Form 10-KSB/A

                    [As last amended in Release No. 33-7505,
                   effective January 1, 1999, 63 F.R. 9632.]
                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                  Form 10-KSB/A

(Mark One)

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

        For the fiscal year ended            May 31, 2002

[ ]    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.
                 (Name of small business issuer in its charter)

           New Mexico                                  91-2003490
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or organization)

     717 Encino Pl. N.E. Suite 17                          Albuquerque, NM 87102
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number                    (505) 243-8220

Securities registered under Section 12(b) of the Exchange Act:

Title of each class                    Name of each exchange on which registered

       None                                              None

Securities registered under Section 12(g) of the Exchange Act:

                                  Common Stock
                                (Title of Class)


                                (Title of Class)
<PAGE>

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

Check if there is no disclosure  of delinquent  files in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

          State issuer's revenues for its most recent fiscal year. $ 0

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified  date within the past 60 days.  (See  definition  of affiliate in Rule
12b-2 of the Exchange Act.) $14,769,871 as of August 16, 2002.

Note:  If  determining  whether  a  person  is  an  affiliate  will  involve  an
unreasonable  effort and expense,  the issuer may calculate the aggregate market
value of the common  equity held by  non-affiliates  on the basis of  reasonable
assumptions, if the assumptions are stated.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 12,308,226 as of August 16, 2002

        Transitional Small Business Disclosure Format (check one):

 Yes       No    X


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ITEM I - DESCRIPTION OF BUSINESS


Overview

Protalex,  Inc. (the  "Company") is a development  stage company  engaged in the
development and marketing of a new class of organic chemical  molecules,  called
"bioregulators,"  for the  treatment of  rheumatoid  arthritis  ("RA") and other
autoimmune diseases.

The use of bioregulatory compounds for the treatment of human disease represents
a  completely  new  approach to therapy.  Unlike  many  existing  pharmaceutical
agents,  which  act  upon  the  end  products  of  complex  metabolic  pathways,
bioregulators  influence cellular activities at a more basic level. This results
in  restoration  of tissue  integrity and function,  in many  instances not only
alleviating,  but  potentially  reversing the  pathologic  process.  The Company
intends to bring this unique  biotechnology to commercial  realization,  thereby
establishing an entirely new category of pharmaceutical treatment of disease.

The  Company has since its  inception  focused  primarily  on the  treatment  of
rheumatoid arthritis (RA) and animal studies of RA are continuing. Additionally,
the Company is now  starting the process of filing an  investigational  new drug
application  with  the Food and Drug  Administration  (FDA)  and has also  begun
planning full clinical trials.

About Bioregulation

The  Company's  discoveries  and its  proprietary  products  represent the first
application of  bioregulator  technology to the treatment of disease.  Since the
1960's,  however,  certain  natural and synthetic  molecules  have been known to
influence cell  proliferation  and  differentiation  in laboratory  experiments.
(Proliferation   consists   simply  of  an  increase  in  cell   number,   while
differentiation  implies the ability to accomplish  some function  especially to
respond to or initiate some change in the cell's environment.)

Both  proliferation and  differentiation  can be influenced by external stimuli,
most  of  which  are  in  the  form  of  chemical   "messages."   Under   normal
circumstances, equilibrium is maintained within and among cells by the continual
exchange of such messages. Cells may begin to function or proliferate abnormally
under three  circumstances:  when they  receive an  erroneous  signal from their
environment,  when  their  reception  or  processing  of  external  messages  is
impaired, or when they receive abnormal genetic signals from within.  Widespread
abnormalities of cellular  differentiation  cause diseases of many kinds,  while
uncontrolled cellular  proliferation causes cancer. The Company's  bioregulators
are  compounds  with the  ability  to act upon  cells  at a  primitive  level of
function,  "resetting"  their internal  mechanisms to allow resumption of normal
behavior.

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<PAGE>

Some naturally occurring bioregulators have the property of stimulating cellular
proliferation   at   certain    concentrations,    while   promoting    cellular
differentiation  at other  concentrations.  In the latter  role,  they can bring
about increased production of antibodies in one cell line, or slow the growth of
a tumor in another,  apparently by helping  restore normal function within cells
and  promoting  cell-to-cell  signaling.  Bioregulators  seem to act upon a wide
variety of tissue types, suggesting that they affect simple activities common to
all cells.

Bioregulators  represent a completely  new approach to the treatment of disease.
For example,  rheumatoid arthritis is one of the "autoimmune" diseases, in which
cells of the immune system erroneously identify other body tissues as "foreign".
These immune cells then produce substances that attack other body tissues,  such
as the lining of the joints.  Current therapy for rheumatoid  arthritis is aimed
at either  suppressing the symptoms caused by this attack,  or inactivating  the
substances   produced  by  the  immune   cells.   In  contrast,   the  Company's
bioregulators  act upon the immune cells  themselves,  restoring normal cellular
function. In this way, bioregulator  treatment not only relieves symptoms of the
disease,  but also may promote  reversal of the tissue  damage that  already has
taken place.

The Company's research has defined the concept of bioregulators and has produced
proprietary compounds particularly suitable for therapeutic administration.  The
most active of these show intense cellular activity in miniscule doses. Clinical
effectiveness in such a low dosage range is expected to yield exceptional safety
and freedom from side effects.

Experiments and Studies

The best  demonstration of the ability of bioregulators to  re-equilibrate  cell
differentiation lie in the field of immunology.  Here, both humoral and cellular
immune  responses  can  be  modified  by  the  appropriate  concentration  of  a
bioregulating  agent. Cell proliferation also can be normalized by bioregulators
in experiments  dealing with natural  senescence  and tumor growth.  Examples of
each of these processes are outlined below.

In Vitro Experiments

IGG  Production in HPBL.  Bioregulators  induce immune  responsiveness  in human
peripheral blood lymphocytes in response to a number of antigenic  stimuli.  The
number of antibody-producing cells can be amplified as much as 100 to 1000 times
above untreated values.  This technique can be used to produce highly monoclonal
antibodies.

Cell  Senescence  Studies.  The life span of cells in culture can be extended by
nearly 100% through the action of  bioregulators.  When senescence  finally does
take place, it affects all of the cells simultaneously,  thus "rectangularizing"
the usually gradual fall of the survival curve.

In Vivo Experiments

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Nude  Mice.   A  mouse   strain   lacking  in  cellular   immunity,   nude  mice
characteristically show almost no production of T cells, which makes them highly
susceptible  to  infection  and early  death.  This  situation  mimics a genetic
disease in humans called DiGeorge syndrome.  Administration of bioregulators can
partially  reverse  this  deficit,  restoring  about  70% of the  mice's  T cell
complement  and almost  doubling their life  expectancy.  The same effect can be
obtained in mice whose thymus has been surgically removed in early life.

Nude  Rats  With  Heterologous   Tumors.   Another  rodent  strain  with  immune
deficiency, the nude rat, often is used in experiments involving transplantation
of tumors  from other  animals,  but  persist  in the nude rat  because of their
inability to mount a rejection  response.  Administration  of  bioregulators  in
tumor-bearing  rats results in regression of the neoplasm in about two-thirds of
the animals.

Dogs With Implanted  Homologous  Tumors.  As part of study of  bioregulators  as
potential "contrast agents" for nuclear magnetic resonance imaging, glial tumors
were  transplanted  into  the  brains  of  dogs.  This  type of  tumor  normally
progresses rapidly with irreversible  neurological signs appearing between 2 and
3 weeks after  transplantation.  A bioregulator  compound was injected 3 times a
week for 3 weeks following  transplantation.  Complete tumor regression was seen
in 100% of the treated animals.

Inflammatory   Arthritis   Model.   The  Company's   bioregulator   altered  the
inflammatory  process  in mice  induced  with  arthritis.  This  alteration  was
substantially different from a mere delaying of the onset of the disease.

Naturally Occurring Disease

Dogs and Cats With Spontaneous  Tumors. Data continues to be collated on several
dozen  domestic  dogs and cats that have been given the  bioregulator  treatment
outline above for  spontaneously  occurring  tumors of various types.  Anecdotal
reports have been received from  veterinarians all over the country,  indicating
success with  bioregulator  treatment,  but a controlled study with a consistent
protocol is needed to validate this mode of therapy.

Genetic  Autoimmune  Model.  In this  mouse  model the  Company's  bioregulators
positively affected several disease processes.

Markets

Human  autoimmune  diseases  provide  the  first  and most  obvious  target  for
bioregulator  therapy. In these disorders,  the immune system  misidentifies the
body's own tissues as "foreign," prompting an inappropriate and prolonged immune
response that can damage tissues and organs  throughout  the body.  Bioregulator
treatment can be expected to restore normal immune homeostasis,  with the result
that the disease is not merely ameliorated, but permanently cured.

RA will be the first  autoimmune  disease  targeted  and will be the primary and
immediate focus of the Company.  RA is a serious autoimmune disorder that causes
the body's immune system to mistakenly produce antibodies that attack the lining
of the  joints,  resulting  in  inflammation  and  pain.  RA can  lead to  joint
deformity  or  destruction,   organ  damage,  disability  and  premature  death.
According to a leading  scientific  journal,  the prevalence of RA in the United
States is  approximately 1% (or about 2.5 million  people),  with  approximately
200,000 new cases diagnosed yearly.

Currently,  no uniformly effective  treatment for RA exists.  Current treatments
are costly,  and in most cases must be continued for decades.  In contract,  the
Company believes that bioregulator  therapy will be much more cost effective and
can be administered by weekly injections over the course of a few months.

