UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

          For the quarterly period ended September 30, 2007

[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange Act
    of 1934 for the transition period from --- to ---

                        Commission file number: 000-31883

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


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

                                Alameda, CA 94501
                    (Address of principal executive offices)

                                 (510) 865-6412
                            Issuer's telephone number

     Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]     No [ ]

     Indicate by check whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).   Yes [ ]      No [X]

     On November 8, 2007, the registrant had outstanding 29,470,523 Common
Stock, $0.0001 par value per share.

     Transitional Small Business Disclosure Format:   Yes [ ]    No [X]


<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

                                                                          PAGE
                                                                          ----
<S>                                                                       <C>

PART I - FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . .    3
  ITEM 1.  FINANCIAL STATEMENTS.. . . . . . . . . . . . . . . . . . . . .    3
    Consolidated Balance Sheets
     September 30, 2007 and December 31, 2006 (Unaudited) . . . . . . . .    3

    Consolidated Statements of Operations
      For the Three and Nine Months ended September 30, 2007 and
      2006 (Unaudited), and the Period from Inception Through September 30,
      2007 (Unaudited). . . . . . . . . . . . . . . . . . . . . . . . . .    4

    Consolidated Statements of Cash Flows
      For the Nine Months ended September 30, 2007 and 2006 (Unaudited) .    5

    Notes to Condensed Consolidated Financial Statements (Unaudited). . .    6

  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. . .   10
    Results of Operations . . . . . . . . . . . . . . . . . . . . . . . .   10
    Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . .   12
    Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

  ITEM 3.  CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . .   13

PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .   14
  ITEM 1.  LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . .   14
  ITEM 2.  CHANGES IN SECURITIES. . . . . . . . . . . . . . . . . . . . .   14
  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES. . . . . . . . . . . . . . . .   14
  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. . . . . .   14
  ITEM 5.  OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . .   15
  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . .   15

SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
</TABLE>


                                        2
<PAGE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                       PROTON LABORATORIES, INC
                                CONDENSED CONSOLIDATED BALANCE SHEETS
                                             (UNAUDITED)

                                                                        SEPTEMBER 30,    DECEMBER 31,
                                                                                 2007            2006
-----------------------------------------------------------------------------------------------------
ASSETS                                                                  (UNAUDITED)
<S>                                                                   <C>              <C>
CURRENT ASSETS
Cash                                                                  $        8,461   $       9,768
Accounts receivable, less allowance for doubtful accounts of
  24,586 and $30,419, respectively                                             2,403             794
Inventory                                                                    113,652         143,865
-----------------------------------------------------------------------------------------------------
  TOTAL CURRENT ASSETS                                                       124,516         154,427
-----------------------------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT
Furniture and fixtures                                                        23,316          23,316
Equipment and machinery                                                      241,680         238,776
Leasehold improvements                                                        15,823          11,323
Accumulated depreciation                                                     (99,270)        (69,550)
-----------------------------------------------------------------------------------------------------
  NET PROPERTY AND EQUIPMENT                                                 181,549         203,865
-----------------------------------------------------------------------------------------------------
DEPOSITS                                                                       6,131           6,131
=====================================================================================================
TOTAL ASSETS                                                          $      312,196   $     364,423
=====================================================================================================

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable                                                      $      126,789   $      71,314
Accrued expenses                                                             331,801         266,079
Deferred revenue                                                              52,506          52,506
Preferred dividends payable                                                   20,800          16,000
Convertible debenture, net discount of $141,507                              108,493               -
Fair value of derivative liabilities                                         361,148               -
  TOTAL CURRENT LIABILITIES                                                1,001,537         405,899
-----------------------------------------------------------------------------------------------------
STOCKHOLDER LOANS                                                            307,642         270,642
TOTAL LIABILITIES                                                          1,309,179         676,541
=====================================================================================================
STOCKHOLDERS' DEFICIT
Series A convertible preferred stock, 400,000 shares authorized
  with a par value of $0.0001; 8,000 shares issued and outstanding;
  liquidation preference of $80,000 and $0, respectively                      80,000          80,000
Undesignated preferred stock, 19,600,000 shares authorized with a
  par value of $0.0001; no shares issued or outstanding                            -               -
Common stock, 100,000,000 common shares authorized with a par
  value of $0.0001; 29,270,523 and 21,658,223 shares issued and
  outstanding, respectively                                                    2,929           2,168
Additional paid in capital                                                 5,892,162       4,045,371
Stock subscription receivable                                                (20,000)        (20,000)
Accumulated deficit                                                       (6,952,074)     (4,419,657)
-----------------------------------------------------------------------------------------------------
  TOTAL STOCKHOLDERS' DEFICIT                                               (996,983)       (312,118)
-----------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                           $      312,196   $     364,423
=====================================================================================================
</TABLE>

