FORM 10-QSB/A
                                 Amendment No. 1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                    ----------------------------------------

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

                  For the quarterly period ended June 30, 2004

                                       or

( )      Transition 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                        (I.R.S.  Employer
   incorporation or organization)                       Identification No.)

           4021 N. 75th Street , Suite 201, Scottsdale, Arizona 85251
--------------------------------------------------------------------------------
                (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
                     -------                   ---------

The number of shares  outstanding of Registrant's  common stock as of August 17,
2004 was 30,168,716.


<PAGE>



                       IR BIOSCIENCES, INC. AND SUBSIDIARY


                                TABLE OF CONTENTS



                                                                     Page Number
                                                                     -----------
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements:

          Consolidated Balance Sheet as of June 30, 2004.....................F-1

          Consolidated Statement of Operations for the three months
          and six months ended  June 30, 2004 and  2003, and for the
          period of inception  (October 30, 2002) to June 30, 2004...........F-2

          Consolidated  Statement of Cash Flows for the six months ended
          June 30, 2004 and 2003, and for the  period  of  inception
          (October 30, 2002) to June 30, 2004................................F-3

          Consolidated Statement of Stockholder' Equity (Deficit) for the
          Period from inception (October 30, 2002) to June 30, 2004..........F-5

          Notes to Consolidated Financial Statements.........................F-7

  Item 2. Management's Discussion and Analysis of Financial Condition
          or Plan of Operation.................................................3

  Item 3. Controls and Procedures.............................................17


PART II.  OTHER INFORMATION

  Item 1. Legal Proceedings...................................................18

  Item 2. Changes in Securities and Use of Proceeds...........................18

  Item 3. Defaults Upon Senior Securities.....................................18

  Item 4. Submission of Matters to a Vote of Securities Holders...............18

  Item 5. Other Information...................................................18

  Item 6. Exhibits and Reports on Form 8-K....................................18

          Signatures..........................................................19



<PAGE>



ITEM 1.   FINANCIAL INFORMATION


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
                           Consolidated Balance Sheet
                                  June 30, 2004
                                   (Unaudited)


                                     Assets

Current assets
   Cash and cash equivalents                                       $    5,208
   Prepaid services and other assets                                    4,800
                                                                   ----------

     Total current assets                                              10,008

Licensed proprietary rights, net                                        7,783
Furniture and equipment, net                                            2,456
                                                                   ----------

Total assets                                                       $   20,247
                                                                   ==========

               Liabilities and Deficiency in Stockholders' Equity

Current liabilities
   Current portion of notes payable, net of discount               $  934,011
   Accounts payable and accrued liabilities                           787,652
                                                                   ----------

     Total current liabilities                                      1,721,663

Long-term notes payable, net of discount                               30,659

Commitments and Contingencies

Deficiency in Stockholders' Equity
   Preferred stock, 0.001 par value: 10,000,000 shares
     authorized, no shares issued and outstanding                          --
   Common stock, $0.001 par value; 100,000,000
     shares authorized; 28,319,500 shares issued
     and outstanding at June 30, 2004                                  28,319
   Additional paid-in capital                                       4,270,874
   Deferred compensation                                           (1,187,344)
   Deficit Accumulated during the Development Stage                (4,843,924)
                                                                   ----------
   Total deficiency in stockholder's equity                        (1,732,075)
                                                                   ----------

     Total liabilities and deficiency in stockholders' equity      $   20,247
                                                                   ==========

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

                                      F-1


<PAGE>


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
                      Consolidated Statements of Operations
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                           For the Three                   For the Six               Cumulative
                                                           Months Ended                    Months Ended            From Inception
                                                             June 30,                        June 30,               (October 30,
                                                   ----------------------------    ----------------------------      2002) to
                                                           2004            2003            2004            2003    June 30, 2004
                                                   ------------    ------------    ------------    ------------    -------------
<S>                                               <C>            <C>             <C>             <C>             <C>

Revenues                                           $         --    $         --    $         --    $         --    $         --

Operating expenses:
   Selling, general and administrative expenses       1,574,415         280,872       2,505,489         369,074       3,899,285
   Merger fees and costs                                     --              --              --              --         350,000
   Financing cost                                            --              --              --              --          90,000
                                                   ------------    ------------    ------------    ------------    -------------

      Total operating expenses                        1,574,415         280,872       2,505,489         369,074       4,339,285
                                                   ------------    ------------    ------------    ------------    -------------

Operating loss                                       (1,574,415)       (280,872)     (2,505,489)       (369,074)     (4,339,285)

   Interest expense                                     131,737          22,642         435,815          22,642         504,639
                                                   ------------    ------------    ------------    ------------    -------------

      Total other expense                               131,737          22,642         435,815          22,642         504,639
                                                   ------------    ------------    ------------    ------------    -------------

  Loss before income taxes                           (1,706,152)       (303,514)     (2,941,304)       (391,716)     (4,843,924)

   Provision for income taxes                                --              --              --              --              --
                                                   ------------    ------------    ------------    ------------    -------------

Net loss                                           $ (1,706,152)   $   (303,514)   $ (2,941,304)   $   (391,716)   $ (4,843,924)
                                                   ============    ============    ============    ============

Net loss per share - basic and diluted             $      (0.06)   $      (0.02)   $      (0.11)   $      (0.02)   $      (0.23)
                                                   ============    ============    ============    ============

Weighted average shares outstanding -
   basic and diluted                                 27,474,445      15,425,852      26,163,266      19,194,414      21,045,680
                                                   ============    ============    ============    ============

</TABLE>

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

                                      F-2

<PAGE>


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

                                                           For the Six            Cumulative
                                                          Months Ended           From Inception
                                                            June 30,             (October 30,
                                                   ---------------------------     2002) to
                                                        2004           2003      June 30, 2004
                                                   ------------   ------------   ------------


<S>                                               <C>            <C>            <C>

Cash flows from operating activities:
   Net loss                                        $(2,941,304)   $  (391,716)   $(4,843,924)
Adjustments to reconcile net loss to to net
  cash used in operating activities:
    Non-cash compensation                            1,912,027         19,779      1,998,637
    Amortization of deferred compensation                   --          9,000             --
    Interest expense                                    37,545             --        106,169
    Amortization of discount on notes payable          399,222         10,306        701,524
    Depreciation and amortization                       12,053          6,258         24,815
    Changes in operating assets and liabilities:            --             --             --
    Prepaid services and other assets                   31,043        (49,843)        (4,799)
    Accounts payable and accrued expenses              243,931         95,024        678,932
                                                   ------------   ------------   ------------

Net cash used in operating activities                 (305,483)      (301,192)    (1,338,646)

Cash flows from investing activities:
    Acqisition of property and equipment                    --         (3,304)        (3,304)
    Increase in cash related to acquisition                 --       (350,000)            --
    Increase in prepaid acquisition costs                   --        (90,000)            --
                                                   ------------   ------------   ------------

Net cash used in investing activities                       --       (443,304)        (3,304)

Cash flows from financing activities:
    Proceeds from notes payable                        442,957        795,000      1,643,957
    Principal payments on notes payable               (174,000)            --       (424,000)
    Shares of stock issued for cash                     31,200         65,000        127,201
    Officer repayment of amounts paid on his behalf         --             --         19,880
    Cash paid on amount due to officer                      --        (14,381)       (19,880)
                                                   ------------   ------------   ------------

Net cash provided by financing activities              300,157        845,619      1,347,158
                                                   ------------   ------------   ------------

Net increase in cash and cash equivalents               (5,326)       101,123          5,208

Cash and cash equivalents at beginning of period        10,534         32,155             --
                                                   ------------   ------------   ------------

Cash and cash equivalents at end of period         $     5,208    $   133,278    $     5,208
                                                   ============   ============   ============
Cash paid during the period for:
Interest                                           $     4,553    $        --    $    46,346
                                                   ============   ============   ============

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

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

                                      F-3


<PAGE>


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




Non-cash investing and financing activities:

In January 2004, the Company issued 800,000 shares  (post-split) of common stock
with a fair market value of $800,000 to a consultant.


In February 2004, the Company issued 40,000 shares  (post-split) of common stock
with a fair market value of $24,800 to a consultant.


In March 2004, the Company issued 1,051,600 shares  (post-split) of common stock
with a fair market value of $420,640 to a consultant.


In March 2004, the Company issued  500,000 shares  (post-split)  of common stock
with a fair market value of $250,000 to a consultant.


In March 2004,  the Company  issued 67,800 shares  (post-split)  of common stock
with a fair market value of $10,800 to consultants.


In March 2004,  the Company  issued 45,800 shares  (post-split)  of common stock
with a fair  maket  value of  $29,132 to a vendor in  satisfaction  of  accounts
payable.


In April 2004, the Company issued  200,000 shares  (post-split)  of common stock
with a fair market  value of $64,000 to its Chief  Financial  Officer is payment
for services rendered.


In May 2004, the Company  converted a Note Payable in the amount of $35,000 into
350,000 shares (post-split) of common stock.


In May 2004, the Company issued 125,000 shares (post-split) of common stock with
a fair market value of $25,000 to a consultant.


In May 2004, the Company issued 500,000 shares (post-split) of common stock with
a fair market value of $500,000 to a consultant.



