: Excludes Materials and Specialty Items.

THE TERMS AND PROVISIONS OF THE FOLLOWING ATTACHED APPENDICIES ARE INCORPORATED HEREIN BY REFERENCE AND SHALL BE BINDING ON THE PARTIES:

APPENDIX I	DESCRIPTION OF SERVICES
APPENDIX II	PAYMENT SCHEDULE AND TERMS
APPENDIX III	GENERAL TERMS AND CONDITIONS

THE SERVICES DESCRIBED IN THIS SERVICE ESTIMATE, INCLUDING THE APPENDICES HERETO, SHALL BE REFERRED TO HEREIN AS THE "SERVICES."

THE PHARMACEUTICAL PRODUCT TO BE MANUFACTURED PURSUANT TO THIS SERVICE ESTIMATE SHALL BE REFERRED TO HEREIN AS THE "PRODUCT."

THIS SERVICE ESTIMATE SHALL BECOME BINDING ON THE PARTIES IF SIGNED BY AN AUTHORIZED REPRESENTATIVE OF PROTALEX, INC. AND RETURNED TO AAIPHARMA WITHIN 30 DAYS OF THE DATE HEREOF.

AAIPharma Inc.		Protalex, Inc.


Reviewed and Approved by:		Printed Name of Authorized Representative
Beth Balkcum
Manager, Product Development,
Project Management


Date		Signature


Reviewed and Approved by:		Date
Lee Karras
Senior Vice President, Pharmaceutical
Operations


Date		Purchase Order Number

*Please return signed document to:*
Baron Bowers
Project Manager, Product Development Group
AAIPharma Inc.		Telephone: 843.746.2513
4221 Faber Place Drive		Facsimile: 843.746.2550
Charleston, SC 29405		E-mail: baron.bowers@aaipharma.com

PRTX8000

Page 2 of 9

01/29/2007

Confidential

Appendix I

Description of Services

I.	Project Responsibility

Client will supply AAIPharma with sufficient quantities of Active Pharmaceutical Ingredient (“API”) and a current MSDS. Note : Client will supply the API accompanied by a Certificate of Analysis (COA) and a release statement or a COA from an independent laboratory in order for AAIPharma to perform limited release testing.

AAIPharma will perform the following tests to release the API: identification and appearance. Note : A change order may be necessary if additional release testing is required by AAIPharma. AAIPharma will release a single lot of API to be used in the engineering and clinical batches.

AAIPharma will source sufficient amounts of packaging components and materials on behalf of Client for use in the activities described herein. The costs will be passed-through to Client plus 15% for sourcing and handling.

AAIPharma will perform full COA testing per USP or specification for all raw materials and packaging components.

II.

Process Transfer and Engineering Batch

AAIPharma will

Review all technical documentation provided by Protalex.

Generate appropriate test procedures and specifications for manufacturing PRTX-100.

Prepare and issue a batch record to manufacture an engineering batch of PRTX-100.

Set-up AAIPharma equipment as appropriate for the Protalex-specified packaging components and perform trial runs to optimize the operating parameters of the filling equipment ( Note : If AAIPharma does not purchase the components directly, then Protalex will be responsible for sourcing the components in packaging configurations suitable for AAIPharma gross cleaning equipment).

Compound, aseptically fill and lyophilize one full-scale engineering (test) batch as outlined in the batch record; if API is limited, AAIPharma will use surrogate material or placebo to fill the shelves of the lyophilizer.

Perform appropriate in-process testing (pH, appearance, bioburden, fill weight and concentration via UV 280).

Test the batch according to specifications agreed upon in writing by Protalex and AAIPharma. AAIPharma will test the batch for concentration by UV280, appearance, pH, isoelectric focusing (IEF), SDS-PAGE, Size Exclusion Chromatography (SEC), PX1 Binding Affinity (ELISA), concentration by m BCA, moisture (cKF), completeness, clarity, and color of solution after reconstitution, reconstitution time, content uniformity, analytical content (the appropriate method is to be determined) and particulate matter (via HIAC).

