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

                                   FORM 10-KSB

(X)  Annual Report  Pursuant to Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934

     For the fiscal year ended December 31, 2003.

                                       OR

( )  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

                        Commission File Number: 33-05384

                          IR BIOSCIENCES HOLDINGS, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its Charter)

                    DELAWARE                                13-3301899
         --------------------------------              -------------------
         (State or Other Jurisdiction of                (I.R.S. Employer
          Incorporation or Organization)               Identification No.)

       8655 East Via De Ventura, Suite E-155                  85258
      ---------------------------------------          -------------------
     (Address of Principal Executive Offices)               (Zip Code)

                                 (480) 922-3926
                ------------------------------------------------
                (Issuer's Telephone Number, including Area Code)

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

                                      NONE

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

                    COMMON STOCK, $ 0.001 PAR VALUE PER SHARE
                    -----------------------------------------
                                (Title of class)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 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                                      No         X
          ---------------                         ------------------

Check if there is no disclosure of delinquent  filers 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. [ X ]

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

The aggregate market value of the Registrant's  issued and outstanding shares of
common stock held by  non-affiliates  of the Registrant as of May 6, 2004 (based
on the average of the bid and asked  prices as reported by the NASD OTC Bulletin
Board as of that date) was approximately $2,309,569.

The number of shares outstanding of Registrant's  Common Stock, par value $0.001
as of May 3, 2004: 27,581,274.

Documents Incorporated by reference:  None

Transitional Small Business Disclosure Format   Yes           No      X
                                                   --------      ----------

<PAGE>

                               TABLE OF CONTENTS

                                                                          Page
                                                                          ----

                                     PART I

Item 1.  Description of Business.............................................3

Item 2.  Description of Property............................................21

Item 3.  Legal Proceedings..................................................21

Item 4.  Submission of Matters to a Vote of Security Holders................22

                                     PART II

Item 5.  Market for Common Equity, Related Stockholder
         Matters and Small Business Issuer Purchases
         of Equity Securities...............................................22

Item 6.  Management's Discussion and Analysis or Plan of Operations.........22

Item 7.  Financial Statements...............................................25

Item 8.  Changes in and Disagreements with Accountants......................26

Item 8a. Controls and Procedures............................................

                                    PART III

Item 9.  Directors and Executive Officers of the Registrant.................26

Item 10. Executive Compensation.............................................28

Item 11. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters.........................30

Item 12. Certain Relationships and Related Transactions.....................31

Item 13. Exhibits and Reports on Form 8-K...................................31

Item 14. Principal Accountant Fees and Services.............................32

                                   SIGNATURES

<PAGE>


                                INTRODUCTORY NOTE

THE  DISCUSSIONS  IN  THIS  FORM  10-KSB  MAY  CONTAIN  CERTAIN  FORWARD-LOOKING
STATEMENTS  WITHIN THE MEANING OF SECTION 27A OF THE  SECURITIES ACT OF 1933 AND
SECTION 21E OF THE  SECURITIES  EXCHANGE ACT OF 1934. IN ADDITION,  WHEN USED IN
THIS  FORM  10-KSB,  THE  WORDS  "ANTICIPATES,"  "IN THE  OPINION,"  "BELIEVES,"
"EXPECTS,"  AND SIMILAR  EXPRESSIONS  ARE  INTENDED TO IDENTIFY  FORWARD-LOOKING
STATEMENTS.  ACTUAL FUTURE RESULTS COULD DIFFER  MATERIALLY FROM THOSE DESCRIBED
IN  THE  FORWARD-LOOKING   STATEMENTS  AS  A  RESULT  OF  FACTORS  DISCUSSED  IN
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS SET FORTH BELOW,  AS WELL AS IN "RISK FACTORS" SET FORTH HEREIN.  THE
COMPANY CAUTIONS THE READER,  HOWEVER, THAT THIS LIST OF RISK FACTORS MAY NOT BE
EXHAUSTIVE.  THE COMPANY  EXPRESSLY  DISCLAIMS ANY  OBLIGATION OR UNDERTAKING TO
RELEASE PUBLICLY ANY UPDATES OR CHANGES TO THESE FORWARD-LOOKING STATEMENTS THAT
MAY BE MADE TO REFLECT ANY ANTICIPATED OR UNANTICIPATED  EVENTS OR CIRCUMSTANCES
AFTER THE DATE OF SUCH STATEMENTS.

                                     PART I

ITEM 1.       DESCRIPTION OF BUSINESS

Unless the context otherwise  requires,  references to "we," "us," the "Company"
or "ImmuneRegen" mean IR BioSciences Holdings, Inc.

BUSINESS DEVELOPMENT

Our company, IR BioSciences Holdings, Inc., is a Delaware corporation and, until
July 2001,  was engaged in the  business of assisting  unaffiliated  early-stage
development and small to mid-sized  emerging growth companies with financial and
business development  services,  including raising capital in private and public
offerings. During 2001, we failed to meet our revenue targets. On July 27, 2001,
a majority  interest in our company was acquired by a private  investor,  and we
installed new management  and adopted a new business plan. The immediate  action
taken  regarding  this new  business  plan was to  discontinue  our then current
operations effective July 27, 2001.

On July 2, 2003, our company and ImmuneRegen Biosciences, Inc., a privately-held
Delaware corporation ("ImmuneRegen"),  entered into and consummated an Agreement
and Plan of Merger (the  "Merger").  In accordance  with the Merger,  on July 2,
2003, we acquired  ImmuneRegen in exchange for  10,531,585  shares of our common
stock.  The  transaction  contemplated  by the  Agreement  was  intended to be a
"tax-free"  reorganization  pursuant  to  the  provisions  of  Section  351  and
368(a)(1)(A)  of the Internal  Revenue Code of 1986,  as amended.  On August 29,
2003, the Registrant's name was changed from GPN Network, Inc. to IR BioSciences
Holdings, Inc.

CORPORATE STRUCTURE

IR BioSciences  Holdings is a  publicly-traded  entity and has one  wholly-owned
subsidiary:  ImmuneRegen BioSciences,  Inc. ImmuneRegen  BioSciences,  Inc. is a
Delaware Corporation,  and was incorporated on October 30, 2002. Currently,  all
of our Company's operations are conducted by ImmuneRegen BioSciences, Inc.

BUSINESS  DESCRIPTION

ImmuneRegen BioSciences, Inc. is a biotechnology company engaged in the research
and  development of  applications  utilizing  modified  substance P, a naturally
occurring immunomodulator. Derived from homeostatic substance P, ImmuneRegen has
named its proprietary  compound  "Homspera."  Currently,  ImmuneRegen  holds two
patents  and  four  provisional  patents  in the  United  States.  Additionally,


                                        3

<PAGE>

ImmuneRegen  holds a patent with the European Union and Australia and is seeking
to extend its patents into Canada and, possibly, Japan.

ImmuneRegen's  initial  areas  of focus  will be in  continuing  development  of
several applications for use in improving pulmonary function and stimulating the
immune system.  These  applications  have been derived from research studies and
positive  results from  laboratory  tests  conducted by management over the past
nine years.

With  the  assistance  of  our  U.S.  Food  and  Drug   Administration   ("FDA")
consultants,  Synergos, Inc., ImmuneRegen plans to apply for Investigational New
Drug ("IND") approval from the FDA. Based on ImmuneRegen's past test results and
continuing studies, ImmuneRegen believes that its IND may be activated, allowing
it to begin its human clinical trials using the Homspera compound as a treatment
for lung injury caused by acute respiratory disease syndrome ("ARDS"),  an often
fatal disease.

ImmuneRegen's  goal is to enter into overseas  licensing and royalty  agreements
for its  applications  while awaiting  approval by the FDA in the Unites States.
Once approval has been obtained by the FDA,  ImmuneRegen hopes to further expand
its sales efforts  internationally  and will attempt to begin to generate  sales
domestically  through the  licensing and the direct sales of its products in the
United   States.   A  goal  is  to   strategically   align  itself  with  larger
pharmaceutical  and other  biotechnology and medical research  companies,  which
ImmuneRegen  believes  may  enhance  its  ability  to succeed  in  reaching  the
objectives of bringing its applications to the  marketplace.  If FDA approval is
granted,  ImmuneRegen  intends  to  seek to  establish  license  agreements  and
relationships domestically that will bring Homspera to those in need of it.

Substance P
-----------

Substance  P, first  isolated in 1931,  is a  bioactive  11-amino  acid  peptide
belonging to a group of neurokinins (small peptides that are broadly distributed
in the central nervous system and peripheral  nervous  system).  Substance P has
been  found  to be  involved  in many  physiological  processes  including  pain
modulation,  smooth muscle contraction,  blood pressure control, kidney function
and water homeostasis. The peptide is widely distributed in numerous tissues and
body   fluids   including   the   central   and   peripheral   nervous   system,
gastrointestinal tract, visual system and circulatory system.

In the 1950s,  substance P was considered to be the neurotransmitter for primary
sensory afferent fibers, or the pain transmitter.  By the 1970s, the biochemical
properties of purified  substance P were found to be a  proteinaceous  substance
composed of amino acids that, subsequently, could be synthetically derived.

Since  then,  substance  P has  been  extensively  studied  by  researchers  and
scientists worldwide because of its many general  physiological  effects (smooth
muscle  contraction,  inflammation,  neurotransmission,  blood vessel  dilation,
histamine release,  and activation of the immune system) including its potential
to stimulate  epithelial  growth;  heal ulcers and ocular wounds;  and, as a new
approach to dulling anxiety and relieving depression and stress.

ImmuneRegen's  patents  and  continued  substance P research  are  derived  from
discoveries  made during  research  funded by the Air Force Office of Scientific
Research in the early 1990s. During this research ImmuneRegen's  founders,  Drs.
Witten and Harris,  observed that the exposure of animals to jet fuels  resulted
in pathological  changes in the lung and immune systems of those exposed. It was
also observed  that such exposure  resulted in depletion of substance P from the
lungs of the animals.  These studies further showed that the  administration  of
substance P may help prevent and reverse the effects of jet fuel exposure in the
lungs, as well as protect and regenerate the immune system.  The immune findings
led to early research on the treatment of exposure to acute radiation and on the
possible reversal of lung damage caused by ARDS and cigarette smoke.

Research & Development
----------------------

Homspera is a proprietary  compound  created by modifying  substance P. Based on
initial findings and ongoing research studies,  ImmuneRegen intends to initially
focus on developing  treatments for acute


                                        4

<PAGE>

radiation  syndrome  ("ARS"),  ARDS and hair replacement  related to loss due to
traditional  anti-cancer  treatments.  Additionally,  management  believes  that
Homspera may be proven to provide  applications  for: 1)  lessening  lung damage
caused by cigarette smoke and other toxicants  related to air pollution;  2) the
treatment of respiratory diseases associated with chronic obstructive  pulmonary
disease  ("COPD");  3)  the  treatment  of  lung  and  other  cancers;  4)  hair
replacement; and, 5) the treatment of animals through the development of similar
applications for use in veterinary medicine.

In the  future,  ImmuneRegen  believes  that  it may be  able  to  increase  and
strengthen its market  position in the following  ways: (i) working with the FDA
to  obtain  the  approval  of  the  Homspera  and  future   developments;   (ii)
investigating foreign markets for the use of Homspera and future products;  and,
(iii) continuing its current research into developing new applications.

ImmuneRegen  has  established  a  pilot   manufacturing   facility  at  its  lab
headquarters in Tucson,  Arizona for the production of  immune-based  therapies.
ImmuneRegen  expect these  facilities to be adequate to supply limited  clinical
trial quantities for its products under  development.  Additional  manufacturing
capacity will be needed for commercial scale production,  if these therapies are
approved for commercial sale.

For the manufacture of the applications  under  development,  ImmuneRegen obtain
synthetic  peptides from third party  manufacturers.  ImmuneRegen  believes that
synthesized version of substance P is readily available at low cost from several
life  science and  technology  companies  that provide  biochemical  and organic
chemical   products  and  kits  used  in   scientific   and  genomic   research,
biotechnology,  pharmaceutical  development  and the  diagnosis  of disease  and
chemical manufacturing.  ImmuneRegen believes that the synthetic substance P and
other materials necessary to produce Homspera are readily available from various
sources,  and several  suppliers  are capable of  supplying  substance P in both
clinical and  commercial  quantities.  These  suppliers  also store and ship the
product as well.

ImmuneRegen  expects that its products  will use an inhaler  (puffer)  device to
deliver Homspera to the user. To develop, manufacture and test an inhaler device
ImmuneRegen  hopes to partner  with a drug  development  and  chemical  services
company that offers services ranging from pre-clinical and toxicology studies to
clinical trial support and  manufacturing  services.  ImmuneRegen  believes that
such a partnership may enable it to decrease the time-to-market for its products
and to increase its productivity.

Our Products
------------

Based on its initial research  findings,  ImmuneRegen plans to initially develop
applications using Homspera for:

o    The treatment for ARS;

o    The treatment of ARDS; and,

o    Hair  loss  replacement/attenuation  due  to  its  traditional  anti-cancer
     treatments.

While  performing the necessary  research  studies and due diligence to gain FDA
approval  of  Homspera,   ImmuneRegen   hopes  to  enter  into  various  license
agreements, joint ventures and perform additional research overseas.

In conjunction with these initial areas  ImmuneRegen  plans to continue research
and data collection,  perform further research studies,  and hopes to enter into
license agreements overseas for:

o    Therapies  that may lessen lung damage caused by cigarette  smoke and other
     toxicants related to air pollution;

o    Providing a possible solution to the hair replacement industry; and,


                                        5

<PAGE>

o    The  treatment  of animals  through  the  possible  development  of similar
     applications for use in veterinary medicine.

Looking  ahead,  based  on  collected  preliminary  research  data,  ImmuneRegen
believes it may be able to develop applications for:

o    Reducing the risk of cancer development;

o    Prevention of the spread and metastasis of cancer;

o    The treatment of lung and other cancers;

o    Enhancing an immune response to a viral infection; and,

o    Boosting  a  suppressed  or  failing  immune   system,   which  has  direct
     applications in the treatment of the common cold,  AIDS, food poisoning and
     slowing the effects of aging.

Initial Applications
--------------------

o    Immune-Based Therapies for Acute Radiation Sickness (ARS)

Radiation sickness,  known as acute radiation sickness or syndrome, is a serious
illness that occurs when the entire body (or most of it) receives a high dose of
radiation,  usually  over a short  period of time.  The chance of  survival  for
people with ARS decreases with increasing radiation dose. Most people who do not
recover from ARS will die within several months of exposure.  The cause of death
in most cases is the destruction of the patient's bone marrow,  which results in
infections and internal  bleeding.  For the survivors,  the recovery process may
last from several weeks up to 2 years.

Radiation  is a form of energy.  It comes from  man-made  sources  such as x-ray
machines, from the sun and outer space, and from some radioactive materials such
as uranium in soil. Small quantities of radioactive materials occur naturally in
the air, the water,  the food people eat, and in the human body.  Radiation that
goes  inside the body causes  what is  referred  to as  internal  exposure.  The
exposure  that is referred to as external  comes from sources  outside the body,
such as radiation from sunlight and man-made and naturally occurring radioactive
materials.  Radiation  can affect the body in a number of ways,  and the adverse
health  consequences  of exposure may not be seen for many years.  These effects
can range from mild, such as skin  reddening,  to serious effects such as cancer
and death, depending on the amount of radiation absorbed by the body (the dose),
the type of radiation, the route of exposure, and the length of time a person is
exposed.  Exposure to very large doses of radiation may cause death within a few
days or months.  Exposure to lower doses of  radiation  may lead to an increased
risk of developing cancer or other adverse health effects.

Because of recent  terrorist  events,  people have  expressed  concern about the
possibility of a terrorist  attack  involving  radioactive  materials,  possibly
through the use of a "dirty  bomb," and the harmful  effects of  radiation  from
such an event.  The adverse health  consequences  of a terrorist  nuclear attack
vary  according  to the type of  attack  and the  distance  a person is from the
attack.  Potential terrorist attacks may include a small radioactive source with
a  limited  range of impact or a  nuclear  detonation  involving  a wide area of
impact.  In the event of a terrorist  nuclear attack,  people may experience two
types of exposure from  radioactive  materials:  external  exposure and internal
exposure.  Exposure to very large doses of  external  radiation  may cause death
within a few days or months.  External  exposure to lower doses of radiation and
internal exposure from breathing or eating radioactive contaminated material may
lead to an increased risk of developing cancer and other adverse health effects.
These adverse effects range from mild, such as skin reddening, to severe effects
such as cancer and death,  depending on the amount of radiation  absorbed by the
body (the dose), the type of radiation, the route of exposure, and the length of
time of the exposure.

In animal studies,  ImmuneRegen  believes that it has achieved  positive results
using  Homspera to treat  animals  subjected  to varying  levels of  radioactive
exposure.  Although  ImmuneRegen  continues to perform


                                        6

<PAGE>

studies in this area, it believes that Homspera may prove to be effective in the
treatment of exposure to radiation.

Due to  ImmuneRegen's  relationship  with the United States  Government,  if the
results from  additional  studies are as expected,  ImmuneRegen  believes it may
begin to realize revenue from the sale of Homspera within the next 12 months.

o    Immune-Based Therapies for Acute Respiratory Distress Syndrome

ImmuneRegen  believes that little therapeutic  progress has been achieved in the
understanding of ARDS and the mortality remains high. ARDS is characterized as a
severe injury to most or all of the lungs.  Patients with ARDS experience severe
shortness of breath and often  require  mechanical  ventilation  (life  support)
because of respiratory failure. ARDS is not a specific disease; instead, it is a
type of severe,  acute lung  dysfunction  that is  associated  with a variety of
diseases, such as pneumonia,  shock, sepsis (a severe infection in the body) and
trauma.  ARDS may be confused with  congestive  heart failure,  which is another
common condition that can also cause acute respiratory distress.

The majority of deaths in ARDS are due to nonrespiratory causes. Sepsis accounts
for the  majority of early  deaths,  and multiple  organ  failure is a prominent
cause of late mortality.  As there is no known cure, the current treatment is to
identify  and treat the  underlying  condition  and keep the  patient  alive and
breathing,  usually requiring mechanical  ventilation.  With ARDS, the breathing
muscles  (i.e.,  the diaphragm  and other muscles in the chest) become  fatigued
very  quickly and can stop  working in their effort to get oxygen into the body.
The level of oxygen in the blood drops  rapidly and to  dangerously  low levels,
causing  damage to vital organs and body  processes.  If the oxygen level is not
brought up quickly and  maintained  at adequate  levels,  the damage,  including
severe brain damage, may be irreversible.

To date, there are no specific pharmacological interventions of proven value for
the treatment of ARDS. However, based on positive results and exhaustive studies
from treating lung damage due to jet fuel  exposure,  ImmuneRegen  believes that
its trials may prove Homspera could also be applicable  with similar  results to
the treatment of ARDS.

o    Treatment for Hair Loss Related to Traditional Cancer Treatments

Although  alopecia,  (hair loss) is not life  threatening,  many cancer patients
describe it as a traumatic  side effect of  chemotherapy,  as well as a constant
reminder  of the  cancer  and its  treatment.  Patients  experiencing  hair loss
encounter shedding of hair,  obstacles to routine hair grooming,  and difficulty
in maintaining  body heat,  particularly at night, as well as scalp  sensitivity
and tenderness. Hair loss can also evoke feelings of low self-esteem and fear of
how an altered appearance will be perceived by others.

Hair loss occurs because anticancer drugs can affect normal proliferating cells,
including the cells responsible for hair growth.  This effect,  however,  is not
permanent,  and healthy cells grow back normally once  chemotherapy or radiation
is  completed.  Scalp hairs in the,  "anagen" or growing  phase  (about 90%) are
susceptible to  chemotherapy  and radiation.  The degree of hair loss depends on
the  chemotherapy  drug, the dosage of chemotherapy or radiation,  and how it is
given.

In radiation  treatments only hair that is in a treatment field will be affected
with hair loss.  Generally,  the hair loss will begin approximately two to three
weeks  after the  start of  treatments.  This  hair  will  grow  back  after the
treatments are completed. If a higher dose of radiation is delivered, there is a
chance that the hair loss will be permanent.

Chemotherapy  consists  of the  administration  of drugs  that  destroy  rapidly
dividing  cancer  cells.  Cancer cells are some of the most rapidly  reproducing
cells in the body,  but  other  cells,  such as those  which  contribute  to the
formation of hair shafts and nails, are also rapidly reproducing. Unfortunately,
while chemotherapy drugs preferentially destroy cancer cells, the drugs also can
destroy  those cells  responsible  for normal  growth of hair and nails.  Cancer
patients sometimes shed the hair and nails during treatment.  Chemotherapy drugs
are  poisonous  to the  cells  of the  hair  root  responsible  for  hair  shaft
formation.


                                        7

<PAGE>

Usually,  the hair is lost  rapidly in large  quantities  during  treatment.  In
chemotherapy,  hair loss starts approximately two to three weeks after the first
dose of  chemotherapy,  but will not be noticeable  until one to two months have
elapsed.  Hair loss is  reversible  and will be back totally about three to four
months after the last chemotherapy dose.

ImmuneRegen  believes that through research studies and experiments that aerosol
treatments with Homspera may be proven to have the effect of replacing hair loss
in animal  models.  Supporting  its  initial  findings  are  studies  by various
research  groups showing that substance P may be involved in hair modulation and
has been shown in animal studies  indicate to help induce the transition of hair
from the telogen  phase  (final  phase of the hair  growth  cycle where the hair
falls out) to the anagen  phase  (first  phase of the cycle  where  active  hair
growth occurs). Due to its initial findings and the existing outside research on
substance P,  ImmuneRegen  believes that it may be able to develop  applications
using Homspera to treat the hair loss industry.

