UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





______________________





FORM
10-Q


______________________






x Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange
 Act
of 1934
 
 For
the quarterly period ended March 31,
2008
 
 or
 
 oTransition Report
Pursuant to Section 13 or 15(d) of the Securities
 Exchange
Act of 1934
 
 For
the transition period from ___________ to _____________
 
 Commission File Number: 033-05384
 
 IR
BIOSCIENCES HOLDINGS, INC.
 (Exact
name of Registrant as specified in its charter)
 
 
 DELAWARE
              
              13-3301899(State
      or Other Jurisdiction of Incorporation or Organization)
              
              (I.R.S.
      Employer Identification No.)8767 E. Via De
      Ventura, Suite 190, Scottsdale, AZ
              
              85258(Address
      of Principal Executive Offices)
              
              (Zip
      Code)
  Registrant's
telephone number, including area code: (480)
922-3926
 
 
 __________________________________________________________________________
 (Former
name, former address and former fiscal year, if changed since last
report)
 
 Indicate
by check mark whether Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding twelve months or for such shorter period that the Registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days. Yes x No o
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.  (Check one):
  Large
      accelerated filer  ̈
                
                Accelerated
      filer  ̈Non-accelerated
      filer  ̈    (Do
      not check is a smaller reporting company)
                
                Smaller reporting company
      x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o  
No x
 
 The
number of shares outstanding of Registrant's common stock as of May 9, 2008 was
116,017,539.
 Table of Contents
 
 
 IRBIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
 
 Table Of
Contents
 
  PagePART I. FINANCIAL
      INFORMATIONITEM 1. FINANCIAL
      STATEMENTSCondensed Consolidated Balance
      Sheetsas of March 31,2008(unaudited)and December 31, 2007 (audited)
                F-1Condensed Consolidated
      Statementsof Losses for the three months ended March 31,2008and 2007, and for the period of inception (October
      30, 2002) to March 31,2008(unaudited)
                F-2Condensed Consolidated Statement
      of Stockholders' Equity (Deficit)from date of inception (October 30, 2002)
      to March 31,2008(unaudited)
                F-3
      to F-17Condensed Consolidated Statements
      of Cash Flows for the three months ended March 31,2008and2007, and for the period of inception (October 30,
      2002) to March 31,2008(unaudited)
                F-18Notes to Condensed Consolidated
      Financial Statements
                F-19
      to F-27ITEM 2. MANAGEMENT'S DISCUSSION AND
      ANALYSIS OR PLAN OF OPERATION
                3ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
      RISK
                9ITEM4. CONTROLS
      AND PROCEDURES
                10PART II OTHER
      INFORMATIONITEM 1. LEGAL PROCEEDINGS
                12ITEM 1A. RISK FACTORS
                12ITEM 2. UNREGISTERED SALES OF EQUITY
      SECURITIES AND USE OF PROCEEDS
                12ITEM 3. DEFAULTS UPON SENIOR
      SECURITIES
                13ITEM 4. SUBMISSION OF MATTERS TO A
      VOTE OF SECURITIES HOLDERS
                13ITEM 5. OTHER INFORMATION
                13ITEM 6. EXHIBITS
                13Signatures
                14
   
 
 Table of Contents
  ITEM1. FINANCIAL INFORMATION
 
 IRBioSciences Holdings, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Balance Sheets as of March 31, 2008
 And
December 31, 2007
   March
      31, 2008

                    (unaudited)
                
                December
      31, 2007

                    (audited)AssetsCurrent
      assetsCash
      and cash equivalents
                
                $
                695,469
                
                
                $
                221,120Cash
      – Restricted
                
                
                153,125
                
                
                
                -Prepaid
      services and other current assets (Note 1)
                
                
                63,460
                
                
                
                84,691Salary
      advance (Note 1)
                
                
                1,050
                
                
                
                2,025Total
      current assets
                
                
                913,104
                
                
                
                307,836Deposits
      and other assets (Note 1)
                
                
                7,128
                
                
                
                7,128Furniture
      and equipment, net of accumulated depreciation of $31,151 (Note
      2)
                
                
                35,875
                
                
                
                38,271Total
      assets
                
                $
                956,107
                
                
                $
                353,235Liabilities
      and Stockholders' (Deficit) EquityCurrent
      liabilitiesAccounts
      payable and accrued liabilities (Note 4)
                
                $
                673,361
                
                
                $
                932,609Total
      current liabilities
                
                
                673,361
                
                
                
                932,609Notes
      payable, net of discount of $207,858  (Note 5)
                
                
                1,792,142
                
                
                
                -Total
      liabilities
                
                
                2,465,503
                
                
                
                932,609Commitments
      and Contingencies
                
                
                -
                
                
                
                -Stockholders'
      DeficitPreferred
      stock, $0.001 par value:10,000,000
      shares authorized, no shares issued and outstanding
                
                
                -
                
                
                
                -Common
      stock, $0.001 par value; 250,000,000 shares authorized;115,622,539
      shares issued and outstanding at March 31, 2008
                
                
                115,623
                
                
                
                114,323Common
      stock subscribed (Note 6)
                
                
                19,276
                
                
                
                153,000Additional
      paid-in capital
                
                
                18,328,077
                
                
                
                17,902,441Deficit
      accumulated during the development stage
                
                
                (19,972,372
                )
                
                
                (18,749,138
                )Total
      stockholders’ deficit
                
                
                (1,509,396
                )
                
                
                (579,374
                )Total
      liabilities and stockholders' deficit
                
                $
                956,107
                
                
                $
                353,235
     The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
 
 
 F-1
 Table of Contents
 
 IR
BioSciencesHoldings, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Losses
 for
the three months ended March 31, 2008 and 2007,
 and
for the date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 
 For
      the Three Months Ended March 31,
              
              
              For
      the Period October 30, 2002 to2008
              
              
              2007
              
              
              March 31, 2008Revenues
              
              $
              -
              
              
              $
              -
              
              
              $
              -Operating
      expenses:Selling,
      general and administrative expenses
              
              $
              1,176,907
              
              
              $
              874,110
              
              
              $
              17,262,848Merger
      fees and costs
              
              
              -
              
              
              
              -
              
              
              
              350,000Financing
      cost
              
              
              -
              
              
              
              -
              
              
              
              90,000Impairment
      of intangible asset costs
              
              
              -
              
              
              
              -
              
              
              
              6,393Total
      operating expenses
              
              
              1,176,907
              
              
              
              874,110
              
              
              
              17,709,241Operating
      loss
              
              
              (1,176,907
              )
              
              
              (874,110
              )
              
              
              (17,709,241
              )Other
      expense:Cost
      of penalty for late registration of shares
              
              
              -
              
              
              
              -
              
              
              
              2,192,160(Gain)
      loss from marking to market - warrant portionof
      penalty for late registration of shares
              
              
              -
              
              
              
              -
              
              
              
              (378,198
              )(Gain)
      loss from marketing to market - stock portionof
      penalty for late registration of shares
              
              
              -
              
              
              
              -
              
              
              
              (760,058
              )Interest
      (income) expense, net
              
              
              46,327
              
              
              
              (20,866
              )
              
              
              1,198,683Total
      other (income) expense
              
              
              46,327
              
              
              
              (20,866
              )
              
              
              2,252,587Loss
      before income taxes
              
              
              (1,223,234
              )
              
              
              (853,244
              )
              
              
              (19,961,828
              )Provision
      for income taxes
              
              
              -
              
              
              
              (8,115
              )
              
              
              (10,544
              )Net
      Loss
              
              $
              (1,223,234
              )
              
              $
              (861,359
              )
              
              $
              (19,972,372
              )Net Loss
      per share - basic and diluted
              
              $
              (0.01
              )
              
              $
              (0.01
              )
              
              $
              (0.32
              )Weighted
      average shares outstanding -basic
      and diluted
              
              
              114,885,174
              
              
              
              113,914,576
              
              
              
              62,638,869
   The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-2
 Table of Contents
 
 IRBiosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
  Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalBalance
      at October 30, 2002 (date of inception)
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Shares
      of common stock issued at $0.0006 per share to founders for license of
      proprietary right in December 2002
              
              
              16,612,276
              
              
              
              16,612
              
              
              
              (7,362
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              9,250Shares
      of common stock issued at $0.0006 per share to founders for services
      rendered in December 2002
              
              
              1,405,310
              
              
              
              1,405
              
              
              
              (623
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              782Shares
      of common stock issued at $0.1671 per share to consultants for services
      rendered in December 2002
              
              
              53,878
              
              
              
              54
              
              
              
              8,946
              
              
              
              (9,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -Sale
      of common stock for cash at $0.1671 per share in December
    2002
              
              
              185,578
              
              
              
              186
              
              
              
              30,815
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              31,001Net
      loss for the period from inception (October 30, 2002) to December 31,
      2002
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (45,918
              )
              
              
              (45,918
              )Balance
      at December 31, 2002 (reflective of stock splits)
              
              
              18,257,042
              
              
              $
              18,257
              
              
              $
              31,776
              
              
              $
              (9,000
              )
              
              $
              -
              
              
              $
              (45,918
              )
              
              $
              (4,885
              )Shares
      granted to consultants at $0.1392 per share for services rendered in
      January 2003
              
              
              98,776
              
              
              
              99
              
              
              
              13,651
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              13,750Sale
      of shares of common stock for cash at $0.1517 per share in January
      2003
              
              
              329,552
              
              
              
              330
              
              
              
              49,670
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              50,000
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-3
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
   Common
      StockShares
              
              
              Amount
              
              
              AdditionalPaid-InCapital
              
              
              DeferredCompensation
              
              
              CommonStockSubscribed
              
              
              AccumulatedDeficit
              
              
              TotalShares
      granted to consultants at $0.1392 per share for services rendered in March
      2003
              
              
              154,450
              
              
              
              154
              
              
              
              21,346
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              21,500Conversion
      of notes payable to common stock at $0.1392 per share in April
      2003
              
              
              1,436,736
              
              
              
              1,437
              
              
              
              198,563
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              200,000Shares
      granted to consultants at $0.1413 per share for services rendered in April
      2003
              
              
              14,368
              
              
              
              14
              
              
              
              2,016
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,030Sale
      of shares of common stock for cash at $0.2784 per share in May
      2003
              
              
              17,960
              
              
              
              18
              
              
              
              4,982
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              5,000Sales
      of shares of common stock for cash at $0.2784 per share in June
      2003
              
              
              35,918
              
              
              
              36
              
              
              
              9,964
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              10,000Conversion
      of notes payable to common stock at $0.1392 per share in June
      2003
              
              
              718,368
              
              
              
              718
              
              
              
              99,282
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              100,000Beneficial
      conversion feature associated with notes issued in June
    2003
              
              
              -
              
              
              
              -
              
              
              
              60,560
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              60,560Amortization
      of deferred compensation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              9,000
              
              
              
              -
              
              
              
              -
              
              
              
              9,000Costs
      of GPN Merger in July 2003
              
              
              2,368,130
              
              
              
              2,368
              
              
              
              (123,168
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (120,799
              )
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-4
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
  Common
      StockShares
                
                
                Amount
                
                
                AdditionalPaid-InCapital
                
                
                DeferredCompensation
                
                
                CommonStockSubscribed
                
                
                AccumulatedDeficit
                
                
                Total
 Value
      of warrants issued with extended notes payable in October
    2003
              
              
              -
              
              
              
              -
              
              
              
              189,937
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              189,937Value
      of Company warrants issued in conjunction with fourth quarter notes
      payable issued October through December 2003
              
              
              -
              
              
              
              -
              
              
              
              207,457
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              207,457Value
      of warrants contributed by founders in conjunction with fourth quarter
      notes payable issued October through December 2003
              
              
              -
              
              
              
              -
              
              
              
              183,543
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              183,543Value
      of warrants issued for services in October through December
      2003
              
              
              -
              
              
              
              -
              
              
              