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


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                                     PROTON LABORATORIES, INC
                                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                            (UNAUDITED)

                                                                             FOR THE THREE MONTHS ENDED   FOR THE NINE MONTHS ENDED
                                                                                     SEPTEMBER 30,             SEPTEMBER 30,
                                                                            --------------------------  --------------------------
                                                                                2007          2006          2007          2006
----------------------------------------------------------------------------------------------------------------------------------
                                                                            (UNAUDITED)   (UNAUDITED)   (UNAUDITED)   (UNAUDITED)
<S>                                                                         <C>           <C>           <C>           <C>
SALES                                                                       $    40,241   $    10,433   $   119,280   $    94,994

COST OF GOODS SOLD                                                               36,007        10,900        84,262        81,379
----------------------------------------------------------------------------------------------------------------------------------

GROSS PROFIT                                                                      4,234          (467)       35,018        13,615
----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES
Selling, general and administrative expenses (including
  equity-based expenses of $377,001, $0, $377,001 and $40,526, respectively)    601,502       724,615       852,741       976,656
Product development costs (including  equity-based
  expenses of $0, $0, $1,470,551 and $0, respectively)                                -             -     1,470,551             -
----------------------------------------------------------------------------------------------------------------------------------

LOSS FROM OPERATIONS                                                           (597,268)     (725,082)   (2,288,274)     (963,041)
----------------------------------------------------------------------------------------------------------------------------------

OTHER INCOME AND (EXPENSE)
  Interest income                                                                   200           963           312         1,163
  Interest expense                                                             (117,741)      (13,366)     (128,507)      (46,147)
  Change in fair value of derivative liabilities                               (111,148)            -      (111,148)            -
----------------------------------------------------------------------------------------------------------------------------------
  NET OTHER EXPENSE                                                            (228,689)      (12,403)     (239,343)      (44,984)
----------------------------------------------------------------------------------------------------------------------------------

    NET LOSS                                                                   (825,957)     (737,485)   (2,527,617)   (1,008,025)

PREFERRED STOCK DIVIDEND                                                         (1,600)       (1,600)       (4,800)       (4,800)
----------------------------------------------------------------------------------------------------------------------------------

LOSS APPLICABLE TO COMMON SHAREHOLDERS                                      $  (827,557)  $  (739,085)  $(2,532,417)  $(1,012,825)
==================================================================================================================================

BASIC AND DILUTED LOSS PER
  COMMON SHARE                                                              $     (0.03)  $     (0.04)  $     (0.10)  $     (0.06)
==================================================================================================================================

BASIC AND DILUTED WEIGHTED AVERAGE
  SHARES OUTSTANDING                                                         27,510,740    19,983,251    25,595,631    16,631,410
==================================================================================================================================
</TABLE>

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


                                        4
<PAGE>
<TABLE>
<CAPTION>
                            PROTON LABORATORIES, INC
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

FOR THE NINE MONTHS ENDED SEPTEMBER 30,              2007          2006
---------------------------------------------------------------------------
                                                 (UNAUDITED)   (UNAUDITED)
<S>                                              <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                         $(2,527,617)  $(1,008,025)
Adjustments to reconcile net loss to cash used
  in operating activities:
  Depreciation                                        29,720        23,355
  Bad debt expense                                    (5,833)            -
  Common stock issued for services                 1,847,552       674,238
  Change in fair value of derivative liabilities     111,148             -
  Accretion of debt discounts                        108,493             -
  Changes in operating assets and liabilities
    Accounts receivable                                4,224         7,171
    Inventory                                         30,213      (344,409)
    Accounts payable                                  55,475       (54,427)
    Accrued expenses                                 155,722        53,337
---------------------------------------------------------------------------

  NET CASH FROM OPERATING ACTIVITIES                (190,903)     (648,760)
---------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment                   (7,404)         (752)
---------------------------------------------------------------------------