Other Applications
------------------

o    Immune-Based Therapies for Cigarette Smoke and Other Toxicants

Air  pollution  is one of the  most  pervasive  environmental  problems  because
atmospheric currents can carry contaminated air to every part of the globe. Most
air pollution comes from motor vehicle emissions and from power plants that burn
coal and oil to produce energy for  industrial and consumer use.  Carbon dioxide
and other  harmful  gases  released  into the air from these  sources  adversely
affect weather patterns and the health of people.  Fragile lung tissue is easily
damaged by  pollutants  in the air,  resulting in  increased  risk of asthma and
allergies,  chronic bronchitis,  lung cancer and other respiratory diseases. Air
pollution  threatens  the health of  virtually  every living being on the Earth.
Studies have shown that indoor air quality is a significant concern as levels of
many  common  pollutants  have  been  shown  to  be  2 to 5  times  higher,  and
occasionally more than 100 times higher indoors than they are outdoors.

ImmuneRegen  believes that its results from treating lung damage due to jet fuel
exposure may be proven to be applicable with similar results to damage caused to
the lungs and air  passages  as a result of  prolonged  exposure  to the harmful
toxicants  commonly  found in  polluted  air and  cigarette  smoke.  ImmuneRegen
believes results from its preliminary studies that inhalation of Homspera may be
proven to help prevent  cellular and genetic  damage due to cigarette  smoke and
preserve lung function.  ImmuneRegen  filed a provisional  patent in August 2002
and  expects to file a formal  patent  allotted  under the  provisional  patent.
ImmuneRegen hopes to seek foreign license  agreements and strategic  partners to
begin the development and marketing of its product if the patent is granted.

o    Immune-Based Therapies for the Veterinary Market

By developing  therapies based on Homspera,  ImmuneRegen seeks to be a developer
and marketer of health  products for the  worldwide  food animal and  veterinary
care markets. ImmuneRegen believes that the applications,  which it is currently
developing for human subjects and others specifically for animals, may be proven
to be applicable to the numerous  species of animals  comprising  the veterinary
market.  ImmuneRegen  believes there may be potential  applications  in the food
animal  markets,  including  the dairy and beef cattle  industries  and the pork
production  industry,  as well as large and small  companion  animal  veterinary
health care industries.

ImmuneRegen hopes that its Homspera-based  products for veterinary  applications
may be  offered  initially  in late  2003 to mid  2004,  assuming  the  required
regulatory approval is obtained.  Further, the recent trend in the international
drug industry,  the merger of companies into larger and more  competitive  ones,
reflects  the  highly  competitive   nature  of  the  pharmaceutical   industry.
Currently,  few domestic drug  companies are  competitive  in the  international
animal  drug  market  due to the  lack  of  technology  and  marketing  know-how
including oversees drug registration  procedures.  ImmuneRegen believes that due
to this trend and the lack of  presence  overseas,  strategic  partnerships  and
licenses may be available to it both domestically and internationally.

Future Applications
-------------------

o    Immune-Based Therapies for Cancer

Cancer remains the second-leading cause of death in the industrialized world and
worldwide.  As life expectancy  continues to increase,  so will cases of cancer.
Products are beginning to emerge that are specifically  targeted to cancer cells
or act in  collaboration  with the body's immune response to combat the disease.
ImmuneRegen  believes that this marks a change in the way cancer is treated, and
it believes that such innovative  therapies may help transform the cancer market
during the next decade.

                                        8

<PAGE>

Based on results  from  initial  research  studies,  ImmuneRegen  believes  that
Homspera may be proven to help assist in the  treatment  of cancer.  ImmuneRegen
believes  that  Homspera  may be  proven  to help  the  slowing  and,  possibly,
preventing  the  spread  and  metastasis  of  cancer  from the  site of  origin.
Secondly,  ImmuneRegen  believes  that  Homspera may be proven to help boost the
immune  system,  which may  reduce the risks of cancer  development  and aids in
recovery from chemotherapy and radiation  treatments.  Upon additional  funding,
ImmuneRegen   expects  to  continue  the   development   of  Homspera  for  such
applications.

o    Immune-Based Therapies for the Common Cold/Flu

ImmuneRegen will also be focusing product  development and discovery  activities
on viral respiratory infection ("VRI"), often referred to as the common cold. It
has been  estimated  that adults suffer two to five colds per year,  and infants
and pre-school  children have an average of four to eight colds per year. Due to
its possible ability to help boost the immune system  ImmuneRegen  believes that
Homspera may be proven to be an effective treatment in this application.

o    Immune-Based Therapies for HIV/AIDS

AIDS,  which is caused by the HIV virus, is a condition that slowly destroys the
body's  immune  system making the body  vulnerable  to  infections.  HIV spreads
through  the body by  invading  host  cells and using  the host  cells'  protein
synthesis  capability  to  replicate.  The immune  system  responds by producing
antibody and cellular immune responses capable of attacking HIV. While these and
other  responses are usually  sufficient to temporarily  arrest  progress of the
infection  and  reduce  levels of virus in the  blood,  the virus  continues  to
replicate  and  slowly  destroys  the immune  system by  infecting  and  killing
critical T cells,  known as CD4 cells. As the infection  progresses,  the immune
system's control of HIV weakens;  the level of virus in the blood rises, and the
level of T cells  declines to a fraction of normal  level.  Currently  available
antiviral  products  have been shown to be  effective  at reducing the levels of
virus in the blood;  however,  certain limitations in the therapy have prevented
the antiviral products from being as effective as originally predicted.  This is
due  primarily  to HIV's  ability to develop  resistance  to these drugs and the
drugs'  inability to stimulate  the infected  individual's  own immune system to
kill the virus.

Based on initial research,  ImmuneRegen  believes that individuals  treated with
Homspera may be able to elicit immune responses to multiple  subtypes of HIV. If
proven,  this type of broad cross  reactivity may have future  implications  for
both therapeutic and preventive vaccines. Based on initial research, ImmuneRegen
believes that Homspera may be proven to boost HIV-specific  immune responses and
may induce a positive  virologic  effect in HIV-infected  individuals.  Based on
initial research,  ImmuneRegen  believes Homspera may be proven to stimulate the
production of specific antiviral substances that naturally protect components of
the immune system from HIV infection.  Furthermore, by utilizing an immune-based
therapy  such  as  Homspera,  in  conjunction  with  existing  antiviral  drugs,
ImmuneRegen  believes it may be possible to boost the HIV infected  individual's
immune system  against the virus,  such that the  virologic  effect of antiviral
drug therapy is prolonged and enhanced.

o    Immune-Based Therapies for Food Poisoning

Food poisoning occurs worldwide, however it is most frequently reported in North
America and Europe.  Only a small  proportion of infected  people are tested and
diagnosed.

Salmonella  is  responsible  for a  substantial  portion  of all  cases  of food
poisoning  and serious  complications  occur when the  Salmonella  bacteria make
their way into the bloodstream.

                                        9

<PAGE>

Once in the blood stream, the bacteria can enter any organ system throughout the
body,  causing  disease.  Other  infections  which may be  caused by  salmonella
include:

o    Bone infections (osteomyelitis),

o    Joint infections (arthritis),

o    Infection of the sac containing the heart (pericarditis),

o    Infection   of  the   tissues   which  cover  the  brain  and  spinal  cord
     (meningitis),

o    Infection of the liver (hepatitis),

o    Lung infections (pneumonia),

o    Infection of aneurysms (aneurysms are abnormal  outpouchings which occur in
     weak areas of the walls of blood vessels), and

o    Infections in the center of already-existing tumors or cysts.

Additionally,  ImmuneRegen  believes that Homspera may be proven to help prevent
the spread of the  salmonella  bacteria,  as well as other  organisms that are a
cause of food poisoning.

Immuneregen's Strategy
----------------------

ImmuneRegen's  strategy is to develop,  test and obtain regulatory  approval for
various  applications  using  Homspera in a diverse array of  applications.  The
first two  regulatory  approvals  ImmuneRegen  hopes to obtain are in the United
States and Europe.  ImmuneRegen is currently investigating  regulatory and other
requirements  in  these  countries,  as  well  as  others.  ImmuneRegen  is also
evaluating  other  market  for  distribution  of  Homspera  and  hopes to secure
potential strategic partners and licensees in these foreign markets.

ImmuneRegen's strategy is focused on the following major steps:

o    Establishing and formalizing strategic partnering relationships.

ImmuneRegen's  aim is to establish  relationships  with industry  leaders in the
pharmaceutical and medical device industries for application-specific  sales and
distribution  of its techniques and products,  both domestic and  international.
ImmuneRegen  believes this may have the effect of  generating  revenues in under
twelve months after funding in the form of license  agreements with companies in
Europe and other  countries,  while awaiting  possible FDA approval for sales in
the United States to begin.

o    Accelerating current research efforts.

ImmuneRegen is working on capturing the full benefit of the Homspera  technology
in applications  relating to the aforementioned  fields.  Further,  the research
that has produced Homspera could be applicable to other processes.

o    Expanding production facility capacity.

ImmuneRegen intends to operate a laboratory facility in Tucson,  Arizona,  which
is equipped with state-of-the-art culture equipment, instrumentation and storage
systems. ImmuneRegen intends to implement expansion plans if it receives its IND
from the FDA.

o    Expanding sales, production and administrative resources.

Sales,  increased research, and foreign affiliations will require more resources
by  ImmuneRegen.  ImmuneRegen  hopes these will be supplied  through third party
relationships and increases to staff as necessary.


                                        10

<PAGE>

o    Supplementing and leveraging existing advisory relationships.

Pharmaceutical,  biotechnology and corporate companies are a primary channel for
introducing  and  distributing   new  products.   To  facilitate  the  marketing
strategies  outlined above,  ImmuneRegen  intends to supplement and leverage its
existing relationships.

In the  future,  ImmuneRegen  believes  that  it may be  able  to  increase  and
strengthen its market  position in the following  ways: (i) working with the FDA
to  obtain  the  approval  of  the  Homspera  and  future   developments;   (ii)
investigating foreign markets for the use of Homspera and future products;  and,
(iii) continuing its current research into the science of attenuating ailments.

Manufacturing
-------------

ImmuneRegen  has  established  a  pilot   manufacturing   facility  at  its  lab
headquarters in Tucson,  Arizona for the production of  immune-based  therapies.
ImmuneRegen  expects these  facilities to be adequate to supply limited clinical
trial quantities for our products under  development.  Additional  manufacturing
capacity will be needed for commercial scale production,  if these therapies are
approved for commercial sale.

For the manufacture of the applications under development,  ImmuneRegen  obtains
synthetic  peptides  from  third  party  manufacturers.  ImmuneRegen  believes a
synthesized version of substance P is readily available at low cost from several
life  science and  technology  companies  that provide  biochemical  and organic
chemical   products  and  kits  used  in   scientific   and  genomic   research,
biotechnology,  pharmaceutical  development  and the  diagnosis  of disease  and
chemical manufacturing.  ImmuneRegen believes that the synthetic substance P and
other materials necessary to produce Homspera are readily available from various
sources,  and several  suppliers  are capable of  supplying  substance P in both
clinical and  commercial  quantities.  These  suppliers  also store and ship the
product as well.

ImmuneRegen's  products will use an inhaler  (puffer) device to deliver Homspera
to the user. To develop,  manufacture  and test an inhaler  device,  ImmuneRegen
hopes to partner with a  full-service  drug  development  and chemical  services
company that offers services ranging from pre-clinical and toxicology studies to
clinical trial support and manufacturing  services.  ImmuneRegen believes such a
partnership may enable it to decrease the time-to-market for its products and to
increase its productivity.

Government Regulation
---------------------

Our  development,  manufacture and potential sale of therapeutics are subject to
extensive regulation by United States and foreign governmental  authorities.  In
particular,  pharmaceutical  products  are subject to rigorous  preclinical  and
clinical  testing and to other  approval  requirements  by the FDA in the United
States under the Food, Drug and Cosmetic Act, and by comparable agencies in most
foreign countries.

As an initial step in the FDA regulatory  approval process,  preclinical studies
are typically  conducted in animals to identify  potential safety problems.  For
certain  diseases,  animal  models exist that are believed to be  predictive  of
human  efficacy.  For such  diseases,  a drug  candidate  is tested in an animal
model.  The  results of the studies  are  submitted  to the FDA as a part of the
Investigational  New Drug  application  (IND)  that is filed to comply  with FDA
regulations  prior to  commencement  of human  clinical  testing in the U.S. For
diseases for which no  appropriately  predictive  animal model  exists,  no such
results can be filed.  As a result,  no IN VIVO  evidence  of efficacy  would be
available until such compounds progress to human clinical trials.

Clinical trials are typically conducted in three sequential phases, although the
phases  may  overlap.  In Phase I,  which  frequently  begins  with the  initial
introduction of the drug into healthy human subjects prior to introduction  into
patients, the compound will be tested for safety, dosage tolerance,  absorption,
bioavailability,  biodistribution,  metabolism, excretion, clinical pharmacology
and, if possible,  for early  information on  effectiveness.  Phase II typically
involves studies in a small sample of the intended patient  population to assess
the efficacy and  duration of the drug for a specific  indication,  to determine
dose tolerance and the optimal dose range and to gather  additional  information
relating  to  safety  and  potential


                                       11

<PAGE>

adverse effects.  Phase III trials are undertaken to further  evaluate  clinical
safety  and  efficacy  in  an  expanded  patient  population  at  geographically
dispersed study sites, to determine the overall  risk-benefit  ratio of the drug
and to provide an adequate basis for physician labeling. Each trial is conducted
in accordance with certain  standards under protocols that detail the objectives
of the  study,  the  parameters  to be used to monitor  safety and the  efficacy
criteria to be evaluated.  Each protocol must be submitted to the FDA as part of
the IND.  Further,  each  clinical  study must be  evaluated  by an  independent
Institutional  Review  Board at the  institution  at  which  the  study  will be
conducted.  The  Institutional  Review Board will consider,  among other things,
ethical factors,  the safety of human subjects and the possible liability of the
institution.

Data from preclinical  testing and clinical trials are submitted to the FDA in a
New Drug  Application  (NDA) for marketing  approval.  The process of completing
clinical  testing and  obtaining FDA approval for a new drug is likely to take a
number of years and require the expenditure of substantial resources.  Preparing
an  NDA  involves  considerable  data  collection,  verification,  analysis  and
expense, and there can be no assurance that approval will be granted on a timely
basis,  if at all.  The  approval  process is  affected  by a number of factors,
including  the  severity  of  the  disease,   the  availability  of  alternative
treatments and the risks and benefits  demonstrated in clinical trials.  The FDA
may deny an NDA if  applicable  regulatory  criteria  are not  satisfied  or may
require  additional  testing or information.  Among the conditions for marketing
approval is the requirement that the prospective  manufacturer's quality control
and manufacturing  procedures conform to the FDA's CGMP regulations,  which must
be  followed  at all  times.  In  complying  with  standards  set forth in these
regulations,  manufacturers  must continue to expend time,  monies and effort in
the area of production and quality control to ensure full mechnical  compliance.
Manufacturing  establishments,  both foreign and  domestic,  also are subject to
inspections  by or under the  authority of the FDA and by or under the authority
of other federal, state or local agencies.

Even after initial FDA approval has been obtained,  further  studies,  including
post-marketing studies, may be required to provide additional data on safety and
will be required to gain  approval  for the use of a product as a treatment  for
clinical  indications  other  than  those for which the  product  was  initially
tested. Also, the FDA will require post-marketing  reporting to monitor the side
effects of the drug.  Results  of  post-marketing  programs  may limit or expand
further marketing of the drug products.  Further, if there are any modifications
to the drug, including changes in indication, manufacturing process, labeling or
manufacturing  facilities,  an NDA supplement may be required to be submitted to
the FDA.

The Orphan Drug Act provides  incentives  to drug  manufacturers  to develop and
manufacture  drugs for the treatment of diseases or conditions that affect fewer
than 200,000  individuals in the United  States.  Orphan drug status can also be
sought for diseases or conditions  that affect more than 200,000  individuals in
the United States if the sponsor does not  realistically  anticipate its product
becoming profitable from sales in the United States.  Under the Orphan Drug Act,
a manufacturer  of a designated  orphan  product can seek tax benefits,  and the
holder of the first FDA approval of a designated  orphan product will be granted
a  seven-year  period of marketing  exclusivity  for that product for the orphan
indication.  While the  marketing  exclusivity  of an orphan drug would  prevent
other  sponsors  from  obtaining  approval  of the  same  compound  for the same
indication,  it would not prevent  other types of drugs from being  approved for
the same use. We may apply for orphan  drug  status for the use of Homspera  for
certain indications.

Under the Drug Price  Competition  and Patent Term  Restoration  Act of 1984,  a
sponsor may be granted marketing  exclusivity for a period of time following FDA
approval of certain drug  applications  if FDA  approval is received  before the
expiration of the patent's  original  term.  This  marketing  exclusivity  would
prevent a third party from  obtaining  FDA  approval  for a similar or identical
drug through an Abbreviated New Drug Application,  which is the application form
typically used by manufacturers  seeking approval of a generic drug. The statute
also allows a patent  owner to extend the term of the patent for a period  equal
to  one-half  the period of time  elapsed  between  the filing of an IND and the
filing of the  corresponding  NDA plus the period of time  between the filing of
the NDA and FDA approval.  We may seek the benefits of this  statute,  but there
can be no assurance that we will be able to obtain any such benefits.

Whether or not FDA  approval  has been  obtained,  approval of a drug product by
regulatory  authorities  in  foreign  countries  must be  obtained  prior to the
commencement of commercial sales of the product in such countries. Historically,
the requirements governing the conduct of clinical trials and product approvals,
and the time required for approval, have varied widely from country to country.

                                       12

<PAGE>

In addition to the statutes and regulations described above, we are also subject
to regulation  under the Occupational  Safety and Health Act, the  Environmental
Protection Act, the Toxic Substances Control Act, the Resource  Conservation and
Recovery Act and other present and  potential  future  federal,  state and local
regulations.

FACILITIES

The  Company has a lease  agreement  for 1,440  square  feet of office  space in
Scottsdale,  Arizona.  The lease expires August 31, 2004. Rent expense is $2,734
per month.

EMPLOYEES

As of December  31,  2003,  ImmuneRegen  had one  full-time  employee  and three
contract employees. None of its employees are covered by a collective bargaining
agreement.

RISK FACTORS

The actual  results of the  combined  company may differ  materially  from those
anticipated in these forward-looking  statements. The Registrant and ImmuneRegen
will operate as a combined company in a market  environment that is difficult to
predict and that involves  significant  risks and  uncertainties,  many of which
will  be  beyond  the  combined   company's   control.   Additional   risks  and
uncertainties  not presently  known,  or that are not  currently  believed to be
important to you, if they  materialize,  also may adversely  affect the combined
company.

IMMUNEREGEN HAS AN ACCUMULATED  DEFICIT, IS NOT CURRENTLY PROFITABLE AND EXPECTS
TO INCUR SIGNIFICANT EXPENSES IN THE NEAR FUTURE.

ImmuneRegen  has  incurred  a  substantial  net  loss  for the  period  from its
inception in October 2002 to June 30, 2003, and currently  experiencing negative
cash flow.  ImmuneRegen expects to continue to experience negative cash flow and
operating  losses  through at least 2004 and possibly  thereafter.  As a result,
ImmuneRegen will need to generate significant revenues to achieve profitability.
If  ImmuneRegen's  revenues  grow more  slowly  than it  anticipates,  or if its
operating  expenses exceed its expectations,  ImmuneRegen may experience reduced
profitability.

IMMUNEREGEN'S  INDEPENDENT  OUTSIDE AUDITORS HAVE RAISED SUBSTANTIAL DOUBT ABOUT
IMMUNEREGEN'S ABILITY TO CONTINUE AS A GOING CONCERN.

ImmuneRegen's  independent  certified  public  accountants  have stated in their
report included in this Form 10-KSB that the Company has incurred a net loss and
negative cash flows from  operations of $1,856,702  and $996,890,  respectively,
for the year ended December 31, 2003, and a lack of operational  history,  among
other matters,  that raise  substantial doubt about its ability to continue as a
going concern, which contemplates, among other things, the realization of assets
and satisfaction of liabilities in the normal course of business.  The effect of
this going concern would materially and adversely affect  ImmuneRegen's  ability
to raise capital,  its relationship with potential suppliers and customers,  and
have other unforeseen effects.

THE  REGISTRANT   WILL  BE  REQUIRED  TO  RAISE   ADDITIONAL   CAPITAL  TO  FUND
IMMUNEREGEN'S  OPERATIONS. IF IMMUNEREGEN CANNOT RAISE NEEDED ADDITIONAL CAPITAL
IN THE FUTURE, IT WILL BE REQUIRED TO CEASE OPERATIONS.

ImmuneRegen requires  substantial working capital to fund its operations.  Since
it does not expect to generate  significant  revenues in the foreseeable future,
in  order  to fund  operations,  ImmuneRegen  will be  completely  dependent  on
additional debt and equity  financing  arrangements.  There is no assurance that


                                       13

<PAGE>

any  financing  will be  sufficient  to fund its capital  expenditures,  working
capital and other cash  requirements  for the fiscal year  ending  December  31,
2004.  No  assurance  can be  given  that any such  additional  funding  will be
available  or  that,  if  available,  can be  obtained  on  terms  favorable  to
ImmuneRegen. If ImmuneRegen is unable to raise needed funds on acceptable terms,
ImmuneRegen will not be able to develop or enhance its products,  take advantage
of future  opportunities  or respond to competitive  pressures or  unanticipated
requirements. A material shortage of capital will require the Registrant to take
drastic steps such as reducing  ImmuneRegen's level of operations,  disposing of
selected  assets or seeking an  acquisition  partner.  If cash is  insufficient,
ImmuneRegen will not be able to continue operations.