Perform cleaning verification testing.

Dispose of any remaining vials ( Note : The engineering batch will not be packaged or labeled for clinical use).

Complete the batch record ( Note : AAIPharma QA approval is not required for master or executed copies of engineering batch records).

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Estimated Cost for Section II

XXXX

III. Clinical Batch Manufacture

AAIPharma will:

Prepare the master batch record - to be approved by Protalex.

Compound, aseptically fill and lyophilize two (2) batches of PRTX-100 in a 5-mL vial (Batch sizes: approximately 2,000 vials).

Perform appropriate in-process testing during manufacturing (i.e. pH, appearance, bioburden, fill weight and concentration via UV 280).

Release the batches according to specifications agreed upon in writing by Protalex and AAIPharma. AAIPharma will test the batches for concentration by UV280, appearance, pH, isoelectric focusing (IEF), SDS-PAGE, Size Exclusion Chromatography (SEC), PX1 Binding Affinity (ELISA), concentration by m BCA, moisture (cKF), completeness, clarity, and color of solution after reconstitution, reconstitution time, content uniformity, analytical content (the appropriate method is to be determined), particulate matter (via HIAC), endotoxin and sterility.

Perform cleaning verification testing.

Inspect, label and package the vials - 100% visual inspection; Protalex to approve label copy in writing or provide finished labels with an approved proof copy.

Complete the batch records and issue a copy to Protalex.

Ship the batches FOB to Protalex or a designated site as a single shipment. Each additional shipment will incur an additional $XXXX handling charge.

Estimated Cost for Section III

$XXXX per batch or $XXXX

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IV. Stability Program for Clinical Batches

AAIPharma will set stability for two (2) lots of PRTX-100. Stability evaluations will be performed on the drug product. Data reports will be provided as generated for each time point and a final report will be issued at the end of the study. A stability protocol will be developed by AAIPharma and reviewed and accepted in writing by Protalex. The stability protocol and analytical testing are described in the following table:

TESTS PERFORMED

1. Appearance

2. pH

3. Concentration by UV280 or m BCA

4. Completeness, clarity and color of solution

5. Moisture (cKF)

6. PXI Binding Affinity (ELISA)

7. SEC

8. SDS-PAGE

9. Particulate matter (HIAC)

10. Sterility

SAMPLING SCHEDULE

Time (Months)	25 ° C/60% RH		30 ° C/65% RH		40 ° C/75% RH
0	Tests 1-10
1		Tests 1-9		HOLD*		Tests 1-9
3		Tests 1-9		HOLD*		Tests 1-9
6		Tests 1-9		HOLD*		Tests 1-9
9		Tests 1-9		HOLD*		N/A
12		Tests 1-10		HOLD*		N/A
18		Tests 1-9		N/A		N/A
24		Tests 1-10		N/A		N/A

*HOLD samples will only be tested if significant change occurs during the 6 months storage at 40 ° C/75% RH, or if requested by Protalex, at an additional cost.

Estimated Cost for Section IV

$XXXX per batch or $XXXX ¹

¹ Note: this cost assumes the batches will be placed on stability at separate times.

V.	Project Management

AAIPharma will assign a Project Manager to communicate project progress, track projects and facilitate project team meetings. Teleconferences will be held as needed between the project team and Protalex. The Project Manager will provide e-mail communications to Protalex updating the progress on any projects in-process.

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Appendix II

Payment Schedule and Terms

The estimated cost for the activities outlined in this contract is $XXXX . Materials and packaging components will be passed through to Client at cost plus 15%. A summary of the breakdown costs is as follows:

Service Agreement Section	Service Agreement Description	Estimated Cost
Section I.	Project Responsibility	Cost plus 15%
Section II.	Engineering Batch Manufacture	$XXXX
Section III.	Clinical Batch Manufacture (2)	$XXXX
Section IV.	Stability Program (2)	$XXXX

In addition, Client will be charged for all out-of-pocket costs and/or expenses associated with the activities outlined herein. Such costs and expenses shall include required raw materials, travel and shipping expenses, and lab supplies such as columns, standards and chemicals unavailable from Client. All documented and reasonable out-of-pocket costs and/or expenses will be billed at cost plus 15%. Actual costs based on vendor invoices plus 15% will be invoiced.

