Protalex (PRTX) 10QSB 2006 Q3 Quarterly report (small business)

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, 2006

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 (State or Other Jurisdiction of Incorporation or Organization)	91-2003490 (I.R.S. Employer Identification No.)
145 Union Square Drive New Hope, PA (Address of Principal Executive Offices)	18938 (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

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 22,210,790 shares of common stock, as of April 14, 2006 

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, 2006			May 31, 2005
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	10,816,904		$	9,453,367
Prepaid expenses and employee advances		50,114			9,281
Total current assets		10,867,018			9,462,648
PROPERTY & EQUIPMENT:
Lab equipment		327,287			313,613
Office and computer equipment		157,787			157,787
Furniture & fixtures		33,128			25,556
Leasehold improvements		89,967			27,060
		608,169			524,016
Less accumulated depreciation and amortization		(452,987	)		(400,387	)
		155,182			123,629
OTHER ASSETS:
Deposits		7,590			7,590
Intellectual technology property, net of
accumulated amortization of $6,438 and $5,673 as
of February 28, 2006 and May 31, 2005, respectively		13,862			14,627
Total other assets		21,452			22,217
	$	11,043,652		$	9,608,494
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of capital lease obligation	$	3,738		$	20,046
Accounts payable		405,908			866,628
Payroll and related liabilities		147,801			28,835
Accrued expenses		437,525			81,517
Total current liabilities		994,972			997,026
OTHER LIABILITIES		-			4,655
Total liabilities		994,972			1,001,681
STOCKHOLDERS' EQUITY
Common stock, par value $0.00001,
100,000,000 and 40,000,000 shares authorized as of February 28, 2006 and May 31, 2005 respectively, 22,038,353 and 19,393,221 shares issued and outstanding as of February 28, 2006 and May 31, 2005, respectively		220			194
Additional paid in capital		26,767,809			20,913,822
Deficit accumulated during the development stage		(16,719,349	)		(12,307,203	)
Total stockholders’ equity		10,048,680			8,606,813
	$	11,043,652		$	9,608,494

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, 2006 and 2005, and From

Inception (September 17, 1999) through February 28, 2006

													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,
	2006			2005			2006			2005			2006
Revenues	$	-		$	-		$	-		$	-		$	-
Operating Expenses
Research and development		(2,731,240	)		(2,513,987	)		(1,044,226	)		(874,723	)		(9,934,056	)
Administrative		(1,569,182	)		(1,034,929	)		(603,798	)		(429,075	)		(5,383,622	)
Professional fees		(336,688	)		(525,512	)		(110,394	)		(258,320	)		(1,616,646	)
Depreciation and amortization		(3,155	)		(3,991	)		(1,050	)		(1,258	)		(149,261	)
Operating loss		(4,640,265	)		(4,078,419	)		(1,759,468	)		(1,563,376	)		(17,083,585	)
Other income (expense)
Interest income		228,860			92,563			93,419			45,926			445,326
Interest expense		(741	)		(2,128	)		(127	)		(491	)		(70,510	)
Loss on disposal		-			-			-			-			(10,580	)
Net loss	$	(4,412,146	)	$	(3,987,984	)	$	(1,666,176	)	$	(1,517,941	)	$	(16,719,349	)
Weighted average number of common
shares outstanding		20,013,580			16,791,933			21,173,309			16,791,933			13,578,228
Loss per common share - basic and diluted	$	(.22	)	$	(.24	)	$	(.08	)	$	(.09	)	$	(1.23	)

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, 2006 and 2005 and From

Inception (September 17, 1999) through February 28, 2006

(Unaudited)