IMMUNEREGEN'S  LIMITED  OPERATING  HISTORY  MAKES IT  DIFFICULT  TO EVALUATE THE
SUCCESS  OF ITS  BUSINESS  MODEL AND THE  EFFECTIVENESS  OF ITS  MANAGEMENT.  IF
IMMUNEREGEN'S PLAN IS NOT SUCCESSFUL,  OR MANAGEMENT IS NOT EFFECTIVE, THE VALUE
OF THE REGISTRANT'S COMMON STOCK MAY DECLINE.

ImmuneRegen was founded in October 2002. As a result,  ImmuneRegen has a limited
operating  history on which you can base your  evaluation  of its  business  and
prospects.  ImmuneRegen's  business and prospects must be considered in light of
the risks and uncertainties  frequently  encountered by companies in their early
stages of development. These risks and uncertainties include the following:

o    ImmuneRegen's  ability to raise additional  funding and the amounts raised,
     if any;

o    The time and costs involved in obtaining regulatory approvals;

o    Continued  scientific  progress in  ImmuneRegen's  research and development
     programs;

o    The scope and results of preclinical studies and clinical trials;

o    The costs involved in filing, prosecuting and enforcing patent claims;

o    Competing technological and market developments;

o    Effective commercialization activities and arrangements;

o    The costs of defending against and settling lawsuits; and

o    Other factors not within the combined company's control or known to it.

The combined  company cannot be sure that it will be successful in meeting these
challenges and addressing these risks and uncertainties.  If it are unable to do
so, ImmuneRegen's business will not be successful.

IMMUNEREGEN'S  FAILURE TO SUCCESSFULLY  DEVELOP AND COMMERCIALIZE  PRODUCTS WILL
CAUSE US TO CEASE OPERATIONS.

ImmuneRegen's  failure to develop and commercialize  products  successfully will
cause it to cease operations.  Its potential  therapies  utilizing Homspera will
require  significant  additional research and development efforts and regulatory
approvals prior to potential commercialization in the future. ImmuneRegen cannot
guarantee that it, or its corporate collaborators,  if any, will ever obtain any
regulatory  approvals  of Homspera.  ImmuneRegen  currently is focusing its core
competencies  on Homspera  although  there may be no  assurance  that it will be
successful in so doing.

ImmuneRegen's  therapies and technologies  utilizing Homspera is at early stages
of  development  and may not be  shown  to be safe or  effective  and may  never
receive regulatory approval.  ImmuneRegen's  technologies utilizing Homspera has
not yet been  tested in humans.  Regulatory  authorities  may not  permit  human
testing of potential products based on these technologies. Even if human testing
is permitted,  any potential  products based on Homspera may not be successfully
developed or shown to be safe or effective.


                                       14

<PAGE>

The results of ImmuneRegen's  preclinical studies and clinical trials may not be
indicative  or future  clinical  trial  results.  A  commitment  of  substantial
resources to conduct time-consuming  research,  preclinical studies and clinical
trials  will be required  if it is to develop  any  products.  Delays in planned
patient  enrollment  in  ImmuneRegen's  clinical  trials may result in increased
costs,  program delays or both.  None of  ImmuneRegen's  potential  products may
prove to be safe or effective in clinical trials.  Approval of the Unites States
Food and Drug Administration,  the FDA, or other regulatory approvals, including
export  license  permissions,  may not be  obtained  and  even  if  successfully
developed and approved,  ImmuneRegen's potential products may not achieve market
acceptance.  Any  products  resulting  from  ImmuneRegen's  programs  may not be
successfully  developed or  commercially  available for a number of years, if at
all.

Moreover,  unacceptable  toxicity or side effects could occur at any time in the
course of human clinical trials or, if any products are  successfully  developed
and  approved  for  marketing,  during  commercial  use of any of  ImmuneRegen's
proposed products.  The appearance of any unacceptable  toxicity or side effects
could interrupt,  limit,  delay or abort the development of any of ImmuneRegen's
proposed products or, if previously approved,  necessitate their withdrawal from
the market.

THE LENGTHY PRODUCT  APPROVAL  PROCESS AND UNCERTAINTY OF GOVERNMENT  REGULATORY
REQUIREMENTS  MAY DELAY OR PREVENT  IMMUNEREGEN  FROM  COMMERCIALIZING  PROPOSED
PRODUCTS.

Clinical  testing,  manufacture,  promotion,  export  and sale of  ImmuneRegen's
proposed products are subject to extensive  regulation by numerous  governmental
authorities in the United States,  principally the FDA, and corresponding  state
and  foreign  regulatory   agencies.   This  regulation  may  delay  or  prevent
ImmuneRegen  from   commercializing   proposed   products.   Noncompliance  with
applicable  requirements can result in, among other things, fines,  injunctions,
seizure  or recall of such  products,  total or  partial  suspension  of product
manufacturing  and  marketing,  failure  of the  government  to grant  premarket
approval, withdrawal of marketing approvals and criminal prosecution.

The regulatory process for new therapeutic drug products, including the required
preclinical studies and clinical testing, is lengthy and expensive.  ImmuneRegen
may not receive necessary FDA clearances for any of its potential  products in a
timely  manner,  or at all.  The length of the  clinical  trial  process and the
number of patients the FDA will require to be enrolled in the clinical trials in
order to establish the safety and efficacy of ImmuneRegen's proposed products is
uncertain.

Even if human  clinical  trials  of  Homspera  are  initiated  and  successfully
completed, the FDA may not approve Homspera for commercial sale. ImmuneRegen may
encounter  significant  delays  or  excessive  costs in its  efforts  to  secure
necessary approvals.  Regulatory requirements are evolving and uncertain. Future
United States or foreign  legislative or administrative  acts could also prevent
or delay  regulatory  approval of our products.  ImmuneRegen  may not be able to
obtain the necessary  approvals for clinical trials,  manufacturing or marketing
of any  of  our  products  under  development.  Even  if  commercial  regulatory
approvals  are  obtained,  they  may  include  significant  limitations  on  the
indicated uses for which a product may be marketed.

In  addition,  a marketed  product is subject to  continual  FDA  review.  Later
discovery  of  previously  unknown  problems  or  failure  to  comply  with  the
applicable  regulatory  requirements may result in restrictions on the marketing
of a product or withdrawal  of the product from the market,  as well as possible
civil or criminal sanctions.

Among the other  requirements  for regulatory  approval is the requirement  that
prospective  manufacturers conform to the FDA's Good Manufacturing Practices, or
GMP, requirements.  In complying with the FDA's GMP requirements,  manufacturers
must continue to expend time, money and effort in production, record keeping and
quality control to assure that products meet applicable specifications and other
requirements.  Failure  to comply  and  maintain  compliance  with the FDA's GMP
requirements  subjects  manufacturers to possible FDA regulatory action and as a
result, may have a material adverse effect on ImmuneRegen.  ImmuneRegen,  or its
contract manufacturers,  if any, may not be able to maintain compliance with the


                                       15

<PAGE>

FDA's GMP  requirements on a continuing  basis.  Failure to maintain  compliance
could have a material adverse effect on ImmuneRegen.

The FDA has not designated expanded access protocols for Homspera as "treatment"
protocols.  The FDA may not  determine  that  Homspera  meets  all of the  FDA's
criteria for use of an investigational  drug for treatment use. Even if Homspera
is allowed for treatment use,  third party payers may not provide  reimbursement
for the costs of treatment with Homspera. The FDA also may not consider Homspera
to be an appropriate  candidate for accelerated  approval,  expedited  review or
fast track designation.

Marketing  any  drug  products   outside  of  the  United  States  will  subject
ImmuneRegen to numerous and varying foreign  regulatory  requirements  governing
the  design  and  conduct  of human  clinical  trials  and  marketing  approval.
Additionally, ImmuneRegen's ability to export drug candidates outside the United
States on a  commercial  basis will be subject  to the  receipt  from the FDA of
export  permission,  which may not be  available on a timely  basis,  if at all.
Approval procedures vary among countries and can involve additional testing, and
the time required to obtain approval may differ from that required to obtain FDA
approval.  Foreign  regulatory  approval  processes  include  all of  the  risks
associated with obtaining FDA approval set forth above,  and approval by the FDA
does not ensure approval by the health authorities of any other country.

TECHNOLOGICAL CHANGE AND COMPETITION MAY RENDER IMMUNEREGEN'S POTENTIAL PRODUCTS
OBSOLETE.

The life science industry  continues to undergo rapid change, and competition is
intense and is  expected  to  increase.  Competitors  may succeed in  developing
technologies  and products that are more  effective or affordable  than any that
ImmuneRegen  is developing  or that would render  ImmuneRegen's  technology  and
proposed products obsolete or noncompetitive.  Most of ImmuneRegen's competitors
have substantially  greater  experience,  financial and technical  resources and
production,  marketing  and  development  capabilities.   Accordingly,  some  of
ImmuneRegen's  competitors  may succeed in  obtaining  regulatory  approval  for
products more rapidly or effectively  than it, or technologies and products that
are  more  effective  and  affordable  than any that  ImmuneRegen  is  currently
developing.

IMMUNEREGEN'S  LACK OF COMMERCIAL  MANUFACTURING  AND MARKETING  EXPERIENCE  MAY
PREVENT IT FROM SUCCESSFULLY COMMERCIALIZING PRODUCTS.

ImmuneRegen has not manufactured  any of its products in commercial  quantities.
ImmuneRegen may not successfully make the transition from manufacturing clinical
trial quantities to commercial  production  quantities or be able to arrange for
contract  manufacturing and this could prevent us from commercializing  products
or limit our profitability  from our products.  Even if Homspera is successfully
developed  and receives  FDA  approval,  ImmuneRegen  has not  demonstrated  the
capability to manufacture Homspera in commercial quantities. ImmuneRegen has not
demonstrated  the  ability  to  manufacture  Homspera  in  large-scale  clinical
quantities.  ImmuneRegen  expects  to  rely  on  third  parties  for  the  final
activation step of the Homspera  manufacturing process. If any of these proposed
manufacturing  operations prove  inadequate,  there may be no assurance that any
other  arrangements  may be  established  on a timely basis or that  ImmuneRegen
could establish other manufacturing capacity on a timely basis.

IMMUNEREGEN  HAS NO  EXPERIENCE  IN THE SALES,  MARKETING  AND  DISTRIBUTION  OF
PHARMACEUTICAL OR BIOTECHNOLOGY PRODUCTS.  THUS, IMMUNEREGEN'S PROPOSED PRODUCTS
MAY NOT BE SUCCESSFULLY  COMMERCIALIZED  EVEN IF THEY ARE DEVELOPED AND APPROVED
FOR COMMERCIALIZATION.

The  manufacturing  process of  ImmuneRegen's  proposed  products is expected to
involve a number of steps and requires compliance with stringent quality control
specifications  imposed by ImmuneRegen and by the FDA. Moreover,  it is expected
that ImmuneRegen's proposed products may be manufactured only in a facility that
has undergone a satisfactory  inspection and certification by the FDA. For these
reasons,  ImmuneRegen  would not be able to quickly  replace  its  manufacturing
capacity if we were unable to use its manufacturing  facilities as a result of a
fire,  natural disaster  (including an earthquake),  equipment  failure or other
difficulty,  or if such  facilities  are deemed not in  compliance  with the GMP
requirements,   and  the   noncompliance   could  not  be   rapidly   rectified.
ImmuneRegen's inability or reduced capacity to


                                       16

<PAGE>

manufacture   its  proposed   products   would  prevent  it  from   successfully
commercializing its proposed products.

ImmuneRegen may enter into arrangements with contract manufacturing companies in
order  to  meet  requirements  for  its  products,  or  to  attempt  to  improve
manufacturing  efficiency.  If ImmuneRegen chooses to contract for manufacturing
services,  ImmuneRegen may encounter costs,  delays and/or other difficulties in
producing,  packaging and distributing its clinical trials and finished product.
Further,  contract  manufacturers  must also operate in compliance  with the GMP
requirements;  failure  to do so  could  result  in,  among  other  things,  the
disruption of its product  supplies.  ImmuneRegen's  potential  dependence  upon
third parties for the manufacture of its proposed  products may adversely affect
its profit margins and its ability to develop and deliver proposed products on a
timely and competitive basis.

ADVERSE  DETERMINATIONS  CONCERNING  PRODUCT PRICING,  REIMBURSEMENT AND RELATED
MATTERS COULD PREVENT IMMUNEREGEN FROM SUCCESSFULLY COMMERCIALIZING HOMSPERA.

ImmuneRegen's  ability  to earn  sufficient  revenue  on  Homspera  or any other
proposed  products will depend in part on the extent to which  reimbursement for
the  costs of such  products  and  related  treatments  will be  available  from
government health administration authorities,  private health coverage insurers,
managed  care   organizations  and  other   organizations.   Failure  to  obtain
appropriate  reimbursement  may  prevent  it from  successfully  commercializing
Homspera  or  any  proposed   products.   Third-party  payers  are  increasingly
challenging the prices of medical products and services.  If purchasers or users
of Homspera or any such other proposed  products are not able to obtain adequate
reimbursement  for the cost of using  such  products,  they may forego or reduce
their use.  Significant  uncertainty  exists as to the  reimbursement  status of
newly  approved  health care products and whether  adequate third party coverage
will be available.

IMMUNEREGEN'S SUCCESS WILL DEPEND UPON THE ACCEPTANCE OF HOMSPERA BY THE MEDICAL
COMMUNITY.

ImmuneRegen's  ability  to market  and  commercialize  Homspera  depends  on the
acceptance  and  utilization of Homspera by the medical  community.  ImmuneRegen
will  need  to  develop  commercialization   initiatives  designed  to  increase
awareness  about it and Homspera  among  targeted  audiences,  including  public
health  activists  and  community-based  outreach  groups  in  addition  to  the
investment  community.  Currently,   ImmuneRegen  has  not  developed  any  such
initiatives.  Without  such  acceptance  of  Homspera,  the  product  upon which
ImmuneRegen expects to be substantially  dependent,  ImmuneRegen may not be able
to successfully commercialize Homspera or generate revenue.

PRODUCT LIABILITY EXPOSURE MAY EXPOSE IMMUNEREGEN TO SIGNIFICANT LIABILITY.

ImmuneRegen faces an inherent business risk of exposure to product liability and
other  claims  and  lawsuits  in the event  that the  development  or use of its
technology  or  prospective  products  is  alleged to have  resulted  in adverse
effects.  ImmuneRegen may not be able to avoid significant  liability  exposure.
ImmuneRegen may not have sufficient insurance coverage,  and ImmuneRegen may not
be able to obtain  sufficient  coverage at a  reasonable  cost.  An inability to
obtain product  liability  insurance at acceptable cost or to otherwise  protect
against  potential  product  liability  claims  could  prevent  or  inhibit  the
commercialization  of its  products.  A product  liability  claim could hurt its
financial   performance.   Even  if  ImmuneRegen   avoids  liability   exposure,
significant costs could be incurred that could hurt its financial performance.

IF IMMUNEREGEN FAILS TO ATTRACT AND RETAIN CONSULTANTS AND EMPLOYEES, ITS GROWTH
COULD BE LIMITED AND ITS COSTS COULD  INCREASE,  WHICH MAY ADVERSELY  AFFECT ITS
RESULTS OF OPERATIONS AND FINANCIAL POSITION.

ImmuneRegen's  future success  depends in large part upon its ability to attract
and retain highly skilled  executive-level  management and scientific personnel.
The  competition in the scientific  industry for such personnel is intense,  and
ImmuneRegen  cannot  be  sure  that  it will be  successful  in  attracting  and
retaining such personnel.  Most of  ImmuneRegen's  consultants and employees and
several of its executive  officers began working for ImmuneRegen  recently,  and
all  employees  are  subject  to "at  will"


                                       17

<PAGE>

employment.  Most of ImmuneRegen's  consultants and employees are not subject to
non-competition agreements. ImmuneRegen cannot guarantee that it will be able to
replace  any of its  management  personnel  in the event their  services  become
unavailable.

IMMUNEREGEN'S PATENTS AND PROPRIETARY  TECHNOLOGY MAY NOT BE ENFORCEABLE AND THE
PATENTS  AND  PROPRIETARY  TECHNOLOGY  OF OTHERS MAY  PREVENT  IMMUNEREGEN  FROM
COMMERCIALIZING PRODUCTS.

Although ImmuneRegen  believes its patents to be protected and enforceable,  the
failure to obtain  meaningful  patent  protection  products and processes  would
greatly diminish the value of its potential products and processes.

In addition,  whether or not  ImmuneRegen's  patents are issued,  or issued with
limited coverage, others may receive patents, which contain claims applicable to
its  products.  Patents we are not aware of may adversely  affect  ImmuneRegen's
ability to develop and commercialize products.

The patent positions of  biotechnology  and  pharmaceutical  companies are often
highly uncertain and involve complex legal and factual questions. Therefore, the
breadth of claims allowed in biotechnology and pharmaceutical  patents cannot be
predicted. ImmuneRegen also relies upon non-patented trade secrets and know how,
and others may independently develop  substantially  equivalent trade secrets or
know how.  ImmuneRegen  also relies on protecting our proprietary  technology in
part through  confidentiality  agreements with its current and former  corporate
collaborators,  employees, consultants and certain contractors. These agreements
may be breached,  and  ImmuneRegen  may not have adequate  remedies for any such
breaches. In addition, ImmuneRegen's trade secrets may otherwise become known or
independently  discovered  by  ImmuneRegen's  competitors.   Litigation  may  be
necessary to defend against  claims of  infringement,  to enforce  ImmuneRegen's
patents or to protect  trade  secrets.  Litigation  could result in  substantial
costs and  diversion  of  management  efforts  regardless  of the results of the
litigation.  An  adverse  result in  litigation  could  subject  ImmuneRegen  to
significant liabilities to third parties, require disputed rights to be licensed
or require ImmuneRegen to cease using certain technologies.

IMMUNEREGEN'S  PRODUCTS AND SERVICES COULD INFRINGE ON THE INTELLECTUAL PROPERTY
RIGHTS OF OTHERS,  WHICH MAY CAUSE IT TO ENGAGE IN COSTLY  LITIGATION AND, IF IS
NOT SUCCESSFUL,  COULD CAUSE IT TO PAY SUBSTANTIAL  DAMAGES AND PROHIBIT IT FROM
SELLING OUR PRODUCTS OR SERVICING IMMUNEREGEN'S CLIENTS.

ImmuneRegen  cannot  be  certain  that its  technology  and  other  intellectual
property  does not infringe  upon the  intellectual  property  rights of others.
Authorship  and  priority of  intellectual  property  rights may be difficult to
verify.  Because  patent  applications  in the United  States  are not  publicly
disclosed  until the patent is issued,  applications  may have been filed  which
relate to services  similar to those offered by ImmuneRegen.  ImmuneRegen may be
subject to legal proceedings and claims from time to time in the ordinary course
of its business,  including claims of alleged infringement of the trademarks and
other intellectual property rights of third parties.

If ImmuneRegen's  products violate  third-party  proprietary  rights,  it cannot
assure  you that it  would  be able to  arrange  licensing  agreements  or other
satisfactory resolutions on commercially reasonable terms, if at all. Any claims
made against us relating to the  infringement  of third-party  propriety  rights
could  result  in  the  expenditure  of  significant  financial  and  managerial
resources and  injunctions  preventing it from providing  services.  Such claims
could severely harm ImmuneRegen's financial condition and ability to compete.

HAZARDOUS  MATERIALS  AND  ENVIRONMENTAL  MATTERS  COULD EXPOSE  IMMUNEREGEN  TO
SIGNIFICANT COSTS.

ImmuneRegen may be required to incur significant costs to comply with current or
future  environmental  laws  and  regulations.  Although  ImmuneRegen  does  not
currently  manufacture  commercial  quantities of its proposed products, it does
produce  limited   quantities  of  these  products  for  its  clinical   trials.
ImmuneRegen's  research and development and manufacturing  processes involve the
controlled  storage,


                                       18

<PAGE>

use and disposal of hazardous  materials,  biological  hazardous  materials  and
radioactive  compounds.  ImmuneRegen is subject to federal, state and local laws
and regulations governing the use, manufacture,  storage,  handling and disposal
of these materials and some waste products.  Although  ImmuneRegen believes that
its safety  procedures for handling and disposing of these materials comply with
the  standards   prescribed  by  these  laws  and   regulations,   the  risk  of
contamination or injury from these materials cannot be completely eliminated. In
the event of an incident,  ImmuneRegen could be held liable for any damages that
result,  and any  liability  could  exceed  our  resources.  Current  or  future
environmental  laws  or  regulations  may  have a  material  adverse  effect  on
ImmuneRegen's operations, business and assets.

Risks Related to Capital Structure
----------------------------------

IMMUNEREGEN'S STOCK PRICE IS VOLATILE AND COULD DECLINE IN THE FUTURE.