                                       5
<PAGE>

The  Company's  decision to  concentrate  its efforts on RA, as opposed to other
autoimmune diseases or cancers, is based upon two main considerations:

  *  Evidence that  bioregulators  strongly  influence the immune system in ways
     that should produce beneficial effects in patients with RA;

  *  At this stage in the Company's development, the Company believes it is most
     appropriate  to  concentrate  its efforts and  resources  on  developing  a
     treatment  for a  single,  well  defined,  and  serious  disease  for which
     adequate therapy currently is not available.

The  Company  anticipates  that its  products  will  initially  be used to treat
patients with severe cases of RA, and  particularly  those  individuals for whom
other  treatments  have  failed.  Additionally,  the Company  believes  that its
experience with this class of patients will prove the Company  believes that its
experience with this class of patients will prove the efficacy and safety of its
products,  and will encourage the use of its products in less severely  affected
individuals in earlier stages of the disease.

Competition

In strictest terms, the Company has no direct competition in its field, since no
other firms known to the Company have brought to market any  therapeutic  agents
based upon bioregulator technology. However, the Company's products will compete
with  other   pharmaceutical   agents   intended   to  treat  RA.  A  number  of
pharmaceutical agents are currently being used, with varying degrees of success,
to control the symptoms of RA and slow its progress. Available treatment options
include:

  *  Analgesic/anti-inflammatory  preparations,  ranging from simple  aspirin to
     the recently introduced COX-2 inhibitors;

  *  Immunosuppressive/antineoplastic    drugs,   including   azathioprine   and
     methotrexate;

  *  TNF (Tumor Necrosis Factor)  inhibitors,  currently  represented by Immunex
     Corporation's Enbrel-Registered Trademark;

  *  "Immunoadsorption  Therapy",  now in  limited  use in Europe and the United
     States,  entailing  weekly  sessions  during  which a  patient's  blood  is
     separated and passed through a molecular filter; and

  *  Colloidal gold given by injection,  a  time-honored  treatment but one with
     extreme variability of effect and an unknown mechanism of action.

In all, at least a dozen large and small pharmaceutical  companies are active in
this market,  with Immunex Corporation and Pfizer, Inc. dominating the market as
a  result  of  their  respective  products,   Enbrel-Registered   Trademark  and
Celebrex-Registered  Trademark.  Despite  intense  media  attention and enormous
sales, the long-term efficacy of these compounds remains to be evaluated.

                                       6
<PAGE>

Operations

The  Company  is  currently   engaged  in  developing  the  corporate  base  for
commercialization of its bioregulator  products,  as well as planning production
and marketing  strategies.  The Company's  business  operations are housed in an
office in Albuquerque. The Company currently has no manufacturing facilities and
may have to rely on others to  manufacture  compounds  for the  Company's use in
research and development, pre-clinical trials, and clinical trials.

The  Company  continues  ongoing  research  aimed  at  clarifying  the  biologic
functions of bioregulators,  establishing  their safety and efficacy in treating
induced arthritis in animals,  and determining  appropriate dosage and treatment
protocols.

Reverse Merger

In  September  1999,  Protalex,  Inc.,  a New Mexico  corporation  ("Protalex"),
acquired a majority  of the issued  and  outstanding  shares of common  stock of
Enerdyne  from  Don  Hanosh,  pursuant  to a Stock  Purchase  Agreement  between
Protalex,  Enerdyne  and Mr.  Hanosh.  Under the Stock  Purchase  Agreement,  in
consideration  for Mr.  Hanosh's  shares of common  stock,  Protalex  executed a
Promissory  Note in the amount of $368,546.00 in favor of Mr. Hanosh,  which has
been paid in full.

In November 1999,  Protalex  merged with and into Enerdyne  pursuant to a Merger
Agreement  and Plan of  Reorganization  (the "Merger  Agreement"),  and Enerdyne
changed its name to Protalex,  Inc.,  thereby  creating  the Company.  Under the
Merger Agreement,  each share of Protalex common stock  outstanding  immediately
prior to the effective  date of the merger was converted  into 822 shares of the
Company's common stock.  After the merger,  Protalex's former  shareholders held
approximately  92.28%  of  the  shares  of  common  stock  of the  Company,  and
Enerdyne's former  shareholders held approximately 7.72% of the shares of common
stock of the Company.

Business and Marketing Strategy

The  Company  has  initiated  private  placements  of stock to raise  funds  for
completion of animal research, initiation of Phase I and Phase II human studies,
and production and marketing of the Company's products on a commercial scale and
has recently filed its first patent. Currently the Company estimates that it has
enough  cash to fund  development  activities  and  operations  for the  next 10
months.

The  Company  expects  if it is  granted  all  regulatory  approvals,  that  its
bioregulator  products  will  be  competitive   throughout  the  global  market.
Therefore,  the Company intends to enter into  collaborative  arrangements  with
larger  strategic  partners  to market and sell the  Company's  products  in the
United States and in foreign  markets.  The Company  expects that these partners
will be responsible  for funding or reimbursing all or a portion of the costs of
pre-clinical  and clinical trials  required to obtain  regulatory  approval.  In
return for such  payments,  the Company will grant these  partners  exclusive or
semi-exclusive   rights  to  market   certain  of  its  products  in  particular
geographical regions.

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<PAGE>

Government Regulation

The  Company's  ongoing  research  and  development  activities,  and its future
manufacturing and marketing  activities,  are subject to extensive regulation by
numerous  governmental  authorities,  both in the  United  States  and in  other
countries. In the United States, the FDA regulates the approval of the Company's
products under the authority of the Federal Food, Drug and Cosmetics Act.

In  order  to  obtain  FDA  approval  of  the  Company's  new  drugs,  extensive
pre-clinical  and  clinical  tests must be  conducted  and a rigorous  clearance
process  must be  completed.  Satisfaction  of the  FDA's  safety  and  efficacy
requirements  may take several years and require the  expenditure of substantial
resources.

The FDA approval  process  entails  several steps.  Initially,  the Company must
conduct  pre-clinical  trials.  During  pre-clinical  trials,  the Company  must
evaluate the safety and  efficacy of its  products  through in vitro and in vivo
laboratory animal testing. Subsequently the FDA will require, at a minimum, that
the Company (i) prepare a  pharmacological  profile of the drug;  (ii) determine
the toxicity of the drug in at least two species of animals;  and (iii)  conduct
short-term toxicity studies ranging from two weeks to three months, depending on
the proposed clinical trials.

Upon successful  completion of pre-clinical  trials,  the Company must submit an
Investigational  New Drug  Application  ("IND")  to the FDA  before it can begin
human  clinical  trials.  The  purpose  of the  IND is to  confirm  pre-clinical
research data.

Clinical studies are typically  conducted in three sequential  phases,  although
these phases may overlap.  In Phase I trials, a drug is tested for safety in one
or more doses in a small number of patients or  volunteers.  In Phase II trials,
efficacy  and safety are tested in up to  several  hundred  patients.  Phase III
trials involve  additional  safety,  dosage and efficacy  testing in an expanded
patient population at multiple test sites.

The results of the  pre-clinical and clinical trials are submitted to the FDA in
the form of a New Drug  Application  ("NDA").  The  approval  of an NDA may take
substantial  time and effort.  In addition,  upon approval of an NDA the FDA may
require post marketing  testing and  surveillance  of the approved  product,  or
place other conditions on their approvals.

Sales of new drugs outside the United  States are subject to foreign  regulatory
requirements that differ from country to country. Foreign regulatory approval of
a product  must  generally  be obtained  before that  product may be marketed in
those countries.

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<PAGE>

However, the FDA approval process is among the most restrictive in the world and
typically  takes a longer time to complete  than  foreign  regulatory  approval.
Research and development  efforts and pre-clinical trial for the Company's first
product for the treatment of RA are  complete.  The Company has started to apply
to the FDA to secure its approval for limited  safety  testing of the  Company's
product in humans.  Following the  successful  completion of limited  safety and
efficacy trials, the Company expects to conduct full-scale studies of safety and
efficacy  (NDA) in patients with advanced and  intractable  RA. This  full-scale
study will be supervised by Dr. Arthur Bankhurst, a renowned rheumatologist, and
should be completed in approximately  two years. Dr. Bankhurst is a director and
shareholder of the Company. Once the trials are finished, an application for FDA
authorization  to  produce  and  market the  product  will be filed,  with final
approval estimated to take an additional six months.

Patents, Trademarks, and Proprietary Technology

The  Company's  success will depend on its ability to maintain its trade secrets
and proprietary  technology in the United States and in other countries,  and on
the Company to obtain patents for the bioregulatory  technology.  The Company is
currently  seeking  patents  for  proteins  for  use as  medications  for  human
autoimmune disease. Patent protection will also be sought for the derivatives of
proteins.  The Company has filed an initial patent in April 2002 and will pursue
additional patents as appropriate.

Risks Related To The Company's Business

This Registration Statement Contains Forward-Looking Statements Which May Differ
From The Company's Actual Future Results.  This registration  statement contains
forward-looking  statements that involve  substantial  risks and  uncertainties.
These statements are identified by forward-looking  words such as "may," "will,"
"expect," "anticipate,"  "believe," "estimate," and "continue" or similar words.
Statements  that  contain  these words  should be read  carefully  because  they
discuss the Company's future expectations,  contain projections of the Company's
future results of operations or of the Company's financial condition,  and state
other  "forward-looking"  information.  The Company  believes it is important to
communicate its  expectations.  However,  there may be events in the future that
the Company is not able to accurately predict which the Company has no control.

