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 September 30, 2005

                                       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
   ---      ---


Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

Yes        No X
   ---     ---

The number of shares outstanding of Registrant's  common stock as of November 8,
2005 was 69,475,428.


<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
             September 30, 2005 (unaudited)...............................F-1

             Condensed Consolidated Statement of Operations for
             the three months and nine months ended September 30, 2005
             and 2004, and for the period of inception
             (October 30, 2002) to September 30, 2005.....................F-2

             Condensed Consolidated Statement of Deficiency in
             Stockholders' Equity from date of inception
             (October 30, 2002) to September 30, 2005.....................F-3

             Condensed  Consolidated Statement of Cash Flows for the
             nine months ended  September 30, 2005 and 2004, and for
             the period of inception (October 30, 2002) to
             September 30, 2005...........................................F-8

             Notes to Condensed Consolidated Financial Statements.........F-10

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

    Item 3.  Controls and Procedures......................................21


PART II  OTHER INFORMATION


    Item 1.  Legal Proceedings............................................21

    Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds..21

    Item 3.  Defaults Upon Senior Securities..............................23

    Item 4.  Submission of Matters to a Vote of Securities Holders........23

    Item 5.  Other Information............................................23

    Item 6.  Exhibits.....................................................23

             Signatures...................................................23

                                      -2-

<PAGE>



ITEM 1. FINANCIAL INFORMATION

The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
for interim  financial  information and with the instructions to Form 10-QSB and
Item  310  of  Regulation  S-B.  Accordingly,  they  do not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for  complete  financial  statements.   The  accompanying   unaudited  financial
statements  reflect all  adjustments  that,  in the opinion of  management,  are
considered necessary for a fair presentation of the financial position,  results
of  operations,  and cash  flows  for the  periods  presented.  The  results  of
operations  for such  periods  are not  necessarily  indicative  of the  results
expected  for the full fiscal year or for any future  period.  The  accompanying
unaudited  financial  statements  should be read in conjunction with the audited
financial  statements  of IR  BioSciences  Holdings,  Inc.  ("we,"  "us," or the
"Company")  included in the Form 10-KSB for the fiscal year ended  December  31,
2004.


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
          Condensed Consolidated Balance Sheet as of September 30, 2005
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                          Sept 30,
                                                                             2005
                                                                       -------------
<S>                                                                   <C>
Assets
Current assets

    Cash and cash equivalents                                          $    667,041
    Prepaid services and other current assets                                15,713
                                                                       ------------

      Total current assets                                                  682,754

    Licensed proprietary rights, net                                          6,624
    Furniture and equipment, net                                              4,795
                                                                       ------------

Total assets                                                           $    694,173
                                                                       ============

Liabilities and Deficiency in Stockholders'  Equity
Current liabilities
    Accounts payable and accrued liabilities                              2,408,545
                                                                       ------------

      Total current liabilities                                           2,408,545

Commitments and Contingencies

Stockholders' deficit Preferred stock, 0.001 par value:

10,000,000 shares authorized, no shares issued and outstanding                   --
    Common stock, $0.001 par value; 100,000,000 shares authorized;
      69,436,319 shares issued and outstanding at September 30, 2005         69,436
    Additional paid-in capital                                            9,447,102
    Deferred compensation                                                   (14,859)
    Deficit Accumulated during the Development Stage                    (11,216,051)
                                                                       ------------
      Total deficiency in stockholder's equity                           (1,714,372)
                                                                       ------------

Total liabilities and deficienty in  stockholders' equity              $    694,173
                                                                       ============
</TABLE>


                                      F-1
<PAGE>


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
                 Condensed Consolidated Statement of Operations
        For the three and nine months ended September 30, 2005 and 2004,
                         And for the period of inception
                    (October 30, 2002) to September 30, 2005
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                                         Cumulative
                                                                                                            from
                                                                                                          Inception
                                        For the Three    For the Three   For the Nine     For the Nine   (October 30,
                                         Months Ended    Months Ended     Months Ended    Months Ended     2002) to
                                           Sept 30,        Sept 30,         Sept 30,         Sept 30,    September 30,
                                             2005            2004             2005            2004           2005
                                         ------------    ------------    ------------    ------------    ------------
<S>                                    <C>              <C>             <C>              <C>            <C>

Revenues                                           --              --              --              --              --

Operating expenses:

   Selling, general and
administrative
   expenses                              $    507,445    $  1,041,152    $  1,939,800    $  3,546,641    $  7,529,684

   Merger fees and costs                           --              --              --              --         350,000

   Financing cost                             579,575              --       2,072,831              --       2,162,831
                                         ------------    ------------    ------------    ------------    ------------


      Total operating expenses              1,087,020       1,041,152       4,012,631       3,546,641      10,042,515


Operating loss                             (1,087,020)     (1,041,152)     (4,012,631)     (3,546,641)    (10,042,515)

Other expense:

   Interest income (expense)                    5,925         (70,612)          4,607        (506,427)     (1,173,536)

                                         ------------    ------------    ------------    ------------    ------------
      Total other expense
                                                5,925         (70,612)          4,607        (506,427)     (1,173,536)


  Loss before income taxes                 (1,081,095)     (1,111,764)     (4,008,024)     (4,053,068)    (11,216,051)


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

                                         ------------    ------------    ------------    ------------    ------------
Net loss                                 $ (1,081,095)   $ (1,111,764)   $ (4,008,024)   $ (4,053,068)   $(11,216,051)
                                         ============    ============    ============    ============    ============

Net loss per share - basic and diluted   $      (0.02)   $      (0.04)   $      (0.06)   $      (0.15)   $      (0.31)

Weighted average shares outstanding -
basic and diluted                          69,337,210      29,040,133      67,103,634      27,129,221      36,302,076
                                         ============    ============    ============    ============    ============

</TABLE>

                                       F-2
<PAGE>



                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
                Condensed Consolidated Statement of Deficiency in
               Stockholders' Equity For the period from inception
                    (October 30, 2002) to September 30, 2005
                                   (unaudited)


<TABLE>
<CAPTION>

                                                                                                        Deficit
                                                                                                        Accumulated
                                             Common Stock        Additional                 Common      During the
                                       -----------------------    Paid-In     Deferred      Stock       Development
                                         Shares       Amount      Capital    Compensation  Subscribed   Stage           Total
                                       ----------  -----------  -----------  ------------  -----------  -----------  -----------
<S>                                  <C>           <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

</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 Deficiency in Stockholders' Equity
     For the period from inception (October 30, 2002) to September 30, 2005
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                                                        Deficit
                                                                                                        Accumulated
                                             Common Stock        Additional                 Common      During the
                                       -----------------------    Paid-In     Deferred      Stock       Development
                                         Shares       Amount      Capital    Compensation  Subscribed   Stage           Total
                                       ----------  -----------  -----------  ------------  -----------  -----------  -----------
<S>                                     <C>           <C>          <C>          <C>        <C>         <C>              <C>
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 twelve month
period ended December 31, 2003                 --           --           --            --           --   (1,856,702)  (1,856,702)
                                                                                                                              --
                                       ----------  -----------  -----------  ------------  -----------  -----------  -----------
Balance at December 31, 2003           23,431,300       23,431    1,035,441            --           --   (1,902,620)    (843,748)

Shares granted at $1.00 per
share pursuant to the Senior
Note Agreement in  January 2004           600,000          600      599,400      (600,000)          --           --           --

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

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
</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 Deficiency in Stockholders' Equity
     For the period from inception (October 30, 2002) to September 30, 2005
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                        Accumulated
                                             Common Stock        Additional                 Common      During the
                                       -----------------------    Paid-In     Deferred      Stock       Development
                                         Shares       Amount      Capital    Compensation  Subscribed   Stage          Total
                                       ----------  -----------  -----------  ------------  -----------  -----------  -----------
<S>                                    <C>         <C>         <C>           <C>          <C>          <C>           <C>
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

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
</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
                       Deficiency in Stockholders' Equity
     For the period from inception (October 30, 2002) to September 30, 2005
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                        Accumulated
                                             Common Stock        Additional                 Common      During the
                                       -----------------------    Paid-In     Deferred      Stock       Development
                                         Shares       Amount      Capital    Compensation  Subscribed   Stage          Total
                                       ----------  -----------  -----------  ------------  -----------  -----------  -----------

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

Issuance of warrant to officer
in October                                     --           --      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            --           --           --       56,067

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
</TABLE>

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

                                      F-6

<PAGE>

                   IR Biosciences Holding, Inc. and Subsidiary
                          (A Development Stage Company)
                Condensed Consolidated Statement of Deficiency in
               Stockholders' Equity For the period from inception
                    (October 30, 2002) to September 30, 2005
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                        Deficit
                                                                                                        Accumulated
                                             Common Stock        Additional                 Common      During The
                                       -----------------------    Paid-In     Deferred      Stock       Development
                                         Shares       Amount      Capital    Compensation  Subscribed   Stage           Total
                                       ----------  -----------  -----------  ------------  -----------  -----------  -----------

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

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
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)          --            --           --           --           --

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

Loss for the twelve months 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
                                      ===========  ===========  ===========  ============  ===========  ===========  ===========

Sale of shares of common stock
for cash at $0.20 per share
in March 2005 for warrant
exercise, net of costs                  6,600,778        6,601    1,184,256            --           --           --    1,190,857

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

Accrued deferred compensation in
February, 2005 to a consultant
for 50,000 shares at $0.65 per
share. Committed but unissued                  --           --           --       (32,500)          --           --      (32,500)

Amortization of deferred
compensation for the three months
ended March 31, 2005                           --           --           --       149,061           --           --      149,061

