Edgar Filing: IR BIOSCIENCES HOLDINGS INC

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
NOVEMBER 24, 2004 REGISTRATION NO._____
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

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IR BIOSCIENCES HOLDINGS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

DELAWARE 2834 13-3301899
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)

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4021 NORTH 75TH STREET, SUITE 201
SCOTTSDALE, ARIZONA 85251
(408) 922-3926
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)

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MICHAEL WILHELM, CHIEF EXECUTIVE OFFICER
4021 NORTH 75TH STREET, SUITE 201
SCOTTSDALE, ARIZONA 85251
(408) 922-3926
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

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COPIES TO
THOMAS J. POLETTI, ESQ.
TED WEITZMAN, ESQ.
KIRKPATRICK & LOCKHART LLP
10100 SANTA MONICA BLVD., 7TH FLOOR
LOS ANGELES, CA 90067
TELEPHONE (310) 552-5000 FACSIMILE (310) 552-5001

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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: From time to time after the
effective date of this Registration Statement

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. |X|

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
the same offering. |_|

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|

CALCULATION OF REGISTRATION FEE
==========================================================================================================================
PROPOSED
MAXIMUM
PROPOSED MAXIMUM AGGREGATE
AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE(2) PRICE(2) REGISTRATION FEE
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Common stock, $.001 par value (3) 37,141,981 $0.18 $6,685,557 $ 847
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Common stock, $.001 par value (4) 10,019,600 0.18 1,803,528 229
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Total Registration Fee 47,161,581 $1,076
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(Footnotes to table on next page)

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SUCH SECTION 8(A), MAY DETERMINE.

(1) In accordance with Rule 416(a), the Registrant is also registering
hereunder an indeterminate number of shares that may be issued and resold
to prevent dilution resulting from stock splits, stock dividends or
similar transactions as well as anti-dilution provisions applicable to
shares underlying the warrants.

(2) Estimated pursuant to Rule 457(c) of the Securities Act of 1933 solely for
the purpose of computing the amount of the registration fee based on the
average of the bid and ask prices reported on the OTC Bulletin Board on
November 22, 2004.

(3) Represents shares of the Registrant's common stock being registered for
resale that have been issued to the selling stockholders named in the
prospectus or a prospectus supplement.

(4) Represents shares of the Registrant's common stock being registered for
resale that have been or may be acquired upon the exercise of warrants
issued to the selling stockholders named in the prospectus or a prospectus
supplement.

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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with |the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
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PROSPECTUS
Subject to Completion, Dated November 24, 2004
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47,161,581 SHARES

IR BIOSCIENCES HOLDINGS, INC.

COMMON STOCK

This prospectus relates to 47,161,581 shares of common stock of IR
BioSciences Holdings, Inc. that may be sold from time to time by the selling
stockholders named in this prospectus. We will not receive any proceeds from the
sales by the selling stockholders, but we will receive funds from the exercise
of warrants held by selling stockholders, if exercised.

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Our common stock is traded on the OTC Bulletin Board maintained by the
National Association of Securities Dealers, Inc. under the symbol "IRBO." On
November 22, 2004, the closing sales price for our common stock on the OTCBB was
$0.18 per share.

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THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.

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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

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The date of this prospectus is _______

TABLE OF CONTENTS

PROSPECTUS SUMMARY.............................................................1
RISK FACTORS...................................................................3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.............................15
USE OF PROCEEDS...............................................................17
DIVIDEND POLICY...............................................................17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS........................................18
BUSINESS......................................................................22
MANAGEMENT....................................................................36
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................40
SELLING STOCKHOLDERS..........................................................41
DESCRIPTION OF CAPITAL STOCK..................................................54
SHARES ELIGIBLE FOR FUTURE SALE...............................................56
PLAN OF DISTRIBUTION..........................................................57
LEGAL MATTERS.................................................................58
EXPERTS.......................................................................58
ADDITIONAL INFORMATION........................................................58
INDEX TO FINANCIAL STATEMENTS................................................F-1

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Please read this prospectus carefully. It describes our business, our
financial condition and results of operations. We have prepared this prospectus
so that you will have the information necessary to make an informed investment
decision.

You should rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell
shares of our common stock and seeking offers to buy shares of our common stock
only in jurisdictions where offers and sales are permitted. The information
contained in this prospectus is accurate only as of the date of the prospectus,
regardless of the time the prospectus is delivered or the common stock is sold.

-i-

PROSPECTUS SUMMARY

This summary highlights some information from this prospectus, and it
may not contain all of the information that is important to you. You should read
the following summary together with the more detailed information regarding our
company and the common stock being sold in this offering, including "Risk
Factors" and our consolidated financial statements and related notes, included
elsewhere in, or incorporated by reference into, this prospectus. All share and
per share information included in this prospectus has been adjusted for a
1-for-20 reverse split of our common stock that we effected in July 2003 and a
2-for-1 forward stock split of our common stock that we effected in April 2004.

OUR COMPANY

GENERAL

We specialize in the research and development of important life saving,
health-enhancing therapeutic applications and therapies. Our proprietary
product, which we have named "Homspera," is derived from Substance P, a
naturally occurring peptide found within the human body. Currently, we hold two
patents and four provisional patents in the United States. Additionally, we hold
a patent with each of the European Union and Australia, and we are seeking to
extend our patents into Canada and, possibly, Japan. Based on our initial
studies and ongoing research, we are developing applications using Homspera to
improve pulmonary function and stimulate the immune system in humans for the
treatment of acute radiation syndrome, acute lung injury, acute respiratory
distress syndrome ("ARDS") and hair replacement related to loss due to
traditional anti-cancer treatments. We plan to apply for Investigational New
Drug ("IND") approval from the United States Federal and Drug Administration
("FDA").

COMPANY HISTORY

We were originally incorporated in Delaware in June 1985 under the name
Vocaltech, Inc. to develop, design, manufacture and market products utilizing
proprietary speech-generated tactile feedback devices. We completed our initial
public offering of our securities in October 1987. We changed our name to
InnoTek, Inc. in November 1992. In January 1992, we effected a 1-for-6.3 reverse
stock split of our common stock. In December 1994, we acquired all of the
outstanding stock of InnoVisions, Inc., a developer and marketer of skin
protective products, discontinued our prior operations in their entirety and
changed our name to DermaRx Corporation. In April 2000, we effected a reverse
merger with a subsidiary of Go Public Network, Inc., which was engaged in
assisting early-stage development and emerging growth companies with financial
and business development services. We changed our name to GoPublicNow.com, Inc.,
effected a 1-for-5 reverse stock split and discontinued our prior operations in
their entirety. In November 2000, we changed our name to GPN Network, Inc. In
July 2001, we discontinued the operations of GPN Network, Inc. in their entirety
and began looking for appropriate merger partners. Our objective became the
acquisition of an operating company with the potential for growth in exchange
for our securities. In July 2003, we effected a reverse merger with ImmuneRegen
BioSciences, Inc. and adopted our current business model. In July 2003, we
effected a 1-for-20 reverse stock split, and in April 2004, we effected a
2-for-1 stock split. ImmuneRegen BioSciences, Inc. was incorporated in October
2002; all information contained herein refers to the operations of ImmuneRegen
BioSciences, Inc., our wholly-owned operational subsidiary.

RECENT DEVELOPMENTS

In October 2004, we completed a private placement, whereby we sold an
aggregate of $2,450,000 worth of units to accredited investors (the "Private
Placement"). Each unit was sold for $10,000 (the "Unit Price") and consisted of
(a) a number of shares of our common stock determined by dividing the Unit Price
by $0.125, and (b) a warrant to purchase, at any time prior to the fifth
anniversary following the date of issuance of the warrant, a number of shares of
our common stock equal to fifty percent (50%) of the number of shares included
within the unit, at a price equal to $0.50 per share of common stock. In
consideration of the investment, we granted to each investor certain
registration rights and anti-dilution rights.

-1-

Further to the Private Placement, we entered into a settlement
agreement with certain creditors whereby for full and complete satisfaction of
claims totaling an aggregate of $158,017.25 (the "Claim Amount"), we issued to
the creditors the following: (a) a number of shares of our common stock
determined by dividing the Claim Amount by $0.125, and (b) warrants to purchase,
at any time prior to the fifth anniversary following the date of issuance of the
warrant, a number of shares of our common stock equal to fifty percent (50%) of
the number of shares described above, at a price equal to $0.50 per share of
common stock. The warrants are identical to the warrants issued in the Private
Placement.

Pursuant to the terms of a placement agency agreement, dated September
3, 2004, by and between us and Joseph Stevens & Co., Inc., we issued 4,900,000
shares of our common stock to Joseph Stevens & Co., Inc. or its designees, upon
the closing of the Private Placement. The shares were issued as consideration
for the services of Joseph Stevens & Co., Inc. as our placement agent in the
Private Placement.

We also previously issued convertible promissory notes in the aggregate
principal amount of $558,500. Immediately upon the closing of the Private
Placement, and in accordance with the terms of the promissory notes, all
outstanding principal and accrued interest converted into 4,689,875 shares of
our common stock and warrants to purchase 433,516 shares of our common stock.

THE OFFERING

Common stock offered by selling stockholders.... 47,161,581 shares(1)
Common stock outstanding........................ 62,125,081 shares(2)
Use of proceeds................................. We will not receive any
proceeds from the sale of the
common stock, but we will
receive funds from the exercise
of warrants by selling
stockholders, if exercised.
OTC Bulletin Board.............................. IRBO

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(1) Represents 37,141,981 shares of our common stock that were issued to selling
stockholders and 10,019,600 shares of our common stock underlying warrants that
were issued to selling stockholders.

(2) The number of shares of common stock outstanding as of November 23, 2004
listed above excludes:

o 63,212 shares of our common stock issuable upon exercise of options at a
weighted average exercise price of $25.00 per share that were granted
outside of our 2003 Stock Option, Deferred Stock and Restricted Stock
Plan. No options had been granted under our 2003 Stock Option, Deferred
Stock and Restricted Stock Plan. For a description of our 2003 Stock
Option, Deferred Stock and Restricted Stock Plan, please see
"Management--2003 Stock Option, Deferred Stock and Restricted Stock
Plan"; and

o 17,430,710 shares of our common stock issuable upon exercise of warrants
with exercise prices ranging from $0.05 to $2.00 per share.

ADDITIONAL INFORMATION

We were originally incorporated in Delaware under the name of
Vocaltech, Inc. in June 1985. We changed our name to InnoTek, Inc. in November
1992, to DermaRx Corporation in December 1994, to GoPublicNow.com, Inc. in April
2000, to GPN Network, Inc. in November 2000 and to IR BioSciences Holdings, Inc.
in August 2003. Our executive offices are located at 4021 N. 75th Street, Suite
201, Scottsdale, AZ 85251. Our telephone number is (480) 922-3926.

In this prospectus, the terms "we," "us," and "our" refer to IR
BioSciences Holdings, Inc., a Delaware corporation, and its consolidated
subsidiary, as appropriate in the context, and, unless the context otherwise
requires, "common stock" refers to the common stock, par value $0.001 per share,
of IR BioSciences Holdings, Inc.

-2-

RISK FACTORS

Any investment in our common stock involves a high degree of risk. You
should carefully consider the risks described below and all of the information
contained in this prospectus before deciding whether to purchase our common
stock. If any of the following risks actually occur, our business, financial
condition and results of operations could be harmed. The trading price of our
common stock could decline, and you may lose all or part of your investment in
our common stock.

RISKS RELATED TO OUR FINANCIAL RESULTS

WE HAVE NOT GENERATED ANY REVENUE AND HAVE AN ACCUMULATED DEFICIT. WE ARE NOT
CURRENTLY PROFITABLE AND EXPECT TO INCUR SIGNIFICANT EXPENSES IN THE NEAR
FUTURE.

We are focused on product development and have not generated any
revenue to date. We have incurred operating losses since our inception. Our net
loss for the nine months ended September 30, 2004 and for fiscal year 2003 was
$4,053,068, and $1,856,702, respectively. As of September 30, 2004, we had an
accumulated deficit of $5,955,688.

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

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

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

We have incurred a net loss and negative cash flows from operations of
$5,955,688 and $1,482,107, respectively, for the period from the inception of
our operating subsidiary, ImmuneRegen BioSciences, Inc., in October 2002 to
September 30, 2004, and due to that and a lack of operational history, among
other matters, our independent certified public accountants have raised
substantial doubt about our ability to continue as a going concern, which
contemplates, among other things, the realization of assets and satisfaction of
liabilities in the normal course of business. The effect of this going concern
could materially and adversely affect our ability to raise capital and our
relationship with potential suppliers and customers, and could have other
unforeseen effects.

OUR OPERATING EXPENSES ARE UNPREDICTABLE.

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

-3-

WE MAY EXPERIENCE FLUCTUATION OF QUARTERLY OPERATING RESULTS.

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

RISKS RELATED TO OUR BUSINESS

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

We require substantial working capital to fund our operations. Since we
do not expect to generate significant revenues in the foreseeable future, in
order to fund operations, we will be completely dependent on additional debt and
equity financing arrangements. There is no assurance that any financing will be
sufficient to fund our capital expenditures, working capital and other cash
requirements for the next 12 months. No assurance can be given that any such
additional funding will be available or that, if available, can be obtained on
terms favorable to us. If we are unable to raise needed funds on acceptable
terms, we will not be able to develop or enhance our products, take advantage of
future opportunities or respond to competitive pressures or unanticipated
requirements. A material shortage of capital will require us to take drastic
steps such as reducing our level of operations, disposing of selected assets or
seeking an acquisition partner. If cash is insufficient, we will not be able to
continue operations.

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

Our operating subsidiary, ImmuneRegen BioSciences, Inc., was founded in
October 2002. As a result, we have a limited operating history on which you can
base your evaluation of our business and prospects. Our 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 Our 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 our 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.

-4-

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, our business will not be successful.

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

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

OUR FAILURE TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE PRODUCTS WILL CAUSE US TO
CEASE OPERATIONS.

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

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

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

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

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

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

The regulatory process for new therapeutic drug products, including the
required preclinical studies and clinical testing, is lengthy and expensive. We
may not receive necessary FDA clearances for any of our potential products in a
timely manner, or at all. The length of the clinical trial process and the
number of patients the FDA

-5-

will require to be enrolled in the clinical trials in order to establish the
safety and efficacy of our proposed products is uncertain.

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

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 us. We,
or our contract manufacturers, if any, may not be able to maintain compliance
with the FDA's GMP requirements on a continuing basis. Failure to maintain
compliance could have a material adverse effect on us.

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

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

OBTAINING FDA AND OTHER REGULATORY APPROVALS IS COMPLEX, TIME CONSUMING AND
EXPENSIVE, AND THE OUTCOMES ARE UNCERTAIN.