The  risk  factors  listed  in this  section,  as well as any  other  cautionary
language  appearing in this registration  statement,  provide examples of risks,
uncertainties  and events that may cause the Company's  actual results to differ
materially  from the  expectations  described in the  Company's  forward-looking
statements.  The  occurrence  of the events  described in these risk factors and
elsewhere in this  registration  statement  could have an adverse  effect on the
Company's business, results of operations and financial condition.

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<PAGE>

The  Company  May Not Be Able To  Continue  As A Going  Concern  If It Does  Not
Attract  Investment  Capital Or  Generate  Operating  Revenue.  The Company is a
development  stage enterprise and does not have operating  revenue,  nor does it
anticipate  generating  operating revenue in the foreseeable future. The ability
of the Company to  continue as a going  concern is  dependent  initially  on its
ability to raise sufficient  investment capital to fund all necessary operations
and product development activities.  Thereafter,  in order to generate operating
revenue the Company  must develop  products  that gain  regulatory  approval and
market  acceptance.  There can be no assurance  that the Company will be able to
raise  sufficient  investment  capital or  successfully  develop  and market its
products.

The Company Has A History Of Losses  Since Its Merger  With  Enerdyne,  And Will
Continue To Incur Losses Until Its Sales  Generate  Sufficient  Revenues.  Since
Enerdyne  Corporation's  acquisition  of  Protalex,  Inc.  (which is more  fully
described in "Corporate History"),  the Company has incurred significant losses.
The  Company  expects  to  continue  to  incur  net  losses  until  sales of its
bioregulator  products  generate  sufficient  revenues  to fund  its  continuing
operations.

The Company Is  Uncertain  Whether Its  Bioregulator  Products  Can Be Developed
Successfully,  And It May Have To Incur  Additional  Expenses If It  Experiences
Problems In Development. The Company does not know whether bioregulator products
can be  successfully  developed for  administration  as human  medications.  The
Company's  failure to demonstrate the safety and/or efficacy of its bioregulator
product, at the human trial stage, would necessitate  potentially  expensive and
time-consuming additional research.

The Company's  Bioregulator Product Is Limited To A Single Disease,  Which Means
The  Company's  Prospects  May Be Limited If Its Product  Does Not  Successfully
Treat The  Disease.  The  Company is focused on the  treatment  of one  disease,
rheumatoid  arthritis.  If the results from the Company's  animal studies and/or
the human  clinical  trials  related to that  disease are  inconclusive  or show
results no better than a substance with no medical effect, the Company would not
have a  commercially  viable  product.  In this case, a great deal of additional
research would be required, and it is unlikely that the Company would be able to
attract further capital.

The  Company's  Bioregulator  Products  May  Not  Be  Accepted  By  The  Medical
Community,  Which Would Result In Poor Product Sales. The Company's bioregulator
product  may be safe  and  effective  for its  intended  use,  but may not  show
sufficient   superiority  to  other  treatments  currently  in  use  to  gain  a
significant  share of the  market.  Additionally,  the  novelty  of this form of
treatment  or its mode of  administration  may make  bioregulator  therapy  less
appealing  than  existing  treatments  to  prescribing  physicians  or to  their
patients.  Inadequate  medical acceptance would result in poor product sales and
decreased  profitability,  and could impair the Company's ability to continue to
operate.

The Company Is  Uncertain  Whether Its  Existing  Bioregulator  Products  Can Be
Extended To Treat Diseases Other Than  Rheumatoid  Arthritis.  While the Company
will  initially  focus on the treatment of rheumatoid  arthritis,  its long-term
plans call for the  extension  of  bioregulator  therapy to other types of human
disease,  such as cancer.  The  development  of new  bioregulator  products  (or
expanding  the  indications  for  existing  products  to  the  treatment  of new
diseases)  will be subject to many of the same  hazards and risks  discussed  in
this "Risk Factors" section.

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<PAGE>

The Company Is Exposed To Significant  Costs And Risks Related To The Regulatory
Approval Of Bioregulator Products,  And Is At A Competitive  Disadvantage Due To
Its Need To Complete The Regulatory  Process.  Before the Company's products can
be  manufactured,  marketed and sold to the public,  the requirements of the FDA
and similar governmental agencies in foreign countries must be met. The approval
process typically entails considerable time and expense, and may delay marketing
of the Company's products for a considerable  period. The Company cannot predict
when  regulatory  applications  might be  submitted,  nor when final  regulatory
approval will be obtained.  Also, the FDA could approve only certain uses of the
Company's products or subject its products to additional testing or surveillance
programs.  Failure to obtain  timely FDA  approval  will  require the Company to
spend more resources on additional applications,  and would delay the generation
of income from sales of the Company's  products.  In addition,  the FDA approval
process  presents a competitive  advantage to some of the Company's  competitors
who have already received FDA approval for their products.

The Company  Depends On  Reimbursement  From Third Parties,  Who May Decrease Or
Eliminate The Amount Of  Reimbursement  Paid To The Company.  In today's medical
economy,  reimbursement  for all types of medical care depends  substantially on
third  party  payors,  including  government  authorities  (e.g.,  the  Medicare
program),  private  health  insurers  and  other  organizations,  such as health
maintenance  organizations  ("HMOs").  Managed  healthcare  is increasing in the
United  States,  the number of HMOs is growing,  and  legislative  proposals are
being introduced to reform  healthcare or reduce  government  medical  insurance
programs.  As a part of their cost-control  efforts, such entities may establish
fiscal policies  decreasing or eliminating the amount of  reimbursement  for the
Company's products,  making it difficult for the Company to sell its products at
a sufficient profit to remain in business.

The  Company  May  Not Be Able  To  Manufacture  Its  Bioregulator  Products  In
Commercial  Quantities  And May  Have To  Incur  Significant  Costs  To Meet Its
Manufacturing  Requirements.   Currently,  the  Company  does  not  possess  the
facilities  or equipment to  manufacture  its products.  The Company  intends to
contract  with a  third  party  or  parties  to  manufacture  its  products  for
commercial  distribution.  However, the Company does not know whether such third
party or parties will be able to successfully  manufacture sufficient quantities
of the Company's products for these purposes. Therefore, the Company may have to
invest substantial sums to construct facilities sufficient to meet its long-term
manufacturing requirements. See "Operations."

The Company May Not Be Able To Protect Or Maintain  The  Security Of Its Patents
Or Other Proprietary  Information.  The Company intends to apply for,  prosecute
and  maintain  patents  for this  technology.  Conceivably,  the  Company may be
unsuccessful  in  obtaining  patents  and in avoiding  infringements  of patents
granted  to  others.   Even  if  patents  are  granted  to  the   Company,   the
enforceability  of patents issued to biotechnology and  pharmaceutical  firms is
often highly uncertain, and existing law may not protect the Company's patents.

Without patent  protection,  it is unlikely that the Company could  successfully
market its bioregulator products.  Lacking a proprietary advantage,  the Company
would be  unable to  prevent  marketing  of its  bioregulator  products  by more
well-established  competitors  who  would be able to  dominate  the  market.  In
addition,  the Company  could incur  substantial  costs in defending  any patent
litigation  brought  against  it or in  asserting  its  patent  rights in a suit
against another party. See "Patents, Trademarks and Proprietary Technology."

                                       11
<PAGE>

The Company  relies on trade  secrets,  know-how  and  continuing  technological
advancement  to develop  and  maintain  its  competitive  position.  The Company
requires that each of its employees enter into a confidentiality  agreement that
contains  provisions  prohibiting the disclosure of confidential  information to
anyone outside the Company. However, these confidentiality agreements may not be
honored and the  Company  may be unable to protect its rights to its  unpatented
trade secrets.  Dissemination of this proprietary information might allow others
to develop  bioregulator  products that would compete with those of the Company,
diminishing the Company's sales and market share.

The  Company's  Business  Could Be Harmed By New  Research  Efforts  and Product
Development By The Company's  Competitors,  Most of Whom Have Greater  Resources
Than  The  Company.   The  Company  is  engaged  in  a  sector  of  the  economy
characterized by extensive research efforts and rapid technological development.
New drug discoveries are to be expected, including those directed at the disease
the  Company  has  targeted.   A  number  of  the  Company's   competitors  have
substantially more capital, research and development, regulatory, manufacturing,
marketing,  human and other  resources  and  experience  than the Company.  Such
competitors may develop products that are more effective or less costly than any
of the  Company's  current or future  products  and also may  produce and market
their  products  more  successfully  than the  Company.  Large-scale  successful
competition would reduce the Company's market share and profitability, and might
jeopardize the Company's ability to stay in business. See "Competition."

The Company Is Exposed To Significant Liability Associated With Its Bioregulator
Products,  And May Not Be Able To  Secure  Insurance  To  Cover  These  Risks On
Acceptable  Terms, If At All. While the Company  believes that its  bioregulator
product  will be safe  compared  to other  drugs,  the  Company  still may incur
significant  product  liability  exposure.  When the Company  develops a product
suitable  for  human  administration,  it  intends  to secure  adequate  product
liability  coverage.  However,  insurers  may  not  offer  the  Company  product
liability  insurance,  may raise the  price of such  insurance  or may limit the
coverage of such insurance. In addition, the Company may not be able to maintain
such  insurance in the future on  acceptable  terms and such  insurance  may not
provide the Company with adequate coverage against potential  liabilities either
for clinical trials or commercial sales.  Successful product liability claims in
excess of the Company's insurance would affect the Company's ability to continue
to operate as a going concern.