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

                                      F-4


<PAGE>


                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
          Consolidated Statement of Deficiency in Stockholders' Equity
           From date of inception (October 30, 2002) to June 30, 2004
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                             Common Stock      Additional
                                                         -------------------    Paid-In      Deferred   Accumulated
                                                           Shares     Amount    Capital    Compensation   Deficit       Total
                                                         ----------  --------  ----------  ------------ ------------ -----------
<S>                                                    <C>          <C>       <C>        <C>          <C>

Balance 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)          --                     9,250

Shares of common stock issued at $0.0006 per share
  to founders for services rendered in December 2002      1,405,310     1,405        (623)          --                       782

Shares 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           --                    31,001

Net loss for the period from inception (October 30,
  2002) to December 31, 2002                                     --        --          --           --      (45,918)     (45,918)
                                                         ----------  --------  ----------  -----------  -----------  -----------

Balance at December 31, 2002 (reflective of
  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           --                    13,750

Sale of shares of common stock for cash at $0.1517
  per share in January 2003                                 329,552       330      49,670           --                    50,000

Shares granted to consultants at $0.1392 per share
  for services rendered in March 2003                       154,450       154      21,346           --                    21,500

Conversion of notes payable to common stock at
  $0.1392 per share in April 2003                         1,436,736     1,437     198,563           --                   200,000

Shares granted to consultants at $0.1413 per share
  for services rendered in April 2003                        14,368        14       2,016           --                     2,030

Sale of shares of common stock for cash at $0.2784
  per share in May 2003                                      17,960        18       4,982           --                     5,000

Sales of shares of common stock for cash at $0.2784
  per share in June 2003                                     35,918        36       9,964           --                    10,000

Conversion of notes payable to common stock at
  $0.1392 per share in June 2003                            718,368       718      99,282           --                   100,000

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

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

 Costs of GPN Merger in July 2003                         2,368,130     2,368    (123,168)          --                  (120,799)

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

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

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

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

 Net loss for the year 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)
                                                         ----------  --------  ----------  -----------  -----------  -----------

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

                                      F-5

<PAGE>

                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
          Consolidated Statement of Deficiency in Stockholders' Equity
           From date of inception (October 30, 2002) to June 30, 2004
                             (Unaudited)(continued)

                                                             Common Stock      Additional
                                                         -------------------    Paid-In      Deferred   Accumulated
                                                           Shares     Amount    Capital    Compensation   Deficit       Total
                                                         ----------  --------  ----------  ------------ ------------ -----------

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 in January 2004 at $1.00 per share
  to a consultant for services                              800,000       800     799,200     (800,000)                       --

Shares issued in February 2004 to a consultant
  at $0.62 per share for services                            40,000        40      24,760      (24,800)                       --

Shars issued in March 2004 to a consultant
  at $0.40 per share for services                         1,051,600     1,052     419,588     (420,640)                       --

Shares issued in March 2004 to a consultant
  at $0.50 per share for services                           500,000       500     249,500     (250,000)                       --

Shares sold for cash in March 2004 at $0.15 per share         8,000         8       1,192           --                     1,200

Shares issued in March 2004 at $0.2857 per share
  to consultants for services                                67,800        68      10,732           --                    10,800

Shares issued in March 2004 at $0.64 per share
  to consultants for services                                45,800        45      29,267           --                    29,312

Amortization of deferred compensation through
  March 2004                                                     --        --          --      688,027                   688,027

Shares to be issued to a consultant at $0.41
  per share for contracted services                              --        --          --      (82,000)                  (82,000)

Shares granted pursuant to the New Senior
  Note Agreement in April 2004                              600,000       600     149,400     (150,000)                       --

Shares issued in April 2004 to officer at $0.32
  per share for services                                    200,000       200      63,800           --                    64,000

Conversion of Note Payable to common stock at $0.10
  per share in May 2004                                     350,000       350      34,650           --                    35,000

Benefial Conversion Feature associated with note
  payable in May 2004                                            --        --      52,500           --                    52,500

Issuance of warrants to officers and founder in
  May 2004 for services                                          --        --     250,704           --                   250,704

Shares to a consultant in May 2004 at $0.20 per share
  as a due dilligence fee                                   125,000       125      24,875           --                    25,000

Shares issued to a consultant in May 2004 at $1.00
  per share for services                                    500,000       500     499,500     (500,000)                       --

Benefial Conversion Feature associated with notes
  payable issued in April, May, and June 2004                    --        --      20,938           --                    20,938

Issuance of warrants to employees and consultants for
  services rendered in April through June 2004                   --        --       5,427           --                     5,427

Amortization of deferred compensation through June 2004          --        --          --      952,069                   952,069

Net loss for the six months ended June 30, 2004                  --        --          --           --   (2,941,304)  (2,941,304)

                                                         ----------  --------  ----------  -----------  -----------  -----------
 Balance at June 30, 2004                                28,319,500  $ 28,319  $4,270,874  $(1,187,344) $(4,843,924) $(1,732,075)
                                                         ==========  ========  ==========  ===========  ===========  ===========
</TABLE>

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

                                      F-6
<PAGE>

                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (Unaudited)

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

General
-------

The accompanying  unaudited condensed 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-month and six-month periods ended June 30,
2004 are not necessarily  indicative of the results that may be expected for the
year ended December 31, 2004.  The unaudited  condensed  consolidated  financial
statements  should be read in  conjunction  with the December 31, 2003 financial
statements  and  footnotes  thereto  included in the  Company's  Securities  and
Exchange Commission Form 10-KSB.

Business and Basis of Presentation
----------------------------------

IR  BioSciences  Holdings,  Inc.  ("Company")  is currently a development  stage
company  under the  provisions  of Statement of Financial  Accounting  Standards
("SFAS")  No. 7. The  Company  was  incorporated  under the laws of the State of
Delaware,  and has a December 31  year-end.  The  Company  has one  wholly-owned
subsidiary:  ImmuneRegen BioSciences,  Inc. ImmuneRegen  BioSciences,  Inc. is a
Delaware Corporation,  and was incorporated on October 30, 2002. Currently,  all
of our Company's operations are conducted by ImmuneRegen BioSciences, Inc.


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
------------------------

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement
amends SFAS No.  123,  "Accounting  for  Stock-Based  Compensation,"  to provide
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee  compensation.  In addition,  this
statement  amends  the  disclosure  requirements  of  SFAS  No.  123 to  require
prominent  disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported  results.  The Company has chosen to continue to account
for stock-based  compensation using the intrinsic value method prescribed in APB
Opinion No. 25 and related  interpretations.  Accordingly,  compensation expense
for stock options is measured as the excess, if any, of the fair market value of
the  Company's  stock at the date of the grant  over the  exercise  price of the
related option. The Company has adopted the annual disclosure provisions of SFAS
No. 148 in its  financial  reports for the year ended  December 31, 2002 and for
the subsequent periods.

                                      F-7
<PAGE>


                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (Unaudited)

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Reverse Acquisition
-------------------

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

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

Effective with the Agreement, all previously outstanding common stock, preferred
stock,  options and warrants owned by the Company's  shareholders were exchanged
for an aggregate of  21,063,170  (post-split)  shares of GPN common  stock.  The
value of the stock that was issued was the historical cost of GPN's net tangible
assets, which did not differ materially from their fair value.

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

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

The   stockholders   of  ImmuneRegen   (aggregating   approximately   40)  owned
approximately 90% of the Registrant's common stock outstanding immediately after
the effective time of the Merger  (excluding any additional shares issuable upon
outstanding options,  warrants and other securities  convertible into our common
stock).

Under  Delaware law, the  Registrant  did not need to obtain the approval of its
stockholders to consummate the Merger,  as the  constituent  corporations in the
merger  were Merger Sub and  ImmuneRegen,  each of which are  business  entities
incorporated  under the laws of Delaware.  The  Registrant  is not a constituent
corporation in the Merger.

For accounting purposes, this transaction was accounted for as a reverse merger,
since  the  stockholders  of  ImmuneRegen  own a  majority  of  the  issued  and
outstanding  shares of common stock of the  Registrant,  and the  directors  and
executive officers of ImmuneRegen became the directors and executive officers of
the  Registrant.  No  agreements  exist  among  present  or  former  controlling
stockholders of the Registrant or present or former members of ImmuneRegen  with
respect to the  election  of the members of our board of  directors,  and to the
Registrant's knowledge, no other agreements exist which might result in a change
of control of the Registrant.

ImmuneRegen BioSciences Asia PTE. LTD.
-------------------------------------

ImmuneRegen  BioSciences Asia PTE. LTD. ("IRB Asia") was formed by the Company's
Chief Executive  Officer and by a Founder of the Company on May 6, 2004, for the
purpose of licensing the Company's  proprietary compound Homspera in Asia. As of
June 30, 2004,  the Company held a minority  interest in IRB Asia. At August 23,
2004,  the  Company was in the  process of  transferring  the shares of IRB Asia
currently held by the Chief Executive and by the Founder to the Company,  making
IRB Asia a wholly-owned subsidiary of the Company. As of June 30, 2004, IRB Asia
was inactive.

Going Concern
-------------

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplate continuation of the Company as a going concern. However, the Company
has no established source of revenue. This matter raises substantial doubt about
the Company's ability to continue as a going concern. These financial statements
do not include any adjustments relating to the recoverability and classification
of recorded asset amounts,  or amounts and  classification  of liabilities  that
might be necessary should the Company be unable to continue as a going concern.

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

                                      F-8
<PAGE>

                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (Unaudited)

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)

Interim Financial Statements
----------------------------

The accompanying balance sheet as of June 30, 2004, the statements of operations
for the three  months and six months  ended June 30, 2004 and 2003,  and for the
period from inception to June 30, 2004, and the statements of cash flows for the
six months ended June, 2004 and 2003, and from the period of inception  (October
30, 2002) to June 30, 2004 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
undercounted  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.

Prepaid Services
----------------

Prepaid  services  consist of outside  services that the Company has paid for in
advance.  At March 31,  2004 this  amount was  $10,000,  consisting  of a 90 day
consulting  contract.  This item is charged to expense on a straight  line basis
over the term of the contract.

Licensed Proprietary Rights
---------------------------

The Company has licensed from its founders certain  proprietary rights which the
Company  intends  to  utilize  in the  execution  of its  business  plan.  These
proprietary  rights are being amortized over the term of the license  agreement,
or ten years.  The amount amortized during the three months ended March 31, 2004
and 2003 was $232. The Company  amortized $1,235 for the period from October 30,
2002 (inception) to March 31, 2004.

Furniture and Equipment
-----------------------

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

                  Computer equipment        3 years
                  Furniture                 7 years

The  amount  depreciated  for the six months  ended  June 30,  2004 and 2003 was
$12,053  and  $6,258,  respectively.  The  amount  depreciated  from the date of
inception (October 30, 2002) through June 30, 2004 was $24,815.

                                      F-9
<PAGE>

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS

In  January  2003,  the FASB  issued  interpretation  No. 46,  Consolidation  of
Variable   Interest   Entities  (FIN  46),  as  revised   December  2003.   This
interpretation of Accounting  Research Bulletin No. 51,  Consolidated  Financial
Statements, addresses consolidation by business enterprises of variable interest
entities  (VIEs) that either:  (1) do not have sufficient  equity  investment at
risk  to  permit  the  entity  to  finance  its  activities  without  additional
subordinated  financial  support,  or (2) the equity investors lack an essential
characteristic of a controlling financial interest.  This interpretation applies
immediately  to VIEs created  after  January 31,  2003.  It applies in the first
fiscal year or interim period beginning after June 15, 2003, to VIEs in which an
enterprise  holds a variable  interest that it acquired before February 1, 2003.
The  application  of FIN 46 did not have a material  effect on our  consolidated
financial statements.

NOTE 3 -    RELATED PARTY TRANSACTIONS


Founder's Consulting Fees
-------------------------

During the three months and six months ended June 30, 2004, the Company  accrued
$30,000 and  $60,000,  respectively,  in  consulting  fees payable to two of the
Company's founders.