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

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

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

Amortization of deferred
compensation for the three months
ended June 30, 2005                            --           --           --        22,563           --           --       22,563

Conversion of notes payable into
232,153 common stock not yet issued            --           --           --            --       65,003           --       65,003

Issuance of 232,153 shares of common
stock for conversion of notes payable     232,153          232       64,771            --      (65,003)          --           --

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

Amortization of deferred compensation
for the three months ended
September 30, 2005                             --           --           --        16,003           --           --       16,003

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

Loss for the nine months ended
September 30, 2005                             --           --           --            --           --   (4,008,024)  (4,008,024)

                                       ----------  -----------  -----------  ------------  -----------  -----------  -----------
Balance at September 30, 2005          69,436,319       69,436    9,447,102       (14,859)          --  (11,216,051)  (1,714,372)


</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 Statement of
                      Cash Flows For the nine months ended
                          September 30, 2005 and 2004,
                         And for the period of inception
                    (October 30, 2002) to September 30, 2005
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                          Cumulative
                                                          For the         For the         from Inception
                                                          Nine Months     Nine Months     (October 30,
                                                          Ended           Ended           2002) to
                                                          September 30,   September 30,   September 30,
                                                          2005            2004            2005
                                                          ------------    ------------    ------------
<S>                                                      <C>             <C>              <C>

Cash flows from operating activities:
  Net loss                                                $ (4,008,024)   $ (4,053,068)   $(11,216,051)
  Adjustments to reconcile net loss to net cash
    used in operating activities:

  Non-cash compensation                                        462,773       2,636,280       3,862,773
  Interest expense                                               4,007          74,517         156,407
  Amortization of discount on notes payable                         --         406,360       1,006,935
  Depreciation and amortization                                  2,401          12,454          28,418
  Changes in operating assets and liabilities:                      --
        Prepaid services and other assets                       (9,000)         33,543         (15,712)
        Accounts payable and accrued expenses                2,064,910         440,970       2,619,952
                                                          ------------    ------------    ------------
Net cash used in operating activities                       (1,482,933)       (448,944)     (3,557,278)

Cash flows from investing activities:

  Acquisition of property and equipment                             --              --          (8,087)
                                                          ------------    ------------    ------------
Net cash used in investing activities                               --              --          (8,087)

Cash flows from financing activities:

   Proceeds from notes payable                                      --         576,057       1,233,500
   Principal payments on notes payable and demand loans        (14,997)       (174,000)       (264,997)
   Shares of stock sold for cash                             1,190,857          31,200       3,259,903
   Procees from exercised of warrants                            4,000              --           4,000
   Officer repayment of amounts paid on his behalf                  --              --          19,880
   Cash paid on behalf of officer                                   --              --         (19,880)
   Cash paid on amount due to officer                               --              --              --
                                                          ------------    ------------    ------------
   Net cash provided by financing activities                 1,179,860         433,257       4,232,406

Net increase in cash and cash equivalents                     (303,073)        (15,687)        667,041

Cash and cash equivalents at beginning of period               970,114          10,534              --
                                                          ------------    ------------    ------------

Cash and cash equivalents at end of period                $    667,041    $     (5,153)   $    667,041
                                                          ============    ============    ============
</TABLE>

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

                                      F-8
<PAGE>


                  IR BioSciences Holdings, Inc. and Subsidiary
                          (A Development Stage Company)
                       Condensed Consolidated Statement of
                      Cash Flows For the nine months ended
                          September 30, 2005 and 2004,
                         And for the period of inception
                    (October 30, 2002) to September 30, 2005
                             (Unaudited) (continued)


<TABLE>
<CAPTION>
                                                                                          Cumulative
                                                          For the         For the         from Inception
                                                          Nine Months     Nine Months     (October 30,
                                                          Ended           Ended           2002) to
                                                          September 30,   September 30,   September 30,
                                                          2005            2004            2005
                                                          ------------    ------------    ------------
<S>                                                      <C>             <C>             <C>
Supplemental disclosure of cash flow information:

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
                                                          =============   =============   ===========

Cash paid during the period for:
Interest                                                  $       1,486   $       4,553   $    44,286
                                                          =============   =============   ===========

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

Common stock issued in exchange for proprietary rights    $          --   $          --   $  9,250.00
                                                          =============   =============   ===========

Common stock issued in exchange for services              $      10,000   $   2,095,240   $ 2,925,286
                                                          =============   =============   ===========

Common stock issued in exchange for previously incurred
debt and accrued interest                                 $      65,003   $      35,000   $ 1,060,594
                                                          =============   =============   ===========

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                                   $     261,312   $          --   $   762,744
                                                          =============   =============   ===========

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

Common stock issued in satisfaction of accounts payable   $          --   $      29,132   $   157,219
                                                          =============   =============   ===========

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

Amortization of deferred compensation                     $     187,627   $          --   $   187,627
                                                          =============   =============   ===========

Fair value of common stock and warrants in
connection with the late filing of registration
statement.                                                $   2,072,831   $          --   $ 2,072,831
                                                          =============   =============   ===========

</TABLE>

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

                                      F-9
<PAGE>


                          IR BIOSCIENCES HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2005
                                   (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 nine-month  periods ended September 30, 2005 and
2004 are not necessarily  indicative of the results that may be expected for the
year ended December 31, 2005.  The unaudited  condensed  consolidated  financial
statements  should be read in  conjunction  with the December 31, 2004 financial
statements and footnotes thereto included in the Company's annual report on Form
10-KSB filed with the Securities  and Exchange  Commission on April 19, 2005 and
form 10-KSB/A filed with the Securities and Exchange Commission on May 2, 2005.

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.  Through our wholly  owned
subsidiary,  ImmuneRegen  BioSciences,  Inc., we are engaged in the research and
development  of  Homspera(TM),  a  proprietary  compound  that is  derived  from
homeostatic substance P, a naturally occurring peptide.  Currently, the majority
of our development  efforts are centered around two drug candidates derived from
Homspera, Radilex(TM) and Viprovex(TM). Radilex has been formulated specifically
for the  indication  of acute  exposure to  radiation.  Viprovex was  formulated
specifically  for  applications  relating to the treatment of maladies caused by
exposure to various chemical and biological agents. 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.

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

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

                                      F-10
<PAGE>

For purposes of pro forma  disclosures,  the estimated fair value of the options
is  amortized  over  the  options'  vesting  period.  The  Company's  pro  forma
information was as follows:

Three months ended September 30, 2005:

                                    2005           2004
                                -----------    -----------
Net loss, as reported           $(1,081,095)   $(1,111,764)

Compensation recognized under
under APB 25                             --             --
Compensation recognized under
SFAS 123                             77,969             --
                                -----------    -----------

Pro forma net loss              $(1,159,064)   $(1,111,764)
                                ===========    ===========


Pro forma loss per share        $     (0.02)   $     (0.04)
                                ===========    ===========



Nine months ended September 30, 2005:

                                    2005           2004
                                -----------    -----------
Net loss, as reported           $(4,008,024)   $(4,053,068)

Compensation recognized under
under APB 25                             --             --
Compensation recognized under
SFAS 123                             77,969             --
                                -----------    -----------

Pro forma net loss              $(4,085,993)   $(4,053,068)
                                ===========    ===========


Pro forma loss per share        $     (0.06)   $     (0.15)
                                ===========    ===========

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

The  accompanying  balance  sheet as of September  30, 2005,  the  statements of
operations for the three and nine months ended  September 30, 2005 and 2004, and
for the period of inception  (October 30, 2002) to September  30, 2005,  and the
statements of cash flows for nine months ended  September 30, 2005 and 2004, and
from the period of  inception  (October  30,  2002) to  September  30,  2005 are
unaudited.  These unaudited interim financial statements include all adjustments
(consisting of normal recurring accruals),  which, in the opinion of management,
are  necessary  for a fair  presentation  of the results of  operations  for the
periods presented. Interim results are not necessarily indicative of the results
to be expected for a full year.

Use of estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements,  and the  reported  amounts of revenues and expenses
during the reported  periods.  Actual results could materially differ from those
estimates.

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

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

                                      F-11
<PAGE>

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

Prepaid  services and other current  assets  consist of (i) salary advance to an
employee of $2,300;  (ii) deposits of $2,260;  and (iii) prepaid  consulting and
legal fees of $11,153.

Licensed proprietary rights
---------------------------

The Company has licensed from its founders certain  proprietary rights which the
Company  intends  to  utilize  in the  execution  of its  business  plan.  These
proprietary  rights are being amortized over the term of the license  agreement,
or ten years.  The amount  amortized during the three months ended September 30,
2005 and 2004 was $232 during each period.  The amount amortized during the nine
months  ended  September  30,  2005 and 2004 was $696 during  each  period.  The
Company  amortized  $2,626 for the period from October 30, 2002  (inception)  to
September 30, 2005.

Furniture and equipment
-----------------------

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

       Computer equipment         3 years
       Furniture                  7 years

The amounts  depreciated  for the three months ended September 30, 2005 and 2004
were $967 and $170,  respectively.  The amounts  depreciated for the nine months
ended September 30, 2005 and 2004 were $1,705 and $510, respectively. The amount
depreciated from the date of inception  (October 30, 2002) through September 30,
2005 was $3,293.