Dependence  upon  Key  Personnel;  Management  of  Growth.  The  success  of the
Company's  operations during the foreseeable future will depend largely upon the
continued services of the following individuals: Mr. John Doherty, the Company's
President,  Dr. Dennis Vik, the  Company's  Chief  Scientist  and Mr.  Frederick
Kuckuck a Company Vice President.  The loss of the services of Mr. Doherty,  Dr.
Vik or Mr.  Kuckuck  could have a material  adverse  impact on the Company.  Mr.
Doherty Dr. Vik and Mr. Kuckuck have not entered into employment agreements with
the Company.

The Company's success will also depend in part on its ability to manage, attract
and retain qualified technical, management and sales personnel.  Competition for
such  personnel is intense.  There can be no assurance  that the Company will be
successful in attracting  and retaining the personnel it required to conduct its
operations successfully.  The Company's results of operations could be adversely
affected  if the  Company  were  unable to  attract,  manage  and  retain  these
personnel or if its revenues fail to increase at a rate sufficient to absorb the
resulting increase in expenses. See "Employees."

                                       12
<PAGE>

Illiquidity of the Company's Public Shares; Potential Volatility of Stock Price.
The market price of the shares of the Company's common stock is highly volatile,
mainly due to the public market for the shares.  Factors such as fluctuation the
Company's operating results, the introduction of new products or services by the
Company  or its  competitors,  and  general  market  conditions  may also have a
significant effect on the market price of the Company's common stock.

Need for Additional Funding.  The Company believes that its available short-term
assets and investment income will be sufficient to meets its operating  expenses
and capital  expenditures for 10 months. The Company does not know if additional
financing  will be available when needed,  or if it is available,  if it will be
available on acceptable terms.  Insufficient  funds may prevent the Company from
implementing  its business  strategy or may require the Company to delay,  scale
back or eliminate certain components of its business plan.

Employees

The Company currently has four full-time  employees and one part-time  employee.
The Company's  employees are non-union and none are  represented by an organized
labor union. The Company  believes its  relationship  with its employees is very
good and it has never experienced an employee-related work stoppage. The Company
will need to hire and retain highly-qualified experienced technical,  management
and sales  personnel  in order to execute its business  plan,  carry out product
development  and secure  advantages over its  competitors.  No assurances can be
given that the  Company  will  continue  to be able to pay the  higher  salaries
necessary to retain such skilled employees.

Additional Information

The Company does not intend to provide an annual report to its security holders,
or to  prepare  quarterly  reports  available  for  inspection  by its  security
holders. Security holders are encouraged to visit the SEC website for the latest
filings and information about the Company.


ITEM 2 - DESCRIPTION OF PROPERTY

The  Company's  office and  laboratory  is  located at 717 Encino NE,  Suite 17,
Albuquerque,  New Mexico 87102.  The Company leases this property  pursuant to a
three-year lease agreement.


ITEM 3 - LEGAL PROCEEDINGS

The Company is not a party to any pending legal proceedings.  The Company is not
aware of threatened legal proceedings to which any person, officer, affiliate of
Protalex or any owner of more than 5% of Protalex  stock is an adverse  party to
or has a material interest adverse to Protalex.


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

No matter was  submitted  to a vote of security  holders  during the year of the
fiscal year ended May 31,  2002,  except for the  election of  directors  at the
Company's annual shareholder meeting.

                                       13
<PAGE>


ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
                 MATTERS

The Company's  common stock is traded on the OTC Bulletin Board under the symbol
"PRTX".

The following table sets forth, for the fiscal periods  indicated,  the high and
low closing bid prices for the common stock of  Protalex,  Inc. for the last two
years.  The Company's  fiscal  year-end is May 31. The quotations are taken from
Internet  quotation  sources.  The quotations may reflect  inter-dealer  prices,
without retail mark-up, markdown or commission and may not necessarily represent
actual transactions.

                                        High     Low
                                        ----     ---

        Fiscal Year 2000
                First Quarter           3.23    1.875
                Second Quarter          3.937   2.062
                Third Quarter           2.812   2.125
                Fourth Quarter          3.187   1.950

        Fiscal Year 2001
                First Quarter           2.85    1.47
                Second Quarter          3.40    2.00
                Third Quarter           3.60    2.35
                Fourth Quarter          3.18    2.60


                                       14
<PAGE>

At May 31, 2002 the Company had 11,490,035  shares of common stock  outstanding,
which  were held by  holders of record.  The  transfer  agent for the  Company's
common stock is Standard Registrar & Transfer Agency, PO Box 14411, Albuquerque,
NM 87111. The Company has nine market makers currently.

Dividend Policy. No dividends have been declared or paid to date by the Company.
The Company  currently  anticipates  that it will retain all future earnings for
use in the  operation  and  expansion of its  business  and does not  anticipate
paying any cash dividends in the foreseeable future.

Recent Sales of Unregistered Securities.  In November 1999, the Company issued a
total of 8,289,048  shares of its common  stock to Protalex,  Inc., a New Mexico
corporation (Protalex),  in connection with its acquisition of Protalex pursuant
to a Merger  Agreement  and Plan of  Reorganization.  The Company  issued  these
shares in reliance upon the exemption from  registration  in Section 4(2) of the
Securities Act of 1933, as amended.

Subsequent to November  1999, at various dates from November 18 through  January
12, 2000, the Company issued 459,444 shares of stock to various  individuals all
at $0.36 per share.  From May 1 to May 27, 2000, the Company also issued 100,000
shares of restricted stock in exchange for legal services.  In December of 2000,
the  Company  issued  425,000  shares of  restricted  stock at $1 per share,  in
September of 2001, 881,600 shares of stock were issued at $1.25 per share and in
July of 2002,  842,000 shares of stock and 842,000 warrants were issued at $1.50
a unit.  The Company  issued  these  shares in  reliance  on the  "sophisticated
investor"  exemption and obtained signed  subscription  agreements  attesting to
financial net worth and investment  experience of the stock  purchasers.  During
the year and  subsequent  to May 31,  2002,  the Company has issued  stand-alone
stock options to two directors and one employee in connection with their serving
as directors and as an employee.


ITEM 6 - PROTALEX INC. - MANAGEMENT'S DISCUSSIONS AND ANALYSIS INCLUDING PLAN OF
         OPERATION

The  Company's  principal  activities  consist  of  preparing  for  the  Company
sponsored investigational new drug (IND) application, which the Company hopes to
submit  in the last  quarter  of 2002 or the  first  quarter  of  2003.  The IND
application  process  seeks,  along with  other  considerations,  the  necessary
approvals  from the FDA to conduct human trials.  Initial  meetings  between the
Company and the FDA have occurred in this regard. Laboratory research and animal
work  continue,  thus  strengthening  and extending  the  Company's  therapeutic
approach  and  increasing  available  laboratory  data.  The  Company  has added
pharmaceutical  expertise to its board of directors  and has named Dennis Vik as
Chief Scientific Officer for all intellectual property activities. Dr. Paul Mann
has  left  the  Company  and has  assigned  all  rights  to the  initial  patent
application to the Company. Dr. Mann remains a shareholder of the Company.

The Company  raised  $1,263,000  by issuing  842,000  common  shares and 842,000
warrants  convertible at $1.50 per share in a private  placement in July 2002 to
fund the ongoing continuation of the Company. The Company filed its first patent
application in April 2002 in connection with its  bioregulator  technology.  The
Company believes that the recent private  placement  completed in July 2002 will
assist in the  Company-sponsored IND and help to continue to develop and execute
a broader patent  strategy.  The Company  intends to file further patents on its
candidate drug designated PRTX-001.

                                       15
<PAGE>

Funding from the July 2002 private  placement  together with  remaining  current
resources from the September  2001 placement will fund  operations and necessary
research and development  over the next 10 months.  The Company has acquired and
will continue to acquire laboratory equipment.

These  acquisitions  will help to keep down the high cost  associated with third
party  contracting,  and speed the process of learning  more about the Company's
core technology.  The Company  believes that all of these activities  strengthen
the Company's position in the marketplace.

Please refer to the  Company's  10-SB filing  (December 3, 1999) and  amendments
thereto for more information on the Company's technology and risk factors.

                                       16
<PAGE>


ITEM 7 - FINANCIAL STATEMENTS


                              FINANCIAL STATEMENTS
                           AND REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS

                                 PROTALEX, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)

                                  May 31, 2002


                                       17
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
Protalex, Inc.


We have audited the accompanying  balance sheet of Protalex,  Inc. (a New Mexico
corporation  in the  development  stage)  as of May 31,  2002,  and the  related
statement  of  stockholders'  deficit  for the period  from  September  17, 1999
(inception)  through May 31, 2002 and the related  statements of operations  and
cash flows for the years ended May 31, 2002 and 2001. These financial statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.  We believe our audits  provide a reasonable
basis for our opinion.

As discussed in Note I to the  financial  statements,  an error  resulting in an
understatement  of  compensation  expense  related to the  reporting  of Company
issued  stock  options as of May 31,  2002,  was  discovered  subsequent  to the
issuance of our  report on  those financial  statements  dated  August 15, 2002.
Accordingly,  the  accompanying  May 31,  2002  financial  statements  have been
restated to correct the error.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial  position of Protalex,  Inc. as of May 31,
2002 and 2001,  and the  results  of its  operations  and its cash flows for the
years then ended and the period from  September 17, 1999 through May 31, 2002 in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue as a going  concern.  The Company is in the  development
stage and its ability to continue as a going  concern is initially  dependent on
its ability to raise  adequate  capital to fund  necessary  product  development
activities  and  subsequently  on the inflow of operating  revenue  derived from
developed  products which must be regulatory  approved and market accepted.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


                                                    Atkinson & Co., Ltd.

