FORM 10-QSB
                       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, 2006

                                       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 4,
2006 was 69,624,851.


<PAGE>





                  IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS



PART I.  FINANCIAL INFORMATION                                            Page
                                                                          Number



     Item 1. Financial Statements:

                Condensed Consolidated Balance Sheet as of
                June 30, 2006 (unaudited)  ..................................F-1

                Condensed Consolidated Statement of Losses for the
                three and six months ended June 30, 2006 and 2005,
                and for the period of inception (October 30, 2002)
                to June 30, 2006 (unaudited) ................................F-2

                Condensed Consolidated Statement of Stockholders'
                Equity (Deficit)from date of inception (October
                30, 2002) to June 30, 2006 (unaudited) ...............F-3 to F-6

                Condensed Consolidated  Statements of Cash Flows for
                the six months ended June 30, 2006 and 2005, and for
                the period of inception (October 30, 2002) to
                June 30, 2006 (unaudited)  ...........................F-7 to F-8

                Notes to Condensed Consolidated Financial
                Statements (Unaudited) ..............................F-9 to F-17


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


     Item 3. Controls and Procedures .........................................11


PART II         OTHER INFORMATION


     Item 1. Legal Proceedings ...............................................12


     Item 2. Unregistered Sale of Equity Securities
                and Use of Proceeds ..........................................12


     Item 3. Defaults Upon Senior Securities .................................13


     Item 4. Submission of Matters to a Vote of Securities Holders ...........13


     Item 5. Other Information................................................14


     Item 6. Exhibits.........................................................15

                Signatures....................................................16

                                        2


<PAGE>





ITEM 1. FINANCIAL INFORMATION

                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
            Condensed Consolidated Balance Sheet as of June 30, 2006
                                   (Unaudited)

                                                                  June 30,
                                                                    2006
                                                                ------------
Assets

Current assets

   Cash and cash equivalents                                    $     23,663
   Prepaid services and other current assets (note 1)                 17,370
                                                                ------------

      Total current assets                                            41,033

   Deposits and other assets (note 1)                                  2,260
   Furniture and equipment, net of
      accumulated depreciation of $7,744                              16,819
                                                                ------------

Total assets                                                    $     60,112
                                                                ============

Liabilities and Deficiency in Stockholders' Equity

Current liabilities

   Accounts payable and accrued liabilities (note 3)            $    779,795
   Cash advance (note 4)                                              70,000
   Note payable (note 5)                                             509,750
   Warrant portion of penalty for late registration
      of shares - with registration rights (note 6)                  258,986
   Common stock portion of penalty for late registration
      of shares (note 6)                                           1,245,240
                                                                ------------

      Total current liabilities                                    2,863,771

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; 69,624,851 shares issued and outstanding
      at June 30, 2006 (note 7)                                       69,622
   Additional paid-in capital (note 7)                             9,546,403
   Deficit Accumulated during the Development Stage              (12,419,684)
                                                                ------------
      Total deficiency in stockholder's equity                    (2,803,659)
                                                                ------------

Total liabilities and deficiency in stockholder's equity        $     60,112
                                                                ============

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

                                       F-1



                  IR BioSciences Holdings, Inc. and Subsidiary
                           (A Development Stage Company)
                   Condensed Consolidated Statements of Losses
                      For the three months and six months
                        ended June 30, 2006 and 2005,
                         And for the period of inception
                      (October 30, 2002) to June 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                                         For the         For the
                                          Three           Three                                     Cumulative from
                                          Months         Months        For the Six    For the Six  Inception (October
                                        Ended June     Ended June     Months Ended    Months Ended    30, 2002) to
                                         30, 2006       30, 2005      June 30, 2006  June 30, 2005   June 30, 2006
                                      ------------    ------------    ------------    ------------    ------------
<S>                                   <C>             <C>             <C>             <C>             <C>
Revenues                              $         --    $         --    $         --    $         --    $         --

Operating expenses:

   Selling, general and
      administrative expenses              601,972         593,835       1,163,116       1,432,355       9,287,417
   Merger fees and costs                        --              --              --              --         350,000
   Financing cost                               --       1,493,256              --       1,493,256          90,000
   Impairment of intangible
      asset costs                               --              --              --              --           6,393
                                      ------------    ------------    ------------    ------------    ------------
      Total operating expenses             601,972       2,087,091       1,163,116       2,925,611       9,733,810

Operating loss                            (601,972)     (2,087,091)     (1,163,116)     (2,925,611)     (9,733,810)

Other expense:

   Cost of penalty for late
      registration of shares              (994,574)             --        (438,601)             --       2,192,160
   (Gain) loss from marketing to
      market - warrant portion of
      penalty for late registration
      of shares                            (39,887)             --         (46,755)             --        (301,448)
   (Gain) loss from marketing to
      market - stock portion of
      penalty for late registration
      of shares                           (124,524)             --         (72,101)             --        (386,486)
   Interest (income) expense                15,057             341          14,891           1,318       1,181,648
                                      ------------    ------------    ------------    ------------    ------------
      Total other (income) expense      (1,143,928)            341        (542,566)          1,318       2,685,874

  Income (loss) before income taxes        541,956      (2,087,432)       (620,550)     (2,926,929)    (12,419,684)

   Provision for income taxes                   --              --              --              --              --
                                      ------------    ------------    ------------    ------------    ------------
Net income (loss)                     $    541,956    $ (2,087,432)   $   (620,550)   $ (2,926,929)   $(12,419,684)
                                      ============    ============    ============    ============    ============

Net income (loss) per share -
   basic and diluted                  $       0.01   $      (0.03)   $      (0.01)   $      (0.04)   $      (0.29)
                                      ============    ============    ============    ============    ============

Weighted average shares outstanding
   basic and diluted                    69,632,567      69,039,111      69,554,432      65,968,335      43,073,567
                                      ============    ============    ============    ============    ============

</TABLE>

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

                                       F-2



<PAGE>

                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
       Condensed Consolidated Statement of Stockholders' Equity (Deficit)
           From date of inception (October 30, 2002) to June 30, 2006
                                   (Unaudited)


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

</TABLE>

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

                                       F-3


<PAGE>

                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
       Condensed Consolidated Statement of Stockholders' Equity (Deficit)
           From date of inception (October 30, 2002) to June 30, 2006
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                          Common Stock       Additional
                                                  ------------------------    Paid-In      Deferred    Accumulated
                                                    Shares         Amount      Capital   Compensation    Deficit       Total
                                                  -----------  -----------  -----------  ------------  -----------  -----------
<S>                                               <C>          <C>          <C>          <C>           <C>          <C>
Shares granted at $1.00 per share pursuant to
   the Senior Note Agreement in January 2004          600,000          600      599,400      (600,000)          --           --

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

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

Shares issued to a consultant at $0.40 per
   share for services rendered in March 2004        1,051,600        1,051      419,589      (420,640)          --           --

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

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

Shares issued at $0.50 per share to
   consultants for services rendered in
   March 2004                                          20,000           20        9,980            --           --       10,000

Shares issued to a consultant at  $0.40 per
   share  for services rendered in March 2004           2,000            2          798            --           --          800

Shares issued to consultants at $0.32 per
   share for services rendered in March 2004           91,600           92       29,220            --           --       29,312

Shares to be issued to consultant at $0.41 per
   share in April 2004 for services to be
   rendered through March 2005                             --           --           --       (82,000)          --      (82,000)

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

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

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

Beneficial Conversion Feature associated with
   note payable in May 2004                                --           --       35,000            --           --       35,000

Issuance of warrants to officers and founder
   for services rendered in May 2004                       --           --      269,208            --           --      269,208

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

Shares issued to a consultant at $1.00 per
   share for services to be rendered over
   twelve months beginning May 2004                   500,000          500      499,500      (500,000)          --           --

Beneficial Conversion Feature associated with
   notes payable issued in June 2004                       --           --        3,000            --           --        3,000

Issuance of warrants to note holders in April,
   May, and June 2004                                      --           --       17,915            --           --       17,915

Issuance of warrants to employees and
   consultants for services rendered in
   April through June 2004                                 --           --        8,318            --           --        8,318

Shares issued in July  to a consultant at
   $0.10 for services to be rendered through
   July 2005                                          250,000          250       24,750       (25,000)          --           --

Shares issued to a consultant in July and
   September at $0.41 per share for services
   to be rendered through April 2005                  200,000          200       81,800            --           --       82,000

Shares issued to a consultant in September at
   $0.12 to $0.22 for services rendered
   through September 2004                             127,276          127       16,782            --           --       16,909

</TABLE>

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


                                       F-4


<PAGE>

                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
       Condensed Consolidated Statement of Stockholders' Equity (Deficit)
           From date of inception (October 30, 2002) to June 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                          Common Stock       Additional
                                                  ------------------------    Paid-In      Deferred    Accumulated
                                                    Shares         Amount      Capital   Compensation    Deficit       Total
                                                  -----------  -----------  -----------  ------------  -----------  -----------
<S>                                               <C>          <C>          <C>          <C>           <C>          <C>
Shares issued in July to September 2004 as
   interest on note payable                           300,000          300       35,700            --           --       36,000

Issuance of warrants with notes payable in
   July and August 2004                                    --           --       72,252            --           --       72,252

Accrued deferred compensation in August 2004
   to a consultant for 100,000 shares at $0.10
   per share, committed but unissued                       --           --           --       (10,000)          --      (10,000)

Shares issued in August 2004 at $0.14 to a
   consultant for services to be performed
   through October 2004                               100,000          100       13,900       (14,000)          --           --

Shares issued in August 2004 at $0.125 per
   share for conversion of $30,000 demand loan        240,000          240       29,760            --           --       30,000

Shares issued in August 2004 at $0.16 per
   share to a consultant for services provided        125,000          125       19,875            --           --       20,000

Shares issued in October 2004 to employees at
   $0.16 to $0.25 per share                            48,804           49        8,335            --           --        8,384

Commitment to issue 100,000 shares of stock to
   a consultant at $0.23 per share for services
   to be provided through September 2005                   --           --           --       (23,000)          --      (23,000)

Sale of stock for cash in October at $0.125 per
   share, net of costs of $298,155                 18,160,000       18,160    1,345,763            --           --    1,363,923

Value of warrants issued with sale of common
   stock in October, net of costs                          --           --      607,922            --           --      607,922

Issuance of warrant to officer in October, 2004            --           --      112,697            --           --      112,697

Issuance of stock to investment bankers in
   October 2004 for commissions earned              4,900,000        4,900       (4,900)           --           --           --

Conversion of accounts payable to stock in
   October at $0.125 per share                      1,257,746        1,258      107,382            --           --      108,640

Value of warrants issued with accounts
   payable conversions                                     --           --       48,579            --           --       48,579

Conversion of demand loan to stock in October
   at $0.11 per share                                  93,300           93       10,170            --           --       10,263

Forgiveness of notes payable in October 2004               --           --       36,785            --           --       36,785

Issuance of stock to officer and director at
   $0.125 per share in October for conversion
   of liability                                     1,440,000        1,440      122,493            --           --      123,933

Value of warrants issued with officer and
   director conversion of liabilities                      --           --       56,067            --           --       56,047

Conversion of debt and accrued interest to
   common stock at $0.075 to $0.125 per share       6,703,151        6,703      417,514            --           --      424,217

Value of warrants issued with conversion
   of debt                                                 --           --      191,111            --           --      191,111

Conversion of note payable in October into
   common stock at $0.075 per share                    67,613           68        4,932            --           --        5,000

Issuance of warrants to note holders in
   October 2004                                            --           --      112,562            --           --      112,562

Value of shares issued to CFO as compensation         100,000          100       34,900            --           --       35,000

