Edgar Filing: IR BIOSCIENCES HOLDINGS INC

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

FORM 10-KSB

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

For the fiscal year ended December 31, 2003.

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

Commission File Number: 33-05384

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

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

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

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

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

NONE

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

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

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes No X
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

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

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

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

Documents Incorporated by reference: None

Transitional Small Business Disclosure Format Yes No X
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TABLE OF CONTENTS

Page
----

PART I

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

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

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

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

PART II

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

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

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

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

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

PART III

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

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

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

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

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

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

SIGNATURES

INTRODUCTORY NOTE

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

PART I

ITEM 1. DESCRIPTION OF BUSINESS

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

BUSINESS DEVELOPMENT

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

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

CORPORATE STRUCTURE

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

BUSINESS DESCRIPTION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

o The treatment for ARS;

o The treatment of ARDS; and,

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

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

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

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

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

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

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

o Reducing the risk of cancer development;

o Prevention of the spread and metastasis of cancer;

o The treatment of lung and other cancers;

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

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

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

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

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

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

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

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

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

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

o Immune-Based Therapies for Acute Respiratory Distress Syndrome

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

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

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

o Treatment for Hair Loss Related to Traditional Cancer Treatments

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

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

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

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

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

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

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

o Immune-Based Therapies for Cigarette Smoke and Other Toxicants

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

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

o Immune-Based Therapies for the Veterinary Market

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

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

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

o Immune-Based Therapies for Cancer

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

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

o Immune-Based Therapies for the Common Cold/Flu

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

o Immune-Based Therapies for HIV/AIDS

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

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

o Immune-Based Therapies for Food Poisoning

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

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

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

o Bone infections (osteomyelitis),

o Joint infections (arthritis),

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

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

o Infection of the liver (hepatitis),

o Lung infections (pneumonia),

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

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

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

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

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

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

o Establishing and formalizing strategic partnering relationships.

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

o Accelerating current research efforts.

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

o Expanding production facility capacity.

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

o Expanding sales, production and administrative resources.

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

o Supplementing and leveraging existing advisory relationships.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FACILITIES

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

EMPLOYEES

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

RISK FACTORS

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

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

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

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

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

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

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

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

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

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

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

o The time and costs involved in obtaining regulatory approvals;

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

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

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

o Competing technological and market developments;

o Effective commercialization activities and arrangements;

o The costs of defending against and settling lawsuits; and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PRODUCT LIABILITY EXPOSURE MAY EXPOSE IMMUNEREGEN TO SIGNIFICANT LIABILITY.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

o ImmuneRegen's financial position and results of operations;

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

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

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

o U.S. and foreign governmental regulatory actions;

o Actual or anticipated changes in drug reimbursement policies;

o Developments with ImmuneRegen's collaborators, if any;

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

o Status of litigation;

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

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

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

o Market conditions for life science stocks in general.

THERE IS NO ASSURANCE OF AN ESTABLISHED PUBLIC TRADING MARKET.

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

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

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

o changes in interest rates;

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

o variations in quarterly operating results;

o change in financial estimates by securities analysts;

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

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

o general economic and other national conditions.

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

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

BROKER-DEALER REQUIREMENTS MAY AFFECT TRADING AND LIQUIDITY.

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

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

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

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

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

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

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

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

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

WE HAVE NO INTENTION TO PAY DIVIDENDS.

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

ITEM 2. DESCRIPTION OF PROPERTY

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

ITEM 3. LEGAL PROCEEDINGS

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

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

None.

PART II

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

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

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

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

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

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

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

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

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

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

Overview
--------

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

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

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

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

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

Revenue
-------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Net Loss
--------

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

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

ITEM 7. FINANCIAL STATEMENTS

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

RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
Certified Public Accountants

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
IR Biosciences Holdings Inc.

Scottsdale, Arizona

We have audited the accompanying consolidated balance sheet of IR Biosciences
Holdings Inc. and Subsidiary (a development stage company)(the "Company") as of
December 31, 2003 and the related consolidated statements of losses, deficiency
in stockholders' equity, and cash flows for the year ended December 31, 2003.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

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

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

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

New York, New York
May 18, 2004

F-1

INDEPENDENT AUDITORS' REPORT

Board of Directors
ImmuneRegen BioSciences, Inc.
Scottsdale, Arizona

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ImmuneRegen BioSciences, Inc.
as of December 31, 2002, and the results of its operations and cash flows for
the period from October 30, 2002 (inception) to December 31, 2002, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
accompanying financial statements, the Company's significant operating losses
raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1. The
financial statements do not include any adjustments to asset carrying amounts or
the amount and classification of liabilities that might result from the outcome
of this uncertainty.

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

F-2

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

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

F-3

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

For the Twelve From the Date Cumulative
Months Ended of Inception from Inception
December 31, October 30, 2002) to October 30, 2002) to
2003 December 31, 2002 December 31, 2003
------------ -------------------- ---------------------

Revenues $ -- $ -- $ --
Operating expenses:
Selling, general and
administrative expenses 1,348,078 45,718 1,393,796
Merger fees and costs 350,000 0 350,000
Financing cost 90,000 0 90,000
------------ ------------ ------------

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

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

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

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

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

F-4

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

Cash flows from operating activities:
Net loss during development stage $(1,856,702) (45,918) $(1,902,620)

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

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

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

Cash flows from investing activities:

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

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

Cash flows from financing activities:

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

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

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

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

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

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

F-5

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

NON-CASH INVESTING AND FINANCING ACTIVITIES:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

F-6

IR BioSciences Holdings, Inc. and Subsidiary
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
From date of inception (October 30, 2002) to December 31, 2003