Albuquerque, New Mexico
August 15, 2002 (except for Note I,
for which the date is July 17, 2003)

                                       18
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                                 BALANCE SHEET
                                 (As Restated)

                                  May 31, 2002


                                     ASSETS

CURRENT ASSETS
  Cash ..........................................    $   261,867
  Prepaid expense ...............................          1,602
                                                     -----------
         Total current assets ...................                    $   263,469

EQUIPMENT
  Lab equipment .................................        178,496
  Office and computer equipment .................        157,643
  Furniture & fixtures ..........................         21,268
  Leasehold improvements ........................         10,685
                                                     -----------

                                                         368,092
  Less accumulated depreciation .................       (195,018)        173,074
                                                     -----------
OTHER ASSETS
   Intellectual technology property, net of
    accumulated amortization of $2,623 ..........                         17,677
                                                                     -----------



                                                                     $   454,220
                                                                     ===========

                                       19
<PAGE>

                                  LIABILITIES

CURRENT LIABILITIES
  Accounts payable ..............................    $    56,105
  Payroll taxes payable .........................          2,345
  Interest payable ..............................            553
  Current maturities of
    long-term liabilities .......................         36,338
                                                     -----------
         Total current liabilities ..............                    $    95,341

LONG-TERM LIABILITIES, less
  current maturities
  Equipment note payable ........................                          2,986
                                                                     -----------

         Total liabilities ......................                         98,327

STOCKHOLDERS' DEFICIT
  Common stock, no par value,
    authorized 40,000,000 shares,
    11,728,735 shares issued,
    11,490,235 shares outstanding ...............
    238,500 shares in the treasury
    at $0 cost ..................................      2,492,891
  Common stock, contra ..........................       (368,547)
  Additional paid in capital ....................        316,569
  Deficit accumulated during
    the development stage .......................     (2,085,020)        355,893
                                                     -----------     -----------

                                                                     $   454,220
                                                                     ===========

    The accompanying notes are an integral part of this financial statement.


                                       20
<PAGE>


                                 Protalex, Inc.
                      (A Company in the Development Stage)

                            STATEMENT OF OPERATIONS

            From Inception (September 17, 1999) through May 31, 2002


                                                                  From Inception
                                     Year Ended                       Through
                                    May 31, 2002     Year Ended     May 31, 2002
                                    (As Restated)   May 31, 2001   (As Restated)
                                    ------------    ------------    ------------
Revenues ........................  $       --      $       --      $       --

Operating Expenses
  Research and development ......      (918,022)       (452,102)     (1,493,615)
  Administrative ................      (252,436)        (42,223)       (322,472)
  Professional fees .............       (91,289)        (36,859)       (205,668)
  Depreciation and amortization .       (17,393)        (11,261)        (35,197)
                                   ------------    ------------    ------------
          Operating Loss ........    (1,279,140)       (542,445)     (2,056,952)

Other income (expense)
  Interest income ...............         7,381          12,228          30,278
  Interest expense ..............        (8,706)        (23,649)        (58,346)
                                   ------------    ------------    ------------
          NET LOSS ..............  $ (1,280,465)   $   (553,866)   $ (2,085,020)
                                   ============    ============    ============

Weighted average number of common
  shares outstanding ............    11,343,640       9,663,509       9,820,145
                                   ============    ============    ============

Loss per common share ...........  $       (.11)   $       (.06)   $       (.21)
                                   ============    ============    ============

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


                                       21
<PAGE>


                                 Protalex, Inc.
                      (A Company in the Development Stage)

                       STATEMENT OF STOCKHOLDERS' EQUITY

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)
<TABLE>
<CAPTION>
                                                                                                       Deficit
                                                                                                     Accumulated
                                                 Common Stock          Additional       Common         In The
                                           -------------------------     Paid in        Stock-       Development
                                              Shares       Amount        Capital        Contra          Stage          Total
                                           -----------   -----------   -----------    -----------    -----------    -----------
<S>                                        <C>           <C>           <C>            <C>            <C>            <C>
September 17, 1999 -- initial issuance
  of 10,000 shares for intellectual
  technology license at $.03 per share .        10,000   $       300   $      --      $      --      $      --      $       300

September 30, 1999 -- cost of public
  shell acquisition over net assets
  acquired to be accounted for as a
  recapitalization .....................          --            --            --         (250,000)          --         (250,000)

October 27, 1999 -- issuance of 84
  shares to individual for $25,000 .....            84        25,000          --             --             --           25,000

November 15, 1999 -- reverse merger
  transaction with Enerdyne
  Corporation, net transaction amounts .     8,972,463       118,547          --         (118,547)          --             --

November 15, 1999 -- treasury shares -
  Enerdyne  $-0- cost ..................       238,500          --            --             --             --             --

November 18, 1999 - February 7, 2000
  -- issuance of 459,444 shares to
  various investors at $0.36 per share .       459,444       165,400          --             --             --          165,400

January 1, 2000 -- issuance of 100,000
  shares in exchange for legal services        100,000        15,000          --             --             --           15,000

May 1 - 27, 2000 -- issuance of 640,000
  shares to various investors at $1.00
  per share ............................       640,000       640,000          --             --             --          640,000

May 27, 2000 -- issuance of 1,644 shares
  to individual in exchange for interest
  due ..................................         1,644         1,644          --             --             --            1,644

December 7, 2000 -- issuance of 425,000
  shares to various investors at $1.00
  per share ............................       425,000       425,000          --             --             --          425,000

November 7, 2001 - issuance of 881,600
  at $1.25 per share ...................       881,600     1,102,000          --             --             --        1,102,000

Additional paid in capital .............          --            --         316,569           --             --          316,569

Net loss from prior periods ............          --            --            --             --         (804,555)      (804,555)

Net loss for the year ..................          --            --            --             --       (1,280,465)    (1,280,465)
                                           -----------   -----------   -----------    -----------    -----------    -----------

                                            11,728,735   $ 2,492,891   $   316,569    $  (368,547)   $(2,085,020)   $   355,893
                                           ===========   ===========   ===========    ===========    ===========    ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       22
<PAGE>



                                Protalex, Inc.
                      (A Company in the Development Stage)

                            STATEMENT OF CASH FLOWS

 Periods from Inception (September 17, 1999) through May 31, 2002 (As Restated)
<TABLE>
<CAPTION>
                                                                                     From Inception
                                                          Year Ended    Year Ended       Through
                                                         May 31, 2002   May 31, 2001   May 31, 2002
                                                         -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>
Cash flows from operating activities
  Net loss ...........................................   $(1,280,465)   $  (553,866)   $(2,085,020)
  Adjustments to reconcile net loss to net
    cash provided by operating activities
      Depreciation and amortization ..................       111,102         78,980        196,625
      Noncash compensation expense ...................       133,000           --          133,000
      Non cash expenses ..............................          --             --           16,644
      Decrease in interest receivable ................          --           10,669           --
      Decrease (increase) in prepaid expense .........        15,539        (16,641)        (1,602)
      (Decrease) increase in payroll taxes payable ...        (2,307)         3,877          2,345
      (Decrease) increase in interest payable ........        (2,451)        (4,758)           553
      (Decrease) increase in professional fees payable          (192)        (7,592)          --
      (Decrease) increase in accrued compensation ....       (17,922)        12,804           --
      Increase in accounts payable ...................        56,105           --           56,105
      Increase (decrease) in related party advance
       and licenses fee payable ......................          --          (40,000)          --
                                                         -----------    -----------    -----------

         Net cash used in operating activities .......      (987,591)      (516,527)    (1,681,350)
                                                         -----------    -----------    -----------

Cash flows from investing activities
  Acquisition of intellectual technology license
    - fee portion ....................................          --             --          (20,000)
  Acquisition of equipment ...........................       (38,116)      (164,849)      (275,645)
  Excess of amounts paid for Public Shell
    over assets acquired to be accounted for
    as a recapitalization ............................          --             --         (250,000)
  Note receivable from individual ....................          --          118,547           --
                                                         -----------    -----------    -----------

         Net cash used in investing activities .......       (38,116)       (46,302)      (545,645)
                                                         -----------    -----------    -----------

Cash flows from financing activities
  Proceeds from stock issuance .......................     1,102,000        425,000      2,357,400
  Principal payment on installment purchase payable ..      (170,249)       (24,687)      (194,936)
  Additional paid-in-capital .........................       143,569         40,000        183,569
  Principal payment on note payable individual .......          --         (225,717)      (225,717)
  Issuance of note payable to individual .............          --             --          368,546
                                                         -----------    -----------    -----------

         Net cash provided by financing activities ...     1,075,320        214,596      2,488,862
                                                         -----------    -----------    -----------

NET INCREASE (DECREASE) IN CASH ......................        49,613       (348,233)       261,867

Cash, beginning of period ............................       212,254        560,487           --
                                                         -----------    -----------    -----------

Cash, end of period ..................................   $   261,867    $   212,254    $   261,867
                                                         ===========    ===========    ===========
</TABLE>
   The accompanying notes are an integral part of these financial statements.