The process of obtaining FDA and other regulatory approvals is time
consuming, expensive and difficult to design and implement. Clinical trials are
required and the marketing and manufacturing of our applications are subject to
rigorous testing procedures. Our applications will require clinical trials. The
commencement and completion of clinical trials for our Homspera-based
applications or any of our applications could be delayed or prevented by a
variety of factors, including:

o delays in obtaining regulatory approvals to commence a study;

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

o delays in the enrollment of patients;

-6-

o lack of efficacy during clinical trials; or

o unforeseen safety issues.

Significant delays in clinical trials will impede our ability to
commercialize our applications and generate revenue and could significantly
increase our development costs.

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

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

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

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

o suspending manufacturing; or

o withdrawing marketing clearance.

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

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

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

LEGISLATIVE OR REGULATORY REFORM OF THE HEALTHCARE SYSTEM MAY AFFECT OUR ABILITY
TO SELL OUR FUTURE PRODUCTS PROFITABLY.

In both the United States and a number of foreign jurisdictions, there
have been legislative and regulatory proposals to change the healthcare system
in ways that could impact our ability to sell our future products profitably.
The FDA's policies may change and additional government regulations may be
enacted, which could prevent or delay regulatory approval of our applications.
We cannot predict the likelihood, nature or extent of adverse government
regulation that may arise from future legislation or administrative action,
either in the United States or abroad. If we are not able to maintain regulatory
compliance, we might not be permitted to market our future products and our
business could suffer.

-7-

TECHNOLOGICAL CHANGE MAY RENDER OUR POTENTIAL PRODUCTS OBSOLETE, OR OUR
COMPETITORS MAY HAVE GREATER RESOURCES AND CAPABILITIES AND SUPERIOR PRODUCTS.

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 we are developing or that would render our technology and proposed
products obsolete or noncompetitive. Most of our competitors have substantially
greater experience, financial and technical resources and production, marketing
and development capabilities. Accordingly, some of our competitors may succeed
in obtaining regulatory approval for products more rapidly or effectively than
us, or technologies and products that are more effective and affordable than any
that we are currently developing. Our future success will depend on our ability
to develop and market effectively our products against those of our competitors.
If our products receive marketing approval but cannot compete effectively in the
marketplace, our profitability and financial position will suffer.

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

We have not manufactured any of our products in commercial quantities.
We may not successfully make the transition from manufacturing clinical trial
quantities to commercial production quantities or be able to arrange for
contract manufacturing and this could prevent us from commercializing products
or limit our profitability from our products. Even if Homspera is successfully
developed and receives FDA approval, we have not demonstrated the capability to
manufacture Homspera in commercial quantities. We have not demonstrated the
ability to manufacture Homspera in large-scale clinical quantities. We expect 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 we could establish other manufacturing
capacity on a timely basis.

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

The manufacturing process of our proposed products is expected to
involve a number of steps and requires compliance with stringent quality control
specifications imposed by us and by the FDA. Moreover, it is expected that our
proposed products may be manufactured only in a facility that has undergone a
satisfactory inspection and certification by the FDA. For these reasons, we
would not be able to quickly replace our manufacturing capacity if we were
unable to use our 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. Our inability or reduced capacity
to manufacture our proposed products would prevent us from successfully
commercializing our proposed products.

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

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

Our ability to earn sufficient revenue on Homspera or any other
proposed products will depend in part on the extent to which reimbursement for
the costs of such products and related treatments will be available from
government health administration authorities, private health coverage insurers,
managed care organizations and other organizations. Failure to obtain
appropriate reimbursement may prevent us from successfully commercializing
Homspera or any proposed products. Third-party payers are increasingly
challenging the prices of medical products

-8-

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.

OUR SUCCESS WILL DEPEND UPON THE ACCEPTANCE OF HOMSPERA BY THE MEDICAL
COMMUNITY.

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

PRODUCT LIABILITY EXPOSURE MAY EXPOSE US TO SIGNIFICANT LIABILITY.

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

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

We currently have established a pilot manufacturing facility at our lab
headquarters in Tucson, Arizona for the production of immune-based therapies. We
expect these facilities to be adequate to supply limited clinical trial
quantities for our products under development. Additional manufacturing capacity
will be needed for commercial scale production, if these therapies are approved
for commercial sale. For the manufacture of the applications under development,
we obtain synthetic peptides from third party manufacturers. 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. Although, we believe that the synthetic substance P and other
materials necessary to produce Homspera are readily available from various
sources, and several suppliers are capable of supplying substance P in both
clinical and commercial quantities, our dependence on such manufacturers, may
delay or impair our ability to generate revenues, or adversely affect our
profitability.

OUR BUSINESS, WHICH DEPENDS ON A SMALL NUMBER OF FACILITIES, IS VULNERABLE TO
NATURAL DISASTERS, TELECOMMUNICATION AND INFORMATION SYSTEMS FAILURES, TERRORISM
AND SIMILAR PROBLEMS, AND WE ARE NOT FULLY INSURED FOR LOSSES CAUSED BY ALL OF
THESE INCIDENTS.

We conduct our research and development operations at our Tucson
facility. This facility could be damaged by fire, floods, power loss,
telecommunication and information systems failures and similar events. Our
insurance policies have limited coverage levels for loss or damages in these
events and may not adequately compensate us for any losses that may occur. In
addition, terrorist acts or acts of war may cause harm to our employees or
damage our facilities. The potential for future terrorist attacks, the national
and international responses to terrorist attacks or perceived threats to
national security, and other acts of war or hostility have created many economic
and political uncertainties that could adversely affect our business and results
of operations in ways that we cannot predict, and could cause our stock price to
fluctuate or decline. We are uninsured for these types of losses.

-9-

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

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

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

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

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

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

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

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

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

-10-

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

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

We cannot be certain that our 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 application is published or the patent is issued,
applications may have been filed which relate to services similar to those
offered by us. We may be subject to legal proceedings and claims from time to
time in the ordinary course of our business, including claims of alleged
infringement of the trademarks and other intellectual property rights of third
parties.

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

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

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

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

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

PROVISIONS IN OUR BYLAWS PROVIDE FOR INDEMNIFICATION OF OFFICERS AND DIRECTORS,
WHICH COULD REQUIRE US TO DIRECT FUNDS AWAY FROM OUR BUSINESS AND FUTURE
PRODUCTS.

Our bylaws provide for the indemnification of our officers and
directors. We may be required to advance costs incurred by an officer or
director and to pay judgments, fines and expenses incurred by an officer or
director, including reasonable attorneys' fees, as a result of actions or
proceedings in which our officers and directors are involved by reason of being
or having been an officer or director of our company. Funds paid in satisfaction
of

-11-

judgments, fines and expenses may be funds we need for the operation of our
business and the development of our applications, thereby affecting our ability
to attain profitability.

OUR BUSINESS IS SUBJECT TO REPORTING REQUIREMENTS THAT ARE CURRENTLY EVOLVING
AND, ONCE ESTABLISHED, COULD SUBSTANTIALLY INCREASE OUR OPERATING EXPENSES AND
DIVERT MANAGEMENT'S ATTENTION FROM THE OPERATION OF OUR BUSINESS.

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

RISKS RELATED TO THIS OFFERING

OUR STOCK PRICE IS VOLATILE AND COULD DECLINE IN THE FUTURE.

The price of our 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. We believes that a number of
factors, both within and outside our control, could cause the price of the our
common stock to fluctuate, perhaps substantially. Factors such as the following
could have a significant adverse impact on the market price of our common stock:

o Our ability to obtain additional financing and, if available, the
terms and conditions of the financing;

o Our financial position and results of operations;

o The results of preclinical studies and clinical trials by us, our
collaborators or our competitors;

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

o Announcements of technological innovations or new products by us or
our competitors;

o U.S. and foreign governmental regulatory actions;

o Actual or anticipated changes in drug reimbursement policies;

o Developments with our collaborators, if any;

o Developments concerning patent or other proprietary rights of us or
our competitors (including litigation);

o Status of litigation;

o Period-to-period fluctuations in our operating results;

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

-12-

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

o Market conditions for life science stocks in general.

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

Our common stock is currently traded on a limited basis on the OTC
Bulletin Board under the symbol "IRBO". The quotation of our common stock on the
OTCBB does not assure that a meaningful, consistent and liquid trading market
currently exists, and in recent years such market has experienced extreme price
and volume fluctuations that have particularly affected the market prices of
many smaller companies like us. Our common stock is thus subject to this
volatility. Sales of substantial amounts of common stock, or the perception that
such sales might occur, could adversely affect prevailing market prices of our
common stock.

THERE IS NO ASSURANCE OF AN ESTABLISHED PUBLIC TRADING MARKET.

Although our 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 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 our 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 our common stock;

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

o General economic and other national conditions.

OUR COMMON STOCK IS CONSIDERED A "PENNY STOCK."

Our common stock is considered to be a "penny stock" since it meets one
or more of the definitions in Rules 15g-2 through 15g-6 promulgated under
Section 15(g) of the Securities Exchange Act of 1934, as amended. 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.

-13-

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 our 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 our common stock to
resell their shares to third parties or to otherwise dispose of them in the
market or otherwise.

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

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

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

Certain of our stockholders have the right to register securities for
resale that they hold pursuant to registration rights agreements. We expect to
continue to incur product development and selling, general and administrative
costs, and in order to satisfy our funding requirements, we will need to sell
additional equity securities, which may be subject to similar registration
rights. The sale or the proposed sale of substantial amounts of our common stock
in the public markets may adversely affect the market price of our common stock.
Our stockholders may experience substantial dilution and a reduction in the
price that they are able to obtain upon sale of their shares. Also, any new
equity securities issued may have greater rights, preferences or privileges than
our existing common stock.

ADDITIONAL AUTHORIZED SHARES OF COMMON STOCK AVAILABLE FOR ISSUANCE MAY
ADVERSELY AFFECT THE MARKET.

We are authorized to issue 100,000,000 shares of Common Stock. As of November
23, 2004, we had 62,125,081 shares of common stock issued and outstanding,
excluding shares reserved in anticipation of the exercise of stock options or
warrants. As of November 2, 2004, we had outstanding stock options to purchase
63,212 shares of our common stock at a weighted average exercise price of $25.00
per share and outstanding warrants to purchase 17,430,710 shares of our common
stock with exercise prices ranging from $0.05 to $2.00 per share. Additionally,
we have 374,800 shares of common stock reserved for issuance under our 2003
Stock Option, Deferred Stock and Restricted Stock Plan. To the extent stock is
issued or options and warrants are exercised, holders of our common stock will
experience further dilution. In addition, as in the case of the warrants, in the
event that any future financing should be in the form of, be convertible into or
exchangeable for, equity securities and upon the exercise of options and
warrants, security holders may experience additional dilution.

-14-

SHARES ELIGIBLE FOR FUTURE SALE MAY ADVERSELY AFFECT THE MARKET.

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

An aggregate of 47,161,581 shares of our common stock are being registered with
the SEC in the registration statement of which this prospectus forms a part. The
registration and subsequent sales of such shares of common stock will likely
have an adverse effect on the market price of our common stock.

WE 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 OUR COMMON STOCK.

Our 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 our common stock, at a purchase price substantially lower
than the market price of shares of our common stock without stockholder
approval.

WE HAVE NO INTENTION TO PAY DIVIDENDS.

We have never declared or paid any dividends on its securities. We
currently intend to retain our earnings for funding growth and, therefore, do
not expect to pay any dividends in the foreseeable future.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In addition to historical information, this prospectus contains
statements relating to our future business and/or results, including, without
limitation, the statements under the captions "Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business." These statements include certain projections and
business trends that are "forward-looking" within the meaning of the United
States Private Securities Litigation Reform Act of 1995. You can identify these
statements by the use of words like "may," "will," "could," "should," "project,"
"believe," "anticipate," "expect," "plan," "estimate," "forecast," "potential,"
"intend," "continue" and variations of these words or comparable words.
Forward-looking statements do not guarantee future performance and involve risks
and uncertainties. Actual results will differ, and may differ materially, from
projected results as a result of certain risks and uncertainties. These risks
and uncertainties include, without limitation, those described under "Risk
Factors" and those detailed from time to time in our filings with the SEC, and
include, among others, the following:

o Our limited operating history and ability to continue as a going
concern;

o Our ability to successfully develop and commercialize products based
on our therapies and technologies utilizing Homspera;

o A lengthy approval process and the uncertainty of FDA and other
government regulatory requirements may have a material adverse
effect on our ability to commercialize our applications;

o Clinical trials may fail to demonstrate the safety and effectiveness
of our applications or therapies, which could have a material
adverse effect on our ability to obtain government regulatory
approval;

o The degree and nature of our competition;

-15-

o Our ability to employ and retain qualified employees; and

o The other factors referenced in this prospectus, including, without
limitation, under the sections entitled "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," and "Business."

These risks are not exhaustive. Other sections of this prospectus may
include additional factors which could adversely impact our business and
financial performance. Moreover, we operate in a very competitive and rapidly
changing environment. New risk factors emerge from time to time and it is not
possible for our management to predict all risk factors, nor can we assess the
impact of all factors on our business or to the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results. These forward-looking statements
are made only as of the date of this prospectus. Except for our ongoing
obligation to disclose material information as required by federal securities
laws, we do not intend to update you concerning any future revisions to any
forward-looking statements to reflect events or circumstances occurring after
the date of this prospectus.

-16-

USE OF PROCEEDS

We will not receive any proceeds from the sale of the shares of common
stock by the selling stockholders, but we will receive funds from the exercise
of warrants held by selling stockholders, if exercised.

MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Our common stock is approved for quotation on the NASD OTC Bulletin
Board under the symbol "IRBO." From July 2, 2003 through April 6, 2004, we
traded under the symbol "IRBH." Previous to July 2, 2003, we traded under the
symbol "GPNN." We effected a 1-for-20 reverse split of our common stock on July
2, 2003 and a 2-for-1 forward stock split of our common stock on April 6, 2004.
The following table sets forth the high and low bid prices for our common stock
on a post-split basis 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.

2004
HIGH LOW
----------------------------
1st Quarter.................................. $ 1.00 $ 0.27
2nd Quarter.................................. 1.01 0.11
3rd Quarter.................................. 0.23 0.08
4th Quarter (through November 22, 2004)...... 0.50 0.15

2003
HIGH LOW
----------------------------
1st Quarter.................................. $ 0.10 $ 0.10
2nd Quarter.................................. 2.00 0.10
3rd Quarter.................................. 4.50 0.55
4th Quarter.................................. 1.125 0.275

2002
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 November 8, 2004, there were approximately 515 holders of record of our
common stock. On November 22, 2004, the closing sales price for our common stock
on the OTCBB was $0.18 per share.