Value of warrants issued to members of
   advisory committees in November
   and December                                            --           --       16,348            --           --       16,348

Beneficial conversion feature associated with
   notes  payable                                          --           --      124,709            --           --      124,709

Shares issued in error to be cancelled                 (9,002)          (9)           9            --           --           --

Amortization of deferred compensation through
   December 31, 2004                                       --           --           --     2,729,454           --    2,729,454

Loss for the year ended
   December 31, 2004                                       --           --           --            --   (5,305,407)  (5,305,407)
                                                 ------------  -----------  -----------  ------------  -----------  -----------
Balance at December 31, 2004                       62,423,388       62,423    7,922,943      (169,986)  (7,208,027)     607,353
                                                 ------------  -----------  -----------  ------------  -----------  -----------
</TABLE>

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

                                       F-5

<PAGE>


                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
       Condensed Consolidated Statement of Stockholders' Equity (Deficit)
           From date of inception (October 30, 2002) to June 30, 2006
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                          Common Stock       Additional
                                                  ------------------------    Paid-In      Deferred    Accumulated
                                                    Shares         Amount      Capital   Compensation    Deficit       Total
                                                  -----------  -----------  -----------  ------------  -----------  -----------
<S>                                               <C>          <C>          <C>          <C>           <C>          <C>
Sale of shares of common stock for cash at
   $0.20 per share in Mar 2005 for warrant
   exercise, net of costs                           6,600,778        6,600    1,184,256            --           --    1,190,856

Value of warrants issued to members
   of advisory committees in March 2005                    --           --      137,049            --           --      137,049

Deferred compensation in Feb 2005 to a
   consultant for 50,000 shares of stock at
   $0.65 per share.                                        --           --           --       (32,500)          --      (32,500)

Warrants exercised at $0.05 per share
   in June 2003                                        80,000           80        3,920            --           --        4,000

Value of warrants issued to members of
   advisory committee in June 2005                         --           --       70,781            --           --       70,781

Value of warrants issued to investors and
   service providers in June 2005                          --           --       32,991            --           --       32,991

Issuance of 232,153 shares of common
   stock in July 2005 for conversion of
   notes payable                                      232,153          232       64,771            --           --       65,003

Issuance of 100,000 shares of common stock
   in August 2005 to a consultant for
   services provided                                  100,000          100        9,900            --           --       10,000

Value of warrants issued to advisory
   committee in September 2005 for services                --           --       20,491            --           --       20,491

Amortization of deferred comp for the
   twelve months ended December, 2005                      --           --           --       199,726           --      199,726

Value of warrants issued in October
   and December 2005 to investors and
   service providers                                       --           --       18,399            --           --       18,399

Loss for the year ended
   December 31, 2005                                       --           --           --            --   (4,591,107)  (4,591,107)

                                                 ------------  -----------  -----------  ------------  -----------  -----------
Balance at December 31, 2005                       69,436,319       69,435    9,465,501        (2,760) (11,799,134)  (2,266,958)
                                                 ------------  -----------  -----------  ------------  -----------  -----------

Issuance of 100,000 shares of common stock
   in March 2006 to an officer,
   previously accrued                                100,000          100       41,316             --           --       41,416

Value of warrants issued to advisory
   committee in March 2006 for services                   --           --        8,399             --           --        8,399

Amortization of deferred comp for the
   three months ended March 31, 2006                      --           --           --          2,760           --        2,760

Loss for the three months ended
   March 31, 2006                                         --           --           --             --   (1,162,506)  (1,162,506)
                                                 ------------  -----------  -----------  ------------  -----------  -----------
Balance at March 31, 2006                          69,536,319      69,535    9,515,216             --  (12,961,640)  (3,376,889)
                                                 ------------  -----------  -----------  ------------  -----------  -----------

Issuance of common stock in May 2006
   To a consultant for services provided              34,464           34       16,164             --           --       16,198

Conversion of accrued interest to common
   Stock at $0.125 per share in May 2006              19,288           19        2,392             --           --        2,411

Conversion of accrued interest to common
   Stock at $0.125 per share in May 2006              16,324           16        2,025             --           --        2,041

Conversion of accrued interest to common
   Stock at $0.10 per share in May 2006               13,456           13        1,342             --           --        1,355

Common stock issued pursuant to the exercise
   Of warrants at $0.09 per share in June 2006         5,000            5          445             --           --          450

Value of warrants issued to members of
   Advisory committee in June 2006                        --           --        8,819             --           --        8,819

Income for three months ended June 30, 2006               --           --           --             --      541,956      541,956
                                                 ------------  -----------  -----------  ------------  -----------  -----------
Balance at June 30, 2006                           69,624,851      69,622    9,546,403             --  (12,419,684)  (2,803,659)
                                                 ============  ===========  ===========  ============  ===========  ===========

</TABLE>

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

                                       F-6


<PAGE>


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
                 Condensed Consolidated Statements of Cash Flows
                 For the six months ended June 30, 2006 and 2005,
                and for the period of inception (October 30, 2002)
                                to June 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                    Cumulative from
                                                                                                       Inception
                                                                   For the Six      For the Six      (October 30,
                                                                  Months Ended      Months Ended   2002) to June 30,
                                                                  June 30, 2006    June 30, 2005          2006
                                                                 ----------------  --------------- -------------------
<S>                                                              <C>              <C>             <C>
Cash flows from operating activities:
   Net loss                                                    $     (620,550)     $   (2,926,929)     $   (12,419,684)
   Adjustments to reconcile net loss to net
      cash used in operating activities:
   Non-cash compensation                                               45,926             426,279            3,966,779
   Cost of penalty for late registration of shares -
      stock portion                                                  (360,197)                 --            1,631,726
   Cost of penalty for late registration of shares -
      warrant portion                                                 (78,404)                 --              560,434
  (Gain) loss from marking to market - stock portion
      of penalty for late registration of shares                      (72,101)                 --             (386,486)
  (Gain) loss from marking to market - warrant portion
      of penalty for late registration of shares                      (46,755)                 --             (301,448)
   Legal fees for note payable                                         10,125                  --               10,125
   Placement fees for note payable                                     40,000                  --               40,000
   Impairment of intangible asset                                          --                  --                6,393
   Interest expense                                                        --               4,007             156,407
   Amortization of discount on notes payable                               --                  --            1,006,935
   Depreciation and amortization                                        3,882               1,202               33,100
   Changes in operating assets and liabilities:
     Prepaid services and other assets                                 17,137              (2,000)              20,371
     Accounts payable and accrued expenses                            324,890           1,489,453              980,843
                                                            -----------------   -----------------   ------------------

   Net cash used in operating activities                             (736,047)         (1,007,988)          (4,694,505)

Cash flows from investing activities:
   Acquisition of property and equipment                              (16,475)                 --              (24,562)
                                                            -----------------   -----------------   ------------------

   Net cash used in investing activities                              (16,475)                 --              (24,562)

Cash flows from financing activities:
   Proceeds from notes payable and cash advances                      509,875                  --            1,743,375
   Principal payments on notes payable and demand loans                    --             (14,997)            (264,997)
   Shares of stock sold for cash                                           --           1,190,857            3,259,902
   Proceeds from exercise of warrant                                      450               4,000                4,450
   Officer repayment of amounts paid on his behalf                         --                  --               19,880
   Cash paid on behalf of officer                                          --                  --              (19,880)
                                                            -----------------   -----------------   ------------------

   Net cash provided by financing activities                          510,325           1,179,860            4,742,730

Net increase (decrease) in cash and cash equivalents                 (242,197)            171,872               23,662

Cash and cash equivalents at beginning of period                      265,860             970,114                   --
                                                            -----------------   -----------------   ------------------
Cash and cash equivalents at end of period                     $       23,663      $    1,141,986      $        23,662
                                                            =================   =================   ==================

</TABLE>


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


                                       F-7

<PAGE>


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
                 Condensed Consolidated Statements of Cash Flows
                 For the six months ended June 30, 2006 and 2005,
                and for the period of inception (October 30, 2002)
                                to June 30, 2006
                                   (Unaudited)

<TABLE>
<CAPTION>


Supplemental disclosures of cash flow information
<S>                                                       <C>            <C>           <C>
Cash paid during the period for:
Interest                                                  $        438   $      1,486  $     43,991
                                                          ============   ============  ============

Taxes                                                     $         --   $         --  $         --
                                                          ============   ============  ============

Acquisition and capital restructure:
   Assets acquired                                                  --             --            --
   Liabilities assumed                                              --             --      (120,799)
   Common stock retained                                            --             --        (2,369)
   Adjustment to additional paid-in capital                         --             --       123,168
   Organization costs                                               --             --       350,000
                                                          ------------   ------------  ------------
Total consideration paid                                  $         --   $         --  $    350,000
                                                          ============   ============  ============

Common stock issued in exchange for proprietary rights    $         --   $         --  $      9,250
                                                          ============   ============  ============

Common stock issued in exchange for services              $     16,198   $         --  $  2,941,484
                                                          ============   ============  ============

Common stock issued in exchange for previously incurred
   debt and accrued interest                              $      5,807   $     65,003  $  1,066,401
                                                          ============   ============  ============

Common stock issued in exchange as interest               $         --   $         --  $     36,000
                                                          ============   ============  ============

Amortization of beneficial conversion feature             $         --   $         --  $    223,269
                                                          ============   ============  ============

Stock options and warrants issued in exchange for
   services rendered                                      $         --   $    249,821  $    772,381
                                                          ============   ============  ============

Debt and accrued interest forgiveness from note holders   $         --   $         --  $     36,875
                                                          ============   ============  ============

Common stock issued in satisfaction of amounts due
   to an Officer and a Director                           $         --   $         --  $    180,000
                                                          ============   ============  ============

Common stock issued in satisfaction of accounts payable   $         --   $         --  $    157,219
                                                          ============   ============  ============

Deferred compensation to a consultant accrued
   in March 2005                                          $         --   $         --  $  2,630,761
                                                          ============   ============  ============

Amortization of deferred compensation                     $      2,760   $    171,624  $    202,486
                                                          ============   ============  ============

Fair Value of common stock and warrants payable in
connection with late filing of registration statement     $   (994,574)  $  1,493,256  $  1,636,187
                                                          ============   ============  ============

Gaining from marking to market - stock portion of
   penalty for late registration of shares                $   (124,524)  $         --  $   (442,909)
                                                          ============   ============  ============

Gaining from marking to market - warrant portion of
   penalty for late registration of shares                $    (39,887)  $         --  $   (294,580)
                                                          ============   ============  ============

Impairment of intangible asset                            $         --   $         --  $      6,393
                                                          ============   ============  ============

Issuance of stock to Officer, previously accrued          $     41,416   $         --  $     41,416
                                                          ============   ============  ============

Value of warrants issued to members of advisory boards    $     17,219   $         --  $     17,219
                                                          ============   ============  ============

Consulting services received for note payable             $      9,750   $         --  $      9,750
                                                          ============   ============  ============
</TABLE>

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

                                      F-8

<PAGE>

                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  June 30, 2006
                                   (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 and six-month  periods ended June 30, 2006
are not necessarily  indicative of the results that may be expected for the year
ended  December  31,  2006.  The  unaudited  condensed   consolidated  financial
statements  should be read in  conjunction  with the December 31, 2005 financial
statements and footnotes thereto included in the Company's annual report on Form
10-KSB filed with the Securities  and Exchange  Commission on March 28, 2006 and
Form 10-KSB/A  filed with the  Securities  and Exchange  Commission on March 31,
2006.

