form10qsba.htm


UNITED STATES
SECURITIES ANDEXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB
Amendment Number 1

S
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act  of  1934

For the quarterly period ended March 31, 2007

£
Transition  Report Under Section 13 or 15(d) of the Securities Exchange Actof 1934 for the transition period from  ___ to ___ 

Commission file number: 000-31883

PROTON LABORATORIES, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

Washington
91-2022700
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

980 Atlantic Avenue, Suite 110
Alameda, CA 94501
(Address of principal executive offices)

(510) 865-6412
Issuer's telephone number

Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 S No o
 
Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes £ No x
 
On May 16, the registrant had outstanding 26,470,523 Common Stock, $0.0001 par value per share.
 
Transitional Small Business Disclosure Format:   Yes £   No S
 



 
Introduction: This amendment number 1 provides new Part 1-Item 3—Controls and Procedures, new certifications for exhibits 31.1 and 31.2, and the current company address on the cover page.
 
 
 

 
 
CONTENTS

   
PAGE NO.
     
PART I.
 
     
 
     
1
     
4
     
 
     
5
     
5
     
5
     
5
     
5
     
5
     
 
6
     
Certifications  

 


 
PART I.     FINANCIAL INFORMATION

ITEM  1.     FINANCIAL  STATEMENTS


PROTON LABORATORIES, INC.
TABLE OF CONTENTS
 
 
 
PAGE
   
F-1
 
 
F-2
   
F-3
   
F-4

 
PROTON LABORATORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
   
MARCH 31,
   
DECEMBER 31,
 
   
2007
   
2006
 
ASSETS
           
CURRENT ASSETS
           
Cash
  $ 7,469     $ 9,768  
Accounts receivable, less allowance for doubtful accounts of $24,586 and $30,419, respectively
    2,119       794  
Inventory
    115,938       143,865  
TOTAL CURRENT ASSETS
    125,526       154,427  
PROPERTY ANDEQUIPMENT
               
Furniture and fixtures
    23,316       23,316  
Equipment and machinery
    242,330       238,776  
Leasehold improvements
    11,323       11,323  
Accumulated depreciation
    (80,184       (69,550 )
NETPROPERTY ANDEQUIPMENT
    196,785       203,865  
DEPOSITS
    6,131       6,131  
TOTAL ASSETS
  $ 328,442     $ 364,423  
LIABILITIES ANDSTOCKHOLDERS' DEFICIT
               
CURRENT LIABILITIES
               
Accounts payable
  $ 48,169     $ 71,314  
Accrued expenses
    287,171       266,079  
Deferred revenue
    52,506       52,506  
Preferred dividends payable
    17,600       16,000  
TOTAL CURRENT LIABILITIES
    405,446       405,899  
STOCKHOLDER LOANS, NETOF CURRENT PORTION
    307,642       270,642  
TOTAL LIABILITIES
  $ 713,088     $ 676,541  
STOCKHOLDERS' DEFICIT
               
Series A convertible preferred stock, 400,000 shares authorizedwith a par value of $0.0001; 8,000 shares issued and outstanding;liquidation preference of $80,000 and $0, respectively
    80,000       80,000  
Undesignated preferred stock, 19,600,000 shares authorized with a par value of $0.0001; no shares issued or outstanding
    -       -  
Common stock, 100,000,000 common shares authorized with a par value of $0.0001; 26,470,523 and 21,658,223 shares issued and outstanding, respectively
    2,649       2,168  
Additional paid in capital
    5,515,441       4,045,371  
Stock subscription receivable
    (20,000 )     (20,000 )
Accumulated deficit
    (5,962,736 )     (4,419,657 )
  TOTAL STOCKHOLDERS' DEFICIT
    (384,646 )     (312,118 )
TOTAL LIABILITIES ANDSTOCKHOLDERS' DEFICIT
  $ 328,442     $ 364,423  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

 
PROTON LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
 
FOR THE THREE MONTHS ENDED MARCH 31, 2007
 
2007
   
2006
 
             
SALES
  $ 51,741     $ 50,922  
                 
COST OF GOODS SOLD
    29,800       44,292  
                 
GROSS PROFIT
    21,941       6,630  
OPERATING EXPENSES
               
Selling, general and administrative expenses (including equity-based expenses of $0 and $40,526, respectively)
    87,538       128,030  
Product development costs (including  equity-based expenses of $1,470,551 and $0, respectively)
    1,470,551       -  
                 
LOSS FROM OPERATIONS
    (1,536,148 )     (121,400 )
                 
OTHER INCOME AND (EXPENSE)
               