DIVIDEND POLICY

We have not declared or paid any cash dividends on our common stock,
and we currently intend to retain future earnings, if any, to finance the
expansion of our business, and we do not expect to pay any cash dividends in the
foreseeable future. The decision whether to pay cash dividends on our common
stock will be made by our board of directors, in their discretion, and will
depend on our financial condition, operating results, capital requirements and
other factors that the board of directors considers significant.

-17-

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

This prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Our actual results could differ
materially from those set forth as a result of general economic conditions and
changes in the assumptions used in making such forward-looking statements. The
following discussion and analysis of our financial condition and results of
operations should be read together with the audited consolidated financial
statements and accompanying notes and the other financial information appearing
else where in this prospectus. 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 PROSPECTUS 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. WE UNDERTAKE 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
WE FILE FROM TIME-TO-TIME WITH THE SEC.

OVERVIEW

GENERAL

We are a 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, we
have named our proprietary compound "Homspera." Currently, we hold two patents
and four provisional patents in the United States. Additionally, we hold a
patent with the European Union and Australia and are seeking to extend our
patents into Canada and, possibly, Japan.

-18-

Our initial area of focus is 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.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2004, we had current assets of $2,300, consisting of
prepaid services of $2,300. Also, at September 30, 2004, we had current
liabilities of $1,949,349, consisting of a cash overdraft of $5,153, notes
payable net of discount of $1,044,365 and accounts payable and accrued
liabilities of $899,831. This resulted in negative working capital of
$1,947,049. During the nine months ended September 30, 2004, we used cash in
operating activities of $448,944. From the date of inception (October 30, 2002)
to September 30, 2004, we had a net loss of $5,955,688 and used cash of
$1,482,107 in operating activities. We met our cash requirements during this
period through the private placement of $31,200 of our common stock and
$1,353,057 from the issuance of notes payable, net of repayments. In October
2004, we completed a private placement, whereby we sold an aggregate of
$2,450,000 worth of units to accredited investors. Each unit was sold for
$10,000 and consisted of (a) a number of shares of our common stock determined
by dividing the unit price of $10,000 by $0.125, and (b) a warrant to purchase,
at any time prior to the fifth anniversary following the date of issuance of the
warrant, a number of shares of our common stock equal to fifty percent (50%) of
the number of shares included within the unit, at a price equal to $0.50 per
share of common stock. In consideration of the investment, we granted to each
investor certain registration rights and anti-dilution rights.

Our independent certified public accountants have stated in their
report, included in this prospectus, that we have 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 our ability to continue as
a going concern. We currently have no revenue, and there is no guarantee that
our business model will be successful, or that we will be able to generate
sufficient revenue to fund future operations. As a result, we expect our
operations to continue to use net cash, and we will be required to seek
additional debt or equity financings during the coming quarters in order to fund
our operations.

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

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

At September 30, 2004, we were in default on seventeen of our notes
payable in the aggregate amount of $591,000 plus accrued interest of $48,131.
Fifteen of these notes in the aggregate amount of $571,000 plus accrued interest
of $45,785.54 were converted to equity or paid in November, 2004. The Company
believes that the remaining two notes in default at September 30, 2004 in the
aggregate amount of $20,000 plus accrued interest of $2,346 will either be
converted to equity or paid.

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

CRITICAL ACCOUNTING POLICIES

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

-19-

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. We are in the
process of assessing the potential impact of this proposed statement to the
financial statements.

RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2004
COMPARED TO THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2003.

REVENUE

We are in the development stage and have no revenue.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses were $3,546,641 for the
nine months ended September 30, 2004 which is an increase of $2,879,980 or 432%
compared to selling, general and administrative expenses of $666,661 for the
nine months ended September 30, 2003. These expenses are primarily comprised of
non-cash compensation of $2,636,280, legal and accounting fees of $249,077,
officer wages of $131,350, research and development costs of $84,519, consulting
fees of $121,550, and contract labor of $65,747.

Over the coming twelve months, we expect legal and accounting fees to
remain high due to the compliance requirements of our 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. Public relations and marketing expenditures are expected to increase
by approximately $35,000 as we gain an understanding of the eventual placement
of our products in the market. Expenses related to contract labor and personnel
are expected to increase over the coming twelve months as our overhead and
administrative burden increases. Officer salary will increase during the coming
twelve months to approximately $175,000 pursuant to contractual arrangements. We
may also hire additional and/or part-time employees to discharge certain
critical functions during the next 12 months. Research and development costs are
expected to increase by approximately $750,000 as we further focus on developing
our products for the marketplace. Rent expense is expected to stay constant for
the coming twelve months.

INTEREST EXPENSE

Interest expense was $506,427 for the nine months ended September 30,
2004, an increase of $394,765 or 354% compared to interest expense of $111,662
for the nine months ended September 30, 2003. This amount consists of
amortization of the discount on notes payable of $412,815, interest on notes
payable of $57,612, and stock issued for interest and loan extension charges of
$36,000.

We expect interest expense will decrease over the next twelve months as
we have either repaid or converted substantially all of this debt into shares of
our common stock in November 2004.

NET LOSS

For the reasons above, the net loss for the nine months ended September
30, 2004 was $4,053,068, an increase of $2,834,745 or 233% compared to a net
loss of $1,218,323 for the nine months ended September 30, 2003.

We expect our losses to continue and to increase over the coming twelve
months. We do not expect to expect to begin to generate revenue in the next
twelve months, and costs are likely to increase as we move our products through
the testing and approval phases, and as we continue to build out our corporate
infrastructure.

-20-

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

We are currently in the development stage and have not yet generated
any revenue.

SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES

During the twelve months ended December 31, 2003, selling, general, and
administrative expenses 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 selling, general and administrative expenses 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.

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, 2002) to December 31,
2003. This amount is related to the reverse merger between GPN Network, Inc. and
ImmuneRegen Biosciences, Inc., which was consummated in July 2003. $185,000 of
this amount were monies paid to the former controlling shareholder of GPN
Network, Inc., and the remaining $165,000 of these funds were used to satisfy
certain outstanding liabilities of GPN Network, Inc.

During the twelve months ending December 31, 2004 we 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
relating to the reverse merger and an aborted private offering.

We expect 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 our notes payable. An
additional $200 of interest was accrued during the period of inception (October
30, 2002) through December, 2002.

NET LOSS

For the reasons stated above, our 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, our net loss was
$1,902,620 or $0.20 per share. We expect that losses will continue through the
period ending December 31, 2004.

-21-

BUSINESS

BUSINESS OVERVIEW

We are engaged in the research and development of important life
saving, health-enhancing therapeutic applications and therapies. Our proprietary
product, Homspera, is derived from Substance P, a naturally occurring peptide
found within the human body. Our vision to which we aspire is to be recognized
as a leading developer of biotechnology products and applications for the 21st
century.

Initially, all our applications and products will be developed through
our wholly-owned operational subsidiary, ImmuneRegen BioSciences, Inc., a
Delaware corporation, based on Homspera, a proprietary, patented compound.
Homspera is derived from Substance P, a naturally occurring peptide found within
the human body, and has been developed and extensively researched by our
founders over the past 10 years.

Our strategy is to develop, test and obtain regulatory approval for
various applications using Homspera in a diverse array of life enhancing and
life saving applications in order to commercialize these applications and
products for licensing, sales and distribution. Already, we believe that
Homspera may have shown efficacy for the treatments of acute radiation syndrome
("ARS"), acute lung injury ("ALI") / acute respiratory distress syndrome
("ARDS") and hair replacement related to loss due to traditional anti-cancer
treatments. The first applications that we will concentrate on developing will
be in these three areas.

Further, based on research studies and results from laboratory tests conducted
by our science team we believe that Homspera may be used to develop viable and
exciting applications and therapies for: 1) dramatically lessening lung damage
caused by cigarette smoke and other toxicants related to air pollution; 2) the
treatment of SARS, Avian flu, as well as, other widespread respiratory diseases
associated with chronic obstructive pulmonary disease ("COPD") and other
respiratory illnesses such asthma, bronchitis, etc.; 3) the treatment of lung
and other cancers; and, 4) influenza.

Our current business model is designed around obtaining the required
regulatory approvals, which will allow for the introduction of our patented
Homspera based applications and products. Once approval has been obtained, we
hope to expand our sales efforts and to begin to generate sales domestically
through both the licensing and the direct sales of our products. We believe that
we can increase and strengthen our market position in the following ways: (i)
working with the FDA to obtain the approval of Homspera and future developments;
(ii) investigating foreign markets for the use of Homspera and future products;
(iii) securing relationships with strong partners in our field; (iv) entering
into license agreements, strategic partnerships and joint ventures for our
various applications; and, (v) continuing our current research into improving
our processes, reducing costs and developing new, exciting applications.

STRATEGY AND IMPLEMENTATION

Our strategy is to develop, test and obtain regulatory approval for
various applications using Homspera in a diverse array of life enhancing and
life saving applications in order to commercialize these applications for
licensing, sales and distribution. We hope to build a marketing infrastructure
to reach across broad geographic lines in order to ensuring maximum exposure and
easy penetration into the many diverse markets throughout the world.

Our goal is to become a leader in the research, development and
commercialization of Homspera based applications to a targeted governmental,
physician and retail customer base. We expect the strategy that we are pursuing
will create sustainable value for patients, healthcare professionals,
shareholders and employees. We believe this will be achieved by:

o Rapidly developing, launching and marketing innovative applications
and treatments based on proprietary technologies that not only
satisfy unmet medical needs in large patient populations but also
meet the needs of smaller, lower profile populations;

-22-

o Aggressively deploying a targeted licensing and alliance strategy to
supplement growth and enhance our vigorous in-house research and
development efforts; and,

o Working to increase our market presence throughout the United
States, Europe and Asia, recruiting and retaining the best
scientists with passion to discover and develop innovative
therapies.

Our business development emphasis over the next three years will be
two-fold. First, we will continue to strive to access new opportunities and
further product development. Second, we will actively pursue licensing or
partnering our technologies with multinational biotechnology and pharmaceutical
companies.

In order to implement this strategy, our management has focused its
business plan on the following major steps:

o ACCELERATING CURRENT RESEARCH EFFORTS. We will work on capturing the
full benefit of the proprietary Homspera compound in applications
relating to all of the aforementioned fields. Further, the research
that has led us in our current direction could be applicable to
other processes, as well.

o CREATING VALUE AND PATHWAYS TO MARKET. We plan to begin discussions
with identified industry leaders in the pharmaceutical,
biotechnology and medical research industries for
application-specific license and distribution agreements of our
therapies and products, the formation of strategic relationships and
partnering.

LICENSE AND DISTRIBUTION AGREEMENTS

We intend to generate revenues through the licensing and the direct
sale of our products and applications. We believe this will have the
effect of generating revenues in the form of license agreements with
companies throughout Europe and Asia, while awaiting governmental
approval for sales in to begin. STRATEGIC RELATIONSHIPS It is our
aim to establish relationships with such industry leaders, not only
in the United States, but also throughout Europe and the rest of the
world, which represent the broadest market appeal for our specific
applications.

PARTNERING

By strategically partnering with large pharmaceutical and other
biotechnology and medical research and development companies, we
hope to enhance our ability to succeed in bringing our applications
to the marketplace quickly and cost effectively.

o EXPANDING sales, PRODUCTION AND ADMINISTRATIVE RESOURCES. Increased
sales, research and foreign affiliations will require more
resources. We expect that these will be supplied through third party
relationships and increases to staff as necessary.

o Supplementing AND LEVERAGING EXISTING ADVISORY RELATIONSHIPS.
Pharmaceutical, biotechnology and medical companies are a primary
channel for introducing and distributing new products. To facilitate
the marketing strategies outlined above, we hope that our existing
relationships will be supplemented and leveraged. Our management
expects this support to be a key building block in our future
growth.

SUBSTANCE P

Homspera is derived from homeostatic substance P, a naturally occurring
peptide found within the human body

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

-23-

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 studied by researchers and scientists
because of its many general physiological effects (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.

POTENTIAL APPLICATIONS

Based on our initial studies and ongoing research through our
wholly-owned subsidiary, ImmuneRegen BioSciences, Inc., we are developing
applications using Homspera for the treatment of: acute radiation syndrome
("ARS"), acute lung injury ("ALI") / acute respiratory distress syndrome
("ARDS") and hair replacement related to loss due to traditional anti-cancer
treatments.

INITIAL POTENTIAL APPLICATIONS

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 person'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 past terrorist events, people have expressed much greater
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.

-24-

In animal studies, we have achieved positive results using Homspera to
treat animals subjected to lethal levels of radiation exposure. We are
continuing to conduct studies in this area and have recently demonstrated what
we believe is a 50% survival rate in our most recent study, up from what we
believe was 25% in the prior study.

At the request of the FDA, we are currently undergoing an animal
subject study using mice to determine the effectiveness of direct muscle
injection of Homspera versus inhalation. Upon the conclusion of this test, we
expect to initiate our final test using primates. We believe the findings from
these studies may lead to significant military and biodefense applications for
Homspera.

IMMUNE-BASED THERAPIES FOR ACUTE LUNG INJURY (ALI) AND ACUTE
RESPIRATORY DISTRESS SYNDROME (ARDS)

The lungs have as their primary function providing oxygen and
eliminating carbon dioxide, and, are therefore, the doorway to the basic life
processes. Since they are the major organ in the body that is in constant
contact with both the outside air and the internal environment, the lungs are
uniquely vulnerable to disease. Lung disease encompasses a broad spectrum of
conditions, ranging from acute illnesses such as influenza and pneumonia, to
chronic diseases such as asthma, cancer and emphysema. The term "Acute Lung
Injury" has been used as an umbrella term for hypoxemic respiratory failure, a
severe version of which is "Acute Respiratory Distress Syndrome."

ACUTE LUNG INJURY

ALI refers to a syndrome in which there is a widespread impairment of
the function of the small blood vessels in the lungs, causing them to leak fluid
and inflammatory cells into the lung substance in response to insults such as
infection, shock and noxious agents. This condition is difficult to treat,
because medications that speed up the removal of fluids from the lungs and
increase the likelihood of survival also have undesirable side effects. To this
date, no effective treatment is available.

ALI is most often seen as part of a systemic inflammatory process,
particularly systemic sepsis, as the result of a severe infection in the lungs
or elsewhere in the body. Sepsis can be caused by a wide variety of infectious
organisms that interact with blood cells in numerous internal organs of the
body, causing a disseminated inflammatory process that leads to multiple organ
failure, with the lung as a particularly susceptible target. As fluid leaks into
the air spaces of the lungs, the level of oxygen in the blood falls, leading to
shortness of breath and frequently to death.