NOTE 2 - RELATED PARTY TRANSACTIONS

Proprietary rights agreements
-----------------------------

In December 2002, the Company entered into a royalty-free license agreement (the
"License  Agreement")  with  its two  founders  and  largest  shareholders  (the
"Licensors").  Under the terms of the License Agreement,  the Licensors grant to
the Company an exclusive license to use and sublicense certain patents,  medical
applications,  and other technologies developed by the Licensors.  The Company's
obligations  under the  License  Agreement  include  (i)  reasonable  efforts to
protect  any  licensed  patents  or  other  associated   property  rights;  (ii)
reasonable efforts to maintain  confidentiality of any proprietary  information;
(iii) upon the granting by the U. S. Food and Drug Administration to the Company
the right to market a product,  the Company  will  maintain a broad form general
liability and product liability insurance.

In February 2005, Drs. Witten and Harris executed assignment documents in which,
for good and valuable  consideration,  patent applications and patents developed
by them were assigned to ImmuneRegen BioSciences,  Inc. The assignment documents
included all of the patents and patent  applications  which were included in and
covered by the Licensing Agreement, as amended. Drs. Witten and Harris have also
assigned all proprietary  technology developed at ImmuneRegen  subsequent to the
execution of the February 2005 assignment documents.

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

On December  16,  2002,  the Company  entered into  consulting  agreements  (the
"Consulting  Agreements")  with its two founders and chief  research  scientists
(the "Consultants").  The Consulting  Agreements were on a month-to-month basis.
Under the terms of the Consulting Agreements, the Consultants agreed to place at
the disposal of the Company  their  judgment and  expertise in the area of acute
lung injury. In consideration for these services, the Company agreed to pay each
consultant a  non-refundable  fee of $5,000 per month,  which shall accrue until
such time as the Company raises at least  $2,000,000 in equity or debt financing
at which time such accrued  amount will become due and payable.  Pursuant to the
Consulting  Agreements,  during the period from  January 1, 2003 to December 31,
2003, the Company accrued  $120,000 in consulting  fees.  During the period from
January 1, 2004 to December 31, 2004, the Company accrued an additional  $90,000
in consulting  fees.  The amounts due the  Consultants at December 31, 2003 were
$125,000 and were included in accounts payable and accrued expenses.

                                      F-12
<PAGE>

In October  2004,  the Company  achieved the  threshold  amount of $2,000,000 in
equity or debt  financing.  As of October 2004,  the  aggregate  amounts due the
Consultants under the Consulting Agreements was $215,000.

In October  2004, one of the Consultants   elected to exchange 724,000 shares of
the  Company's  common  stock and a warrant to  purchase an  additional  362,000
(post-split)  shares of common stock at an exercise price of $0.50  (post-split)
in exchange  for $90,500 of the  $107,500 of the  previously  accrued and unpaid
fees due him under the Consulting Agreement, and the balance of $17,000 was paid
to the  consultant.  At  December  31,  2004,  there  is no  balance  due to the
Consultant.

In October 2004,  because the remaining  Consultant had not taken an active role
in the  management  of the  Company,  he agreed  that would  forgive  the amount
accrued to him under the Consulting agreement of $107,500. The Company accounted
for the  transaction as a forgiveness of  indebtedness  under FAS No. 140 during
the year ended December 31, 2004.

In March 2005, Dr. Harris resigned as consultant to us and our subsidiaries.

During the three months ended  September  30, 2005,  the Company paid $24,000 in
consulting  fees to the  Consultant,  and  charged  $19,000  of this  amount  to
operations and $5,000 to prepaid  consulting fees; During the three months ended
September 30, 2004, the Company accrued the amount of $15,000 in consulting fees
payable to the Company's  Founders.  During the nine months ended  September 30,
2005, the Company paid a total of $62,000 to the Consultant, charging $31,000 of
this  amount  to  operations  and the  remaining  $31,000  against  the  accrued
liability;  also during the nine months ended  September  30, 2005,  the Company
accrued an  additional  $19,000 in  consulting  fees due to the  Consultant.  At
September 30, 2005,  there is a prepaid asset of $9,153  relating to these fees.
During the nine months ended  September 30, 2004, the Company accrued $90,000 in
consulting fees payable to the Consultants.

Employment agreements
---------------------

Pursuant to our  employment  agreement with Michael  Wilhelm,  our President and
Chief Executive  Officer,  dated December 16, 2002, we paid a salary of $125,000
and $175,000 to Mr. Wilhelm during the first and second years of his employment,
respectively.  Thereafter  we paid an annual  salary of $250,000.  On August 10,
2005, we entered into a new  employment  agreement  with our President and Chief
Executive Officer, Michael K. Wilhelm. Pursuant to this new employment agreement
we shall pay an annual salary of $275,000 to Mr. Wilhelm through the term of his
employment.   Mr.  Wilhelm's  salary  is  payable  in  regular  installments  in
accordance with the customary payroll  practices of our company.  Also on August
10,  2005,  Mr.  Wilhelm  received an option to purchase  103,030  shares of the
Company's stock at a price of $0.33,  which was 110% of the closing market price
on the date of the option grant. These options vested on September 10, 2005. The
Company valued these options using the intrinsic  value method,  and because the
option  price was less than the closing  market  price of the  Company's  common
stock when the  103,030  options  vested on August  10,  2005 there was no value
assigned to these options.

Pursuant to our employment  agreement with John  Fermanis,  our Chief  Financial
Officer,  dated February 15, 2005, we paid a 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  $1,190,857  net of
fees. From March 4, 2005,  until December 31, 2005, we will pay 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.
Mr. Fermanis also receives 100,000 shares of the Company's  common stock,  which
are earned at the rate of 1/12 or 8,333 per month  beginning  January 2005.  The
Company  charges to operations  the market value of these shares as of the first
day of each month.  For the three months ended  September 30, 2005,  the Company
charged $7,583 to operations for the issuance of 25,000 shares to Mr.  Fermanis;
for the nine months ended  September 30, 2005, the Company charged to operations
the amount of $31,916 for the issuance of 75,000 shares to Mr. Fermanis.


NOTE 3 - DEBT

During the nine months  ended  September  30,  2005,  the Company paid two notes
payable in the  aggregate  amount of  $80,000.  Payment  was made by cash in the
amount of  $14,997,  and by  converting  a note with a balance of  $65,003  into
232,153  shares of the  Company's  common  stock at a price of $0.28 per  share.
These shares were issued in July 2005.

                                      F-13
<PAGE>

NOTE 4 - EQUITY

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

On January 24, 2005, the Company made a tender offer to certain of the Company's
shareholders  whereby the exercise price of certain  warrants  issued in October
2004 (the  "Warrants")  would be reduced from $0.50 to $0.20 per share. In March
2005,  6,600,778  shares of common  stock were sold  pursuant  to this offer for
aggregate proceeds of $1,320,156 less costs of $129,300.

In June 2005,  the Company  issued 80,000 shares of common stock pursuant to the
Exercise of a warrant at a price of $0.05 per share.

In July 2005,  the Company  issued  232,153 shares of common stock at a price of
$0.28 per share pursuant to the conversion of a note payable (see Note 5.)

In August 2005, the Company issued 100,000 shares of common stock pursuant to an
agreement with a service provider. The fair value of these shares of $10,000 was
amortized over the life of the contract, from July 2004 to July 2005.

Warrants
--------

During the three  months ended March 31, 2005,  the Company  issued  warrants to
purchase  268,033  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 $137,049  three
months ended March 31, 2005.

During the three  months  ended June 30, 2005,  the Company  issued  warrants to
purchase  366,814  shares of common stock at prices ranging from $0.038 to $1.00
per share.  The Company also  cancelled  warrants to purchase  123,530 shares of
common stock at a price of $2.00 per share.  The Company  valued these  issuance
and  cancellations  using the  Black-Scholes  valuation  model,  and charged the
amount of $103,772 to operations during the three months ended June 30, 2005.

Also during the three months ended June 30,  2005,  warrants to purchase  80,000
shares of common stock at a price of $0.05 per share were exercised.

During the three months ended September 30, 2005, the Company issued warrants to
purchase  77,250  shares of common stock at prices  ranging from $0.125 to $1.00
per share. The Company valued these warrants using the  Black-Scholes  valuation
model,  and charged the amount of $20,491 to operations  during the three months
ended September 30, 2005.

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.

<TABLE>
<CAPTION>


                   Warrants Outstanding                                Warrants Exercisable
      ---------------------------------------------       ----------------------------------------------
<S>                <C>           <C>                   <C>             <C>            <C>

                                   Weighted Average       Weighed                       Weighted Average
                                      Remaining           Average                          Remaining
      Exercise          Number     Contractual Life       Exercise        Number        Contractual Life
        Prices       Outstanding       (Years)             Price        Exercisable          (Years)
---------------------------------------------------------------------------------------------------------

     $0.01-0.10         519,780         3.64             $0.01-0.10       519,780            3.64
     0.125-0.21         903,919         3.72             0.125-0.21       903,919            3.72
      0.25-0.56       9,270,406         3.82              0.25-0.56     9,270,406            3.82
           1.00         830,844         2.29                   1.00       830,844            2.29
           2.00          49,050         3.49                   2.00        49,050            3.49
                     ----------        -----                           ----------            ----
                     11,573,999         3.69                           11,573,999            3.69
                     ==========        =====                           ==========            ====

</TABLE>


                                      F-14

<PAGE>


Transactions involving warrants are summarized as follows:

                                                           Weighted Average
                                        Number of Shares   Price Per Share
                                         ---------------    ---------------

   Outstanding at January 1, 2005             17,666,210           $    .49
     Granted                                     268,033                .48
     Exercised                                (6,600,778)               .50
     Canceled or expired                              --                 --
                                              ----------           --------
   Outstanding at March 31, 2005              11,333,465           $    .47

     Granted                                     366,814                .32
     Exercised                                   (80,000)               .05
     Cancelled or expired                       (123,530)              2.00
                                              ----------         ----------
   Outstanding at June 30, 2005               11,496,749           $    .45

     Granted                                      77,250                .56
     Exercised                                        --                 --
     Cancelled or expired                             --                 --
                                              ----------         ----------
   Outstanding at September 30, 2005          11,573,999           $    .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:

                                                       2005
                                                       ----
 Significant assumptions (weighted-average):
     Risk-free interest rate at grant date        3.69% to 4.00%
     Expected stock price volatility               104% to 163%
     Expected dividend payout                           --
     Expected option life-years (a)                   3 to 5

Options
-------

We granted, prior to the merger with ImmuneRegen  BioSciences,  Inc., options to
purchase 63,212 shares of our common stock at a weighted  average exercise price
of $25.00 per share to certain  employees and  consultants  that are exercisable
over  various  periods  through  March 2010.  These stock  options  were granted
outside of our 2003 Stock Option, Deferred Stock and Restricted Stock Plan.