              85,861
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              85,861Net
      loss for the twelve month period ended December 31, 2003
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,856,702
              )
              
              
              (1,856,702
              )Balance
      at December 31, 2003
              
              
              23,431,300
              
              
              $
              23,431
              
              
              $
              1,035,441
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (1,902,620
              )
              
              $
              (843,748
              )Shares
      granted at $1.00 per share pursuant to the Senior Note Agreement in
      January 2004
              
              
              600,000
              
              
              
              600
              
              
              
              599,400
              
              
              
              (600,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued at $1.00 per share to a consultant for services rendered in January
      2004
              
              
              800,000
              
              
              
              800
              
              
              
              799,200
              
              
              
              (800,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-5
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
  Common
      StockShares
                
                
                Amount
                
                
                AdditionalPaid-InCapital
                
                
                DeferredCompensation
                
                
                CommonStockSubscribed
                
                
                AccumulatedDeficit
                
                
                Total
 Shares
      issued to a consultant at $0.62 per share for services rendered in
      February 2004
              
              
              40,000
              
              
              
              40
              
              
              
              24,760
              
              
              
              (24,800
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued to a consultant at $0.40 per share for services rendered in March
      2004
              
              
              1,051,600
              
              
              
              1,051
              
              
              
              419,589
              
              
              
              (420,640
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued to a consultant at $0.50 per share for services rendered in March
      2004
              
              
              500,000
              
              
              
              500
              
              
              
              249,500
              
              
              
              (250,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      sold for cash at $0.15 per share in March, 2004
              
              
              8,000
              
              
              
              8
              
              
              
              1,192
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,200Shares
      issued at $0.50 per share to consultants for services rendered in March
      2004
              
              
              20,000
              
              
              
              20
              
              
              
              9,980
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              10,000Shares
      issued to a consultant at $0.40 per share for services rendered in March
      2004
              
              
              2,000
              
              
              
              2
              
              
              
              798
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              800Shares
      issued to consultants at $0.32 per share for services rendered in March
      2004
              
              
              91,600
              
              
              
              92
              
              
              
              29,220
              
              
              
              -
              
              
              
              -
              
              
              
              .-
              
              
              
              29,312Shares
      to be issued to consultant at $0.41 per share in April 2004 for services
      to be rendered through March 2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (82,000
              )
              
              
              -
              
              
              
              -
              
              
              
              (82,000
              )
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
   F-6
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
  Common
      StockShares
                  
                  Amount
                  
                  AdditionalPaid-InCapital
                  
                  
                  DeferredCompensation
                  
                  
                  CommonStockSubscribed
                  
                  
                  AccumulatedDeficit
                  
                  
                  Total
 Shares
      granted pursuant to the New Senior Note Agreement in April
      2004
              600,000
              600
              
              
              149,400
              
              
              (150,000
              )Shares
      issued to officer at $0.32 per share for services rendered in April
      2004
              200,000
              200
              
              
              63,800
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              64,000Conversion
      of Note Payable to common stock at $0.10 per share in May
    2004
              350,000
              350
              
              
              34,650
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              35,000Beneficial
      Conversion Feature associated with note payable in May
2004
              -
              -
              
              
              35,000
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              35,000Issuance
      of warrants to officers and founder for services rendered in May
      2004
              -
              -
              
              
              269,208
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              269,208Shares
      to a consultant at $0.20 per share as a due diligence fee in May
      2004
              125,000
              125
              
              
              24,875
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              25,000Shares
      issued to a consultant at $1.00 per share for services to be rendered over
      twelve months beginning May 2004
              500,000
              500
              
              
              499,500
              
              
              (500,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -Beneficial
      Conversion Feature associated with notes payable issued in June
      2004
              -
              -
              
              
              3,000
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3,000
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-7
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalIssuance
      of warrants to note holders in April, May, and June 2004
              
              
              -
              
              
              
              -
              
              
              
              17,915
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              17,915Issuance
      of warrants to employees and consultants for services rendered April to
      June 2004
              
              
              -
              
              
              
              -
              
              
              
              8,318
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              8,318Shares
      issued in July to a consultant at $0.10 for services to be rendered
      through July 2005
              
              
              250,000
              
              
              
              250
              
              
              
              24,750
              
              
              
              (25,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued to a consultant in July and September at $0.41 per share for
      services to be rendered through April 2005
              
              
              200,000
              
              
              
              200
              
              
              
              81,800
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              82,000Shares
      issued to a consultant in September at $0.12 to $0.22 for services
      rendered through September 2004
              
              
              127,276
              
              
              
              127
              
              
              
              16,782
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              16,909Shares
      issued in July to September 2004 as interest on note
    payable
              
              
              300,000
              
              
              
              300
              
              
              
              35,700
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              36,000Issuance
      of warrants with notes payable in July and August 2004
              
              
              -
              
              
              
              -
              
              
              
              72,252
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              72,252Accrued
      deferred compensation in August  2004 to a consultant for
      100,000 shares at $0.10 per share, committed but unissued
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (10,000
              )
              
              
              -
              
              
              
              -
              
              
              
              (10,000
              )
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-8
 Table of Contents
 IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
  Common
      StockShares
                    
                    Amount
                    
                    AdditionalPaid-InCapital
                    
                    
                    DeferredCompensation
                    
                    
                    CommonStockSubscribed
                    
                    
                    AccumulatedDeficit
                    
                    
                    Total
 Shares
      issued in August 2004 at $0.14 to a consultant for services to be
      performed through October 2004
              
              
              100,000
              
              
              
              100
              
              
              
              13,900
              
              
              
              (14,000
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued in August 2004 at $0.125 per share for conversion of $30,000 demand
      loan
              
              
              240,000
              
              
              
              240
              
              
              
              29,760
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              30,000Shares
      issued in August 2004 at $0.16 per share to a consultant for services
      provided.
              
              
              125,000
              
              
              
              125
              
              
              
              19,875
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              20,000Shares
      issued in October 2004 to employees at $0.16 to $0.25 per
      share
              
              
              48,804
              
              
              
              49
              
              
              
              8,335
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              8,384Commitment
      to issue 100,000 shares of stock to a consultant at $0.23 per share for
      services to be provided through September 2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (23,000
              )
              
              
              -
              
              
              
              -
              
              
              
              (23,000
              )Sale
      of stock for cash in October at $0.125 per share, net of costs of
      $298,155
              
              
              18,160,000
              
              
              
              18,160
              
              
              
              1,345,763
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,363,923Value
      of warrants issued with sale of common stock in October, net of
      costs
              
              
              -
              
              
              
              -
              
              
              
              607,922
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              607,922Issuance
      of warrant to officer in October, 2004
              
              
              -
              
              
              
              -
              
              
              
              112,697
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              112,697
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-9
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
  Common
      StockShares
                      
                      Amount
                      
                      AdditionalPaid-InCapital
                      
                      DeferredCompensation
                      
                      CommonStockSubscribed
                      
                      
                      AccumulatedDeficit
                      
                      
                      Total
 Issuance
      of stock to investment bankers in October 2004 for commissions
      earned
              
              
              4,900,000
              
              
              
              4,900
              
              
              
              (4,900
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Conversion
      of accounts payable to stock in October at $0.125 per
share
              
              
              1,257,746
              
              
              
              1,258
              
              
              
              107,382
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              108,640Value
      of warrants issued with accounts payable conversions
              
              
              -
              
              
              
              -
              
              
              
              48,579
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              48,579Conversion
      of demand loan to stock in October at $0.11 per share
              
              
              93,300
              
              
              
              93
              
              
              
              10,170
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              10,263Forgiveness
      of notes payable in October 2004
              
              
              -
              
              
              
              -
              
              
              
              36,785
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              36,785Issuance
      of stock to officer and director at $0.125 per share in October for
      conversion of liability
              
              
              1,440,000
              
              
              
              1,440
              
              
              
              122,493
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              123,933Value
      of warrants issued with officer and director conversion of
      liabilities
              
              
              -
              
              
              
              -
              
              
              
              56,067
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              56,067Conversion
      of debt and accrued interest to common stock at $0.075 to $0.125 per
      share
              
              
              6,703,151
              
              
              
              6,703
              
              
              
              417,514
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              424,217Value
      of warrants issued with conversion of debt
              
              
              -
              
              
              
              -
              
              
              
              191,111
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              191,111
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-10
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
  Common
      StockShares
                      
                      Amount
                      
                      AdditionalPaid-InCapital
                      
                      DeferredCompensation
                      
                      CommonStockSubscribed
                      
                      
                      AccumulatedDeficit
                      
                      Total
 Conversion
      of note payable in October into common stock at $0.075 per
      share
              
              
              67,616
              
              
              
              68
              
              
              
              4,932
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              5,000Issuance
      of warrants to note holders in October 2004
              
              
              -
              
              
              
              -
              
              
              
              112,562
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              112,562Value
      of shares issued to CFO as compensation
              
              
              100,000
              
              
              
              100
              
              
              
              34,900
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              35,000Value
      of warrants issued to members of advisory committees in November and
      December
              
              
              -
              
              
              
              -
              
              
              
              16,348
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              16,348Beneficial
      conversion feature associated with notes payable
              
              
              -
              
              
              
              -
              
              
              
              124,709
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              124,709Shares
      issued per conversion of Note Payable - correction
              
              
              (9,002
              )
              
              
              (9
              )
              
              
              9
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Amortization
      of deferred compensation through December 31, 2004
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,729,454
              
              
              
              -
              
              
              
              -
              
              
              
              2,729,454Loss
      for the twelve months ended December 31, 2004
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (5,305,407
              )
              
              
              (5,305,407
              )Balance
      at December 31, 2004
              
              
              62,423,391
              
              
              $
              62,423
              
              
              $
              7,922,943
              
              
              $
              (169,986
              )
              
              $
              -
              
              
              $
              (7,208,027
              )
              
              $
              607,353
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-11
 Table of Contents
   IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalSale
      of shares of common stock for cash at $0.20 per share in March 2005 for
      warrant exercise, net of costs
              
              
              6,600,778
              
              
              
              6,600
              
              
              
              1,184,256
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,190,856Value
      of warrants issued to members of advisory committees in March
                2005
              
              
              -
              
              
              
              -
              
              
              
              137,049
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              137,049Deferred
      compensation in February 2005 to a consultant for 50,000 shares of common
      stock at $0.65 per share.
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (32,500
              )
              
              
              -
              
              
              
              -
              
              
              
              (32,500
              )Warrants
      exercised at $0.05 per share in June 2003
              
              
              80,000
              
              
              
              80
              
              
              
              3,920
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              4,000Value
      of warrants issued to members of advisory committee in June
      2005
              
              
              -
              
              
              
              -
              
              
              
              70,781
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              70,781Value
      of warrants issued to investors and service providers in June
      2005
              
              
              -
              
              
              
              -
              
              
              
              32,991
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              32,991Issuance
      of 232,153 shares of common stock in July 2005 for conversion of notes
      payable
              
              
              232,153
              
              
              
              232
              
              
              
              64,771
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              65,003Issuance
      of 100,000 shares of common stock in August 2005 to a consultant for
      services provided
              
              
              100,000
              
              
              
              100
              
              
              
              9,900
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              10,000
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-12
 Table of Contents
   IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalValue
      of warrants issued to advisory committee in September 2005 for
      services
              
              
              -
              
              
              
              -
              
              
              
              20,491
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              20,491Amortization
      of deferred comp for the twelve months ended December,
2005
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              199,726
              
              
              
              -
              
              
              
              -
              
              
              
              199,726Value
      of warrants issued in October and December 2005 to investors and service
      providers
              
              
              -
              
              
              
              -
              
              
              
              18,399
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              18,399Loss
      for the year ended December 31,2005
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              
              (4,591,107
              )
              
              
              (4,591,107
              )Balance
      at December 31, 2005
              
              
              69,436,322
              
              
              $
              69,435
              
              
              $
              9,465,501
              
              
              $
              (2,760
              )
              