Interest income
    53       25  
Interest expense
    (5,384 )     (17,737 )
NET OTHER EXPENSE
    (5,331 )     (17,712 )
                 
NET LOSS
    (1,541,479 )     (139,112 )
                 
PREFERRED STOCK DIVIDEND
    (1,600 )     (1,600 )
                 
LOSS APPLICABLE TO COMMON SHAREHOLDERS
  $ (1,543,079 )   $ (140,712 )
                 
BASIC ANDDILUTED LOSS PER COMMON SHARE
  $ (0.07 )   $ (0.01 )
                 
BASIC ANDDILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
    22,721,415       14,337,412  

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

 
PROTON LABORATORIES, INC.
 CONSOLIDATED STATEMENTS OF CASHFLOWS (UNAUDITED)
 
FOR THE THREE MONTHS ENDED MARCH 31,
 
2007
   
2006
 
             
             
CASHFLOWS FROM OPERATING ACTIVITIES
           
Net loss
  $ (1,541,479 )   $ (139,112 )
Adjustments to reconcile net loss to cash used in operating activities:
               
Depreciation
    10,634       7,649  
Common stock issued for services
    1,470,       0,526  
Changes in operating assets and liabilities
               
Accounts receivable
    (1,325 )     8,319  
Inventory
    27,927       4,139  
Accounts payable
    (23,145 )     (28,644 )
Accrued expenses
    21,092       33,286  
                 
NET CASHFROM OPERATING ACTIVITIES
    (35,745 )     (73,837 )
                 
CASHFLOWS FROM INVESTING ACTIVITIES
               
Purchases of property and equipment
    (3,554 )     -  
 
               
NET CASH FROM INVESTING ACTIVITIES
    (3,554 )     -  
                 
CASHFLOWS FROM FINANCING ACTIVITIES
               
Proceeds from stockholder loans
    37,000       73,852  
                 
NET CASH FROM FINANCING ACTIVITIES
    37,000       73,852  
                 
NET INCREASE (DECREASE) IN CASH
    (2,299 )     15  
                 
CASH AT BEGINNING OF PERIOD
    9,768       1,384  
                 
CASH AT END OF PERIOD
  $ 7,469     $ 1,399  
                 
NON-CASHINVESTING ANDFINANCING ACTIVITIES:
               
Stock issued for accrued legal services
  $ -     $ 40,526  
Accrual of preferred stock dividends
  $ 1,600     $ 1,600  

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

 
PROTON LABORATORIES, INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE  1  -  BASIS  OF  PRESENTATION  AND  NATURE  OF  OPERATIONS

BASIS  OF PRESENTATION - The condensed consolidated financial statements include the accounts of Proton Laboratories, Inc., and its wholly owned subsidiary ("Proton" or the "Company"). All significant intercompany transactions and balances have been eliminated in consolidation.

In April 2004, the Company changed its name from BentleyCapitalCorp.com, Inc. to Proton Laboratories, Inc. The Company's subsidiary also changed its name from Proton Laboratories, Inc. to Water Science, Inc.

CONDENSED  FINANCIAL  STATEMENTS  -  The accompanying unaudited condensed consolidated financial statements are condensed and, therefore, do not include all disclosures normally required by accounting principles generally accepted in the United States of America. These statements should be read in conjunction with the Company's annual financial statements included in the Company's December 31, 2006Annual Report on Form 10-KSB. In particular, the Company's significant accounting principles were presented as Note 1 to the consolidated financial statements in that report. In the opinion of management, all adjustments necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements and consist of only normal recurring adjustments. The results of operations presented in the accompanying condensed consolidated financial statements for the three months ended March 31, 2007are not necessarily indicative of the results that may be expected for the full year ending December 31, 2007.

NATURE  OF  OPERATIONS  -  The Company's operations are located in Alameda, California. The core business of the Company consists of the sales and marketing of the Company's industrial, environmental and residential systems throughout the United States of Americawhich alter the properties of water to produce functional water. The Company acts as an exclusive importer and master distributor of these products to various companies. Additionally, the Company formulates intellectual properties under licensing agreements, supplies consumer products, consults on projects utilizing functional water, facilitates between manufacturer and industry and acts as educators on the benefits of functional water.

USE  OF  ESTIMATES  - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

BASIC  AND  DILUTED  LOSS  PER  COMMON  SHARE  -  Basic loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding. Diluted loss per common share is calculated by dividing net loss by the weighted-average number of Series A convertible preferred shares and common shares outstanding to give effect to potentially issuable common shares except during loss periods when those potentially issuable shares are anti-dilutive. Potential common shares from convertible preferred stock have not been included as they are anti-dilutive.