AAIPharma will provide Client with copies of raw data upon request. These data will be provided at a charge of $XXXX for non-chromatographic projects and $XXXX for chromatographic projects.

AAIPharma will revise the final reports once at no additional charge upon Client’s request. Additional revisions to final reports will be conducted at $XXXX per hour. Client will not be charged for revisions required due to AAIPharma error.

AAIPharma will notify Client should testing yield aberrant or out-of-specification data. All work (including time spent reviewing the investigation with laboratory management and quality assurance personnel) associated with laboratory investigations that are not due to AAIPharma’s error will be charged to Client at $XXXX per hour. Client also agrees to pay for any re-tests that confirm the original test results including marginal pass/fail results.

AAIPharma will perform all testing per the methods indicated. Should method optimization or development be required, Client will be notified and, upon approval, method optimization/development will be conducted at $XXXX per hour.

Stability setup and storage charges are due and payable upon initiation of the study. These fees are not refundable. Client will be entitled to terminate the project at any time with thirty (30) days prior written notice. Any revisions to the stability protocol made after the initiation of the study will be charged to Client at $XXXX per hour.

This cost estimate is based on the information available and AAIPharma’s experience with the procedures involved. AAIPharma reserves the right to revise this Agreement should the scope of the project change. Any changes in the scope or the nature of the work covered by this service Agreement must be mutually agreed to and confirmed by a written change order.

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PAYMENT SCHEDULE

Payment	Payment Description	Amount
1	Prepayment Due Upon Signature of Contract	$XXXX
2	Engineering Batch Manufacture	$XXXX
3	First Clinical Batch is Released by AAIPharma Quality Assurance	$XXXX
4	Second Clinical Batch is Released by AAIPharma Quality Assurance	$XXXX
5	Stability Program Initiated for Clinical Batch #1	$XXXX
6	6 Month Stability Report is Issued for Clinical Batch #1	$XXXX
7	12 Month Stability Report is Issued for Clinical Batch #1	$XXXX
8	18 Month Stability Report is Issued for Clinical Batch #1	$XXXX
9	24 Month Stability Report is Issued for Clinical Batch #1	$XXXX
10	Stability Program Initiated for Clinical Batch #2	$XXXX
11	6 Month Stability Report is Issued for Clinical Batch #2	$XXXX
12	12 Month Stability Report is Issued for Clinical Batch #2	$XXXX
13	18 Month Stability Report is Issued for Clinical Batch #2	$XXXX
14	24 Month Stability Report is Issued for Clinical Batch #2	$XXXX

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Appendix III

General Terms and Conditions

a. Requirements Client will supply AAIPharma with this Service Estimate, or a copy of it, signed by the appropriate authorized Client representative. Client will also supply AAIPharma with a purchase order number and prepayment in the amount of $XXXX.

b. Invoicing Unless otherwise agreed, AAIPharma will invoice Client pursuant to the Payment Schedule and Terms set forth in Appendix II. All invoices are due and payable upon receipt and are subject to 1.5% interest monthly after thirty (30) days from the date of the respective invoice. In the event of default in the payment for services rendered, Client shall be responsible for all collection fees and expenses incurred by AAIPharma, including reasonable attorney’s fees.

c. Good Manufacturing Practices AAIPharma operates its manufacturing facilities in compliance with applicable, current Good Manufacturing Practices and AAIPharma internal standard operating procedures, and is registered with the Food and Drug Administration, Registration Numbers 10-49418, 10-58430, 19-54450 and 10-55790 (Wilmington, NC; Research Triangle Park, NC; Shawnee, Kansas and Charleston, SC; respectively).