During the three months ended  September 30, 2005, the Company issued options to
an employee to purchase  103,030 shares of the Company's common stock at a price
equal to 110% of the closing price of the Company's  common stock on the date of
issuance.  The options have an exercise price of $0.33 and a term of five years.
The Company  valued these options using the  intrinsic  value method.  Since the
exercise price of the options was greater than the market value of the Company's
stock at the date of issuance,  the Company  assigned $0 value to these options.
Also during the three  months ended  September  30,  2005,  the Company  granted
150,000  discretionary  incentive stock options to our Chief Executive  Officer,
Michael K. Wilhelm, per his employment  agreement.  The options have an exercise
price of $0.44 and a term of five years.  The Company valued these options using
the intrinsic value method.  Since the exercise price of the options was greater
than the  market  value of the  Company's  stock  at the date of  issuance,  the
Company assigned $0 value to these options.

The following table summarizes the changes in stock options  outstanding and the
related prices for the shares of the Company's  common stock issued to employees
of the Company.

<TABLE>
<CAPTION>

                   Options Outstanding                                Options Exercisable
      ---------------------------------------------       ----------------------------------------------
  <S>               <C>          <C>                    <C>           <C>             <C>

                                   Weighted Average       Weighed                       Weighted Average
                                      Remaining           Average                          Remaining
      Exercise          Number     Contractual Life       Exercise        Number        Contractual Life
      Prices         Outstanding       (Years)             Price        Exercisable          (Years)
--------------------------------------------------------------------------------------------------------
     $0.33              103,030         4.86              $0.33           103,030            4.86
     $0.44              150,000         4.59              $0.44           150,000            4.59
    $25.00               63,212         4.50             $25.00            63,212            4.50
                     ----------        -----                           ----------            ----
                        316,242         4.66                              316,242            4.66
                     ==========        =====                           ==========            ====
</TABLE>


                                      F-15

<PAGE>

Transactions involving options are summarized as follows:

                                                           Weighted Average
                        Number of Shares Price Per Share
                                         ---------------    ---------------

   Outstanding at January 1, 2005                 63,212           $  25.00
     Granted                                          --                 --
     Exercised                                        --                 --
     Canceled or expired                              --                 --
                                              ----------           --------
   Outstanding at March 31, 2005                  63,212           $  25.00

     Granted                                          --                 --
     Exercised                                        --                 --
     Cancelled or expired                             --                 --
                                              ----------         ----------
   Outstanding at June 30, 2005                   63,212           $  25.00

     Granted                                     253,030            $  0.40
     Exercised                                        --                 --
     Cancelled or expired                             --                 --
                                              ----------         ----------
   Outstanding at September 30, 2005             316,242            $  5.31
                                              ==========         ==========

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

In October 2004, the Company completed a private placement sale of shares of its
common stock and warrants to purchase  additional  shares of common  stock.  The
Company agreed to register these shares along with the shares  underlying  these
warrants  within  ninety days from the closing date of the  transaction,  or the
Company  would incur a penalty  equivalent to an additional 2% of the shares and
warrants to be  registered  for every 30 days that the Company fails to complete
this  registration.  This penalty  amounts to an aggregate of 461,200 shares and
181,600  warrants  per 30 day  period  until  such a time as  this  registration
Statement is made  effective.  As of September 30, 2005, the Company is required
to issue additional 3,827,960 shares of common stock and warrants to purchase an
additional  1,507,280  shares of common stock.  These shares have been valued at
the market price of the common stock at the time each 30 day period, for a total
of $1,539,331  at September 30, 2005;  the warrants have been valued at $533,500
at September 30, 2005 utilizing the  Black-Scholes  valuation  model.  The total
value of the common  stock and  warrants  issuable  pursuant to this late filing
penalty at September 30, 2005 is $2,072,831.  This amount was charged to finance
cost during the nine months  ended  September  30, 2005 and are  included in the
Company's  balance sheet at September  30, 2005 as accounts  payable and accrued
liabilities.

The Company  anticipates  completing the registration of these shares during the
quarter  ended  December  31,  2005,  but expects  that an  obligation  to issue
approximately  1,245,240 additional shares and 490,320 additional warrants at an
aggregate cost of approximately $649,367 will be incurred.

NOTE 5 - SUBSEQUENT EVENTS

None.


                                      F-16
<PAGE>



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

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.

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.

                                      -3-

<PAGE>

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

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

Overview
--------

IR BioSciences Holdings, Inc. is a development-stage  biopharmaceutical company.
Through   our   wholly   owned   subsidiary,   ImmuneRegen   BioSciences,   Inc.
("ImmuneRegen"), we are engaged in the research and development of Homspera(TM),
a proprietary compound that is derived from homeostatic substance P, a naturally
occurring  peptide.  Currently,  the  majority  of our  development  efforts are
centered  around two drug  candidates  derived from  Homspera,  Radilex(TM)  and
Viprovex(TM).  Radilex has been  formulated  specifically  for the indication of
acute  exposure  to  radiation.   Viprovex  was  formulated   specifically   for
applications  relating to the  treatment  of maladies  caused by the exposure to
various chemical and biological agents. Our research and development efforts are
at a very early stage and Radilex and Viprovex have only undergone  pre-clinical
testing in mice.

We  own 2  issued  U.S.  and 2  issued  foreign  patents  and 5  pending  Patent
Cooperation  Treaty  (PCT)  applications,  6 pending  U.S.  applications  and 15
pending foreign patent applications.

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

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

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 2005

Revenue
-------

We are in the development stage and have no revenue.

Sales, general, and administrative expenses
-------------------------------------------

Sales, general, and administrative expenses ("SG&A") were $507,445 for the three
months ended  September  30, 2005, a decrease of $533,707 or  approximately  51%
compared to SG&A of $1,041,152 during the three months ended September 30, 2004.
The decrease is primarily due to lower costs of non-cash  compensation.  For the
three  months  ended  September  30, 2005,  this amount  consisted  primarily of
officer compensation of $95,846,  research and development of $83,020, legal and
accounting  fees of  $79,085,  other  consulting  fees of  $73,621,  payroll and
related  costs of $55,355,  public  relations  and  marketing  of  $30,164,  and
non-cash compensation costs of $23,586.

The Company  expects  SG&A to  increase  during the coming  twelve  months as we
continue to utilize  non-cash  compensation in order to conserve cash, build out
the  Company's  infrastructure,  and continue to develop the  Company's  line of
potential products.

                                      -4-

<PAGE>

Late filing of registration statement
-------------------------------------

In October 2004, the Company completed a private placement sale of shares of its
common stock and warrants to purchase  additional  shares of common  stock.  The
Company agreed to register these shares along with the shares  underlying  these
warrants  within  ninety days from the closing date of the  transaction,  or the
Company  would incur a penalty  equivalent to an additional 2% of the shares and
warrants to be  registered  for every 30 days that the Company fails to complete
this  registration.  This penalty  amounts to an aggregate of 461,200 shares and
181,600  warrants  per 30 day  period  until  such a time as  this  registration
Statement is made  effective.  During the three months ended September 30, 2005,
the Company  incurred  additional  penalties  in the amount of  $579,575.  As of
September 30, 2005, the Company is required to issue additional 3,827,960 shares
of common  stock and  warrants  to purchase an  additional  1,507,280  shares of
common  stock.  These  shares have been valued at the market price of the common
stock at the time each 30 day period, for a total of $1,539,331 at September 30,
2005;  the warrants have been valued at $533,500 at September 30, 2005 utilizing
the  Black-Scholes  valuation  model.  The total  value of the common  stock and
warrants  issuable pursuant to this late filing penalty at September 30, 2005 is
$2,072,831. This amount was charged to finance cost during the nine months ended
September 30, 2005 and are included in the Company's  balance sheet at September
30, 2005 as accrued penalty for late registration of shares.

The Company  anticipates  completing the registration of these shares during the
quarter  ended  December  31,  2005,  but expects  that an  obligation  to issue
approximately  1,245,240 additional shares and 490,320 additional warrants at an
aggregate cost of approximately $649,367 will be incurred.

Interest income / expense
-------------------------

Interest  income (net) for the three months ended September 30, 2005 was $5,925,
a decrease  of $76,537  compared to  interest  expense  (net) of $70,612 for the
three months  ended  September  30,  2004.  The decrease is due to a higher cash
balances and a decrease in debt.

Net loss
--------

For the reasons above, primarily lower SG&A expenses and lower interest expenses
offset by the late registration penalty, the net loss for the three months ended
September 30, 2005 was $1,081,095,  an decrease of $30,669 or  approximately  3%
compared to a net loss of  $1,111,764  for the three months ended  September 30,
2004.