              $
              -
              
              
              $
              (11,799,134
              )
              
              $
              (2,266,958
              )Issuance
      of 100,000 shares to officer, previously accrued
              
              
              100,000
              
              
              
              100
              
              
              
              41,316
              
              
              
              -
              
              
              ­
              
              
              
              -
              
              
              
              41,416Value
      of warrants issued to members of advisory committee in March
      2006
              
              ­
              
              
              
              -
              
              
              
              8,399
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              8,399Amortization
      of deferred compensation for the three months ended March 31,
      2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,760
              
              
              
              -
              
              
              
              -
              
              
              
              2,760Issuance
      of common stock in May 2006 to a consultant for services
      provided
              
              
              34,464
              
              
              
              35
              
              
              
              16,162
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              16,197
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-13
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalConversion
      of accrued interest to common stock at $0.125 per share in May,
      2006
              
              
              19,288
              
              
              
              19
              
              
              
              2,392
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,411Conversion
      of accrued interest to common stock at $0.125 per share in May,
      2006
              
              
              16,324
              
              
              
              16
              
              
              
              2,025
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              2,041Conversion
      of accrued interest to common stock at $0.10 per share in May,
      2006
              
              
              13,454
              
              
              
              14
              
              
              
              1,341
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,355Common
      stock issued pursuant to the exercise of warrants at $0.09 per share in
      June 2006
              
              
              5,000
              
              
              
              5
              
              
              
              445
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              450Value
      of warrants issued to members of advisory committee in June
      2006
              
              
              -
              
              
              
              -
              
              
              
              8,820
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              8,820Value
      of warrants issued to members of advisory committee in September
      2006
              
              
              -
              
              
              
              -
              
              
              
              3,495
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3,495Value
      of warrants issued to officers
              
              
              -
              
              
              
              -
              
              
              
              50,874
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              50,874Issuance
      of penalty Common Stock, previously accrued
              
              
              4,150,798
              
              
              
              4,151
              
              
              
              867,514
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              871,665Issuance
      of penalty warrants, previously accrued
              
              
              -
              
              
              
              -
              
              
              
              182,239
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              182,239
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
   F-14
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalValue
      of options issued to officer
              
              
              -
              
              
              
              -
              
              
              
              78,802
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              78,802Value
      of warrants issued to members of advisory committee in December
      2006
              
              
              -
              
              
              
              -
              
              
              
              1,974
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,974Issuance
      of Common Stock for cash
              
              
              34,266,250
              
              
              
              34,267
              
              
              
              4,579,282
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              4,613,549Common
      stock to be issued as commission for equity fund raising
              
              
              -
              
              
              
              -
              
              
              
              (5,483
              )
              
              
              -
              
              
              
              5,483
              
              
              
              -
              
              
              
              -Value
      of options issued to officer
              
              
              -
              
              
              
              -
              
              
              
              32,120
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              32,120Value
      of options issued to officer
              
              
              -
              
              
              
              -
              
              
              
              185,472
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              185,472Loss
      for the year ended December 31, 2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,486,046
              )
              
              
              (1,486,046
              )Balance
      at December 31, 2006
              
              
              108,041,900
              
              
              $
              108,042
              
              
              $
              15,522,690
              
              
              $
              -
              
              
              $
              5,483
              
              
              $
              (13,285,180
              )
              
              $
              2,351,035Common
      stock issued as commission for equity fund raising
              
              
              5,482,600
              
              
              
              5,483
              
              
              
              -
              
              
              
              -
              
              
              
              (5,483
              )
              
              
              -
              
              
              
              -Common
      stock issued to consultant in January, 2007 at $0.15 per
    share
              
              
              298,039
              
              
              
              298
              
              
              
              44,408
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              44,706Common
      stock issued to consultants in January, 2007 at $0.155 per
      share
              
              
              400,000
              
              
              
              400
              
              
              
              61,600
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              62,000
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  F-15
 Table of Contents
  IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalCommon
      stock issued to consultants in January, 2007 at $0.15 per
      share
              
              
              100,000
              
              
              
              100
              
              
              
              14,900
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              15,000Value
      of options issued to officer in January, February and March
      2007
              
              
              -
              
              
              
              -
              
              
              
              471,457
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              471,457Value
      of options issued to employee in January, 2007
              
              
              -
              
              
              
              -
              
              
              
              5,426
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              5,426Value
      of warrants issued to a consultant in April 2007
              
              
              -
              
              
              
              -
              
              
              
              166,998
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              166,998Value
      of options issued to employees in July 2007
              
              
              -
              
              
              
              -
              
              
              
              996,133
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              996,133Value
      of options issued to directors in July 2007
              
              
              -
              
              
              
              -
              
              
              
              537,833
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              537,833Value
      of options issued to consultants in July 2007
              
              
              -
              
              
              
              -
              
              
              
              80,996
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              80,996Common
      stock to be issued for consulting services
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              33,000
              
              
              
              -
              
              
              
              33,000Common
      stock to be issued for finder’s fee
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              120,000
              
              
              
              -
              
              
              
              120,000Loss
      for the year ended December 31, 2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (5,463,958
              )
              
              
              (5,463,958
              )Balance
      atDecember 31, 2007
              
              
              114,322,539
              
              
              $
              114,323
              
              
              $
              17,902,441
              
              
              $
              -
              
              
              $
              153,000
              
              
              
              (18,749,138
              )
              
              $
              (579,374
              )
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
   F-16
 Table of Contents
   IR
Biosciences Holding, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statement of Stockholders' Equity (Deficit)
 From
date of inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 Additional
              
              
              
              
              
              CommonCommon
      Stock
              
              
              Paid-In
              
              
              Deferred
              
              
              Stock
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Capital
              
              
              Compensation
              
              
              Subscribed
              
              
              Deficit
              
              
              TotalCommon
      stock issued for consulting services previously accrued
              
              
              300,000
              
              
              
              300
              
              
              
              32,700
              
              
              
              -
              
              
              
              (33,000
              )
              
              
              -
              
              
              
              -Common
      stock issued for finder’s fee, previously accrued
              
              
              1,000,000
              
              
              
              1,000
              
              
              
              119,000
              
              
              
              -
              
              
              
              (120,000
              )
              
              
              -
              
              
              
              -Common
      stock to be issued for interest payment at $0.0488 per
    share
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              19,276
              
              
              
              -
              
              
              
              19,276Value
      of warrants issued to a consultant in April 2007
              
              
              -
              
              
              
              -
              
              
              
              38,599
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              38,599Value
      of warrants issued pursuant to convertible debt agreement
              
              
              -
              
              
              
              -
              
              
              
              226,754
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              226,754Value
      of options issued to advisory boards
              
              
              -
              
              
              
              -
              
              
              
              3,729
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3,729Value
      of options issued to an employee in January 2007
              
              
              -
              
              
              
              -
              
              
              
              1,357
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              1,357Value
      of options issued to consultants in July 2007
              
              
              -
              
              
              
              -
              
              
              
              3,497
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3,497Loss
      for the three months ended March 31, 2008
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,223,234
              )
              
              
              (1,223,234
              )Balance
      at March 31, 2008
              
              
              115,622,539
              
              
              $
              115,623
              
              
              $
              18,328,077
              
              
              $
              -
              
              
              $
              19,276
              
              
              $
              (19,972,372
              )
              
              $
              (1,509,396
              )
 
 The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
 
 
 F-17
 Table of Contents
  IR
BioSciencesHoldings, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flows
 For
the Three Months Ended March 31, 2008 and 2007,
 And
For the Period of Inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 
 For
      the Three Months Ended March 31,
              
              
              For
      the Period October 30, 2002 to2008
              
              
              2007
              
              
              March 31,
      2008Cash
      flows from operating activities:Net
      loss
              
              $
              (1,223,234
              )
              
              $
              (861,359
              )
              
              $
              (19,972,372
              )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Non-cash
      compensation
              
              
              55,432
              
              
              
              259,920
              
              
              
              6,863,791Cost
      of penalty for late registration of shares - stock
      portion
              
              
              -
              
              
              
              -
              
              
              
              1,631,726Cost
      of penalty for late registration of shares - warrant
      portion
              
              
              -
              
              
              
              -
              
              
              
              560,434(Gain)
      loss from marking to market - stock portion of penalty for late
      registration of shares
              
              
              -
              
              
              
              -
              
              
              
              (760,058
              )(Gain)
      loss from marking to market - warrant portion of penalty for late
      registration of shares
              
              
              -
              
              
              
              -
              
              
              
              (378,198
              )Legal
      fees for note payable
              
              
              -
              
              
              
              -
              
              
              
              20,125Placement
      fees for note payable
              
              
              -
              
              
              
              -
              
              
              
              65,000Impairment
      of intangible asset
              
              
              -
              
              
              
              -
              
              
              
              6,393Interest
      expense
              
              
              -
              
              
              
              -
              
              
              
              156,407Amortization
      of discount on notes payable
              
              
              18,896
              
              
              
              -
              
              
              
              1,025,831Amortization
      of cash held in escrow
              
              
              21,875
              
              
              
              -
              
              
              
              21,875Depreciation
      and amortization
              
              
              3,993
              
              
              
              2,850
              
              
              
              56,508Changes
      in operating assets and liabilities:Deposits
              
              
              -
              
              
              
              -
              
              
              
              (4,868
              )Prepaid
      services and other assets
              
              
              12,981
              
              
              
              (23,565
              )
              
              
              (28,969
              )Accounts
      payable and accrued expenses
              
              
              (239,972
              )
              
              
              -
              
              
              
              938,391Salary
      advance
              
              
              975
              
              
              
              750
              
              
              
              (1,050
              )Net
      cash used in operating activities
              
              
              (1,349,054
              )
              
              
              (621,404
              )
              
              
              (9,799,034
              )Cash
      flows from investing activities:Acquisition
      of property and equipment
              
              
              (1,597
              )
              
              
              (6,004
              )
              
              
              (67,026
              )Net
      cash used in investing activities
              
              
              (1,597
              )
              
              
              (6,004
              )
              
              
              (67,026
              )Cash
      flows from financing activities:Proceeds
      from notes payable
              
              
              1,825,000
              
              
              
              -
              
              
              
              3,778,375Principal
      payments on notes payable and demand loans
              
              
              -
              
              
              
              -
              
              
              
              (1,094,747
              )Shares
      of stock sold for cash
              
              
              -
              
              
              
              -
              
              
              
              7,873,451Proceeds
      from exercise of warrant
              
              
              -
              
              
              
              -
              
              
              
              4,450Officer
      repayment of amounts paid on his behalf
              
              
              -
              
              
              
              -
              
              
              
              19,880Cash
      paid on behalf of officer
              
              
              -
              
              
              
              -
              
              
              
              (19,880
              )Net
      cash provided by financing activities
              
              
              1,825,000
              
              
              
              -
              
              
              
              10,561,529Net
      increase (decrease) in cash and cash equivalents
              
              
              474,349
              
              
              
              (627,408
              )
              
              
              695,469Cash
      and cash equivalents at beginning of period
              
              
              221,120
              
              
              
              2,752,103
              
              
              
              -Cash
      and cash equivalents at end of period
              
              $
              695,469
              
              
              $
              2,124,695
              
              
              $
              695,469
 
    F-18
 Table of Contents
  IR
BioSciences Holdings, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flows
 For
the Three Months Ended March 31, 2008 and 2007,
 And
For the Period of Inception (October 30, 2002) to March 31, 2008
 (Unaudited)
 (continued)
 
 For
      the Three Months Ended March 31,
              
              
              For
      the Period October 30, 2002 to2008
              
              
              
              2007
              
              
              
              March
      31, 2008
 Supplemental
      disclosures of cash flow information:Cash
      paid during the period for:Interest
              