	Nine			Nine			From Inception
	Months Ended			Months Ended			Through
	February 28,			February 28,			February 28,
	2006			2005			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(4,412,146	)	$	(3,987,984	)	$	(16,719,349	)
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		53,365			40,853			481,946
Non cash compensation expense		343,046			256,955			1,878,892
Non cash expenses		-			-			16,644
(Increase) in:
Prepaid expense and employee advances		(40,833	)		(842	)		(57,704	)
(Decrease) increase in:
Accounts payable and accrued expenses		(104,712	)		342,534			843,433
Payroll and related liabilities		118,966			(894	)		147,801
Other liabilities		(4,655	)		3,094			-
Net cash and cash equivalents used in operating activities		(4,046,969	)		(3,346,284	)		(13,397,757	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of intellectual technology license - fee portion		-			-			(20,000	)
Acquisition of equipment		(84,153	)		(71,057	)		(494,689	)
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		(84,153	)		(71,057	)		(758,689	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from stock issuance, net of costs		5,510,967			-			25,338,625
Principal payment on equipment notes payable
and capital leases		(16,308	)		(15,234	)		(291,673	)
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 provide by (used in) financing activities		5,494,659			(15,234	)		24,973,350
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		1,363,537			(3,432,575	)		10,816,904
Cash and cash equivalents, beginning		9,453,367			9,292,783			-
Cash and cash equivalents, end	$	10,816,904		$	5,860,208		$	10,816,904
SUPPLEMENTAL SCHEDULE OF CASH
FLOW INFORMATION:
Interest paid	$	614		$	2,128		$	66,770
Taxes paid	$	14,952		$	-		$	15,052

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, 2005. 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, and expense, and the disclosure of contingent assets and liabilities. Estimated amounts could differ from actual results.

2. Loss per Common Share

The Financial Accounting Standards Board (FASB) has issued Statement of Financial Accounting Standards No. 128, “Earnings Per Share” (SFAS No. 128) which 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 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, 2006 the Company had a total of 8,850,892 potentially dilutive securities.

3. Stock Based Compensation

The Company adopted the disclosure provisions of Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure.” The Company accounts for options granted to employees using the intrinsic value recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25) and related interpretations. In accordance with APB 25, the Company records compensation cost as the difference between the exercise price of the options and the fair market value of the Company stock on the measurement (grant) date. These costs are amortized to expense over the options’ vesting period (see Note C - Recent Accounting Pronouncements pertaining to SFAS No. 123-Revised). Options to non-employees are 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.

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

													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,
	2006			2005			2006			2005			2006
Net loss, as reported	$	(4,412,146	)	$	(3,987,984	)	$	(1,666,176	)	$	(1,517,941	)	$	(16,719,349	)
Add:Stock-based employee
Compensation expense
included in reported
net loss		343,046			219,003			49,535			67,487			1,226,068
Deduct:Stock-based employee
Compensation expense
determined under fair-
value method for all
awards		(1,015,133	)		(1,166,164	)		(196,267	)		(617,679	)		(4,304,782	)
Pro forma net loss	$	(5,084,233	)	$	(4,945,145	)	$	(1,812,908	)	$	(2,068,133	)		(19.798,063	)
Loss per share, as reported basic
and diluted	$	(.22	)	$	(.24	)	$	(.08	)	$	(.09	)	$	(1.23	)
Pro forma loss per share basic and
diluted	$	(.25	)	$	(.29	)	$	(.09	)	$	(.12	)	$	(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 Months Ended			Nine Months Ended			Three Months Ended			Three Months Ended			From Inception Through
	February 28, 2006			February 28, 2005			February 28, 2006			February 28, 2005			February 28, 2006
Dividends per year		0			0			0			0			0
Volatility percentage		107-114	%		103	%		114	%		103	%		90%-131	%
Risk free interest rate		3.85-4.42	%		2.57-3.52	%		4.39	%		3.52	%		2.07%-5.11	%
Expected life (years)		4			4			4			4			3-5

NOTE C - RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the FASB revised SFAS No. 123. SFAS No. 123-Revised supersedes APB 25 and related interpretations, and will require all companies to estimate the fair value of all share-based awards granted and then amortize that estimated fair value to expense over the requisite service period. SFAS No. 123-Revised is effective for the Company for all annual periods beginning after June 15, 2005. The Company currently accounts for options issued to its employees under the recognition and measurement principles of APB 25 and related interpretations. The Company is required to adopt SFAS No. 123-Revised by the first quarter of fiscal year 2007. See Note B. 3, “Stock Based Compensation,” for pro forma information if the Company had elected to adopt the requirements of the previously issued SFAS No. 123 for options issued to employees.