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 we move our line of  potential
products  through  the  testing  and  approval  phases,  and as we build out our
corporate infrastructure.

RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2005 AND
2004

Revenue
-------

We are in the development stage and have no revenue.

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

Selling, general and administrative expenses were $1,939,800 for the nine months
ended September 30, 2005 which is a decrease of $1,606,841 or approximately  45%
compared to SG&A of $3,546,641 for the nine months ended September 30, 2004. The
decrease is primarily due to lower costs of non-cash compensation.  This expense
is  primarily  comprised  of  non-cash  compensation  of  $460,364,   legal  and
accounting fees of $408,109,  consulting fees of $268,598,  officer compensation
of $212,838, payroll and related costs of $149,809,, research and development of
$108,439,  public relation and marketing of $95,047, travel and entertainment of
$82,546, and rent of $23,043.


                                      -5-
<PAGE>

Late filing of registration statement
-------------------------------------

In October 2004, the Company completed a private placement sale of shares of its
common stock and warrants to purchase  additional  shares of common  stock.  The
Company agreed to register these shares along with the shares  underlying  these
warrants  within  ninety days from the closing date of the  transaction,  or the
Company  would incur a penalty  equivalent to an additional 2% of the shares and
warrants to be  registered  for every 30 days that the Company fails to complete
this  registration.  This penalty  amounts to an aggregate of 461,200 shares and
181,600  warrants  per 30 day  period  until  such a time as  this  registration
Statement is made  effective.  As of September 30, 2005, the Company is required
to issue additional 3,827,960 shares of common stock and warrants to purchase an
additional  1,507,280  shares of common stock.  These shares have been valued at
the market price of the common stock at the time each 30 day period, for a total
of $1,539,332  at September 30, 2005;  the warrants have been valued at $533,500
at September 30, 2005 utilizing the  Black-Scholes  valuation  model.  The total
value of the common  stock and  warrants  issuable  pursuant to this late filing
penalty at September 30, 2005 is $2,072,831.  This amount was charged to finance
cost during the nine months ended September 30, 2005 and are included in accrued
penalty  for late  registration  of shares  in the  Company's  balance  sheet at
September 30, 2005.

The Company  anticipates  completing the registration of these shares during the
quarter  ended  December  31,  2005,  but expects  that an  obligation  to issue
approximately  1,245,240 additional shares and 490,320 additional warrants at an
aggregate cost of approximately $649,367 will be incurred.

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

Interest income (net) was $4,607 for the nine months ended September 30, 2005, a
decrease of  $511,034  compared  to  interest  expense of $506,427  for the nine
months ended September 30, 2004. The decrease is due to a decrease in debt along
with an increase cash balances.

Net loss
--------

For the reasons above, primarily lower SG&A expenses and lower interest expenses
offset by the late registration  penalty, the net loss for the nine months ended
September 30, 2005 was  $4,008,024,  a decrease of $45,044 or  approximately  1%
compared to a net loss of  $4,053,068  for the nine months ended  September  30,
2004.

PLAN OF OPERATION

We expect to continue to incur  increasing  operating losses for the foreseeable
future,  primarily  due to our  continued  research and  development  activities
attributable  to new  and  existing  products  and  general  and  administrative
activities.

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

We incurred an expense of $83,020 for the three months ended  September 30, 2005
in research and development activities related to the development of Radilex and
Viprovex  versus an expense of $22,709 for the three months ended  September 30,
2004. 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 $301,123 in research and development activities.  These costs include
the manufacture and delivery of our drug by third party manufacturers,  payments
to Contract Research Organizations ("CRO") for consulting related to our studies
and costs of performing such studies.

If  we  are  successful  in  obtaining  additional  funding  through  grants  or
investment  capital,  we  anticipate  that  during  the next 12  months  we will
increase our research and development  activities by approximately $450,000 to a
total of  approximately  $600,000  in an effort to further  develop  Radilex and
Viprovex,  excluding a radiation  study on primates  which we estimate will cost
$1,500,000.  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.


                                      -6-
<PAGE>

Our major research and development projects include:

RESEARCH AND DEVELOPMENT OF RADILEX IN RADIOLOGICAL EXPOSURE APPLICATIONS.
---------------------------------------------------------------------------

We have commenced initial testing of Radilex to record its potential therapeutic
effects on the treatment of toxic  radiation  exposure.  Our initial testing has
been limited to seven prior mouse studies.

We are currently  preparing the protocols for a radiation  sensitivity  study on
rodents in which we will further validate our prior studies.  We expect to begin
the study within the next 60 days.  We estimate that the study will be completed
within 3  months  upon  commencement  at an  estimated  cost of  $100,000.  Upon
completion of the aforementioned  study we will prepare the protocols  necessary
for a non-human  primate study to test the efficacy of Radilex as a treatment to
acute radiation  sickness.  We expect this study to begin within the next twelve
months.  We believe that  preliminary  results will be available  within 90 days
from  beginning of study,  with analysis  within an additional 60 to 90 days. We
expect an additional  $1,500,000  will be required to complete the primate study
in 2006.

If we are successful in completing the study and achieve the desired results, we
intend to submit the  necessary  documentation  to the FDA and other  regulatory
agencies for  approval.  If approval for Radilex is granted,  we expect to begin
efforts to commercialize our product immediately thereafter. We are anticipating
revenues from the sale of Radilex beginning in calendar year 2008 as a treatment
to the effects caused by irradiation.

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 as a possible therapeutic for radiation exposure.
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.

RESEARCH AND DEVELOPMENT OF VIPROVEX IN CHEMICAL AND BIOLOGICAL EXPOSURE
------------------------------------------------------------------------
APPLICATIONS.
-------------

We are currently  continuing to conduct preliminary  research and development on
the  efficacy  of  Viprovex  as a potential  treatment  for toxic  chemical  and
biological  exposure.  Our initial testing has been limited to early preclinical
studies on rodent  models.  We estimate  approximately  $120,000 for  additional
studies  related to the use of  Viprovex  in these  areas  over the next  twelve
months.  We  anticipate  additional  studies to begin in the  fourth  quarter of
calendar 2005 and continue on an ongoing basis over the next three years.  If we
are successful in achieving desirable results, we intend to design the protocols
and begin studies for these indications,  when capital is available.  As we have
only collected  preliminary data and additional studies are required,  we cannot
predict when, if ever, a viable  treatment can be  commercialized.  If we do not
observe  significant  results or we lack the capital to further the development,
we may abandon  such  research and  development  efforts;  thereby  limiting our
future potential revenues.

RESEARCH AND DEVELOPMENT OF HOMSPERA IN WOUND HEALING APPLICATIONS.
-------------------------------------------------------------------

Within the next three months we plan to begin  preclinical  studies to determine
if Homspera  could  become a compound  that would be used in wound  healing.  We
expect to begin  studies in the first  quarter of calendar  2006. We do not have
any research and  development  expenses  associated  with the use of Homspera in
wound healing in 2005, 2004 or 2003. We estimate  approximately $120,000 for the
costs of such studies over the next twelve months.  We anticipate the completion
of such  studies  within  eight months of  commencement  of the  studies.  If we
achieve  desirable  results,  we will design the protocols and begin studies for
these  indications  when  capital  is  available.  As  we  have  only  collected
preliminary data and additional studies are required, we cannot predict when, if
ever, a viable product can be commercialized.  If we do not observe  significant
results or we lack the capital to further the  development,  we may abandon such
research and development efforts thereby limiting our future potential revenues.

                                      -7-

<PAGE>

We will need to generate  significant revenues from product sales and or related
royalties and license agreements to achieve and maintain profitability.  Through
September  30, 2005,  we had no revenues  from any product  sales,  royalties or
licensing  fees,  and have not achieved  profitability  on a quarterly or annual
basis.  Our ability to achieve  profitability  depends upon, among other things,
our ability to develop products,  obtain regulatory  approval for products under
development and enter into agreements for product development, manufacturing and
commercialization.  Moreover,  we may  never  achieve  significant  revenues  or
profitable operations from the sale of any of our products or technologies.

REVENUES

We have not  generated  any revenues  from  operations  from our  inception.  We
believe we will begin generating  revenues from operations  during calendar year
2008 as we  transition  from a  development  stage  company to that of an active
growth and acquisition stage company.

COSTS AND EXPENSES

From our  inception  through  September  30, 2005,  we have  incurred  losses of
$11,216,051.  These  expenses  were  associated  principally  with  equity-based
compensation  to  employees  and  consultants,  product  development  costs  and
professional services.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2005, we had current  assets of $682,754  consisting of cash of
$667,041 and other current assets of $15,713. At September 30, 2005, we also had
current   liabilities  of  $2,408,545,   consisting  accrued  penalty  for  late
registration  of  $2,072,831  and accounts  payable and accrued  liabilities  of
$335,714.  This  resulted  in net  working  deficit  at  September  30,  2005 of
$(1,725,791).  During the nine months ended September 30, 2005, the Company used
cash in operating activities of $1,482,933.  From the date of inception (October
30, 2002) to September 30, 2005,  the Company has had a net loss of  $11,216,051
and has used cash of $3,557,278 in operating activities.

The Company  currently has no revenue.  There is no guarantee  that our business
model will be successful, or that we will be able to generate sufficient revenue
to fund future operations.  As a result, we expect our operations to continue to
use net cash,  and that we will be  required to seek  additional  debt or equity
financings during the coming quarters. Since inception, the Company has financed
its 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  September  30,  2005 via the private
placement of $3,263,903 of our common stock.