Business and basis of presentation
----------------------------------

         IR BioSciences  Holdings,  Inc. (the "Company," "we," or "us") formerly
GPN Network,  Inc.  ("GPN") is currently a  development  stage company under the
provisions of Statement of Financial  Accounting  Standards  ("SFAS") No. 7. The
Company,  which was  incorporated  under the laws of the  State of  Delaware  on
October 30, 2002,  is a  biopharmaceutical  company  engaged in the research and
development of potential drugs through its wholly owned subsidiary,  ImmuneRegen
BioSciences,  Inc.  Our  goal is to  develop  therapeutics  to be  used  for the
protection of the body from exposure to radiation and other harmful agents, such
as  toxic  chemicals  and  biological  materials.  Our  current  focus is on the
development  of  two  potential  applications,  Radilex  and  Viprovex.  We  are
developing  Radilex  for use as a  potential  treatment  for acute  exposure  to
radiation.  Viprovex  is being  developed  for use in  potential  treatments  of
maladies caused by exposure to toxic chemicals, such as formalin, and biological
agents,  such as anthrax  and avian  influenza.  Our  research  and  development
efforts are at a very early stage and Radilex and Viprovex  have only  undergone
pre-clinical  testing  in mice.  From its  inception  through  the date of these
financial  statements,  the Company has  recognized no revenues and has incurred
significant operating expenses.

The consolidated  financial  statements  include the accounts of the Company and
its  wholly  owned  subsidiary,   ImmuneRegen   BioSciences,   Inc.  Significant
intercompany transactions have been eliminated in consolidation.

Reclassification
----------------

Certain  reclassifications  have been made to conform to prior  periods' data to
the  current  presentation.  These  reclassifications  had no effect on reported
losses.

                                       F-9

<PAGE>

Stock based compensation
------------------------

Effective  January  1,  2006,  the  Company  adopted  SFAS  No.  123  (revised),
"Share-Based Payment" (SFAS 123(R)) utilizing the modified prospective approach.
Prior to the  adoption of SFAS 123(R) we  accounted  for stock  option  grant in
accordance  with APB Opinion No. 25,  "Accounting for Stock Issued to Employees"
(the intrinsic value method), and accordingly,  recognized  compensation expense
for stock option grants.

Under the modified prospective  approach,  SFAS 123(R) applies to new awards and
to awards  that  were  outstanding  on  January  1,  2006 that are  subsequently
modified,  repurchased or cancelled.  Under the modified  prospective  approach,
compensation  cost  recognized  in the first six months of fiscal 2006  includes
compensation cost for all share-based  payments granted prior to, but not vested
as of  January  1,  2006,  based  on the  grant-date  fair  value  estimated  in
accordance with the original  provisions of SFAS 123, and compensation  cost for
all  share-based  payments  granted  subsequent  to January 1, 2006 based on the
grant-date  fair value  estimated  in  accordance  with the  provisions  of SFAS
123(R).  Prior  periods  were not restated to reflect the impact of adopting the
new standard.

As a result of adopting  SFAS  123(R) on January 1, 2006,  for the three and six
months ended June 30, 2006,  there was no effect on our income  before taxes and
net income as there were no stock options granted during this period,  and there
were no outstanding but unvested options or grants at December 31, 2005.

Interim financial statements
----------------------------

The accompanying balance sheet as of June 30, 2006, the statements of operations
for the three and six months ended June 30, 2006 and 2005, and for the period of
inception  (October 30, 2002) to June 30, 2006, and the statements of cash flows
for six months  ended June 30, 2006 and 2005,  and from the period of  inception
(October  30,  2002) to June 30, 2006 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.

                                      F-10

<PAGE>

Long-lived assets
-----------------

The Company accounts for its long-lived assets under the provision of Statements
of Financial  Accounting  Standards No. 121,  "Accounting  for the Impairment of
Long-Lived  Assets and for  Long-Lived  Assets To Be Disposed Of." The Company's
long-lived  assets are reviewed  for  impairment  whenever  events or changes in
circumstances  indicate  that the  carrying  amount  of such  assets  may not be
recoverable.   Events  relating  to  recoverability   may  include   significant
unfavorable  changes in business  conditions,  recurring losses, or a forecasted
Inability to achieve  break-even  operating results over an extended period. The
Company evaluates the  recoverability of long-lived assets based upon forecasted
undiscounted  cash  flows.  Should  an  impairment  in value be  indicated,  the
carrying  value of  intangible  assets will be  adjusted,  based on estimates of
future discounted cash flows resulting from the use and ultimate  disposition of
the asset.

Prepaid services and other current assets
-----------------------------------------

Prepaid services and other current assets at June 30, 2006 of $17,370 consist of
prepaid insurance in the amount of $9,507.

Deposits and other assets
-------------------------

Deposits and other assets at June 30, 2006 consist of a deposit on leased office
space in the amount of $2,260.

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
       Laboratory equipment       3 years
       Furniture                  7 years

The amounts  depreciated  for the three months ended June 30, 2006 and 2005 were
$1,941 and $568, respectively.  The amounts depreciated for the six months ended
June 30, 2006 and 2005 were $3,882 and $738 respectively. The amount depreciated
from the date of inception (October 30, 2002) through June 30, 2006 was $7,744.

                                      F-11

<PAGE>

NOTE 2 - RELATED PARTY TRANSACTIONS

Consulting agreements
---------------------

In January 2006, the Company  received  correspondence  from one of its founders
stating  that  he  would  terminate  his  consulting  contract  if his  specific
requirements  were not met. We subsequently  accepted his termination  effective
February  1, 2006.  During the three  months  ended June 30,  2006,  the Company
wrote-off the  outstanding  amount of $2,847 which had been accrued  pursuant to
this consulting contract.

Cash Advance
------------

In March 2006, the Company received a cash advance from a Director in the amount
of $50,000. This advance bears interest at the rate of 12% per annum. During the
three months  ended March 31, 2006 and three  months  ended June 30,  2006,  the
Company accrued  interest in the amount $164 and $1,660,  respectively,  on this
advance.  The Company  anticipates  converting  this  advance to a note  payable
during the quarter ending September 30, 2006.


NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
-------------------------------------------------

Accounts payable and accrued liabilities  consisted of the following at June 30,
2006:

Accounts payable and accrued liabilities   $ 721,230
Accounts payable - shell company              34,926
Interest payable                              15,938
Insurance financing payable                    4,501
State income tax payable                       3,200
                                            --------
                                           $ 779,795
                                            ========


                                      F-12

<PAGE>

NOTE 4 - CASH ADVANCES

In March 2006, the Company received a cash advance from a Director in the amount
of $50,000. This advance bears interest at the rate of 12% per annum. During the
three months  ended March 31, 2006 and three  months  ended June 30,  2006,  the
Company accrued  interest in the amount $164 and $1,660,  respectively,  on this
advance.  The Company  anticipates  converting  this  advance to a note  payable
during the quarter ending September 30, 2006.

In  June of  2006,  the  Company  received  a cash  advance  from an  individual
accredited investor in the amount of $20,000. This advance bears interest at the
rate of 12% per annum.  During the three months ended June 30, 2006, the Company
accrued interest in the amount of $72 on this advance.  The Company  anticipates
converting  this advance to a note payable during the quarter  ending  September
30, 2006.

NOTE 5 - NOTES PAYABLE

On April 13, 2006, the Company  entered into an unsecured  Senior
Promissory  Note in the  amount of  $500,000  with an  accredited
investor.  Following the payment of commissions and expenses, the
Company  received net  proceeds of  approximately  $439,875.  The
outstanding  principal  amount of the note,  plus interest at the
rate of 12% per  annum,  is  payable  in  cash on or  before  the
earlier  of (i)  April 12,  2007 or (ii) the date upon  which the
Company sells any of its equity or debt securities in a financing
transaction, or a series of financings, with gross proceeds equal
to $1,000,000;  provided,  however,  that a subsequent  financing
transaction  will not include (x)  issuances  of common  stock to
employees,  (y) the exercise of any options to purchase shares of
common stock that are  outstanding as of the date hereof,  or (z)
the grant,  issuance or exercise of options or common stock under
the Company's stock, option,  deferred stock and restricted stock
plan for the purpose of satisfying the Company's payables.  In an
event of default,  as defined in the note,  the note shall become
immediately  due and payable,  and during the  continuation of an
event of default, the Company must pay interest on the note in an
amount  equal to 2% per month until the event of default is cured
or waived.  During the three  months  ended  June 30,  2006,  the
Company accrued interest in the amount of $13,000 on this note.         $500,000



In June 2006,  the Company issued a note payable in the amount of
$9,750 in  exchange  for  consulting  services.  This note  bears
interest  at the rate of 7% per annum.  During  the three  months
ended June 30, 2006, the Company  accrued  interest in the amount
of $41 on this note.                                                       9,750

Total notes payable as of June 30, 2006 (excluding interest)            $509,750
                                                                        --------

NOTE 6 - PENALTY FOR LATE REGISTRATION OF SHARES

During the three months ended March 31, 2006,  the Company  accrued the issuance
of  1,383,600  shares of common  stock and  warrants to  purchase an  additional
544,800 shares of common stock pursuant to a penalty  calculation with regard to
the late  registration  of shares sold in a private  placement in October  2004.
During the three months ending June 30, 2006, the Company  accrued no additional
shares of common stock or warrants pursuant to the penalty  calculation  pending
the  conclusion of an agreement  with the investors in the private  placement of
October  2004 to limit the number of shares and  warrants  which the  Company is
obligated to issue pursuant to the penalty  calculation.  The Company charged to
operations  $456,588 and $105,339,  respectively,  during the three months ended
March  31,  2006  representing  the fair  value of these  shares  and  warrants,
respectively.  During the three months  ended March 31,  2006,  the Company also
marked to market the value of the  5,242,307  shares and warrants to purchase an
additional  2,064,187  shares which were  outstanding at December 31, 2005. This
resulted  in a charge to  operations  of $52,423 and a credit to  operations  of
$6,868 for these previously  outstanding shares and warrants,  respectively.  At
March 31, 2006,  the Company had  obligations to issue an aggregate of 6,625,907
shares and warrants to purchase an additional  2,608,987  shares,  respectively,
and had charged to operations the amount of $555,973 for the cost of issuance of
shares and  warrants.  The  Company  also  charged to  operations  the amount of
$52,423 as a loss from marking to market the  outstanding  stock  portion of the
penalty,  and recognized a gain in the amount of $6,868 representing  marking to
market the outstanding warrant portion of the penalty.

In August  2006,  the Company  reached an  agreement  with the  investors in the
private placement of October 2004 which limits the number of warrants and shares
which the Company is obligated to issue  pursuant to the penalty  calculation to
an aggregate of 18% of the number of original  shares and warrants issued in the

                                      F-13
<PAGE>

October 2004 private  placement.  This agreement limits the number of shares and
warrants  issuable  pursuant  to the  penalty  calculation  to an  aggregate  of
4,150,800  shares and  warrants  to  purchase an  additional  1,634,400  shares,
respectively.  This  results in a decrease  in the number of shares  issuable of
2,475,107  (with a fair  value of  $816,785)  and a  decrease  in the  number of
warrant shares issuable of 974,587 (with a fair value of $177,789). This results
in a net realized gain of $994,574  during the three months ended June 30, 2006.
During the three months  ended June 30, 2006,  the Company also marked to market
the value of the previously  issued penalty shares and warrants,  which resulted
in realized gains of $72,101 and $46,755, respectively.


On July 10,  2006 the  Company,  pursuant  to Rule  477 of  Regulation  C of the
Securities Act of 1933, as amended,  applied for an order granting the immediate
withdrawal  of  its  Registration  Statement  on  Form  SB-2.  The  registration
statement was originally  filed with the  Securities and Exchange  Commission on
November 24, 2004, and amended by pre-effective  amendments no. 1, 2, 3 and 4 on
July  20,  2005,  November  16,  2005,  February  22,  2006 and  April 7,  2006,
respectively.