  NET CASH FROM INVESTING ACTIVITIES                  (7,404)         (752)
---------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net                -       891,019
Proceeds from stockholder loans                       37,000        73,852
Proceeds from convertible debentures                 160,000             -
Payment on note payable                                    -      (267,852)
---------------------------------------------------------------------------

  NET CASH FROM FINANCING ACTIVITIES                 197,000       697,019
---------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH                       (1,307)       47,507

CASH AT BEGINNING OF PERIOD                            9,768         1,384
---------------------------------------------------------------------------

CASH AT END OF PERIOD                            $     8,461   $    48,891
===========================================================================

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Accrual of preferred stock dividends             $     4,800   $     4,800
Stock issued for accrued legal services          $         -   $    40,526
Stock issued for future services                 $         -   $   389,693
Stock issued under subscription agreement        $         -   $    36,533
Payment for services with convertible debenture  $    90,000   $         -
</TABLE>

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


                                        5
<PAGE>
                            PROTON LABORATORIES, INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  1  -  BASIS  OF  PRESENTATION  AND  NATURE  OF  OPERATIONS

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

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

CONDENSED  FINANCIAL  STATEMENTS  -  The  accompanying  unaudited  condensed
consolidated  financial  statements are condensed and, therefore, do not include
all disclosures normally required by accounting principles generally accepted in
the  United  States  of America.  These statements should be read in conjunction
with  the  Company's  annual  financial  statements  included  in  the Company's
December  31,  2006  Annual Report on Form 10-KSB.  In particular, the Company's
significant  accounting  principles were presented as Note 1 to the consolidated
financial  statements  in  that  report.  In  the  opinion  of  management,  all
adjustments  necessary  for  a  fair  presentation  have  been  included  in the
accompanying  condensed  consolidated  financial  statements and consist of only
normal  recurring  adjustments.  The  results  of  operations  presented  in the
accompanying  condensed  consolidated  financial  statements for the nine months
ended  September 30, 2007 are not necessarily indicative of the results that may
be  expected  for  the  full  year  ending  December  31,  2007.

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

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

BASIC  AND  DILUTED  LOSS  PER  COMMON  SHARE  -  Basic loss per common share is
calculated  by dividing net loss by the weighted-average number of common shares
outstanding.  Diluted  loss  per common share is calculated by dividing net loss
by  the  weighted-average  number  of  Series A convertible preferred shares, 8%
convertible  debenture  and  common  shares  outstanding  to  give  effect  to
potentially  issuable  common  shares  except  during  loss  periods  when those
potentially  issuable  shares  are  anti-dilutive.  Potential common shares from
convertible  preferred  stock  and  the  8%  convertible debenture have not been
included  as  they  are  anti-dilutive.

CONVERTIBLE DEBENTURES - The Company accounts for conversion options embedded in
convertible  debentures  in  accordance  with  SFAS  No.  133  "Accounting  for
Derivative  Instruments and Hedging Activities" ("SFAS 133") and Emerging Issues
Task  Force  ("EITF")  00-19,  "Accounting  for Derivative Financial Instruments
Indexed  to,  and potentially settled in, a Company's Own Stock" ("EITF 00-19").
SFAS  133  generally requires companies to bifurcate conversion options embedded
in convertible notes from their host instruments and to account for them as free
standing  derivative  financial  instruments in accordance with EITF 00-19. SFAS
133


                                        6
<PAGE>
                            PROTON LABORATORIES, INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  2  -  BUSINESS  CONDITION

provides  for  an  exception  to  this  rule  when  convertible  notes,  as host
instruments,  are  deemed  to  be  conventional as that term is described in the
implementation  guidance  under  Appendix A to SFAS 133 and further clarified in
EITF  05-2  "The  Meaning of "Conventional Convertible Debt Instrument" in Issue
No.  00-19.

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity with accounting principles generally accepted in the United States of
America,  which  contemplate continuation of the Company as a going concern. The
Company  has incurred losses applicable to common shareholders of $2,532,417 for
the  nine  months  ended September 30, 2007. For September 30, 2007 and December
31,  2006  the  Company  had  working capital deficits of $887,021 and $251,472,
respectively.  The  Company  has  relied  upon  borrowings from related parties,
proceeds  from  convertible  debentures  and capital raised through the sales of
common  stock  to  fund  operations.