              $
              19,299
              
              
              $
              -
              
              
              $
              105,352Taxes
              
              $
              -
              
              
              $
              8,115
              
              
              $
              8,115Acquisition
      and capital restructure:Assets
      acquired
              
              
              -
              
              
              
              -
              
              
              
              -Liabilities
      assumed
              
              
              -
              
              
              
              -
              
              
              
              (120,799
              )Common
      stock retained
              
              
              -
              
              
              
              -
              
              
              
              (2,369
              )Adjustment
      to additional paid-in capital
              
              
              -
              
              
              
              -
              
              
              
              123,168Organization
      costs
              
              
              -
              
              
              
              -
              
              
              
              350,000Total
      consideration paid
              
              $
              -
              
              
              $
              -
              
              
              $
              350,000Common
      stock issued in exchange for proprietary rights
              
              $
              -
              
              
              $
              -
              
              
              $
              9,250Common
      stock issued in exchange for services
              
              $
              33,000
              
              
              $
              77,000
              
              
              $
              3,210,483Common
      stock issued in exchange for previously incurred debt and accrued
      interest
              
              $
              -
              
              
              $
              -
              
              
              $
              1,066,401Common
      stock issued in exchange as interest
              
              $
              -
              
              
              $
              -
              
              
              $
              36,000Amortization
      of beneficial conversion feature
              
              $
              -
              
              
              $
              -
              
              
              $
              223,269Stock
      options and warrants issued in exchange for services
      rendered
              
              $
              43,453
              
              
              $
              182,920
              
              
              $
              3,421,945Debt
      and accrued interest forgiveness from note holders
              
              $
              -
              
              
              $
              -
              
              
              $
              36,785Common
      stock issued in satisfaction of amounts due to an Officer and a
      Director
              
              $
              -
              
              
              $
              -
              
              
              $
              180,000Common
      stock issued in satisfaction of accounts payable
              
              $
              -
              
              
              $
              -
              
              
              $
              157,219Deferred
      compensation to a consultant accrued in March 2005
              
              $
              -
              
              
              $
              -
              
              
              $
              2,630,761Amortization
      of deferred compensation
              
              $
              -
              
              
              $
              -
              
              
              $
              202,486Fair
      value of common stock and warrants in payable in connection with late
      filing of registration statement
              
              $
              -
              
              
              $
              -
              
              
              $
              3,684,664Gain
      from marking to market - stock portion of penalty for late registration of
      shares
              
              $
              -
              
              
              $
              -
              
              
              $
              (1,124,255
              )Gain
      from marking to market - warrant portion of penalty for late registration
      of shares
              
              $
              -
              
              
              $
              -
              
              
              $
              (456,603
              )Impairment
      of intangible asset
              
              $
              -
              
              
              $
              -
              
              
              $
              6,393Issuance
      of stock to Officer, previously accrued
              
              $
              -
              
              
              $
              -
              
              
              $
              41,416Value
      of warrants issued to members of advisory board
              
              $
              -
              
              
              $
              -
              
              
              $
              22,688Services
      for note payable
              
              $
              -
              
              
              $
              -
              
              
              $
              9,750Issuance
      of shares for accounts payable
              
              $
              -
              
              
              $
              44,706
              
              
              $
              44,706Stock
      issued as commission for equity fund raising
              
              $
              120,000
              
              
              $
              5,483
              
              
              $
              125,483Value
      of options issued to members of advisory board
              
              $
              3,729
              
              
              $
              -
              
              
              $
              3,729Value
      of warrants issued for financing
              
              $
              226,754
              
              
              $
              -
              
              
              $
              226,754Value
      of shares to be issued for interest payment
              
              $
              19,276
              
              
              $
              -
              
              
              $
              19,276
  The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements
   F-19
 Table of Contents
  IR
BIOSCIENCESHOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
  Note
1 - Summary Of Accounting Policies
 
 General
 
 The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-QSB, and therefore, do
not include all the information necessary for a fair presentation of financial
position, results of operations and cash flows in conformity with accounting
principles generally accepted in the United States of America for a complete set
of financial statements.
 
 In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. The results
from operations for the three months ended March 31, 2008 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2008. The unaudited condensed consolidated financial statements should be read
in conjunction with the December 31, 2007 financial statements and footnotes
thereto included in the Company's annual report on SEC Form 10-KSB filed with
the Securities and Exchange Commission on March 31, 2008 10-KSB.
 
 Business and basis of
presentation
 
 IR
BioSciences Holdings, Inc. (the "Company," "we," or "us") 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 development-stage biopharmaceutical company. Through our wholly owned
subsidiary, ImmuneRegen BioSciences, Inc., the Company is engaged in the
research and development of potential drugs. The Company’s goal is to develop
therapeutics to be used for the protection of the body from exposure to harmful
agents such as toxic chemicals and radiation, as well as, biological agents,
including influenza and anthrax. The Company’s research and development efforts
are at a very early stage and Radilex and Viprovex, the Company’s potential drug
candidates, have only undergone pre-clinical testing in mice. From its inception
through the date of these financial statements, the Company has recognized no
revenues and has incurred significant operating expenses.
 
 The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiary, ImmuneRegen BioSciences, Inc. Significant inter-company
transactions have been eliminated in consolidation.
 
 Reclassification
 
 Certain
reclassifications have been made to conform to prior periods' data to the
current presentation. These reclassifications had no effect on reported
losses.
 
 Stock based
compensation
 
 Effective
January 1, 2006, the Company adopted SFAS No. 123 (revised), "Share-Based
Payment" (SFAS 123(R)) utilizing the modified prospective approach. Prior to the
adoption of SFAS 123(R) we accounted for stock option grant in accordance with
APB Opinion No. 25, "Accounting for Stock Issued to Employees" (the intrinsic
value method), and accordingly, recognized compensation expense for stock option
grants.
 
 Under the
modified prospective approach, SFAS 123(R) applies to new awards and to awards
that were outstanding on January 1, 2006 that are subsequently modified,
repurchased or cancelled. Under the modified prospective approach, compensation
cost recognized in the nine months of fiscal 2006 includes compensation cost for
all share-based payments granted prior to, but not yet vested as of January 1,
2006, based on the grant-date fair value estimated in accordance with the
original provisions of SFAS 123, and compensation cost for all share-based
payments granted subsequent to January 1, 2006 based on the grant-date fair
value estimated in accordance with the provisions of SFAS 123(R). Prior periods
were not restated to reflect the impact of adopting the new
standard.
  F-20
 Table of Contents
  IR
BIOSCIENCES HOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
 A summary of option activity under the
Plan as of March 31, 2008, and changes during the period ended are presented
below:
 
 Options
              
              
              Weighted
      Average
                Exercise
      PriceOutstanding
      at December 31, 2007
              
              
              16,014,212
              
              
              $
              0.29Issued
              
              
              397,465
              
              
              
              0.12Exercised
              
              
              -
              
              
              
              -Forfeited
      or expired
              
              
              -
              
              
              
              -Outstanding
      at March 31, 2008
              
              
              16,411,677
              
              
              $
              0.29Non-vested
      at March 31, 2008
              
              
              342,500
              
              
              $
              0.08Exercisable
      at March 31, 2008
              
              
              16,069,177
              
              
              $
              0.29
 
 Aggregate
intrinsic value of options outstanding and exercisable at March 31, 2008 was
$0.  Aggregate intrinsic value represents the difference between the
Company's closing stock price on the last trading day of the fiscal period,
which was $0.09 as of March 31, 2008, and the exercise price multiplied by the
number of options outstanding. As of March 31, 2008, total unrecognized
stock-based compensation expense related to stock options was $17,779. The total
fair value of options vested during the three months ended March 31, 2008 was
$8,583.
 
 Interim financial
statements
 
 The
accompanying balance sheet as of March 31, 2008, the statements of operations
for the three months ended March 31, 2008 and 2007, and for the period of
inception (October 30, 2002) to March 31, 2008, and the statements of cash flows
for three months ended March 31, 2008 and 2007, and from the period of inception
(October 30, 2002) to March 31, 2008 are unaudited. These unaudited interim
financial statements include all adjustments (consisting of normal recurring
accruals), which, in the opinion of management, are necessary for a fair
presentation of the results of operations for the periods presented. Interim
results are not necessarily indicative of the results to be expected for a full
year.
 
 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.
 
 Long-lived
assets
 
 The
Company accounts for its long-lived assets under the provision of Statements of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets To Be Disposed Of." The Company's
long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be
recoverable. Events relating to recoverability may include significant
unfavorable changes in business conditions, recurring losses, or a forecasted
Inability to achieve break-even operating results over an extended period. The
Company evaluates the recoverability of long-lived assets based upon forecasted
undiscounted cash flows. Should an impairment in value be indicated, the
carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset.
  F-21
 Table of Contents
  IR
BIOSCIENCES HOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
 Prepaid services and other
current assets
 
 Prepaid
services and other current assets consist of the following:
 
 March
      31, 2008
              
              
              December
      31, 2007Prepaid
      insurance
              
              $
              20,475
              
              
              $
              29,502Prepaid
      expenses
              
              
              42,985
              
              
              
              55,189$
              63,460
              
              
              $
              84,691
 
 Salary
Advance
 
 The
Company has made an advance of salary to one employee in the amount of $1,050
and $2,025 as of March 31, 2008 and December 31, 2007,
respectively.
 
 Deposits and other
assets
 
 Deposits
and other assets consist of a deposit on leased office space in the amount of
$7,128 as of March 31, 2008 and December 31, 2007.
 
 Restricted
Cash
 
 The
Company has cash in the amount of $175,000 held in escrow pursuant to the
Securities Purchase Agreement that was entered into in January
2008.  These funds are amortized on a straight-line basis over a 24
month period, with a monthly amortization expense of $7,292.  As of
March 31, 2008, a total of $21,875 of amortization expense was recognized,
resulting in a balance in the restricted cash escrow account of
$153,125.
 
 Note
2 – 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
      yearsLaboratory
      equipment
              3
      yearsFurniture
              7
      years
  Depreciation
expense for the three months ended March 31, 2008 and 2007 was $3,993 and
$2,850, respectively. The amount depreciated from the date of inception
(October 30, 2002) through March 31, 2008 was $56,508.  Company’s
furniture and equipment consists of the following:
  March
      31, 2008
              
              
              December
      31, 2007Office
      Equipment
              
              $
              60,879
              
              
              $
              59,282Office
      furniture and fixtures
              
              
              6,147
              
              
              
              6,14767,026
              
              
              
              65,429Accumulated
      depreciation
              
              
              (31,151
              )
              
              
              (27,158
              )Total
              
              $
              35,875
              
              
              $
              38,271
 
  F-22
 Table of Contents
  IR
BIOSCIENCES HOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
 Note
3 - Related Party Transactions
 
 Credit
Cards
 
 The
Company has a line of credit with Bank of America for $25,000. Our Chief
Executive Officer co-signs this line of credit. At March 31, 2008 the Company
had an outstanding balance on the line of credit of $21,856.
 