InOne Contract
--------------

The  Company has  entered  into a series of  contracts  for  marketing,  website
development,  and website hosting with InOne Advertising  "(In-One"),  a company
run by the spouse of the Company's CEO. Pursuant to these contracts,  during the
six months ended June 30, 2004, the Company issues 45,800 shares (post-split) of
its common stock to with a value of $29,312 to In-One.

Office Lease
------------

The Company  subleases  its office  space from  Foresight  Capital  Partners,  a
company  controlled by the Company's CEO. The rent cost is passed through to the
Company at the same rental rate that  Foresight  Capital  Partners is charged by
the facility's  primary  landlord.  Rent expense amounted to $8,568 and $17,136,
respectively, for the three and six month periods ended June 30, 2004.

Shares issued to Chief Financial Officer
----------------------------------------

In April 2004,  the Company issued  200,000  shares  (post-split)  of its common
stock to the Company's Chief Financial Officer as payment for services performed
from June 2003 through June 2004.

                                      F-10

<PAGE>
                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (Unaudited)


NOTE 3 - RELATED PARTY TRANSACTIONS (CONTINUED)


Stratum Consulting Agreement
----------------------------

On April 1, 2004, the Company  entered into a consulting  agreement with Stratum
Consulting  Group,  Inc. ("The Stratum  Agreement") a company  controlled by the
Company's  Secretary.  The Stratum  Agreement has a term of twelve  months,  and
calls for Stratum to provide  financial  consulting to the Company in return for
the following:  200,000 shares  (post-split) of the Company's  common stock upon
execution of the  agreement,  and the number of shares of the  Company's  common
stock equal to $2,500 per month for the term of the agreement.

Founder and CEO Warrants
------------------------

On May 6, 2004,  the  Company  granted a five-year  warrant to purchase  500,000
shares  (post-split) of the Company's  common stock at $0.25 per share to one of
the  Company's  founders  and to the  Company's  CEO.  The Company  valued these
warrants using the Black-Scholes  valuation model, and charged the entire amount
of $124,411 for each warrant to the Company's  statement of  operations  for the
three month period ending June 30, 2004.


NOTE 4 - DEBT


Amended Secured Convertible Promissory Notes
--------------------------------------------

During  the  three  and six month  periods  ended  June 30,  2004,  the  Company
amortized  to  interest  expense  $11,855  and  $105,768,  respectively,  of the
discount associated with its Amended  Convertible  Promissory Notes Payable (the
"Amended  Notes").  At June 30, 2004, the total principal amount due pursuant to
the Amended Notes is $245,000. The total discount remaining on the Amended Notes
at June 30,  2004 is $0. In June  2004,  the  terms of the  Amended  Notes  were
extended to August,  2004.  Interest  accrued for the three and six months ended
June 30, 2004 was $4,818 and $9,636, respectively. Total accrued interest due on
the Amended  Notes at June 30, 2004 was $13,968.  At June 30, 2004,  five of the
Amended Notes were in default as they had not been paid within their terms. With
the exception of one note in the principal  amount of $100,000,  the Company has
negotiated  extensions  to the  terms  of these  notes.  The  Company  is not in
compliance with the provisions of the $100,000 note.


Fourth Quarter Secured Convertible Promissory Notes
---------------------------------------------------

During the three months ended June 30, 2004,  the Company  converted  one of the
Fourth Quarter  Secured  Convertible  Notes (the "Fourth  Quarter Notes") in the
amount of $35,000 into 350,000  shares  (post-split)  of common stock,  and made
principal  payments of $4,000 on another  Fourth  Quarter  Note.  During the six
months ended June 30, 2004, the Company made principal payments of an additional
$15,000 on the Fourth Quarter Notes.  During the three and six months ended June
30, 2004,  the Company  amortized  to interest  expense  $$40,100 and  $233,428,
respectively,  of the discount associated with the Fourth Quarter Notes. At June
30, 2004, the total  discount  remaining on the Fourth Quarter Notes was $0, and
the  total  principal  amount  due  pursuant  to the  Fourth  Quarter  Notes was
$337,000.  Interest accrued for the three and six months ended June 30, 2004 was
$7,160 and  $14,827,  respectively.  Total  accrued  interest  due on the Fourth
Quarter  Notes at June 30,  2004 was  $21,535.  At June 30,  2004,  eight of the
Fourth  Quarter  Notes were in default  as they had not been paid  within  their
terms. The Company has negotiated extensions to the terms of these notes, and at
August 23, 2004, these notes are no longer in default.



                                      F-11
<PAGE>
                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (Unaudited)

NOTE 4 - DEBT (CONTINUED)


Senior Secured Promissory Notes
-------------------------------

In January 2004, the Company entered into a $150,000  Senior Secured  Promissory
Note Agreement (the "Senior  Note").  The Senior Note bears interest at the rate
of 12% per annum and has a term of 90 days.  Interest  accrued for the three and
six months ended June 30, 2004 was $3,100 and $4,500,  respectively.  The Senior
Note is senior  secured  indebtedness  of the  Company and is secured by certain
collateral.  As additional  incentive to enter into the Senior Note, the Company
provided  600,000 shares  (post-split)  of the Company's  common stock valued at
$600,000.

In April,  2004, the Senior Note was paid in full and the Company entered into a
new Senior Secured promissory Note Agreement in the amount of $154,500 (the "New
Senior  Note").  The New Senior Note bears interest at the rate of 12% per annum
and has a term of 90 days.  Interest  accrued on the New Senior Secured Note for
the three and six months period ending June 30, 2004 was $3,251.  The New Senior
Note is senior  secured  indebtedness  of the  Company and is secured by certain
collateral.  As  additional  incentive  to enter into the New Senior  Note,  the
Company  provided  600,000  shares  (post-split)  of the Company's  common stock
valued at $150,000.

Other Notes Payable
-------------------

At June 30, 2004, the Company has  outstanding  eight other notes payable in the
aggregate  principal  amount of  $211,581.  These  notes bear  interest at rates
ranging from 6% to 12% per annum. During the three and six months ended June 30,
2004, interest of $2,059 and $3,015,  respectively,  was accrued on these notes.
Six notes with an aggregate principal amount of $176,581 are due within one year
at June 30,  2004.  Two  notes  with an  aggregate  amount  of  $35,000  are due
twenty-four  months  from  inception,  or April and May 2006.  During  the three
months  ended June 30,  2004,  the Company  received  cash  proceeds of $137,100
pursuant to these notes,  and made principal  payments of $5,000.  Total accrued
interest on these notes at June 30, 2004 is $3,705.  The Company  recognized  an
aggregate  discount  of  $13,411  on  these  notes  due  to  various  beneficial
conversion features and warrants. During the three and six months ended June 30,
2004, the Company amortized $7,527 of this aggregate discount.

Demand Loan
-----------

In April 2004, the Company  received a $30,000 demand loan from an investor.  In
August 2004, this loan was converted into 200,000 shares of common stock.


NOTE 5 - EQUITY


Stock Split
-----------

On April 6, 2004, the Company effected a two-for-one forward split of its common
stock. The number of shares of common stock outstanding immediately prior to the
reverse split was 13,272,250;  the number of shares of common stock  outstanding
immediately after the reverse split was 26,544,500.  The accompanying  financial
statements reflect the effect of this stock split.

Common Stock
------------

In January 2004,  the Company  entered into the Senior Note  Agreement (see Note
3). Pursuant to this agreement,  the Company issued to the lender 600,000 shares
(post-split) of the Company's  common stock valued at $600,000.  This amount was
charged to deferred  compensation and additional  paid-in capital,  and is being
amortized over the term of the 90 day term of the Senior Note.  During the three
months and six months ended June 30, 2004,  $106,667 and $600,000of this amount,
respectively, had been charged to non-cash compensation.

                                      F-12

<PAGE>
                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (Unaudited)

NOTE 5 - EQUITY (CONTINUED)


Common Stock (continued)
------------------------

In January 2004, the Company issued 800,000 shares  (post-split) of common stock
with a fair market value of $800,000 to a consultant in exchange for services to
be  provided   through  January  2005.  This  amount  was  charged  to  deferred
compensation  and additional  paid-in  capital,  and is being amortized over the
term of the 360 day Agreement. During the three months and six months ended June
30, 2004, $204,444 and $362,222 of this amount,  respectively,  had been charged
to non-cash compensation.

In February  2004,  the Company issued 40,000 shares of common stock with a fair
market value of $24,800 to a consultant  in exchange for services to be provided
through  August  2004.  This  amount was charged to  deferred  compensation  and
additional paid-in capital,  and is being amortized over the term of the 180 day
Agreement.  During the three and six months  ended June 30,  2004,  $12,676  and
$19,564 of this amount, respectively, had been charged to non-cash compensation.

In March 2004, the Company issued 1,051,600 shares  (post-split) of common stock
with a fair market value of $420,640 to a consultant in exchange for services to
be provided through March 2005. This amount was charged to deferred compensation
and additional paid-in capital,  and is being amortized over the term of the 360
day Agreement. During the three and six months ended June 30, 2004, $107,497 and
$125,024  of  this   amount,   respectively,   had  been   charged  to  non-cash
compensation.

In March 2004, the Company issued  500,000 shares  (post-split)  of common stock
with a fair market value of $250,000 to a consultant in exchange for services to
be  provided  through  September  2004.  This  amount was  charged  to  deferred
compensation  and additional  paid-in  capital,  and is being amortized over the
term of the 180 day  Agreement.  During the three and six months  ended June 30,
2004,  $127,778 and $140,278 of this amount,  respectively,  had been charged to
non-cash compensation.

In March 2004, the Company issued 8,000 shares (post-split) of common stock with
a fair market value of $1,200 for cash.

In March 2004,  the Company  issued 67,800 shares  (post-split)  of common stock
with a fair  market  value of $10,800 to various  consultants  in  exchange  for
services rendered. This amount was charged to non-cash compensation.

In March 2004,  the Company  issued 45,800 shares  (post-split)  of stock with a
market value of $29,312 to InOne as payment for outstanding payables.

In April 2004, the Company  entered into the New Senior Note Agreement (see Note
3). Pursuant to this agreement,  the Company issued to the lender 600,000 shares
(post-split) of the Company's  common stock valued at $150,000.  This amount was
charged to deferred  compensation and additional  paid-in capital,  and is being
amortized  over the term of the 90 day term of the New Senior  Note.  During the
three  months and six months  ended June 30,  2004,  $103,846 of this amount had
been charged to non-cash compensation.

In April 2004, the Company issued  200,000 shares  (post-split)  of stock with a
market value of $64,000 to its Chief  Financial  Officer for services  rendered.
This amount was charged to non-cash compensation.