 
NOTE  2  -  BUSINESS  CONDITION

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The company has incurred losses applicable to common shareholders of $1,543,079 for
the three months ended March 31, 2007. For March 31, 2007and December 31, 2006the Company had working capital deficits of $279,920 and $251,472, respectively. Loans and equity funding were required to fund operations.

The Company is working towards raising additional public funds to expand its marketing and revenues. The Company has spent considerable time in contracting with several major overseas corporations for the co-development of enhanced antioxidant beverages for distribution into the overseas markets. In addition, the Company is working with its Canadian business associates to identify institutional businesses to market various disinfection applications based upon functional water, pending government approval.

On February 20, 2007, the Board of Directors of Proton Laboratories, Inc. (the "Company") ratified an exclusive Marketing, Distribution and Sales Agreement ("Marketing Agreement") and a Manufacturing and Packaging Agreement ("Manufacturing Agreement"), each made with Aqua Thirst, Inc. Through the enactment of these agreements, the Company has been able to acquire what is views as key components necessary to strengthen its infrastructure for the manufacturing, marketing and sales of its products and applications.

The Company's ability to continue as a going concern is dependent upon its ability to generate sufficient cash flows to meet its obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.

NOTE  3  -  RELATED  PARTY  TRANSACTIONS

Stockholder  loans  as  of  March  31, 2007and December 31, 2006 consist of the following:
 
   
2007
   
2006
 
             
             
Note payable to CEOand majority shareholder; principal and interest due December 2009; interest is accrued at 7% per annum; unsecured.
  $ 287,642     $ 270,642  
                 
Note payable to shareholder; principal and interest due December 2009; interest is accrued at 7% per annum; unsecured.
    20,000       -  
                 
TOTAL STOCKHOLDER LOANS
    307,642       270,642  
                 
Less: Current Portion
    -       -  
                 
TOTAL STOCKHOLDER LOANS - LONG TERM
  $ 307,642     $ 270,642  

During the three months ended March 31, 2007, two shareholders advanced theCompany $37,000. The Company did not make any payments on notes during the threemonths ended March 31, 2007.

At March 31, 2007, the Company had accrued interest relating to shareholderloans of $56,938.

 
During the three months ended March 31, 2007, the Company accrued $15,000 as salaries payable to the company's CEO, resulting in $210,091 of salaries payable at March 31, 2007.

NOTE  4  -  COMMON  STOCK

During January through March 31, 2007the Company issued 4,812,300 shares of common stock for various services and agreements. The value of the shares was $1,470,551 based on market prices ranging from $0.30 to $0.37 per share which was the market price of the Company's common stock on the dates of issuances.

NOTE  5  -  COMMITMENTS

PRODUCTION  AGREEMENT - In June 2005, the Company entered into an agreement with Mitachi, a Japanese electronics component manufacturer, to aid in the production of enhanced drinking water generators. Pursuant to this agreement, Mitachi agreed to pay the Company 25,000,000 Yen for engineering design, molding, tooling and preparation costs, and the exclusive product distribution rights for China, Taiwan, and Japan. As of March 31, 2007, Mitachi had paid 6,000,000 Yen, or $52,506, for the above mentioned distribution rights. Since the project is not yet completed and no units have been sold, this amount is classified as deferred revenue.

EQUITY  LINE  - In March 2007, the Company entered into an equity line agreement with EFUND SMALL CAPFUND II, LP, a Nevada Limited Partnership, (the "Equity Line Investor"). Under the equity line, the Company has the right to draw up to $10,000,000 from the Equity Line Investor. The Company is entitled to draw funds and to "put" to the Equity Line Investor shares of the Company's common stock in lieu of repayment of the draw. The Equity Line Investor has registration rights related to any common stock purchased under the equity line agreement.

NOTE  6  -  SUBSEQUENT  EVENTS

During April 2007, the Company issued 200,000 shares of common stock for services rendered.

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

FORWARD-LOOKING  STATEMENT

Certain statements contained herein, including, without limitation, statements containing the words, "believes," "anticipates," "expects," and other words of similar meaning, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. In addition to the forward-looking statements contained herein, the following forward-looking factors could cause our future results to differ materially our forward-looking statements: competition, funding, government compliance and market acceptance of our products.

INTRODUCTION

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the accompanying notes thereto for the year ended December 31, 2006which appear in our Form 10-KSB for the year then ended, and our unaudited financial statements for the quarter ended March 31, 2007and the accompanying notes thereto and the other financial information appearing elsewhere herein. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the USA, which contemplates our continuation as a going concern. We have incurred losses applicable to common shareholders of $1,543,079 for the three months ended March 31, 2007. We had working capital deficit of $279,920 at March 31, 2007. Loans and equity funding were required to fund operations.