 The
Company has a line of credit with Bank of America for $25,000. Our Chief
Executive Officer co-signs this line of credit. At March 31, 2008 the Company
had an outstanding balance on the line of credit of $17,520.
  Note
4 - Accounts Payable And Accrued Liabilities
 
 Accounts
payable and accrued liabilities consisted of the following:
 
 March
      31, 2008
              
              
              December
      31, 2007Accounts
      payable and accrued liabilities
              
              $
              592,646
              
              
              $
              852,
      411Accounts
      payable - shell company
              
              
              34,926
              
              
              
              34,926Credit
      cards payable
              
              
              39,376
              
              
              
              36,765Interest
      payable
              
              
              3,213
              
              
              
              3,215Accrued
      payroll
              
              
              -
              
              
              
              2,092State
      income tax payable
              
              
              3,200
              
              
              
              3,200$
              673,361
              
              
              $
              932,609
 
 Note
5 - Notes Payable
 
 On
January 3, 2008, the Company entered into a Securities Purchase Agreement (the
“Purchase Agreement”) with YA Global Investments, L.P. (the “Buyer”), pursuant
to which the Buyer greed to purchase from the Company (i) up to $3 million of
secured convertible debentures (the “Convertible Debentures”), which shall be
convertible into shares of the Company’s common stock and (ii) warrants to
acquire up to 7,500,000 additional shares of Common Stock (the “Warrants”) (the
“Financing”).
  The
initial closing of the Financing occurred on January 3, 2008, at which time the
Company sold to the Buyer $2 million of the Convertible Debentures and the
Warrants (the “First Closing”).  The Company, at its sole option, may
elect to sell and issue to the Buyer an additional $1 million of Convertible
Debentures within the six months following the execution of the Purchase
Agreement (the “Second Closing”).  Obligations under the Convertible
Debentures are guaranteed by ImmuneRegen BioSciences, Inc., the Company’s
wholly-owned subsidiary (the “Guarantor”). The Company’s obligations under the
Convertible Debentures are secured by (i) all of the assets and property of the
Guarantor pursuant to a Security Agreement and (ii) by Patent Collateral of the
Company and the Guarantor in accordance with a Patent Security Agreement by and
among the Company, the Buyer and the Guarantor.
  F-23
 Table of Contents
  IR
BIOSCIENCES HOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
  The
Convertible Debentures mature on December 31, 2010, unless extended by the
holder, and accrue interest at the rate of 8% per annum.  Interest is
payable in cash quarterly on the last day of each calendar quarter beginning on
March 31, 2008, or at the Company’s option if “Equity Conditions”(as defined in
the debenture) are satisfied, it may be paid by the issuance of Common
Stock.  The Convertible Debentures are convertible at any time at the
option of the holder into shares of the Company’s Common Stock at a price equal
to $0.20 per share.  On or after December 31, 2009 or if the Company’s
fails to achieve certain milestones based on preclinical studies and submission
of a Investigational New Drug Application, as set forth in the Convertible
Debenture, the conversion price of the Convertible Debentures becomes the lower
of (i) $0.20 per share or (ii) 80% of the lowest daily volume weighted average
price during the five trading days immediately preceding
conversion.
  The
Company may redeem a portion or all amounts outstanding under the Convertible
Debentures prior to the December 31, 2010 provided that certain conditions to
redemption have been satisfied.   The Company may force a
conversion of the Convertible Debentures into Common Stock, provided that
specified conditions have been satisfied.  Holders of the Convertible
Debentures are subject to limitations on their right to convert the Convertible
Debentures, or receive shares of Common Stock as payment of interest, if after
giving effect to such conversion or receipt of shares, the holder would be
deemed to beneficially own more than 9.99% of the Company’s then outstanding
Common Stock.  Upon the occurrence of certain events of default
defined in the Convertible Debentures, including the Company’s failure to pay
the holder any amount of principal, interest, or other amounts when due, the
full principal amount of the Convertible Debentures, together with interest and
other amounts due, become immediately due and payable in cash, provided however,
that holder may request payment of such amounts in Common Stock of the
Company.
  In the
event the Company effects any “fundamental transaction” as defined in the
Convertible Debentures, including a merger or consolidation of the Company or
sale of more than 50% of its assets, the holder may (i) require the redemption
of all amounts owed, including principal, accrued and unpaid interest and any
other charges; (ii) require the conversion of the Convertible Debentures into
shares of common stock and other securities, cash and property; or (iii) in the
case of a merger or consolidation, require the surviving entity to issue to the
holder a convertible debenture with a principal amount equal to the Convertible
Debentures then held by the holder, plus all accrued and unpaid interest and
other amounts, and with the same terms and conditions as the Convertible
Debentures.
 
 The
Company placed $175,000 into an escrow account upon the First Closing, and if
the Company elects to close the Second Closing it will place an additional
$75,000 into escrow.  The funds in escrow will be used to compensate
the Buyer’s investment manager for monitoring and managing the Buyer’s purchase
and investment.  The $175,000 in escrow will be amortized on a
straight-line basis over a 24 month period, with a monthly amortization expense
of $7,292.   As of March 31, 2008, the balance remaining in the
escrow account was $153,125.
 
 The
Company agreed to pay a $20,000 structuring fee to the Buyer’s investment
manager. In addition, for the period from January 3, 2008 through 30 days after
all amounts owed to the Buyer under the Convertible Debentures have been paid,
the officers and directors of the Company agreed not to sell, transfer, pledge,
or otherwise encumber or dispose of any securities of the Company except in
accordance with the volume limitations set forth in Rule 144(e) of the General
Rules and Regulations under the Securities Act of 1933, as amended.
 
 The
Warrants have an exercise price, subject to adjustments, of $0.25 per share and
are exercisable at any time on or prior to December 31, 2012. The Warrants
provide a right of cashless exercise if, at the time of exercise, there is no
effective registration statement registering the resale of the shares underlying
the Warrants. Holders of the Warrants are subject to limitations on their right
to exercise the Warrants, if after giving effect to the exercise, a holder and
its affiliates would be deemed to beneficially own more than 9.99% of the
Company’s then outstanding Common Stock.
 
 The Buyer
has a right of first refusal on any future funding that involves the issuance of
the Company’s capital stock for so long as a portion of the Convertible
Debentures is outstanding.
 
 During
the three months ended March 31, 2008, the Company accrued interest in the
amount of $38,575 on this note.  The Company paid $19,299 of the
accrued interest in cash, and the remaining $19,276 will be paid in shares of
common stock.   As of March 31, 2008, the shares of common stock
have not been issued and the interest in the amount of $19,276 is shown as
common stock subscribed on the Company’s balance sheet at March 31,
2008.
 
 Pursuant
to the Purchase Agreement, the Company issued warrants to acquire 7,500,000
additional shares of common stock.  These warrants were valued using
the guidance of EITF 00-27, resulting in a value of $226,754.  The
value of these warrants was taken as a discount to the convertible note, and
will be amortized over the three year life of the note.  As of March
31, 3008, the remaining discount to the convertible notes payable is
$207,858.
  
 F-24
 Table of Contents
 
 IR
BIOSCIENCES HOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
 Note
6 - Equity
 
 Common
stock
 
 Pursuant
to an agreement dated, November 20, 2007, the Company agreed to issue 1,000,000
shares of common stock to a consultant for services provided.  These
shares were not issued as of December 31, 2007, and the value of these shares in
the amount of $120,000 was been recorded as common stock subscribed at December
31, 2007.  During the three months ended March 31, 2008, the Company
issued the 1,000,000 shares of common stock.
 
 Pursuant
to an agreement dated, November 5, 2007, the Company agreed to issue 300,000
shares of common stock to a consultant for services to be performed over the
next year.  These shares were not issued as of December 31, 2007 and
the value of the shares in the amount of $33,000 was been recorded in common
stock subscribed at December 31, 2007.  During the three months ended
March 31, 2008, the Company issued the 300,000 shares of common
stock.
 
 In March
2007, the Company agreed to issue 395,000 shares of common stock to a note
holder for accrued interest in the amount of $19,276.  These shares
were not issued as of March 31, 2008 and the fair value of these shares of
$19,276 has been recorded as common stock subscribed at March 31,
2008.
  Warrants
 
 In April
2007, the Company issued warrants to purchase 5,000,000 shares of common stock
to a consultant.  The warrants vest 750,000 immediately and 177,083
every month for the next two years.  The Company charged to operations
the amount of $38,599, representing the value of the warrants that vested during
the three months ended March 31, 2008, respectively.
 
 In
January 2008, the Company issued warrants to purchase 7,500,000 shares of common
stock pursuant to a financing agreement. These warrants were valued using
the guidance of EITF 00-27, resulting in a value of $226,754.  The
value of these warrants was taken as a discount to the convertible note, and
will be amortized over the three year life of the note.  As of March
31, 3008, the remaining discount to the convertible notes payable is
$207,858.
 
 The
following table summarizes the changes in warrants outstanding and the related
prices for the shares of the Company's common stock issued to non-employees of
the Company. These warrants were granted in lieu of cash compensation for
services performed or financing expenses and in connection with placement of
convertible debentures.
 
 Warrants
      Outstanding
              
              
              Warrants
      ExercisableWeighted
              
              
              
              
              
              
              
              
              WeightedAverage
              
              
              Weighted
              
              
              
              
              
              AverageRemaining
              
              
              Average
              
              
              
              
              
              RemainingExercise
              
              
              Number
              
              
              Contractual
              
              
              Exercise
              
              
              Number
              
              
              ContractualPrices
              
              
              Outstanding
              
              
              Life
      (years)
              
              
              Price
              
              
              Exercisable
              
              
              Life
      (years)$
              .05-.10
              
              
              
              565,800
              
              
              
              1.43
              
              
              $
              .05-.10
              
              
              
              565,800
              
              
              
              1.43.125-.22
              
              
              
              2,433,480
              
              
              
              2.90
              
              
              
              .125-.22
              
              
              
              1,839,730
              
              
              
              2.52.23-.56
              
              
              
              38,658,010
              
              
              
              3.33
              
              
              
              .23-.56
              
              
              
              35,887,181
              
              
              
              3.281.00
              
              
              
              664,120
              
              
              
              0.70
              
              
              
              1.00
              
              
              
              664,120
              
              
              
              0.702.00
              
              
              
              6,550
              
              
              
              1.32
              
              
              
              2.00
              
              
              
              6,550
              
              
              
              1.3242,327,960
              
              
              
              3.24
              
              
              
              
              
              
              
              38,963,381
              
              
              
              3.17
   F-25
 Table of Contents
  IR
BIOSCIENCES HOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
 Transactions
involving warrants are summarized as follows:
  Number
      of Shares
                (post-split)
              
              
              Weighted
      Average
                Price
      Per Share
                (post-split)Outstanding
      at December 31, 2007
              
              
              35,160,647
              
              
              $
              0.36Granted
              
              
              7,500,000
              
              
              
              0.25Exercised
              
              
              -
              
              
              
              -Cancelled
      or expired
              
              
              (332,687
              )
              
              
              0.43Outstanding
      at March 31, 2008
              
              
              42,327,960
              
              
              $
              0.34
 
 The
estimated value of the compensatory warrants granted to non-employees in
exchange for services and financing expenses was determined using the
Black-Scholes pricing model and the following assumptions:
 
 2008
              
              2007Significant
      assumptions (weighted-average):Risk-free
      interest rate at grant date
              4.25%
              
              4.75%Expected
      stock price volatility
              82.54
      to 93.11%
              
              87.71%Expected
      dividend payout
              -
              
              -Expected
      warrant life-years
              3
      to 5
              
              3
      to 5
  Options
  In March
2008, the Company issued options to purchase 250,000 shares of common stock a
director.  Options to purchase 50% or 125,000 shares vest in 30 days
and options to purchase the remaining 50% or 125,000 shares vest over twelve
months.  The Company valued these options at
$19,625.   This amount will be charged to operations as the
options vest.
 
 In March
2008, the Company issued options to purchase 15,000 shares of common stock an
employee. Options to purchase 50% or 7,500 shares vest  in 30 days and
options to purchase the remaining 50% or 7,500 shares vest twelve
months.  The Company valued these options at $976.  The
amount will be charged to operations as the options vest.
 
 In March
2008, the Company issued options to purchase 15,000 shares of common stock an
employee. Options to purchase 50% or 7,500 shares vest  in 30 days and
options to purchase the remaining 50% or 7,500 shares vest twelve
months.  The Company valued these options at $976.  The
amount will be charged to operations as the options vest.
 