NOTE D - RELATED PARTIES

For the nine and three month period 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. For the nine and three month period ended February 28, 2005 the Company incurred $10,060 and $5,128, 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 period ended February 28, 2006, the Company incurred $112,500 and $37,500 respectively, for this director’s fee. For the nine and three month period ended February 28, 2005, the Company incurred $112,500 and $37,500 respectively, for this director’s fee.

The Company has agreements with Carleton A. Holstrom, Eugene A. Bauer, M.D. and Peter G. Tombros to pay each of them $1,667 per month on a quarterly basis payable in arrears as a director fee. For the nine and three month periods ended February 28, 2006, the Company incurred $35,000 and $15,000, respectively, for these directors’ fees. For the nine and three month periods ended February 28, 2005, the Company incurred $5,000 for these directors’ fees.

NOTE E - CAPITAL RAISE

On December 30, 2005, the Company raised $5,839,059 through the sale of 2,595,132 shares of its common stock at $2.25 per share, with warrants to purchase an additional 648,784 shares of its common stock, at an exercise price of $2.99 per share. The warrants expire on December 30, 2010. Net of transaction costs of $328,092, the Company’s proceeds were $5,510,967.

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, 2005. 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, 2005 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 the Company’s lead compound, PRTX-100, laid the foundation for the Investigational New Drug Application (IND) for treating Rheumatoid Arthritis (RA). The Company submitted its IND application to the United States Food and Drug Administration (FDA) on March 4, 2005; On March 31, 2005 the FDA verbally disclosed to the Company that it had placed the Company’s IND on clinical hold, pending additional product characterization. On August 10, 2005, the Company formally replied to the FDA. On September 9, 2005, the FDA notified the Company that it lifted the clinical hold on its IND and that its proposed study can proceed. The Company commenced with the Phase I clinical trial on December 5, 2005 and the Company anticipates that this clinical trial will be completed in the fourth fiscal quarter of 2006. The Company also expects that other clinical trial-related activities will occur during the next fiscal year, including designing clinical trial protocols for additional clinical trials, arranging for packaging and testing, and completing additional toxicology studies utilizing its manufactured drug. Additionally, the Company intends to conduct research and pre-clinical activities with PRTX-100 in Idiopathic Thrombocytopenic Purpura (ITP), Pemphigus and other autoimmune indications.

In the area of intellectual property and derivative drug development, the Company’s patent application was filed in April 2002, and additional patent applications relating to the manufacturing process of PRTX-100 and new compounds are currently in process.

Staffing plans for fiscal 2006 include additional clinical and laboratory support personnel. Continued growth in staffing is anticipated in the Company’s business plan, and specialized staffing requirements in the areas of scientific and FDA regulatory affairs will require competitive salaries to attract and retain qualified personnel. On April 3, 2006, the Company announced the hiring of John Stockmal as Director of Project Management.

Research and Development Expenses - Research and Development expenses were $2,731,240 and $1,044,226 for the nine and three months ended February 28, 2006, compared with $2,513,987 and $874,723 for the nine and three months ended February 28, 2005. The increase in this quarter of $169,503 or 19% was primarily due to an increase in clinical personnel when compared to the same period in 2005.

Administrative Expenses - Administrative expenses were $1,569,182 and $603,798 for the nine and three months ended February 28, 2006, compared with $1,034,929 and $429,075 for the nine and three months ended February 28, 2005. The increase in this quarter of $174,723 or 41% was due to compensation increases for existing personnel. Stock based compensation decreased in this quarter by $17,952 when compared to the same period in 2005.

Professional Fees - Professional fees were $336,688 and $110,394 for the nine and three months ended February 28, 2006, compared with $525,512 and $258,320 for the nine and three months ended February 28, 2005. The decrease of $147,926 or 57% was due to a decrease in activity in the areas of legal, audit, tax, employee recruitment, investment banking fees, investor relations and the Scientific Advisory Board when compared to the same period in 2005.