In May 2004,  the Company issued  350,000  shares  (post-split)  of stock with a
market  value of  $87,500  via  conversion  of a note  payable  in the amount of
$35,000.  The Company  recorded a charge to interest  expense for the beneficial
conversion feature of this transaction in the amount of $52,500.

                                      F-13
<PAGE>

                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2004
                                   (Unaudited)

NOTE 5 - EQUITY (CONTINUED)


Common Stock (continued)
------------------------

In May 2004,  the Company issued  125,000  shares  (post-split)  of stock with a
market value of $25,000 to a consultant as a due diligence  fee. This amount was
charged to non-cash compensation.

In May 2004,  the Company issued  500,000  shares  (post-split)  of stock with a
market  value of $500,000 to a consultant  for  services to be rendered  through
December 2004. This value was determined as of the date the consulting agreement
was  signed,  which was in  December  2003.  This amount was charged to deferred
compensation  and additional  paid-in  capital,  and is being amortized over the
term of the  agreement.  During  the three and six months  ended June 30,  2004,
$268,493 of this amount has been charged to non-cash compensation.

Except as otherwise  indicated  above,  all  valuations  of the above shares are
based on the stock price at the date of issue,  which did not differ  materially
from the value of the services that were rendered by the  consultants  under the
contracts.


NOTE  6 - SUBSEQUENT EVENTS


April Consulting Agreements
----------------------------

In April 2004, the Company entered into two agreements  with a consultant  which
called for the issuance of an aggregate of 850,000  shares  (post-split)  of the
Company's common stock. In July 2004,  these agreements were voided;  the shares
were not issued and are not due to be issued.

Notes Payable Extensions
------------------------

At June 30, the Company  was in default of fourteen of its notes  payable in the
aggregate  principal  amount of $561,000.  With the exception of one note in the
principal amount of $100,000, the Company has negotiated extensions to the terms
of these notes.  The Company is not in  compliance  with the  provisions  of the
$100,000 note.

Common Stock Issued
-------------------

In July and August 2004,  the Company  issued an aggregate of 625,776  shares of
common stock pursuant to various consulting agreements.

In July and August 2004,  the Company  issued  120,000 shares of common stock in
partial  satisfaction  of the  agreement  to extend the term of the Senior  Note
Payable.

In August  2004,  the Company  converted a note payable in the amount of $30,000
into into 200,000 shares of common stock.


                                      F-14
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.


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

EXCEPT FOR HISTORICAL  INFORMATION  CONTAINED  HEREIN,  THE MATTERS DISCUSSED IN
THIS  QUARTERLY  REPORT  FORM  10-QSB ARE  FORWARD-LOOKING  STATEMENTS  THAT ARE
SUBJECT TO CERTAIN RISKS AND  UNCERTAINTIES  THAT COULD CAUSE ACTUAL  RESULTS TO
DIFFER MATERIALLY FROM THOSE SET FORTH IN SUCH FORWARD-LOOKING  STATEMENTS. SUCH
FORWARD-LOOKING   STATEMENTS   MAY  BE   IDENTIFIED   BY  THE  USE  OF   CERTAIN
FORWARD-LOOKING  TERMINOLOGY,  SUCH AS "MAY," "EXPECT,"  "ANTICIPATE," "INTEND,"
"ESTIMATE,"   "BELIEVE,"  OR  COMPARABLE  TERMINOLOGY  THAT  INVOLVES  RISKS  OR
UNCERTAINTIES.  ACTUAL  FUTURE  RESULTS  AND TRENDS MAY DIFFER  MATERIALLY  FROM
HISTORICAL AND ANTICIPATED RESULTS,  WHICH MAY OCCUR AS A RESULT OF A VARIETY OF
FACTORS.  SUCH RISKS AND  UNCERTAINTIES  INCLUDE,  WITHOUT  LIMITATION,  FACTORS
DESCRIBED  UNDER "RISK FACTORS" AND ELSEWHERE IN THIS  QUARTERLY  REPORT ON FORM
10-Q.  EXCEPT FOR OUR ONGOING  OBLIGATION TO DISCLOSE  MATERIAL  INFORMATION  AS
REQUIRED BY FEDERAL  SECURITIES  LAWS, WE DO NOT INTEND TO UPDATE YOU CONCERNING
ANY FUTURE  REVISIONS TO ANY  FORWARD-LOOKING  STATEMENTS  TO REFLECT  EVENTS OR
CIRCUMSTANCES OCCURRING 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
--------

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

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

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

                                       3

<PAGE>

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

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

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

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

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

We expect  that our  products  will use an  inhaler  (puffer)  device to deliver
Homspera to the user. To develop, manufacture and test an inhaler device we hope
to partner with a drug  development  and chemical  services  company that offers
services  ranging from  pre-clinical  and  toxicology  studies to clinical trial
support and  manufacturing  services.  We believe  that such a  partnership  may
enable us to decrease  the  time-to-market  for our products and to increase our
productivity.

RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2004

Revenue
-------

We are in the development stage and have no revenue.

                                       4
<PAGE>

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

Selling,  general and  administrative  expenses ("SG&A") were $1,574,415 for the
three  months  ended June 30, 2004 which is an increase  of  $1,293,543  or 461%
compared to SG&A of  $280,872  for the three  months  ended June 30,  2003.  The
increase is primarily comprised of non-cash  compensation,  legal and accounting
fees,  officer  wages,  research and  development  costs,  consulting  fees, and
contract  labor.  We expect  these  costs to  increase  in the coming year as we
continue to utilize  non-cash  compenation in order to conserve our cash, and as
we seek further  financing,  implement our plan of operation,  and build out our
administrative and operational infrastructure.

Interest expense
----------------

Interest  expense was $131,737  for the three  months  ended June 30,  2004,  an
increase  of $109,095  or 481%  compared to interest  expense of $22,642 for the
three months ended June 30, 2003.  This amount  consists of  amortization of the
discount on notes  payable of $112,939 and interest on notes payable of $18,798.
We expect interest  expense may continue to increase over the next twelve months
if the level of our debt increases.

Net loss
--------

For the reasons above, the net loss for the three months ended June 30, 2004 was
$1,706,152, an increase of $1,402,638 or 462% compared to a net loss of $303,514
for the three months  ended June 30, 2003.  We expect our losses to continue and
to increase over the coming twelve  months.  We do not expect to expect to begin
to generate revenue in the next twelve months,  and costs are likely to increase
as we move our  products  through  the testing and  approval  phases,  and as we
continue to build out our corporate infrastructure.

RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2004

Revenue
-------

We are in the development stage and have no revenue.

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

Selling,  general and administrative expenses were $2,505,489 for the six months
ended June 30, 2004 which is an increase of  $2,136,415 or 579% compared to SG&A
of $2,136,415 for the six months ended June 30, 2003.  This expense is primarily
comprised of non-cash  compensation of $1,912,026,  legal and accounting fees of
$185,711,  officer wages of $87,500,  research and development costs of $61,807,
consulting fees of $65,000, and contract labor of $41,503.

Interest expense
----------------

Interest  expense  was  $435,815  for the six  months  ended June 30,  2004,  an
increase of $413,173 or 1,825%  compared to interest  expense of $22,642 for the
six months  ended June 30, 2003.  This amount  consists of  amortization  of the
discount on notes  payable of $401,133 and interest on notes payable of $34,682.

Net loss
--------

For the reasons  above,  the net loss for the six months ended June 30, 2004 was
$2,941,304, an increase of $2,549,588 or 651% compared to a net loss of $391,716
for the six months ended June 30, 2003.


                                       5
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2004, we had current assets of $10,008  consisting of cash of $5,208
and  prepaid  services  of  $4,800.  Also  at  June  30,  2004,  we had  current
liabilities  of  $1,721,663,  consisting  of notes  payable  net of  discount of
$934,011 and accounts payable and accrued liabilities of $787,652.  This results
in negative working capital of $1,711,655.  During the six months ended June 30,
2004, the Company used cash in operating  activities of $305,483.  From the date
of inception (October 30, 2002) to June 30, 2004, the Company has had a net loss
of $4,843,924  and has used cash of $1,338,646 in operating  activities.  We met
our cash  requirements  during this period  through  the  private  placement  of
$127,201 of our common stock and $1,219,957  from the issuance of notes payable,
net of repayments.

At June 30,  2004,  we were in default of fourteen  of our Notes  Payable in the
aggregate  amount  of  $561,000  plus  accrued  interest  of  $33,864.  We  have
negotiated extensions to the terms of these notes and at August 23, 2004, we are
current with all of our obligations under these notes.

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 developmentIt is expected that in order to implement its business
plan, we will require additional  capital.  There can be absolutely 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.

By adjusting our operations and development to the level of  capitalization , we
believe  we have  sufficient  capital  resources  to meet  projected  cash  flow
deficits  through the next twelve months.  However,  if  thereafter,  we are not
successful  in generating  sufficient  liquidity  from  operations or in raising
sufficient  capital  resources,  on terms  acceptable  to us,  this would have a
material  adverse effect on our business,  results of operations , liquidity and
financial condition.

At June 30, the Company  was in default of fourteen of its notes  payable in the
aggregate  principal  amount of $561,000.  With the exception of one note in the
principal amount of $100,000, the Company has negotiated extensions to the terms
of these notes.  The Company is not in  compliance  with the  provisions  of the
$100,000 note.

Product Research and Development
--------------------------------

We anticipate performing further research and development of the applications of
our  proprietary  compound  "Homspera"  during  the next  twelve  months.  These
projected  expenditures are dependent upon our generating revenues and obtaining
sources of financing in excess of our existing  capital  resources.  There is no
guarantee that we will be successful in raising the funds required or generating
revenues  sufficient  to fund the  projected  costs of research and  development
during the next 12 months.

Acquisition of Plant and Equipment and Other Assets
---------------------------------------------------

We do not  anticipate  the sale of any  material  property , plant or  equipment
during the next 12 months.  We do not anticipate the acquisition of any material
property, plant or equipment during the next 12 months.

Number of Employees
-------------------

From our  inception  through the period  ended June 30, 2004 , we have relied on
the services of outside consultants for services and have one (1) employee.  Our
sole full time employee is our Chief Executive  Officer,  Michael K. Wilhelm. In
order for us to attract and retain quality personnel, we anticipate we will have
to offer  competitive  salaries to future  employees.  We anticipate that it may
become  desirable to add additional full and or part time employees to discharge
certain critical functions during the next 12 months. This projected increase in
personnel is dependent upon our ability to generate  revenues and obtain sources
of  financing.  There is no guarantee  that we will be successful in raising the
funds required or generating  revenues sufficient to fund the projected increase
in the number of employees.  As we continue to expand,  we will incur additional
cost for personnel.