                                       23
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                       STATEMENT OF CASH FLOWS -CONTINUED

        Periods from Inception (September 17, 1999) through May 31, 2002

<TABLE>
<CAPTION>
                                                                                            From Inception
                                                          Period Ended                         Through
                                                          May 31, 2002     Period Ended      May 31, 2002
                                                          (As Restated)    May 31, 2001      (As Restated)
<S>                                                     <C>              <C>               <C>

Interest paid .......................................   $        10,157   $        28,407          $55,149
                                                        ===============   ===============   ==============

Taxes paid ..........................................   $          --     $            50   $           50
                                                        ===============   ===============   ==============

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITIES


10,000 shares of company stock were
  issued as part of the cost of acquisition
  of the intellectual technology license
  at inception - value at $.03 per share ............   $          --     $          --     $          300
                                                        ===============   ===============   ==============
100,000 shares of company stock were
  issued in exchange for legal services
  performed .........................................   $          --     $          --     $       15,000
                                                        ===============   ===============   ==============
1,644 shares of company stock were
  issued in exchange for interest payable ...........   $          --     $          --     $        1,644
                                                        ===============   ===============   ==============
Lab equipment was acquired through
  issuance of installment contract to seller ........   $          --     $          --     $       91,430
                                                        ===============   ===============   ==============
</TABLE>
   The accompanying notes are an integral part of these financial statements.


                                       24
<PAGE>


                                 Protalex, Inc.
                      (A Company in the Development Stage)

                         NOTES TO FINANCIAL STATEMENTS

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE A - DESCRIPTION OF OPERATIONS AND DEVELOPMENT STAGE STATUS

Protalex,  Inc.  (the  Company or Protalex) is a  development  stage  enterprise
incorporated  on September 17, 1999 and based in  Albuquerque,  New Mexico.  The
Company  was formed to take all  necessary  steps to fully  develop and bring to
commercial  realization certain bioregular technology for the treatment of human
diseases. The Company has no operating revenue.


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Concentration of Credit Risk

Financial  instruments  potentially  subjecting the Company to concentrations of
credit  risk  consist  primarily  of  deposits  in  excess of FDIC  limits.  The
Company's  demand deposits are placed with major financial  institutions and the
Company  does not believe that it is exposed to undue credit risk for any demand
deposits that may, from time to time, exceed the federally insured limits.

2. Equipment, Depreciation and Amortization

Equipment is carried at cost.  Depreciation  has been provided by the Company in
order to amortize the cost of equipment over their estimated  useful lives.  The
Company  uses the  straight-line  method  for all  classes  of  assets  for book
purposes.  The  technology  property  is  amortized  over a  20-year  life  on a
straight-line basis. Depreciation and amortization expense is $111,102,  $78,980
and $196,625 for the year ending May 31,  2002,  May 31, 2001 and for  inception
through  May 31,  2002,  respectively.  Certain  depreciable  amounts  have been
classified as R & D expense on the financial statements.

3. Estimates

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

                                       25
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

4. Loss per Common Share

The  Financial  Accounting  Standards  Board  (FASB)  has issued  Statements  of
Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS No. 128) which
is effective for periods ending after  December 15, 1997.  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  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.

5. Income Taxes

Income taxes are recognized  using enacted tax rates,  and are composed of taxes
on financial  accounting  income that is adjusted for the requirement of current
tax  law  and  deferred  taxes.  Deferred  taxes  are the  expected  future  tax
consequences of temporary  differences  between the financial statement carrying
amounts and tax bases of existing assets and  liabilities.  The Company does not
expect to have  current  income  taxes  payable or deferred tax balances for the
foreseeable future.

6. Other Comprehensive Income

From  September 17, 1999  (inception)  through May 31, 2002,  the Company had no
changes in equity which constitute components of other comprehensive income.

7.      Research and Development

Research and development costs are expensed as incurred.

8.      Fair Value of Financial Instruments

The fair value of the  Company's  financial  instruments,  principally  cash and
debt, approximates their carrying value.


                                       26
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE C - REVERSE MERGER

On November 15, 1999, Enerdyne  Corporation ( Enerdyne or Public Shell) acquired
all of the outstanding common stock of Protalex, Inc. (Protalex) in exchange for
the issuance of additional  shares of Enerdyne stock.  The ratio of exchange was
822 shares of Enerdyne stock issued for each share of Protalex  stock  received.
For accounting  purposes,  the acquisition has been treated as an acquisition of
Enerdyne by Protalex and as a recapitalization of Protalex (Reverse Merger). The
historical financial statement of operations presented herein include only those
of the accounting  acquirer and that the retained earnings (deficit) of only the
accounting  acquirer  carries over consistent  with the  requirements of reverse
merger  accounting.  Concurrently with the share exchange,  Enerdyne changed its
name to Protalex, Inc.

The details of the reverse merger transaction are as follows:
<TABLE>
<CAPTION>

                                                                                               Merged
                                                                                            Balance Sheet
                                     Protalex,          Enerdyne         Transaction         at November
Account Description                    Inc.            Corporation       Adjustments          16, 1999
---------------------------         ----------         ----------        ----------          ----------
<S>                                 <C>                <C>                <C>                <C>
Cash                                $   23,531         $     -            $    -             $   23,531
Note receivable shareholder               -               118,547              -                118,547
License                                 20,300               -                 -                 20,300
Investment in Enerdyne                 368,546               -             (368,546)               -
Other current assets                     8,212               -                 -                  8,212
Other current liabilities              (17,555)              -                 -                (17,555)
Accounts payable Alex                  (40,000)              -                 -                (40,000)
Note payable                          (368,546)              -                 -               (368,546)
Common stock                           (25,300)          (833,459)          714,912            (143,847)
Additional paid in capital                -            (1,105,014)        1,105,014                -
Treasury stock                            -               430,424          (430,424)               -
Accumulated deficit                     30,812          1,389,502        (1,389,502)             30,812
Common stock - contra                     -                  -              368,546             368,546
                                    ----------         ----------        ----------          ----------

                                    $     -            $     -           $    -              $    -
                                    ==========         ==========        ==========          ==========
</TABLE>

                                       27
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

      From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE C - REVERSE MERGER - CONTINUED

Additional information in connection with stock amounts and number of shares
issued is as follows:
<TABLE>
<CAPTION>
                               Protalex, Inc.              Enerdyne Corporation
                          -----------------------  --------------------------------------
                                                                          Shares
                                                                  -----------------------
Account Description        Shares        Amount    Outstanding     Treasury      Amount
-------------------      ----------    ----------   ----------    ----------   ----------
<S>                      <C>           <C>          <C>           <C>          <C>
Common stock .........       10,084    $   25,300    1,578,907       238,500   $  833,459
822 to 1 stock
  recapitalization ...      (10,084)         --      8,289,048          --           --
Cancellation of shares
  formerly held by
  Protalex in Enerdyne         --            --       (885,408)         --           --
Increase to record net
  assets of Enerdyne .         --         118,547         --            --           --
Cancellation of common
  stock amounts for
  Enerdyne ...........         --            --           --            --       (833,459)
Name change to
  Protalex, Inc. .....         --            --           --            --           --
                         ----------    ----------   ----------    ----------   ----------

                               --      $  143,847    8,982,547       238,500   $     --
                         ==========    ==========   ==========    ==========   ==========
</TABLE>

NOTE D - INTELLECTUAL TECHNOLOGY PROPERTY

The  Company's  information  technology  was  originally  licensed from a former
related party. This intellectual  property was then assigned to the Company upon
the  dissolution  of the related party.  The cost of the technology  property is
being amortized over a 20-year period. The intellectual property is reported net
of accumulated  amortization  of $2,623.  The Company  reviews the  intellectual
property for impairment on at least an annual basis.

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards (SFAS) No. 142.  "Goodwill and Other Intangible
Assets."  The  provisions  of SFAS No.  142 are  required  to be  applied by the
Company  beginning in FY 2002.  The Company has not evaluated the impact of this
accounting  standard  on its  financial  reporting.  Any change in the method of
accounting  for  intangible  assets  would  not have a  material  effect  on the
financial statement.


                                       28
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)



NOTE E - INCOME TAXES

The  Company  has no  taxable  income  and no income  tax  liability  during the
reported period of operation.

The net loss reported on the statement of operations ($1,280,465) as well as the
net loss carried from 2001  ($804,555)  is  available to offset  future  taxable
income.  The net  operating  losses  (NOL)  expires  in 15 years  and 14  years,
respectively,  if not utilized  during that time. No deferred tax asset has been
recorded for the NOL as an equivalent  valuation allowance applies against it in
recognition of the Company's uncertainty as a going concern.

The merger  transaction  of Enerdyne and Protalex is tax-free  under  applicable
provisions of the Internal Revenue Code.  Under applicable  federal tax statutes
and  regulations  the NOLs  available  to  Enerdyne  are  lost as more  than 50%
beneficial ownership of Enerdyne changed hands on September 30, 1999.


NOTE F - RELATED PARTIES

On July 17, 2001, a shareholder group contributed funds that allowed the Company
to pay off its remaining balance due to an individual  incurred in the Company's
reverse  merger  transaction.  No shares or notes  payable to  shareholder  were
issued in the transaction.  The Company recorded  additional  paid-in-capital in
the amount of  $142,830  plus  interest  to reflect  contributed  funds and debt
payoff.