Our founder and Chief Scientific Officer, Dr. Mark Witten has over 20
years experience in studying and developing treatments for ALI. Based on his
past research and our continuing research studies, we believe that Homspera may
be proven to be effective in treating lung injury and could potentially save
many of those who would otherwise die from the syndrome.

ACUTE RESPIRATORY DISTRESS SYNDROME

The term Acute Respiratory Distress Syndrome, was first introduced by
Ashbaugh and Petty more than two decades ago to describe a viral infection
resulting in severe damage to the lungs and often death. 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 can be confused with congestive heart failure, which
is another common condition that can also cause acute respiratory distress.

Since the initial description of ARDS in literature in 1967, mortality
has ranged from 50 to 70 percent. 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

-25-

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, can 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, we
believe that our trials may prove Homspera is able to be applied with similar
results to the treatment of ARDS. Furthermore, recent studies using Homspera
have proven successful in treating animal subjects infected with the Hong Kong
influenza virus, a respiratory disease that in similar to ARDS.

TREATMENT FOR HAIR LOSS RELATED TO TRADITIONAL CANCER TREATMENTS

Although alopecia, (hair loss) is not life threatening, many cancer
patients describe it as the most 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 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.

We believe that we have found through research studies and experiments
that aerosol treatments with Homspera may have had the effect of replacing hair
loss in animal models. We believe that we may be able to develop applications
using Homspera to effectively replace hair in those individuals undergoing
radiation and chemotherapy treatments.

PIPELINE APPLICATIONS

Based on research studies and positive results from laboratory tests
conducted by our science team we believe that Homspera may be used to develop
viable and exciting applications and therapies for: 1) dramatically lessening
lung damage caused by cigarette smoke and other toxicants related to air
pollution; 2) the treatment of SARS, Avian flu, as well as, other widespread
respiratory diseases associated with chronic obstructive pulmonary disease
(COPD) and other respiratory illnesses such asthma, bronchitis, etc.; 3) the
treatment of lung and other cancers; and, 4) influenza.

-26-

We may, in the future, perform further research and development into
one or more of these areas in order to develop an effective treatment.

IMMUNE-BASED THERAPIES FOR CIGARETTE SMOKE AND OTHER TOXICANTS

Environmental toxicants, such as cigarette smoke and air pollution, may
have significant effects on many physiological systems of the exposed
individual. For example, significant changes in immune competence in the lung,
even if short-lived, may have serious consequences for the exposed host that may
affect susceptibility to infectious agents, particularly if combined with
pulmonary cellular damage. Major alterations in lung and immune function that
are long lasting may result in an increased likelihood of development and/or
progression of cancer and other pathological states.

Both mainstream and second-hand exposure to cigarette smoke is known to
damage the lungs, alter the immune system, and predispose individuals to the
development of emphysema and lung cancer. Second-hand cigarette smoke is
considered highly toxic, even compared to the mainstream cigarette smoke that a
human smoker inhales, due to the low combustion temperature of the smoldering
cigarette.

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.

We believe that previous studies by our founders, Drs. Harris and
Witten, have demonstrated that administration of Homspera was capable of
protecting the pulmonary and immune systems from damage due to environmental
toxicants. Treatment of mice exposed to second-hand smoke with aerosolized
Homspera helped to prevent pathological cellular and functional changes in the
lung as reflected by prevention of damage to airway basement
membranes/endothelial cells and preservation of normal airway dynamic
compliance. Further, we believe that Homspera treatment helped to reduce and/or
prevent the occurrence of micronuclei formation in cells isolated from mice
exposed in vivo to second-hand (an indicator of DNA/genetic damage). Finally, in
an experimental in vivo lung cancer model, we believe that Homspera helped to
significantly reduce the numbers of lung tumors, increased animal survival, and
activated pulmonary immune defense mechanisms.

We believe that our results from treating lung damage due to jet fuel
exposure and mainstream and second-hand smoke may be applied 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. We believe that results from our preliminary studies may have shown that
inhalation of aerosolized Homspera appears to be capable of preserving lung
function and inhibiting, preventing and/or reversing the cellular and genetic
precursors of emphysema and malignancy that often result from exposure to
cigarette smoke and other environmental toxicants found in the air. We plan to
actively seek foreign license agreements and strategic partners to begin the
development and marketing of our product once the patent has been granted.

IMMUNE-BASED THERAPIES FOR THE TREATMENT OF SARS, AVIAN FLU, AS WELL
AS, OTHER WIDESPREAD RESPIRATORY DISEASES ASSOCIATED WITH CHRONIC OBSTRUCTIVE
PULMONARY DISEASE (COPD)

In mouse models conducted by our company after a week of JP-8 jet fuel
exposure followed by infection with the Hong Kong influenza virus, the science
team observed that Homspera treatment may have helped to diminish death (zero
deaths in the Homspera-treated mice) and respiratory illness. The diminished
inflammatory reaction in the lungs was characterized by the following
parameters:

(1) A very large decrease in the number of inflammatory cells recovered
in the broncho-alveolar lavage fluid in the Homspera-treated mice.
Additionally, these mice had markedly decreased levels of leukotriene
B4 in the broncho-alveolar lavage fluid compared to the JP-8 jet fuel

-27-

exposed Hong Kong virus-infected mice. Leukotriene B4 is a
chemoattractant for inflammatory cells to move from the systemic
circulation into the lungs.

(2) Lung pathology demonstrated that airway cilia were intact in the
JP-8 jet fuel exposed Hong Kong virus-infected mice treated with
Homspera compared to the JP-8 jet fuel exposed Hong Kong virus-infected
mice. Additionally, the airway epithelial cells of the mice treated
with Homspera had fewer mitochondria, indicating that these cells were
not under stress compared to the JP-8 jet fuel exposed Hong Kong
virus-infected mice.

(3) Lastly, the science team did not observe any Hong Kong virus
individual virons in the lung tissue of the mice treated with Homspera.
This led to the hypothesis that Homspera up-regulated pulmonary
alveolar macrophages to phagocytize (eat and destroy) the Hong Kong
virus virons.

We believe that Homspera may be used in developing treatments for
several respiratory illnesses.

IMMUNE-BASED THERAPIES FOR CHRONIC OBSTRUCTIVE PULMONARY DISEASE (COPD)

COPD, including chronic bronchitis and emphysema, is characterized by
breathing difficulty due to partial blockage of the bronchial tubes.

APPLICATION POTENTIAL. Based on our studies with ARDS we expect that
similar treatments can be used for treating COPD, including asthma, chronic
bronchitis and emphysema.

IMMUNE-BASED THERAPIES FOR SEVERE ACUTE RESPIRATORY SYNDROME (SARS)

Although scientists have made many advances in finding a cure for
Severe Acute Respiratory Syndrome (SARS), so far they have been unable to find a
drug that will cure it or treat it effectively.

Our recent results in treating the Hong Kong influenza virus have led
to discussions with a Singapore based contract research organization (CRO) and
the Economic Development Boards of both Singapore and Taiwan that is seeking
certain domestic and Asian pharmaceutical entities to partner on SARS studies.

IMMUNE-BASED THERAPIES FOR THE NIPAH VIRUS

Nipah virus is a newly recognized zoonotic virus. No drug therapies
have yet been proven to be effective in treating Nipah infection and treatment
relies on providing intensive supportive care.

The virus was "discovered" in 1999 and has caused disease in animals
and in humans, through contact with infectious animals. Nipah is closely related
to another newly recognized zoonotic virus called Hendra virus. Although members
of this group of viruses have only caused a few focal outbreaks, the biologic
property of these viruses to infect a wide range of hosts and to produce a
disease causing significant mortality in humans has made this emerging viral
infection a public heath concern.

It is currently believed that certain species of fruit bats are the
natural hosts of both Nipah and Hendra viruses. They are distributed across an
area encompassing northern, eastern and south-eastern areas of Australia,
Indonesia, Malaysia, the Philippines and some of the Pacific Islands. The mode
of transmission from animal to animal, and from animal to human is uncertain,
but appears to require close contact with contaminated tissue or body fluids
from infected animals. Nipah antibodies have been detected in pigs, other
domestic and wild animals.

The incubation period is between 4 and 18 days. In many cases the
infection is mild or inapparent (sub-clinical). In symptomatic cases, the onset
is usually with "influenza-like" symptoms, with high fever and muscle pains
(myalgia). The disease may progress to inflammation of the brain (encephalitis)
with drowsiness, disorientation, convulsions and coma.

-28-

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. This marks a dynamic change in the way cancer is treated, and we
believe that such innovative therapies will transform the cancer market during
the next decade.

Based on results from research studies conducted by ImmuneRegen
BioSciences, Inc., our management believes that Homspera may be used to assist
in the treatment of cancer by slowing and, possibly, preventing the spread and
metastasis of cancer from the site of origin.

IMMUNE-BASED THERAPIES FOR INFLUENZA AND VIRAL INFECTIOUS DISEASE

We also believe that Homspera may be used in treating influenza, viral
respiratory infection (VRI), often referred to as the common cold.

Influenza or "the flu" is a highly contagious viral infection of the
nose, throat and lungs that is one of the most severe illnesses of the winter
season. The flu is caused by the influenza virus. There are three types of
influenza viruses: influenza A, B and C. Influenza A and B can cause serious
disease and can lead to epidemics. The flu is spread easily from person to
person, primarily when an infected person coughs or sneezes. It can lead to
hospitalization or even death, especially among persons over the age of 65 and
in infants.

Due to its believed ability to help boost the immune system management
believes that Homspera may be an effective treatment, as the infection can only
be cured by one's own immune system producing specific antibodies against the
virus.

INTELLECTUAL PROPERTY

In December 2002, we entered into a royalty-free license agreement with
David Harris and Mark Witten, who are our two founders and largest shareholders.
Under the terms of the license agreement, Messrs. Harris and Witten granted to
us an exclusive license to use and sublicense certain patents, medical
applications, and other technologies developed by them. Our obligations under
this 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 us the right to market a product, we will
maintain a broad form general liability and product liability insurance.

We believe that patents, trademarks, copyrights and other proprietary
rights are important to our business. We also rely on trade secrets, know-how,
continuing technological innovations and licensing opportunities to develop and
maintain our competitive position. We seek to protect our intellectual property
rights by a variety of means, including obtaining patents, maintaining trade
secrets and proprietary know-how, and technological innovation to operate
without infringing on the proprietary rights of others and to prevent others
from infringing on our proprietary rights. Our policy is to seek to protect our
proprietary position by, among other methods, actively seeking patent protection
in the United States and foreign countries.

Our success depends in part on our ability to maintain our proprietary
position through effective patent claims and their enforcement against our
competitors. Although we believe our patents and patent applications provide a
competitive advantage, the patent positions of companies like ours are generally
uncertain and involve complex legal and factual questions. We do not know
whether any of our patent applications will result in the issuance of any
patents. Our issued patents, those that may be issued in the future or those
acquired by us, may be challenged, invalidated or circumvented, and the rights
granted under any issued patent may not provide us with proprietary protection
or competitive advantages against competitors with similar technology. In
particular, we do not know if competitors will be able to design variations on
our treatment methods to circumvent our current and anticipated patent claims.
Furthermore, competitors may independently develop similar technologies or
duplicate any technology developed by us. Because of the extensive time required
for the development, testing and regulatory

-29-

review of a potential product, it is possible that, before any of our products
can be commercialized or marketed, any related patent claim may expire or remain
in force for only a short period following commercialization, thereby reducing
the advantage of the patent.

We also rely upon trade secrets, confidentiality agreements,
proprietary know-how and continuing technological innovation to remain
competitive, especially where we do not believe patent protection is appropriate
or obtainable. We continue to seek ways to protect our proprietary technology
and trade secrets, including entering into confidentiality or license agreements
with our employees and consultants, and controlling access to and distribution
of our technologies and other proprietary information. While we use these and
other reasonable security measures to protect our trade secrets, our employees
or consultants may unintentionally or willfully disclose our proprietary
information to competitors.

Our commercial success will depend in part on our ability to operate
without infringing upon the patents and proprietary rights of third parties. It
is uncertain whether the issuance of any third party patents would require us to
alter our products or technology, obtain licenses or cease certain activities.
Our failure to obtain a license to technology that we may require to discover,
develop or commercialize our future products may have a material adverse impact
on us. One or more third-party patents or patent applications may conflict with
patent applications to which we have rights. Any such conflict may substantially
reduce the coverage of any rights that may issue from the patent applications to
which we have rights. If third parties prepare and file patent applications in
the United States that also claim technology to which we have rights, we may
have to participate in interference proceedings in the USPTO to determine
priority of invention.

We have collaborated and may collaborate in the future with other
entities on research, development and commercialization activities. Disputes may
arise about inventorship and corresponding rights in know-how and inventions
resulting from the joint creation or use of intellectual property by us and our
collaborators, partners, licensors and consultants. As a result, we may not be
able to maintain our proprietary position.

As of August 2004, we had two issued U.S. patents, four pending U.S.
patent applications, two issued foreign patents and three pending foreign patent
applications. SEE CHART BELOW. Our issued patents and patent applications
primarily cover the methods whereby Homspera is used in improving pulmonary
function and stimulating the immune system. We are in the process of pursuing
several other patent applications.

-----------------------------------------------------------------------------
TITLE COUNTRY STATUS DATE
-----------------------------------------------------------------------------
Acute Respiratory Distress U.S. Pending 4-14-03
Syndrome
-----------------------------------------------------------------------------
Acute Respiratory Syndromes U.S. Pending 4-25-03
-----------------------------------------------------------------------------
Amelioratin of Effects of U.S. / Foreign Pending 8-22-03
Cigarette Smoke
-----------------------------------------------------------------------------
Stimulation of Hair Growth U.S. / Foreign Pending 12-18-03
-----------------------------------------------------------------------------
Substance P Treatment for U.S. Issued 8-31-99
Immunostimulation
-----------------------------------------------------------------------------
Substance P Treatment for U.S. Issued 12-7-99
Immunostimulation
-----------------------------------------------------------------------------
Substance P Treatment for Foreign Issued 7-8-97
Immunostimulation
-----------------------------------------------------------------------------
Substance P Treatment for Foreign Issued 7-8-97
Immunostimulation
-----------------------------------------------------------------------------
Substance P Treatment for Foreign Pending 7-8-97
Immunostimulation
-----------------------------------------------------------------------------

-30-

COMPETITION

We are engaged in segments of the biopharmaceutical industry that are
intensely competitive and rapidly changing. If successfully developed and
approved, the product candidates that we are currently developing will compete
with numerous existing therapies. In addition, a number of companies are
pursuing the development of novel pharmaceutical products that target the same
diseases that we are targeting, and some companies, including several
multinational pharmaceutical companies, are simultaneously marketing several
different drugs and may therefore be able to market their own combination drug
therapies.