d. Amendment No addition to or modification of this Service Estimate shall be effective unless made in writing and signed by both parties, except the parties may orally agree to a change order (encompassing a change in project scope or definition) for additional services providing the associated fee for such additional services does not exceed 10% of the relevant portion of the project cost. AAIPharma will confirm in writing any such oral change order, and Client will be responsible for payment for such additional services.

e. Termination Client shall be entitled to terminate or cancel the project at any time on thirty (30) days' written notice received by AAIPharma prior to the respective scheduled manufacturing date. In the event of such termination or cancellation, Client will be obligated to pay only for the cost of work, materials and services used for the project through the effective date of the cancellation, reasonable project shut down costs, and AAIPharma's cost of all materials and services previously acquired or contracted for and which cannot be utilized in other day-to-day operations. In addition, a cancellation fee in the amount of $XXXX (50% of the estimated project cost set forth in Appendix II (the “Project Cost”) shall be due to AAIPharma should Client provide AAIPharma less than thirty (30) days and more than ten (10) days notice of such termination or cancellation in writing. Client shall pay to AAIPharma a cancellation fee in the amount of $XXXX (75% of the Project Cost) should it provide AAIPharma ten (10) days or less notice of such termination or cancellation in writing. Such Project Cost payments will be invoiced as provided hereunder. Client shall not be charged a cancellation fee for any manufacturing orders canceled if a written notice of cancellation is received by AAIPharma more than thirty (30) days before the scheduled clinical supplies manufacturing.

f. Delivery Schedule Delivery dates, if any, in this Service Estimate are approximations. AAIPharma shall not be liable for, nor shall AAIPharma be in breach of its obligations to Client because of any delivery made within reasonable time of the estimated delivery date.

g. Safety information To ensure the safe handling, storage, usage, shipment and disposal of chemicals and other materials provide to AAIPharma by Client, Client warrants that it will provide AAIPharma with all necessary safety information (including, without limitation, Material Safety Data Sheets). Client is responsible for labeling and all other information relevant to the chemicals, materials, drug product and placebo (“Materials”), as appropriate.

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h. Warranty AAIPharma warrants that all services performed by it hereunder conform to the requirements set forth in this Service Estimate. The foregoing warranty is made to Client only and is not transferable. AAIPHARMA MAKES NO WARRANTIES, EITHER EXPRESS, IMPLIED OR OTHERWISE, EXCEPT THOSE HEREIN EXPRESSLY PROVIDED. AAIPHARMA SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT AND ANY WARRANTY, EXPRESS OR IMPLIED, THAT THE ACTUAL SCIENTIFIC OR PHARMACEUTICAL RESULTS OF THE SERVICES HEREUNDER WILL NECESSARILY MEET CLIENT’S DESIRED SCIENTIFIC OR OTHER RESULTS.

i. Liability Limitation AAIPharma will perform all services hereunder according to good scientific practices and in conformity with relevant cGMP's. The parties agree that AAIPharma's entire liability for performing these services is limited to the amount of compensation received from Client pursuant to this Service Estimate. Notwithstanding anything in this Service Estimate or otherwise to the contrary, in no event shall AAIPharma or its affiliates be liable under any theory, including negligence, for lost profits, or special, incidental, consequential, indirect, punitive or exemplary damages.

j. Indemnification Client shall defend, indemnify and hold harmless AAIPharma, its directors, officers, employees, agents and representatives from any claims, proceedings or investigations arising out of or in connection with the services preformed hereunder including, without limitation, amounts paid in settlement of claims, proceedings or investigations, and shall bear all expenses, fees or costs in connection therewith (“Loss”), provided that such Loss is not the result of AAIPharma’s gross negligence or willful misconduct.