                                       29
<PAGE>


                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE G - LONG-TERM DEBT

The Company has the following long-term debt at May 31, 2002:


11.5% installment purchase agreement,
  due in monthly installments of $3,015,
  including interest, through June 2003.
  The note is collateralized by equipment.       $      39,324

Less current maturities                                (36,338)
                                                 -------------

Long-term debt, less current maturities          $       2,986
                                                 =============

Maturities of long-term  debt for each of the years  succeeding May 31, 2002 are
as follows:

        Year
        ----

        2003                                     $      36,338
        2004                                             2,986
                                                 -------------

                                                 $      39,324
                                                 =============

NOTE H - GOING CONCERN UNCERTAINTY

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going concern.  The Company is a development  stage  enterprise and
does not have operating revenue nor anticipate  generating operating revenue for
the  foreseeable  future.  The  ability of the  Company to  continue  as a going
concern is  dependent  initially on its ability to raise  sufficient  investment
capital to fund all necessary  operations  and product  development  activities.
Secondly,  the Company must develop  products that are  regulatory  approved and
market accepted to generate operating revenue.  There is no assurance that these
plans will be  realized in whole or in part.  The  financial  statements  do not
include  any   adjustments   that  might   result  from  the  outcome  of  these
uncertainties.

                                       30
<PAGE>


                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE I - STOCK OPTIONS

All options issued are "stand alone"  options.  There is no Company stock option
plan  currently.  The Company  accounted for the options to employees  using the
"intrinsic"  method which records as  compensation  cost the difference  between
exercise  price of the options and the fair market value of Company stock on the
measurement  (grant) date.  Options to non-employees are accounted for using the
"fair value" method, which recognizes the value of the option as an expense over
the  expected  life of the  option  with a  corresponding  increase  to  paid-in
capital.

On April 28, 2000, the Company granted stock options to three  individuals and a
corporate  associate to purchase  10,000 shares each of Company  common stock at
$0.36 per share.  During  the year ended May 31,  2002,  these  options  expired
without being  exercised.  In accordance  with accounting  principles  generally
accepted in the United  States of America,  the  accrued  compensation  costs of
these options were reversed against payroll expense in the current period.

RESTATEMENT INFORMATION
-----------------------

The  accompanying   balance  sheet,   statement  of  operations,   statement  of
stockholders deficit and statement of cash flows have been restated to recognize
the cost to the  Company  of issuing a stock  option to one of its  non-employee
directors.  The  option  vested  immediately,  has a ten  year  term  and has an
exercise  price of $1.25 per  share.  The  Company  accounted  for the option in
accordance with APB Opinion No. 25 and has recognized compensation expense based
on the intrinsic  value method.  This method  records  compensation  cost as the
difference between the exercise price of the option and the fair market value of
the Company stock on the  measurement  (grant)  date.  Because the option vested
immediately, $133,000 of compensation expense was recorded during the year ended
May 31,  2002.  Previously,  $11,500 of expense  was  recorded  on this  option.
Accordingly, net loss was increased by $121,500 to reflect immediate vesting.

Had the Company determined  compensation  expense based on the fair value at the
measurement  date for its stock option under  Statement of Financial  Accounting
Standards  No.  123,  the  Company's  net loss and loss  per  share  would  have
increased to the proforma amounts indicated as follows:

                                                               From Inception
                            Year Ended        Year Ended          Through
                           May 31, 2002      May 31, 2001       May 31, 2002
                           ------------      ------------       -------------
Net loss, as reported     $ (1,280,465)      $  (553,866)       $ (2,085,020)
Proforma net loss           (1,166,361)         (553,866)         (1,970,916)

Loss per share, as
reported                          (.11)             (.06)              (.21)
Proforma loss per share           (.10)             (.06)              (.22)


                                       31
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE I - STOCK OPTIONS - CONTINUED

The fair value of the  option is  estimated  on the date of the grant  using the
Black-Scholes option pricing model with the following assumptions:  dividends of
$0 per year; expected volatility of 83 percent;  risk-free interest rate of 5.05
percent; and an expected life of five years.

A summary of the common  stock  option  activity for  employees,  directors  and
officers is as follows:

                                                        Weighted
                                                         Average
                                                        Exercise
                                           Options       Prices     Exercisable
                                           --------     ---------   -----------
Balance, September 17, 1999 ...........        --       $    --          --

Granted, April 28, 2000 ...............      40,000         0.36       40,000
Exercised .............................        --            --          --
                                           --------
Balance, May 31, 2001 .................      40,000         0.36       40,000

Granted, November 26, 2001 ............     100,000         1.25      100,000
Expired, April 28, 2002 ...............     (40,000)         .36      (40,000)
Exercised .............................        --            --          --
                                           --------
Balance, May 31, 2002 .................     100,000     $   1.25      100,000
                                           ========

NOTE J - DESCRIPTION OF LEASING ARRANGEMENTS

The  Company  leases its  laboratory  and office  space  under a  noncancellable
operating lease. The lease term is for 36 months and 4 days, from April 27, 2001
through April 30, 2004. While the agreement provides for minimum lease payments,
the lease is non-renewable.  The lease does provide an option to purchase at any
time during the lease period for an agreed upon $70,000.

The following is a schedule of future minimum lease payments  required under the
lease:

                2002                 $  14,104
                2003                    16,925
                2004                    15,515


                                       32
<PAGE>

                                 Protalex, Inc.
                      (A Company in the Development Stage)

                   NOTES TO FINANCIAL STATEMENTS - CONTINUED

     From Inception (September 17, 1999) through May 31, 2002 (As Restated)


NOTE K - SUBSEQUENT EVENTS

  1. On July 5, 2002,  the Company  closed a private  placement of $1,263,000 by
     issuing 842,000 shares of common stock.

  2. On July 5, 2002,  the  Company  issued  842,000  stock  warrants.  No stock
     warrants have been exercised as of the date of this filing.

  3. On various  dates  subsequent  to May 31,  2002,  the Company  issued stock
     options for a total of 358,680 shares  exercisable at $1.50 per share.  The
     options expire at varying dates from three to ten years from date of grant.

  4. On June 21,  2002,  Dr.  Paul Mann  resigned  as  Director,  Treasurer  and
     Secretary. A patent assignment was executed from Paul Mann to the Company.


                                       33
<PAGE>


ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

The  Company has not had any changes in or  disagreements  with its  accountants
since inception.


ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
         PERSONS

The following table sets forth certain information with respect to the Company's
directors and executive officers as of August 2002:

        Name                   Age                     Position
------------------------       ---         -------------------------------------

John E. Doherty                48          President and Director

William Hitchcock              63          Chairman and Director

Frank M. Dougherty             54          Secretary and Director

Frederick W. Kuckuck           37          Vice President

Arthur D. Bankhurst, M.D.      65          Chief Clinical Officer and Director

Dennis Vik, Ph.D.              45          Chief Scientific Officer

Thomas Stagnaro                59          Director

Donald K. Dean                 41          Treasurer and Chief Financial Officer


                                       34
<PAGE>


JOHN E.  DOHERTY - Mr.  Doherty  has served as  President  and a director of the
Company since November  1999,  and  previously  served as a director of Enerdyne
since August  1999.  From 1976 to 1994,  Mr.  Doherty was a vice  president  and
principal of Doherty & Co., an investment  banking firm. During this time he was
involved in the early and later stage  financing of  companies  such as Thoratec
Laboratories,  SeraCare, Inc. and Excalibur  Technologies.  Mr. Doherty attended
Tufts University in Boston, Massachusetts. From 1994 to the present, Mr. Doherty
has been a private investor, and over the last year and a half was involved with
the early stage development of Protalex.

THOMAS  STAGNARO - Mr.  Stagnaro is President and CEO of Agile  Therapeutics,  a
private company focused on developing women's healthcare products.  Mr. Stagnaro
formerly  was  president  and CEO of  3-Dimensional  Pharmaceuticals  and Univax
Biologics.  Mr. Stagnaro began his career with Serle  Laboratories  and has held
increasingly  important  positions  during  his 30 years  in the  pharmaceutical
industry.  Tom has  raised  over  $200  million  for three  developmental  stage
companies and took Univax Biologics  public in 1972. His present company,  Agile
Therapeutics, is a development-stage research-based firm founded in 1997 that is
involved in developing novel products for transdermal delivery of pharmaceutical
agents. Mr. Stagnaro was appointed to the Board during the year.

ARTHUR D.  BANKHURST,  M.D. - Dr.  Bankhurst  has  served as a  director  of the
Company since November  1999,  and  previously  served as a director of Enerdyne
since August 1999. Dr.  Bankhurst  earned his bachelors  degree in  biochemistry
from the Massachusetts  Institute of Technology,  and his M.D. from Case Western
Reserve  University.  He served as a research  fellow at the Hall  Institute  of
Medical Research in Melbourne,  Australia and as a senior research fellow at the
WHO  Research  Unit  in  Geneva,  Switzerland.  He  joined  the  faculty  of the
University  of New  Mexico  in  1971,  and now  holds a joint  professorship  in
internal medicine and microbiology. Dr. Bankhurst's professional accomplishments
in the fields of  arthritis  and  immunology  are  reflected  in his being named
Senior  Investigator  for the Arthritis  foundation from  1974-1979,  as well as
serving as  associate  editor of several  prestigious  medical  journals.  These
journals include The Journal of Immunology  (1984-1987),  Diagnostic  Immunology
(1984-1988),  and Clinical Immunology and Immunopathology  (1988-present).  With
more  than  140  publications  to  his  credit,  Dr.  Bankhurst  has a  national
reputation as an investigator,  and has participated in a number of multi-center
trials of anti-arthritis drugs.