NOTE 7 - EQUITY

Common stock
------------

In March 2006,  the Company  issued  100,000 shares of common stock to its Chief
Financial Officer.  These shares had been earned,  and were accrued,  during the
year ended December 31, 2005.

In May 2006,  the Company  issued 34,464 shares of S-8 common stock at $0.47 per
share to a consultant for services  provided.  These shares were issued pursuant
to a consulting  agreement between the Company and the consultant dated April 1,
2004.

In May 2006,  the Company  issued  19,288  shares of common  stock at $0.125 per
share to an investor for the  conversion of accrued  interest  through March 31,
2005, the conversion date, per the terms of a convertible note dated November 1,
2002.

In May 2006,  the Company  issued  16,324  shares of common  stock at $0.125 per
share to an  investor  for the  conversion  of accrued  interest on a note dated
September  26,  2003.  By  agreement  in April 2004,  interest  accrued  through
November 10, 2004, the conversion date.

In May 2006, the Company issued 13,454 shares of common stock at $0.10 per share
to an investor for the conversion of accrued  interest through October 15, 2004,
the  conversion  date,  per the terms of a convertible  note dated  December 12,
2003.

In June 2006, the Company issued 5,000 shares of common stock at $0.09 per share
for the exercise of warrants by an investor.

Warrants
--------

During the three  months ended March 31, 2006,  the Company  issued  warrants to
purchase 61,500 shares of common stock at prices ranging from $0.125 to $1.00 to
consultants for services performed.  The Company valued these warrants using the
Black-Scholes  valuation  model,  and charged the amount of $8,399 to operations
during the three months ended March 31, 2006.

During the three  months  ended June 30, 2006,  the Company  issued  warrants to
purchase  84,653 shares of common stock at prices ranging from $0.20 to $1.00 to
consultants for services performed.  The Company valued these warrants using the
Black-Scholes  valuation  model,  and charged the amount of $8,819 to operations
during the three months ended June 30, 2006.

Also  during the three  months  ended June 30,  2006,  an  investor  exercised a
warrant to purchase  5,000  shares of the  Company's  common stock at a price of
$0.09 per share.

Warrants  outstanding  do not include the warrants to be issued  pursuant to the
penalty for late registration of shares - see Note 4.

                                      F-14
<PAGE>

The  following  table  summarizes  the changes in warrants  outstanding  and the
related  prices  for  the  shares  of  the  Company's  common  stock  issued  to
non-employees  of the  Company.  These  warrants  were  granted  in lieu of cash
compensation for services performed or financing expenses and in connection with
placement of convertible debentures.

         Warrants Outstanding                        Warrants Exercisable
   -----------------------------------    --------------------------------------
                          Weighted                                  Weighted
                          Average        Weighted                   Average
                          Remaining      Average                    Remaining
Exercise    Number        Contractual    Exercise     Number        Contractual
Prices      Outstanding   Life (years)   Price        Exercisable   Life (years)
--------    -----------   ------------   ---------    -----------   ------------

$ .05-.10       514,780       2.89        $.05-.10       514,780          2.89
 .125-.22       952,819       2.96        .125-.22       952,819          2.96
  .25-.56     9,301,405       3.07         .25-.56     9,301,405          3.07
     1.00       903,811       1.63           1.00        903,811          1.63
     2.00        85,203       2.82           2.00         85,203          2.82
            -----------   ------------                -----------    -----------
             11,758,018       2.94                    11,758,018          2.94
            ===========   ============                ===========    ===========

Transactions involving warrants are summarized as follows:

                                        Number of Shares    Weighted Average
                                          (post-split)      Price Per Share
                                                              (post-split)
                                         ---------------    ------------------

   Outstanding at December 31, 2005           11,616,865                .46
      Granted                                     61,500                .67
      Exercised                                       --                 --
      Cancelled or expired                            --                 --
                                             -----------          ---------
   Outstanding at March 31, 2006              11,678,365                .46
      Granted                                     84,653                .67
      Exercised                                   (5,000)               .09
      Canceled or expired                             --                 --
                                              ----------           --------
   Outstanding at June 30, 2006               11,758,018                .46
                                              ==========           ========



The estimated value of the  compensatory  warrants  granted to  non-employees in
exchange  for  services  and  financing   expenses  was  determined   using  the
Black-Scholes pricing model and the following assumptions:

                                                       2006           2005
                                                       ----           ----
 Significant assumptions (weighted-average):
     Risk-free interest rate at grant date        4.5% to 4.75%       3.75%
     Expected stock price volatility               73% to 75%      93% to 179%
     Expected dividend payout                           --             --
     Expected option life-years (a)                      3           3 to 5


Options
-------

There were no options granted during the six months ended June 30, 2006

The  following  table  summarizes  the  changes in options  outstanding  and the
related prices for the shares of the Company's  common stock issued to employees
of the Company under a non-qualified employee stock option plan.


          Options Outstanding                        Options Exercisable
   -----------------------------------    --------------------------------------
                         Weighted                                   Weighted
                         Average         Weighted                   Average
                         Remaining       Average                    Remaining
Exercise   Number        Contractual     Exercise     Number        Contractual
Prices     Outstanding   Life (years)    Price        Exercisable   Life (years)
--------   -----------   ------------    ---------    -----------   ------------

$25.00        63,212         3.75         $25.00       63,212         3.75
 0.31          1,000         4.45           0.31        1,000         4.45
 0.33        103,030         4.11           0.33      103,030         4.11
 0.44        150,000         3.84           0.44      150,000         3.84
             -------                                  -------
             317,242                                  317,242
             =======                                  =======

                                      F-15
<PAGE>

Transactions  involving  stock  options  issued to employees  are  summarized as
follows:

                                                         Weighted Average
                                     Number of Shares     Price Per Share
                                     ----------------    ----------------
Outstanding at December 31, 2005         317,242             $ 5.30
    Granted                                   --                 --
    Exercised                                 --                 --
    Expired                                   --                 --
                                     ----------------    ----------------
Outstanding at March 31, 2006            317,242             $ 5.30
    Granted                                   --                 --
    Exercise                                  --                 --
    Expired                                   --                 --
                                      ----------------    ----------------
Outstanding at June 30, 2006             317,242             $ 5.30
                                     ================    ================




Shares and warrants issuable due to late filing of registration statement
-------------------------------------------------------------------------

During the three months ended March 31, 2006,  the Company  accrued the issuance
of  1,383,600  shares of common  stock and  warrants to  purchase an  additional
544,800 shares of common stock pursuant to a penalty  calculation with regard to
the late  registration  of shares sold in a private  placement in October  2004.
During the three months ending June 30, 2006, the Company  accrued no additional
shares of common stock or warrants pursuant to the penalty  calculation  pending
the  conclusion of an agreement  with the investors in the private  placement of
October  2004 to limit the number of shares and  warrants  which the  Company is
obligated to issue pursuant to the penalty  calculation.  The Company charged to
operations  $456,588 and $105,339,  respectively,  during the three months ended
March  31,  2006  representing  the fair  value of these  shares  and  warrants,
respectively.  During the three months  ended March 31,  2006,  the Company also
marked to market the value of the  5,242,307  shares and warrants to purchase an
additional  2,064,187  shares which were  outstanding at December 31, 2005. This
resulted  in a charge to  operations  of $52,423 and a credit to  operations  of
$6,868 for these previously  outstanding shares and warrants,  respectively.  At
March 31, 2006,  the Company had  obligations to issue an aggregate of 6,625,907
shares and warrants to purchase an additional  2,608,987  shares,  respectively,
and had charged to operations the amount of $555,973 for the cost of issuance of
shares and  warrants.  The  Company  also  charged to  operations  the amount of
$52,423 as a loss from marking to market the  outstanding  stock  portion of the
penalty,  and recognized a gain in the amount of $6,868 representing  marking to
market the outstanding warrant portion of the penalty.

In August  2006,  the Company  reached an  agreement  with the  investors in the
private placement of October 2004 which limits the number of warrants and shares
which the Company is obligated to issue  pursuant to the penalty  calculation to
an aggregate of 18% of the number of original  shares and warrants issued in the
October 2004 private  placement.  This agreement limits the number of shares and
warrants  issuable  pursuant  to the  penalty  calculation  to an  aggregate  of
4,150,800  shares and  warrants  to  purchase an  additional  1,634,400  shares,
respectively.  This  results in a decrease  in the number of shares  issuable of
2,475,107  (with a fair  value of  $816,785)  and a  decrease  in the  number of
warrant shares issuable of 974,587 (with a fair value of $177,789). This results
in a net realized gain of $994,574  during the three months ended June 30, 2006.
During the three months  ended June 30, 2006,  the Company also marked to market
the value of the previously  issued penalty shares and warrants,  which resulted
in realized gains of $72,101 and $46,755, respectively.

On July 10,  2006 the  Company,  pursuant  to Rule  477 of  Regulation  C of the
Securities Act of 1933, as amended,  applied for an order granting the immediate
withdrawal  of  its  Registration  Statement  on  Form  SB-2.  The  registration
statement was originally  filed with the  Securities and Exchange  Commission on
November 24, 2004, and amended by pre-effective  amendments no. 1, 2, 3 and 4 on
July  20,  2005,  November  16,  2005,  February  22,  2006 and  April 7,  2006,
respectively.

NOTE 8 - SUBSEQUENT EVENTS

On July 10,  2006 the  Company,  pursuant  to Rule  477 of  Regulation  C of the
Securities Act of 1933, as amended,  applied for an order granting the immediate
withdrawal  of  its  Registration  Statement  on  Form  SB-2.  The  registration
statement was originally  filed with the  Securities and Exchange  Commission on
November 24, 2004, and amended by pre-effective  amendments no. 1, 2, 3 and 4 on
July  20,  2005,  November  16,  2005,  February  22,  2006 and  April 7,  2006,
respectively.
                                      F-16
<PAGE>

On July 14, 2006, pursuant to the term of his employment  agreement our Board of
Directors  granted  a  one-time   nonstatutory   option  to  purchase  1,896,970
discretionary  incentive  stock  options to our  President  and Chief  Executive
Officer,  Michael K. Wilhelm, per his employment  agreement.  The options have a
per share exercise price of $0.231, 110% of the closing price on the date of the
grant,  and a term of five years.  The options were granted in  furtherance of a
resolution  by our Board on August 8, 2005 pursuant to which the options were to
be  granted  at such time that the  Company's  2003  Stock  Plan is  amended  to
authorize  additional shares, which was effected by approval of our shareholders
on June 28, 2006.

On July 14,  2006,  we issued a warrant  to our  President  and Chief  Executive
Officer,  Michael K. Wilhelm, to purchase 300,000 shares at a price of $0.25 per
share for personal collateralizations for the benefit of our company extended on
three notes totaling  $101,000  between  October and November 2003. In addition,
pursuant  to the  term of his  employment  agreement,  we  issued  to our  Chief
Financial Officer, John N. Fermanis,  62,500 common stock purchase warrants. The
warrants have a per share exercise price of $0.158,  75% of the closing price on
the date of issue, and expire five years after date of issuance.