                                       6
<PAGE>

Trends, Risks and Uncertainties
-------------------------------

We have sought to identify what we believe to be the most  significant  risks to
our business,  but we cannot  predict  whether,  or to what extent,  any of such
risks may be realized nor can we guarantee that we have  identified all possible
risks that might arise.  Investors  should  carefully  consider all of such risk
factors before making an investment decision with respect to our Common Stock.

RISK FACTORS
------------


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

WE HAVE AN  ACCUMULATED  DEFICIT,  ARE NOT CURRENTLY  PROFITABLE  AND EXPECTS TO
INCUR SIGNIFICANT EXPENSES IN THE NEAR FUTURE.

ImmuneRegen  has  incurred  a  substantial  net  loss  for the  period  from its
inception  in  October  2002 to June 30,  2004,  and is  currently  experiencing
negative cash flow.  We expect to continue to experience  negative cash flow and
operating  losses  through  at least  2004 and  thereafter  for the  foreseeable
future. As a result,  ImmuneRegen will need to generate  significant revenues to
achieve profitability.  If our revenues grow more slowly than we anticipate,  or
if our operating  expenses exceed our  expectations,  we may experience  reduced
profitability.

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

Our  independent  certified  public  accountants  have  stated  in their  report
included  in our  Form  10-KSB  that we have  incurred  substantial  losses  and
negative  cash flows for the period of inception of October 30, 2002 to June 30,
2004 and due to that and a lack of  operational  history,  among other  matters,
there has been raised substantial doubt about our ability to continue as a going
concern,  which contemplates,  among other things, the realization of assets and
satisfaction of liabilities in the normal course of business. The effect of this
going concern may materially and adversely  affect our ability to raise capital,
our  relationship  with  potential  suppliers  and  customers,  and  have  other
unforeseen effects.

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.

ImmuneRegen has focused on product development and has not generated any revenue
to date. We have incurred operating losses since our inception.

We currently have no product  candidates  for sale in the United States,  and we
cannot  guarantee  that we will  ever have  marketable  products  in the  United
States.  We must  demonstrate  that  our  product  candidates  satisfy  rigorous
standards of safety and efficacy before the FDA and other regulatory authorities
in the  United  States and abroad  will  approve  the  products  for  commercial
marketing. We will need to conduct significant additional research,  preclinical
testing and clinical  testing before we can file  applications  with the FDA for
approval of our product candidates.  In addition,  to compete  effectively,  our
future  products  must  be  easy  to  use,   cost-effective  and  economical  to
manufacture on a commercial scale. We may not achieve any of these objectives.

We expect to incur losses as we research,  develop and seek regulatory approvals
for our  products.  If our  products  fail in  clinical  trials  or do not  gain
regulatory  approval,  or if our products do not achieve market  acceptance,  we
will not be profitable. If we fail to become and remain profitable, or if we are
unable to fund our continuing losses, our business may fail.

OUR  OPERATING  EXPENSES  ARE  UNPREDICTABLE,  WHICH MAY  ADVERSELY  AFFECT  OUR
BUSINESS, OPERATIONS AND FINANCIAL CONDITION.

As a result of our limited  operating history and because of the emerging nature
of the markets in which we will compete,  our financial data is of limited value
in planning  future  operating  expenses.  To the extent our operating  expenses
precede or are not rapidly followed by increased revenue, our business,  results
of operations and financial condition may be materially adversely affected.  Our
expense  levels  will be based  in part on our  expectations  concerning  future
revenues. A significant portion of our revenue is anticipated to be derived from
Homspera; however the size and extent of such revenues are wholly dependent upon
the  choices  and  demand  of  individuals,  which  are  difficult  to  forecast
accurately.  We may be unable to adjust  our  operations  in a timely  manner to
compensate  for  any  unexpected  shortfall  in  revenues.   Further,   business
development and marketing  expenses may increase  significantly as we expand our
operations.

                                       7
<PAGE>

WE MAY EXPERIENCE FLUCTUATION OF QUARTERLY OPERATING RESULTS WHICH MAY CAUSE OUR
STOCK PRICE TO FLUCTUATE.

Our quarterly  operating results may fluctuate  significantly in the future as a
result of a variety of factors,  many of which are outside  our  control.  These
factors  include:  the level of demand for Homspera and any other products;  our
ability to attract and retain personnel with the necessary strategic,  technical
and creative skills required for effective operations;  the amount and timing of
expenditures  by customers;  the amount and timing of capital  expenditures  and
other costs relating to the expansion of our operations;  government  regulation
and legal  developments  regarding  the use of  Homspera;  and general  economic
conditions.  As a strategic response to changes in the competitive  environment,
we may from time to time make certain pricing, service,  technology or marketing
decisions that could have a material  adverse  effect on our quarterly  results.
Due  to  all of  these  factors,  our  operating  results  may  fall  below  the
expectations of securities  analysts,  stockholders  and investors in any future
quarter.

IF OUR PLAN IS NOT SUCCESSFUL OR MANAGEMENT IS NOT  EFFECTIVE,  THE VALUE OF OUR
COMMON STOCK MAY DECLINE.

Our operating subsidiary,  ImmuneRegen BioSciences, Inc., was founded in October
2002. As a result,  we are a development  stage company with a limited operating
history that makes it impossible to reliably predict future growth and operating
results. Our business and prospects must be considered in light of the risks and
uncertainties  frequently  encountered  by  companies  in their early  stages of
development. In particular, we have not demonstrated that we can:

     o    ensure  that our  products  function  as  intended  in human  clinical
          applications;
     o    obtain the regulatory  approvals  necessary to commercialize  products
          that we may develop in the future;
     o    manufacture,  or arrange  for  third-parties  to  manufacture,  future
          products in a manner that will enable us to be profitable;
     o    establish  many  of  the  business  functions  necessary  to  operate,
          including sales,  marketing,  administrative and financial  functions,
          and establish appropriate financial controls;
     o    make,  use, and sell future  products  without  infringing  upon third
          party intellectual property rights; or,
     o    respond effectively to competitive pressures.

We cannot be sure that we will be  successful in meeting  these  challenges  and
addressing  these  risks  and  uncertainties.  If we are  unable  to do so,  our
business will not be successful.

WE WILL BE REQUIRED TO RAISE  ADDITIONAL  CAPITAL TO FUND OUR OPERATIONS.  IF WE
CANNOT RAISE  NEEDED  ADDITIONAL  CAPITAL IN THE FUTURE,  WE WILL BE REQUIRED TO
CEASE OPERATIONS.

We require substantial  working capital to fund our operations.  Since we do not
expect to generate  significant  revenues in the foreseeable future, in order to
fund operations,  we will be completely  dependent on additional debt and equity
financing  arrangements.  As of June 30,  2004,  our  cash and cash  equivalents
totaled  approximately  $10,008.  Based on our current  plans,  we believe these
financial resources, and interest earned thereon, will be sufficient to meet our
operating expenses and capital requirements for at least the next 30 days. 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, 2004.  No assurance  can be given that any such  additional
funding  will be  available  or that,  if  available,  can be  obtained on terms
favorable to 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.

We expect to require  substantial  additional funds in order to finance our drug
discovery and development programs,  fund operating expenses,  pursue regulatory
clearances,  develop  manufacturing,   marketing  and  sales  capabilities,  and
prosecute and defend our intellectual  property  rights.  We may seek additional
funding   through   public  or  private   financing  or  through   collaborative
arrangements with strategic partners.

You should be aware that in the future:
     o    we may not obtain additional  financial resources when necessary or on
          terms favorable to us, if at all; and,
     o    any available additional financing may not be adequate.


                                       8
<PAGE>

If we cannot raise additional funds when needed, or on acceptable terms, we will
not be able to continue to develop our drug candidates.  We require  substantial
working  capital  to fund our  operations.  Since we do not  expect to  generate
significant revenues in the foreseeable future, in order to fund operations,  we
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 next 12 months.  Our working capital as of June. 30, 2004 was  $(1,711,655).
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.

ALL OUR APPLICATIONS ARE ALL DERIVED FROM THE USE OF HOMSPERA. IF HOMSPERA IS
FOUND TO BE UNSAFE OR INEFFECTIVE, OUR BUSINESS WOULD BE MATERIALLY HARMED.

All  our  potential  applications  are  derived  from  the use of  Homspera.  In
addition,  we  expect to  utilize  Homspera  in the  development  of any  future
products we market.  If these current or future  products are found to be unsafe
or  ineffective  due to the use of  Homspera,  we may  have to  modify  or cease
production of the products.  As all of our applications  utilize or will utilize
Homspera,  any findings that Homspera is unsafe or  ineffective  would  severely
harm our business operations,  since all of our primary revenue sources would be
negatively affected by such findings.

IF WE FAIL TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE  PRODUCTS,  WE WILL HAVE TO
CEASE OPERATIONS.

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

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

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

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

THE MARKET FOR TREATING ACUTE RADIATION  SYNDROME IS UNCERTAIN AND WE MAY NOT BE
ABLE TO SUCCESSFULLY COMMERCIALIZE RADILEX.

We do not believe any drug has ever been  approved  and  commercialized  for the
treatment of severe  acute  radiation  injury.  In  addition,  the  incidence of
large-scale   exposure  to  nuclear  or   radiological   events  has  been  low.


                                       9
<PAGE>

Accordingly,  even if Radilex,  our lead drug candidate to treat Acute Radiation
Syndrome (ARS), is approved by the FDA, we cannot predict with any certainty the
size of this market.  The potential  market for Radilex is largely  dependent on
the  size of  stockpiling  orders,  if any,  procured  by the U.S.  and  foreign
governments. While a number of governments have historically stockpiled drugs to
treat  indications such as smallpox,  anthrax  exposure,  plague,  tularemia and
certain  long-term  effects  of  radiation  exposure,  we  are  unaware  of  any
significant  stockpiling  orders for drugs to treat  ARS.  While we have filed a
formal response to the U.S.  Department of Health and Human Services Request for
Information  (RFI) for therapeutics to treat ARS, at least one other company has
responded  to this RFI,  and we cannot  guarantee  that our response to this RFI
will  result in a U.S.  Department  of Health  and Human  Services  Request  for
Proposal (RFP) or any stockpiling  orders. A decision by the U.S.  Government to
enter into a commitment to purchase Radilex prior to FDA approval is largely out
of our control.  Our  development  plans and  timelines  may vary  substantially
depending  on  whether  we  receive  such a  commitment  and  the  size  of such
commitment,  if any. In  addition,  even if Radilex is  approved  by  regulatory
authorities, we cannot guarantee that we will receive any stockpiling orders for
Radilex,  that any such order would be  profitable  to us or that  Radilex  will
achieve market acceptance by the general public.