k. Proprietary Information and Technology Client will own all data and written reports arising out of this project and all chemical entities supplied by Client or prepared for Client in this project upon payment for Services. Any patent or other intellectual property rights directly resulting from information supplied by Client to AAIPharma in the performance of this project will be assigned to Client. Notwithstanding the foregoing, AAIPharma shall retain ownership of any inventions, processes, techniques, improvements, know-how, trade secrets, discoveries and other intellectual properties and other assets which have been, or will be, developed by AAIPharma independent of the services and this Service Estimate (hereinafter, “AAIPharma Proprietary Technology”). In the event Client chooses to further develop and/or commercialize a technology comprising, in whole or in part, AAIPharma Proprietary Technology, Client must first obtain a license from AAIPharma to use such AAIPharma Proprietary Technology. Such license agreement shall be memorialized in a separate writing containing mutually agreeable terms negotiated in good faith by AAIPharma and Client. Client agrees to indemnify AAIPharma against any liability for infringement of any patent or other intellectual property rights arising from Client-directed services or Client-supplied information in the performance of this project.

l. Nondisclosure AAIPharma agrees, for a period of five (5) years from the date hereof, that, except to the extent required by law, regulation, judicial requirement, or regulatory agency, it will not itself use, or provide or disclose to any third party, any information, data, or documents which were specifically developed or generated by AAIPharma for Client other than any AAIPharma Proprietary Technology incorporated therein.

m. Excluded Materials Notwithstanding the nondisclosure section set forth above, information, data, or documents developed or generated by AAIPharma for its internal use or for third parties other than Client is not restricted by the ownership rights to be transferred to Client herein. Further, data and technology relating to the synthesis of raw material and dosage forms other than Client’s product is not restricted by this Agreement for AAIPharma's subsequent use.

n. Choice of Law This Service Estimate shall be interpreted and construed in accordance with the laws of the State of Delaware, without the application of its choice of law provisions to the contrary.

o. Force Majeure AAIPharma shall not be liable for any failure to meet its obligations under this Agreement due to any cause beyond AAIPharma’s reasonable control, including, without limitation, acts of public enemy, acts of any governmental authority, including governmental laws, ordinances, rules and regulations whether or not valid, acts of God, including hurricanes, floods, epidemics and severe weather, quarantine restrictions, strikes or lockouts, labor disputes or shortages, embargoes, war, riot, malicious acts or damage, accidents, interruption of supplies, equipment malfunction or failure of electrical supply or other utilities.

p. Inspection Both parties recognize that proper authorities may request that AAIPharma produce records, data, or materials related to Client products during the course of, or as the subject of, an inspection. In such instances, AAIPharma will notify AAIPharma’s contact at Client of such regulatory inspection.

q. Survival Paragraphs e, h, i, j, k, l, n and q of this Appendix III shall survive the expiration, cancellation or termination of this Service Agreement.

r. Samples Unless otherwise set forth herein, after performance of the services contemplated hereunder, AAIPharma will retain any Materials for a period of two (2) months. After that time, such Materials will automatically be returned to Client or destroyed by appropriate means in Wilmington, NC. Please initial and date one selection:

Client would like for AAIPharma to ______return_____ destroy the remaining samples.

If the disposition of the samples is not indicated, the samples will be returned to Client at the end of the 2-month retain period. All shipping charges will be charged to the Client.

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Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Steven H. Kane; certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Protalex, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report.

4. The small business issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and

b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of small business issuer's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.


Dated: April 13, 2007	By:	/s/ Steven H. Kane
		Steven H. Kane
		Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Marc L. Rose; certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Protalex, Inc.;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.


Dated: April 13, 2007	By:	/s/ Marc L. Rose
		Marc L. Rose
		Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Steven H. Kane, Chief Executive Officer of Protalex, Inc. (the "Registrant"), do hereby certify pursuant to Rule 13a-l4(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code that:

(1) the Registrant's Quarterly Report on Form 10-QSB for the quarter ended February 28, 2007 (the "Report"), to which this statement is filed as an exhibit, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Dated: April 13, 2007	By:	/s/ Steven H. Kane
		Steven H. Kane
		Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Marc L. Rose, Chief Financial Officer of Protalex, Inc. (the "Registrant"), do hereby certify pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code that:

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Dated: April 13, 2007	By:	/s/ Marc L. Rose
		Marc L. Rose
		Chief Financial Officer