The price of  ImmuneRegen's  common stock has been volatile in the past and will
likely continue to fluctuate in the future.  The stock market in general and the
market for shares of life  science  companies  in  particular  have  experienced
extreme stock price  fluctuations.  In some cases,  these fluctuations have been
unrelated to the operating performance of the affected companies. Many companies
in the life science and related industries have experienced  dramatic volatility
in the market  prices of their common  stock.  The  Registrant  believes  that a
number of factors, both within and outside our control, could cause the price of
the Registrant's common stock to fluctuate, perhaps substantially.  Factors such
as the following could have a significant  adverse impact on the market price of
the ImmuneRegen's common stock:

o    The Registrant's  ability to obtain additional financing and, if available,
     the terms and conditions of the financing;

o    ImmuneRegen's financial position and results of operations;

o    The results of preclinical studies and clinical trials by ImmuneRegen,  its
     collaborators or its competitors;

o    Concern  as  to,  or  other   evidence   of,  the  safety  or  efficacy  of
     ImmuneRegen's proposed products or its competitors' products;

o    Announcements of  technological  innovations or new products by ImmuneRegen
     or its competitors;

o    U.S. and foreign governmental regulatory actions;

o    Actual or anticipated changes in drug reimbursement policies;

o    Developments with ImmuneRegen's collaborators, if any;

o    Developments  concerning patent or other proprietary  rights of ImmuneRegen
     or its competitors (including litigation);

o    Status of litigation;

o    Period-to-period fluctuations in ImmuneRegen's operating results;

o    Changes  in  estimates  of  the  combined  company's   performance  by  any
     securities analysts;

o    New  regulatory   requirements  and  changes  in  the  existing  regulatory
     environment;

o    Market conditions for life science stocks in general.

THERE IS NO ASSURANCE OF AN ESTABLISHED PUBLIC TRADING MARKET.

Although  ImmuneRegen's  common stock trades on the NASD OTC Bulletin  Board,  a
regular  trading  market for the  securities may not be sustained in the future.
The NASD has enacted  recent  changes that


                                       19

<PAGE>

limit  quotations  on the OTC Bulletin  Board to  securities of issuers that are
current in their reports filed with the Securities and Exchange Commission.  The
effect on the OTC  Bulletin  Board of these  rule  changes  and  other  proposed
changes  cannot  be  determined  at this  time.  The OTC  Bulletin  Board  is an
inter-dealer, Over-The-Counter market that provides significantly less liquidity
than the NASD's automated  quotation system (the "NASDAQ Stock Market").  Quotes
for stocks  included on the OTC Bulletin  Board are not listed in the  financial
sections of  newspapers  as are those for the NASDAQ  Stock  Market.  Therefore,
prices for  securities  traded solely on the OTC Bulletin Board may be difficult
to obtain and holders of common stock may be unable to resell  their  securities
at or near their  original  offering  price or at any price.  Market  prices for
ImmuneRegen's common stock will be influenced by a number of factors, including:

o    the issuance of new equity securities pursuant to a future offering;

o    changes in interest rates;

o    competitive  developments,  including  announcements  by competitors of new
     products or  services or  significant  contracts,  acquisitions,  strategic
     partnerships, joint ventures or capital commitments;

o    variations in quarterly operating results;

o    change in financial estimates by securities analysts;

o    the depth and liquidity of the market for ImmuneRegen's common stock;

o    investor  perceptions  of  our  company  and  the  technologies  industries
     generally; and

o    general economic and other national conditions.

IMMUNEREGEN'S COMMON STOCK IS CONSIDERED A "PENNY STOCK."

ImmuneRegen's  common stock is  considered  to be a "penny stock" since it meets
one or more of the  definitions in Rules 15g-2 through 15g-6  promulgated  under
Section 15(g) of the Securities Exchange Act of 1934, as amended.  These include
but are not limited to the following:  (i) the stock trades at a price less than
five dollars ($5.00) per share; (ii) it is NOT traded on a "recognized" national
exchange;  (iii) it is NOT quoted on the NASDAQ Stock Market, or even if so, has
a price less than five dollars (5.00) per share;  or (iv) is issued by a company
with net  tangible  assets  less than  $2,000,000,  if in  business  more than a
continuous three years, or with average revenues of less than $6,000,000 for the
past three years.  The principal  result or effect of being  designated a "penny
stock" is that  securities  broker-dealers  cannot  recommend the stock but must
trade in it on an unsolicited basis.

BROKER-DEALER REQUIREMENTS MAY AFFECT TRADING AND LIQUIDITY.

Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2
promulgated thereunder by the SEC require broker-dealers dealing in penny stocks
to provide  potential  investors  with a document  disclosing the risks of penny
stocks and to obtain a manually signed and dated written receipt of the document
before effecting any transaction in a penny stock for the investor's account.

Potential  investors in ImmuneRegen's  common stock are urged to obtain and read
such  disclosure  carefully  before  purchasing any shares that are deemed to be
"penny stock." Moreover,  Rule 15g-9 requires  broker-dealers in penny stocks to
approve the  account of any  investor  for  transactions  in such stocks  before
selling  any  penny  stock  to  that  investor.   This  procedure  requires  the
broker-dealer to (i) obtain from the investor information  concerning his or her
financial  situation,  investment  experience  and investment  objectives;  (ii)
reasonably  determine,  based on that  information,  that  transactions in penny
stocks are  suitable  for the  investor  and that the  investor  has  sufficient
knowledge and experience as to be reasonably  capable of evaluating the risks of
penny stock  transactions;  (iii) provide the investor with a written  statement
setting forth the basis on which the  broker-dealer  made the  determination  in
(ii) above;  and (iv) receive a signed and dated copy of such statement from the
investor,  confirming  that it  accurately  reflects  the  investor's  financial
situation,  investment  experience and investment  objectives.  Compliance


                                       20

<PAGE>

with these  requirements may make it more difficult for holders of ImmuneRegen's
common stock to resell their shares to third parties or to otherwise  dispose of
them in the market or otherwise.

IMMUNEREGEN'S  EXECUTIVE OFFICERS,  DIRECTORS AND PRINCIPAL STOCKHOLDERS CONTROL
OUR BUSINESS AND MAY MAKE DECISIONS THAT ARE NOT IN OUR BEST INTERESTS.

ImmuneRegen's  officers,   directors  and  principal  stockholders,   and  their
affiliates,  in the aggregate,  own over a majority of the outstanding shares of
our common stock. As a result, such persons,  acting together,  have the ability
to  substantially  influence  all  matters  submitted  to our  stockholders  for
approval,  including  the  election  and  removal of  directors  and any merger,
consolidation or sale of all or substantially all of our assets,  and to control
ImmuneRegen's  management  and  affairs.   Accordingly,  such  concentration  of
ownership  may have the effect of delaying,  deferring or preventing a change in
discouraging  a  potential  acquirer  form  making a tender  offer or  otherwise
attempting  to  obtain  control  of  ImmuneRegen's  business,  even  if  such  a
transaction would be beneficial to other stockholders.

SALES OF ADDITIONAL  EQUITY  SECURITIES MAY ADVERSELY AFFECT THE MARKET PRICE OF
OUR COMMON STOCK AND YOUR RIGHTS IN THE REGISTRANT MAY BE REDUCED.

Certain  of  ImmuneRegen's  stockholders  have  the  right  to  hold  securities
registered pursuant to registration rights agreements.  The sale or the proposed
sale of substantial  amounts of ImmuneRegen's  equity  securities or convertible
debt  securities  may adversely  affect the market price of its common stock and
its  stockholders  may  experience  substantial  dilution.  Also, any new equity
securities  issued may have  greater  rights,  preferences  or  privileges  than
ImmuneRegen's existing common stock.

IMMUNEREGEN CAN ISSUE SHARES OF PREFERRED STOCK WITH RIGHTS SUPERIOR TO THOSE OF
THE HOLDERS OF OUR COMMON STOCK. SUCH ISSUANCES CAN DILUTE THE TANGIBLE NET BOOK
VALUE OF SHARES OF THE REGISTRANT'S COMMON STOCK.

ImmuneRegen's  Board of Directors is authorized to issue up to 10,000,000 shares
of blank check  preferred  stock with rights that are  superior to the rights of
the  stockholders of its common stock, at a purchase price  substantially  lower
than  the  market  price of  shares  of its  common  stock  without  stockholder
approval.

WE HAVE NO INTENTION TO PAY DIVIDENDS.

ImmuneRegen  has  never  declared  or  paid  any  dividends  on its  securities.
ImmuneRegen  currently  intends to retain its earning  for  funding  growth and,
therefore, does not expect to pay any dividends in the foreseeable future.

ITEM 2.       DESCRIPTION OF PROPERTY

The  Company has a lease  agreement  for 1,440  square  feet of office  space in
Scottsdale,  Arizona.  The lease expires August 31, 2004. Rent expense is $2,734
per month.  ImmuneRegen  subleases  its  office  space  from  Foresight  Capital
Partners,  a company  controlled by  ImmuneRegen's  CEO. The rent cost is passed
through to ImmuneRegen at the same rental rate that Foresight  Capital  Partners
is charged by the facility's primary landlord.

ITEM 3.       LEGAL PROCEEDINGS

On December 13, 2001, service of process was effectuated upon GPN with regard to
a fee agreement between GPN and Silver and Deboskey, a Professional  Corporation
located in Denver, Colorado. On November 27, 2002, judgment was entered in favor
of Silver & Deboskey in the amount of $28,091. At December 31, 2003, the Company
has not paid any of this amount.


                                       21

<PAGE>

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

         None.

                                     PART II

ITEM 5.      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

The  Company's  common stock is approved for  quotation on the NASD OTC Bulletin
Board under the symbol  "IRBO".  From July 2, 2003  through  April 6, 2004,  the
ImmuneRegen  traded  under the symbol  "IRBH".  Previous  to July 2,  2003,  the
Company traded under the symbol "GPNN".  The following table sets forth the high
and low bid prices for the  Company's  common  stock for the periods  noted,  as
reported  by the  National  Daily  Quotation  Service  and the  Over-The-Counter
Bulletin Board.  Quotations reflect inter-dealer prices, without retail mark-up,
markdown or commission and may not represent actual transactions.

                                                     2003
                                            HIGH                LOW
          -----------------------------------------------------------
          1st Quarter                      $0.20              $0.20
          2nd Quarter                       4.00               0.20
          3rd Quarter                       9.00               1.10
          4th Quarter                       2.25               0.55
          -----------------------------------------------------------

                                                      2001
                                             HIGH                LOW
          -----------------------------------------------------------
          1st Quarter                      $0.80              $0.40
          2nd Quarter                       0.40               0.30
          3rd Quarter                       0.70               0.20
          4th Quarter                       0.40               0.10
          -----------------------------------------------------------

At May 5, 2004, there were  approximately 374 holders of record of the Company's
Common Stock.

The Company has not paid any  dividends  on its shares of common stock since its
inception and does not  anticipate  that dividends will be paid in the immediate
future.

ITEM  6.  MANAGEMENT'S   DISCUSSION  AND  ANALYSIS  OF  FINANCIAL CONDITION  AND
          RESULTS OF OPERATIONS

The  following  information  should be read in  conjunction  with the  financial
statements  and the notes  thereto.  The  analysis  set forth  below is provided
pursuant to applicable Securities and Exchange Commission regulations and is not
intended to serve as a basis for projections of future events.

EXCEPT FOR HISTORICAL  INFORMATION  CONTAINED  HEREIN,  THE MATTERS DISCUSSED IN
THIS FORM  10-KSB ARE  FORWARD-LOOKING  STATEMENTS  THAT ARE  SUBJECT TO CERTAIN
RISKS AND  UNCERTAINTIES  THAT COULD CAUSE ACTUAL  RESULTS TO DIFFER  MATERIALLY
FROM THOSE SET FORTH IN SUCH  FORWARD-LOOKING  STATEMENTS.  SUCH FORWARD-LOOKING
STATEMENTS MAY BE IDENTIFIED BY THE USE OF CERTAIN FORWARD-LOOKING  TERMINOLOGY,
SUCH AS "MAY," "WILL," "EXPECT,"  "ANTICIPATE," "INTEND," "ESTIMATE," "BELIEVE,"
OR COMPARABLE  TERMINOLOGY THAT INVOLVES RISKS OR  UNCERTAINTIES.  ACTUAL FUTURE
RESULTS  AND  TRENDS MAY  DIFFER  MATERIALLY  FROM  HISTORICAL  AND  ANTICIPATED
RESULTS,  WHICH MAY OCCUR AS A RESULT OF A VARIETY  OF  FACTORS.  SUCH RISKS AND
UNCERTAINTIES  INCLUDE,  WITHOUT  LIMITATION,  FACTORS DISCUSSED IN MANAGEMENT'S


                                       22

<PAGE>

DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF  OPERATIONS  SET
FORTH  BELOW,  AS WELL AS IN  "RISK  FACTORS"  SET  FORTH  HEREIN.  GPN  NETWORK
UNDERTAKES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING  STATEMENT,  WHETHER AS A
RESULT OF NEW INFORMATION,  FUTURE EVENTS OR OTHERWISE. READERS SHOULD CAREFULLY
REVIEW THE  FACTORS  SET FORTH IN OTHER  REPORTS OR  DOCUMENTS  THAT GPN NETWORK
FILES FROM TIME-TO-TIME WITH THE SEC.

Overview
--------

ImmuneRegen BioSciences, Inc. is development stage biotechnology company engaged
in the research and development of applications  utilizing modified substance P,
a naturally  occurring  immunomodulator.  Derived from homeostatic  substance P,
ImmuneRegen  has  named  its   proprietary   compound   "Homspera."   Currently,
ImmuneRegen holds two patents and four provisional patents in the United States.
Additionally,  ImmuneRegen  holds a patent with the European Union and Australia
and is seeking to extend its patents into Canada and, possibly, Japan.

ImmuneRegen's  initial  areas  of focus  will be in  continuing  development  of
several applications for use in improving pulmonary function and stimulating the
immune system.  These  applications  have been derived from research studies and
positive  results from  laboratory  tests  conducted by management over the past
nine years.

LIQUIDITY AND CAPITAL RESOURCES

From the date of inception  (October 30, 2002)  through  December 31, 2003,  the
Company  has  raised  $951,000  from  the  issuance  of  notes  payable  (net of
repayments of $250,000) and $96,001 from the sale of common stock.  Cash used by
operating  activities  from the date of inception  (October  30,  2002)  through
December  31, 2003 was  $1,033,163,  and cash used in investing  activities  was
$3,304.

At December 31, 2003, the Company had negative working capital of $866,040. This
amount  consisted  primarily  of cash of $10,534 and prepaid  services and other
current  assets of $35,843,  and  current  liabilities  of accounts  payable and
accrued liabilities of $413,441,  accrued consulting fees of $125,000, and notes
payable  plus  convertible  notes  payable  (net of  discount)  of  $62,171  and
$311,805,  respectively. The actual cash amount due on the notes payable without
considering  the discount is an  additional  $339,195,  or  $713,171.  The gross
amount of  liabilities  coming due within  twelve months at December 31, 2003 is
$1,252,359.

At  December  31,  2003,  the Company  had in place a total of  seventeen  notes
payable for a gross amount due of $713,171 less  discounts of $339,195  relating
to warrants  issued with the notes.  These  notes  mature at various  dates from
January  through  June 2004.  At May 5,  2004,  thirteen  of these  notes in the
aggregate amount of $575,000 were in default as they have not been repaid within
their stated term.  During May 2004,  the Company  executed 90 day extensions to
the terms of these notes.

Thirteen of these notes in the aggregate  amount of $566,000 will  automatically
convert to common stock should the Company  raise at least  $500,000 in proceeds
from  investors  (the  "Qualified  Financing").  At May 5, 2004, the Company had
underway a private  placement of its common stock (the "Private  Placement")  by
which the Company intends to raise approximately $1,500,000, though there can be
absolutely no assurance that this or any amount will actually be raised.  Should
the  Private  Placement  result in raising at least  $500,000,  it will become a
Qualified  Financing  and the thirteen  convertible  notes  subject to automatic
conversion provisions, plus accrued interest, will convert to equity.

Even if the Company achieves a Qualified  Financing,  further capital  infusions
will  be  required  in  order  to  execute  our  business  plan.  The  Company's
independent  certified public accountants have stated in their report,  included
in this Form 10-KSB,  that the Company has incurred a net loss and negative cash
flows from  operations of $1,856,702  and $996,890,  respectively,  for the year
ended  December  31,  2003.  This loss,  in  addition  to a lack of  operational
history,  raises a  substantial  doubt  about its ability to continue as a going
concern. In the absence of significant revenue and profits, and since it


                                       23

<PAGE>

does not expect to generate  significant revenues in the foreseeable future, the
Company, in order to fund operations, will be completely dependent on additional
debt and equity financing arrangements. There is no assurance that any financing
will be sufficient to fund its capital  expenditures,  working capital and other
cash requirements for the fiscal year ending December 31, 2004. No assurance can
be  given  that  any such  additional  funding  will be  available  or that,  if
available, can be obtained on terms favorable to ImmuneRegen.  If ImmuneRegen is
unable to raise needed funds on acceptable  terms,  ImmuneRegen will not be able
to develop or enhance its products,  take advantage of future  opportunities  or
respond to  competitive  pressures  or  unanticipated  requirements.  A material
shortage of capital will require the  Registrant  to take drastic  steps such as
reducing  ImmuneRegen's  level of  operations,  disposing of selected  assets or
seeking an acquisition partner. If cash is insufficient, ImmuneRegen will not be
able to continue operations.

On March 31, 2004,  the  Financial  Accounting  Standards  Board (FASB) issued a
proposed Statement, Share-Based Payment, an amendment of FASB Statements No. 123
and 95, that would require companies to account for stock-based  compensation to
employees using a fair value method as of the grant date. The proposed statement
addresses the accounting for transactions in which a company  receives  employee
services  in  exchange  for  equity  instruments  such  as  stock  options,   or
liabilities that are based on the fair value of the company's equity instruments
or that may be settled  through the issuance of such equity  instruments,  which
includes the  accounting  for  employee  stock  purchase  plans.  This  proposed
statement would eliminate a company's ability to account for share-based  awards
to employees using APB Opinion 25,  Accounting for Stock Issued to Employees but
would not change  the  accounting  for  transactions  in which a company  issues
equity  instruments for services to non-employees or the accounting for employee
stock ownership plans. The proposed  statement,  if adopted,  would be effective
for awards that are  granted,  modified,  or settled in fiscal  years  beginning
after  December  15,  2004.  The  Company  is in the  process of  assessing  the
potential impact of this proposed statement to the financial statements.

RESULTS OF  OPERATIONS  FOR THE TWELVE MONTH PERIOD ENDED  DECEMBER 31, 2003 AND
FOR THE PERIOD OF INCEPTION (OCTOBER 30, 2002) TO DECEMBER 31, 2003.

Revenue
-------

The Company is currently in the development  stage and has not yet generated any
revenue.

Selling, General, and Administrative Expenses
---------------------------------------------

During  the twelve  months  ended  December  31,  2003,  selling,  general,  and
administrative expenses ("SG&A") were $1,348,078. This amount consists primarily
of amortization  of discount on notes payable of $302,302,  legal and accounting
fees of  $259,381,  consulting  fees of  $197,741,  officer  salary of $125,000,
public  relations and marketing of $95,132,  non-cash  compensation  of $85,861,
contract labor of $46,454, research and development of $42,972, and rent expense
of $31,369.

Total SG&A for the period of inception  (October 30, 2002) through  December 31,
2003,  were  $1,393,796.  This  increase of $45,718 from the twelve months ended
December  31,  2003  consists  primarily  of an  additional  $22,427  in  public
relations and website  expenses,  an additional  $12,986 in legal and accounting
fees, and an additional $6,613 in consulting fees.

Over the coming twelve months,  the Company expects legal and accounting fees to
remain high due to the compliance requirements of the Company's  publicly-traded
status.  In  addition,  we  intend  to  investigate  possible  acquisitions  and
strategic  alliance  arrangements  which will require legal and  accounting  due
diligence.  Officer  salary will  increase  during the coming  twelve  months to
approximately  $175,000 pursuant to contractual  arrangements.  Public relations
and marketing  expenditures are expected to increase as we gain an understanding
of  the  eventual  placement  of our  products  in the  market.  Contract  labor
expenditures  are  expected to  increase  over the coming  twelve  months as our
overhead and administrative burden increases. Research and development will also
increase as we further  focus on


                                       24

<PAGE>

developing  our products for the  marketplace.  Rent expense is expected to stay
constant for the coming twelve months.

Merger Fees and Costs
---------------------

Merger fees and costs were  $350,000 for the twelve months end December 31, 2003
and for the period of inception  (October  30, 2003) to December 31, 2003.  This
amount is related to the Merger which was consummated in July, 2003. $185,000 of
this amount was the cost of the merger  shell,  GPN Network,  Inc. The remaining
$165,000 of these funds were used to satisfy certain outstanding  liabilities of
GPN.

During the twelve months ending  December 31, 2004, the Company may  investigate
potential  acquisition  candidates,  and the  potential  cash  costs  of such an
acquisition or acquisitions is not possible to forecast.

Financing Cost
--------------

Financing  costs were $90,000 for the twelve months ending December 31, 2003 and
for the period of inception (October 30, 2003) to December 31, 2003. This amount
consists of non-refundable prepaid travel and road show costs.

The Company expects this amount to decrease in the twelve months ending December
31, 2004.

Interest Expense
----------------

Interest  expense  during the twelve months ended December 31, 2003 was $68,624.
This amount  consists of interest  payable on the Company's  notes  payable.  An
additional $200 of interest was accrued during the period of inception  (October
30, 2002) through December, 2002.

If  the  Company  achieves  a  Qualified  Financing,   it  is  anticipated  that
approximately $566,000 of the $713,171 notes payable outstanding will convert to
equity, and that interest expense will subsequently be reduced during the twelve
months ending December 31, 2004. There can be no guarantee,  however,  that this
will be the case.