The  Company  is  working  towards raising additional public funds to expand its
marketing  and  revenues.  In addition, the Company is working with its Canadian
business  associates  to  identify  institutional  businesses  to market various
disinfection  applications  based  upon  functional  water,  pending  government
approval.

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

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

NOTE  3  -  CONVERTIBLE  DEBTURE

On  June  29, 2007, the Company entered into a financing arrangement with Legacy
Media, LLC ("Legacy") that provided the issuance of a $250,000, 8.0% convertible
debenture, due December 29, 2007. Proceeds from the arrangement were received in
two  installments  of  $125,000,  net of $90,000 held as payment for services by
Legacy,  on  July  6  and  August 6, 2007 and has been used for operations. Upon
issuance,  the  convertible debenture is convertible into shares of the Company'
common  stock,  at  the lesser of (i) 50% of the lowest closing bid price during
the  fifteen (15) days of full trading prior to the conversion date or (ii) 100%
of the average of the five lowest closing bid prices for the thirty (30) trading
days  immediately  following  the first reverse split in the stock price. Legacy
also  received  an additional 3,200,000 shares for additional services rendered.
All  of  Legacy's  shares  may be registered in an SB-2 filing at their request,
subject  to  SEC  approval.  On  October  4,  2007,  the Company filed an inital
registration statement for certain of Legacy's shares on form SB-2. Please refer
to  note  5.


                                        7
<PAGE>
                            PROTON LABORATORIES, INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

In  connection  with  the  issuance  of  the  convertible debenture, the Company
evaluated  the  terms  and  features  and  determined  that under EITF 05-2 "The
Meaning  of  Conventional  Convertible  Debt  Instrument in Issue No. 00-19" the
convertible  debt  was  deemed  non-conventional  due  to the variable number of
common  shares the convertible debenture was convertible into.  Accordingly, the
conversion  feature  embedded within the convertible debentures did not meet the
established  criteria for equity classification under Emerging Issues Task Force
EITF  00-19  "Accounting  for  Derivative  Financial Instruments Indexed to, and
Potentially  Settled  in,  a  Company's  Own  Stock".

Upon  issuances, the Company valued the embedded conversion feature liability of
the  convertible  debenture  at  $166,390  and  $149,780 using the Black-Scholes
valuation method based on the following variables; a risk free rate of 5.10% and
4.52%; an exercise price of $0.09 and $0.075; a volatility of 151.4% and 147.5%;
and  a remaining term of 0.50 and 0.45 years, respectively. Since the fair value
of  the  conversion  feature  exceeded  the  carrying  value  of the convertible
debenture  on  the  date of issuance, the Company recorded $66,170 of additional
expense  during the period ending September 30, 2007.  The Company is amortizing
the  discount  over  the  term  of  the  convertible  debenture.  The  embedded
conversion feature is being carried at its respective fair value with changes in
its  value  recorded  in  the  statement  of  operations.

At  September  30,  2007,  the  Company revalued the embedded conversion feature
liability of the convertible debenture at $361,148 resulting in an entry to loss
on derivative liability of $44,978 during the three and nine month periods ended
September 30, 2007. The Company used the Black-Scholes valuation method with the
following  variables;  risk  free  rate  of  4.23%;  exercise  price  of  $0.03;
volatility  of  159.9%;  and  a  remaining  life  of  0.25  years.

During the three and nine months ended September 30, 2007, the Company amortized
$108,493  of  the discount on the convertible debentures to interest expense. To
date  there  have  been  no  conversions.

NOTE 4 - RELATED PARTY TRANSACTIONS

Stockholder  loans as of September 30, 2007 and December 31, 2006 consist of the
following:

<TABLE>
<CAPTION>
                                                                      2007      2006
--------------------------------------------------------------------------------------
<S>                                                                 <C>       <C>
Note payable to CEO and majority shareholder; principal and
  interest due December 2009; interest is accrued at 7% per annum;
  unsecured.                                                        $287,642  $270,642

Note payable to shareholder; principal and interest due
  December 2009; interest is accrued at 7% per annum; unsecured.      20,000         -
--------------------------------------------------------------------------------------

    TOTAL STOCKHOLDER LOAN                                           307,642   270,642

    Less: Current Portion                                                  -         -
--------------------------------------------------------------------------------------

    TOTAL STOCKHOLDER LOAN - LONG TERM                              $307,642  $270,642
======================================================================================
</TABLE>


                                        8
<PAGE>
                            PROTON LABORATORIES, INC
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

During  the  nine months ended September 30, 2007, two shareholders advanced the
Company  $37,000 at an interest rate of 7%. The $37,000 is included as a part of
the  stockholder loans shown above. The Company did not make any payments on the
notes  during  the  nine  months  ended  September  30,  2007.