Effective July 25, 2006, the Company entered into an unsecured senior promissory
note in the  amount of  $250,000  with an  accredited  investor.  Following  the
payment of  commissions  and  expenses,  the Company  received  net  proceeds of
approximately $210,000. Effective August 1, 2006, the Company converted two cash
advances into unsecured senior  promissory  notes, in the respective  amounts of
$50,000 and $20,000,  with individual  accredited  investors,  one of whom was a
Director.  Following the payment of fees and expenses,  the Company received net
proceeds of  approximately  $68,600.  The outstanding  principal  amount of each
note,  plus  interest  at the rate of 12% per  annum,  is  payable in cash on or
before  the  earlier of (i) one year from the date of such note or (ii) the date
upon which the Company sells any of its equity or debt securities in a financing
transaction,  or a series of financings, with gross proceeds equal to $1,000,000
or more; provided,  however,  that a subsequent  financing  transaction will not
include (x)  issuances of common  stock to  employees  of the  Company,  (y) the
exercise  of any  options  to  purchase  common  stock of the  Company  that are
outstanding  as of the date  hereof,  or (z) the grant,  issuance or exercise of
options  or common  stock of the  Company  under the  Company's  stock,  option,
deferred  stock and  restricted  stock plan for the  purpose of  satisfying  the
Company's payables.

In August  2006,  the Company  reached an  agreement  with the  investors in the
private placement of October 2004 which limits the number of warrants and shares
which the Company is obligated to issue  pursuant to the penalty  calculation to
an  aggregate  of 18% of the number of  original  number of shares and  warrants
issued in the October 2004 private  placement.  This agreement limits the number
of shares and  warrants  issuable  pursuant  to the  penalty  calculation  to an
aggregate of 4,150,800  shares and warrants to purchase an additional  1,634,400
shares, respectively. See note 7.


                                      F-17
<PAGE>

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

Special Note Regarding Forward-looking Statements

Some of the statements  under "Risk  Factors,"  "Business" and elsewhere in this
Quarterly Report on Form 10-QSB  constitute  forward-looking  statements.  These
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, levels of activity, performance or achievements to
be  materially   different  from  any  future   results,   levels  of  activity,
performance,  or  achievements  expressed  or  implied  by such  forward-looking
statements.  Such factors  include,  among other things,  those  described under
"Risk Factors" and elsewhere in this Quarterly  Report on Form 10-QSB and in the
"Risk  Factors"  section  of our  annual  report on Form  10-KSB  filed with the
Securities  and Exchange  Commission on March 28, 2006 and Form  10-KSB/A  filed
with the Securities and Exchange Commission on March 30, 2006.

In some cases, you can identify  forward-looking  statements by terminology such
as  "may,"   "will,"   "should,"   "could,"   "expects,"   "plans,"   "intends,"
"anticipates," "believes," "estimates," "predicts," "potential" or "continue" or
the negative of such terms or other comparable terminology.

Although  we believe  that the  expectations  reflected  in the  forward-looking
statements  are  reasonable,  we  cannot  guarantee  future  results,  levels of
activity,  performance,  or  achievements.  Moreover,  neither  we nor any other
person  assumes  responsibility  for  the  accuracy  and  completeness  of  such
statements. We are under no duty to update any of the forward-looking statements
after the date of this report.

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

Overview
--------

         IR BioSciences Holdings, Inc. is a biopharmaceutical company engaged in
the  research  and  development  of  potential  drugs  through its wholly  owned
subsidiary, ImmuneRegen BioSciences, Inc. Our goal is to develop therapeutics to
be used for the  protection  of the body from  exposure to  radiation  and other
harmful agents, such as toxic chemicals and biological materials.

         Our drug development  efforts are based on patents for the use of Sar9,
Met  (O2)11-Substance P, an analog of the naturally occurring human neuropeptide
Substance P. We use the generic name  Homspera to refer to the  synthetic  Sar9,
Met  (O2)11-Substance P peptide. All of our research and development efforts are
early, pre-clinical stage and Homspera has only undergone exploratory studies to
evaluate its biological activity in small animals.

         Our current focus is on the  development of two potential  applications
based on the use of Sar9, Met  (O2)11-Substance P, Radilex and Viprovex.  We are
developing  Radilex  for use as a  potential  treatment  for acute  exposure  to
radiation.  Viprovex  is being  developed  for use in  potential  treatments  of
maladies caused by exposure to toxic chemicals, such as formalin, and biological
agents,  such as anthrax and avian  influenza.  To date we have sponsored  seven
studies and  co-sponsored  three  radiation  studies all of which were conducted
utilizing rodents and have conducted limited  preclinical studies with regard to
the development of Viprovex.

         We have filed patent applications and provisional patent  applications,
where   applicable,   for  the  use  of  the   active   ingredient   Sar9,   Met
(O2)11-Substance  P in applications  that we are researching.  We own two issued
U.S. and two issued foreign  patents and two pending Patent  Cooperation  Treaty
(PCT)  applications,  nine pending U.S.  provisional patent  applications and 16
pending foreign provisional patent applications.

         Our  potential  drug   candidates,   Radilex  and  Viprovex  and  other
technologies  based on the use of Homspera,  are at early stages of  development
and may not be shown to be safe or effective  and may never  receive  regulatory
approval.  Neither Radilex nor Viprovex nor our technologies based on the use of
Homspera have yet been tested in large animals or humans.  There is no guarantee
that  regulatory  authorities  will ever permit large animal or human testing of
Radilex, Viprovex or any other potential products derived from Homspera. Even if
such testing is permitted, none of Radilex, Viprovex or any other potential drug
candidates, if any, derived from Homspera may be successfully developed or shown
to be safe or effective.

                                       3
<PAGE>

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

         To date, we have not obtained regulatory approval for or commercialized
any applications based on the use of Homspera or any of its derivatives. We have
incurred  significant  losses since our  inception and we expect to incur annual
losses for at least the next three years as we continue  with our drug  research
and development efforts.


RESULTS OF  OPERATIONS  FOR THE THREE MONTH PERIODS ENDED JUNE 30, 2006 AND JUNE
30, 2005

Revenue
-------

         We have not generated any revenues from  operations from our inception.
We believe we will begin earning  revenues from operations  during calendar year
2009 as we transition from a development stage company.

Sales, General, and Administrative Expenses
-------------------------------------------

         Sales, general, and administrative  expenses ("SG&A") were $601,972 for
the three months ended June 30, 2006, an increase of $8,137 or  approximately 1%
compared to SG&A of $593,835  during the three months  ended June 30, 2005.  The
decrease is primarily due to lower costs of non-cash compensation. For the three
months  ended  June  30,  2006,  this  amount  consisted  primarily  of  officer
compensation  of  $97,250,  research  and  development  of  $21,619,  legal  and
accounting  fees of  $152,822,  other  consulting  fees of $75,951,  payroll and
related  costs of $40,267,  public  relations  and  marketing  of  $22,526,  and
non-cash compensation costs of $8,819.

         The Company expects SG&A to increase during the coming twelve months as
we  continue  to build  out the  Company's  infrastructure  and to  develop  the
Company's line of potential products.

Interest (Income)/Expense (net)
-------------------------------

         Interest  expense (net) was $15,057 for the three months ended June 30,
2006,  an  increase  of $14,716 or  approximately  4,315%  compared  to interest
expense of $341 for the three months ended June 30, 2005.  Interest  expense was
increased because the Company entered into notes payable during the three months
ended June 30, 2006.

         The Company expects interest expense to remain at low levels during the
coming twelve months.

Net Loss
--------

         For the reasons stated above and a one-time  adjustment to Other Income
for $1,158,985  relating to the cost of penalty for late  registration of shares
our net gain for the three months ended June 30, 2006 was $541,956, or $0.01 per
share an increase of $2,629,388 or approximately  126% compared to a net loss of
$2,087,432 for the three months ended June 30, 2005.

         Our  independent  certified  public  accountants  have  stated in their
report  included  in SEC  Form  10-KSB/A  that we have  incurred  a net loss and
negative cash flows from operations of $4,591,107 and $1,884,113,  respectively,
for the year ended  December  31,  2005.  This loss,  in  addition  to a lack of
operational history, raises substantial doubt about our ability to continue as a
going concern. In the absence of significant  revenue and profits,  and since we
do not expect to generate significant revenues in the foreseeable future, we, in
order to fund  operations,  will be completely  dependent on additional debt and

                                       4
<PAGE>


equity financing arrangements.  There is no assurance that any financing will be
sufficient  to fund our  capital  expenditures,  working  capital and other cash
requirements  for the fiscal year ending  December 31, 2006. No assurance can be
given that any such additional  funding will be available or that, if available,
can be obtained on terms favorable to us. If we are unable to raise needed funds
on  acceptable  terms,  we will not be able to develop or enhance our  products,
take advantage of future  opportunities  or respond to competitive  pressures or
unanticipated  requirements.  A material  shortage of capital will require us to
take  drastic  steps such as  reducing  our level of  operations,  disposing  of
selected assets or seeking an acquisition  partner. If cash is insufficient,  we
will not be able to continue operations.

         The Company expects losses to increase during the coming twelve months.
The Company  does not expect to begin to generate  revenue in the coming  twelve
months,  and our costs are likely to  increase  as  continue  our  research  and
development efforts on our early,  pre-clinical stage products and build out our
corporate infrastructure.

Shares and warrants issuable due to late filing of registration statement
-------------------------------------------------------------------------

         During the three months ended March 31, 2006,  the Company  accrued the
issuance  of  1,383,600  shares of common  stock and  warrants  to  purchase  an
additional 544,800 shares of common stock pursuant to a penalty calculation with
regard to the late registration of shares sold in a private placement in October
2004.  During the three  months  ending June 30,  2006,  the Company  accrued no
additional   shares  of  common  stock  or  warrants  pursuant  to  the  penalty
calculation  pending the  conclusion  of an agreement  with the investors in the
private  placement  of October  2004 to limit the number of shares and  warrants
which the Company is obligated to issue pursuant to the penalty calculation. The
Company charged to operations  $456,588 and $105,339,  respectively,  during the
three  months ended March 31, 2006  representing  the fair value of these shares
and warrants,  respectively.  During the three months ended March 31, 2006,  the
Company also marked to market the value of the 5,242,307  shares and warrants to
purchase an additional  2,064,187  shares which were outstanding at December 31,
2005.  This  resulted  in a charge  to  operations  of  $52,423  and a credit to
operations  of $6,868 for these  previously  outstanding  shares  and  warrants,
respectively.  At March  31,  2006,  the  Company  had  obligations  to issue an
aggregate of 6,625,907  shares and warrants to purchase an additional  2,608,987
shares,  respectively,  and had charged to operations the amount of $555,973 for
the cost of  issuance  of shares  and  warrants.  The  Company  also  charged to
operations  the  amount  of  $52,423  as a  loss  from  marking  to  market  the
outstanding stock portion of the penalty, and recognized a gain in the amount of
$6,868  representing  marking to market the  outstanding  warrant portion of the
penalty.

         In August 2006, the Company  reached an agreement with the investors in
the private  placement  of October  2004 which limits the number of warrants and
shares  which  the  Company  is  obligated  to  issue  pursuant  to the  penalty
calculation to an aggregate of 18% of the number of original shares and warrants
issued in the October 2004 private  placement.  This agreement limits the number
of shares and  warrants  issuable  pursuant  to the  penalty  calculation  to an
aggregate of 4,150,800  shares and warrants to purchase an additional  1,634,400
shares,  respectively.  This  results  in a  decrease  in the  number  of shares
issuable  of  2,475,107  (with a fair value of  $816,785)  and a decrease in the
number of warrant  shares  issuable of 974,587  (with a fair value of $177,789).
This  results in a net realized  gain of $994,574  during the three months ended
June 30, 2006.  During the three  months  ended June 30, 2006,  the Company also
marked to market the value of the previously issued penalty shares and warrants,
which resulted in realized gains of $72,101 and $46,755, respectively.