Net Loss
--------

For the reasons  stated  above,  the  Company's  net loss for the twelve  months
ending  December 31, 2003 was $1,856,702 or $0.17 per shares.  For the period of
inception  (October 30, 2002) through  December 31, 2003, the Company's net loss
was $1,902,620 or $0.20 per share. The Company expects that losses will continue
through the period ending December 31, 2004.

The Company's  independent  certified  public  accountants  have stated in their
report included in this Form 10-KSB that the Company has incurred a net loss and
negative cash flows from  operations of $1,856,702  and $996,890,  respectively,
for the year ended  December  31,  2003.  This loss,  in  addition  to a lack of
operational history, raises substantial doubt about its ability to continue as a
going concern. In the absence of significant  revenue and profits,  and since it
does not expect to generate  significant revenues in the foreseeable future, the
Company, in order to fund operations, will be completely dependent on additional
debt and equity financing arrangements. There is no assurance that any financing
will be sufficient to fund its capital  expenditures,  working capital and other
cash requirements for the fiscal year ending December 31, 2004. No assurance can
be  given  that  any such  additional  funding  will be  available  or that,  if
available, can be obtained on terms favorable to ImmuneRegen.  If ImmuneRegen is
unable to raise needed funds on acceptable  terms,  ImmuneRegen will not be able
to develop or enhance its products,  take advantage of future  opportunities  or
respond to  competitive  pressures  or  unanticipated  requirements.  A material
shortage of capital will require the  Registrant  to take drastic  steps such as
reducing  ImmuneRegen's  level of  operations,  disposing of selected  assets or
seeking an acquisition partner. If cash is insufficient, ImmuneRegen will not be
able to continue operations.


ITEM 7.  FINANCIAL STATEMENTS


The financial statements of the Company are attached hereto as pages F-1 through
F-24.


                                       25
<PAGE>

                    RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                          Certified Public Accountants

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Shareholders
IR Biosciences Holdings Inc.

Scottsdale, Arizona

We have audited the  accompanying  consolidated  balance sheet of IR Biosciences
Holdings Inc. and Subsidiary (a development stage company)(the  "Company") as of
December 31, 2003 and the related consolidated statements of losses,  deficiency
in  stockholders'  equity,  and cash flows for the year ended December 31, 2003.
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 audit.

We conducted our audit 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  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the consolidated  financial  position of the Company at
December 31, 2003 and the  consolidated  results of its  operations and its cash
flows  for the year  ended  December  31,  2003 in  conformity  with  accounting
principles  generally  accepted in the United  States of America.  We express no
opinion on the cumulative period from inception through December 31, 2002.

The accompanying  consolidated  financial statements for the year ended December
31, 2003 have been  prepared  assuming that the Company will continue as a going
concern.  As shown in the  financial  statements,  the Company has  incurred net
losses since its inception.  This raises  substantial  doubt about the Company's
ability to continue  as a going  concern.  Management's  plans in regard to this
matter are  described  in Note 1. The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.



                                   /s/RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                                   -------------------------------------------
                                   Russell Bedford Stefanou Mirchandani LLP
                                   Certified Public Accountants


New York, New York
May 18, 2004

                                                                             F-1
<PAGE>


INDEPENDENT AUDITORS' REPORT

Board of Directors
ImmuneRegen BioSciences, Inc.
Scottsdale, Arizona

We have audited the accompanying balance sheet of ImmuneRegen BioSciences,  Inc.
as of December 31, 2002, and the related statements of operations, stockholders'
equity  (deficit),  and  cash  flows  for  the  period  from  October  30,  2002
(inception)  to  December  31,  2002.   These   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on the financial statements based on our audits.

We conducted our audit 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  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of ImmuneRegen  BioSciences,  Inc.
as of December 31, 2002,  and the results of its  operations  and cash flows for
the period from October 30, 2002 (inception) to December 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.  As  discussed  in  Note 1 to the
accompanying  financial  statements,  the Company's significant operating losses
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments to asset carrying amounts or
the amount and  classification of liabilities that might result from the outcome
of this uncertainty.


/s/ Stonefield Josephson, Inc.
------------------------------
Stonefield Josephson, Inc.
Certified Public Accountants
Irvine, California
December 8, 2003


                                                                             F-2

<PAGE>


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                                                                  December 31,
                                                                     2003
                                                                 -----------
Assets
Current assets
   Cash and cash equivalents                                     $    10,534
   Prepaid services and other assets                                  35,843
                                                                 -----------
      Total current assets                                            46,377
      Licensed proprietary rights, net                                 8,247
      Capitalized website costs, net                                  11,250
      Furniture and equipment, net                                     2,795
                                                                 -----------
Total assets                                                     $    68,669
                                                                 ===========
Liabilities and Stockholders' Deficit
Current liabilities
   Accounts payable and accrued liabilities                          538,441
      Notes payable to shareholder                                    62,171
      Notes payable, net of discount                                 311,805
                                                                 -----------
        Total current liabilities                                    912,417
Commitments and Contingencies
Stockholders' deficit
   Preferred stock, 0.001 par value:
        10,000,000 shares authorized,
        no shares issued and outstanding                                 --
   Common stock, $0.001 par value;
        100,000,000 shares authorized;
        11,715,650 shares issued and outstanding                      11,715
   Additional paid-in capital                                      1,047,157
   Deficit accumulated during the development stage               (1,902,620)
                                                                 -----------
      Total stockholder's deficit                                   (843,748)
                                                                 -----------
Total liabilities and stockholders' deficit                      $    68,669
                                                                 ===========

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

                                                                             F-3
<PAGE>

               IR BioSciences Holdings, Inc. and Subsidiary
                      (A Development Stage Company)
                  Consolidated Statements of Operations

<TABLE>
<CAPTION>


                                        For the Twelve    From the Date           Cumulative
                                        Months Ended      of  Inception           from Inception
                                        December 31,      October 30, 2002) to    October 30, 2002) to
                                            2003          December 31, 2002       December 31, 2003
                                        ------------      --------------------    ---------------------
<S>                                     <C>                  <C>                       <C>
Revenues                                $         --         $         --              $         --
Operating expenses:
   Selling, general and
     administrative expenses               1,348,078               45,718                 1,393,796
   Merger fees and costs                     350,000                    0                   350,000
   Financing cost                             90,000                    0                    90,000
                                        ------------         ------------              ------------

      Total operating expenses             1,788,078               45,718                 1,833,796
                                        ------------         ------------              ------------

Operating loss                            (1,788,078)             (45,718)               (1,833,796)

   Interest expense                           68,624                  200                    68,824
                                        ------------         ------------              ------------
  Loss before income taxes                (1,856,702)             (45,918)               (1,902,620)

   Provision for income taxes                     --                   --                        --
                                        ------------         ------------              ------------
Net loss during development stage       $ (1,856,702)        $    (45,918)             $ (1,902,620)
                                        ============         ============              ============
Net loss per share -
  basic and diluted                     $      (0.17)        $      (0.02)             $      (0.20)
                                        ============         ============              ============
Weighted average shares
  outstanding - basic and diluted         10,658,646            2,212,042                 9,432,207
                                        ============         ============              ============
</TABLE>

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

                                                                             F-4
<PAGE>

               IR BioSciences Holdings, Inc. and Subsidiary
                      (A Development Stage Company)
                  Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                     For the Twelve    From the Date           Cumulative
                                                     Months Ended      of  Inception           from Inception
                                                     December 31,      October 30, 2002) to    October 30, 2002) to
                                                         2003          December 31, 2002       December 31, 2003
                                                     ---------------   ---------------------   --------------------
<S>                                                  <C>                <C>                      <C>
Cash flows from operating activities:
   Net loss during development stage                 $(1,856,702)             (45,918)              $(1,902,620)

  ADJUSTMENTS TO RECONCILE NET LOSS TO TO NET
  CASH USED IN OPERATING ACTIVITIES:

  Non-cash compensation                                  105,641                  782                   106,423
  Amortization of deferred compensation                    9,000                   --                     9,000
  Interest expense                                        68,624                   --                    68,624
  Amortization of discount on notes payable              302,302                   --                   302,302
  Depreciation and amortization                           12,685                   77                    12,762
  Changes in operating assets and liabilities:                --
        Prepaid services and other assets                (35,842)                  --                   (35,842)
        Accounts payable and accrued expenses            397,402                8,786                   406,188
                                                     -----------          -----------               -----------

   NET CASH USED IN OPERATING ACTIVITIES                (996,890)             (36,273)               (1,033,163)

Cash flows from investing activities:

   Acqisition of property and equipment                   (3,304)                  --                    (3,304)
                                                     -----------          -----------               -----------

   NET CASH USED IN INVESTING ACTIVITIES                  (3,304)                  --                    (3,304)

Cash flows from financing activities:

   Proceeds from notes payable                         1,186,000               15,000                 1,201,000
   Principal payments on notes payable                  (250,000)                  --                  (250,000)
   Shares of stock issued for cash                        65,000               31,001                    96,001
   Officer repayment of amounts paid on his behalf        19,880                   --                    19,880
   Cash paid on behalf of officer                        (19,880)                  --                   (19,880)
   Cash paid on amount due to officer                    (22,427)              22,427                        --
                                                     -----------          -----------               -----------

   NET CASH PROVIDED BY FINANCING ACTIVITIES             978,573               68,428                 1,047,001
                                                     -----------          -----------               -----------

Net increase in cash and cash equivalents                (21,621)              32,155                    10,534

Cash and cash equivalents at beginning of period          32,155                   --                        --
                                                     -----------          -----------               -----------
Cash and cash equivalents at end of period           $    10,534          $    32,155               $    10,534
                                                     ===========          ===========               ===========
              Cash paid during the period for:
                                      Interest       $    41,793                   --                  $ 41,793
                                                     ===========          ===========               ===========

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

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

                                                                             F-5
<PAGE>
               IR BioSciences Holdings, Inc. and Subsidiary
                      (A Development Stage Company)
                Consolidated Statements of Cash Flows (continued)

NON-CASH INVESTING AND FINANCING ACTIVITIES:

For the period ending December 31, 2002:
----------------------------------------

In December  2002, the Company  issued  8,306,138  shares of common stock with a
fair  value of  $9,250  to the  Company's  founders  for a  license  to  certain
proprietary rights.

In December  2002, the Company issued 702,655 shares of common stock with a fair
value of $782 to a Company founder for services provided.

In December  2002,  the Company issued 26,939 shares of common stock with a fair
value of $9,000 to a service provider.

In December  2002,  the Company issued 92,789 shares of common stock with a fair
value of $31,001 to four service providers.

For the period ending December 31, 2003:
----------------------------------------

During January 2003, the Company issued 49,388 shares of its common stock with a
fair value of $13,750 to 2 service providers.

During March 2003,  the Company  issued 77,225 shares of its common stock with a
fair value of $21,500 to a service provider.

In April 2003,  the Company  issued 7,184 shares of its common stock with a fair
value of $2,000 to a service provider.

In April 2003,  the Company  converted a note  payable in the amount of $200,000
into 718,368 shares of common stock.

In June 2003,  the  Company  recorded  a  beneficial  conversion  feature of its
convertible  notes  payable in the amount of $60,560 as a discount  to the notes
payable.

In July 2003,  the Company  effected a reverse  split of its common stock in the
ratio of  .897960746  to one.  The net effect was a reduction  in the number of
shares of common stock outstanding of 1,196,748.

In July 2003, the Company  completed the Merger with GPN Network,  Inc. Pursuant
to the Merger,  the Company assumed the following  assets and liabilities of GPN
Network:  Net accounts  payable of $60,492,  due to related part of $4,486,  and
note payable of $55,821 in exchange for 1,184,065 shares of the Company's common
stock and $350,000 in cash. The Company expensed the $350,000 cash payment,  and
recorded  an  increase  of $1,184  for the par value of the  common  stock and a
decrease of $121,983 to addition paid-in capital.

In October 2003,  the Company  recorded the value of warrants  issued with notes
payable as an increase to paid-in capital of $189,937.

In October  through  December 2003,  the Company  recorded the value of warrants
issued with notes payable as an increase to paid-in capital of $207,457.

In October  through  December 2003,  the Company  recorded the value of warrants
contributed  by the  Company's  founders as an  increase  to paid-in  capital of
$183,543.

In October  through  December 2003,  the Company  recorded the value of warrants
issued with notes payable as in increase to paid-in capital of $85,861.

                                                                             F-6
<PAGE>

                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
            Consolidated Statement of Stockholders' Equity (Deficit)
                 From date of inception (October 30, 2002) to December 31, 2003
<TABLE>
<CAPTION>
                                                                                                           Deficit
                                                                                                           Accumulated
                                                             Common Stock       Additional                 During
                                                             ------------       Paid-In     Deferred       Development
                                                          Shares      Amount    Capital     Compensation   Stage         Total
                                                        ---------------------  ----------   ------------   -----------  ------------
<S>                                                     <C>         <C>        <C>             <C>          <C>          <C>

Balance at October 30, 2002 (date of inception)                --   $      --         --    $         --   $        --  $        --

Shares of common stock issued to founders for
     license of proprietary rights in December 2002      8,306,138      8,306        944              --            --        9,250

Shares of common stock issued to founders for
     services rendered in December 2002                    702,655        703         79              --            --          782

Shares of common stock issued to consultants
     for services rendered in December 2002                 26,939         27      8,973          (9,000)           --           --

Sale of common stock for cash in December 2002              92,789         92     30,909              --            --       31,001

Net loss for the period from inception
     (October 30, 2002) to December 31, 2002                    --         --         --              --       (45,918)     (45,918)
                                                        ----------  ---------  ----------   ------------   -----------  ------------
Balance at December 31, 2002 (reflective
     of reverse stock split)                             9,128,521      9,128     40,905          (9,000)      (45,918)      (4,885)

Shares granted to consultants for services
     rendered in January 2003                               49,388         49     13,701              --            --       13,750

Sale of shares of common stock for
     cash in January 2003                                  164,776        165     49,835              --            --       50,000

Shares granted to consultants for services
     rendered in March 2003                                 77,225         78     21,422              --            --       21,500

Conversion of notes payable to common stock
     in April 2003                                         718,368        718    199,282              --            --      200,000

Shares granted to consultants for services
     rendered in April 2003                                  7,184          7      2,023              --            --        2,030

Sale of shares of common stock for cash in May 2003          8,980          9      4,991              --            --        5,000

Sale of shares of common stock for cash in June 2003        17,959         18      9,982              --            --       10,000

Conversion of notes payable to common stock
     in June 2003                                          359,184        359     99,641              --            --      100,000

Beneficial conversion feature associated with notes
     issued in June 2003                                        --         --     60,560              --            --       60,560

Amortization of deferred compensation                           --         --         --           9,000            --        9,000

Costs of GPN Merger in July 2003                         1,184,065      1,184   (121,983)             --            --     (120,799)

Value of warrants issued with extended notes
     payable in October 2003                                                     189,937              --            --      189,937

Value of Company warrants issued in conjunction
     with fourth quarter notes payable issued
     October through December 2003                                               207,457              --            --      207,457

Value of warrants contributed by founders in
     conjunction with fourth quarter notes payable
     issued October through December 2003                                        183,543              --            --      183,543

Value of warrants issued for services in
     October through December 2003                                                85,861              --            --       85,861

Net loss for the twelve month period
     ending December 31, 2003                                                                               (1,856,702)  (1,856,702)
                                                        ----------  ---------  ----------   ------------   -----------  ------------
Balance at December 31, 2003                            11,715,650     11,715  1,047,157              --    (1,902,620)    (843,748)
                                                        ----------  ---------  ----------   ------------   -----------  ------------
                                                                                   F-7
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.
<PAGE>



                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

1.       Summary of Significant Accounting Policies:

         NATURE OF BUSINESS

         IR Biosciences  Holdings Inc.  ("Company")  formerly GPN Network,  Inc.
         ("GPN") is currently a development  stage company under the  provisions
         of  Statement  of Financial  Accounting  Standards  ("SFAS") No. 7. The
         Company, which was incorporated under the laws of the State of Delaware
         on October 30, 2002,  is a  biotechnology  company and plans to develop
         and market  applications  utilizing  modified  substance P, a naturally
         occurring immunomodulator.

         GOING CONCERN

         The accompanying  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.  However,  the Company has no  established  source of revenue.
         This matter raises  substantial  doubt about the  Company's  ability to
         continue as a going concern.  These 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 as a
         going concern.

         Management  plans to take the following  steps that it believes will be
         sufficient  to provide  the  Company  with the  ability to  continue in
         existence: Management intends to continue to raise additional financing
         through  private debt or equity  financing or other means and interests
         that it deems necessary, with a view to moving forward and sustaining a
         prolonged growth in its strategy phases.  The Company believes that its
         status as a publicly traded company will improve its chances of raising
         funds through either equity or debt financings.

         ACQUISITION AND CORPORATE RESTRUCTURE

         On July 20, 2003 ImmuneRegen  Biosciences  Inc.  ("ImmuneRegen")entered
         into an  Agreement of Plan and Merger  ("Agreement")  with GPN Network,
         Inc. ("GPN") an inactive publicly  registered shell corporation with no
         significant assets or operations.  In accordance with SFAS No. 141, the
         Company was the acquiring  entity.  While the  transaction is accounted
         for using the purchase method of accounting, in substance the Agreement
         is a recapitalization of the Company's capital structure.

         For accounting purposes,  the Company has accounted for the transaction
         as a reverse acquisition and the Company shall be the surviving entity.
         The total purchase price and carrying value of net assets  acquired was
         $ 0. From July 2001 until the date of the  Agreement  the  Company  was
         inactive. The Company  did  not  recognize  goodwill or any  intangible
         assets in connection with the transaction.

         Effective with the Agreement,  all previously outstanding common stock,
         preferred   stock,   options  and  warrants   owned  by  the  Company's
         shareholders  were  exchanged for an aggregate of 10,531,585  shares of
         GPN  common  stock.  The value of the  stock  that was  issued  was the
         historical  cost of GPN's net  tangible  assets,  which did not  differ
         materially from their fair value.

         Effective  with the  Agreement,  GPN changed its name to IR Biosciences
         Holdings Inc.

         The accompanying  financial statements present the historical financial
         condition, results of operations and cash flows of the Company prior to
         the merger with GPN.

                                                                             F-8

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

1.       Summary of Significant Accounting Policies, continued:

         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  and disclosure of contingent  assets
         and  liabilities  at the  date  of the  financial  statements,  and the
         reported amounts of revenues and expenses during the reported  periods.
         Actual results could materially differ from those estimates.

         CASH EQUIVALENTS

         For purposes of the statement of cash flows,  cash equivalents  include
         all highly liquid debt  instruments  with original  maturities of three
         months or less which are not securing any corporate obligations.

         CASH CONCENTRATION

         The Company maintains its cash in bank deposit accounts that, at times,
         may exceed  federally  insured limits.  The Company has not experienced
         any losses in such accounts.

         BASIC AND DILUTED LOSS PER SHARE

         In accordance  with SFAS No. 128,  "Earnings Per Share," the basic loss
         per common share is computed by dividing  net loss  available to common
         stockholders   by  the  weighted   average   number  of  common  shares
         outstanding. Diluted loss per common share is computed similar to basic
         loss per common  share  except that the  denominator  is  increased  to
         include  the number of  additional  common  shares that would have been
         outstanding  if the potential  common shares had been issued and if the
         additional  common shares were  dilutive.  As of December 31, 2002, the
         Company had no  outstanding  stock options or warrants.  As of December
         31, 2003,  the Company  granted  warrants to employees and  consultants
         that can be converted  into  additional  shares of common stock.  These
         warrants  would  have an  anti-dilutive  effect and  therefore  are not
         included in diluted loss per share.

         COMPREHENSIVE INCOME

         SFAS No. 130, "Reporting  Comprehensive  Income," establishes standards
         for  the  reporting  and  display  of  comprehensive   income  and  its
         components  in the  financial  statements.  As of December 31, 2003 and
         2002 the Company has no items that represent other comprehensive income
         and, therefore, has not included a Statement of Comprehensive Income.

         INCOME TAXES

         The Company  accounts for income taxes under SFAS 109,  "Accounting for
         Income  Taxes."  Under  the  asset  and  liability  method of SFAS 109,
         deferred tax assets and  liabilities  are recognized for the future tax
         consequences   attributable   to  differences   between  the  financial
         statements  carrying  amounts of existing  assets and  liabilities  and
         their  respective tax bases.  Deferred tax assets and  liabilities  are
         measured using enacted tax rates expected to apply to taxable income in
         the years in which  those  temporary  differences  are  expected  to be
         recovered or settled. Under SFAS 109, the effect on deferred tax assets
         and liabilities of a change in tax rates is recognized in income in the
         period the enactment occurs. A valuation allowance, if any, is provided
         for certain  deferred tax assets if it is more likely than not that the
         Company will not realize tax assets through future operations.


                                                                             F-9

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

1.       Summary of Significant Accounting Policies, continued:

         FAIR VALUE OF FINANCIAL INSTRUMENTS

         The Company measures its financial assets and liabilities in accordance
         with accounting  principles  generally accepted in the United States of
         America.  The estimated  fair values  approximate  their carrying value
         because of the short-term  maturity of these  instruments or the stated
         interest rates are indicative of market interest rates.