Although we believe that there is a significant future market for
therapeutics to treat lung and other cancers, respiratory infection and other
viral diseases, we anticipate that, even if we successfully develop Homspera and
Homspera is approved for marketing, it will face intense and increasing
competition in the future as new products enter the market and advanced
technologies become available. There can be no assurance that existing products
or new products for the treatment of such ailments developed by competitors,
including GlaxoSmithKline, Merck & Co., Bristol-Myers Squibb and Abbott
Laboratories, will not be more effective, or more effectively marketed and sold,
than Homspera should it be successfully developed and receive regulatory
approval, or any other therapeutic that may be developed by us. Competitive
products or the development by others of a cure or new treatment methods may
render our technologies and products and compounds obsolete, noncompetitive or
uneconomical prior to our recovery of development or commercialization expenses
incurred with respect to any such technologies or products or compounds. Many of
our competitors have significantly greater financial, technical and human
resources than us and may be better equipped to develop, manufacture, sell,
market and distribute products. In addition, many of these companies have
extensive experience in preclinical testing and clinical trials, obtaining FDA
and other regulatory approvals and manufacturing and marketing pharmaceutical
products. Many of these competitors also have products for use individually or
in combination therapy that have been approved or are in late-stage development
and operate large, well-funded research and development programs. Smaller
companies may also prove to be significant competitors, particularly through
collaborative arrangements with large pharmaceutical and biotechnology
companies. Furthermore, academic institutions, governmental agencies and other
public and private research organizations are becoming increasingly aware of the
commercial value of their inventions and are more actively seeking to
commercialize technologies they have developed.

New developments in areas in which we are conducting our research and
development are expected to continue at a rapid pace in both industry and
academia. If our product candidates and compounds are successfully developed and
approved, we will face competition based on the safety and effectiveness of our
products and compounds, the timing and scope of regulatory approvals,
availability of manufacturing, sales, marketing and distribution capabilities,
reimbursement coverage, price and patent position. There can be no assurance
that our competitors will not develop more effective or more affordable
technology or products, or achieve earlier patent protection, product
development or product commercialization than us. Accordingly, our competitors
may succeed in commercializing products more rapidly or effectively than us,
which could have a material adverse effect on our business, financial condition
and results of operations.

GOVERNMENTAL REGULATION

Our technologies are subject to extensive government regulation,
principally by the FDA and state and local authorities in the United States and
by comparable agencies in foreign countries. Governmental authorities in the
United States extensively regulate the pre-clinical and clinical testing,
safety, efficacy, research, development, manufacturing, labeling, storage,
record-keeping, advertising, promotion, export, marketing and distribution,
among other things, of pharmaceutical products under various federal laws
including the Federal Food, Drug and Cosmetic Act, or FFDCA, and under
comparable laws by the states and in most foreign countries.

DOMESTIC REGULATION

In the United States, the FDA, under the FFDCA, the Public Health
Service Act and other federal statutes and regulations, subject pharmaceutical
and biologic products to rigorous review. If we do not comply with applicable
requirements, we may be fined, the government may refuse to approve our
marketing applications or allow us to manufacture or market our products or
product candidates, and we may be criminally prosecuted. The FDA also has the
authority to discontinue or suspend manufacture or distribution, require a
product withdrawal or

-31-

recall or revoke previously granted marketing authorizations, if we fail to
comply with regulatory standards or if we encounter problems following initial
marketing.

FDA APPROVAL PROCESS

To obtain approval of a new product from the FDA, we must, among other
requirements, submit data demonstrating the product's safety and efficacy as
well as detailed information on the manufacture and composition of the product
candidate. In most cases, this entails extensive laboratory tests and
pre-clinical and clinical trials. This testing and the preparation of necessary
applications and processing of those applications by the FDA are expensive and
typically take many years to complete. The FDA may deny our applications or may
not act quickly or favorably in reviewing these applications, and we may
encounter significant difficulties or costs in our efforts to obtain FDA
approvals that could delay or preclude us from marketing any products we may
develop. The FDA also may require post-marketing testing and surveillance to
monitor the effects of approved products or place conditions on any approvals
that could restrict the commercial applications of these products. Regulatory
authorities may withdraw product approvals if we fail to comply with regulatory
standards or if we encounter problems following initial marketing. With respect
to patented products or technologies, delays imposed by the governmental
approval process may materially reduce the period during which we will have the
exclusive right to exploit the products or technologies.

The FDA does not apply a single regulatory scheme to human tissues and
the products derived from human tissue. On a case-by-case basis, the FDA may
choose to regulate such products as transplanted human tissue, medical devices
or biologics. A fundamental difference in the treatment of products under these
classifications is that the FDA generally permits human tissue for
transplantation to be commercially distributed without marketing approval. In
contrast, products regulated as medical devices or biologics usually require
such approval.

The process required by the FDA before a new drug or biologic may be
marketed in the United States generally involves the following:

o completion of pre-clinical laboratory tests or trials and formulation
studies;

o submission to the FDA of an IND for a new drug or biologic, which must
become effective before human clinical trials may begin;

o performance of adequate and well-controlled human clinical trials to
establish the safety and efficacy of the proposed drug or biologic for
its intended use; and,

o submission and approval of a New Drug Application, or NDA, for a drug,
or a BLA for a biologic.

Pre-clinical tests include laboratory evaluation of product chemistry
formulation and stability, as well as studies to evaluate toxicity. In view of
the nature of our product candidates and our prior clinical experience with our
product candidates, we concluded that it was reasonably safe to initiate
clinical trials and that the clinical trials would be adequate to further assess
both the safety and efficacy of our product candidates. The results of
pre-clinical testing, together with manufacturing information and analytical
data, are submitted to the FDA as part of an IND application. The FDA requires a
30-day waiting period after the filing of each IND application before clinical
trials may begin, in order to ensure that human research subjects will not be
exposed to unreasonable health risks. At any time during this 30-day period or
at any time thereafter, the FDA may halt proposed or ongoing clinical trials, or
may authorize trials only on specified terms. The IND application process may
become extremely costly and substantially delay development of our products.
Moreover, positive results of pre-clinical tests will not necessarily indicate
positive results in clinical trials.

The sponsor typically conducts human clinical trials in three
sequential phases, which may overlap. These phases generally include the
following:

Phase I: The product is usually first introduced into healthy humans
or, on occasion, into patients, and is tested for safety, dosage
tolerance, absorption, distribution, excretion and metabolism.

-32-

Phase II: The product is introduced into a limited patient population
to:

o assess its efficacy in specific, targeted indications;

o assess dosage tolerance and optimal dosage; and

o identify possible adverse effects and safety risks.

Phase III: These are commonly referred to as pivotal studies. If a
product is found to have an acceptable safety profile and to be
potentially effective in Phase II clinical trials, new clinical trials
will be initiated to further demonstrate clinical efficacy, optimal
dosage and safety within an expanded and diverse patient population at
geographically-dispersed clinical study sites.

If the FDA does ultimately approve the product, it may require
post-marketing testing, including potentially expensive Phase IV studies, to
monitor its safety and effectiveness.

Clinical trials must meet requirements for Institutional Review Board,
or IRB, oversight, informed consent and the FDA's Good Clinical Practices. Prior
to commencement of each clinical trial, the sponsor must submit to the FDA a
clinical plan, or protocol, accompanied by the approval of the committee
responsible for overseeing clinical trials at one of the clinical trial sites.
The FDA and the IRB at each institution at which a clinical trial is being
performed may order the temporary or permanent discontinuation of a clinical
trial at any time if it believes that the clinical trial is not being conducted
in accordance with FDA requirements or presents an unacceptable risk to the
clinical trial patients.

The sponsor must submit to the FDA the results of the pre-clinical and
clinical trials, together with, among other things, detailed information on the
manufacturing and composition of the product, in the form of an NDA, or, in the
case of a biologic, a BLA. Once the submission has been accepted for filing, the
FDA has 180 days to review the application and respond to the applicant. The
review process is often significantly extended by FDA requests for additional
information or clarification. The FDA may refer the BLA to an advisory committee
for review, evaluation and recommendation as to whether the application should
be approved, but the FDA is not bound by the recommendation of an advisory
committee.

It is possible that our product candidates will not successfully
proceed through this approval process or that the FDA will not approve them in
any specific period of time, or at all. The FDA may deny or delay approval of
applications that do not meet applicable regulatory criteria, or if the FDA
determines that the clinical data do not adequately establish the safety and
efficacy of the product. Satisfaction of FDA pre-market approval requirements
for a new biologic is a process that may take several years and the actual time
required may vary substantially based upon the type, complexity and novelty of
the product or disease. The FDA reviews these applications and, when and if it
decides that adequate data are available to show that the product is both safe
and effective and that other applicable requirements have been met, approves the
drug or biologic for marketing. Government regulation may delay or prevent
marketing of potential products for a considerable period of time and impose
costly procedures upon our activities. Success in early stage clinical trials
does not assure success in later stage clinical trials. Data obtained from
clinical activities is not always conclusive and may be susceptible to varying
interpretations that could delay, limit or prevent regulatory approval. Upon
approval, a product candidate may be marketed only for those indications
approved in the BLA or NDA and may be subject to labeling and promotional
requirements or limitations, including warnings, precautions, contraindications
and use limitations, which could materially impact profitability. Once approved,
the FDA may withdraw the product approval if compliance with pre- and
post-market regulatory standards is not maintained or if safety, efficacy or
other problems occur after the product reaches the marketplace.

The FDA may, during its review of an NDA or BLA, ask for additional
test data. If the FDA does ultimately approve the product, it may require
post-marketing testing, including potentially expensive Phase IV studies, to
monitor the safety and effectiveness of the product. In addition, the FDA may,
in some circumstances, impose restrictions on the use of the product, which may
be difficult and expensive to administer and may require prior approval of
promotional materials.

-33-

ONGOING FDA REQUIREMENTS

Before approving an NDA or BLA, the FDA will inspect the facilities at
which the product is manufactured and will not approve the product unless the
manufacturing facilities are in compliance with the FDA's current Good
Manufacturing Practices, or cGMP, requirements which govern the manufacture,
holding and distribution of a product. Manufacturers of biologics also must
comply with the FDA's general biological product standards. Following approval,
the FDA periodically inspects drug and biologic manufacturing facilities to
ensure continued compliance with the cGMP requirements. Manufacturers must
continue to expend time, money and effort in the areas of production, quality
control, record keeping and reporting to ensure full compliance with those
requirements. Failure to comply with these requirements subjects the
manufacturer to possible legal or regulatory action, such as suspension of
manufacturing, seizure of product, voluntary recall of product, withdrawal of
marketing approval or civil or criminal penalties. Adverse experiences with the
product must be reported to the FDA and could result in the imposition of
marketing restrictions through labeling changes or market removal. Product
approvals may be withdrawn if compliance with regulatory requirements is not
maintained or if problems concerning safety or efficacy of the product occur
following approval.

The labeling, advertising, promotion, marketing and distribution of a
drug or biologic product also must be in compliance with FDA and FTC
requirements which include, among others, standards and regulations for
direct-to-consumer advertising, industry-sponsored scientific and educational
activities, and promotional activities involving the internet. The FDA and FTC
have very broad enforcement authority, and failure to abide by these regulations
can result in penalties, including the issuance of a Warning Letter directing
the company to correct deviations from regulatory standards, a requirement that
future advertising and promotional materials be pre-cleared by the FDA and
enforcement actions that can include seizures, injunctions and criminal
prosecution.

Manufacturers are also subject to various laws and regulations
governing laboratory practices, the experimental use of animals and the use and
disposal of hazardous or potentially hazardous substances in connection with
their research. In each of the above areas, the FDA has broad regulatory and
enforcement powers, including the ability to levy fines and civil penalties,
suspend or delay issuance of approvals, seize or recall products and deny or
withdraw approvals.

HIPAA REQUIREMENTS

Other federal legislation may affect our ability to obtain certain
health information in conjunction with our research activities. The Health
Insurance Portability and Accountability Act of 1996, or HIPAA, mandates, among
other things, the adoption of standards designed to safeguard the privacy and
security of individually identifiable health information. In relevant part, the
U.S. Department of Health and Human Services, or HHS, has released two rules to
date mandating the use of new standards with respect to such health information.
The first rule imposes new standards relating to the privacy of individually
identifiable health information. These standards restrict the manner and
circumstances under which covered entities may use and disclose protected health
information so as to protect the privacy of that information. The second rule
released by HHS establishes minimum standards for the security of electronic
health information. While we do not believe we are directly regulated as a
covered entity under HIPAA, the HIPAA standards impose requirements on covered
entities conducting research activities regarding the use and disclosure of
individually identifiable health information collected in the course of
conducting the research. As a result, unless they meet these HIPAA requirements,
covered entities conducting clinical trials for us may not be able to share with
us any results from clinical trials that include such health information.

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.

MANUFACTURING

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

-34-

For the manufacture of the applications under development, we obtain
synthetic peptides from third party manufacturers. We believe 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. We believe that the synthetic substance P and other materials
necessary to produce Homspera are readily available from various sources, and
several suppliers are capable of supplying substance P in both clinical and
commercial quantities. These suppliers also store and ship the product as well.

We believe that our products will use an inhaler (puffer) device to
deliver Homspera to the user. To develop, manufacture and test an inhaler
device, we hope to partner with a 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. We believe such a
partnership may enable us to decrease the time-to-market for our products and to
increase our productivity.

Employees

As of November 23, 2004, we had one full-time employee and three
contract employees. None of our employees are covered by a collective bargaining
agreement or are represented by a labor union. We have not experienced any work
stoppages and consider our employee relations to be good.

PROPERTY

We have a lease agreement for 800 square feet of office space in
Scottsdale, Arizona. The lease expires September 30, 2005. Rent expense is
$2,297 per month. We believe that our facilities are adequate for our current
needs and suitable additional or substitute space will be available in the
future to replace our existing facilities, if necessary, or accommodate
expansion of our operations.

LEGAL PROCEEDINGS

On December 13, 2001, service of process was effectuated upon GPN
Network, Inc. with regard to a fee agreement between GPN Network, Inc. and
Silver and Deboskey, a Professional Corporation located in Denver, Colorado. On
November 7, 2002, judgment was entered in favor of Silver & Deboskey in the
amount of $28,091. At October 31, 2004, we had not paid any of this amount.

-35-

MANAGEMENT

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 37 President, Chief Executive Officer and Director
Mark L. Witten, Ph.D. 51 Director and Research Scientist
David T. Harris, Ph.D. 48 Director and Research Scientist
Theodore E. Staahl, M.D. 59 Director
Eric J. Hopkins 49 Chief Financial Officer
Steven J. Scronic 32 Secretary

MICHAEL K. WILHELM, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR.
Mr. Wilhelm has served as our President and Chief Executive Officer and on our
Board of Directors since July 2003 and as President and Chief Executive Officer
of ImmuneRegen BioSciences, Inc. since December 2002 and on its Board of
Directors since November 2002. Mr. Wilhelm has been actively involved in the
financial industry since 1990. After leaving the brokerage industry, Mr. Wilhelm
founded Foresight Capital Partners in July 1996, 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 took an active role, provided advisory services and facilitated
financing for continued growth and development. Mr. Wilhelm was Managing
Director of Foresight Capital Partners until December 2002.