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

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

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

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

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

IF WE OBTAIN  REGULATORY  APPROVAL  OF OUR  PRODUCTS,  THEY WILL BE  SUBJECT  TO
CONTINUING REVIEW AND EXTENSIVE REGULATORY REQUIREMENTS,  WHICH COULD AFFECT THE
MANUFACTURING AND MARKETING OF OUR PRODUCTS.

A marketed  product is subject to  continual  FDA  review.  Later  discovery  of
previously unknown problems or failure to comply with the applicable  regulatory
requirements  may  result in  restrictions  on the  marketing  of a  product  or
withdrawal of the product from the market, as well as possible civil or criminal
sanctions.  The FDA could withdraw a previously approved product from the market
upon receipt of newly discovered information, including a failure to comply with
regulatory requirements,  the occurrence of unanticipated problems with products
following approval, or other reasons, which could adversely affect our operating
results.

                                       10
<PAGE>

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

Additionally,   the  FDA's  policies  may  change  and   additional   government
regulations may be enacted,  which could prevent or delay regulatory approval of
our applications.  We cannot predict the likelihood, nature or extent of adverse
government  regulation that may arise from future  legislation or administrative
action,  either in the United  States or abroad.  If we are not able to maintain
regulatory  compliance,  we might not be permitted to market our future products
and our business could suffer.

IF WE FAIL TO OBTAIN APPROVAL FROM FOREIGN REGULATORY  AUTHORITIES,  WE WILL NOT
BE ALLOWED TO MARKET OR SELL OUR PRODUCTS IN OTHER COUNTRIES.

Marketing  any drug  products  outside of the United  States will  subject us to
numerous and varying foreign  regulatory  requirements  governing the design and
conduct of human  clinical  trials and  marketing  approval.  Additionally,  our
ability to export  drug  candidates  outside the United  States on a  commercial
basis will be subject to the receipt  from the FDA of export  permission,  which
may not be available on a timely basis, if at all.

Approval procedures vary among countries and can involve additional testing, and
the time required to obtain approval may differ from that required to obtain FDA
approval.  Foreign  regulatory  approval  processes  include  all of  the  risks
associated with obtaining FDA approval set forth above,  and approval by the FDA
does not ensure approval by the health authorities of any other country.

SIGNIFICANT  DELAY OR FAILURE TO OBTAIN  REGULATORY  APPROVALS  WOULD IMPEDE OUR
ABILITY TO GENERATE REVENUE.

The process of obtaining FDA and other  regulatory  approvals is time consuming,
expensive and difficult to design and  implement.  Clinical  trials are required
and the marketing and  manufacturing of our applications are subject to rigorous
testing  procedures.  Significant  delays in  clinical  trials  will  impede our
ability  to  commercialize  our  applications  and  generate  revenue  and could
significantly increase our development costs. The commencement and completion of
clinical trials for our  Homspera-based  applications or any of our applications
could be delayed or prevented by a variety of factors, including:

     o    delays in obtaining regulatory approvals to commence a study;
     o    delays in identifying and reaching  agreement on acceptable terms with
          prospective clinical trial sites;
     o    delays in the enrollment of patients;
     o    lack of efficacy during clinical trials; or,
     o    unforeseen safety issues.

Even if  marketing  approval  from  the  FDA is  received,  the  FDA may  impose
post-marketing requirements, such as:

     o    labeling and  advertising  requirements,  restrictions or limitations,
          including the inclusion of warnings,  precautions,  contra-indications
          or use  limitations  that could  have a material  impact on the future
          profitability of our applications;
     o    testing  and  surveillance  to monitor our future  products  and their
          continued compliance with regulatory requirements;
     o    submitting products for inspection and, if any inspection reveals that
          the  product  is  not  in  compliance,  prohibiting  the  sale  of all
          products;
     o    suspending manufacturing; or,
     o    withdrawing marketing clearance.

CLINICAL  TRIALS  MAY  FAIL  TO  DEMONSTRATE  THE  SAFETY  AND  EFFICACY  OF OUR
APPLICATIONS, WHICH COULD PREVENT OR SIGNIFICANTLY DELAY REGULATORY APPROVAL.

Prior  to  receiving  approval  to  commercialize  any  of our  applications  or
therapies,  we must demonstrate with substantial  evidence from  well-controlled
clinical  trials,  and to the  satisfaction  of the  FDA  and  other  regulatory
authorities in the United States and abroad, that our applications are both safe
and  effective.  We will need to  demonstrate  our  applications'  efficacy  and
monitor their safety  throughout the process.  If any future clinical trials are
unsuccessful,  our business and  reputation  would be harmed and our stock price
would be adversely affected.

                                       11
<PAGE>

All of our  applications  are prone to the risks of failure inherent in biologic
development.  The results of early-stage  clinical trials of our applications do
not necessarily predict the results of later-stage clinical trials. Applications
in  later-stage  clinical  trials may fail to show  desired  safety and efficacy
traits despite having progressed  through initial clinical  testing.  Even if we
believe  the  data  collected  from  clinical  trials  of  our  applications  is
promising, this data may not be sufficient to support approval by the FDA or any
other U.S. or foreign regulatory approval.  Preclinical and clinical data can be
interpreted in different ways.  Accordingly,  FDA officials could interpret such
data  in  different  ways  than we do,  which  could  delay,  limit  or  prevent
regulatory approval. The FDA, other regulatory authorities, or we may suspend or
terminate  clinical  trials at any time.  Any  failure or  significant  delay in
completing  clinical  trials for our  applications,  or in receiving  regulatory
approval  for the sale of any  products  resulting  from our  applications,  may
severely harm our business and reputation.

DELAYS IN THE CONDUCT OR COMPLETION OF OUR  PRECLINICAL  OR CLINICAL  STUDIES OR
THE ANALYSIS OF THE DATA FROM OUR PRECLINICAL OR CLINICAL  STUDIES MAY RESULT IN
DELAYS IN OUR PLANNED FILINGS FOR REGULATORY APPROVALS,  OR ADVERSELY AFFECT OUR
ABILITY TO ENTER INTO COLLABORATIVE ARRANGEMENTS.

We may encounter  problems with some or all of our completed or ongoing  studies
that may cause us or  regulatory  authorities  to delay or suspend  our  ongoing
studies or delay the analysis of data from our completed or ongoing studies.  If
the results of our ongoing and planned  studies for our drug  candidates are not
available  when we expect or if we  encounter  any delay in the  analysis of the
results of our studies for our drug candidates:

     o    we may not have the  financial  resources  to  continue  research  and
          development of any of our drug candidates; and,
     o    we may not be able to enter into collaborative  arrangements  relating
          to any drug candidate subject to delay in regulatory filing.

Any of  the  following  reasons,  among  others,  could  delay  or  suspend  the
completion of our ongoing and future studies:

     o    delays in enrolling volunteers;
     o    interruptions  in the  manufacturing  of our drug  candidates or other
          delays in the  delivery of  materials  required for the conduct of our
          studies;
     o    lower than anticipated retention rate of volunteers in a trial;
     o    unfavorable efficacy results;
     o    serious side effects experienced by study participants relating to the
          drug candidate;
     o    new communications from regulatory agencies about how to conduct these
          studies; or,
     o    failure to raise additional funds.

IF  THE   MANUFACTURERS  OF  OUR  PRODUCTS  DO  NOT  COMPLY  WITH  CURRENT  GOOD
MANUFACTURING PRACTICES REGULATIONS, OR CANNOT PRODUCE THE AMOUNT OF PRODUCTS WE
NEED  TO  CONTINUE  OUR  DEVELOPMENT,  WE  WILL  FALL  BEHIND  ON  OUR  BUSINESS
OBJECTIVES.

Manufacturers   producing  our  drug   candidates   must  follow   current  Good
Manufacturing  Practices,  or GMP,  regulations  enforced by the FDA and foreign
equivalents.  If a manufacturer  of our drug  candidates does not conform to the
GMP regulations and cannot be brought up to such a standard, we will be required
to find  alternative  manufacturers  that do  conform.  This  may be a long  and
difficult  process,  and  may  delay  our  ability  to  receive  FDA or  foreign
regulatory approval of our products.

We also rely on our manufacturers to supply us with a sufficient quantity of our
drug candidates to conduct clinical trials.  If we have difficulty in the future
obtaining  our  required  quantity  and quality of supply,  we could  experience
significant delays in our development programs and regulatory process.

OUR  LACK  OF  COMMERCIAL  MANUFACTURING,   SALES,  DISTRIBUTION  AND  MARKETING
EXPERIENCE MAY PREVENT US FROM SUCCESSFULLY COMMERCIALIZING PRODUCTS.

The  manufacturing  process of our  proposed  products  is expected to involve a
number  of  steps  and  requires   compliance  with  stringent  quality  control
specifications imposed by us and by the FDA. We have no experience in the sales,
marketing and distribution of pharmaceutical or biotechnology  products. We have
not  manufactured  any of our  products  in  commercial  quantities.  We may not
successfully make the transition from manufacturing clinical trial quantities to
commercial   production   quantities   or  be  able  to  arrange  for   contract
manufacturing and this could prevent us from  commercializing  products or limit
our profitability from our products.

                                       12
<PAGE>

WE RELY ON THIRD  PARTY  MANUFACTURERS  FOR THE  MANUFACTURE  OF  HOMSPERA.  OUR
INABILITY TO MANUFACTURE HOMSPERA, AND OUR DEPENDENCE ON SUCH MANUFACTURERS, MAY
DELAY OR IMPAIR OUR  ABILITY  TO  GENERATE  REVENUES,  OR  ADVERSELY  AFFECT OUR
PROFITABILITY.

We may enter into arrangements with contract manufacturing companies in order to
meet  requirements  for our  products  or to attempt  to  improve  manufacturing
efficiency.  If we  choose  to  contract  for  manufacturing  services,  we  may
encounter costs,  delays and/or other  difficulties in producing,  packaging and
distributing  our  clinical  trials  and  finished  product.  Further,  contract
manufacturers must also operate in compliance with the GMP requirements; failure
to do so could  result in, among other  things,  the  disruption  of our product
supplies. Our potential dependence upon third parties for the manufacture of our
proposed  products may  adversely  affect our profit  margins and our ability to
develop and deliver proposed products on a timely and competitive basis. For the
manufacture of the applications under development,  we obtain synthetic peptides
from third party  manufacturers.  A  synthesized  version of Homspera is readily
available at low cost from several life science and  technology  companies  that
provide  biochemical and organic  chemical  products and kits used in scientific
and  genomic  research,   biotechnology,   pharmaceutical  development  and  the
diagnosis  of  disease  and  chemical  manufacturing.  If any of these  proposed
manufacturing  operations prove  inadequate,  there may be no assurance that any
other  arrangements  may be  established  on a  timely  basis  or that we  could
establish other manufacturing  capacity on a timely basis.  Although, we believe
that the synthetic substance P and other materials necessary to produce Homspera
are readily available from various sources, and several suppliers are capable of
supplying substance P in both clinical and commercial quantities, our dependence
on such manufacturers,  may delay or impair our ability to generate revenues, or
adversely affect our profitability.