         STOCK-BASED COMPENSATION

         The Company accounts for stock-based employee compensation arrangements
         in  accordance  with the  provisions  of  Accounting  Principles  Board
         Opinion  No.  25,  "Accounting  for  Stock  Issued to  Employees,"  and
         complies with the disclosure  provisions of SFAS 123,  "Accounting  for
         Stock-Based   Compensation."   Under  APB  25,   compensation  cost  is
         recognized over the vesting period based on the excess,  if any, on the
         date of grant of the deemed fair value of the Company's shares over the
         employee's  exercise  price.  When the  exercise  price of the employee
         share  options  is less  than the fair  value  price of the  underlying
         shares on the grant date, deferred stock compensation is recognized and
         amortized to expense in accordance with FASB Interpretation No. 28 over
         the vesting period of the individual options. Accordingly,  because the
         exercise price of the Company's  employee options equals or exceeds the
         market  price  of the  underlying  shares  on the  date  of  grant,  no
         compensation expense is recognized.  Options or shares awards issued to
         non-employees  are valued using the fair value method and expensed over
         the period services are provided.

         PREPAID SERVICES

         Prepaid  services consist of outside services that the Company has paid
         for  in  advance.  At  December  31,  2003  this  amount  was  $35,843,
         consisting  of a legal  retainer in the amount of $18,543 and a prepaid
         research  contract  with the  University  of Arizona of $17,300.  These
         items are charged to expense as the services are performed.

         LICENSED PROPRIETARY RIGHTS

         The Company has licensed from its founders certain  proprietary  rights
         which the Company  intends to utilize in the  execution of its business
         plan.  Consideration  for this  license was the  issuance of  8,306,138
         shares  (pre-split) of the Company's  common stock.  These  proprietary
         rights are being amortized over the term of the license  agreement,  or
         ten  years.  The  shares  issued  were  valued at $.001 per share  (par
         value).

         CAPITALIZED WEBSITE COSTS

         The Company  capitalized  certain website development costs pursuant to
         EITF 00-2  "Accounting for Web Site Development Costs"; these costs are
         amortized over two years.

         FURNITURE AND EQUIPMENT

         Furniture  and  equipment   are  valued  at  cost.   Depreciation   and
         amortization  are provided over the estimated  useful lives up to seven
         years using the  straight-line  method.  The estimated service lives of
         property and equipment are as follows:

                  Computer equipment                3 years
                  Furniture                         7 years


                                                                            F-10

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

1.       Summary of Significant Accounting Policies, continued:

         ADVERTISING

         The Company  follows the policy of charging the costs of advertising to
         expenses  incurred.  The Company has not incurred any advertising costs
         during the year ended December 31, 2003 and for the period from October
         30, 2002 (inception) through December 31, 2002 and 2003.

         NEW ACCOUNTING PRONOUNCEMENTS

         In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of Statement
         133 on Derivative  Instruments and Hedging  Activities." This Statement
         amends and clarifies financial  accounting and reporting for derivative
         instruments, including certain derivative instruments embedded in other
         contracts  (collectively  referred to as  derivatives)  and for hedging
         activities under SFAS No. 133,  "Accounting for Derivative  Instruments
         and  Hedging  Activities."  This  Statement  amends  Statement  133 for
         decisions  made  (1) as part of the  Derivatives  Implementation  Group
         process that effectively  required  amendments to Statement 133, (2) in
         connection   with  other  Board   projects   dealing   with   financial
         instruments, and (3) in connection with implementation issues raised in
         relation to the  application  of the  definition  of a  derivative,  in
         particular,  the meaning of an initial net  investment  that is smaller
         than  would be  required  for other  types of  contracts  that would be
         expected to have a similar  response to changes in market factors,  the
         meaning of underlying,  and the  characteristics  of a derivative  that
         contains financing components. The Company does not anticipate that the
         adoption  of this  pronouncement  will  have a  material  effect on the
         financial statements.

         In May 2003,  the FASB  issued SFAS No.  150,  "Accounting  for Certain
         Financial  Instruments  with  Characteristics  of both  Liabilities and
         Equity."  This  Statement  establishes  standards  for  how  an  issuer
         classifies   and   measures   certain   financial    instruments   with
         characteristics  of both  liabilities  and equity.  It requires that an
         issuer  classify a financial  instrument  that is within its scope as a
         liability  (or  an  asset  in  some   circumstances).   Many  of  those
         instruments  were  previously   classified  as  equity.   Some  of  the
         provisions of this Statement are consistent with the current definition
         of liabilities in FASB Concepts  Statement No. 6, Elements of Financial
         Statements.  The remaining  provisions of this Statement are consistent
         with the  Board's  proposal  to revise  that  definition  to  encompass
         certain  obligations  that a  reporting  entity  can or must  settle by
         issuing  its  own  equity  shares,  depending  on  the  nature  of  the
         relationship  established between the holder and the issuer.  While the
         Board still plans to revise that  definition  through an  amendment  to
         Concepts Statement 6, the Board decided to defer issuing that amendment
         until it has  concluded  its  deliberations  on the next  phase of this
         project.  That next phase  will deal with  certain  compound  financial
         instruments   including   puttable  shares,   convertible   bonds,  and
         dual-indexed  financial  instruments.  The Company does not  anticipate
         that the adoption of this  pronouncement will have a material effect on
         the financial statements


                                                                            F-11

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

1.       Summary of Significant Accounting Policies (Continued)

         NEW ACCOUNTING PRONOUNCEMENTS (Continued)

         In January 2003, the FASB issued  Interpretation No. 46, "Consolidation
         of Variable Interest Entities."  Interpretation 46 changes the criteria
         by  which  one  company   includes  another  entity  in  its  financial
         statements.  Previously,  the  criteria  were based on control  through
         voting interest.  Interpretation 46 requires a variable interest entity
         to be by a company if that company is subject to a majority of the risk
         of loss from the variable interest  entity's  activities or entitled to
         receive a majority of the entity's  residual returns or both. A company
         that  consolidates  a variable  interest  entity is called the  primary
         beneficiary  of  that  entity.   The   consolidation   requirements  of
         Interpretation  46 apply  immediately  to  variable  interest  entities
         created after January 31, 2003. The consolidation requirements apply to
         older  entities in the first  fiscal year or interim  period  beginning
         after June 15, 2003.  Certain of the disclosure  requirements  apply in
         all financial  statements issued after January 31, 2003,  regardless of
         when the variable interest entity was established. The Company does not
         expect  the  adoption  to  have a  material  impact  to  the  Company's
         financial position or Results of operations.

         During  October  2003,  the  FASB  issued  Staff  Position  No.  FIN 46
         deferring  the  effective  date for applying the  provisions  of FIN 46
         until  the end of the  first  interim  or annual  period  ending  after
         December  31,  2003,  if the  variable  interest  was created  prior to
         February  1,  2003,  and the public  entity  has not  issued  financial
         statements  reporting that variable  interest entity in accordance with
         FIN 46. The FASB also indicated it would be issuing a  modification  to
         FIN 46 prior to the end of 2003. Accordingly,  the Company has deferred
         the adoption of FIN 46 with respect to VIE's  created prior to February
         1, 2003.  Management is currently  assessing the impact, if any, FIN 46
         may have on the Company;  however,  management  does not believe  there
         will be any material  impact on its  financial  statements,  results of
         operations   or   liquidity   resulting   from  the  adoption  of  this
         interpretation.

2. Related-Party Transactions:

         EMPLOYMENT CONTRACTS

         On December 16, 2002, the Company  entered into an employment  contract
         with its President and CEO (the "CEO  Contract")  for a period of three
         years  terminating  on December 15,  2005.  The  agreement  calls for a
         salary at the rate of $125,000  per annum for the first year,  $175,000
         for the second year,  and $250,000 for the third year. The CEO Contract
         also provides for the following various bonus incentives:

                  i)       A  quarterly   discretionary  bonus  based  upon  the
                           Company's  performance in the previous quarter.  This
                           discretionary  bonus  will be in the  form  of  stock
                           options.

                  ii)      A quarterly five-year warrant to purchase up to 4,490
                           shares (post  reverse-split)  of the Company's common
                           stock at 75% of the fair market value of the stock on
                           the date the warrant is granted.

                  iii)     At  such  time  as the  CEO  introduces  a  financial
                           partner  to the  Company  through  which the  Company
                           raises  at  least   $1,500,000   in  equity  or  debt
                           financing,  the CEO  shall  be  granted  a  five-year
                           warrant   to   purchase    224,490    shares    (post
                           reverse-split) of the Company's common stock.


                                                                            F-12

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

2.       Related-Party Transactions, continued:

         CONSULTING AGREEMENTS

         On December 16, 2002, the Company  entered into  consulting  agreements
         (the "Consulting  Agreements") with its two founders and chief research
         scientists  (the  "Consultants").  The  Consulting  Agreements are on a
         month-to-month basis. Under the terms of the Consulting Agreements, the
         Consultants  agree  to  place  at the  disposal  of the  Company  their
         judgment  and   expertise  in  the  area  of  acute  lung  injury.   In
         consideration  for  these  services,  the  Company  agrees  to pay each
         consultant a non-refundable fee of $5,000 per month, which shall accrue
         until such time as the Company raises at least  $2,000,000 in equity or
         debt  financing,  at which time such accrued amount will become due and
         payable.  As of  December  31,  2003 and 2002,  the Company has accrued
         payables due to the founders of $125,000 and $5,000, respectively.

         PROPRIETARY RIGHTS AGREEMENT

         In December  2002,  the Company  entered  into a  royalty-free  license
         agreement (the "License  Agreement")  with its two founders and largest
         shareholders  (the  "Licensors").   Under  the  terms  of  the  License
         Agreement,  the Licensors grant to the Company an exclusive  license to
         use and sublicense  certain patents,  medical  applications,  and other
         technologies  developed by the  Licensors.  The  Company's  obligations
         under the License Agreement  include (i) reasonable  efforts to protect
         any  licensed  patents  or  other  associated   property  rights;  (ii)
         reasonable  efforts  to  maintain  confidentiality  of any  proprietary
         information;  (iii)  upon  the  granting  by the U. S.  Food  and  Drug
         Administration  to the  Company  the  right to  market a  product,  the
         Company  will  maintain  a broad form  general  liability  and  product
         liability insurance. The Company has recorded a capital contribution of
         $9,250 and an offsetting intangible asset as a result of this agreement
         at December 31, 2002.  It is being  amortized  over the 10-year term of
         the agreement.

         DUE TO RELATED PARTIES

         Pursuant to the Consulting  Agreements,  during the period from October
         30, 2002  (inception) to December 31, 2002, the Company  accrued $5,000
         in consulting fees.  During the period from January 1, 2003 to December
         31, 2003,  the Company  accrued an  additional  $120,000 in  consulting
         fees.  As of  December  31,  2003 and 2002,  the  Company  has  accrued
         payables due to the founders of $125,000 and $5,000, respectively.

         OFFICE LEASE

         The Company entered into a lease agreement for the period from December
         1, 2002 to August 31,  2004.  Rent  expense  is $2,734  per month.  The
         Company subleases its office space from Foresight  Capital Partners,  a
         company  controlled  by the  Company's  CEO.  The rent  cost is  passed
         through to ImmuneRegen  at the same rental rate that Foresight  Capital
         Partners is charged by the facility's  primary landlord.  The remaining
         amount  due under  the  non-cancelable  lease  agreement  entered  into
         December  1, 2002 is  $21,872  for the period  January 1, 2004  through
         August 31, 2004.

         Rent expense  amounted to $31,369 for the year ended  December 31, 2003
         and  $2,734  and  $34,103  for  the  periods   from  October  30,  2002
         (inception) through December 31, 2002 and 2003, respectively.


                                                                            F-13

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

2.       Related-Party Transactions, continued:

         InOne CONTRACT

         The  Company  has  entered  into  a  series  of  contracts  with  InOne
         Advertising & Design, Inc.  ("InOne").  InOne employs the spouse of the
         Company's  Chief  Executive  Officer.  These  contracts  include  (i) a
         three-year  agreement  dated January 13, 2003 whereby InOne will design
         and create  certain  corporate  identity  and  marketing  materials  in
         exchange for 36,000 shares  (pre-split)  of the Company's  common stock
         and $15,000.  This  agreement  also  provides  that InOne will bill the
         Company  on an  hourly  basis  for  additional  services,  as well as a
         $100,000  termination fee if the agreement is terminated as a result of
         a merger or acquisition of the Company;  (ii) an agreement  dated March
         14, 2003 whereby  InOne will  design,  create,  maintain,  and host the
         Company's   website  for  one  year  in  exchange  for  70,000   shares
         (pre-split)  of  the  Company's  common  stock  and  $4,200;  (iii)  an
         agreement  dated December 30, 2003 whereby InOne will name and design a
         logo for the Company's new product for SARS application in exchange for
         $5,000 and a warrant to purchase 10,000 shares of the Company's  common
         stock at a price of $0.25;  (iv) an agreement  dated  December 31, 2003
         whereby InOne will name and design a logo for the Company's new product
         for ARDS  application  in exchange for $5,000 and a warrant to purchase
         10,000 shares of the Company's common stock at a price of $0.25.

         NOTES PAYABLE

         In October 2003, the Company was loaned $30,000 by the father of one of
         the Company's founders. Pursuant to the terms of this transaction,  the
         Company  provided this lender with a warrant to purchase  15,000 shares
         of the Company's common stock at a price of $2.00 per share. See Note 4
         Notes Payable - Fourth Quarter Secured Convertible Promissory Notes.

         In October 2003, the Company was loaned $40,000 by a company controlled
         by the  Company's  President  and CEO.  Pursuant  to the  terms of this
         transaction,  the  Company  provided  this  lender  with a  warrant  to
         purchase  20,000  shares of the  Company's  common  stock at a price of
         $2.00 per  share.  See Note 4 Notes  Payable - Fourth  Quarter  Secured
         Convertible Promissory Notes.

         In December 2003,  the Company was loaned $20,000 by the  mother-in-law
         of the  Company's  President  and CEO.  Pursuant  to the  terms of this
         transaction,  the  Company  provided  this  lender  with a  warrant  to
         purchase  10,000  shares of the  Company's  common  stock at a price of
         $2.00 per  share.  See Note 4 Notes  Payable - Fourth  Quarter  Secured
         Convertible Promissory Notes.

3.       Commitments and Contingencies:

         MINIMUM FEE - ADVERTISING AND DESIGN

         The Company has a three-year  contract  for the period  January 2003 to
         January 2006 with its  advertising  and design  agency.  This  contract
         stipulates  that  there  will be a minimum  guaranteed  annual  fee for
         consultation,  planning,  creative and account  service of $100,000 for
         each of the three years of the contract if  termination of the contract
         is the result of a merger or acquisition  of the Company.  The contract
         was not terminated upon the GPN Merger Agreement.

         On December 13, 2001,  service of process was effectuated upon GPN with
         regard to a fee  agreement  between  GPN and  Silver  and  Deboskey,  a
         Professional  Corporation located in Denver,  Colorado. On November 27,
         2002,  judgment was entered in favor of Silver & Deboskey in the amount
         of $28,091. At December 31, 2003, the Company has not paid any of these
         amounts.


                                                                            F-14

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

3.       Commitments and Contingencies, continued:

         OFFICE LEASE

         The Company entered into a lease agreement for the period from December
         1, 2002 to August 31,  2004.  Rent  expense  is $2,734  per month.  The
         Company subleases its office space from Foresight  Capital Partners,  a
         company  controlled  by the  Company's  CEO.  The rent  cost is  passed
         through to ImmuneRegen  at the same rental rate that Foresight  Capital
         Partners is charged by the facility's  primary landlord.  The remaining
         amount  due under  the  non-cancelable  lease  agreement  entered  into
         December  1, 2002 is  $21,872  for the period  January 1, 2004  through
         August 31, 2004.

         Rent expense  amounted to $31,369 for the year ended  December 31, 2003
         and  $2,734  and  $34,103  for  the  periods   from  October  30,  2002
         (inception) through December 31, 2002 and 2003, respectively.

         InOne CONTRACT

         The  Company  has  entered  into  a  series  of  contracts  with  InOne
         Advertising & Design, Inc.  ("InOne").  InOne employs the spouse of the
         Company's  Chief  Executive  Officer.  These  contracts  include  (i) a
         three-year  agreement  dated January 13, 2003 whereby InOne will design
         and create  certain  corporate  identity  and  marketing  materials  in
         exchange for 36,000 shares  (pre-split)  of the Company's  common stock
         and $15,000.  This  agreement  also  provides  that InOne will bill the
         Company  on an  hourly  basis  for  additional  services,  as well as a
         $100,000  termination fee if the agreement is terminated as a result of
         a merger or acquisition of the Company;  (ii) an agreement  dated March
         14, 2003 whereby  InOne will  design,  create,  maintain,  and host the
         Company's   website  for  one  year  in  exchange  for  70,000   shares
         (pre-split)  of  the  Company's  common  stock  and  $4,200;  (iii)  an
         agreement  dated December 30, 2003 whereby InOne will name and design a
         logo for the Company's new product for SARS application in exchange for
         $5,000 and a warrant to purchase 10,000 shares of the Company's  common
         stock at a price of $0.25;  (iv) an agreement  dated  December 31, 2003
         whereby InOne will name and design a logo for the Company's new product
         for ARDS  application  in exchange for $5,000 and a warrant to purchase
         10,000 shares of the Company's common stock at a price of $0.25.

4.       Convertible Notes:

         A summary of convertible  promissory notes payable at December 31, 2003
is as follows:

Convertible Promissory Note                                           $  15,000

Secured Convertible Promissory Notes                                    245,000
Debt discount - value attributable to warrants issued with
   Amended Notes, net of accumulated amortization of $84,169           (105,768)

Fourth Quarter Secured Convertible Promissory Notes                     391,000
Debt Discount - value attributable to Company Warrants issued with
   Fourth Quarter Notes, net of accumulated amortization of $84,882    (122,575)
Debt Discount - value attributable to Founders Warrants issued with
   Fourth Quarter Notes, net of accumulated amortization of $72,691    (110,852)
                                                                      ---------
                                                                      $ 311,805
                                                                      =========

                                                                            F-15

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

4.       Convertible Notes, continued:

         CONVERTIBLE PROMISSORY NOTE

         On  November  1,  2002,  the  Company  received a loan in the amount of
         $15,000.  On January 20, 2003, a convertible  promissory note agreement
         (the  "Convertible  Note") was  executed  in support of this loan.  The
         Convertible  Note is due on January 20, 2004, and bears interest at the
         rate of 8%. The Convertible Note is accelerated if certain events occur
         with  regard to a sale of the  Company's  assets or an  initial  public
         offering  of the  Company's  securities.  The  Convertible  Note may be
         converted  into shares of the Company's  common stock at any time prior
         to the anniversary of the note by mutual consent of the Company and the
         note holder at the conversion  price of $1.67 per share.  As additional
         consideration,  the note  holder  also  received a warrant to  purchase
         13,469 shares (post reverse-split) of the Company's common stock at the
         price of $1.67 per share. In accordance with Emerging Issues Task Force
         Issue 98-5,  ACCOUNTING  FOR  CONVERTIBLE  SECURITIES  WITH  BENEFICIAL
         CONVERSION FEATURES OR CONTINGENTLY ADJUSTABLE CONVERSION RATIOS ("EITF
         98-5"),  the  Company  determined  that the  Convertible  Note does not
         contain a beneficial  conversion feature. The Company accounted for the
         warrant issued with the Convertible  Promissory Note in accordance with
         Emerging  Issues Task Force Issue 00-27,  APPLICATION OF ISSUE NO. 98-5
         TO CERTAIN  CONVERTIBLE  INSTRUMENTS  ("EITF 00-27") and calculated the
         value of the warrant utilizing the  Black-Scholes  model and determined
         that the warrant had no value.

         In May 2004,  the  Company  received an  extension  of the terms of the
         Convertible Promissory Note to August, 2004.

         SECURED CONVERTIBLE PROMISSORY NOTES

         In May and June 2003,  the Company  entered into eight note  agreements
         (the "Secured Convertible Promissory Notes") in the aggregate principal
         amount  of  $495,000.  These  notes  were due 120 days from the date of
         issuance and were  immediately  convertible into shares of common stock
         at the option of the note holder.  Notes aggregating a principal amount
         of $295,000 carried interest at the rate of 10% per annum, and one note
         in  the  amount  of  $200,000  carried  a flat  fee of 20% or  $40,000.
         Following the guidance in EITF 00-27, the Company computed the value of
         the beneficial conversion feature of the Convertible Secured Promissory
         Notes and recorded the amount of $60,560 as a discount to notes payable
         and as  additional  paid-in  capital  during  the twelve  months  ended
         December 31, 2003.  This  discount was  amortized  over the term of the
         notes, or 120 days.

         As an  additional  incentive to  investors  in the Secured  Convertible
         Promissory  Notes,  the Company also provided  five-year  warrants (the
         "Secured  Note  Warrants")  to purchase that number of shares of common
         stock equal to one-half  the  initial  principal  amount of the Secured
         Convertible  Promissory Notes. For example, an investor who purchased a
         $10,000 Secured Convertible  Promissory Note would receive a warrant to
         purchase  5,000  shares  of common  stock.  The  exercise  price of the
         Secured Note Warrants is equal to the price per share paid by investors
         in a future equity  financing  (the  "Reorganization  Financing").  The
         Secured Note Warrants are not  considered  granted until the completion
         of the  Reorganization  Financing.  Warrants  to  purchase  a total  of
         247,500  shares of  common  stock are  potentially  issuable  under the
         Secured  Note  Warrants.  In  accordance  with EITF 00-27,  because the
         Reorganization  Financing  had not occurred at December  31, 2003,  the
         Company  ascribed no value to the Secured Note Warrants at December 31,
         2003.

         At December 31, 2003, three of the Secured Convertible Promissory Notes
         with an aggregate  principal amount of $250,000 and accrued interest of
         $41,696 had been  repaid.  The  remaining  five notes with an aggregate
         principal amount of $245,000 were exchanged for new notes (see "Amended
         Secured Convertible Promissory Notes").