MARK L. WITTEN, PH.D., DIRECTOR AND RESEARCH SCIENTIST. Dr. Witten has
served as a research scientist for our company and on our Board of Directors
since July 2003 and as a research scientist for ImmuneRegen BioSciences, Inc.
since December 2002 and on its Board of Directors since November 2002. 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 has
served as a research scientist for our company and on our Board of Directors
since July 2003 and as a research scientist for ImmuneRegen BioSciences, Inc.
since December 2002 and on its Board of Directors since November 2002. 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 has served on our Board
of Directors since April 2003. 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.

-36-

ERIC HOPKINS, CHIEF FINANCIAL OFFICER. Mr. Hopkins has served as our
Chief Financial Officer since July 2003. Mr. Hopkins is a certified public
accountant and financial consultant located in Costa Mesa, 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 GPN Network,
Inc. 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 served as our Secretary
since December 2002, and from December 2002 to June 2003, he served as our Chief
Financial Officer. 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.

There are no family relationships between any of our directors or
executive officers.

COMPENSATION OF DIRECTORS

We do not intend to pay our non-employee directors any annual
compensation. Non-employee directors will be reimbursed for reasonable costs and
expenses incurred for attending any director or committee meetings. Our officers
who are directors will not be paid any director's fees.

COMMITTEES AND ATTENDANCE AT BOARD MEETINGS

One meeting of our Board of Directors was held in 2003, which each
director attended.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the annual and
long-term compensation earned by (1) our Chief Executive Officer, (2) our former
Chief Executive Officer and President who served in such capacities until July
2003 when ImmuneRegen BioSciences, Inc. became a wholly-owned subsidiary of IR
BioSciences, Inc. (the "Reorganization") and (3) each of the other executive
officers whose annual salary and bonus during 2001, 2002 and 2003 exceeded
$100,000 (the "Named Executive Officers").

ANNUAL COMPENSATION
-------------------
NAME AND PRINCIPAL POSITION YEAR SALARY ($)
--------------------------------------------------------------------------------
Michael K. Wilhelm 2003 125,000
Chief Executive Officer and President(1)........... 2002 5,208

Todd M. Ficeto 2003 0
Chief Executive Officer, Chief Financial Officer, 2002 0
President and Secretary(2)......................... 2001 0

----------

(1) Michael K. Wilhelm has served as Chief Executive Officer and President of
IR BioSciences, Inc. since July 2003 when the Reorganization was completed.
Prior to the completion of the Reorganization, Mr. Wilhelm served as Chief
Executive Officer and President of ImmuneRegen BioSciences, Inc. since
December 2002.

-37-

See "Certain Relationships and Related Transactions--ImmuneRegen
BioSciences, Inc." Mr. Wilhelm's compensation is reported in the table with
respect to his positions at both IR BioSciences Holdings, Inc. and
ImmuneRegen BioSciences, Inc. for the years ended December 31, 2002 and
2003.

(2) Todd M. Ficeto served as Chief Financial Officer and Secretary of GPN
Network, Inc. from July 2001 until the completion of the Reorganization in
July 2003 and as Chief Executive Officer and President of GPN Network, Inc.
from August 2001 until the completion of the Reorganization in July 2003.

EMPLOYMENT AGREEMENT

On December 16, 2002, we entered into an employment agreement with our
President and CEO, Michael Wilhelm, for a period of three years terminating on
December 16, 2005. The employment 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. This agreement also provides for the following
various bonus incentives:

i) A quarterly discretionary bonus based upon our 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 of
our common stock at 75% of the fair market value of the stock on
the date the warrant is granted.

iii) At such time as Mr. Wilhelm introduces a financial partner to our
company through which we raise at least $1,500,000 in equity or
debt financing, he shall be granted a five-year warrant to
purchase 224,490 shares (post reverse-split) of our common stock.

CONSULTING AGREEMENTS

On December 16, 2002 we entered into consulting agreements with David
Harris and Mark Witten, who are our two founders and chief research scientists.
The consulting agreements are on a month-to-month basis. Under the terms of
these agreements, Messrs. Harris and Witten agree to place at the disposal of us
their judgment and expertise in the area of acute lung injury. In consideration
for these services, we agree to pay each of them a non-refundable fee of $5,000
per month, which shall accrue until such time as we raise at least $2,000,000 in
equity or debt financing, at which time such accrued amount will become due and
payable.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

We did not grant stock options to any of the Named Executive Officers
during the year ended December 31, 2003.

AGGREGATE OPTION EXERCISED IN LAST FISCAL YEAR END Y/E OPTION VALUES

As of December 31, 2003, there were no outstanding stock options held
by any of the Named Executive Officers, and the Named Executive Officers did not
exercise any stock options during the year ended December 31, 2003.

2003 STOCK OPTION, DEFERRED STOCK AND RESTRICTED STOCK PLAN

During the twelve months ended December 31, 2003, we adopted our 2003
Stock Option, Deferred Stock and Restricted Stock Plan which authorizes our
Board of Directors in accordance with the terms of our 2003 Stock Option,
Deferred Stock and Restricted Stock Plan , among other things, to grant
incentive stock options, as defined by Section 422(b) of the Internal Revenue
Code, nonstatutory stock options and awards of restricted stock and deferred
stock and to sell shares of our common stock pursuant to the exercise of such
stock options for up to an aggregate of 3,600,000 shares (post split). The
options will have a term not to exceed ten years from the date of the grant. We
had issued shares of restricted stock, but had not granted any stock options
under our 2003 Stock Option, Deferred Stock and Restricted Stock Plan as of
November 23, 2004.

-38-

Through December 31, 2003, we had granted, prior to the merger with
ImmuneRegen BioSciences, Inc., options to purchase 63,212 shares of our common
stock at a weighted average exercise price of $25.00 per share to certain
employees and consultants that are exercisable over various periods through
March 2010. These stock options were granted outside of our 2003 Stock Option,
Deferred Stock and Restricted Stock Plan.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information as of December 31, 2003
regarding compensation plans (including individual compensation arrangements)
under which equity securities of our company are authorized for issuance. All
share information included in this table has been adjusted to reflect a 2-for-1
forward stock split of our common stock that was effected in April 2004.

Number of securities
remaining available for
Number of Securities to be Weighted-average future issuance under equity
issued upon exercise of exercise price of compensation plans
outstanding options, outstanding options, (excluding securities
Plan Category warrants and rights warrants and rights reflected in column (a)
(a) (b) (c)
--------------------------------------------------------------------------------------------------------

Equity compensation
plans approved by
security holders........ 0(1) N/A 3,600,000(2)

Equity compensation
plans not approved by
security holders........ 63,212 $25 --

Total................... 63,212 3,600,000
======= =========

(1) Represents stock options outstanding under our 2003 Stock Option, Deferred
Stock and Restricted Stock Plan.

(2) Represents shares available for future issuance under our 2003 Stock
Option, Deferred Stock and Restricted Stock Plan as of December 31, 2003.

(3) 374,800 shares are available for future issuance under our 2003 Stock
Option, Deferred Stock and Restricted Stock Plan as of the date hereof.

-39-

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

IMMUNEREGEN BIOSCIENCES, INC.

ImmuneRegen BioSciences, Inc. is a wholly-owned subsidiary of IR
BioSciences Holdings, Inc. IR BioSciences Holdings, Inc. and ImmuneRegen
BioSciences, Inc. have interlocking executive positions and share common
ownership.

LICENSE AGREEMENT

DUE TO RELATED PARTIES

Pursuant to consulting agreements entered into with David Harris and
Mark Witten, who are our two founders and chief research scientists, during the
period from October 30, 2002 (inception) to December 31, 2002, we accrued $5,000
in consulting fees. During the period from January 1, 2003 to December 31, 2003,
we accrued an additional $120,000 in consulting fees. We had accrued payables
collectively due to Drs. Harris and Witten of $125,000 and $5,000 as of December
31, 2003 and 2002, respectively. In connection with our recently completed
private offering in October 2004, $90,500 of such amount owed to Dr. Witten
converted into 724,000 shares of our common stock and warrants to purchase
362,000 shares of common stock. As of August 15, 2004, we had accrued payables
due to our President and CEO, Michael Wilhelm, of $109,374. In connection with
our recently completed private offering in October 2004, $89,500 of such amount
was converted into 716,000 shares of common stock and warrants to purchase
358,000 shares of common stock.

OUTSTANDING LOANS

In October 2003, we were loaned $30,000 by the father of one of our
founders. Pursuant to the terms of this transaction, we provided this lender
with a warrant to purchase 15,000 shares of our common stock at a price of $2.00
per share. This loan was repaid in October 2004.

In October 2003, we were loaned $40,000 by a company controlled by
Michael Wilhelm, our President and CEO. Pursuant to the terms of this
transaction, we provided this lender with a warrant to purchase 20,000 shares of
our common stock at a price of $2.00 per share. This loan was repaid in October
2004.

In December 2003, we were loaned $20,000 by the mother-in-law of
Michael Wilhelm, our President and CEO. Pursuant to the terms of this
transaction, we provided this lender with a warrant to purchase 10,000 shares of
our common stock at a price of $2.00 per share. This loan was repaid in October
2004.

STRATUM CONSULTING LLC

Stratum Consulting LLC, an entity controlled by Steve Scronic, our
Secretary, has a consulting agreement whereby they were issued 200,000 shares of
restricted common stock and are paid a monthly fee of $2,500 in cash and an
additional $2,500 in restricted common stock.

-40-

PRINCIPAL AND SELLING STOCKHOLDERS

This prospectus relates to the resale from time to time of up to a
total of 47,161,581 shares of common stock by the selling stockholders,
comprising:

o 37,144,505 shares of our common stock that were issued to selling
stockholders pursuant to transactions exempt from registration under
the Securities Act of 1933; and

o 10,019,600 shares of common stock underlying warrants that were
issued to selling stockholders pursuant to transactions exempt from
registration under the Securities Act of 1933.

The following table sets forth certain information regarding the
beneficial ownership of our common stock as to (1) each person known to us to
beneficially own more than five percent of our common stock, (2) each director,
(3) our Named Executive Officers, (4) all directors and executive officers as a
group and (5) the selling stockholders and the shares offered by them in this
prospectus. Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission, or SEC. In computing the number of
shares beneficially owned by a selling stockholder and the percentage of
ownership of that selling stockholder, shares of common stock underlying shares
of convertible preferred stock, options or warrants held by that selling
stockholder that are convertible or exercisable, as the case may be, within 60
days of November 23, 2004 are included. Those shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of any other
selling stockholder. Each selling stockholder's percentage of ownership in the
following table is based upon 62,125,081 shares of common stock outstanding as
of November 23, 2004.

Except as described below, none of the selling stockholders within the
past three years has had any material relationship with us or any of our
affiliates:

o Michael Wilhelm has served as our company's Chief Executive Officer
since December 2002 and on our Board of Directors since November
2002;

o Mark Witten has served as a research scientist for our company since
December 2002 and on our Board of Directors since November 2002;

o Theodore Staahl has served on our Board of Directors since April
2003;

o CDM Group, Synergos, Inc., Spelling Communications, Stratum
Consulting Group, LLC, Debra Gessner, and Michael Caridi have
provided services to our company within the past three years, and we
agreed to issue shares of our common stock and warrants to purchase
additional shares of our common stock to each of them in exchange
for the settlement of outstanding indebtedness;

o Steve Scronic, our company's Secretary, is a control party of
Stratum Consulting Group, LLC.

The term "selling stockholders" also includes any transferees, pledges, donees,
or other successors in interest to the selling stockholders named in the table
below. To our knowledge, subject to applicable community property laws, each
person named in the table has sole voting and investment power with respect to
the shares of common stock set forth opposite such person's name.

-41-

NUMBER OF PERCENTAGE OF
PERCENTAGE OF SHARES OF SHARES OF
NUMBER OF SHARES OF NUMBER OF COMMON STOCK COMMON STOCK
SHARES OF COMMON STOCK SHARES OF BENEFICIALLY BENEFICIALLY
COMMON STOCK BENEFICIALLY COMMON STOCK OWNED AFTER OWNED AFTER
BENEFICIALLY OWNED PRIOR REGISTERED COMPLETION OF COMPLETION OF
OWNED PRIOR TO THE FOR SALE THE OFFERING THE OFFERING
SELLING STOCKHOLDER TO OFFERING OFFERING HEREBY (1) (1)
-------------------------------------------------------------------------------------------------------------------------------

Named Executive Officers and directors:

Michael K. Wilhelm
11007 N. Ridgeview Ct.
Fountain Hills, AZ 85268 8,889,024(2) 14.0% 1,074,000(2) 7,815,024(2) 12.4%

Mark L. Witten
7032 E. Rosewood St.
Tucson, AZ 85710-1236 9,962,139(3) 15.6% 1,086,000(3) 8,876,139(3) 13.9%

David T. Harris
4110 N. Alvernon Way
Tucson, AZ 85721 8,306,138(4) 13.4% 0 8,306,138 13.4%

Theodore Staahl
1329 Spanos Court
Suite A-1
Modesto, CA 95356 1,597,796(5) 2.6% 350,000 1,247,796(5) 2.0%

Todd M. Ficeto
9300 Wilshire Blvd.
Penthouse Suite
Beverly Hills, CA 90212 0 0 0 0 0

All directors and executive officers
as a group (6 persons) 29,256,750(7) 44.5% 2,510,000(7) 26,746,750(7) 41.1%

Other Selling Stockholders:

Wayne Adams
4845 Campo Ct.
Coral Gables, FL 33146 300,000(8) * 300,000(8) 0 0

David Benadum
13960 Fox Trail Dr.
Holland, MI 49424 120,000(9) * 120,000(9) 0 0

Delaware Charter Guarantee Trust Co.
F/B/O ML Bond Dental MP-Money Purch Keogh/FBO
Betty C. Bond
601 S. Main St.
Gretna, VA 24557 120,000(9) * 120,000(9) 0 0

Delaware Charter Guarantee Trust Co.
F/B/O ML Bond Dental MP-Money Purch Keogh/FBO
Michael L. Bond
601 S. Main St.
Gretna, VA 24557 120,000(9) * 120,000(9) 0 0