In January 2005, we made a tender offer to temporarily reduce the exercise price
of certain  warrants  issued in October 2004 from $0.50 to $0.20 per share.  The
tender  offer  expired on March 4, 2005.  We  accepted  for  exercise a total of
6,600,778  warrants validly tendered and not withdrawn  pursuant to the terms of
the tender offer, which represents approximately 48% of the aggregate 13,780,449
warrants  that were subject to the offer.  We raised an aggregate of  $1,190,857
from the tender offer, net of costs.

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 of inception from October 30, 2002
to September  30, 2005, we were able to obtain  financing of  $4,232,406  from a
series of private placements of our securities.  Included in this amount was the
conversion of $180,000 of accrued salary and  consulting  fees due to an officer
and a director of the company.  Based on our current plan of  operations  all of
our current  funding is  expected  to be  depleted  by the end of January  2006.
Although we are  continuing  with our efforts to obtain  funding to maintain our
operations,  we cannot assure you that we will be successful or that any funding
we receive will be received timely or on commercially  reasonable  terms. Due to
our working capital deficiency,  and if we do not receive adequate financing, we
will be unable to pay our vendors,  lenders and other  creditors if we cease our
operations,  since the net realizable  value of our non-current  assets will not
generate adequate cash. We currently have no commitments for financing. There is
no guarantee that we will be successful in raising the funds required.

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.

                                      -8-

<PAGE>

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,  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. We believe that
we have  sufficient  capital  resources  to meet  projected  cash flow  deficits
through the end of December 2005. However, if thereafter,  we are not successful
in generating  sufficient  liquidity  from  operations or in raising  sufficient
capital  resources,  this would have a material  adverse effect on our business,
results of operations,  liquidity and financial condition.  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.

During the nine months ended  September 30, 2005, the Company paid off two notes
payable, $14,997 in cash and $65,003 by converting into 232,153 shares of common
stocks at $0.28 per share.  These  shares of common  stock were  issued in July,
2005.

Pursuant to our  employment  agreement with Michael  Wilhelm,  our President and
Chief Executive  Officer,  dated December 16, 2002, we paid a salary of $125,000
and $175,000 to Mr. Wilhelm during the first and second years of his employment,
respectively.  Thereafter  we paid an annual  salary of $250,000.  On August 10,
2005, we entered into a new  employment  agreement  with our President and Chief
Executive Officer, Michael K. Wilhelm. Pursuant to this new employment agreement
we shall pay an annual salary of $275,000 to Mr. Wilhelm through the term of his
employment.   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 a 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  $1,190,856  net of
fees. From March 4, 2005,  until December 31, 2005, we will pay 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.

On December 16, 2002 we entered into a consulting  agreement on a month-to-month
basis with Dr. Mark Witten, our chief research scientist and director. Under the
terms of this  agreement,  Dr.  Witten agrees to place at the disposal of us his
judgment and expertise in the area of acute lung injury.  In  consideration  for
these services,  we agree to pay Dr. Witten a  non-refundable  fee of $5,000 per
month.  Under the terms of our consulting  agreement with Dr. Mark Witten, he is
to  receive a  non-refundable  fee equal to $5,000  per  month.  The  consulting
agreement is on a month-to-month basis.

Acquisition or disposition of plant and equipment
-------------------------------------------------

We did not  dispose or acquire  any  significant  property,  plant or  equipment
during the three months ended September 30, 2005.

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  September 30, 2005, we have relied
on the services of outside consultants for services and currently have six total
employees,  two contract employees and four full-time  employees.  Our full-time
employees are Michael K. Wilhelm,  our Chief Executive  Officer;  John Fermanis,
our  Chief   Financial   Officer;   and,  the  third  and  fourth  serve  in  an
administrative role. In order for us to attract and retain quality personnel, we
anticipate we will have to offer competitive salaries to future employees. We do
not  anticipate our employment  base will  significantly  change during the next
twelve  months,  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

The actual  results of the  combined  company may differ  materially  from those
anticipated  in these  forward-looking  statements.  The  Company  operates in a
market  environment  that is difficult to predict and that involves  significant
risks and uncertainties,  many of which will be beyond the Company's control. If
any of the following risks actually occur, our business, financial condition and
results of operations could be harmed.

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

As of  September  30,  2005,  the  Company  had a  working  capital  deficit  of
$1,725,791.  This  amount  consists  of cash and  current  assets  of  $682,754,
accounts  payable of $170,909,  accrued  current  liabilities of $164,805 and an
accrued  current  liability  of  $2,072,831  related  to a penalty  for the late
registration of the securities sold in the Company's  recent private  placement.
The Company  anticipates  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 the Company's working
capital  position,  the Company would have working capital of $347,040.  We have
incurred a  substantial  net loss for the period from our  inception  in October
2002 to September 30, 2005, and are currently  experiencing  negative cash flow.
We expect to continue to  experience  negative  cash flow and  operating  losses
through  at least 2008 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 have incurred  operating  losses since our inception.  Our net loss for
the nine months ended September 30, 2005 and for fiscal year 2004 was $4,008,024
and  $5,305,407,  respectively.  As of September 30, 2005, we had an accumulated
deficit of $11,216,051.

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

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

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

                                      -10-


<PAGE>

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

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

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

o    ensure  that  our   products   function  as  intended  in  human   clinical
     applications;

o    obtain the regulatory approvals necessary to commercialize products that we
     may develop in the future;

o    manufacture,  or arrange for third-parties to manufacture,  future products
     in a manner that will enable us to be profitable;

o    establish many of the business  functions  necessary to operate,  including
     sales,  marketing,  administrative and financial  functions,  and establish
     appropriate financial controls;

o    make,  use, and sell future  products  without  infringing upon third party
     intellectual property rights; or,

o    respond effectively to competitive pressures.

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

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

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

                                      -11-


<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 to develop our drug candidates.  We require  substantial
working  capital  to fund our  operations.  Since we do not  expect to  generate
significant revenues in the foreseeable future, in order to fund operations,  we
will  be  completely   dependent  on  additional   debt  and  equity   financing
arrangements.  There is no assurance  that any  financing  will be sufficient to
fund our  capital  expenditures,  working  capital  and other cash  requirements
beyond January 2006.  Our working  capital as of September 30, 2005 was $347,040
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
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.

IF WE DO NOT OBTAIN GOVERNMENT  REGULATORY APPROVAL FOR OUR PRODUCTS,  WE CANNOT
SELL OUR PRODUCTS AND WE WILL NOT GENERATE REVENUES.

Our principal  development efforts are currently centered around a class of drug
candidates based on Homspera,  a synthesized version of Substance P, a naturally
occurring  peptide.  We  believe  that these  candidates  show  promise  for the
treatment  of  diseases  and  disorders  in which the body is unable to mount an
appropriate immune response.  However, all drug candidates require U.S. Food and
Drug Administration  ("FDA") and foreign government approvals before they can be
commercialized.  These regulations  change from time to time and new regulations
may be adopted.  None of our drug  candidates  have been approved for commercial
sale. We may incur significant additional operating losses over the next several
years as we fund development,  clinical testing and other expenses while seeking
regulatory  approval.  To date we have conducted limited  preclinical studies of
our potential drug  candidates  using various small animal  models,  significant
additional trials are required, and we may not be able to demonstrate that these
drug  candidates  are safe or  effective.  If we are unable to  demonstrate  the
safety and  effectiveness  of a particular drug candidate to the satisfaction of
regulatory  authorities,  the drug candidate will not obtain required government
approval.  If we do not receive FDA or foreign  approvals for our  products,  we
will not be able to sell our  products  and will not  generate  revenues.  If we
receive regulatory  approval of a product,  such approval may impose limitations
on the indicated  uses for which we may market the product,  which may limit our
ability to generate significant revenues.

WE WILL NEED TO CONDUCT SIGNIFICANT ADDITIONAL RESEARCH, PRECLINICAL TESTING AND
CLINICAL  TESTING BEFORE WE CAN FILE  APPLICATIONS  WITH THE FDA FOR APPROVAL OF
OUR PRODUCT CANDIDATES.

To date we have not yet made applications with the FDA or any other governmental
regulatory agency for approval for our product candidates. Until such as time as
our New Drug Application (NDA) is filed and subsequently  approved,  we will not
be able to manufacture products.

Our  research  and  preclinical  testing is  currently  directed  in  developing
products  candidates  based  on our  proprietary  compound,  Homspera.  We  have
demonstrated in early preclinical studies evidence that may suggest that varying
formulations  of  Homspera  may be used to treat the  suppression  of the body's
immune system caused by exposure to various forms of radiation,  toxic inhalants
and viral infectious  diseases.  As a research and development  company, we may,
from time to time, pursue the development of other products based on discoveries
made during our studies.  To  differentiate  from these other  potential  future
applications,  we are developing specific candidates under the name Radilex as a
potential  treatment  for  maladies  caused  by  exposure  to  various  forms of
radiation, and Viprovex, as a potential treatment to various toxic inhalants and
viral infectious diseases.

We are  currently  conducting  formulation,  toxicity and  stability  studies on
Homspera,  Radilex  and  Viprovex.  We  anticipate  that these  studies  will be
completed in 6 to 9 months.

Also in conjunction  with these  studies,  we plan to begin a rodent study using
Radilex.  We  expect  the  study to be  completed  within 6 to nine  months.  In
parallel  with the rodent  study,  we intend to begin our  preparations  for the
filing of an Investigational New Drug Application (IND). We expect the IND to be
filed with the FDA within the next 12 months.  At the  conclusion  of the rodent
study, we anticipate  commencing a study in non-human  primates.  We expect this
study to be completed  within 16 months.  Based on positive  study  results,  we
expect to file a New Drug Application (NDA) with the FDA in 24 to 36 months.