                                                                            F-16

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

4.       Convertible Notes, continued:

         AMENDED SECURED CONVERTIBLE PROMISSORY NOTES

         When the eight Secured  Convertible  Promissory Notes became due, three
         were paid and five were  exchanged for new notes in October,  2003 (the
         "Amended  Secured  Convertible   Promissory  Notes",  or  the  "Amended
         Notes").  The five Amended Notes have an aggregate  principal amount of
         $245,000  and bear  interest  at the rate of 8% per annum.  The Amended
         Notes are convertible  into common stock at a price of 60% of the price
         of common  stock issued in a  "Qualified  Financing",  defined for this
         purpose  as the next  sale of shares of  capital  stock of the  Company
         within the term of the Amended Notes in one  transaction or a series of
         transactions  of at  least  $500,000.  The  Company  accounted  for the
         Amended Notes in accordance  with EITF 00-27 and  accordingly,  because
         the conversion of the Amended Notes is contingent  upon a future event,
         the value of the  Beneficial  Conversion  Feature  associated  with the
         Amended  Notes  will  not  be  recorded  until  the  occurrence  of the
         Qualified Financing.

         The common stock underlying the Amended Secured Convertible  Promissory
         Notes is  subject to demand  registration  rights  whereby,  should the
         Company  receive  a  request  by  holders  of at least 30% of the total
         number of shares underlying the Amended Notes, the Company is obligated
         to file a registration  statement  within 90 days of such request.  The
         Amended  Notes  are  secured  by  substantially  all the  assets of the
         Company.

         The  investors in the Amended Notes also  received  five-year  warrants
         (the  "Amended  Note  Warrants")  to  purchase  the number of shares of
         common stock equal to one-half the principal amount of their investment
         in the Amended Notes. For example, an investor who purchased an Amended
         Note in the amount of $10,000  would also receive a warrant to purchase
         5,000 shares of the Company's  common stock.  The exercise price of the
         Amended Note Warrants is $2.00.

         The  total  number  of shares  of  common  stock  potentially  issuable
         pursuant to the Amended Note Warrants is 122,500. See note 6.

         In  accordance  with  EITF  00-27,  the  Company  recognized  the value
         attributable  to the Amended Note Warrants in the amount of $189,937 to
         additional paid-in capital and a discount against the Amended Notes.

         The Company  valued the Amended Note Warrants  using the  Black-Scholes
         pricing model and the following assumptions:

         o        contractual terms of 5 years
         o        an average risk free interest rate of 2.375%
         o        a dividend yield of 0.00%
         o        volatility of 312%
         o        debt discount  attributed to the value of the warrants  issued
                  is  amortized  over the 180 day term of the  Amended  Notes as
                  interest expense.

         During the twelve months ended December 31, 2003, the Company amortized
         $84,169 of the discount  associated  with the Amended Notes to interest
         expense.

         The common  stock  underlying  the  Amended  Notes is subject to demand
         registration  rights  whereby,  should the Company receive a request by
         holders of at least 30% of the total  number of shares  underlying  the
         Amended  Notes,  the  Company  is  obligated  to  file  a  registration
         statement within 90 days of such request. The Amended Notes are secured
         by substantially all the assets of the Company .


                                                                            F-17

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

4.       Convertible Notes, continued:

         In May 2004, the Company received 90 day extensions of the terms of the
         Amended Convertible Promissory Note to July, 2004.

         FOURTH QUARTER SECURED CONVERTIBLE PROMISSORY NOTES

         During October,  November,  and December 2003, the Company entered into
         ten note  agreements in the  aggregate  amount of $391,000 (the "Fourth
         Quarter Secured  convertible  Promissory Notes", or the "Fourth Quarter
         Notes").  The Fourth  Quarter Notes bear interest at the rate of 8% per
         annum  and have a term of 180 days,  and are  convertible  into  common
         stock at a price  equal to 80% of the price  per share of common  stock
         issued in the Qualified Financing. The Company accounted for the Fourth
         Quarter Notes in accordance  with EITF 00-27 and  accordingly,  because
         the conversion of the Amended Notes is contingent  upon a future event,
         the value of the BCF associated  with the Fourth Quarter Notes will not
         be recorded until the occurrence of the Qualified Financing.

         The ten investors in the Fourth  Quarter Notes also received  five-year
         warrants (the "Fourth Quarter Company Warrants") to purchase the number
         of shares of common stock equal to 50% of the principal amount of their
         investment in the Fourth  Quarter Notes.  For example,  an investor who
         purchased a Fourth Quarter Note in the amount of $10,000 would received
         a warrant to purchase 5,000 shares of the Company's  common stock.  The
         exercise price of the Fourth Quarter Note Warrants is $2.00.  The total
         number of  shares  of common  stock  issuable  pursuant  to the  Fourth
         Quarter Note Warrants is 195,500. See note 6.

         In  accordance  with  EITF  00-27,   the  Company  recorded  the  value
         attributable  to the Fourth Quarter  Company  Warrants in the amount of
         $207,457  to  additional  paid-in  capital  and a discount  against the
         Fourth  Quarter Notes.  The Company  valued the Fourth Quarter  Company
         Warrants in accordance with EITF 00-27 using the Black-Scholes  pricing
         model and the following assumptions:

         o        contractual terms of 5 years
         o        an average risk free interest rate of 2.375%
         o        a dividend yield of 0.00%
         o        volatility of 312%
         o        debt discount  attributed to the value of the warrants  issued
                  is  amortized  over the 180 day term of the  Amended  Notes as
                  interest expense.

         During the twelve months ended December 31, 2003, the Company amortized
         $84,882 of the  discount  associated  with the Fourth  Quarter  Company
         Warrants to interest expense.

         Nine of the ten  investors  who received a Fourth  Quarter Note Warrant
         also  received  a  five-year  warrant  (the  "Fourth  Quarter  Founders
         Warrants")  from two of the  Company's  founders  (the  "Founders")  to
         purchase  directly  from the Founders at a price of $0.01 per share the
         number of shares of common  stock equal to 50% of their  investment  in
         the Fourth  Quarter  Notes.  For example,  an investor who  purchased a
         Fourth  Quarter  Note in the  amount of $10,000  would have  received a
         warrant to purchase 5,000 shares of the Company's common stock directly
         from the Founders.  The total number of shares of common stock issuable
         pursuant to the Fourth  Quarter  Note  Warrants is 183,000.  The Fourth
         Quarter  Founders  Warrants  are  not an  obligation  of  the  Company.
         However, they are considered a capital contribution by the Founders and
         are  recorded  as a  discount  to the  Fourth  Quarter  Notes and as an
         addition to additional  paid-in  capital during the twelve months ended
         December 31, 2003 in the amount of $183,543.


                                                                            F-18

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

4.       Convertible Notes, continued:

         FOURTH QUARTER SECURED CONVERTIBLE PROMISSORY NOTES (CONTINUED)

         The Company valued the warrants in accordance with EITF 00-27 using the
         Black-Scholes pricing model and the following assumptions:

         o        contractual terms of 5 years
         o        an average risk free interest rate of 2.375%
         o        a dividend yield of 0.00%
         o        volatility of 312%
         o        debt discount  attributed to the value of the warrants  issued
                  is  amortized  over the 180 day term of the  Amended  Notes as
                  interest expense.

         During the twelve months ended December 31, 2003, the Company amortized
         $72,691 of the discount  associated  with the Fourth  Quarter  Founders
         Warrants to interest expense.

         The total discount  against the Fourth Quarter Notes  (attributable  to
         both the Founders Warrants and the Company  Warrants) was $391,000.  Of
         this amount, a total of $157,573 was charged to interest expense during
         the twelve months ended December 31, 2003.

         In May 2004,  the Company  received a 90 day  extension of the terms of
         the  Amended   Convertible   Promissory  Notes  to  July,  August,  and
         September, 2004.

5.       Notes Payable - Shareholder:

         At December 31, 2003, the Company has  outstanding two notes payable to
         shareholders  in the  aggregate  amount of  $62,171.  These  notes bear
         interest at the rate of 6% per annum, which is capitalized quarterly.

6.       Stockholders' Deficit:

         PREFERRED STOCK

         The  Company is  authorized  to issue  10,000,000  shares of  preferred
         stock,  par value $0.001 per share.  No shares of preferred  stock have
         been issued as of December 31, 2003.

         COMMON STOCK

         The Company is authorized to issue 100,000,000  shares of common stock,
         par value $0.001 per share.

         In  December   2002,  the  Company   issued   8,306,138   shares  (post
         reverse-split)  of  common  stock  with a fair  value of  $9,250 to the
         Company's founders for a license to certain proprietary rights.

         Also  in  December  2002,  the  Company  issued  702,655  shares  (post
         reverse-split)  of common  stock with a fair value of $782 to a Company
         founder for services provided.

         In December 2002, the Company issued 26,939 shares (post reverse-split)
         of common  stock with a fair  value of $9,000 to a vendor for  services
         rendered.

         In December 2002,  the Company sold 92,789 shares (post  reverse-split)
         of its common stock for net proceeds of $31,001.


                                                                            F-19

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

6.       Stockholders' Deficit, continued:

         During   January   2003,   the  Company   issued  49,388  shares  (post
         reverse-split)  of its  common  stock with a fair value of $13,750 to 2
         service providers.

         COMMON STOCK (CONTINUED)

         During  January  2003,  the Company sold 164,776  (post  reverse-split)
         shares of its common stock for $50,000 in cash.

         During   March  2003,   the  Company   issued   77,225   shares   (post
         reverse-split)  of its  common  stock with a fair value of $21,500 to a
         service provider.

         In April 2003,  the Company  converted a note  payable in the amount of
         $200,000 to 718,368 shares (post reverse-split) of its common stock.

         In April 2003, the Company issued 7,184 shares (post  reverse-split) of
         its common stock with a fair value of $2,030 to a service provider.

         In May 2003, the Company sold 8,980 shares (post  reverse-split) of its
         common stock for $5,000 in cash.

         In June 2003,  the Company sold 17,959 shares (post  reverse-split)  of
         its common stock for $10,000 in cash.

         In June 2003,  the  Company  converted a note in the amount of $100,000
         into 359,184 shares (post reverse-split) of common stock.

         In July 2003, the Company issued 1,184,065 shares (post  reverse-split)
         of its common stock pursuant to the Merger with GPN Network, Inc.

         WARRANTS

         At December 31, 2002, the Company had outstanding  warrants to purchase
         13,469 shares of common stock at $1.67 per share.

         During the twelve months ended  December 31, 2003,  the Company  issued
         warrants to purchase 84,786 shares (post reverse-split) of common stock
         at  prices  ranging  from  $0.25 to $2.00  per  share to eight  service
         providers.  The Company  valued the  warrants  using the  Black-Scholes
         calculation  model,  and the  warrants  were  deemed to have a combined
         value of $85,860.  This amount was charged to expense on the  Company's
         financial statements for the twelve months ending December 31, 2003.

         In October 2003,  pursuant to the Amended Note agreements (see note 4),
         the Company issued the Amended Note Warrants to purchase 122,500 shares
         of its common stock at a price of $2.00 per share.  The Company  valued
         the Amended Note Warrants using the  Black-Scholes  calculation  model,
         and the warrants were deemed to have a combined value of $189,937. This
         amount was recorded as a discount to the Amended  Notes and an addition
         to paid-in  capital,  and is being  charged to expense over the term of
         the notes,  or 180 days.  During the twelve  months ended  December 31,
         2003,  the Company  recognized  $84,169 of expense in relation to these
         warrants.

         In October, November, and December 2003, pursuant to the Fourth Quarter
         Note  agreements  (see note 4), the Company  issued the Fourth  Quarter
         Company  Warrants to purchase  195,500  shares of its common stock at a
         price of $2.00 per share.  In  addition,  also  pursuant  to the Fourth
         Quarter Note agreements,  two of the Company's founders issued directly
         to investors in the Fourth Quarter Notes warrants to purchase  directly



                                                                            F-20

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

6.       Stockholders' Deficit, continued:

         from the  founders a total of 183,000  shares of the  Company's  common
         stock at a price of $0.01 per share. The Founders Warrants are recorded
         as a capital  contribution  to the  Company.  The  Company  valued  the
         Company  Warrants and the  Founders  Warrants  using the  Black-Scholes
         valuation  model.  The combined  value of the Company  Warrants and the
         Founders  Warrants  exceeded the total  principal  amount of the Fourth
         Quarter Notes, or $391,000. The Company allocated the relative value of
         the Founders  Warrants  and the Company  Warrants to the total value of
         the Fourth  Quarter Notes,  or $391,000,  and recorded this amount as a
         discount  to the Fourth  Quarter  Notes and as an  addition  to paid-in
         capital. The discount is being amortized over the life of the notes, or
         180 days. During the twelve months ended December 31, 2003, the Company
         recognized $157,573 of expense in relation to these warrants.

         The following represents a summary of warrant transactions:

                                           Warrants       Weighted  Average
                                          Outstanding       Exercise Price
                                          -----------     ------------------
Balance, December 31, 2001                        0                 0
                        Granted              13,469             $0.84
                      Exercised                   0                 0
                                            -------             -----
Balance, December 31, 2002                   13,469             $0.84
                        Granted             402,786             $1.78
                      Exercised                   0                 0
                                            -------             -----
     Balance, December 31, 2003             416,255             $1.78
                                            =======             =====

         REVERSE STOCK SPLIT

         On  June  30,  2003,  the  Company's  Board  of  Directors  approved  a
         0.897960946  for 1.00  reverse-split  of the  Company's  common  stock.
         Immediately before the  reverse-split,  there were 11,728,333 shares of
         the Company's  common stock issued and outstanding;  immediately  after
         the split,  there were 10,531,585  shares of the Company's common stock
         issued  and  outstanding.  The  effect  of the  reverse  split has been
         presented  in  the  accompanying   financial   statement  and  footnote
         disclosures.

7.       Stock Option Plan:

         During the twelve months ended December 31, 2003,  the Company  adopted
         the 2003 Stock Option,  Deferred Stock and  Restricted  Stock Plan (the
         "Plan") which  authorizes the Board of Directors in accordance with the
         terms  of the  Plan,  among  other  things,  to grant  incentive  stock
         options,  as defined by Section  422(b) of the Internal  Revenue  Code,
         nonstatutory  stock  options  (collectively,  the "Stock  Options") and
         awards of  restricted  stock and  deferred  stock and to sell shares of
         common stock of the Company  ("Common  Stock") pursuant to the exercise
         of such stock options for up to an aggregate of 3,232,658  shares.  The
         options  will have a term not to exceed  ten years from the date of the
         grant.

         The Company has  elected to follow APB Opinion No. 25  (Accounting  for
         Stock  Issued  to  Employees)  in  accounting  for its  employee  stock
         options.  Accordingly,  no  compensation  expense is  recognized in the
         Company's  financial  statements related to options issued to employees
         because the exercise  price of the  Company's  employee  stock  options
         equals the market  price of the  Company's  common stock on the date of
         grant.  For  options  issued  to  consultants,  pursuant  to  Financial
         Accounting   Standards   Board   Statement  No.  123   (Accounting  for
         Stock-Based  Compensation)  the  Company  determined  that there was no
         compensation  costs  based on the fair  value at the grant date for its
         stock options.


                                                                            F-21

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

7.       Stock Option Plan, continued:

         The Company had not issued any stock options under the Plan at December
         31, 2003.

         Through December 31, 2002, GPN had granted,  pre-Merger,  stock options
         to certain employees and consultants which are exercisable over various
         periods  through March 2010.  These stock options are currently held by
         the  Company  outside  of the Plan.  A summary of the  Company's  stock
         options  granted  outside the Plan as of December  31, 2003 and 2002 is
         presented below:

<TABLE>
<CAPTION>
                                                 2003                          2002
                                                 ----                          ----
                                                        Average                       Average
                                        Options      Exercise Price   Options      Exercise Price
-------------------------------------------------------------------------------------------------
<S>                                     <C>             <C>            <C>            <C>
Outstanding at beginning of period           0             N/A         30,606         $ 50.00
Granted or assumed from GPN             31,606          $50.00              0
Exercised                                    0             N/A              0
Cancelled                                    0             N/A              0
Outstanding at end of year              31,606         $ 50.00         30,606         $ 50.00
Weighted-average value of options
granted during the period                $ N/A                          $ N/A
</TABLE>

8.       Private  Placement  Agreement  (Reorganization  Financing) and Offering
         Memorandum:

         On May 28, 2003, the Company entered into an engagement  agreement (the
         "Private Placement  Agreement") with VMR Capital Markets,  U.S. ("VMR")
         whereby  VMR will act as the agent for the Company in  connection  with
         the private placement of up to $2,000,000 of the Company's common stock
         on a best efforts  basis.  The offering will be made only to "Qualified
         Institutional  Buyers" and individuals who are "Accredited  Investors,"
         as  those  terms  are  defined  in  Rule  144  and  in   Regulation  D,
         respectively, under the Securities Act of 1933, as amended. The term of
         the Private  Placement  Agreement  is for a period of six months.  Upon
         consummation of a financing under the Private Placement Agreement,  the
         Company will pay to VMR a fee equal to 10% of the  principal  amount of
         any common  stock  sold in the  Private  Placement.  In  addition,  the
         Company will pay to VMR a non-accountable expense allowance equal to 3%
         of the principal amount of stock sold in the Private Placement. For the
         year ended  December  31,  2003,  the Company  had  charged  $90,000 to
         operations.  On November  28,  2003,  the Private  Placement  Agreement
         expired and no funds had been raised.

9.       Development Stage Company:

         The Company is in the development stage, and its operations are subject
         to the risks  inherent  in the  establishment  of a new  business  with
         previously untested  technology.  The Company has generated no revenues
         and has  accumulated  losses of more than $1.9  million  for the period
         from  inception   (October  30,  2002)  to  December  31,  2003.  Since
         inception,  the Company has  financed its  operations  primarily by the
         issuance of equity securities and short-term borrowings.

         During  2003,  the Company  financed  its  operations  with (i) sale of
         equity  securities  of  $65,000  and  (ii)  short-term   borrowings  of
         $1,186,000. See Notes 4 and 5.


                                                                            F-22

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

10.      Subsequent Events:

         FINANCIAL PUBLIC RELATIONS

         In January  2004,  the  Company  signed a  six-month  agreement  with a
         consultant for financial  public  relations  services in exchange for a
         monthly  fee of $6,000 and a warrant to purchase  50,000  shares of the
         Company's  common  stock at a price equal to the  closing  price of the
         Company's common stock on the date of the agreement.

         12% SENIOR SECURED PROMISSORY NOTE

         In January 2004, the Company  received a loan in the amount of $150,000
         (the "January  Note").  The January Note bears  interest at the rate of
         12% and has a term of 90 days.  The January Note also provides that the
         lender receives 600,000 shares of the Company's common stock.

         In April 2004,  the Company  purchased the January Note and replaced it
         with a new note (the "April  Note").  The April Note bears  interest at
         the rate of 12% per  annum and has a term of 90 days.  The  April  Note
         also provides that the lender receives  600,000 shares of the Company's
         common stock.

         MARKETING AGREEMENTS

         In January  and March  2004,  the  Company  entered  into two  one-year
         agreements with marketing consultants (the "Marketing Consultants") for
         services  relating to  marketing  the company  with  investors  and the
         investment  community.  The Company  agreed to compensate the Marketing
         Consultants  with an  aggregate of  1,851,600  shares of the  Company's
         common stock.

         S-8 REGISTRATION

         In March 2004, the Company completed an S-8 Registration Statement with
         the Securities and Exchange  Commission to register 1,800,000 shares of
         its common stock.

         STOCK COMPENSATION

         In February,  March,  and April 2004, the Company issued 206,100 shares
         of common stock to seven service providers.

         In April 2004,  the Company issued 200,000 shares of common stock and a
         five-year  warrant to purchase 10,000 shares of common stock at a price
         of $1.00 per share to its Chief Financial Officer for services.

         In April 2004,  the Company issued 62,500 shares of common stock to its
         operations manager for services.

         In April 2004,  the Company  issued  20,000 shares of common stock to a
         service provider.

         STRATEGIC PLANNING CONSULTING AGREEMENT

         In March 2004,  the Company  entered into a six month  agreement with a
         consultant  for  services  relating to strategic  planning,  marketing,
         operations,  and business development in exchange for 250,000 shares of
         the Company's common stock.


                                                                            F-23

<PAGE>

                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                      FOR YEAR ENDED DECEMBER 31, 2003 AND
                      FOR THE PERIOD FROM OCTOBER 30, 2002
                    (INCEPTION) TO DECEMBER 31, 2002 AND 2003

         STOCK SPLIT

         In April 2004, the Company effected a two-for-one  forward split of its
         common  stock.  The effect of this stock has not been  presented in the
         accompanying financial statements and footnote disclosures.

         CORPORATE PLANNING CONSULTING AGREEMENT

         In April  2004,  the Company  entered  into a  twelve-month  consulting
         agreement  for  corporate  planning  services in  exchange  for 600,000
         shares of the Company's  common stock and a warrant to purchase 750,000
         shares of common  stock at $2.00  per share and a warrant  to  purchase
         250,000 shares of common stock at $3.00 per share.

         NOTES PAYABLE EXTENSION:

         In May 2004,  the Company  negotiated 90 day extensions of its maturing
         notes payable.