 In March
2008, the Company issued options to purchase 117,465 shares of common stock to
member of the Company’s advisory board.  These options vest upon
issuance.  The Company charged to operations the amount of $3,729, the
value of the vested options during the three months ended March 31,
2008.
   F-26
 Table of Contents
  IR
BIOSCIENCES HOLDINGS, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008
 (Unaudited)
 The
following table summarizes the changes in options outstanding and the related
prices for the shares of the Company's common stock.
  Options
      Outstanding
              
              
              Options
      ExercisableExercise
      Prices
              
              
              Number
      Outstanding
              
              
              Weighted
      Average Remaining Contractual Life (years)
              
              
              Weighted
      Average Exercise Price
              
              
              Number
      Exercisable
              
              
              Weighted
      Average Remaining Contractual Life (years)$
              0.06-0.22
              
              
              
              14,080,000
              
              
              
              7.51
              
              
              $
              0.06-0.22
              
              
              
              13,737,500
              
              
              
              7.700.23-0.25
              
              
              
              2,014,435
              
              
              
              3.27
              
              
              
              0.23-0.25
              
              
              
              2,014,435
              
              
              
              3.270.31
              
              
              
              1,000
              
              
              
              2.70
              
              
              
              0.31
              
              
              
              1,000
              
              
              
              2.700.33
              
              
              
              103,030
              
              
              
              2.39
              
              
              
              0.33
              
              
              
              103,030
              
              
              
              2.390.44
              
              
              
              150,000
              
              
              
              2.25
              
              
              
              0.44
              
              
              
              150,000
              
              
              
              2.2525.00
              
              
              
              63,212
              
              
              
              2.00
              
              
              
              25.00
              
              
              
              63,212
              
              
              
              2.0016,411,677
              
              
              
              
              
              
              
              
              
              
              
              16,069,177
 
 Options
not vested are not exercisable.
  Transactions involving stock options
issued are summarized as follows:
 
 Number
      of Shares
              
              Weighted
      Average
                Price
      Per ShareOutstanding
      at December 31, 2007
              
              
              16,014,212
              
              $
              0.29Granted
              
              
              397,465
              
              
              0.12Exercised
              
              
              -
              
              
              -Expired
              
              
              -
              
              
              -Outstanding
      at March 31, 2008
              
              
              16,411,677
              
              $
              0.29Non-vested
      at March 31, 2008
              
              
              342,500
              
              $
              0.08Exercisable
      March 31, 2008
              
              
              16,069,177
              
              $
              0.29
 
 Note
7 - Subsequent Events
 
 On April
3, 2008, IR BioSciences Holdings, Inc. (the “Company”), approved a new
employment agreement with John Fermanis effective January 1, 2008 continuing his
employment as Chief Financial Officer of the Company and its wholly owned
subsidiary, ImmuneRegen BioSciences, Inc. for a period of two
years.  Mr. Fermanis’ previous employment agreement with the Company
expired on December 31, 2007.  On the same day, the Company also
approved a change of control agreement with Mr. Fermanis effective January 1,
2008.
 
 Pursuant
to terms of the employment agreement, Mr. Fermanis will be compensated at an
annual base salary of $130,000 for the first year and $140,000 for the second
year.  Mr. Fermanis will also be eligible for discretionary bonuses
under the Company’s stock option plan during his employment.  The
employment agreement has a term of two years, subject to early termination
provisions.  The Company may terminate the employment agreement at any
time for cause, as defined in the employment agreement, and with 15 days notice
without cause.  Mr. Fermanis may terminate the employment agreement
for any reason with 30 days notice.  Upon termination of Mr. Fermanis’
employment by the Company without cause or constructive termination, as defined
in the agreement, the Company agrees to pay to Mr. Fermanis the remainder of his
salary for the year or six months salary, whichever is greater, and any accrued
vacation.  Pursuant to the terms of the employment agreement, Mr.
Fermanis may not compete against the Company and he may not solicit the
Company’s customers during the term of the agreement and for a period of three
years following the termination of his employment agreement.  Mr.
Fermanis also may not disclose any confidential information during or within
three years after his employment.
 
 Pursuant
to the terms of the change of control agreement, the Company agrees to pay Mr.
Fermanis his salary for a period of 18 months from the date of an involuntary
termination, payable in accordance with the Company’s compensation
practice.  Involuntary termination is defined as the termination of
Mr. Fermanis’s employment by the Company without cause or due to constructive
termination at any time within one-year from a change of control event, as
defined in the agreement.  The change of control agreement commences
on the Effective Date and continues until the earlier of (i) the termination of
Mr. Fermanis’s employment with Company if the termination is prior to a change
of control or (ii) subsequent to a Change of Control Date the earlier of (x) the
termination of Mr. Fermanis’s employment absent involuntary termination or (y)
the one-year anniversary of a change of control.
 
 F-27
 Table of Contents
  
 ITEM2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
 
 Special
Note Regarding Forward-looking Statements
 
 Some of
the statements under "Risk Factors," "Business" and elsewhere in this Quarterly
Report on Form 10-Q constitute forward-looking statements. These statements
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance,
or achievements expressed or implied by such forward-looking statements. Such
factors include, among other things, those described under "Risk Factors" and
elsewhere in this Quarterly Report on Form 10-Q and in the "Risk Factors"
section of our annual report on SEC Form 10-KSB filed with the Securities and
Exchange Commission on March 31, 2008.
 
 In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "should," "could," "expects," "plans," "intends," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology.
 
 Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance,
or achievements. Moreover, neither we nor any other person assumes
responsibility for the accuracy and completeness of such statements. We are
under no duty to update any of the forward-looking statements after the date of
this report.
 
 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.
 
 Overview
 
 IR
BioSciences Holdings, Inc. is a development-stage biotechnology company. Through
our wholly-owned subsidiary ImmuneRegen BioSciences, Inc., we are engaged in the
research and development of potential drug candidates, Homspera® and its
derivatives, Radilex® and Viprovex®. Although containing the identical active
ingredient Homspera, we defined Radilex and Viprovex as derivatives of Homspera
due to the potential difference in formulations and indications for use. Our
goals include developing these potential drug candidates to be used as possible
countermeasures for homeland security threats, including radiological, chemical
and biological agents, and to meet the commercial need for similar beneficial
effects in conditions such as radiation therapy, influenza, anthrax and
potentially other microbial ailments. We have discovered activities of Homspera
that may potentially open additional commercialization opportunities in areas
such as human adult stem cell stimulation, vaccine adjuvants, which stimulate
the immune system above that of a stand-alone vaccine, and wound
healing.
 
 Our
patents, patent applications and continued research are partially derived from
discoveries made during research studies related to the function of Substance P,
which is found in the body and has a large number of actions. These studies were
funded by the Air Force Office of Scientific Research (AFOSR) in the early 1990s
and were conducted by research scientists, including our co-founders Drs. Mark
Witten and David Harris. In the course of research on Substance P, scientists
created a number of synthetic analogues, structural derivatives with slight
chemical differences, for study. One of these, which we have named Homspera, is
the basis for our drug development efforts and our intellectual property. All of
our research and development efforts are at the pre-clinical stage and Homspera
has only undergone exploratory studies to evaluate its biological activity in
small animals. There can be no assurance that our interpretation of study
results will prove to be accurate after further testing, and our beliefs
regarding the potential uses of our drug candidates may never
materialize.
 
 Our
current focus is to develop Homspera for regenerating or strengthening the human
immune system, in part, through stimulating human adult stem cells. It is the
belief of our management that the stem cell activity exhibited by Homspera
underlies some of the effects previously reported in potential applications like
treatment for radiation exposure and infectious disease using Homspera
derivatives Radilex and Viprovex, respectively, which are described
below.  Recent studies have evaluated the effects of Homspera on human
adult stem cell activity. Additionally, ongoing studies are being performed to
evaluate the efficacy of Homspera as a potential product to increase the healing
rate of wounds.
  3
 Table of Contents
  
 We are
researching Radilex for use as a potential treatment for acute exposure to
radiation. We believe that Radilex, if developed, may be an acceptable candidate
to be marketed to governmental agencies for procurement. Further, we believe
that a commercial market may exist for the use of Radilex as it relates to the
treatment of radiation-induced side effects of cancer treatments, either as a
stand-alone treatment or as a co-therapeutic agent to be used with other
therapies.
 
 Viprovex
is being researched by us for use in potential treatments of exposure to
biological agents, such as infectious disease, which include influenza and
anthrax. We believe that Viprovex, if developed, can be used in potential
applications for sale to governments for the treatment of exposure to anthrax
and pandemic influenza. In addition, we believe that potential commercial
opportunities may exist for the treatment of seasonal influenza and other viral
or bacterial infections, either as a stand-alone drug or as an adjuvant to other
existing drugs.  Ongoing studies are being performed to evaluate the
efficacy of Viprovex as a vaccine adjuvant to enhance immune response to a given
dose of vaccine.  Based on early studies on Homspera and existing
literature on Substance P, we are also researching the efficacy of Viprovex as a
potential treatment for exposure to chemical agents, such as
formalin.
 
 To date
we have submitted preliminary study data to the U.S. Food and Drug
Administration (FDA) and have been issued two Pre-Investigational New Drug
(PIND) numbers, one for the potential use of Radilex in the treatment of acute
radiation syndrome and the other for the potential use of Viprovex in the
treatment of avian influenza. We have contracted with an FDA regulatory
consultant to assist us in our preparation and submission of an Investigational
New Drug application (IND), a necessary prerequisite to human clinical studies,
which can only follow after the FDA’s allowance of our IND.
 
 We have
filed patent applications directed to various methods of using and compositions
comprising Substance P analogues. We presently own at least five issued patents,
including at least two issued U.S. patents and at least three issued foreign
patents, one of which has been registered in nine countries in the European
Union. We also have at least 61 pending patent applications, including at least
10 pending U.S. utility patent applications, at least 10 pending U.S.
provisional applications, at least 4 pending international patent applications,
and at least 37 pending foreign patent applications. All inventions
embodied in these applications and issued patents have been assigned to the
company by the inventors.
 
 Our
potential drug candidates, Homspera, Radilex and Viprovex, are at pre-clinical
stages of development and may not be shown to be safe or effective and may never
receive regulatory approval. Neither Homspera, Radilex nor Viprovex have been
tested in large animals or humans. There is no guarantee that regulatory
authorities will ever permit human testing of Homspera, Radilex, Viprovex or any
other potential products derived from Homspera. Even if such testing is
permitted, none of Homspera, Radilex, Viprovex or any other potential drug
candidates, if any, derived from Homspera may be successfully developed or shown
to be safe or effective in humans.
 
 The
results of our pre-clinical studies and clinical trials may not be indicative of
future clinical trial results. A commitment of substantial resources to conduct
time-consuming research, pre-clinical studies and clinical trials will be
required if we are to develop any commercial applications using Homspera or any
derivatives thereof. It is possible that partnerships and/or licensing
agreements will not develop during the preclinical and/or clinical stages of
development, if at all. Delays in planned patient enrollment in our future
clinical trials may result in increased costs, program delays or both. None of
our potential technologies may prove to be safe or effective in clinical trials.
Approval of the FDA, or other regulatory approvals, including export license
permissions, may not be obtained and even if successfully developed and
approved, our potential applications may not achieve market acceptance. Any
potential applications resulting from our programs may not be successfully
developed or commercially available for a number of years, if at
all.
 
 To date,
we have not obtained regulatory approval for, or commercialized any
applications, using Homspera or any of its derivatives. We have incurred
significant losses since our inception and we expect to incur annual losses for
at least the next three years as we continue with our drug research and
development efforts.
   4
 Table of Contents
  Results
of Operations for the Three Month Periods Ended March 31, 2008 and March 31,
2007
 
 Revenue
 
 We have
not generated any revenues from operations from our inception. We believe we
will begin earning revenues from operations during calendar year 2009 as we
transition from a development stage company.
 