We had a stockholder deficit of $384,646 at March 31,2007 and a stockholders deficit of $312,118 at December 31, 2006.

Our independent auditors made a going concern qualification in their report dated April 13, 2007, which raises substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.

We have our primary office located in Alameda, California. During 2006 we created a presence in Quincy, Washingtonand Portland, Oregonby aligning ourselves with office spaces that were made available to us. These offices are used primarily for marketing and sales generation.

 
Our business consists of the development, marketing and sales of the industrial, environmental, and residential systems through the United Stateswhich alter the properties of water to produce functional water. During 2006, we continued to import and resell systems manufactured by various Japanese companies; however, during the same time period the company started design, engineering, parts sourcing and assembly identification for developing its own brand labeled products. In Management's view, the company has successfully designed, engineered and developed five commercial systems and one residential unit. If the company can raise sufficient capital, of which there is no assurance, management believes these units will be ready for market introduction during the second quarter of 2007.

We continue to raise funds to bring inventory to market. The company in late 2006 started a dialogue with a funding sourcing entity to raise $10,000,000 to advance its market-ready products to production and revenue. These negotiations have been finalized in the first quarter of 2007.

We formulate intellectual properties under licensing agreements; supply consumer products; consult on projects utilizing functional water; facilitate usage, uses and users of functional water between manufacturer and industry; and act as educators on the benefits of functional water. Our business has been focused on marketing functional water equipment and systems. Alkaline-concentrated functional water may have health-beneficial properties and may be used for drinking and cooking purposes. Acidic-concentrated functional water may be used as a topical, astringent medium.

In February, 2007, the Company entered into an exclusive Marketing, Distribution and Sales Agreement and a Manufacturing and Packaging Agreement with Aqua Thirst, Inc. These agreements effectively provide that the Company will have access to Aquathirst's product distribution channels in domestic and international markets. These distribution channels will cover residential, cosmetic, medical, agricultural, food processing and consumer product areas.

CRITICAL  ACCOUNTING  POLICIES  AND  ESTIMATES

Our  discussion  and  analysis  of  our  financial condition and results of operations  is based upon our consolidated financial statements, which have been prepared  in  accordance  with  generally  accepted  accounting  principles. The preparation  of  these  financial  statements  requires us to make estimates and judgments  that  affect the reported amounts of assets, liabilities, revenue and expenses,  and  related  disclosure  of contingent assets and liabilities. On an ongoing  basis,  we  evaluate our estimates. We base our estimates on historical experience  and  on various other assumptions that are believed to be reasonable under  the circumstances. These estimates and assumptions provide a basis for us to  make  judgments about the carrying values of assets and liabilities that are not  readily  apparent  from  other  sources. Our actual results may differ from these estimates under different assumptions or conditions, and these differences
may  be  material.

We recognize revenue when all four of the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is both fixed and determinable and; (iv) collectibility is reasonably probable. Our revenues are derived from sales of our industrial, environmental and residential systems, which alter the properties of water to produce functional water. We believe that this critical accounting policy affects our more significant judgments and estimates used in the preparation of our consolidated financial statements.

 
Our  fiscal  year  end  is  December  31.

At March 31, 2007, we had accrued interest relating to shareholder loans of $56,938 and outstanding principal due to shareholder loans of $307,642.

During the three months ended March 31, 2007we accrued $15,000 as salaries payable to our CEO, resulting in $210,091 of salaries payable at March 31, 2007.

RESULTS  OF  OPERATIONS-Three  Months  ended  March  31,  2007  and  2006.

We  had  revenue of $51,741 for the three months ended March 31, 2007 compared to revenue of $50,922 for the three months ended March 31, 2006. During the period that the company is developing its new line of products, the revenue base will remain fairly consistent.

We incurred a net loss of $1,541,479 for the three months ended March 31, 2007and a net loss of $139,112 for the three months ended March 31, 2006. This was an increase in net loss attributable to in-kind consultant compensation expenses incurred in the sourcing of manufacturing, marketing and sales infrastructure necessary for the company.

Cash used by operating activities was $35,745 for the for the three months ended March 31, 2007compared to cash used by operating activities of $73,837 for the three months ended March 31, 2006.

We had total assets at March 31, 2007of $328,442, compared to $364,423 at December 31, 2006. During the period that the company is developing its new line of products, the total asset base will remain fairly consistent.