                                                                            F-24

<PAGE>
ITEM 8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

On April 21, 2004,  the Company  terminated  its  relationship  with  Stonefield
Josephson,  Inc. and engaged Russell Bedford  Stefanou  Merchandani,  LLP as the
Company's  independent  certified  public  accountants.  The  decision to change
accountants  was  approved  by the  Company's  Board  of  Directors.  Stonefield
Josephson's  report on the  consolidated  financial  statements  of  ImmuneRegen
BioSciences,  Inc.  for the year  ended  December  31,  2002 did not  contain an
adverse  opinion or a disclaimer of opinion and was not modified or qualified as
to  uncertainty,  audit scope or  accounting  principles;  however,  such report
contained an explanatory  paragraph  relating to substantial doubt regarding the
uncertainty of the Company's ability to continue as a going concern.

On July 15, 2003, GPN terminated its relationship  with Singer Lewak Greenbaum &
Goldstein as the Company's  independent certified public accountants and engaged
Stonefield  Josephson,  Inc. The decision to change  accountants was approved by
the Company's Board of Directors. Singer Lewak Greenbaum & Goldstein's report on
the consolidated  financial  statements for the year ended December 31, 2002 did
not contain an adverse  opinion or a disclaimer  of opinion and was not modified
or qualified as to uncertainty,  audit scope or accounting principles;  however,
such report  contained an explanatory  paragraph  relating to substantial  doubt
regarding  the  uncertainty  of the  Company's  ability to  continue  as a going
concern.

On January 1, 2002, the Company  engaged Singer Lewak  Greenbaum & Goldstein LLP
as  its  new  independent  accountants.  Such  engagement  was  approved  by the
Company's Board of Directors.  In the Company's two most recent fiscal years and
any subsequent  interim  period to the date of  engagement,  the Company has not
consulted with Singer Lewak Greenbaum & Goldstein LLP regarding either:  (i) the
application  of  accounting  principles  to  a  specified  transaction,   either
completed  or proposed;  or the type of audit  opinion that might be rendered on
the Company's financial statements, and neither a written report was provided to
the Company nor oral advice was provided that Singer Lewak Greenbaum & Goldstein
LLP  concluded was an important  factor  considered by the Company in reaching a
decision as to the accounting,  auditing or financial  reporting  issue; or (ii)
any matter  that was either the  subject of a  disagreement  or event,  as those
terms  are  used  in  Item  304(a)(1)(iv)of   Regulation  S-B  and  the  related
instructions to Item 304 of Regulation S-B.

ITEM 8A. CONTROLS AND PROCEDURES.

Disclosure  controls and procedures are controls and other  procedures  that are
designed  to ensure  that  information  required  to be  disclosed  by us in the
reports that we file or submit  under the  Exchange Act is recorded,  processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and  communicated  to our management,  including our
principal  executive  and financial  officers,  as  appropriate  to allow timely
decisions regarding required disclosure.

Evaluation  of  disclosure  and  controls and  procedures.  As of the end of the
period  covered by this Annual  Report,  we conducted an  evaluation,  under the
supervision and with the  participation of our chief executive officer and chief
financial  officer,  of our  disclosure  controls and  procedures (as defined in
Rules  13a-15(e)  of the  Exchange  Act).  Based on this  evaluation,  our chief
executive  officer and chief  financial  officer  concluded  that our disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  by us in reports  that we file or submit  under the  Exchange  Act is
recorded,  processed,  summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms.

Changes in internal  controls over financial  reporting.  There was no change in
our  internal  controls,  which are  included  within  disclosure  controls  and
procedures,   during  our  most  recently  completed  fiscal  quarter  that  has
materially affected,  or is reasonably likely to materially affect, our internal
controls.
                                    PART III

ITEM 9.  DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS   AND  CONTROL  PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

Executive officers are elected annually by the Board of Directors. Board members
serve one-year  terms until their death,  resignation or removal by the Board of
Directors.

NAME                         AGE       POSITION
---------------------------------------------------------------------------
Michael K. Wilhelm           36        Chief Executive Officer and Director
Mark L. Witten, Ph.D.        50        Director and Research Scientist
David T. Harris, Ph.D.       47        Director and Research Scientist
Theodore E. Staahl, M.D.     59        Director

                                       26
<PAGE>

NAME                         AGE       POSITION
---------------------------------------------------------------------------
Eric J. Hopkins              49        Chief Financial Officer
Steven J. Scronic            31        Secretary

MICHAEL K. WILHELM, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR. Mr. Wilhelm
has been actively involved in the financial industry since 1990. Initially,  Mr.
Wilhelm  established  his career as a broker and  financial  advisor and quickly
thereafter was given  managerial  responsibilities.  After leaving the brokerage
industry,  Mr. Wilhelm founded Foresight Capital Partners, a company designed to
identify early stage  companies  with above average growth  potential and assist
them in reaching the next stage of development. In working with these companies,
Mr. Wilhelm takes an active role,  providing  advisory services and facilitating
financing  for  continued  growth and  development.  Mr.  Wilhelm  is  currently
Managing Director of Foresight Capital Partners.

MARK L. WITTEN, PH.D., DIRECTOR AND RESEARCH SCIENTIST. Dr. Witten is a Research
Professor  and  Director  of the Joan B.  and  Donald  R.  Diamond  Lung  Injury
Laboratory in the Department of Pediatrics at the University of Arizona  College
of Medicine.  Dr. Witten obtained his Ph.D. from Indiana University in 1983 with
a  double  major  in  physiology  and  exercise   physiology.   He  conducted  a
post-doctoral  fellowship in  Respiratory  Sciences at the University of Arizona
College of Medicine  from 1983 to 1988.  He then spent two years as an Assistant
Biologist  at  Massachusetts  General  Hospital  and  Instructor  in Medicine at
Harvard  Medical  School.  He returned to The  University of Arizona  College of
Medicine in 1990. Dr. Witten has authored over 200 published  manuscripts,  book
chapters and abstracts.

DAVID T.  HARRIS,  PH.D.,  DIRECTOR  AND  RESEARCH  SCIENTIST.  Dr.  Harris is a
Professor in the  Department of  Microbiology  and  Immunology in the College of
Medicine at The University of Arizona. Dr. Harris obtained his Ph.D. degree from
Wake Forest  University  in 1982 with a major in  microbiology  and  immunology.
After three years of post-doctoral  fellowship  (1982-1985) in immunology at the
Ludwig Institute for Cancer Research in Lausanne, Switzerland, Dr. Harris became
a Research  Assistant  Professor in the College of Medicine at the University of
North  Carolina-Chapel  Hill.  In 1989,  Dr.  Harris moved to The  University of
Arizona  College of Medicine.  Dr. Harris is also Director of the Stem Cell Bank
and Chief Science Officer for Cord Blood  Registry,  Inc. He is also Head of the
Gene Therapy Group. Dr. Harris is a co-inventor with Dr. Witten on the substance
P patents and also holds three additional U.S. patents.  Dr. Harris has authored
more than 200  published  papers,  book chapters and  abstracts.  Dr. Harris has
extensive experience in start-up biotechnology companies, having established one
of the first stem cell banks in 1992 at the University of Arizona. Additionally,
Dr. Harris has extensively consulted for a number of biotechnology companies.

THEODORE E. STAAHL, M.D., DIRECTOR. Dr. Staahl founded the Cosmetic, Plastic and
Reconstructive  Surgery Center in 1978. Dr. Staahl's  professional  training was
received at the  University  of Illinois and the  University of Wisconsin and is
board  certified by the  American  Board of Facial,  Plastic and  Reconstruction
Surgeons, the Board of Cosmetic Surgeons and the American Board of Head and Neck
Surgeons. Dr. Staahl has presented papers at national and international meetings
on hair  transplant,  rhinoplasty and cleft lip deformities.  Additionally,  Dr.
Staahl  is  currently  participating  in the FDA  approval  process  of  another
biotechnology company.

ERIC  HOPKINS,  CHIEF  FINANCIAL  OFFICER.  Mr.  Hopkins is a  certified  public
accountant and financial  consultant  located in Aliso Viejo,  California.  From
April  2001  to  the  present,   Mr.  Hopkins  has  been  in  private  practice,
specializing  in financial  consulting  to publicly held  companies.  He is also
President of  EdgarEyes,  LLC, a financial  reporting  firm.  From April 2000 to
April 2001, Mr. Hopkins served as the Chief Financial Officer of the Registrant.
From  July  1997  to  April   2000,   he  served  as  Director  of  Finance  for
Unisys-PulsePoint Communications, a telecommunications hardware/software company
located in Carpinteria, California. Mr. Hopkins obtained his MBA from Pepperdine
University.

STEVEN J. SCRONIC,  SECRETARY.  Mr. Scronic has worked in the investment banking
sector of the financial  services  industry since 1993,  specializing  in public
financings and private placements, including institutional 144 and non-arbitrage
Regulation  D private  placements  of debt and  equity  for  private  and public
companies.   His  corporate  finance   experience  has  focused  on  generating,


                                       27

<PAGE>

analyzing,  structuring and placing middle-market based financial  transactions.
Previously,  Mr. Scronic was a Vice President of WestPark  Capital and an equity
analyst  and  investment  banker for John  Charles &  Associates,  Inc.  and EBI
Securities,  Inc. Mr. Scronic has been elected to several  corporate  boards and
currently  serves on the  board of two  public  companies  and  several  private
companies.

Compliance With Section 16(A) of the Securities Exchange Act of 1934
--------------------------------------------------------------------

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
directors and executive  officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the SEC initial
reports of  ownership  and reports of changes in  ownership  of Common Stock and
other equity securities of the Company.  Officers,  directors,  and greater than
ten percent  stockholders are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file.  To the  Company's  knowledge,
during the year ended December 31, 2001,  all Section 16(a) filing  requirements
applicable  to the  Company's  officers,  directors and greater than ten percent
stockholders were complied with.

ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table
--------------------------

The  Summary  Compensation  Table shows  certain  compensation  information  for
services  rendered in all capacities for the fiscal year ended December 31, 2002
and the fiscal year ended December 31, 2001. Other than as set forth herein,  no
executive  officer's salary and bonus exceeded $100,000 in any of the applicable
years.  The following  information  includes the dollar value of base  salaries.
Neither  person   received   bonus  awards,   stock  options  or  certain  other
compensation, whether paid or deferred, during the periods indicated.

                           SUMMARY COMPENSATION TABLE

                                                      Annual Compensation
                                                      -------------------
            Name and Principal Position       Year          Salary
            ----------------------------------------------------------------
            Michael K. Wilhelm (1)            2003         $125,000

-----------------------
(1)      Michael  Wilhelm  became the Company's  Chief  Executive  Office at the
         inception of the Company on October 30, 2002.

Option/sar Grants in Last  Fiscal Year
--------------------------------------

         None.

Aggregate Option Exercised in Last Fiscal Year End Y/e Option Values
--------------------------------------------------------------------

         None.

Stock Options
-------------

During the twelve months ended December 31, 2003,  the Company  adopted the 2003
Stock  Option,  Deferred  Stock and  Restricted  Stock Plan (the  "Plan")  which
authorizes  the Board of  Directors  in  accordance  with the terms of the Plan,
among other things,  to grant  incentive  stock  options,  as defined by Section
422(b) of the Internal Revenue Code,  nonstatutory stock options  (collectively,
the "Stock  Options") and awards of restricted  stock and deferred  stock and to
sell shares of common  stock of the  Company  ("Common  Stock")  pursuant to the
exercise of such stock options for up to an aggregate of 1,800,000


                                       28
<PAGE>

shares.  The  options  will have a term not to exceed ten years from the date of
the  grant.  The  Company  had not issued  any stock  options  under the Plan at
December 31, 2003.

Through December 31, 2002, GPN had granted, pre-Merger, stock options to certain
employees and  consultants  which are  exercisable  over various periods through
March 2010. These stock options are currently held by the Company outside of the
Plan. A summary of the Company's  stock options  granted  outside the Plan as of
December 31, 2003 and 2002 is presented below:

The following summarizes the stock option transactions:

<TABLE>
<CAPTION>
                                                             2003                           2002
                                                             ----                           ----
                                                                     Average                       Average
                                                  Options         Exercise Price    Options     Exercise Price
                                                  -------------------------------------------------------------
<S>                                                <C>              <C>             <C>             <C>
        Outstanding at beginning of period              0               N/A         30,606          $ 50.00
        Assumed from GPN                           31,606           $ 50.00              0
        Exercised                                       0               N/A              0
        Cancelled                                       0               N/A              0
        Outstanding at end of year                 31,606           $ 50.00         30,606          $ 50.00
        Weighted-average value of options
        granted during the period                   $ N/A                            $ N/A
</TABLE>

There were no new option grants during the periods  ending  December 31, 2003 or
2002.

Warrants
--------

At November  2002,  the Company  issued a warrant to purchase  13,469  shares of
common stock at $1.67 per share pursuant to a note payable agreement.

During the twelve months ended December 31, 2003, the Company issued warrants to
purchase 84,786 shares of common stock at prices ranging from $0.25 to $2.00 per
share to eight  service  providers.  The Company  valued the warrants  using the
Black-Scholes calculation model, and the warrants were deemed to have a combined
value of $85,860.  This amount was charged to expense on the Company's financial
statements for the twelve months ending December 31, 2003.

In October  2003,  pursuant to the  Amended  Note  agreements  (see note 4), the
Company  issued the Amended  Note  Warrants to  purchase  122,500  shares of its
common stock at a price of $2.00 per share.  The Company valued the Amended Note
Warrants using the Black-Scholes calculation model, and the warrants were deemed
to have a combined value of $189,937.  This amount was recorded as a discount to
the Amended  Notes and an addition to paid-in  capital,  and is being charged to
expense over the term of the notes, or 180 days.  During the twelve months ended
December  31,  2003,  the Company  recognized  $84,169 of expense in relation to
these warrants.

In October,  November,  and December  2003,  pursuant to the Fourth Quarter Note
agreements (see note 4), the Company issued the Fourth Quarter Company  Warrants
to purchase 195,500 shares of its common stock at a price of $2.00 per share. In
addition,  also  pursuant  to the Fourth  Quarter  Note  agreements,  two of the
Company's  founders  issued  directly to investors in the Fourth  Quarter  Notes


                                       29
<PAGE>

warrants to purchase directly from the Founders a total of 158,100 shares of the
Company's common stock at a price of $0.01 per share. The Founders  Warrants are
recorded  as a capital  contribution  to the  Company.  The  Company  valued the
Company  Warrants and the Founders  Warrants using the  Black-Scholes  valuation
model.  The combined  value of the Company  Warrants  and the Founders  Warrants
exceeded the total  principal  amount of the Fourth Quarter Notes,  or $391,000.
The Company  allocated  the  relative  value of the  Founders  Warrants  and the
Company  Warrants to the total value of the Fourth Quarter  Notes,  or $391,000,
and  recorded  this amount as a discount to the Fourth  Quarter  Notes and as an
addition to paid-in  capital.  The discount is being  amortized over the life of
the notes,  or 180 days.  During the twelve months ended  December 31, 2003, the
Company recognized $157,573 of expense in relation to these warrants.

         The following represents a summary of warrant transactions:

                                            Warrants         Weighted Average
                                           Outstanding        Exercise Price
                                           -----------       ----------------
         Balance, December 31, 2001               0                  0
                            Granted          13,469              $0.84
                          Exercised               0                  0
                                            -------              -----
         Balance, December 31, 2002          13,469              $0.84
                            Granted         402,786              $1.78
                          Exercised               0                  0
                                            -------              -----
         Balance, December 31, 2003         416,255              $1.78
                                            =======              =====

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  following  table sets forth  certain  information  as of May 5, 2004,  with
respect to (i) all  officers  and  directors,  and greater than 5% owners of the
Company's common stock.


Name                               Beneficial Ownership   Percentage of Class
------------------------          ---------------------   --------------------
Mark L. Witten                       8,306,138 shares           30.1%

David T. Harris                      8,306,138 shares           30.1%

Michael K. Wilhelm (1)               1,886,805 shares            6.7%

Eric J. Hopkins (2)                    220,070 shares            0.8%

Theodore F. Staahl (3)               1,335,002 shares            4.7%

John J. Machado                      1,766,289 shares            6.4%


Directors and Officers as a Group   20,094,153 shares           70.1%


(1) Consists  of (i)  1,406,805  shares of common  stock,  (ii)  400,000  shares
    issuable upon  conversion of a note payable held by Mr.  Wilhelm,  and (iii)
    80,000 shares issuable upon exercise of warrants.

(2) Consists  of (i)  200,070  shares of common  stock  and (ii)  22,000  shares
    issuable upon exercise of warrants.

(3) Consists of (i) 808,165 shares of common stock, (ii) 350,000 shares issuable
    upon  conversion  of a note payable held by Mr.  Staahl,  and (iii)  176,837
    shares issuable upon exercise of warrants.

                                       30

<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In October  2003,  the  Company  was loaned  $30,000 by the father of one of the
Company's  founders.  Pursuant  to the terms of this  transaction,  the  Company
provided  this lender with a warrant to purchase  15,000 shares of the Company's
common stock at a price of $2.00 per share.

In October 2003, the Company was loaned  $40,000 by a company  controlled by the
Company's  President  and CEO.  Pursuant to the terms of this  transaction,  the
Company  provided  this lender with a warrant to purchase  20,000  shares of the
Company's common stock at a price of $2.00 per share.

In December  2003, the Company was loaned  $20,000 by the  mother-in-law  of the
Company's  President  and CEO.  Pursuant to the terms of this  transaction,  the
Company  provided  this lender with a warrant to purchase  10,000  shares of the
Company's common stock at a price of $2.00 per share.

ITEM 13.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      Financial Statements, Financial Statement Schedules and Exhibits

         Independent Auditor's Report.

         Consolidated Balance Sheet as of December 31, 2003.

         Consolidated  Statements  of  Operations  for the twelve  months  ended
         December 31, 2003 and from the date of inception  (October 30, 2002) to
         December 31, 2003.

         Consolidated  Statement of Stockholder's Equity for the period from the
         date of inception (October 30, 2002) to December 31, 2003.

         Consolidated  Statements  of Cash  Flows for the  twelve  months  ended
         December 31, 2003 and from the date of inception  (October 30, 2002) to
         December 31, 2003.

         Notes to Consolidated Financial Statements.

                                    EXHIBITS
     Exhibit
     Number     Description
     -------    -----------

        31.1    Certification of Chief Executive Officer pursuant to Section 302
                of the Sarbannes Oxley Act of 2002

        31.2    Certification of Chief Financial Officer persuant to Section 302
                of the Sarbannes Oxley Act of 2002

        32.1    Certification Pursuant To 18 U.S.C.ss.1350,  As Adopted Pursuant
                To Section 906 Of The SARBANES-OXLEY ACT OF 2002

        32.2    Certification Pursuant To 18 U.S.C.ss.1350,  As Adopted Pursuant
                To Section 906 Of The SARBANES-OXLEY ACT OF 2002



(b)     Form 8K/A filed as of December 29, 2003 to amend the  Company's  form 8K
        filed on July 7, 2003 pursuant to a change in control of the Company.

                                       31

<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The  following  table sets forth fees  billed to us by our  auditors  during the
fiscal  years ended  December  31, 2003 and  December 31, 2002 for: (i) services
rendered for the audit of our annual financial  statements and the review of our
quarterly financial statements, (ii) services by our auditor that are reasonably
related to the  performance  of the audit or review of our financial  statements
and that are not reported as Audit Fees,  (iii) services  rendered in connection
with tax  compliance,  tax advice and tax planning,  and (iv) all other fees for
services rendered.

                                    December  31, 2003   December 31, 2002
                                    ------------------   -----------------

(i)         Audit Fees                   $ 49,676             $ 30,000
(ii)        Audit Related Fees           $     --             $     --
(iii)       Tax Fees                     $     --             $     --
(iv)        All Other Fees               $     --             $     --
                                    -------------------  ------------------
            Total fees                   $ 49,676             $ 30,000
                                    ===================  ==================

AUDIT FEES.  Consists of fees billed for professional  services rendered for the
audit of the  Company's  consolidated  financial  statements  and  review of the
interim  consolidated  financial  statements  included in quarterly  reports and
services that are normally  provided by the Company's  certifying  accountant in
connection with statutory and regulatory filings or engagements.

AUDIT-RELATED  FEES.  Consists of fees billed for assurance and related services
that are  reasonably  related to the  performance  of the audit or review of the
Company's  consolidated  financial  statements and are not reported under "Audit
Fees." There were no Audit-Related services provided in fiscal 2003 or 2002.

TAX FEES. Consists of fees billed for professional  services for tax compliance,
tax advice and tax planning..

ALL OTHER  FEES.  Consists  of fees for  products  and  services  other than the
services reported above. There were no management  consulting  services provided
in fiscal 2003 or 2002.

POLICY  ON AUDIT  COMMITTEE  PRE-APPROVAL  OF AUDIT  AND  PERMISSIBLE  NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

The  Company  currently  does  not  have  a  designated  Audit  Committee,   and
accordingly,  the Company's  Board of Directors'  policy is to  pre-approve  all
audit and permissible  non-audit services provided by the independent  auditors.
These services may include audit services,  audit-related services, tax services
and other services.  Pre-approval  is generally  provided for up to one year and
any  pre-approval  is  detailed  as to the  particular  service or  category  of
services and is generally subject to a specific budget. The independent auditors
and management  are required to  periodically  report to the Company's  Board of
Directors regarding the extent of services provided by the independent  auditors
in accordance with this pre-approval, and the fees for the services performed to
date.  The Board of  Directors  may also  pre-approve  particular  services on a
case-by-case basis.


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on May 18, 2004

                          IR BioSciences Holdings, Inc.

                            By:     /s/ Michael K. Wilhelm
                               -------------------------------------------------
                                     Michael K. Wilhelm
                                     President and Chief Executive Officer


                                       32