 Sales, General, and
Administrative Expenses
 
 Sales,
general, and administrative expenses ("SG&A") were $1,176,907 for the three
months ended March 31, 2008, an increase of $302,797 or approximately 35%
compared to SG&A of $874,110 during the three months ended March 31, 2007.
The increase is primarily due to higher costs for research and development,
payroll  and related expenses, financing costs and legal and
accounting fees. For the three months ended March 31, 2008, this amount
consisted primarily of research and development costs of $258,171, payroll and
related expenses of $346,838, inclusive of an incentive bonus of $90,750 in cash
for Michael K. Wilhelm, C.E.O. per the terms of his employment agreement,
financing costs of $91,875, legal and accounting fees of $201,026, consulting
and professional fees of $109,270 and non-cash compensation costs of
$47,182.
 
 The
Company expects SG&A to increase during the coming twelve months as we
continue to build out the Company's infrastructure and to develop the Company's
potential drugs and therapeutics.
 
 Interest Income
(net)
 
 Interest
expense (net) was $46,327 for the three months ended March 31, 2008, an increase
of $67,193 or approximately 322% compared to interest income of $20,866 for the
three months ended March 31, 2007. Interest expense increased during the three
months ended March 31, 2008 due to interest costs relating to the securities
purchase agreement with YA Global Investments, L.P. in first quarter of
2008.
 
 The
Company expects interest expense to increase approximately 50% per quarter
beginning in the third quarter as we sell additional securities to YA Global
Investments per the terms of the securities purchase agreement.
  Net Loss
 
 For the
reasons stated above our net loss for the three months ended March 31, 2008 was
$1,223,234 or $0.01 per share, an increase of $361,875 or approximately 42%
compared to a net loss of $861,359 for the three months ended March 31,
2007.
 
 Our
independent certified public accountants have stated in their report included in
our annual report on SEC Form 10-KSB filed with the Securities and Exchange
Commission on March 31, 2008 that we have incurred a net loss and negative cash
flows from operations of $5,463,958 and $2,456,038, respectively, for the year
ended December 31, 2007. This loss, in addition to a lack of operational
history, raises substantial doubt about our ability to continue as a going
concern. In the absence of significant revenue and profits, and since we do not
expect to generate significant revenues in the foreseeable future, we, 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 our capital expenditures, working capital and other cash
requirements for the fiscal year ending December 31, 2008. No assurance can be
given that any such additional funding will be available or that, if available,
can be obtained on terms favorable to us. If we are unable to raise needed funds
on acceptable terms, we will not be able to develop or enhance our products,
take advantage of future opportunities or respond to competitive pressures or
unanticipated requirements. A material shortage of capital will require us to
take drastic steps such as reducing our level of operations, disposing of
selected assets or seeking an acquisition partner. If cash is insufficient, we
will not be able to continue operations.
 
 The
Company expects losses to increase during the coming twelve months. The Company
does not expect to begin to generate revenue in the coming twelve months, and
our costs are likely to increase as continue our research and development
efforts on our early, pre-clinical stage products and build out our corporate
infrastructure.
   5
 Table of Contents
 Plan
of Operations
 
 We expect
to continue to incur increasing operating losses for the foreseeable future,
primarily due to our continued research and development activities attributable
to Homspera, Radilex, Viprovex or any other proposed product, if any, derived
from Homspera and general and administrative activities.
 
 The
preliminary results of our pre-clinical studies using Homspera, Radilex or
Viprovex may not be indicative of results that will be obtained from subsequent
studies or from more extensive trials. Further, our pre-clinical or clinical
trials may not be successful, and we may not be able to obtain the required
regulatory approvals in a timely fashion, or at all.
 
 Product Research and
Development
 
 We
incurred an expense of $258,171 for the three months ended March 31, 2008 in
research and development activities related to the development of Homspera,
Radilex and Viprovex versus an expense of $76,834 for the three months ended
March 31, 2007. From our inception in October 2002, we have spent $1,826,357 in
research and development activities. These costs only include the manufacture
and delivery of our drug by third party manufacturers and payments to contract
research organizations and consultants for consulting related to our studies and
costs of performing such studies. Significant costs relating to research and
development, such as compensation for Dr. Siegel have been classified in
officer’s salaries for consistency of financial reporting.
 
 We
anticipate that during the next 12 months we will increase our research and
development spending to a total of approximately $800,000 in an effort to
further develop Homspera, Radilex and Viprovex. This research and development
cost estimate includes additional animal pharmacology studies, formulation and
animal safety/toxicity studies. If we receive additional funds, through
investment funding, licensing agreements or grants, we expect we will further
increase our research and development spending.
 
 We
believe that initial revenues, if any, will likely be generated through
partnerships, alliances and/or licensing agreements with pharmaceutical or
biotechnology companies. Our focus during the next 12 months will be to identify
those companies which we believe may have an interest in our proposed products
and attempt to negotiate arrangements for potential partnerships, alliances
and/or licensing arrangements. Alliances between pharmaceutical and
biotechnology companies can take a variety of organizational forms and involve
many different payment structures such as upfront payments, milestone payments,
equity injections and royalty payments. To date, we have not entered into
discussions with and have no agreements or arrangements with any such companies.
Even if we are successful in entering into such a partnership or alliance or
licensing our technology, we anticipate that the earliest we may begin to
generate revenues from operations would be calendar year 2009. There is no
assurance that we will ever be successful in reaching such agreements or ever
generate revenues from operations.
  We will
need to generate significant revenues from product sales and or related
royalties and license agreements to achieve and maintain profitability. Through
March 31, 2008, we had no revenues from any product sales, royalties or
licensing fees, and have not achieved profitability on a quarterly or annual
basis. Our ability to achieve profitability depends upon, among other things,
our ability to develop products, obtain regulatory approval for products under
development and enter into agreements for product development, manufacturing and
commercialization. Moreover, we may never achieve significant revenues or
profitable operations from the sale of any of our potential products or
technologies.
 
 If
product development or approval does not occur as scheduled, our time to reach
market will be lengthened and our costs will substantially increase.
Additionally, we may be requested to expand our findings to gather additional
data or we may not achieve the desired results. If so, we may have to design new
protocols and conduct additional studies. This will increase our costs and delay
the time to market for our potential products, if any.  Any of these
occurrences would have a material negative impact on our business and our
liquidity as it may cause us to seek additional capital sooner than expected and
allow our competitors to successfully enter the market ahead of us.
 
 If we are
successful in achieving desirable results for these applications, we intend to
design the protocols and begin further studies for this and other applications,
when capital is available. As we have only collected preliminary data and
additional studies are required, we cannot predict when, if ever, a viable
treatments for these indications can be commercialized. If we do not observe
significant results or we lack the capital to further the development, we may
abandon such research and development efforts; thereby limiting our future
potential revenues.
 
 If we are
successful in completing our studies and the results are as we anticipate, we
intend to prepare and submit the necessary documentation to the FDA and other
regulatory agencies for approval. If approval for Homspera, Radilex and/or
Viprovex is granted, we expect to begin efforts to commercialize our product, if
any, immediately thereafter, however, since we are currently in the pre-clinical
stage of development, it will take an indeterminate amount of time in
development before we have a marketable drug, if ever.
 
 
 6
 Table of Contents
 
  Off-Balance
Sheet Arrangements
 
 There
were no off-balance sheet arrangements as of March 31, 2008.
 
 Revenues
 
 We have
not generated any revenues from operations from our inception. We believe we
will begin earning revenues from operations during calendar year 2009 as we
transition from a development stage company.
 
 Costs
And Expenses
 
 From our
inception through March 31, 2008, we have incurred losses of $19,972,372. These
expenses were associated principally with equity-based compensation to employees
and consultants, product development costs and professional services, and equity
based compensation to shareholders for the penalty incurred for the late
registration of shares.
 
 Liquidity
And Capital Resources
 
 At March
31, 2008, we had current assets of $913,104 consisting of cash of $695,469 and
other current assets of $217,635. At March 31, 2008, we also had current
liabilities of $673,361, consisting of accounts payable of $559,988 and accrued
liabilities of $113,373. This resulted in net working capital at March 31, 2008
of $239,743. During the three months ended March 31, 2008, the Company used cash
in operating activities of $1,349,054. From the date of inception (October 30,
2002) to March 31, 2008, the Company has had a net loss of $19,972,372 and has
used cash of $9,799,034 in operating activities.
 
 We
currently have no revenue. There is no guarantee that our business model will be
successful, or that we will be able to generate sufficient revenue to fund
future operations. As a result, we expect our operations to continue to use net
cash, and that we will be required to seek additional debt or equity financings
during the coming quarters. Since inception, we have financed our operations
through debt and equity financing. While we have raised capital to meet our
working capital and financing needs in the past, additional financing is
required in order to meet our current and projected cash flow deficits from
operations and development of our product line. We met our cash requirements
from our inception through March 31, 2008 via the private placement of
$7,877,901 of our common stock and $2,733,628 from the issuance of notes
payable, net of repayments.
 
 On
January 3, 2008, we entered into a securities purchase agreement with YA Global
Investments, L.P., pursuant to which YA Global Investments, L.P. agreed to
purchase from us (i) up to $3 million of secured convertible debentures, which
shall be convertible into shares of our common stock and (ii) warrants to
acquire up to 7,500,000 additional shares of our common stock. The initial
closing occurred on January 3, 2008, at which time we sold to YA Global
Investments, L.P. $2 million of the convertible debentures and the warrants. The
company, at our sole option, may elect to sell and issue to YA Global
Investments, L.P. an additional $1 million of secured convertible debentures
within the six months following the execution of the securities purchase
agreement.
 
 Pursuant
to our employment agreement with Michael Wilhelm, our President and Chief
Executive Officer, dated December 16, 2002, we paid a salary of $125,000 and
$175,000 to Mr. Wilhelm during the first and second years of his employment,
respectively. Thereafter we paid through August 10, 2005, an annual salary of
$250,000. On August 10, 2005, we entered into a new employment agreement with
Mr. Wilhelm. The new employment agreement calls for a salary at the rate of
$275,000 per annum and provides for bonus incentives. Mr. Wilhelm's salary is
payable in regular installments in accordance with the customary payroll
practices of our company. Further, pursuant to the terms of the change of
control agreement between Mr. Wilhelm and us, we agree to pay Mr. Wilhelm his
salary for a period of 18 months from the date an involuntary termination,
payable in accordance with the Company's compensation practice. Involuntary
termination is defined as the termination of Mr. Wilhelm employment by Company
without cause or due to constructive termination at any time within one-year
from a change of control event, as defined in the agreement.
 
