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                                                                   EXHIBIT 10.16


                  CONVERTIBLE UNSECURED DEMAND PROMISSORY NOTE

                                                              September 27, 2002

         FOR VALUE RECEIVED, the undersigned, PILOT THERAPEUTICS HOLDINGS, INC.,
a Delaware corporation (the "COMPANY"), having an address at 101 N. Chestnut
Street, Suite 102, Winston-Salem, North Carolina 27101, attention: Floyd "Ski"
Chilton III, PhD., President, Chief Executive Officer and Chief Scientific
Officer, hereby promises to pay to the order of Academy Centennial Fund, LLC
(the "LENDER"), at such place as the Lender may designate by written notice to
the Company, the principal sum of SEVENTY-FIVE THOUSAND DOLLARS ($75,000) plus
interest on the principal balance hereof at a per annum rate of 5.0%, Unless
this Note is earlier redeemed, the principal amount of this Note and all accrued
interest thereon shall be payable on the earlier of (i) December 31, 2002 or
(ii) the Lender's demand for payment in a written notice delivered to the
Company which specifies the date of payment.

         So long as any principal of this Note or any accrued interest thereon
remains unpaid, the Lender shall have the right to notify the Company, in
writing, that it wants to convert all or a portion of the principal of this Note
and accrued interest thereon into restricted shares of common stock of the
Company at a conversion price equal to $3.00 per common share (the "Conversion
Notice"). Upon receipt of a Conversion Notice, the Company shall promptly issue
and deliver to the Lender or its designee the number of shares of restricted
common stock of the Company, calculated in accordance with the immediately
preceding sentence, set forth in the Conversion Notice.

         This Note is subject to prepayment in whole or in part at the option of
the Company at any time, upon not less than 5 days' prior written notice
delivered to the Lender, at a price equal to the then outstanding principal
amount hereof, plus accrued interest to the date of prepayment. In the event
that the Company shall make a partial prepayment hereof, the Company shall
prepay such principal amount hereof as set forth in such notice, together with
interest accrued thereon to the date of prepayment.

         Nothing contained herein shall require the Company to pay, or the
Lender to accept, interest in an amount which would subject the Lender to any
penalty or forfeiture under applicable law. Notwithstanding that it is not
intended hereby to charge interest at a rate in excess of the maximum legal rate
of interest permitted to be charged to the Company under applicable law, if
interest in excess of such maximum legal rate shall be payable hereunder, then
ipso facto such rate shall be reduced to the highest lawful rate so that no
amounts shall be charged which are in excess thereof, and, in the event it
should be determined that any excess over such highest lawful rate has been
received, such excess shall be applied by the Lender in reduction of the
outstanding principal indebtedness on this Note.

         In the event any one or more of the provisions contained in this Note
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Note, but this Note shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein or
therein.

         Presentment, protest and demand, notice of demand, notice of
acceleration, notice of intent to accelerate, dishonor, nonpayment and protest
are hereby waived by all makers, sureties, guarantors and endorsers hereof. All
makers, sureties, guarantors and endorsers hereof agree that the maturity of
this Note, or any payment hereunder, may be extended from time to time without
in any way affecting the liability of such makers, sureties, guarantors or
endorsers.


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         The Company promises to pay all reasonable costs of collection upon
default in the payment of this Note or interest hereon when due.

         IN WITNESS WHEREOF, the Company has caused this Note to be executed by
its duly authorized officer, as of the date first written above.



                               PILOT THERAPEUTICS HOLDINGS, INC.



                               By:      /s/ Floyd H. Chilton III, PhD
                                   ------------------------------------------
                                           Floyd "Ski" Chilton III, PhD.
                                      President, Chief Executive Officer and
                                             Chief Scientific Officer


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