LIQUIDITY

At March 31, 2007, we had cash on hand of $7,469. Our growth is dependent on our attaining profit from our operations and our raising of additional capital either through the sale of stock or borrowing funds. There is no assurance that we will be able to raise any equity financing or sell any of our products to generate a profit.

At  March  31,  2007,  we  owed  stockholder  loans  of  $307,642.

In 2007, we entered into an equity line of credit with a private investor by which we have the right to draw an aggregate of up to $10,000,000 from time to time. As of March 31, 2007we had not drawn funds under the equity line.

FUTURE  CAPITAL  REQUIREMENTS

Our growth is dependent on attaining profit from our operations, or our raising additional capital either through the sale of stock or borrowing. There is no assurance that we will be able to raise any equity financing or sell any of our products at a profit.

Our  future  capital requirements will depend upon many factors, including:

-
The  cost  to  acquire  equipment  that  we  then  would  resell.

-
The  cost  of  sales  and  marketing.

 
-
The  rate  at  which  we  expand  our  operations.

-
The  results  of  our  consulting  business.

-
The  response  of  competitors.

Item  3.  Controls  and  Procedures

 
a)    Evaluation of disclosure controls and procedures.

Based on their evaluation of our disclosure controls and procedures (as defined in Rule 13a-15e under the Securities Exchange Act of 1934), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this quarterly report on Form 10-QSB such disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, because of certain adjustments required by our auditors in the area of equity.

In connection with its review of the Company's consolidated financial statements for the quarter ended September 30, 2007, Hansen, Barnett & Maxwell ("HB&M"), the Company's registered public accounting firm, advised the Audit Committee and management of internal control matters with respect to certain financial reporting controls that they considered to be a material weakness, which is described below. A material weakness is a control deficiency, or a combination of control deficiencies, that results in there being more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The material weakness identified at September 30, 2007 was as follows:

A material weakness existed in our control environment relating to inadequate staffing of our technical accounting function, including a lack of sufficient personnel with skills, training and familiarity with certain complex technical accounting pronouncements that have or may affect our financial statements and disclosures.

In response to the observations made by HB&M, we are in the process of implementing enhancements to our internal controls, accounting staff and procedures, which we believe address the matters raised by HB&M, including the retaining of additional outside consultants and employees who will have the skills, training and familiarity with certain complex technical accounting pronouncements appropriate to preparing our financial statements and disclosures.

We are in the process of improving our internal controls in an effort to remediate these deficiencies. Our Chief Financial Officer has implemented revisions and instituted certain checks and balances to our accounting system. Additionally, he has addressed tighter controls over all aspects of financial revenue and expense recognition, as well as improving supervision and training of our accounting staff. We are continuing our efforts to enhance, improve and strengthen our control processes and procedures. Our management and directors will continue to work with our auditors and other outside advisors to ensure that our controls and procedures are adequate and effective.

(b)   Changes in internal control over financial reporting.

During the quarter under report, our Chief Financial Officer has implemented revisions and instituted certain checks and balances to our accounting system. Additionally, he continues to address tighter controls over all aspects of financial revenue and expense recognition, as well as improving supervision and training of our accounting staff.

The evaluation of our disclosure controls included a review of whether there were any significant deficiencies in the design or operation of such controls and procedures, material weaknesses in such controls and procedures, any corrective actions taken with regard to such deficiencies and weaknesses and any fraud involving management or other employees with a significant role in such controls and procedures.

 
PART II - OTHER INFORMATION

ITEM 1.  LEGAL  PROCEEDINGS

None.

ITEM 2.  CHANGES  IN  SECURITIES.

During January through March 31, 2007the Company issued 4,812,300 shares of restricted common stock for various services and agreements. The value of the shares was $1,470,551 based on market prices ranging from $0.30 to $0.37 per share which was the market price of the Company's common stock on the dates of issuances. These securities were issued in private transactions, with respect to Canadian residents, in reliance on the exemption from registration with the SEC provided by Regulation S, and with respect to U.S.citizens, in reliance on the exemption available under Section 4(2) of the 1933 Act.

ITEM 3.  DEFAULTS  UPON  SENIOR  SECURITIES

NONE.

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

None.

ITEM 5.  OTHER  INFORMATION

N/A

ITEM 6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

Exhibit 31.1  Certification

Exhibit 31.2  Certification

Exhibit 32.1  Certification

Exhibit 32.2  Certification

 
SIGNATURES

     In  accordance  with  the  requirements of the Exchange Act, the registrantcaused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
PROTON LABORATORIES, INC.


Date:  January 4, 2008
By:
/s/ Edward Alexander
   
EDWARD ALEXANDER
   
Chief Executive Officer, President, Principal Accounting officer and Chief Financial Officer
 
 
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