During  the  three and nine months ended September 30, 2007, the Company accrued
$5,348 and $16,151, respectively, in interest expense on stockholder loans. , At
September  30,  2007,  the  Company had accrued interest relating to stockholder
loans  of  $67,705  recorded  in accrued liabilities on the accompanying balance
sheet.

During  the  three and nine months ended September 30, 2007, the Company accrued
$15,000  and  $45,000, respectively, for salaries payable to the Company's Chief
Executive Officer, resulting in $260,233 of salaries payable recorded in accrued
liabilities  on  the  accompanying  balance  sheet  at  September  30,  2007.

NOTE 5 - COMMON STOCK

During January through September 30, 2007 the Company issued 7,612,300 shares of
common  stock  for  various services and agreements. The value of the shares was
$1,847,552  based  on  market prices ranging from $0.13 to $0.37 per share which
was  the  market  price  of  the Company's common stock on the date of issuance.

NOTE 6 - COMMITMENTS

PRODUCTION  AGREEMENT - In June 2005, the Company entered into an agreement with
Mitachi, a Japanese electronics component manufacturer, to aid in the production
of  enhanced  drinking  water  generators.  Pursuant  to this agreement, Mitachi
agreed  to  pay  the  Company  25,000,000  Yen  for engineering design, molding,
tooling and preparation costs, and the exclusive product distribution rights for
China,  Taiwan, and Japan.  As of September 30, 2007, Mitachi had paid 6,000,000
Yen, or $52,506, for the above mentioned distribution rights.  Since the project
is  not  yet completed and no units have been sold, this amount is classified as
deferred  revenue.

EQUITY  LINE  -  In  June  2007, the Company terminated an equity line of credit
agreement  with  a  private  investment  fund.  No funds were drawn down on this
equity  line,  and  no  shares  of  stock  were  sold  to  the  investment fund.

LEASE  COMMITMENT  - On July 1, 2007, the Company entered into a lease agreement
to pay monthly lease payments of $3,852 until June 30, 2008 and $3,966 from July
1,  2009  through  June  30,  2009.

NOTE 7 - SUBSEQUENT EVENT

On  October 5, 2007, the Company issued 200,000 shares of common stock for legal
services  rendered.  The  Company  valued the shares at the closing price of the
Company's common stock of $0.06 resulting in share based compensation of $12,000
on  the  date  of  the  transaction.


                                        9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

          FORWARD-LOOKING STATEMENT

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

          INTRODUCTION

The  following discussion and analysis of our financial condition and results of
operations  should  be read in conjunction with our audited financial statements
and  the  accompanying  notes thereto for the year ended December 31, 2006 which
appear  in  our Form 10-KSB for the year then ended, and our unaudited financial
statements  for  the  three  and  nine  months  ended September 30, 2007 and the
accompanying  notes  thereto  and  the  other  financial  information  appearing
elsewhere  herein.

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity  with  accounting  principles  generally  accepted  in the USA, which
contemplates  our  continuation  as  a  going  concern.  We have incurred losses
applicable  to  common  shareholders  of  $2,532,417  for  the nine months ended
September  30, 2007. We had working capital deficit of $887,021 at September 30,
2007.  Loans  and  equity  funding  were  required to fund operations.  We had a
stockholder deficit of $996,983 at September 30, 2007 and a stockholders deficit
of  $312,118  at  December  31,2006.

Our  independent  auditors  made  a  going concern qualification in their report
dated  April  13,  2007,  which  raises  substantial  doubt about our ability to
continue  as  a  going  concern.  The  financial  statements  do not include any
adjustments  relating to the recoverability and classification of recorded asset
amounts  or  amounts  and  classification of liabilities that might be necessary
should  the  Company be unable to continue in existence. Our ability to continue
as  a  going  concern  is dependent upon our ability to generate sufficient cash
flows  to meet our obligations on a timely basis, to obtain additional financing
as  may  be  required,  and ultimately to attain profitable operations. However,
there  is  no assurance that profitable operations or sufficient cash flows will
occur  in the future. We have our primary office located in Alameda, California.
During 2006, we created a presence in Quincy, Washington and Portland, Oregon by
aligning  ourselves  with  office  spaces  that were made available to us. These
offices  are  used  primarily  for  marketing  and  sales  generation.