WILLIAM  M.  HITCHCOCK  - Mr.  Hitchcock  is a  partner  of  Pembroke  Financial
Partners,  LLC, an NASD  securities  firm.  Involved in the investment  business
since 1960, Mr. Hitchcock formerly was affiliated with Lazard Brothers in the UK
and Lehman Brothers in the US. Currently,  he is a director of Plains Resources,
Inc. oil and gas exploration company, and Thoratec Corporation, a medical device
company.  Mr.  Hitchcock  brings to the  Company  many  years of  experience  in
financing and guiding the growth of young companies. Mr. Hitchcock was appointed
to the Board during the year.

FRANK M.  DOUGHERTY - Mr.  Dougherty  is a  practicing  attorney and founder and
owner of Frank M. Dougherty  P.C., a law firm in  Albuquerque,  New Mexico.  Mr.
Dougherty serves as the Company's  secretary.  He has an undergraduate degree in
economics from University of Colorado,  a graduate degree in accounting from the
University of Arizona and a law degree from Texas Tech University. Mr. Daugherty
was appointed to the Board during the year.

                                       35
<PAGE>

FREDERICK W. KUCKUCK - Mr. Kuckuck,  age 37, has a Bachelor's  degree in Biology
and  Psychology  from the  University of  California,  Santa Cruz, and a Masters
degree  in  Business  Administration  with  an  emphasis  on the  management  of
technology from the University of New Mexico.  His prior experience  includes 12
years managing federally regulated laboratories in the environmental and medical
device fields.  He has authored several  publications  related to drug discovery
instrumentation, with four patents pending.

DENNIS  VIK,  PhD.  - Dennis Vik earned his Ph.D.  in  Immunology  from  Harvard
University in Cambridge,  Massachusetts  in 1986. He also earned an MBA from the
Anderson  School of Management in 2000.  Prior to becoming the Chief  Scientific
Officer for Protalex,  Dr. Vik was employed as a research associate,  and later,
assistant  member of the Department of Immunology at Scripps Clinic and Research
Foundation in La Jolla,  California  from 1986 until 1992. Dr. Vik was Assistant
Professor of  Microbiology  at the  University  of New Mexico School of Medicine
from 1992 until 1999. Dr. Vik received the National  Research Service Award from
1988 to 1990 and is a member of the American  Association of Immunologists.  Dr.
Vik has published extensively in the field of immunology.

DONALD DEAN - Mr. Dean,  age 41, has served as  accountant  for Protalex for the
past two years,  and was appointed CFO for Protalex in November  2001. He earned
his B.A.  in  International  Management  from  the  University  of New  Mexico's
Anderson  School of  Management.  Mr.  Dean was  Pacific  Rim  Manager for Hanna
International  in Portland,  Oregon for three years,  and after working in Japan
from 1989 to 1990,  returned  to the  University  of New  Mexico to  complete  a
Masters degree in Business  Administration.  Mr. Dean has run his own accounting
and e-commerce consulting business since 1993.


ITEM 10 - EXECUTIVE COMPENSATION

Executive Officer Compensation

The Company did not pay its Chief Executive Officer any compensation  during the
fiscal year ended May 31, 2002.

Employment Agreements

The  Company  does  not have  employment  agreements  with any of its  executive
officers.

Director Compensation

The Company did not compensate its directors in fiscal 2002.

                                       36
<PAGE>


ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

The  following  table  sets  forth  certain  information   regarding  beneficial
ownership  of the  Company's  common  stock as of August 16,  2002,  (i) by each
person  who is known by the  Company  to own  beneficially  more  than 5% of its
common stock, (ii) by each of the Company's  directors,  and (iii) by all of the
Company's executive officers and directors as a group. Except as provided below,
each person's  address is c/o Protalex,  Inc. P.O. Box 30952,  Albuquerque,  New
Mexico 87190.

                        Directors and Executive Officers

   Name and Address of               Amount and Nature          Percentage of
    Beneficial Owner                 of Beneficial Owner           Class (1)
   -------------------               -------------------        -------------

John E. Doherty, President              2,952,660                  23.9894

Frank M. Dougherty, Secretary              60,000                   0.4875

William Hitchcock                          90,000                   0.7313

Arthur D. Bankhurst                       276,192                   2.2440

Donald K. Dean, Treasurer                 100,000                   0.8125
                                        ---------                  -------

                                        3,478,852                  28.2647
                                        =========                  =======


                          Other beneficial owners > 5%

   Name and Address of               Amount and Nature          Percentage of
    Beneficial Owner                of Beneficial Owner           Class (1)
   -------------------              -------------------         -------------


CEDE & Co.                              1,126,432                   9.1519
PO Box 20
Bowling Green Station
New York, NY  10004

Paul L. Mann                            1,445,021                  11.7403
423 Girard NE
Albuquerque, NM  87106

Leslie McCament-Mann                    1,468,830                  11.9338
3308 Loma Vista Pl. NE
Albuquerque, NM 87106

James J. Hanosh, Jr.                    820,316                     6.6648
12300 Rd 21
Cortez, CO  81321


(1) Based on a total of 12,308,226  outstanding  shares of the Company's  common
stock.

                                       37
<PAGE>


ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On July 17, 2001 a shareholder  group contributed funds that allowed the Company
to pay off its remaining balance due to an individual  incurred in the Company's
reverse  merger  transaction.  No shares or notes payable to  shareholders  were
issued in the transaction.  The Company recorded  additional  paid-in capital in
the amount of $142,830 plus interest to reflect the  contributed  funds and debt
pay-off.

Dr. Paul Mann, former Treasurer,  Secretary,  Director and Chief Scientist,  has
left the Company,  terminating  from those  positions in June 2002 shortly after
the Company's year-end. Dr. Mann entered into a stock buyback agreement with the
Company  whereby the Company will  purchase  142,857  shares of Dr. Mann's stock
directly  from him at $0.70 per share,  payable in 12  monthly  installments  of
$8,333.

On November 26, 2001, the Company issued a stock option to William  Hitchcock in
conjunction  with his  acceptance  of a Protalex  directorship.  He  received an
option for 100,000 shares, which was exercisable immediately at $1.25 per share.
The term of the option is 10 years.  A  subsequent  stock  option was granted to
William  Hitchcock on July 18, 2002 for his efforts and  involvement in the last
private placement of the Company.  The option was for 133,680 shares exercisable
immediately at $1.50 per share.

On June 1, 2002,  the Company  issued a stock  option to Frederick  Kuckuck,  an
employee.  He  received  an option for  125,000  shares,  which was  exercisable
immediately at $1.50 per share. The term of the option is 3 years.

On July 18, 2002,  the Company  issued a stock  option to Thomas P.  Stagnaro in
conjunction  with his  acceptance  of a Protalex  directorship.  He  received an
option for 100,000 shares, which was exercisable immediately at $1.50 per share.
The term of the option is 10 years.

Mr. Don K. Dean, Treasurer and Chief Financial Officer of Protalex, Inc., is the
Brother-in-Law of Mr. John E. Doherty, President.

                                       38
<PAGE>


ITEM 13 - INDEX TO EXHIBITS

2.1     Stock Purchase Agreement among          Incorporated by reference, to
        Protalex, Inc., Don Hanosh and          the Company's 10-SB filing
        Enerdyne Corporation                    December 3, 1999

2.2     Merger Agreement and Plan of            Incorporated by reference, to
        Re-organization between Protalex,       the Company's 10-SB filing
        Inc. and Enerdyne Corporation           December 3, 1999

3.1     Articles of Incorporation, as           Incorporated by reference, to
        amended                                 the Company's 10-SB filing
                                                December 3, 1999

10.1    Promissory Note in favor of             Incorporated by reference, to
        Don Hanosh                              the Company's 10-SB filing
                                                December 3, 1999

10.2    Continuing and Unconditional            Incorporated by reference, to
        Guaranty executed  by                   the Company's 10-SB filing
        John E. Doherty                         December 3, 1999

10.3    Continuing and Unconditional            Incorporated by reference, to
        Guaranty executed  by                   the Company's 10-SB filing
        James K. Strattman                      December 3, 1999

10.5    Form of Confidential Disclosure         Incorporated by reference, to
        Agreement                               the Company's 10-SB filing
                                                December 3, 1999

99.1    Certifications                          Attached

Reports on Form 8-K.

No  reports on Form 8-K were  filed  during  the year.  A report on Form 8-K was
filed subsequent to year-end on August 24, 2002, which detailed the departure of
Paul Mann, previous Chief Scientific Officer.


                                       39
<PAGE>

SIGNATURES


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

PROTALEX, INC.


Date: August 29, 2002                        By: John E. Doherty
      ---------------                            --------------------------
                                                 John E. Doherty, President



         SIGNATURE                    TITLE                     DATE
         ---------                    -----                     ----


  John E. Doherty              President and Director        August 29, 2002
  ---------------
  John E. Doherty


  Frank M. Dougherty           Secretary and Director        August 29, 2002
  ------------------
  Frank M. Dougherty


  Frederick William Kuckuck    Vice President                August 29, 2002
  -------------------------
  Frederick William Kuckuck



  William Hitchcock            Chairman and Director         August 29, 2002
  -----------------
  William Hitchcock


  Donald Dean                  Chief Financial Officer       August 29, 2002
  -----------
  Donald Dean


  Arthur D. Bankhurst          Chief Clinical Officer        August 29, 2002
  ------------------------     and Director
  Arthur D. Bankhurst, M.D.


  Thomas Stagnaro              Director                      August 29, 2002
  ---------------
  Thomas Stagnaro


                                       40