 Pursuant
to our employment agreement with John Fermanis, our Chief Financial Officer,
dated February 15, 2005, we paid a salary of $60,000 until we completed a
financing of $500,000 or more. This occurred on March 4, 2005 when we completed
a Tender Offer for warrants totaling $1,190,857 net of fees. From March 4, 2005,
until December 31, 2005, we paid an annual salary of $85,000. Thereafter, we
paid an annual salary of $98,000 for the second year ending December 31, 2006
and an annual salary of $112,000 for the third year ending December 31, 2007.
Mr. Fermanis' salary is payable in regular installments in accordance with our
customary payroll practices. Mr. Fermanis also received 100,000 shares of our
Common Stock, which were earned at the rate of 1/12 or 8,333 per month beginning
January 2005.
   7
 Table of Contents
 
 Pursuant
to terms of our employment agreement with Mr. Fermanis, our Chief Financial
Officer, dated January 1, 2008, we pay an annual base salary of $130,000 for the
first year and $140,000 for the second year.  Mr. Fermanis will also
be eligible for discretionary bonuses under the Company’s stock option plan
during his employment.  The employment agreement has a term of two
years, subject to early termination provisions.  The Company may
terminate the employment agreement at any time for cause, as defined in the
employment agreement, and upon 15 days written notice without
cause.  Mr. Fermanis may terminate the employment agreement for any
reason with 30 days written notice.  Upon termination of Mr. Fermanis’
employment by the Company without cause or constructive termination, as defined
in the employment agreement, the Company agrees to pay to Mr. Fermanis the
remainder of his salary for the year or six months salary, whichever is greater,
and any accrued vacation.
 Pursuant
to our employment agreement with Hal N. Siegel, our Vice President and Chief
Scientific Officer, dated October 23, 2006, we will pay an annual base salary of
$200,000 for the first year and $210,000 for the second year. Mr. Siegel will
also be eligible for discretionary bonuses under our stock option plan during
his employment. In addition, Mr. Siegel received options with a term of five
years to purchase 200,000 shares of our Common Stock. The options are
exercisable at $0.20 per share. The employment agreement has a term of two
years, subject to early termination provisions. Upon termination of Mr. Siegel's
employment by us without cause or constructive termination, as defined in the
agreement, we agree to pay to Mr. Siegel the remainder of his salary for the
year or six months salary, whichever is greater, and any accrued vacation. In
addition, we entered into a change of control agreement with Hal
Siegel.  Pursuant to the terms of the change of control agreement, we
agree to pay Mr. Siegel his salary for a period of 18 months from the date of an
involuntary termination, payable in accordance with our compensation practice.
Involuntary termination is defined as the termination of Mr. Siegel's employment
by us without cause or due to constructive termination at any time within
one-year of a change of control event, as defined in the agreement.
  Since our
inception, we have been seeking additional third-party funding. During such
time, we have retained a number of different investment banking firms to assist
us in locating available funding; however, we have not yet been successful in
obtaining any of the long-term funding needed to make us into a commercially
viable entity. During the period from October 2004 to March 31, 2008, we were
able to obtain financing of $10,561,529, including a series of private
placements of our securities which resulted in net proceeds to us of $7,877,901
and $2,683,628 from the sale of notes payable, net of repayments. The notes
payable include a transaction in January 2008 where we sold $2 million in
secured convertible debentures which resulted in net proceeds to us of
$1,825,000. We also expect to sell an additional $1 million of the secured
convertible debentures after July 3, 2008 as per the terms of the securities
purchase agreement with YA Global Investments L.P. Based on our current plan of
operations all of our current funding is expected to be depleted by the end of
August, 2008. The additional $1 million is expected to fund operations until
January 2009. If we are not successful in generating sufficient liquidity from
operations or in raising sufficient capital resources, it would have a material
adverse effect on our business, results of operations, liquidity and financial
condition.




Our
registered independent certified public accountants have stated in their report,
dated March 28, 2008, that the Company's recurring losses and negative cash flow
raise substantial doubt about the Company's ability to continue as a going
concern.




While we
have raised capital to meet our working capital and financing needs in the past
through debt and equity financings, additional financing will be required in
order to implement our business plan and to meet our current and projected cash
flow deficits from operations and development. There can be no assurance that we
will be able to consummate future debt or equity financings in a timely manner
on a basis favorable to us, or at all. If we are unable to raise needed funds,
we will not be able to develop or enhance our potential products, take advantage
of future opportunities or respond to competitive pressures or unanticipated
requirements. A material shortage of capital will require us to take drastic
steps such as reducing our level of operations, disposing of selected assets or
seeking an acquisition partner.


Until
such time, if at all, as we receive adequate funding, we intend to continue to
defer payment of all of our obligations which are capable of being deferred,
which actions have resulted in some vendors demanding cash payment for their
goods and services in advance, and other vendors refusing to continue to do
business with us. We do not expect to generate a positive cash flow from our
operations for at least several years, if at all, due to anticipated
expenditures for research and development activities, administrative and
marketing activities, and working capital requirements and expect to continue to
attempt to raise further capital through one or more further private placements.
Based on our operating expenses and anticipated research and development
activities we believe we have sufficient capital to meet our operating needs
through August 2008. Thereafter, we believe that we will require an additional
$2,500,000 to meet our expenses over the next 12 months.
  8
 Table of Contents
  Acquisition or Disposition
of Plant and Equipment
 
 We did
not dispose or acquire any significant property, plant or equipment during the
quarters ended March 31, 2008 and 2007. We do not anticipate the sale of any
significant property, plant or equipment during the next twelve
months.
 Number of
Employees
 
 From our
inception through the period ended March 31, 2008, we have relied primarily on
the services of outside consultants for services.  As of March 31,
2008 we had eleven total employees: seven full-time employees, two
part-time employees and two contract employees. Our full-time employees are
Michael K. Wilhelm, our Chief Executive Officer; John N. Fermanis, our Chief
Financial Officer; Hal N. Siegel, Ph.D., Vice President and Chief Scientific
Officer, a Science Director, two scientific program managers; and,
the seventh serves in an administrative role. In order for us to attract
and retain quality personnel, we anticipate we will have to offer competitive
salaries to future employees. We do not anticipate our employment base will
significantly change during the next twelve months.
  Critical
Accounting Policies and Estimates
 
 The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at the
date of the consolidated financial statements and the reported amounts of
revenues, expenses and allocated charges during the reporting period. Actual
results could differ from those estimates.
  We
describe our significant accounting policies in the Notes to Consolidated
Financial Statements included in our Annual Report on Form 10-KSB as of and
for the year ended December 31, 2007. We discuss our critical accounting
policies and estimates in Management’s Discussion and Analysis of Financial
Condition and or Plan of Operation in the Form 10-KSB.  Other
than as indicated in this quarterly report, there have been no material
revisions to the critical accounting policies as filed in our Annual Report on
Form 10-KSB as of and for the year ended December 31, 2007 with the
SEC on March 31, 2008.
  ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
 
 Not
applicable to smaller reporting companies.
  9
 Table of Contents
  ITEM4. CONTROLS AND PROCEDURES
 
 Evaluation of Disclosure
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.
 
 As of the
end of the period covered by this Quarterly 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 Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon
this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company 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 SEC’s rules and forms and
which also are effective in ensuring that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the Company’s management, including the
Company’s Chief Executive Officer and Chief Financial Officer, to allow timely
decisions regarding required disclosure.
 
 Our
management, including our Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls and procedures or our internal
controls will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. These inherent limitations
include, but are not limited to, the realities that judgments in decision-making
can be faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions. Over time, controls may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.
 
 Changes in internal
controls
 
 There
have been no changes in our internal control over financial reporting identified
in connection with the evaluation required by paragraph (d) of Rule 13a-15 or
15d-15 under the Exchange Act that occurred during the first quarter of 2008
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
 
 10
 Table of Contents
 
 PART II - OTHER INFORMATION
  ITEM1. LEGAL PROCEEDINGS
 
 We are
not currently a party to any material legal proceedings.
  ITEM1A. RISK FACTORS
 
 Other
than with respect to the following risk factors, which have been updated and
restated in their entirety below, there have been no material changes from the
risk factors disclosed in the "Risk Factors" section of our the "Risk Factors"
section of our annual report on Form 10-KSB filed with the Securities and
Exchange Commission on March 31, 2008.
 
 Risks
Related to Our Financial Results
 
 We
have limited cash resources, an accumulated deficit, are not currently
profitable and expect to incur significant expenses in the near
future.
 
 As of
March 31, 2008, we had a working capital of $239,743. This amount consists of
cash of $695,469 and other current assets of $217,635 less accounts payable and
accrued liabilities of $673,361.  We have incurred a net loss of
$19,972,372  for the period from our inception in October 30, 2002 to
March 31, 2008, and have always experienced negative cash flow. We expect to
continue to experience negative cash flow and operating losses through at least
2010 and possibly thereafter. As a result, we will need to generate significant
revenues to achieve profitability.
  We
may fail to become and remain profitable or we may be unable to fund our
continuing losses, in which case our business may fail.
 
 We are
focused on product development and have not generated any revenue to date. We do
not believe we will begin earning revenues from operations until the calendar
year 2009 as we transition from a development stage company. We have incurred
operating losses since our inception. Our net loss for the three months ended
March 31, 2008 was $1,223,234.  As of March 31, 2008, we had an
accumulated deficit of $19,972,372.
  ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
 
 On
January 3, 2008, the Company entered into a securities purchase agreement with
YA Global Investments, L.P. (the “Buyer”), pursuant to which the Buyer agreed to
purchase from the Company (i) up to $3 million of secured convertible
debentures, which shall be convertible into shares of our common stock and (ii)
warrants to acquire up to 7,500,000 additional shares of our common stock (the
“Financing”). The initial closing of the Financing occurred on January 3, 2008,
at which time the Company sold to the Buyer $2 million of the convertible
debentures and the warrants. The Company, at its sole option, may elect to sell
and issue to the Buyer an additional $1 million of convertible debentures within
the six months following the execution of the securities purchase agreement. The
debentures are convertible at any time at the option of the holder into shares
of the common stock at a price equal to $0.20 per share. On or after December
31, 2009 or if the Company’s fails to achieve certain milestones based on
preclinical studies and submission of a Investigational New Drug Application, as
set forth in the convertible debenture, the conversion price of the convertible
debentures becomes the lower of (i) $0.20 per share or (ii) 80% of the lowest
daily volume weighted average price during the five trading days immediately
preceding conversion. The warrants have an exercise price, subject to
adjustments, of $0.25 per share and are exercisable at any time on or prior to
December 31, 2012. The warrants provide a right of cashless exercise if, at the
time of exercise, there is no effective registration statement registering the
resale of the shares underlying the warrants. Holders of the warrants are
subject to limitations on their right to exercise the warrants, if after giving
effect to the exercise, a holder and its affiliates would be deemed to
beneficially own more than 9.99% of the Company’s then-outstanding common stock.
The securities were issued in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act of 1933, as amended, and Rule
506 promulgated thereunder.
  11
 Table of Contents
   On
February 15, 2008, the Board of Directors approved of the issuance of 1,000,000
restricted shares of our common stock to Joseph Stevens & Co., Inc. and its
designees, all of whom are accredited investors, per the terms of a consulting
agreement dated November 20, 2007, under the terms of which the consultant would
provide referral services for a term of one year to identify and introduce
potential Directors to the company. The securities were issued in reliance upon
exemptions from registration pursuant to Section 4(2) under the Securities Act
of 1933, as amended, and Rule 506 promulgated thereunder.
 
 Also on
February 15, 2008, the Board of Directors approved of the issuance of 300,000
restricted shares of common stock to a consultant, who is an accredited
investor, per the terms of a consulting agreement dated November 13, 2007, under
the terms of which the consultant would provide investor relations services and
consulting services for new product development for a term of four months. The
securities were issued in reliance upon exemptions from registration pursuant to
Section 4(2) under the Securities Act of 1933, as amended, and Rule 506
promulgated thereunder.
 
 On March
31, 2008, the Board of Directors approved of the issuance of 395,000 restricted
shares of common stock to YA Global Investments, L.P., who is an accredited
investor, for accrued interest through March 31, 2008 of $19,276. The securities
were issued in reliance upon exemptions from registration pursuant to Section
4(2) under the Securities Act of 1933, as amended, and Rule 506 promulgated
thereunder.
 
 ITEM3. DEFAULTS UPON SENIOR SECURITIES
 
 None.
 
 ITEM
4: SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
 
 None.
 
 ITEM
5: OTHER INFORMATION
 
 None.
  ITEM
6. EXHIBITS
  31.1
              Certification of Chief Executive Officer pursuant to
      Item 601(b)(31) of Regulation S-B, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.31.2
              Certification of Chief Financial Officer pursuant to
      Item 601(b)(31) of Regulation S-B, as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 2002.32.1
              Certifications of Chief Executive Officer pursuant to 18
      U.S.C. Section 1350 as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.*32.2
              Certifications of Chief Financial Officer pursuant to 18
      U.S.C. Section 1350 as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.*
 
 *  This
exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, whether made
before or after the date hereof and irrespective of any general incorporation
language in any filings.
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  Signatures
 
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized, on May 15, 2008.
 
 
 
 IR
      BioSciences Holdings, Inc.By:
              /s/MichaelK.
      WilhelmMichael
      K. WilhelmPresident,
      Chief Executive Officer
 
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