         On July 10, 2006 the Company,  pursuant to Rule 477 of  Regulation C of
the  Securities  Act of 1933,  as  amended,  applied for an order  granting  the
immediate   withdrawal  of  its   Registration   Statement  on  Form  SB-2.  The
registration  statement was  originally  filed with the  Securities and Exchange
Commission on November 24, 2004, and amended by pre-effective  amendments no. 1,
2, 3 and 4 on July 20, 2005,  November 16, 2005,  February 22, 2006 and April 7,
2006, respectively.

RESULTS OF OPERATIONS FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2006 AND JUNE 30,
2005

Revenue
-------

         We have not generated any revenues from  operations from our inception.
We believe we will begin earning  revenues from operations  during calendar year
2009 as we transition from a development stage company.

                                       5
<PAGE>

Selling, general and administrative expenses
--------------------------------------------

         Selling,  general and  administrative  expenses were $1,163,116 for the
six months  ended June 30, 2006 which is a decrease of $269,239 or 19%  compared
to SG&A of  $1,432,355  for the six months ended June 30, 2005.  The decrease is
primarily due to lower costs of non-cash compensation. This expense is primarily
comprised of non-cash  compensation  of $17,219,  legal and  accounting  fees of
$348,579,  payroll and related  costs of $68,952,  consulting  fees of $129,068,
public relations and marketing costs of $45,142,  research and development costs
of $116,035 , and officer's compensation of $190,500.

Interest expense (net)
----------------------

         Interest expense was $14,891 for the six months ended June 30, 2006, an
increase of $13,573  compared  to interest  expense of $1,318 for the six months
ended June 30, 2005.  Interest expense was increased because the Company entered
into notes payable during the thee months ended June 30, 2006.

         The Company expects interest expense to remain at low levels during the
coming twelve months.

Net loss
--------

         For the reasons above,  primarily  lower SG&A expenses and the one-time
adjustment  forthe late  registration  penalty,  the net loss for the six months
ended June 30, 2006 was $620,550,  a decrease of $2,306,379 or 79% compared to a
net loss of $2,926,929 for the six months ended June 30, 2005.

Shares and warrants issuable due to late filing of registration statement
-------------------------------------------------------------------------

         During the three months ended March 31, 2006,  the Company  accrued the
issuance  of  1,383,600  shares of common  stock and  warrants  to  purchase  an
additional 544,800 shares of common stock pursuant to a penalty calculation with
regard to the late registration of shares sold in a private placement in October
2004.  During the three  months  ending June 30,  2006,  the Company  accrued no
additional   shares  of  common  stock  or  warrants  pursuant  to  the  penalty
calculation  pending the  conclusion  of an agreement  with the investors in the
private  placement  of October  2004 to limit the number of shares and  warrants
which the Company is obligated to issue pursuant to the penalty calculation. The
Company charged to operations  $456,588 and $105,339,  respectively,  during the
three  months ended March 31, 2006  representing  the fair value of these shares
and warrants,  respectively.  During the three months ended March 31, 2006,  the
Company also marked to market the value of the 5,242,307  shares and warrants to
purchase an additional  2,064,187  shares which were outstanding at December 31,
2005.  This  resulted  in a charge  to  operations  of  $52,423  and a credit to
operations  of $6,868 for these  previously  outstanding  shares  and  warrants,
respectively.  At March  31,  2006,  the  Company  had  obligations  to issue an
aggregate of 6,625,907  shares and warrants to purchase an additional  2,608,987
shares,  respectively,  and had charged to operations the amount of $555,973 for
the cost of  issuance  of shares  and  warrants.  The  Company  also  charged to
operations  the  amount  of  $52,423  as a  loss  from  marking  to  market  the
outstanding stock portion of the penalty, and recognized a gain in the amount of
$6,868  representing  marking to market the  outstanding  warrant portion of the
penalty.

         In August 2006, the Company  reached an agreement with the investors in
the private  placement  of October  2004 which limits the number of warrants and
shares  which  the  Company  is  obligated  to  issue  pursuant  to the  penalty
calculation to an aggregate of 18% of the number of originalshares  and warrants
issued in the October 2004 private  placement.  This agreement limits the number
of shares and  warrants  issuable  pursuant  to the  penalty  calculation  to an
aggregate of 4,150,800  shares and warrants to purchase an additional  1,634,400
shares,  respectively.  This  results  in a  decrease  in the  number  of sharea
issuable  of  2,475,107  (with a fair value of  $816,785)  and a decrease in the
number of warrant  shares  issuable of 974,587  (with a fair value of $177,789).
This  results in a net realized  gain of $994,574  during the three months ended
June 30, 2006.  During the three  months  ended June 30, 2006,  the Company also
marked to market the value of the previously issued penalty shares and warrants,
which resulted in realized gains of $72,101 and $46,755, respectively.

         On July 10, 2006 the Company,  pursuant to Rule 477 of  Regulation C of
the  Securities  Act of 1933,  as  amended,  applied for an order  granting  the
immediate   withdrawal  of  its   Registration   Statement  on  Form  SB-2.  The
registration  statement was  originally  filed with the  Securities and Exchange
Commission on November 24, 2004, and amended by pre-effective  amendments no. 1,
2, 3 and 4 on July 20, 2005,  November 16, 2005,  February 22, 2006 and April 7,
2006, respectively.

PLAN OF OPERATIONS

         We expect to  continue  to incur  increasing  operating  losses for the
foreseeable  future,  primarily  due to our continued  research and  development
activities  attributable to Radilex,  Viprovex or any other proposed product, if
any, derived from Homspera and general and administrative activities.

                                       6
<PAGE>

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

         We incurred an expense of  $116,035  for the six months  ended June 30,
2006 in  research  and  development  activities  related to the  development  of
Radilex and Viprovex  versus an expense of $25,419 for the six months ended June
30,  2005.  Due to our  liquidity  and limited cash  available,  our spending on
research and development  activities was limited.  From our inception in October
2002, we have spent $422,829 in research and development activities. These costs
only  include  the   manufacture  and  delivery  of  our  drug  by  third  party
manufacturers  and payments to Contract  Research  Organizations  for consulting
related to our studies and costs of performing such studies.  Significant  costs
relating to research and  development,  such as consulting  fees for Drs. Witten
and  Siegel,   among  others,  have  been  classified  in  consulting  fees  for
consistency of financial reporting.

         We  anticipate  that  during  the next 12 months we will  increase  our
research and development  spending to a total of approximately  $3,500,000 in an
effort to  further  develop  Radilex  and  Viprovex.  If we are  unable to raise
additional capital, our research and development activities may be lessened. The
drug development,  clinical trial and regulatory  process is lengthy,  expensive
and uncertain and subject to numerous risks.

         The basis for our  research  and  development  efforts in regard to the
potential  uses of Homspera is derived from  observations  made during  research
funded  by the Air Force  Office of  Scientific  Research  in early  1994 by our
co-founders  Dr. Mark Witten and Dr. David  Harris.  During this research it was
observed  that  the  exposure  of  animals  to  jet  fuel  (JP-8)   resulted  in
pathological changes in the lungs and immune systems of those exposed.  Based on
the  results of these  studies,  we  believe  that the  administration  of Sar9,
Met(O2)11-Substance  P  prevented  and  reversed  the  effects  of JP-8 jet fuel
exposure in the lungs,  as well as protected and  regenerated the immune system.
However,  there is no guarantee that our  interpretation of the results of these
studies will prove to be accurate after further testing.

         Further, we believe that Sar9,  Met(O2)11-Substance  P , Homspera,  may
also be used to treat the effects on the body  caused by exposure to  radiation,
as well as, some toxic  chemicals and harmful  biological  materials,  including
respiratory viruses. We continue to explore the multiple potential  capabilities
of Sar9, Met (O2)11-Substance P and to better understand the mechanisms by which
this  compound can  potentially  provide  protection  against  gamma  radiation,
respiratory viruses and chemical and biological agents.


         Our major research and development projects include:

         Research  and  Development  for  the  use of  Radilex  in
         Radiological Exposure Applications.
         ------------------------------------------------------------

         On  January  14,  2004,  we  received  a  Pre-Investigational  New Drug
Application  (PIND)  number  for the use of  Radilex  (PIND No.  63,255)  in the
treatment of acute radiation syndrome.

         To  date  we  have  sponsored  seven  studies  and  co-sponsored  three
radiation  studies all of which were  conducted  utilizing  rodents to determine
dose response to radiation,  the maximum efficacious dose of Radilex, the impact
on survival and to distinguish survival response between aerosol delivery versus
intra muscular  delivery.  In each of these studies mice were exposed to varying
levels  of  radiation.  In  the  opinion  of  management,   these  studies  have
demonstrated in C57BL/6 mouse model studies that  Radilex-treated mice exhibited
survival rates of up to 50% at 90 days  post-radiation  exposure to an otherwise
lethal  dose of whole body  ionizing  radiation.  Additionally,  we believe  the
results  indicated  that these mice had normal  immune  system  function  at the
90-day post-radiation time point compared to longitudinal control mice. If these
results can be reproduced in further studies, including large animal studies, we
believe that our treatment could potentially  increase an individual's chance of
survival in the event of exposure to radiation.  There is not assurance that our
interpretaion  of the  results of the studies  will prove to be  accurate  after
further testing.


         Research  and  Development  for the use of  Viprovex  in  Chemical  and
         Biological Exposure Applications.
         ------------------------------------------------------------

         On  November  29,  2005 we applied  for a PIND from the  Department  of
Health and Human  Services  (HHS) for the use of  Viprovex in the  treatment  of
avian  influenza.  The PIND number for the use of Viprovex in treating avian flu
was issued on December  19, 2005 (PIND No.  73,709).  We applied for a PIND from
the HHS for the use of Viprovex in treating  chemical  exposure on November  28,
2005.

                                       7
<PAGE>

         We are  researching  the efficacy of Viprovex as a potential  treatment
for exposure to various  chemical  agents,  including  formalin,  and biological
agents, including influenza and anthrax. In addition to our early pilot studies,
we have recently completed three studies on anthrax, one on avian influenza.  We
believe the results of these studies indicated the potential effects of Viprovex
on  the  immune  system,  including  protection  and  replenishment,   increased
cytokines  that  reflect  system  activation,  enhanced  phagocytotic  activity,
potential  dendritic  cell/T  cell  activation,   inhibition  of  apoptosis  and
increased T cell mitogenesis. It is the opinion of management that these results
may  underlie  the  potential  ability of  Viprovex  to enhance  flu  therapies,
minimize  the  respiratory  impact  of  influenza   infection  and  augment  the
capability of vaccination to induce a protective  immune response.  There is not
assurance that our interpretation of the results of the studies will prove to be
accurate after further testing.

         If product development or approval does not occur as scheduled our time
to reach market will be lengthened  and our costs will  substantially  increase.
Additionally,  we may be requested  to expand our findings to gather  additional
data or we may not achieve the desired results. If so, we may have to design new
protocols and conduct additional studies. This will increase our costs and delay
the time to market for Radilex for use as a possible therapeutic for exposure to
acute  radiation and Viprovex for use as a the potential  treatment for exposure
to  chemical  and  biological  agents.  Any of these  occurrences  would  have a
material negative impact on our business and our liquidity as it may cause us to
seek  additional  capital  sooner than  expected  and allow our  competitors  to
successfully enter the market ahead of us.



OFF-BALANCE SHEET ARRANGEMENTS

There were no off-balance sheet arrangements as of June 30, 2006.

REVENUES

         We have not generated any revenues from  operations from our inception.
We believe we will begin earning  revenues from operations  during calendar year
2009 as we transition from a development stage company.