                                      -12-

<PAGE>

We are currently  conducting a pre-clinical study on the efficacy of Viprovex as
a treatment  for exposure to anthrax  with the Air Force School of  Aeronautical
Medicine.  We expect  this study to conclude  within the next 45 to 60 days.  In
addition,  we have recently prepared the protocol for a pre-clinical study using
Viprovex in the  treatment  of  influenza.  We expect this study to begin in the
first quarter of 2006 to be completed  within 120 days.  After the conclusion of
these aforementioned studies, we expect to design and perform additional studies
in order to ascertain if filing an IND for Viprovex is warranted.

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

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

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

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

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

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

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

THE MARKET FOR  TREATING  ASPECTS OF ACUTE  RADIATION  SYNDROME  AND EXPOSURE TO
VARIOUS  BIOLOGICAL  AGENTS IS  UNCERTAIN  AND IF WE ARE UNABLE TO  SUCCESSFULLY
COMMERCIALIZE  RADILEX OR VIPROVEX,  WE WILL NOT RECOGNIZE A SIGNIFICANT PORTION
OF OUR FUTURE REVENUES, IF ANY.

                                      -13-
<PAGE>

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

IF WE DO NOT OBTAIN GOVERNMENT  REGULATORY APPROVAL FOR OUR PRODUCTS,  WE CANNOT
SELL OUR PRODUCTS AND WE WILL NOT GENERATE REVENUES.

Our principal  development efforts are currently centered around a class of drug
candidates based on Homspera,  a synthesized,  modified analog of Substance P, a
naturally  occurring peptide.  We believe that these candidates show promise for
the treatment of diseases,  conditions  and situation in which the body's immune
system is  compromised  or unable to respond  appropriately.  However,  all drug
candidates  require  U.S.  Food  and Drug  Administration  ("FDA")  and  foreign
government approvals before they can be commercialized. These regulations change
from  time to  time  and  new  regulations  may be  adopted.  None  of our  drug
candidates  have been approved for  commercial  sale.  We may incur  significant
additional  operating losses over the next several years as we fund development,
clinical testing and other expenses while seeking regulatory  approval.  To date
we have conducted limited  preclinical  studies of our potential drug candidates
using various small animal  models,  significant  additional  studies as well as
clinical trials are required,  and we may not be able to demonstrate  that these
drug  candidates  are likely to be safe and  effective  for human use. If we are
unable  to  demonstrate  the  safety  and  effectiveness  of a  particular  drug
candidate to the satisfaction of regulatory authorities, the drug candidate will
not obtain  required  government  approval.  If we do not receive FDA or foreign
approvals  for our  products,  we will not be able to sell our products and will
not generate  revenues.  If we receive  regulatory  approval of a product,  such
approval may impose  limitations  on the indicated  uses for which we may market
the product, which may limit our ability to generate significant revenues.

THE LENGTHY PRODUCT  APPROVAL  PROCESS AND UNCERTAINTY OF GOVERNMENT  REGULATORY
REQUIREMENTS MAY DELAY OR PREVENT US FROM COMMERCIALIZING PROPOSED PRODUCTS, AND
THEREFORE ADVERSELY AFFECT THE TIMING AND LEVEL OF FUTURE REVENUES, IF ANY.

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

o    delays in obtaining regulatory approvals to commence a study;

o    delays in  identifying  and  reaching  agreement on  acceptable  terms with
     prospective clinical trial sites;

o    delays in the enrollment of patients;

o    lack of efficacy during clinical trials; or

o    unforeseen safety issues.

                                      -14-
<PAGE>

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

o    labeling  and  advertising   requirements,   restrictions  or  limitations,
     including the inclusion of warnings, precautions, contra-indications or use
     limitations  that could have a material impact on the future  profitability
     of our applications;

o    testing and surveillance to monitor our future products and their continued
     compliance with regulatory requirements;

o    submitting  products for inspection and, if any inspection reveals that the
     product is not in compliance, prohibiting the sale of all products;

o    suspending manufacturing; or

o    withdrawing marketing clearance.

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

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

The FDA has not designated  expanded access protocols for Radilex,  Viprovex and
Homspera as  "treatment"  protocols.  The FDA may not  determine  that  Radilex,
Viprovex  and  Homspera   meet  all  of  the  FDA's   criteria  for  use  of  an
investigational  drug for treatment use. Even if Radilex,  Viprovex and Homspera
are allowed for treatment use, third party payers may not provide  reimbursement
for the costs of treatment with Radilex, Viprovex and Homspera. The FDA also may
not consider Radilex,  Viprovex and Homspera to be an appropriate  candidate for
acceptance as Emergency Use Authorization for Promising Medical  Countermeasures
Under  Development,   accelerated  approval,  expedited  review  or  fast  track
designation.

IF WE FAIL TO OBTAIN APPROVAL FROM FOREIGN REGULATORY  AUTHORITIES,  WE WILL NOT
BE  ALLOWED  TO MARKET OR SELL OUR  PRODUCTS  IN OTHER  COUNTRIES,  WHICH  WOULD
ADVERSELY AFFECT OUR LEVELS OF FUTURE REVENUES, IF ANY.

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

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

CLINICAL  TRIALS  MAY  FAIL  TO  DEMONSTRATE  THE  SAFETY  AND  EFFICACY  OF OUR
APPLICATIONS,   THE  EFFECT  OF  WHICH  COULD  PREVENT  OR  SIGNIFICANTLY  DELAY
REGULATORY  APPROVAL  AND  THEREFORE  ADVERSELY  AFFECT  THE TIMING AND LEVEL OF
FUTURE REVENUES, IF ANY.

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

                                      -15-
<PAGE>

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

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

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

o    we  may  not  have  the  financial   resources  to  continue  research  and
     development of any of our drug candidates; and,

o    we may not be able to enter into collaborative arrangements relating to any
     drug candidate subject to delay in regulatory filing.

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

o    delays in enrolling volunteers;

o    interruptions  in the  manufacturing of our drug candidates or other delays
     in the delivery of materials required for the conduct of our studies;

o    lower than anticipated retention rate of volunteers in a trial;

o    unfavorable efficacy results;

o    serious side effects experienced by study participants relating to the drug
     candidate;

o    new  communications  from  regulatory  agencies  about how to conduct these
     studies; or,

o    failure to raise additional funds.

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

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

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

OUR  LACK  OF  COMMERCIAL  MANUFACTURING,   SALES,  DISTRIBUTION  AND  MARKETING
EXPERIENCE MAY PREVENT US FROM SUCCESSFULLY COMMERCIALIZING PRODUCTS WHICH WOULD
ADVERSELY AFFECT OUR LEVEL OF FUTURE REVENUES, IF ANY.

                                      -16-
<PAGE>

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

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

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

For the manufacture of the applications under  development,  we obtain synthetic
peptides from third party manufacturers. A synthesized version of substance P is
readily available at low cost from several life science and technology companies
that  provide  biochemical  and  organic  chemical  products  and  kits  used in
scientific and genomic research,  biotechnology,  pharmaceutical development and
the diagnosis of disease and chemical  manufacturing.  If any of these  proposed
manufacturing  operations prove  inadequate,  there may be no assurance that any
other  arrangements  may be  established  on a  timely  basis  or that we  could
establish other manufacturing  capacity on a timely basis.  Although, we believe
that the synthetic substance P and other materials necessary to produce Radilex,
Viprovex and Homspera are readily  available from various  sources,  and several
suppliers are capable of supplying  substance P in both clinical and  commercial
quantities,  our  dependence  on such  manufacturers,  may delay or  impair  our
ability to generate revenues, or adversely affect our profitability.

ADVERSE  DETERMINATIONS  CONCERNING  PRODUCT PRICING,  REIMBURSEMENT AND RELATED
MATTERS COULD PREVENT US FROM SUCCESSFULLY COMMERCIALIZING RADILEX, VIPROVEX AND
HOMSPERA WHICH WOULD ADVERSELY AFFECT OUR LEVEL OF FUTURE REVENUES, IF ANY.

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

THE MEDICAL COMMUNITY MAY NOT ACCEPT AND UTILIZE RADILEX, VIPROVEX AND HOMSPERA,
THE EFFECT OF WHICH  WOULD  PREVENT  US FROM  SUCCESSFULLY  COMMERCIALIZING  THE
PRODUCT AND ADVERSELY AFFECT OUR LEVEL OF FUTURE REVENUE, IF ANY.

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

                                      -17-
<PAGE>

PRODUCT LIABILITY EXPOSURE MAY EXPOSE US TO SIGNIFICANT LIABILITY OR COSTS WHICH
WOULD ADVERSELY  IMPART OUR FUTURE  OPERATING  RESULTS AND DIVERT FUNDS FROM THE
OPERATION OF OUR BUSINESS.

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

WE MAY FAIL TO PROTECT ADEQUATELY OUR PROPRIETARY TECHNOLOGY,  WHICH WOULD ALLOW
COMPETITORS  TO TAKE  ADVANTAGE  OF OUR RESEARCH AND  DEVELOPMENT  EFFORTS,  THE
EFFECT OF WHICH COULD ADVERSELY AFFECT ANY COMPETITIVE ADVANTAGE WE MAY HAVE.

We own or have obtained a license to 2 issued U.S. and 2 issued foreign  patents
and 5 pending  Patent  Cooperation  Treaty  (PCT)  applications,  6 pending U.S.
applications and 15 pending foreign patent applications. Our success will depend
in part on our ability to obtain  additional  United  States and foreign  patent
protection for our drug candidates and processes, preserve our trade secrets and
operate  without  infringing the proprietary  rights of third parties.  We place
considerable  importance on obtaining  patent  protection  for  significant  new
technologies, products and processes.