Michael L. Bond
601 S. Main St.
Gretna, VA 24557 240,000(10) * 240,000(10) 0 0

David Briskie
15006 Beltway Dr.
Addison, TX 75001 300,000(8) * 300,000(8) 0 0

Edward L. Chant
226 Edward Street
Suite #2
Aurora Ontario L4G 3S8
Canada 600,000(11) * 600,000(11) 0 0

Jerry Chitwood
3276 Lexington Rd.
Richmond, KY 40475 120,000(9) * 120,000(9) 0 0

Keith H. Cooper
5840 De Claire Ct.
Atlanta, GA 30328 240,000(10) * 240,000(10) 0 0

Raymond B. Cromer
873 Westtown Rd.
West Chester, PA 19382 120,000(9) * 120,000(9) 0 0

Sherida Downer & Paul Downer JT WROS
546 Merimont Blvd.
Auburn AL 36830 180,000(12) * 180,000(12) 0 0

John R. Durant
1867 S. Ashe Ct.
Auburn, AL 36830 240,000(10) * 240,000(10) 0 0

Matt Earl
5120 Aihama Dr.
Woodland Hills, CA 91364 120,000(9) * 120,000(9) 0 0

-42-

Gary Ecklar
1630 N. Broadway
Lexington, KY 40505 720,000(13) 1.2% 720,000(13) 0 0

Robert Lee England IV
3 Montcrest Dr.
Birmingham, AL 35213 120,000(9) * 120,000(9) 0 0

Roger Erickson
850 S. Boulder Hwy. 222
Henderson, NV 89015 360,000(14) * 360,000(14) 0 0

Delaware Charter Guarantee & Trust Co.
F/P/O Roger Erickson
SEP IRA
850 S. Boulder Hwy. 222
Henderson, NV 89015 240,000(10) * 240,000(10) 0 0

Arturo L. Filippe
1300 N. Portrero Grande Dr. S.
San Gabriel, CA 91770 120,000(9) * 120,000(9) 0 0

Flagship Mortgage Co.
c/o Brian Shannon
30 East Padonia Rd.
Ste 207
Timonium, MD 21093 120,000(9) * 120,000(9) 0 0

William L. Fox & Lynne Fox JT WROS
450 Music Mountain Rd.
Falls Village, CA CT 06031 600,000(11) * 600,000(11) 0 0

Delaware Charter G&T Co. Trust Co. F/B/O
Anthony Gentile IRA
7076 Via Quito
Pleasanton, CA 94566 300,000(8) * 300,000(8) 0 0

Myron Gerber
84 Gifford St. #33
New Bedford, MA 02744 240,000(10) * 240,000(10) 0 0

Gummersbach LTD
22 Victoria St.
Hamilton, Bermuda HMF 12 600,000(11) * 600,000(11) 0 0

Steven Gurewitsch
930 5th Ave.
Apt. 3-G
New York, NY 10021 480,000(15) * 480,000(15) 0 0

Jack Ham Revocable Living Trust Dtd. 3/22/00
Jack Ham Trustee
3143 Marcus Pointe Blvd.
Pensicola, FL 32505 240,000(10) * 240,000(10) 0 0

William J. Kathol
7220 S. 141st
Omaha, NE 68138 600,000(11) * 600,000(11) 0 0

-43-

Reichert, Wenner, Koch, & Provinzino
Profit Sharing Plan
F/B/O John Koch
501 St. Germain
St. Cloud, MN 56302 180,000(12) * 180,000(12) 0 0

Robert Koch
1825 Eye St. N.W.
Ste 1100
Washington, DC 20006 240,000(10) * 240,000(10) 0 0

Peter J. Lawrence
5 Landsdowne Crescent
London W11 2NH
United Kingdom 360,000(14) * 360,000(14) 0 0

David Lind
267 Dedham St.
Norfolk, MA 02056 300,000(8) * 300,000(8) 0 0

Lind Family Investments LP
1000 West Washington St.
Suite #502
Chicago, IL 60607 120,000(9) * 120,000(9) 0 0

Barry Lind Revocable Trust
Barry Lind Trustee U/A/D 12/19/1989
1000 West Washington St.
Suite #502
Chicago, IL 60607 720,000(13) 1.2% 720,000(13) 0 0

Randall K. Lowry, Jr.
14511 Falling Creek Dr.
Houston, TX 77014 600,000(11) * 600,000(11) 0 0

Mike Marr
3577 Fruitville Ave.
Oakland, CA 94602 240,000(10) * 240,000(10) 0 0

Glen Miskiewicz
48 Par-La-Ville Rd.
Apt. 724
Hamilton, HM11
Bermuda 600,000(11) * 600,000(11) 0 0

MSB Family Trust
D/T/D 6/25/93 Michael Blechman
TTEE 295 Shadowood Ln.
Northfield, IL 60093 540,000(16) * 540,000(16) 0 0

Daniel Navarro Jr. &
Richard Navarro JT WROS 2036 Highway 35 N.
South Amboy, NJ 08879 120,000(9) * 120,000(9) 0 0

-44-

David R. Nichols & Angela S. Nichols
Revocable Trust 1993
David Nichols and Angela Nichols TTEES
2250 Applewood Ln.
Camarillo, CA 93012 600,000(11) * 600,000(11) 0 0

Michael O'Brien
1575 Professional Way
P.O. Box 2737
Auburn, AL 36831 180,000(12) * 180,000(12) 0 0

Nelson Pan
985 Main St.
Melrose, MA 02176 180,000(12) * 180,000(12) 0 0

Prahalathan Rajasekaran
c/o Jupiter Asset Management
1 Grosvenor Place
London SW1X 7JJ
England 360,000(14) * 360,000(14) 0 0

The Richardson Family Trust D/T/D 07/19/90
Dennis L. Richardson &
Evette Richardson TTEES
537 Ocampo Dr.
Pacific Palisades, CA 90272 480,000(15) * 480,000(15) 0 0

Barry Saxe
35 McDaniel Rd.
Shady, NY 12409 1,440,000(17) 2.3% 1,440,000(17) 0 0

Jody R. Saxe & Richard Saxe JT WROS
3 West Ledge Rd.
Marblehead, MA 01945 120,000(9) * 120,000(9) 0 0

Lawrence M. Silver
225 West Hubbard
Suite #600
Chicago, IL 60610 420,000(18) * 420,000(18) 0 0

Delaware Charter Guarantee Trust Co. F/B/O
Richard S. Simms II Keogh Plan
5951 S. Middlefield Rd.
Ste. 105
Littleton, CO 80123 120,000(9) * 120,000(9) 0 0

John Spiziri
5 Nettie Lane
Lancaster, PA 17603 120,000(9) * 120,000(9) 0 0

Charles D. Stadterman
5620 Elgin St.
Pittsburgh, PA 15206 180,000(12) * 180,000(12) 0 0

William S. Tyrrell
Dogwood Townhouses #A12
4601 Henry Hudson Parkway
Bronx, NY 10471 720,000(13) 1.2% 720,000(13) 0 0

-45-

Peter T. White
122 Wilsondale St.
Westwood, MA 02090 300,000(8) * 300,000(8) 0 0

Robert Wilner
787 King St.
Rye Brook, NY 10573 480,000(15) * 480,000(15) 0 0

Olen C. Wilson
2404 Teckla Blvd.
Amarillo, TX 79106 180,000(12) * 180,000(12) 0 0

Tad Wilson
877 Maple Dr.
Spencer, IN 47460 120,000(9) * 120,000(9) 0 0

Jonathan H. Witherspoon
730 Yorkshire Road
Winston Salem, NC 27106 120,000(9) * 120,000(9) 0 0

Alan J. Young
1750 Braeside Avenue
Northbrook, IL 60062 420,000(18) * 420,000(18) 0 0

Roger Bouchard
32 Walnut Road
Rocky Hill, CT 06067 563,527(19) * 555,527 8,000(19) *

John Dann
895 Moraga Road, Suite 7
Lafayette, CA 94549 788,750 1.3% 788,750 0 0

Donn Fassero
600 Coffee Road
Modesto, CA 95355 619,745 * 619,745 0 0

Jerome French
1600 N. Foliage Dr.
Wichita, KS 67206 1,723,033(20) 2.8% 1,698,033 25,000(20) *

Jeffrey Friedman
12074 Broadway Terrace
Oakland, CA 94611 2,647,320(21) 4.3% 2,397,320 250,000(21) *

Steven Moore
1026 Rodeo Rd.
Pebble Beach, CA 93953 1,041,353(22) 1.7% 991,353 50,000(22) *

Daniel P. Neri
308 Bordeaux Lane
Cary, NC 27511 502,593(22) * 452,593 50,000(22) *

-46-

Warren Stout
800 E. Colorado Blvd., Suite 450
Pasadena, CA 91101 1,602,551(23) 2.6% 1,552,551 50,000(23) *

Stephen Walker
5829 Niwot Road
Longmont, CO 80503 44,347 * 44,347 0 0

CDM Group
3541 East Broadway Rd.
Phoenix, AZ 85040 115,064(24) * 115,064(24) 0 0

Synergos, Inc.
2202 Timberloch Place, Suite 230
The Woodlands, TX 77380 839,088(25) 1.4% 839,088(25) 0 0

Spelling Communications
2211 Corinth Avenue, Suite 210
Los Angeles, CA 890064 286,164(26) * 286,164(26) 0 0

Stratum Consulting Group, LLC
11442 E. Aster Drive
Scottsdale, AZ 85259 296,276(27) * 266,276(27) 30,000(27) *

Debra Gessner
9331 E. Calle de Valle
Scottsdale, AZ 85255 270,000(28) * 270,000(28) 0 0

Richard Ackner
14643 Drafthorse Ln.
Wellington, FL 33414 120,000(9) * 120,000(9) 0 0

Jason J. Aiello &
Rachel Aiello JT WROS
714 Willowbrook Rd.
Staten Island, NY 10314 120,000(9) * 120,000(9) 0 0

Richard B. Aronson
11 Lawrence Ln.
Lexington, MA 02421 120,000(9) * 120,000(9) 0 0

Richard E. Beattie
101 Graystone Farm Rd.
White Hall, MD 21161 240,000(10) * 240,000(10) 0 0

John J. Bender
2803 S. 22nd St.
LaCrosse, WI 54601 120,000(9) * 120,000(9) 0 0

Lester B. Boelter
50 Shady Oak Ct.
Winona, MN 55987 900,000(29) 1.4% 900,000(29) 0 0

Elliot Braun
3775 Park Ave.
Edison, NJ 08820 300,000(8) * 300,000(8) 0 0

Robert Burkhardt
2615 Kingston Point
Fort Wayne, IN 46815 240,000(10) * 240,000(10) 0 0

-47-

William Crowell &
Patricia Crowell JT WROS
9045 E. Havasupia Dr.
Scottsdale, AZ 85255 120,000(9) * 120,000(9) 0 0

Edward Duffy
178 Hanson Ln.
New Rochelle, NY 10804 120,000(9) * 120,000(9) 0 0

Franz Family Trust
D/T/D 8/16/02 David Franz & Nicole Franz
TTEES 5553 Wellesley Dr.
Calabasas, CA 91302 120,000(9) * 120,000(9) 0 0

Bernie Gallas
5200 N. Diversey Blvd. #204
Milwaukee, WI 53217 180,000(10) * 180,000(10) 0 0

William M. Goldstein
787 Trethanny Ln.
Wayne, PA 19087 150,000(30) * 150,000(30) 0 0

Mark Hellner
900 West Olive
Merced, CA 95348 480,000(15) * 480,000(15) 0 0

Michael Hennessy
686 Bowman Rd.
Chamberburg, PA 17201 120,000(9) * 120,000(9) 0 0

Joel Katz
c/o American Business
1205 Northern Blvd.
Manahasset, NY 11030 300,000(8) * 300,000(8) 0 0

Michael Kramm &
Doris Kramm JT WROS
39 Rugen Dr.
Harrington Pk., NY 07640 120,000(9) * 120,000(9) 0 0

Indy S. Kullar
3-8699 10th Ave.
Burnaby, BC V3N259
Canada 180,000(12) * 180,000(12) 0 0

David Bruce Laughton
12065 Beaufait Ave.
Northridge, CA 91326 120,000(9) * 120,000(9) 0 0

Myron A. Leon
2806 Saklan Indian Dr.
Walnut Creek, CA 94595 120,000(9) * 120,000(9) 0 0

Dwight E. Long
406 Belle Glen Ln.
Brentwood, TN 37027 360,000(14) * 360,000(14) 0 0

-48-

George F. McCabe Jr. Family Trust
DTD 2/11/98
George F. McCabe TTEE
926 Hawk Landing
Frontland Park, FL 34731 300,000(8) * 300,000(8) 0 0

James L. McCormack
3355 Fruitvale Rd.
Lincoln, CA 95648 120,000(9) * 120,000(9) 0 0

John Kevin McCrary
4520 Red Fox Rd.
Fort Collins, CO 80526 120,000(9) * 120,000(9) 0 0

E. Scott Millbury
Southshore Dr.
Millbury Lane
Rangely, ME 04970 120,000(9) * 120,000(9) 0 0

John Richard Miller
29 Bishop Kirk Place
Oxford, OX27HJ
UK 600,000(11) * 600,000(11) 0 0

Sanford J. Miller &
Babette D. Miller JT WROS
7606 Forsyth Blvd.
St. Louis, MO 63105 300,000(8) * 300,000(8) 0 0

Enrico Monaco
2230 Ocean Ave.
Brooklyn, NY 11229 180,000(12) * 180,000(12) 0 0

James Mulryan &
Maureen Mulryan JT WROS
9925 S. Bell Ave.
Chicago, IL 60643 120,000(9) * 120,000(9) 0 0

Allen Notowitz
2710 Victoria Mnr.
San Carlos, CA 94070 120,000(9) * 120,000(9) 0 0

Paul B. Poulsen &
Kathleen J. Poulsen
JT WROS 215 Alvarado Ave.
Los Angeles, CA 94022 240,000(10) * 240,000(10) 0 0

Progressive Ins. Services, Inc.
Money Purchase Pension Plan
Russell E. Davis TTEE
205 E. Reynolds Rd.
Lexington, KY 40571 120,000(9) * 120,000(9) 0 0

Palangat Radhakrishnan &
Devika Radhakrishnan JT WROS
115 White Ave.
New Hyde Pk., NY 11040 300,000(8) * 300,000(8) 0 0

-49-

Frank Restivo
1311 S. Hidden Valley Dr.
W. Covina, CA 91791 120,000(9) * 120,000(9) 0 0

Delaware Charter Guaranty & Trust Co.
FBO Stanley Riggins IRA
1349 Biltmore Drive
Charlotte, NC 28207 120,000(9) * 120,000(9) 0 0

Paul Sallwasser &
Teri Sallwasser JT WROS
301 Windmill Palm Ave.
Plantation, FL 33324 240,000(10) * 240,000(10) 0 0