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Net loss for the twelve month period
ending December 31, 2003 (1,856,702) (1,856,702)
---------- --------- ---------- ------------ ----------- ------------
Balance at December 31, 2003 11,715,650 11,715 1,047,157 -- (1,902,620) (843,748)
---------- --------- ---------- ------------ ----------- ------------
F-7

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

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

1. Summary of Significant Accounting Policies:

NATURE OF BUSINESS

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

GOING CONCERN

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

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

ACQUISITION AND CORPORATE RESTRUCTURE

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

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

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

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

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

F-8

1. Summary of Significant Accounting Policies, continued:

USE OF ESTIMATES

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

CASH EQUIVALENTS

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

CASH CONCENTRATION

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

BASIC AND DILUTED LOSS PER SHARE

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

COMPREHENSIVE INCOME

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

INCOME TAXES

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

F-9

1. Summary of Significant Accounting Policies, continued:

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

STOCK-BASED COMPENSATION

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

PREPAID SERVICES

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

LICENSED PROPRIETARY RIGHTS

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

CAPITALIZED WEBSITE COSTS

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

FURNITURE AND EQUIPMENT

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

Computer equipment 3 years
Furniture 7 years

F-10

1. Summary of Significant Accounting Policies, continued:

ADVERTISING

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

NEW ACCOUNTING PRONOUNCEMENTS

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

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

F-11

1. Summary of Significant Accounting Policies (Continued)

NEW ACCOUNTING PRONOUNCEMENTS (Continued)

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

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

2. Related-Party Transactions:

EMPLOYMENT CONTRACTS

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

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

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

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

F-12

2. Related-Party Transactions, continued:

CONSULTING AGREEMENTS

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

PROPRIETARY RIGHTS AGREEMENT

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

DUE TO RELATED PARTIES

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

OFFICE LEASE

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

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

F-13

2. Related-Party Transactions, continued:

InOne CONTRACT

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

NOTES PAYABLE

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

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

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

3. Commitments and Contingencies:

MINIMUM FEE - ADVERTISING AND DESIGN

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

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

F-14

3. Commitments and Contingencies, continued:

OFFICE LEASE

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

InOne CONTRACT

4. Convertible Notes:

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

Convertible Promissory Note $ 15,000

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

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

F-15

4. Convertible Notes, continued:

CONVERTIBLE PROMISSORY NOTE

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

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

SECURED CONVERTIBLE PROMISSORY NOTES

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

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

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

F-16

4. Convertible Notes, continued:

AMENDED SECURED CONVERTIBLE PROMISSORY NOTES

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

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

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

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

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

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

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

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

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

F-17

4. Convertible Notes, continued:

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

FOURTH QUARTER SECURED CONVERTIBLE PROMISSORY NOTES

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

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

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

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

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

F-18

4. Convertible Notes, continued:

FOURTH QUARTER SECURED CONVERTIBLE PROMISSORY NOTES (CONTINUED)

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

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

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

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

5. Notes Payable - Shareholder:

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

6. Stockholders' Deficit:

PREFERRED STOCK

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

COMMON STOCK

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

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

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

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

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

F-19

6. Stockholders' Deficit, continued:

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

COMMON STOCK (CONTINUED)

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

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

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

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

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

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

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

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

WARRANTS

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

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

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

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

F-20

6. Stockholders' Deficit, continued:

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

The following represents a summary of warrant transactions:

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

REVERSE STOCK SPLIT

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

7. Stock Option Plan:

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

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

F-21

7. Stock Option Plan, continued:

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

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

2003 2002
---- ----
Average Average
Options Exercise Price Options Exercise Price
-------------------------------------------------------------------------------------------------

Outstanding at beginning of period 0 N/A 30,606 $ 50.00
Granted or assumed from GPN 31,606 $50.00 0
Exercised 0 N/A 0
Cancelled 0 N/A 0
Outstanding at end of year 31,606 $ 50.00 30,606 $ 50.00
Weighted-average value of options
granted during the period $ N/A $ N/A

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

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

9. Development Stage Company:

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

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

F-22

10. Subsequent Events:

FINANCIAL PUBLIC RELATIONS

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

12% SENIOR SECURED PROMISSORY NOTE

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

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

MARKETING AGREEMENTS

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

S-8 REGISTRATION

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

STOCK COMPENSATION

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

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

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

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

STRATEGIC PLANNING CONSULTING AGREEMENT

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

F-23

STOCK SPLIT

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

CORPORATE PLANNING CONSULTING AGREEMENT

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

NOTES PAYABLE EXTENSION:

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

F-24

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

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

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

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

ITEM 8A. CONTROLS AND PROCEDURES.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ITEM 10. EXECUTIVE COMPENSATION

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

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

SUMMARY COMPENSATION TABLE

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

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

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

None.

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

None.

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

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

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

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

The following summarizes the stock option transactions:

2003 2002
---- ----
Average Average
Options Exercise Price Options Exercise Price
-------------------------------------------------------------

Outstanding at beginning of period 0 N/A 30,606 $ 50.00
Assumed from GPN 31,606 $ 50.00 0
Exercised 0 N/A 0
Cancelled 0 N/A 0
Outstanding at end of year 31,606 $ 50.00 30,606 $ 50.00
Weighted-average value of options
granted during the period $ N/A $ N/A

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

Warrants
--------

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

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

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

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

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

The following represents a summary of warrant transactions:

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

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

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

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

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

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

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

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

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

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

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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

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

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

(a) Financial Statements, Financial Statement Schedules and Exhibits

Independent Auditor's Report.

Consolidated Balance Sheet as of December 31, 2003.

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

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

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

Notes to Consolidated Financial Statements.

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

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

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

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

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

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

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

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

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

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

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

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

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

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

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

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

SIGNATURES

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

IR BioSciences Holdings, Inc.

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