Liquidity and Capital Resources

Since 1999, the Company has incurred significant losses, and the Company expects to experience operating losses and negative cash flow for the foreseeable future. The Company’s primary source of cash to meet short-term and long-term liquidity needs is the sale of shares of its common stock. The Company issues shares in private placements at a discount to the then-current market price (as resales 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 May 25, 2005, the Company raised $5,057,885 through the sale of 2,593,788 shares of its common stock at $1.95 per share, with warrants to purchase an additional 920,121 shares of its 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 $206,691, the Company’s proceeds were $4,851,194.

On December 30, 2005, the Company raised $5,839,059 through the sale of 2,595,132 shares of its common stock at $2.25 per share, with warrants to purchase an additional 648,784 shares of its common stock, at an exercise price of $2.99 per share. The warrants expire on December 30, 2010. Net of transaction costs of $328,092, the Company’s proceeds were $5,510,967.

As of February 28, 2006, the Company’s net working capital was $9,872,046 and its total cash and cash equivalents were $10,816,904. The Company has no planned material capital expenditures, significant payments due on obligations, or other demands or commitments to be incurred beyond the next 12 months. However, the Company anticipates entering into significant contracts to perform clinical trials and contract manufacturing in calendar year 2006 that will extend into calendar year 2007. With the completion of the December 30, 2005 transaction, the Company anticipates that it will need to raise additional capital in the second half of calendar year 2007 to fund the ongoing FDA approval process.

Off-Balance Sheet Arrangements

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

· Employee Agreements-Officers. To attract and retain qualified management personnel, the Company has entered into employment agreements with three executive officers: Steven H. Kane, President and Chief Executive Officer, Victor S. Sloan, MD, Senior Vice President and Chief Medical Officer, and Marc L. Rose, 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, the Company has 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 annual payments aggregating $150,000, $20,000, $20,000 and $20,000, respectively, as directors’ fees.

· Operating Lease - Office Space. The Company has 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. The Company has 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.

· Capital Lease - Lab Equipment. The Company has entered into a thirty-six month capital lease for a HPLC protein separator. The lease commenced on April 13, 2003 and will expire May 1, 2006.

	Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Employment Agreements-Officers	$	1,001,320	$	1,001,320	$	0	$	0	$	0
Directors Agreements		210,000		210,000		0		0		0
Operating Lease - Office Space		339,975		157,664		182,311		0		0
Operating Lease - Copier		12.200		2,490		8,963		747		0
Capital Lease - Lab Equipment		3,770		3,770		0		0		0
Total	$	1,567,265	$	1,375,244	$	191,274	$	747	$	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, 2005 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, 2006. 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, 2006, 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 significant changes in the Company’s internal controls or any other factors that could significantly affect the Company's internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II — OTHER INFORMATION

ITEM 5.OTHER INFORMATION

None

ITEM 6. EXHIBITS

Exhibit Number	Description
2.1	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 Current Report on Form 8-K dated December 1, 2004 and filed with the Securities and Exchange Commission on December 6, 2004.
3.1	Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December 1, 2004 and filed with the Securities and Exchange Commission on December 6, 2004.

3.2	Bylaws, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated December 1, 2004 and filed with the Securities and Exchange Commission 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 Form 10-QSB filed with the Securities and Exchange Commission on January 13, 2006).
10.1*†	Service Contract with AAIPharma Inc. dated February 8, 2006.
31.1*	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
31.2*	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
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.

	PROTALEX, INC.
Date: April 14, 2006	By:	/s/ Steven H. Kane
		Steven H. Kane, President and Chief
		Executive Officer

Date: April 14, 2006	By:	/s/ Marc L. Rose
		Marc L. Rose, Vice President of Finance,
		Chief Financial Officer, Treasurer and Corporate Secretary

EXHIBIT INDEX

Exhibit Number	Description
2.1	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 Current Report on Form 8-K dated December 1, 2004 and filed with the Securities and Exchange Commission on December 6, 2004.
3.1	Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December 1, 2004 and filed with the Securities and Exchange Commission on December 6, 2004.
3.2	Bylaws, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated December 1, 2004 and filed with the Securities and Exchange Commission 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 Form 10-QSB filed with the Securities and Exchange Commission on January 13, 2006).
10.1*†	Service Contract with AAIPharma Inc. dated February 8, 2006.
31.1*	Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
31.2*	Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act
32.1*	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
32.2*	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

* Filed herewith