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

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

THE MEDICAL COMMUNITY MAY NOT ACCEPT AND UTILIZE  HOMSPERA,  WHICH WOULD PREVENT
US FROM SUCCESSFULLY COMMERCIALIZING THE PRODUCT.

Our ability to market and  commercialize  Homspera depends on the acceptance and
utilization  of  Homspera  by the  medical  community.  We will need to  develop
commercialization  initiatives  designed  to  increase  awareness  about  us and
Homspera  among  targeted  audiences,  including  public  health  activists  and
community-based outreach groups in addition to the investment community.

Currently,  we have not developed any such initiatives.  Without such acceptance
of Homspera, the product upon which we expect to be substantially  dependent, we
may not be able to successfully commercialize Homspera or generate revenue.

PRODUCT LIABILITY EXPOSURE MAY EXPOSE US TO SIGNIFICANT LIABILITY OR COSTS.

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

AS A RESULT OF OUR INTENSELY COMPETITIVE INDUSTRY, WE MAY NOT GAIN ENOUGH MARKET
SHARE TO BE PROFITABLE.

The biotechnology and pharmaceutical  industries are intensely  competitive.  We
have numerous  competitors  in the United States and  elsewhere.  Because we are
pursuing  potentially large markets, our competitors include major multinational
pharmaceutical  companies,  specialized biotechnology firms and universities and
other research institutions. Several of these entities have already successfully
marketed  and  commercialized  products  that will  compete  with our  products,
assuming  that  our  products  gain  regulatory  approval.  Competitors  such as
Hollis-Eden Pharmaceuticals,  Inc. have developed or are developing products for
the treatment of severe acute radiation injury.  Companies such as VaxGen, Inc.,
Acambis plc and Emergent  BioSolutions have developed or are developing vaccines
against infectious diseases, including anthrax.

                                       13
<PAGE>

Many of our  competitors  have greater  financial  and other  resources,  larger
research and development  staffs and more effective  marketing and manufacturing
organizations than we do. In addition, academic and government institutions have
become  increasingly  aware of the commercial value of their research  findings.
These  institutions  are now more  likely  to  enter  into  exclusive  licensing
agreements with commercial  enterprises,  including our competitors,  to develop
and market commercial products.

Our  competitors may succeed in developing or licensing  technologies  and drugs
that  are  more  effective  or  less  costly  than  any we are  developing.  Our
competitors may succeed in obtaining FDA or other regulatory  approvals for drug
candidates before we do. If competing drug candidates prove to be more effective
or less costly than our drug candidates,  our drug candidates,  even if approved
for sale, may not be able to compete successfully with our competitors' existing
products  or new  products  under  development.  If we  are  unable  to  compete
successfully, we may never be able to sell enough products at a price sufficient
to permit us to generate profits.

IF WE FAIL TO ATTRACT AND RETAIN HIGHLY SKILLED SCIENTIFIC PERSONNEL, OUR GROWTH
COULD BE  LIMITED,  WHICH MAY  ADVERSELY  AFFECT OUR RESULTS OF  OPERATIONS  AND
FINANCIAL POSITION.

Our future success  depends in large part upon our ability to attract and retain
highly skilled scientific personnel.  The competition in the scientific industry
for such personnel is intense,  and we cannot be sure that we will be successful
in  attracting  and  retaining  such  personnel.  Most  of our  consultants  and
employees and several of our executive  officers  began working for us recently,
and all employees are subject to "at will" employment.  We cannot guarantee that
we will be able to replace any of our  scientific  personnel  in the event their
services become unavailable.

WE MAY FAIL TO PROTECT ADEQUATELY OUR PROPRIETARY TECHNOLOGY,  WHICH WOULD ALLOW
COMPETITORS TO TAKE ADVANTAGE OF RESEARCH AND DEVELOPMENT EFFORTS.

We own or have  obtained a license to 4 issued U.S.  and  foreign  patents and 8
pending U.S. and foreign patent applications. Our success will depend in part on
our ability to obtain additional United States and foreign patent protection for
our drug  candidates  and  processes,  preserve  our trade  secrets  and operate
without   infringing  the  proprietary   rights  of  third  parties.   We  place
considerable  importance on obtaining  patent  protection  for  significant  new
technologies, products and processes.

Our long-term  success largely depends on our ability to market  technologically
competitive  processes  and  products.  If we fail to obtain or  maintain  these
protections  we may  not be  able  to  prevent  third  parties  from  using  our
proprietary  rights. Our currently pending or future patent applications may not
result  in  issued  patents.  In the  United  States,  patent  applications  are
confidential  until patent  applications  are published or the patent is issued,
and because  third  parties may have filed patent  applications  for  technology
covered by our  pending  patent  applications  without  us being  aware of those
applications,  our patent  applications  may not have  priority  over any patent
applications of others.  In addition,  our issued patents may not contain claims
sufficiently broad to protect us against third parties with similar technologies
or  products  or provide us with any  competitive  advantage.  If a third  party
initiates  litigation  regarding our patents,  and is successful,  a court could
revoke  our  patents or limit the scope of  coverage  for those  patents.  Legal
standards  relating  to the  validity  of patents  covering  pharmaceutical  and
biotechnology  inventions  and the scope of claims  made under such  patents are
still  developing.  In some of the  countries  in which we intend to market  our
products, pharmaceuticals are either not patentable or have only recently become
patentable.  Past  enforcement of intellectual  property rights in many of these
countries has been limited or  non-existent.  Future  enforcement of patents and
proprietary  rights in many other countries may be problematic or unpredictable.
Moreover,  the  issuance of a patent in one country does not assure the issuance
of a similar patent in another country.  Claim  interpretation  and infringement
laws vary by nation, so the extent of any patent protection is uncertain and may
vary in different jurisdictions.

The U.S. Patent and Trademark Office, commonly referred to as the USPTO, and the
courts  have  not  consistently   treated  the  breadth  of  claims  allowed  in
biotechnology patents. If the USPTO or the courts begin to allow broader claims,
the  incidence  and  cost of  patent  interference  proceedings  and the risk of
infringement litigation will likely increase. On the other hand, if the USPTO or
the courts begin to allow narrower claims,  the value of our proprietary  rights
may be limited. Any changes in, or unexpected interpretations of the patent laws
may adversely affect our ability to enforce our patent position.

                                       14
<PAGE>

We  also  rely  upon  trade   secrets,   proprietary   know-how  and  continuing
technological innovation to remain competitive. We protect this information with
reasonable  security measures,  including the use of confidentiality  agreements
with our employees, consultants and corporate collaborators. It is possible that
these  individuals  will breach  these  agreements  and that any  remedies for a
breach will be insufficient to allow us to recover our costs.  Furthermore,  our
trade secrets,  know-how and other  technology may otherwise  become known or be
independently discovered by our competitors.

OUR PATENTS AND  PROPRIETARY  TECHNOLOGY MAY NOT BE ENFORCEABLE  AND THE PATENTS
AND  PROPRIETARY  TECHNOLOGY  OF  OTHERS  MAY  PREVENT  US FROM  COMMERCIALIZING
PRODUCTS.

Although we believe our inventions to be protected and our patents  enforceable,
the failure to obtain meaningful patent protection  products and processes would
greatly diminish the value of our potential products and processes.

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

The patent positions of  biotechnology  and  pharmaceutical  companies are often
highly uncertain and involve complex legal and factual questions. Therefore, the
breadth of claims allowed in biotechnology and pharmaceutical  patents cannot be
predicted. We also rely upon non-patented trade secrets and know how, and others
may independently develop substantially equivalent trade secrets or know how. We
also  rely  on   protecting   our   proprietary   technology   in  part  through
confidentiality  agreements with our current and former corporate collaborators,
employees,   consultants  and  certain  contractors.  These  agreements  may  be
breached,  and  we may  not  have  adequate  remedies  for  any  such  breaches.
Litigation may be necessary to defend against claims of infringement, to enforce
our patents or to protect trade secrets.  Litigation or other disputes regarding
patents and other proprietary rights may be expensive,  cause delays in bringing
products  to market and harm our  ability to operate.  In  addition,  litigation
could result in substantial costs and diversion of management efforts regardless
of the results of the litigation.  An adverse result in litigation could subject
us to significant  liabilities to third parties,  require  disputed rights to be
licensed or require us to cease using certain technologies.

Our products could infringe on the intellectual property rights of others, which
may cause us to engage in costly litigation and, if not successful,  could cause
us to pay substantial damages and prohibit us from selling our products. Because
patent  applications  in the United States are not publicly  disclosed until the
patent  application is published or the patent is issued,  applications may have
been filed which  relate to products  similar to those  offered by us. We may be
subject to legal proceedings and claims from time to time in the ordinary course
of our business,  including claims of alleged infringement of the trademarks and
other intellectual property rights of third parties.

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

In addition,  if another party claims the same subject  matter or subject matter
overlapping  with the  subject  matter that we have  claimed in a United  States
patent  application  or patent,  we may decide or be required to  participate in
interference  proceedings  in the United States  Patent and Trademark  Office in
order to  determine  the  priority of  invention.  Loss of such an  interference
proceeding would deprive us of patent protection  sought or previously  obtained
and could prevent us from  commercializing  our products.  Participation in such
proceedings  could  result in  substantial  costs,  whether or not the  eventual
outcome  is  favorable.  These  additional  costs  could  adversely  affect  our
financial results.

COMPLIANCE WITH  ENVIRONMENTAL LAWS OR REGULATIONS COULD HAVE A MATERIAL ADVERSE
EFFECT ON OUR BUSINESS.

We may be required to incur  significant  costs to comply with current or future
environmental  laws and  regulations.  Although we do not currently  manufacture
commercial quantities of our proposed products, we do produce limited quantities
of these  products for our clinical  trials.  Our research and  development  and


                                       15
<PAGE>

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


WE DEPEND ON THE CONTINUED  SERVICES OF OUR EXECUTIVE OFFICERS AND THE LOSS OF A
KEY EXECUTIVE COULD SEVERELY IMPACT OUR OPERATIONS.