Our long-term  success largely depends on our ability to market  technologically
competitive  processes  and  products.  If we fail to obtain or  maintain  these
protections,  we may  not be  able to  prevent  third  parties  from  using  our
proprietary  rights. Our currently pending or future patent applications may not
result  in  issued  patents.  In the  United  States,  patent  applications  are
confidential  until patent  applications  are published or the patent is issued,
and because  third  parties may have filed patent  applications  for  technology
covered by our  pending  patent  applications  without  us being  aware of those
applications,  our patent  applications  may not have  priority  over any patent
applications of others.  In addition,  our issued patents may not contain claims
sufficiently broad to protect us against third parties with similar technologies
or  products  or provide us with any  competitive  advantage.  If a third  party
initiates  litigation  regarding our patents,  and is successful,  a court could
revoke our patents or limit the scope of coverage for those patents.

Legal standards relating to the validity of patents covering  pharmaceutical and
biotechnology  inventions  and the scope of claims  made under such  patents are
still  developing.  In some of the  countries  in which we intend to market  our
products, pharmaceuticals are either not patentable or have only recently become
patentable.  Past  enforcement of intellectual  property rights in many of these
countries has been limited or  non-existent.  Future  enforcement of patents and
proprietary  rights in many other countries may be problematic or unpredictable.
Moreover,  the  issuance of a patent in one country does not assure the issuance
of a similar patent in another country.  Claim  interpretation  and infringement
laws vary by nation, so the extent of any patent protection is uncertain and may
vary in different jurisdictions.  The U.S. Patent and Trademark Office, commonly
referred  to as the USPTO,  and the courts  have not  consistently  treated  the
breadth of claims allowed in biotechnology  patents.  If the USPTO or the courts
begin to allow broader  claims,  the  incidence and cost of patent  interference
proceedings and the risk of infringement litigation will likely increase. On the
other hand, if the USPTO or the courts begin to allow narrower claims, the value
of our  proprietary  rights  may be  limited.  Any  changes  in,  or  unexpected
interpretations  of the patent laws may adversely  affect our ability to enforce
our patent position.

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

OUR PATENTS AND  PROPRIETARY  TECHNOLOGY MAY NOT BE ENFORCEABLE  AND THE PATENTS
AND  PROPRIETARY  TECHNOLOGY  OF  OTHERS  MAY  PREVENT  US FROM  COMMERCIALIZING
PRODUCTS, WHICH WOULD ADVERSELY AFFECT OUR LEVEL OF FUTURE REVENUES, IF ANY.

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

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

                                      -18-
<PAGE>

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

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

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

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

FAILURE TO COMPLY WITH  ENVIRONMENTAL  LAWS OR  REGULATIONS  COULD  EXPOSE US TO
SIGNIFICANT  LIABILITY  OR COSTS  WHICH  WOULD  ADVERSELY  IMPART OUR  OPERATING
RESULTS AND DIVERT  FUNDS FROM THE  OPERATION  OF OUR  BUSINESS  HAVE A MATERIAL
ADVERSE EFFECT ON OUR BUSINESS.

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

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

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

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

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

                                      -19-
<PAGE>

A LIMITED  PRIOR PUBLIC  MARKET AND TRADING  MARKET MAY CAUSE  VOLATILITY IN THE
PRICE  OF OUR  COMMON  STOCK  AND  THUS  ADVERSELY  AFFECT  THE  VALUE  OF  YOUR
INVESTMENT.

Our common  stock is  currently  traded on a limited  basis on the OTC  Bulletin
Board (the  "OTCBB")  under the  symbol  "IRBO".  The OTCBB is an  inter-dealer,
Over-The-Counter  market that provides  significantly  less  liquidity  than the
NASDAQ Stock Market.  Quotes for stocks  included on the OTCBB are not listed in
the  financial  sections of newspapers as are those for the NASDAQ Stock Market.
Therefore,  prices for securities traded solely on the OTCBB may be difficult to
obtain and holders of common stock may be unable to resell their  securities  at
or near their original offering price or at any price.

The NASD has enacted  recent  changes that limit  quotations on the OTC Bulletin
Board to  securities of issuers that are current in their reports filed with the
Securities  and Exchange  Commission.  The effect on the OTC  Bulletin  Board of
these rule changes and other proposed changes cannot be determined at this time.

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

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

Certain of our  stockholders  have the right to register  securities  for resale
that they hold pursuant to registration rights agreements. We expect to continue
to incur product development and selling,  general and administrative costs, and
in order to satisfy our funding  requirements,  we will need to sell  additional
equity securities, which may be subject to similar registration rights. The sale
or the proposed  sale of  substantial  amounts of our common stock in the public
markets may adversely  affect the market price of our common stock. An aggregate
of 60,331,747  shares of our common stock are being registered with the SEC in a
registration statement.  The registration and subsequent sales of such shares of
common  stock  will  likely  have an adverse  effect on the market  price of our
common stock.

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

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

                                      -20-
<PAGE>

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 September 30, 2005, 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
September 30, 2005 that has  materially  affected,  or is  reasonably  likely to
materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On December 13, 2001, service of process was effectuated upon GPN Network,  Inc.
with regard to a fee agreement between GPN Network,  Inc. and Silver & Deboskey,
a Professional  Corporation  located in Denver,  Colorado.  The complaint sought
compensation for legal services  allegedly rendered to DermaRx Corp. On November
7, 2002, the District Court in Denver,  Colorado  rendered  judgment in favor of
Silver & Deboskey in the amount of $28,091.  At December  31,  2004,  we had not
paid any of this  amount.  The  judgment  of  $28,091  has been  accrued  and is
contained in the $2,408,545 of Accounts  Payable and Accrued  Liabilities on the
Company's condensed consolidated balance sheet of June 30, 2005.

The judgment was subsequently settled in full for a cash payment of $35,107 paid
on August 2, 2005 releasing the Company from all obligations under the judgment.

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

During the three months ended  September 30, 2005, the Company issued options to
an employee to purchase  103,030 shares of the Company's common stock at a price
equal to 110% of the closing price of the Company's  common stock on the date of
issuance.  The options have an exercise price of $0.33 and a term of five years.
The Company  valued these options using the  intrinsic  value method.  Since the
exercise price of the options was greater than the market value of the Company's
stock at the date of issuance,  the Company  assigned $0 value to these options.
Also during the three  months ended  September  30,  2005,  the Company  granted
150,000  discretionary  incentive stock options to our Chief Executive  Officer,
Michael K. Wilhelm, per his employment  agreement.  The options have an exercise
price of $0.44 and a term of five years.  The Company valued these options using
the intrinsic value method.  Since the exercise price of the options was greater
than the  market  value of the  Company's  stock  at the date of  issuance,  the
Company assigned $0 value to these options.

During the three months ended September 30, 2005, the Company issued warrants to
purchase  77,250  shares of common stock at prices  ranging from $0.125 to $1.00
per share. The Company valued these warrants using the  Black-Scholes  valuation
model,  and charged the amount of $20,491 to operations  during the three months
ended September 30, 2005.

On September 28, 2001, the Company entered into a $50,000 Convertible Promissory
Note bearing 8% interest per month with an  accredited  investor.  in accordance
with the terms of the  Promissory  Note, the  outstanding  principal and accrued
interest was  converted  into 232,153  shares of our common stock  releasing the
Company from any further  obligation under the Note. No general  solicitation or
advertising was undertaken in connection with the offer and sale of the Note and
the shares.  The  investor  represented  to the Company  that the  investor  was
purchasing  the securities for the investor's own account and not with a present
view towards the distribution  thereof. In addition,  each investor acknowledged
and  agreed  that the note and the  shares  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. in accordance with the terms of the Promissory Note, the
outstanding  principal and accrued interest was converted into 232,153 shares of
our common stock  releasing  the Company from any further  obligation  under the
Note. No general  solicitation  or advertising was undertaken in connection with
the offer and sale of the Note and the shares.  The investor  represented to the
Company that the investor was  purchasing  the securities for the investor's own
account  and not with a  present  view  towards  the  distribution  thereof.  In
addition, each investor acknowledged and agreed that the note and the shares 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.

                                      -21-
<PAGE>

During the three months ended June 30, 2005,  the Company  issued a stock option
to its chief executive  officer to purchase  150,000 shares of common stock at a
price of $0.44 per share.

During the three months ended  September  30, 2005,  the Company  issued a stock
option to its chief executive officer to purchase 103,030 shares of common stock
at a price of $0.33 per share.

During the nine  months  ended  September  30,  2005,  the  Company  accrued the
issuance  of  3,827,960  shares of common  stock and  warrants  to  purchase  an
additional  1,507,280  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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5: OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a)  Exhibits

10.1     Employment   Agreement  dated  August  10,  2005  by  and  between  the
         Registrant and Michael K. Wilhelm.

10.2     Change of Control  Agreement  dated  August 10, 2005 by and between the
         Registrant and Michael K. Wilhelm.

10.3     Severance Agreement dated August 10, 2005 by and between the Registrant
         and Michael K. Wilhelm.

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

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

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

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

     * This  exhibit  shall not be deemed  "filed" for purposes of Section 18 of
     the Securities Exchange Act of 1934 or otherwise subject to the liabilities
     of that section,  nor shall it be deemed  incorporated  by reference in any
     filing under the Securities  Act of 1933 or the Securities  Exchange Act of
     1934,  whether made before or after the date hereof and irrespective of any
     general incorporation language in any filings.



                                   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 November 10, 2005.

     IR BioSciences Holdings, Inc.

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



                                      -23-