                                       10
<PAGE>
Our business consists of the development, marketing and sales of the industrial,
environmental,  and  residential  systems through the United States, which alter
the  properties  of water to produce functional water. During 2006, we continued
to  import  and  resell  systems  manufactured  by  various  Japanese companies;
however,  during  the  same time period the company started design, engineering,
parts  sourcing and assembly identification for developing its own brand labeled
products.  In  Management's  view,  the  company  has  successfully  designed,
engineered  and  developed  five commercial systems and one residential unit. We
need  to  raise  more funds to bring our residential counter top unit to market,
and  there  is  no assurance that such funds can be raised. The Company believes
the food safety commercial unit will be ready for market introduction during the
third  quarter  of  2007, following certification by an independent underwriters
laboratory.  We  are  prioritizing  the  marketing  and distribution of our food
safety  commercial unit, which can also have applications in the medical, dental
and  sports  facility  industries.

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

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

          CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operations
is based upon our consolidated financial statements, which have been prepared in
accordance  with  generally  accepted  accounting  principles.

The  preparation of these financial statements requires us to make estimates and
judgments  that  affect the reported amounts of assets, liabilities, revenue and
expenses,  and  related  disclosure  of contingent assets and liabilities. On an
ongoing  basis,  we  evaluate our estimates. We base our estimates on historical
experience  and  on various other assumptions that are believed to be reasonable
under  the circumstances. These estimates and assumptions provide a basis for us
to  make  judgments about the carrying values of assets and liabilities that are
not  readily  apparent  from  other  sources. Our actual results may differ from
these estimates under different assumptions or conditions, and these differences
may  be  material.

We  recognize  revenue  when  all  four  of  the following criteria are met: (i)
persuasive  evidence  that  an arrangement exists; (ii) delivery of the products
and/or  services  has  occurred;  (iii)  the  selling  price  is  both fixed and
determinable  and;  (iv)  collectibility  is  reasonably  probable.

Our  revenues  are  derived  from  sales  of  our  industrial, environmental and
residential  systems,  which alter the properties of water to produce functional
water.  We  believe  that  this  critical


                                       11
<PAGE>
accounting  policy  affects our more significant judgments and estimates used in
the  preparation  of  our  consolidated  financial  statements.

RESULTS OF OPERATIONS

          COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

We had revenue of $40,241 for the three months ended September 30, 2007 compared
to  revenue of $10,433 for the three months ended September 30, 2006. During the
current  period  the  Company  is  developing its new line of products, and thus
expects  the  revenue  base  will  remain  fairly  consistent.

We incurred a net loss of $825,957 for the three months ended September 30, 2007
and  a  net loss of $737,485 for the three months ended September 30, 2006. This
was  an  increase in net loss attributable to the recording of non-cash interest
expense  of  $108,493  related  to  the  amortization  of  the  discount  on the
convertible  debentures and additional expense related to the change in the fair
value  of  the  derivative liabilities of $111,148 during the three months ended
September  30,  2007.

          COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

We had revenue of $119,280 for the nine months ended September 30, 2007 compared
to  revenue  of $94,994 for the nine months ended September 30, 2006. During the
current  period  the  Company  is  developing its new line of products, and thus
expects  the  revenue  base  will  remain  fairly  consistent.

We  incurred  a  net  loss of $2,527,617 for the nine months ended September 30,
2007  and a net loss of $1,008,025 for the nine months ended September 30, 2006.
This was an increase in net loss attributable to in-kind consultant compensation
expenses  incurred  in  the  sourcing  of  manufacturing,  marketing  and  sales
infrastructure  necessary for the Company. In addition, the Company had non-cash
interest  expense of $108,493 related to the amortization of the discount on the
convertible  debentures and additional expense related to the change in the fair
value  of  the  derivative  liabilities of $111,148 during the nine months ended
September  30,  2007.

Cash  used  by  operating  activities  was  $190,903  for  the nine months ended
September 30, 2007 compared to cash used by operating activities of $648,760 for
the  nine  months  ended September 30, 2006. The increase is directly related to
the  increase  in  the  Company's  net  loss.