COSTS AND EXPENSES

         From our inception  through June 30, 2006,  we have incurred  losses of
$12,419,685.  These  expenses  were  associated  principally  with  equity-based
compensation to employees and consultants, cost of penalty for late registration
of shares, product development costs and professional services.


LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2006, we had current  assets of $41,033  consisting of cash
of $23,663 and other  current  assets of $17,370.  At June 30, 2006, we also had
current  liabilities of $2,863,771,  consisting of accounts  payable and accrued
liabilities  of $779,795,  notes payable of $579,750 and accrued cost of penalty
for late  registration  of shares of  $1,504,226.  This  resulted in net working
capital deficit at June 30, 2006 of $2,822,739. During the six months ended June
30, 2006,  the Company used cash in operating  activities of $736,047.  From the
date of inception (October 30, 2002) to June 30, 2006, the Company has had a net
loss of $12,419,684 and has used cash of $4,694,505 in operating activities.

         We have  never  generated  revenue.  There  is no  guarantee  that  our
business  model  will be  successful,  or  that  we  will  be  able to  generate
sufficient  revenue  to fund  future  operations.  As a result,  we  expect  our
operations  to  continue  to use net cash,  and that we will be required to seek
additional  debt  or  equity  financings  during  the  coming  quarters.   Since
inception,  we have financed our operations  through debt and equity  financing.
While we have raised capital to meet our working  capital and financing needs in
the past,  additional  financing  is  required  in order to meet our current and
projected  cash flow deficits from  operations  and  development  of our product
line. We met our cash  requirements from our inception through June 30, 2006 via
the private placement of $3,263,902 net of costs of our common stock, $1,195,307
of this was from the exercise of common stock purchase warrants net of costs. An
additional  $1,478,378 was received from the issuance of notes  payable,  net of
repayments.

         In March 2006,  the Company  received a cash advance from a Director in
the amount of $50,000. This advance bears interest at the rate of 12% per annum.
During the three  months and twelve  months  ended June 30,  2006,  the  Company
accrued interest in the amount $164 and $1,660,  respectively,  on this advance.
The Company  anticipates  converting  this advance to a note payable  during the
quarter ending September 30, 2006.

         In June of 2006, the Company received a cash advance from an individual
accredited investor in the amount of $20,000. This advance bears interest at the
rate of 12% per annum.  During the three months ended June 30, 2006, the Company
accrued interest in the amount of $72 on this advance.  The Company  anticipates
converting  this advance to a note payable during the quarter  ending  September
30, 2006.

         Pursuant  to  our  employment   agreement  with  Michael  Wilhelm,  our
President  and Chief  Executive  Officer,  dated  December 16, 2002,  we paid an
annual  salary of  $125,000  and  $175,000 to Mr.  Wilhelm  during the first and

                                       8
<PAGE>

second years of his employment, respectively.  Thereafter we paid through August
10, 2005,  an annual  salary of $250,000.  On August 10, 2005, we entered into a
new employment  agreement with Mr. Wilhelm.  The new employment  agreement calls
for a  salary  at the  rate  of  $275,000  per  annum  and  provides  for  bonus
incentives.   Mr.  Wilhelm's  salary  is  payable  in  regular  installments  in
accordance with the customary payroll practices of our company.

         Pursuant to our  employment  agreement  with John  Fermanis,  our Chief
Financial Officer,  dated February 15, 2005, we paid an annual salary of $60,000
until the company  completed a financing of $500,000 or more.  This  occurred on
March 4, 2005 when the company  completed a Tender Offer for  warrants  totaling
$1,211,000 net of fees. From March 4, 2005,  until December 31, 2005, we paid an
annual  salary of $85,000.  Thereafter,  we will pay an annual salary of $98,000
for the second year ending  December  31, 2006 and an annual  salary of $112,000
for the third year ending December 31, 2007. Mr.  Fermanis' salary is payable in
regular  installments in accordance with the customary  payroll practices of our
company.

         Since  our  inception,  we have  been  seeking  additional  third-party
funding.  During such time,  we have  retained a number of different  investment
banking firms to assist us in locating available funding;  however,  we have not
yet been successful in obtaining any of the long-term  funding needed to make us
into a commercially  viable entity.  During the period from October 2004 to June
2006, we were able to obtain  financing of  $3,590,136  from a series of private
placements  of  our  securities  (which  resulted  in  net  proceeds  to  us  of
$3,263,902).  Based on our current plan of operations all of our current funding
is expected to be depleted by the end of August 2006.  If we are not  successful
in generating  sufficient  liquidity  from  operations or in raising  sufficient
capital  resources,  it would have a material  adverse  effect on our  business,
results of operations, liquidity and financial condition.

While we have  successfully  raised  capital  to meet our  working  capital  and
financing  needs in the past  through  debt and  equity  financings,  additional
financing  will be required in order to implement  our business plan and to meet
our current and projected cash flow deficits from  operations  and  development.
There can be no  assurance  that we will be able to  consummate  future  debt or
equity  financings in a timely manner on a basis  favorable to us, or at all. If
we are unable to raise needed funds 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.
Until  such  time,  if at all,  as we  receive  adequate  funding,  we intend to
continue to defer payment of all of our  obligations  which are capable of being
deferred, which actions have resulted in some vendors demanding cash payment for
their goods and services in advance,  and other vendors  refusing to continue to
do  business  with  us.  In the  event  that  we  are  successful  in  obtaining
third-party  funding, we do not expect to generate a positive cash flow from our
operations  for  at  least  several  years,   if  at  all,  due  to  anticipated
expenditures  for  research  and  development  activities,   administrative  and
marketing activities, and working capital requirements and expect to continue to
attempt to raise further capital through one or more further private placements.
Based  on our  operating  expenses  and  anticipated  research  and  development
activities, we believe that we will require an additional $5 million to meet our
expenses over the next 12 months.

Acquisition or Disposition of Plant and Equipment
-------------------------------------------------

         We did not  dispose  or  acquire  any  significant  property,  plant or
equipment  during the second  quarter ended June 30, 2006. We do not  anticipate
the sale of any significant property,  plant or equipment during the next twelve
months.

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

         From our  inception  through the period  ended June 30,  2006,  we have
relied on the services of outside  consultants  for services and currently  have
four full-time  employees.  Our full-time employees are Michael K. Wilhelm,  our
Chief Executive Officer; John N. Fermanis, our Chief Financial Officer; and, the
third and fourth serve in  administrative  roles. In order for us to attract and
retain  quality  personnel,  we  anticipate  we will  have to offer  competitive
salaries to future  employees.  We do not anticipate  our  employment  base will
significantly  change during the next twelve months,  other than the addition of
one senior  level  appointment  to the  position  of Senior  Vice  President  of
Scientific Development.  As we continue to expand, we will incur additional cost
for  personnel.  This  projected  increase in personnel  is  dependent  upon our
generating  revenues and obtaining  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.

                                       9
<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

Other than with respect to the following  risk factors,  which have been updated
and restated in their entirety below,  there have been no material  changes from
the risk  factors  disclosed  in the  "Risk  Factors"  section  of our the "Risk
Factors"  section of our annual report on Form 10-KSB filed with the  Securities
and  Exchange  Commission  on March 28,  2006 and Form  10-KSB/A  filed with the
Securities and Exchange Commission on March 30, 2006.

                     RISKS RELATED TO OUR FINANCIAL RESULTS

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

         As of June 30, 2006, we had a working  capital  deficit of  $2,822,739.
This amount consists of cash of $23,662 and current assets of $17,370,  accounts
payable and accrued  current  liabilities of $779,795,  including  notes payable
$579,750 and an accrued current liability of $1,504,226 related to a penalty for
the  late  registration  of the  securities  sold in our  October  2004  private
placement.  We anticipate settling this late registration  penalty in additional
shares of common  stock and  warrants  to purchase  additional  shares of common
stock.  If this non-cash  liability were to be removed from our working  capital
position  as of June 30,  2006,  we would  have a  working  capital  deficit  of
$1,318,513.  We have  incurred a  substantial  net loss for the period  from our
inception  in October  2002 to June 30,  2006,  and are  currently  experiencing
negative cash flow.  We expect to continue to experience  negative cash flow and
operating losses through at least 2009 and possibly thereafter.  As a result, we
will need to generate significant revenues to achieve profitability.

WE MAY FAIL TO  BECOME  AND  REMAIN  PROFITABLE  OR WE MAY BE UNABLE TO FUND OUR
CONTINUING LOSSES, IN WHICH CASE OUR BUSINESS MAY FAIL.

         We are  focused  on  product  development  and have not  generated  any
revenue  to  date.  We do not  believe  we  will  begin  earning  revenues  from
operations  until the calendar  year 2009 as we  transition  from a  development
stage company.  We have incurred  operating losses since our inception.  Our net
gain for the six months  ended June 30,  2006 was  $541,956  due to the  penalty
share  adjustment.  As of  June  30,  2006,  we had an  accumulated  deficit  of
$12,419,684.


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.

         Based  on  our  current  plans,  we  believe  our  existing   financial
resources, and interest earned thereon, will be sufficient to meet our operating
expenses and capital requirements  through August 2006. However,  changes in our
research and development plans or other events affecting our operating  expenses
may result in the expenditure of such cash before that time. We estimate that we
will  require  approximately  $5  million  over the next 12  months  in order to
finance our research and development  efforts,  fund operating expenses,  pursue
regulatory clearances and prosecute and defend our intellectual property rights.
We may seek such  additional  funding  through  public or private  financing  or
through collaborative arrangements with strategic partners.

                                       10
<PAGE>

         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.


         If we cannot  raise  additional  funds when  needed,  or on  acceptable
terms,  we will not be able to continue our drug discovery  efforts.  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 beyond August 2006. Our working capital deficit as of June 30, 2006
was  $1,318,513  net  of the  accrual  of  securities  pursuant  to the  penalty
provision of our October 2004 private placement.  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 any 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.


ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

         Disclosure  controls and procedures  are controls and other  procedures
that are designed to ensure that  information  required to be disclosed by us in
the reports that we file or submit under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), is recorded,  processed,  summarized and reported,
within the time periods  specified in the Securities  and Exchange  Commission's
rules and forms. Disclosure controls and procedures include, without limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  by us in  the  reports  that  we  file  under  the  Exchange  Act  is
accumulated  and  communicated  to  our  management,   including  our  principal
executive and  financial  officers,  as  appropriate  to allow timely  decisions
regarding required disclosure.

         As of the end of the  period  covered  by  this  Quarterly  Report,  we
conducted an evaluation, under the supervision and with the participation of our
Chief Executive Officer and Chief Financial Officer,  of our disclosure controls
and  procedures  (as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange
Act). Based on that evaluation,  our Chief Executive Officer and Chief Financial
Officer have concluded that, as of June 30, 2006,  such disclosure  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 have been no  changes  in our  internal  control  over  financial
reporting identified in connection with the evaluation required by paragraph (d)
of Rule 13a-15 or 15d-15 under the Exchange Act that occurred during the quarter
ended June 30, 2006 that has  materially  affected,  or is reasonably  likely to
materially affect, our internal control over financial reporting.

                                       11
<PAGE>

PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

         The Company is not a party to any material  legal  proceedings.  Please
refer to the Company's  report on Form 10-K/A Amendment No. 1 for 2005 regarding
litigation and claims as of December 31, 2005.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

         In June 2006,  the Company issued 5,000 shares of common stock at $0.09
per share for the exercise of warrants by an investor.