The execution of our present business plan depends on the continued  services of
Michael K. Wilhelm,  our Chief Executive Officer and President,  Mark L. Witten,
Ph.D., our acting Chief Scientific Officer. We do not currently maintain key-man
insurance on their lives. While we have entered into employment  agreements with
each of them,  the loss of any of their  services would be detrimental to us and
could have a material  adverse effect on our business,  financial  condition and
results of operations.

OUR  COMPLIANCE  WITH  SECURITIES  LAWS,  RULES AND  REGULATIONS TO WHICH WE ARE
SUBJECT  COULD   SUBSTANTIALLY   INCREASE  OUR  OPERATING  EXPENSES  AND  DIVERT
MANAGEMENT'S ATTENTION FROM THE OPERATION OF OUR BUSINESS.

Because  our common  stock is  publicly  traded,  we are subject to a variety of
rules and regulations of federal,  state and financial market exchange  entities
charged with the  protection of investors  and the oversight of companies  whose
securities are publicly  traded.  These entities,  including the SEC, the Public
Company  Accounting  Oversight  Board  and the NASD  OTC  Bulletin  Board,  have
recently issued new  requirements  and regulations and are currently  developing
additional  regulations  and  requirements in response to recent laws enacted by
Congress,  most notably the Sarbanes-Oxley Act of 2002. As certain rules are not
yet  finalized,  we do not know the level of resources we will have to commit in
order to be in  compliance.  Our  compliance  with current and proposed rules is
likely to  require  the  commitment  of  significant  financial  and  managerial
resources.  As a result, our management's attention might be diverted from other
business concerns, which could negatively affect our business.

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

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

TRADING IN OUR SECURITIES  COULD BE SUBJECT TO EXTREME PRICE  FLUCTUATIONS  THAT
COULD ADVERSELY AFFECT YOUR INVESTMENT.

The market prices for securities of life sciences companies,  particularly those
that  are not  profitable,  have  been  highly  volatile,  especially  recently.
Publicized events and announcements may have a significant  impact on the market
price of our common stock. For example:

     o    biological or medical discoveries by competitors;
     o    public concern about the safety of our drug candidates;
     o    delays in the  conduct or  analysis  of our  preclinical  or  clinical
          studies;
     o    unfavorable results from preclinical or clinical studies;
     o    unfavorable  developments  concerning  patents  or  other  proprietary
          rights; or
     o    unfavorable domestic or foreign regulatory developments;

may have the effect of temporarily or permanently  driving down the price of our
common  stock.  In  addition,  the stock  market  from time to time  experiences
extreme  price and  volume  fluctuations  which  particularly  affect the market
prices for emerging and life  sciences  companies,  such as ours,  and which are
often  unrelated to the operating  performance  of the affected  companies.  For
example,  our stock price has ranged from $0.01 to $4.50 between January 1, 2003
and December 31, 2003.

                                       16
<PAGE>

These  broad  market   fluctuations  may  adversely  affect  the  ability  of  a
stockholder  to dispose of his shares at a price  equal to or above the price at
which the shares were purchased.  In addition, in the past, following periods of
volatility   in  the  market  price  of  a  company's   securities,   securities
class-action  litigation  has often been  instituted  against that company.  Any
litigation against our company, including this type of litigation,  could result
in substantial  costs and a diversion of  management's  attention and resources,
which could materially  adversely affect our business,  financial  condition and
results of operations.

A LIMITED  PRIOR PUBLIC  MARKET AND TRADING  MARKET MAY CAUSE  VOLATILITY IN THE
PRICE OF OUR COMMON STOCK.

Our common  stock is  currently  traded on a limited  basis on the OTC  Bulletin
Board (the  "OTCBB")  under the  symbol  "IRBO".  The OTCBB is an  inter-dealer,
Over-The-Counter  market that provides  significantly  less  liquidity  than the
NASDAQ Stock Market.  Quotes for stocks  included on the OTCBB are not listed in
the  financial  sections of newspapers as are those for the NASDAQ Stock Market.
Therefore,  prices for securities traded solely on the OTCBB may be difficult to
obtain and holders of common stock may be unable to resell their  securities  at
or near their  original  offering  price or at any price.  The NASD has  enacted
recent changes that limit  quotations on the OTC Bulletin Board to securities of
issuers that are current in their reports filed with the Securities and Exchange
Commission. The effect on the OTC Bulletin Board of these rule changes and other
proposed changes cannot be determined at this time.

The  quotation  of our  common  stock  on  the  OTCBB  does  not  assure  that a
meaningful, consistent and liquid trading market currently exists, and in recent
years such market has  experienced  extreme price and volume  fluctuations  that
have particularly  affected the market prices of many smaller companies like us.
Our common stock is thus subject to this volatility.

BROKER-DEALER REQUIREMENTS FOR "PENNY STOCK" TRANSACTIONS MAY AFFECT THE ABILITY
OF OUR INVESTORS TO RESELL THEIR SECURITIES.

Our common stock is  considered to be a "penny stock" since it meets one or more
of the definitions in Rules 15g-2 through 15g-6  promulgated under Section 15(g)
of the  Securities  Exchange  Act of  1934,  as  amended.  Section  15(g) of the
Securities  Exchange  Act of  1934,  as  amended,  and  Rule  15g-2  promulgated
thereunder by the SEC require  broker-dealers dealing in penny stocks to provide
potential  investors with a document disclosing the risks of penny stocks and to
obtain a  manually  signed and dated  written  receipt  of the  document  before
effecting  any  transaction  in  a  penny  stock  for  the  investor's  account.
Compliance  with  this and other  requirements  may make it more  difficult  for
holders  of our  common  stock to resell  their  shares to third  parties  or to
otherwise dispose of them in the market or otherwise.

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

We expect to continue to incur  product  development  and  selling,  general and
administrative costs, and in order to satisfy our funding requirements,  we will
need to sell  additional  equity  securities,  which may be  subject  to similar
registration rights. The sale or the proposed sale of substantial amounts of our
common stock in the public markets may adversely  affect the market price of our
common stock.

From time to time,  certain  stockholders of our company may be eligible to sell
all or some of their  shares  of  common  stock by means of  ordinary  brokerage
transactions in the open market pursuant to Rule 144,  promulgated under the Act
("Rule 144"), subject to certain limitations.  In general, pursuant to Rule 144,
a stockholder (or stockholders  whose shares are aggregated) who has satisfied a
one-year  holding  periods may,  under  certain  circumstances,  sell within any
three-month  period a number of securities  which does not exceed the greater of
1% of the then  outstanding  shares of our common  stock or the  average  weekly
trading  volume of the class during the four calendar  weeks prior to such sale.
Rule 144 also permits,  under  certain  circumstances,  the sale of  securities,
without any  limitations,  by a non-affiliate of our company who has satisfied a
two-year  holding period.  Any substantial  sale of our common stock pursuant to
Rule 144 or pursuant to any resale  prospectus may have an adverse effect on the
market price of our securities.

Our  stockholders  may  experience  substantial  dilution and a reduction in the
price  that they are able to obtain  upon sale of their  shares.  Also,  any new
equity securities issued, including any new series of preferred stock authorized
by our board of directors,  may have greater  rights,  preferences or privileges
than our  existing  common  stock.  To the extent stock is issued or options and
warrants  are  exercised,  holders of our common stock will  experience  further
dilution.  In addition,  as in the case of the  warrants,  in the event that any
future  financing  should be in the form of, be convertible into or exchangeable
for, equity  securities and upon the exercise of options and warrants,  security
holders may experience additional dilution.



ITEM 3.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

The term  "disclosure  controls  and  procedures"  refers  to the  controls  and
procedures of a company that are designed to ensure that information required to
be disclosed by a company in the reports that it files under Rules 13a-14 of the
Securities  Exchange Act of 1934 (the  "Exchange  Act") is recorded,  processed,
summarized and reported within  required time periods.  As of the period covered
by this quarterly report on form 10-QSB (the "Evaluation  Date"), we carried out
an evaluation  under the  supervision  and with the  participation  of our Chief
Executive  Officer  and Chief  Financial  Officer  of the  effectiveness  of our
disclosure  controls  and  procedures.  Based  on  that  evaluation,  our  Chief
Executive  Officer and Chief  Financial  Officer have concluded  that, as of the
Evaluation  Date,  such controls and procedures  were effective in ensuring that
required information will be disclosed on a timely basis in our periodic reports
filed under the Exchange Act.

(b) Changes in internal controls

There were no significant  changes to our internal  controls or in other factors
that could  significantly  affect internal controls subsequent to the Evaluation
Date.

                                       17
<PAGE>

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

We are not a party to any material legal  proceedings  and there are no material
legal proceedings pending with respect to our property.  We are not aware of any
legal proceedings  contemplated by any governmental authorities involving either
of us or our  property.  None of our  directors,  officers or  affiliates  is an
adverse party in any legal proceedings involving us or our subsidiaries,  or has
an interest in any proceeding which is adverse to us or our subsidiaries.

Item 2.   Changes in Securities and Use of Proceeds

          (a) None.
          (b) None.
          (c ) During the three months ended June 30, 2004, we issued a total of
          1,775,000  shares,  net of  cancellations  (post-split)  of our Common
          Stock to officers and  consultants for services  rendered.  325,000 of
          these  shares  (post-split)  are  registered  with  Form  S-8  of  the
          Securities  and  Exchange   Commission.   1,450,000  of  these  shares
          (post-split)  are  considered  exempt from  registration  by reason of
          Section 4(2) of the Securities Act of 1933.
          (d) None.

Item 3.   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 and Reports on Form 8-K

(a)       Exhibits



31.1      Certification of Chief Executive Officer pursuant to Securities
          Exchange Act Rule 13a-14(a).

31.2      Certification of Chief Financial Officer pursuant to Securities
          Exchange Act Rule 13a-14(a).

32.1*     Certification of Chief Executive  Officer  pursuant to U.S.C. 1350, as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*     Certification of Chief Financial  Officer  pursuant to U.S.C. 1350, as
          adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)       Reports on Form 8-K

          On April 7,  2004,  the  Company  filed a Current  Report on Form 8-K,
          dated April 6, 2004, reporting under Items 5 and 7 the two (2) for one
          (1) forward split of its common stock effective April 6, 2004.

          On May 14, 2004, the Company filed a current report on Form 8-K, dated
          April  21,  2004,  reporting  under  Items 4 and 7 the  change  in the
          Company certifying accountant.

* 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.



                                       18
<PAGE>


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 July 19, 2005.



                          IR BioSciences Holdings, Inc.



                   By:    /s/ Michael Wilhelm
                          -----------------------------
                              Michael Wilhelm
                              President, Chief Executive Officer

                   Date:  July 20, 2005


                                       19