We  had  total assets at September 30, 2007 of $312,196, compared to $364,423 at
December  31, 2006. During the current period that the Company is developing its
new  line  of products, and expects that the total asset base will remain fairly
consistent.

               LIQUIDITY

At September 30, 2007, we had cash on hand of $8,461. Our growth is dependent on
our  attaining  profit from our operations and our raising of additional capital
either  through the sale of stock or borrowing funds. There is no assurance that
we  will  be  able  to raise any equity financing or sell any of our products to
generate  a  profit.


                                       12
<PAGE>
At  September 30, 2007, we owed stockholder loans of $307,642. In March 2007, we
entered  into  an equity line of credit with a private investor. As of September
30,  2007  we terminated this equity line without draw down. In addition, during
the  nine months ended we received $160,000 in net proceeds from the issuance of
a  convertible  debenture  which  is  due  in  December  2007.

          FUTURE CAPITAL REQUIREMENTS

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

Our future capital requirements will depend upon many factors, including:
- - The cost to acquire equipment that we then would resell.
- - The cost of sales and marketing.
- - The rate at which we expand our operations.
- - The results of our consulting business.
- - The response of competitors.

ITEM 3.  CONTROLS AND PROCEDURES

(a)  Evaluation  of  disclosure  controls  and  procedures.

     As  of  the end of the period covered by this report, the Company conducted
an  evaluation,  under  the  supervision and with the participation of the Chief
Executive  Officer  and  Chief  Financial  Officer,  of the Company's disclosure
controls  and  procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
from  the  Company's  registered  public  accounting  firm.

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

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

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


                                       13
<PAGE>
PART II  -OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  CHANGES IN SECURITIES.

During  July  2007, the Company entered into an agreement with Legacy Media, LLC
in  connection with the agreement Legacy Media, LLC has been granted 3.2 million
shares  of  the  Company's restricted common stock to provide investor relations
services.

During July 2007, Legacy Media, LLC has also been issued a convertible debenture
by  the  Company  in the amount of $250,000, incurring interest at 8% and due in
December 2007.  The convertible debenture is convertible immediately into shares
of  the  Company's  common stock, at the lesser of (i) 50% of the lowest closing
bid  price during 15 days prior to conversion or (ii) 100% of the average of the
five  lowest  closing  bid  prices for 30 Trading Days immediately following any
reverse  split  in  the  common  stock. All of Legacy Media, LLC's shares may be
registered  in  an  SB-2  filing  at  its  request, subject to SEC approval.

The  Company  also  issued  200,000  shares  of  restricted  common  stock to an
independent  consultant  for  legal  and  business  services  rendered.

These  securities  were  issued  in  private  transactions,  in  reliance on the
exemption  available  under  Section  4(2)  of  the  1933  Act.

ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES

NONE.

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

No matters were submitted to a vote of security holders during the quarter ended
September  30,  2007.

Pursuant  to  Section  RCW  23B.07.040(b)  of  the Revised Code of Washington, a
majority  of  the  shareholders  of  Proton  Laboratories,  Inc.  acting  by  a
Shareholder  Consent  in  Lieu  of  Annual Meeting have appointed a new Board of
Directors  as follows: Ed Alexander, Don Gallego, Gregory Darragh, Jed A. Astin,
Gary Taylor and Steven Perry. Mr. Miceal Ledwith has stepped down from the Board
following  good  service.  The  majority  shareholders  also  consented  to  the
amendment  of  the  articles  of  incorporation  to increase the number of Board
Members  to  nine.  They  have  also consented to the appointment of Dr. Kochiki
Hanoaka  to  the Board as soon as the amendment has been properly filed with the
state  of  Washington.

The effective date of the consent is June 6, 2007. Majority shareholder consents
were  received  as  of  July  27, 2007. The total number of shareholder votes in
favor of the consent was 16,279,308. Proton's total outstanding number of shares
on  the  effective date of the consent was 29,185,673.  A 14-C Statement will be
filed  with  the  Commission  shortly.


                                       14
<PAGE>
ITEM  5.  OTHER  INFORMATION

NONE

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

NONE


                                       15
<PAGE>
SIGNATURES

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

                                          PROTON LABORATORIES, INC.
                                          (Registrant)

Date:     November 14, 2007               By:     /s/ Ed Alexander
                                                 -------------------------------
                                                  Ed Alexander
                                          Its:    Chief Executive Officer,
                                                  President, CFO


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