         On December 12,  2003,  the Company  entered into a $20,000  promissory
note  bearing 8% interest  per year to an  individual  accredited  investor.  On
October 15, 2004 in accordance  with the terms of the promissory  note,  accrued
interest  of  $1,354  was  converted  into  13,454  shares of our  common  stock
releasing the Company from any further  obligation under the note. From the date
of the note's  conversion,  these shares were accrued for by the Company and the
certificate  representing  the  shares  was  issued  in  May  2006.  No  general
solicitation or advertising was undertaken in connection with the offer and sale
of the Note.  The  investor  represented  to the Company  that the  investor was
purchasing  the Note for the  investor's own account and not with a present view
towards the distribution  thereof.  In addition,  the investor  acknowledged and
agreed that the Note and the underlying securities had not been registered under
the Securities Act and may not be offered or sold unless subsequently registered
and/or  offered,   sold  or  transferred  pursuant  to  an  exemption  from  the
registration  requirements.  Therefore, the Company believes that the securities
were offered and sold in reliance upon exemptions from registration  pursuant to
Section  4(2)  under  the  Securities  Act of  1933,  as  amended,  and Rule 506
promulgated thereunder.

         On September 26, 2003,  the Company  entered into a $30,000  promissory
note  bearing 8% interest  per year to an  individual  accredited  investor.  On
November 10, 2004 in accordance  with an agreement  with the  investor,  accrued
interest  of  $2,041  was  converted  into  16,324  shares of our  common  stock
releasing the Company from any further  obligation under the note. From the date
of the note's  conversion,  these shares were accrued for by the Company and the
certificate  representing  the  shares  was  issued  in  May  2006.  No  general
solicitation or advertising was undertaken in connection with the offer and sale
of the Note.  The  investor  represented  to the Company  that the  investor was
purchasing  the Note for the  investor's own account and not with a present view
towards the distribution  thereof.  In addition,  the investor  acknowledged and
agreed that the Note and the underlying securities had not been registered under
the Securities Act and may not be offered or sold unless subsequently registered
and/or  offered,   sold  or  transferred  pursuant  to  an  exemption  from  the
registration  requirements.  Therefore, the Company believes that the securities
were offered and sold in reliance upon exemptions from registration  pursuant to
Section  4(2)  under  the  Securities  Act of  1933,  as  amended,  and Rule 506
promulgated thereunder.

         On November 1, 2002,  the Company  entered  into a $15,000  convertible
promissory  note  bearing  8%  interest  per  year to an  individual  accredited
investor. On March 31, 2005 in accordance with the terms of the promissory note,
accrued  interest of $2,410 was converted into 19,288 shares of our common stock
releasing the Company from any further  obligation under the note. From the date
of the note's  conversion,  these shares were accrued for by the Company and the
certificate  representing  the  shares  was  issued  in  May  2006.  No  general
solicitation or advertising was undertaken in connection with the offer and sale
of the Note.  The  investor  represented  to the Company  that the  investor was
purchasing  the Note for the  investor's own account and not with a present view
towards the distribution  thereof.  In addition,  the investor  acknowledged and
agreed that the Note and the underlying securities had not been registered under
the Securities Act and may not be offered or sold unless subsequently registered
and/or  offered,   sold  or  transferred  pursuant  to  an  exemption  from  the
registration  requirements.  Therefore, the Company believes that the securities
were offered and sold in reliance upon exemptions from registration  pursuant to
Section  4(2)  under  the  Securities  Act of  1933,  as  amended,  and Rule 506
promulgated thereunder.

During the three months ended March 31, 2006,  the Company  accrued the issuance
of  1,383,600  shares of common  stock and  warrants to  purchase an  additional
544,800 shares of common stock pursuant to a penalty  calculation with regard to
the late  registration  of shares sold in a private  placement in October  2004.
During the three months ending June 30, 2006, the Company  accrued no additional
shares of common stock or warrants pursuant to the penalty  calculation  pending
the  conclusion of an agreement  with the investors in the private  placement of
October  2004 to limit the number of shares and  warrants  which the  Company is
obligated to issue pursuant to the penalty  calculation.  The Company charged to
operations  $456,588 and $105,339,  respectively,  during the three months ended
March  31,  2006  representing  the fair  value of these  shares  and  warrants,
respectively.  During the three months  ended March 31,  2006,  the Company also

                                       12
<PAGE>

marked to market the value of the  5,423,307  shares and warrants to purchase an
additional  2,064,187  shares which were  outstanding at December 31, 2005. This
resulted in a charged to  operations  of $52,423 and a credit to  operations  of
$6,868 for these previously  outstanding shares and warrants,  respectively.  At
March 31, 2006,  the Company had  obligations to issue an aggregate of 6,625,907
shares and warrants to purchase an additional  2,608,987  shares,  respectively,
and had charged to operations the amount of $555,973 for the cost of issuance of
shares and warrants. The Company also charged to operations the mount of $52,423
as a loss from marking to market the  outstanding  stock portion of the penalty,
and recognized a gain in the amount of $6,868 representing marking to market the
outstanding warrant portion of the penalty.

         During  the three  months  ended  March 31,  2006 we have  accrued  the
issuance of 84,653 common stock purchase warrants to members of our Bioterrorism
Advisory  Board and  Scientific  Advisory  Board for  participation  during  the
quarter.  These warrants were issued  pursuant to the terms of their  respective
agreements  with us. The exercise  prices of these warrants range from $0.125 to
$1.00 per share.  The warrants  expire  three years after date of issuance.  The
warrants will bear a restrictive  legend  regarding the sale or transfer of such
or the  underlying  securities.  The  warrants  were  issued  in  reliance  upon
exemptions from  registration  pursuant to Section 4(2) under the Securities Act
of 1933, as amended, and Rule 506 promulgated  thereunder.  There were less than
35 investors  and each investor had such  knowledge and  experience in financial
and business  matters that the investor was capable of evaluating the merits and
risks of investing in the warrants.  No general  solicitation or advertising was
undertaken in connection with the offer and sale of these shares.  Each investor
was also provided  with access to our Exchange Act reports  including our annual
report on Form 10-KSB and our quarterly reports on Form 10-QSB.


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

On June  28,  2006,  we held  our  2005  Annual  Meeting  of  Stockholders  (the
"Stockholder Meeting"). At the Stockholder Meeting, our shareholders voted to:

         (i)      elect Hal N.  Siegel as director  and to  re-elect  Michael K.
                  Wilhelm and Theodore E. Staahl as directors;

Which was approved by a vote of  30,536,006  votes for and 6,300 votes  against,
9,606,806 votes withheld,  9,463,931  abstained votes and 20,002,585 were broker
non-votes;

         (ii)     approve an amendment to our Certificate of  Incorporation,  as
                  amended, to increase the number of authorized shares of Common
                  Stock from 100,000,000 to 250,000,000;

Which  was  approved  by a vote of  40,130,228  votes  for and  1,302,912  votes
against, 0 votes withheld,  8,179,903 abstained votes and 20,002,585 were broker
non-votes;

         (iii)    approve an amendment to our 2003 Stock Option,  Deferred Stock
                  and Restricted  Stock Plan (the "Plan") to increase the number
                  of shares of our  Common  Stock  reserved  and  available  for
                  issuance under the Plan from 3,600,000 to 20,000,000; and

Which  was  approved  by a vote of  30,944,255  votes for and  10,431,210  votes
against, 0 votes withheld,  8,237,578 abstained votes and 20,002,585 were broker
non-votes;

         (iv)     ratify the appointment of Russell Bedford Stefanou Mirchandani
                  LLP as the Company's  independent  public  accountants for the
                  fiscal year ending December 31, 2006;

Which  was  approved  by a vote of  32,198,656  votes  for and  8,803,306  votes
against, 0 votes withheld,  8,611,081 abstained votes and 20,002,585 were broker
non-votes.


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<PAGE>


ITEM 5: OTHER INFORMATION

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

         ImmuneRegen   BioSciences  Asia  PTE.  LTD.   ("ImmuneRegen  Asia"),  a
Singaporean  company,  is  an  affiliate  of  IR  BioSciences   Holdings,   Inc.
Approximately  94% of the company is owned equally  between our Chief  Executive
Officer  and  Chairman,   Michael  K.  Wilhelm,  and  our  former  Director  and
co-founder,  Mark  Witten.  IR  BioSciences  Holdings,  Inc.  holds less than 1%
ownership in the company.

         ImmuneRegen  Asia has not conducted any business  since its creation in
May 2004. On March 23, 2006, per  shareholder  and Board  approval,  ImmuneRegen
Asia was struck off the register of companies  and  dissolved.  A notice of such
action was published in the Governmental Gazette on April 7, 2006.
Withdrawal from Registration

         On July 10, 2006 the Company,  pursuant to Rule 477 of  Regulation C of
the  Securities  Act of 1933,  as  amended,  applied for an order  granting  the
immediate   withdrawal  of  its   Registration   Statement  on  Form  SB-2.  The
registration  statement was  originally  filed with the  Securities and Exchange
Commission on November 24, 2004, and amended by pre-effective  amendments no. 1,
2, 3 and 4 on July 20, 2005,  November 16, 2005,  February 22, 2006 and April 7,
2006, respectively.

Unsecured senior promissory notes
---------------------------------

Effective July 25, 2006, the Company entered into an unsecured senior promissory
note in the  amount of  $250,000  with an  accredited  investor.  Following  the
payment of  commissions  and  expenses,  the Company  received  net  proceeds of
approximately $210,000. Effective August 1, 2006, the Company converted two cash
advances into unsecured senior  promissory  notes, in the respective  amounts of
$50,000 and $20,000,  with individual  accredited  investors,  one of whom was a
Director.  Following the payment of fees and expenses,  the Company received net
proceeds of  approximately  $68,600.  The outstanding  principal  amount of each
note,  plus  interest  at the rate of 12% per  annum,  is  payable in cash on or
before  the  earlier of (i) one year from the date of such note or (ii) the date
upon which the Company sells any of its equity or debt securities in a financing
transaction,  or a series of financings, with gross proceeds equal to $1,000,000
or more; provided,  however,  that a subsequent  financing  transaction will not
include (x)  issuances of common  stock to  employees  of the  Company,  (y) the
exercise  of any  options  to  purchase  common  stock of the  Company  that are
outstanding  as of the date  hereof,  or (z) the grant,  issuance or exercise of
options  or common  stock of the  Company  under the  Company's  stock,  option,
deferred  stock and  restricted  stock plan for the  purpose of  satisfying  the
Company's payables.

Agreement  to limit the number of shares and warrants  issuable  pursuant to the
penalty calculation for late registration

In August  2006,  the Company  reached an  agreement  with the  investors in the
private placement of October 2004 which limits the number of warrants and shares
which the Company is obligated to issue  pursuant to the penalty  calculation to
an  aggregate  of 18% of the number of  original  number of shares and  warrants
issued in the October 2004 private  placement.  This agreement limits the number
of shares and  warrants  issuable  pursuant  to the  penalty  calculation  to an
aggregate of 4,150,800  shares and warrants to purchase an additional  1,634,400
shares, respectively.

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<PAGE>




ITEM 6. EXHIBITS

(a)  Exhibits

31.1              Certification  of Chief  Executive  Officer  pursuant  to Item
                  601(b)(31) of Regulation  S-B, as adopted  pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

31.2              Certification  of Chief  Financial  Officer  pursuant  to Item
                  601(b)(31) of Regulation  S-B, as adopted  pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

32.1              Certifications  of  Chief  Executive  Officer  pursuant  to 18
                  U.S.C.  Section 1350 as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.*

32.2              Certifications  of  Chief  Financial  Officer  pursuant  to 18
                  U.S.C.  Section 1350 as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.*

                  o     * 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.


                                       15
<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 August 14, 2006.


     IR BioSciences Holdings, Inc.

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




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