Ronald S. Sheldon Self Directed
Profit Sharing Plan & Trust
Ronald S. Sheldon TTEE
1488 Old Barn Lane
Highland Pk., IL 60035 240,000(10) * 240,000(10) 0 0

Delaware Charter Guarantee & Trust Co.
FBO Stanley Sides IRA
631 Walker Ferry Rd.
Alexander City, AL 35010 240,000(10) * 240,000(10) 0 0

Claire Spooner
111 Seaview Ct.
Neptune, NJ 07753 120,000(9) * 120,000(9) 0 0

Henry Steinberg
934 Southern Drive
Franklin Sq., NY 02038 120,000(9) * 120,000(9) 0 0

Daniel C. Strum
95 Upper Hampden Rd.
Monson, MA 01057 240,000(10) * 240,000(10) 0 0

Frank Sylva
450 Sylva Lane
Lakeport, CA 95453 120,000(9) * 120,000(9) 0 0

Michael Van Petten
5113 Rolling Fairway Dr.
Valrilo, FL 33594 120,000(9) * 120,000(9) 0 0

John Wechsler
159 Bedford Rd.
Greenwich, CT 06831 150,000(30) * 150,000(30) 0 0

Michael Kulick, MD
Profit Shared Plan
450 Sutter, Suite 2620
San Francisco, CA 94118 714,660(31) 1.1% 614,770 100,000(31) *

Michael Caridi
32 Cutler Road
Greenwich, CT 06831 120,000(9) * 120,000(9) 0 0

-50-

Salvatore Clark
P.O. Box 317
Deer Park, NY 11729 220,000 * 220,000 0 0

Antonio Coladonato
2526 Harway Ave.
Brooklyn, NY 11214 5,000 * 5,000 0 0

Kris Destefano
2 Manchester Drive
Bethpage, NY 11714 185,000 * 185,000 0 0

Kristina Fasullo
77 Claradon Lane
Staten Island, NY 10305 5,000 * 5,000 0 0

Alan Ferraro
7201 4th Avenue
Apt. #C-14
Brooklyn, NY 11209 165,000 * 165,000 0 0

William Christopher Frasco
532 Nugent Ave.
Staten Island, NY 10305 100,000 * 100,000 0 0

Steven Markowitz
c/o Joseph Stevens & Co., Inc.
59 Maiden Lane
32nd Fl.
New York, NY 10038 600,625 * 600,625 0 0

Matthew S. Menies
52 Beach Road
Massapequa, NY 11758 125,000 * 125,000 0 0

Fabio Migliaccio
658 Henry Street
Brooklyn, NY 11231 200,000 * 200,000 0 0

Dina Mondelli
1 74th Street
Apt. #2S
Brooklyn, NY 11209 5,000 * 5,000 0 0

Peter Orthos
52 Stone Hill Drive S.
Manhasset, NY 11030 200,000 * 200,000 0 0

Alexander Orthos &
Peter Orthos JT WROS
52 Stone Hill Drive S.
Manhasset, NY 11030 1,336,250 2.2% 1,336,250 0 0

George Paxinos
32043 46th Street
Astoria, NY 11103 85,000 * 85,000 0 0

Robert Petrozzo
20 Woods Lane
East Hampton, NY 11937 340,000 * 340,000 0 0

-51-

James Rathgeber
14 Richboyrne Lane
Melville, NY 11747 410,000 * 410,000 0 0

Joseph Sorbara
4 Windham Court
Muttontown, NY 11545 600,625 * 600,625 0 0

Edward Taylor
6415 Boulevard East
West New York, NJ 07093 46,875 * 46,875 0 0

Andrea Todaro
55 92nd Street
Apt. #2F
Brooklyn, NY 11209 20,000 * 20,000 0 0

Drew Tranchina
178-15 69th Ave.
Fresh Meadows, NY 11365 55,000 * 55,000 0 0

Louis John Ventre
1339 85th Street
Brooklyn, NY 11228 100,000 * 100,000 0 0

Westrock Advisors
230 Park Ave.
Suite #934
New York, NY 10169 15,625 * 15,625 0 0

Jeffrey Blake Woolf
80 Park Ave.
Apt. #7F
New York, NY 10016 80,000 * 80,000 0 0

SBM Certificate Company
5101 River Road, Suite 101
Bethesda, MD 20816
Attn: Eric Westbury 900,000 1.4% 900,000 0 0

----------
* Less than 1 percent.

(1) Represents the amount of shares that will be held by the selling
stockholders after completion of this offering based on the assumption that
all shares registered for sale hereby will be sold. However, the selling
stockholders may offer all, some or none of the shares pursuant to this
prospectus, and to our knowledge there are currently no agreements,
arrangements or understanding with respect to the sale of any of the shares
that may be held by the selling stockholders after completion of this
offering.
(2) Includes 6,505,350 shares underlying warrants that are currently
exercisable, 358,000 of which are being registered for sale hereby, and
5,000,000 of which represent warrants to purchase shares held by David T.
Harris.
(3) Includes 1,932,000 shares underlying warrants that are currently
exercisable, 362,000 of which are being registered for sale hereby.
Includes 75,250 shares held by Mark L. Witten that underlie currently
exercisable warrants held by Jeffrey Friedman and Steven Moore.
(4) Includes 6,000,000 shares held by David T. Harris that underlie currently
exercisable warrants held by Michael K. Wilhelm and Theodore Staahl and
an additional 75,250 shares held by Mr. Harris that underlie currently
exercisable warrants held by Jeffrey Friedman and Steven Moore.
(5) Includes 1,158,000 shares underlying warrants that are currently
exercisable, 1,000,000 of which represent warrants to purchase shares held
by David T. Harris.
(6) Not used.
(7) Includes 9,615,350 shares underlying warrants that are currently
exercisable, 720,000 of which are being registered for sale hereby and
6,000,000 of which are underlying warrants held by Michael Wilhelm and
Theodore Staahl to purchase shares held by David T. Harris. Includes an
aggregate of 150,500 shares held by Mark L. Witten and David T. Harris that
underlie currently exercisable warrants held by Jeffrey Friedman and
Stevevn Moore. Excludes 296,276 shares beneficially owned by Stratum
Consulting Group, LLC, of which Steve Scronic is a control party.
(8) Includes 100,000 shares underlying warrants that are currently exercisable.
(9) Includes 40,000 shares underlying warrants that are currently exercisable.
(10) Includes 80,000 shares underlying warrants that are currently exercisable.
(11) Includes 200,000 shares underlying warrants that are currently exercisable.
(12) Includes 60,000 shares underlying warrants that are currently exercisable.
(13) Includes 240,000 shares underlying warrants that are currently exercisable.
(14) Includes 120,000 shares underlying warrants that are currently exercisable.
(15) Includes 160,000 shares underlying warrants that are currently exercisable.
(16) Includes 180,000 shares underlying warrants that are currently exercisable.
(17) Includes 480,000 shares underlying warrants that are currently exercisable.
(18) Includes 140,000 shares underlying warrants that are currently exercisable.

-52-

(19) Includes 8,000 shares underlying warrants that are currently exercisable.
(20) Includes 25,000 shares underlying warrants that are currently exercisable.
(21) Includes 250,000 shares underlying warrants that are currently exercisable,
62,750 of which represent warrants to purchase shares held by Mark L.
Witten and 62,750 of which represent warrants to purchase shares held by
David T. Harris.
(22) Includes 50,000 shares underlying warrants that are currently exercisable,
12,500 of which represent warrants to purchase shares held by Mark L.
Witten and 12,500 of which represent warrants to purchase shares held by
David T. Harris.
(23) Includes 50,000 shares underlying warrants that are currently exercisable.
(24) Excludes 12,500 shares underlying warrants that are currently exercisable
held by the owner of CDM Group.
(25) Excludes 10,000 shares underlying warrants that are currently exercisable
held by the owner of Synergos, Inc.
(26) Excludes 1,000 shares underlying warrants that are currently exercisable
held by the owner of Spelling Communication.
(27) Includes 30,000 shares underlying warrants that are currently exercisable.
Steve Scronic is a control party of Stratum Consulting Group, LLC and
our Secretary.
(28) Includes 90,000 shares underlying warrants that are currently exercisable.
(29) Includes 300,000 shares underlying warrants that are currently exercisable.
(30) Includes 50,000 shares underlying warrants that are currently exercisable.
(31) Includes 100,000 shares underlying warrants that are currently exercisable.

We will not receive any of the proceeds from the sale of the shares by
the selling stockholders. We have agreed to bear expenses incurred by the
selling stockholders, up to a maximum limit of $15,000, that relate to the
registration of the shares being offered and sold by the selling stockholders,
including the Securities and Exchange Commission registration fee and legal,
accounting, printing and other expenses of this offering.

-53-

DESCRIPTION OF CAPITAL STOCK

We are authorized to issue 100,000,000 shares of common stock, $0.001
par value per share, and 10,000,000 shares of preferred stock, $0.001 par value
per share. The following description of our capital stock does not purport to be
complete and is governed by and qualified by our certificate of incorporation
and bylaws, which are included as exhibits to the registration statement of
which this prospectus forms a part, and by the provisions of applicable Delaware
law.

COMMON STOCK

As of November 23, 2004, we had 62,125,081 shares of common stock
outstanding, which were held of record and beneficially by approximately 515
stockholders. As of November 3, 2004, there were 17,430,710 shares of common
stock underlying outstanding warrants, and options to purchase 63,212 shares of
common stock had been granted or were outstanding outside our 2003 Stock Option,
Deferred Stock and Restricted Stock Plan. No options had been granted or were
outstanding under our 2003 Stock Option, Deferred Stock and Restricted Stock
Plan; 374,800 shares remain available for issuance under this plan.

The holders of our common stock are entitled to one (1) vote per share
on all matters submitted to a vote of our stockholders. In addition, such
holders are entitled to receive ratably such dividends, if any, as may be
declared from time to time by our Board of Directors out of funds legally
available therefore. No dividends may be paid on the common stock until all
accrued but unpaid dividends on the shares of our preferred stock have been
paid. In the event of the dissolution, liquidation or winding up of our company,
the holders of common stock are entitled to share ratably in all assets
remaining after payment of all liabilities of our company and the preference
amount distributable to the holders of the shares of preferred stock. All
outstanding shares of common stock are fully paid and non-assessable. The
holders of common stock do not have any subscription, redemption or conversion
rights, nor do they have any preemptive or other rights to acquire or subscribe
for additional, unissued or treasury shares.

Pursuant to our bylaws, except for any matters which pursuant to
Delaware law require a greater percentage vote for approval, the holders of a
majority of the outstanding shares of common stock, if present in person or by
proxy, are sufficient to constitute a quorum for the transaction of business at
meetings of our stockholders. Except as to any matters which pursuant to
Delaware law require a greater percentage vote for approval, the affirmative
vote of the holders of a majority of the shares of common stock present in
person or by proxy at any meeting (provided a quorum is present) is sufficient
to authorize, affirm or ratify any act or action, including the election of our
Board of Directors.

The holders of the common stock do not have cumulative voting rights.
Accordingly, the holders of more than half of the outstanding shares of common
stock can elect all of the directors to be elected in any election, if they
choose to do so. In such event, the holders of the remaining shares of common
stock would not be able to elect any directors. Our Board of Directors is
empowered to fill any vacancies on the Board created by the resignation, death
or removal of directors.

In addition to voting at duly called meetings at which a quorum is
present in person or by proxy, Delaware law and our bylaws provide that
stockholders may take action without the holding of a meeting by written consent
or consents signed by the holders of a majority of the outstanding shares of our
capital stock entitled to vote thereon. Prompt notice of the taking of any
action without a meeting by less than unanimous consent of the stockholders will
be given to those stockholders who do not consent in writing to the action. The
purposes of this provision are to facilitate action by stockholders and to
reduce the corporate expense associated with special meetings of stockholders.

PREFERRED STOCK

Under our certificate of incorporation, shares of our preferred stock
may, without any action by our stockholders, be issued by our Board of Directors
from time to time in one or more series for such consideration and with such
relative rights, privileges and preferences as the Board may determine.
Accordingly, our Board of Directors has the power, without stockholder approval,
to fix the dividend rate and to establish the provisions, if any,

-54-

relating to voting rights, redemption rate, sinking fund, liquidation
preferences and conversion rights for any series of preferred stock (subject to
the preferences of the shares of common stock offered hereby) issued in the
future, which could adversely affect the voting power or other rights of the
holders of common stock.

Our Board of Directors' authority to issue preferred stock provides a
convenient vehicle in connection with possible acquisitions and other corporate
purposes, but could have the effect of making it more difficult for a person or
group to gain control of our company. As of the date of the prospectus, there
are no shares of preferred stock outstanding, and we do not have present plans
to issue any shares of preferred stock or designate any series of preferred
stock.

STOCK OPTIONS

As of November 23, 2004, there were no outstanding stock options under
our 2003 Stock Option, Deferred Stock and Restricted Stock Plan and 374,800
shares were reserved for future grant under our 2003 Stock Option, Deferred
Stock and Restricted Stock Plan. There were outstanding stock options to
purchase an additional 63,212 shares of our common stock that were granted
outside of our 2003 Stock Option, Deferred Stock and Restricted Stock Plan at a
weighted average exercise price of $25.00 per share.

WARRANTS

As of November 23, 2004, there were outstanding warrants to purchase
17,430,710 shares of our common stock with exercise prices ranging from $0.05 to
$2.00 per share.

DELAWARE ANTI-TAKEOVER LAW AND CHARTER AND BYLAW PROVISIONS

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, this statute prohibits a publicly-held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date that the person became
an interested stockholder unless, with certain exceptions, the business
combination or the transaction in which the person became an interested
stockholder is approved in a prescribed manner. Generally, a "business
combination" includes a merger, asset or stock sale, or other transaction
resulting in a financial benefit to the stockholder.

Generally, an "interested stockholder" is a person who, together with
affiliates and associates, owns or within three years prior, did own 15% or more
of the corporation's voting stock. These provisions may have the effect of
delaying, deferring or preventing a change in control of us without further
action by our stockholders.

Our certificate of incorporation and bylaws contain provisions that
could have the effect of discouraging potential acquisition proposals or making
a tender offer or delaying or preventing a change in control of our company,
including changes a stockholder might consider favorable. In particular, our
certificate of incorporation and bylaws, as applicable, among other things,
will:

o provide our board of directors with the ability to alter our bylaws
without stockholder approval;

o provide that special meetings of stockholders can only be called by
our Board of Directors or by a committee of our Board of Directors
that has been duly designated by the Board and whose powers and
authority included the power to call such meetings;

o provide for an advance notice procedure with regard to the
nomination of candidates for election as directors and with regard
to business to be brought before a meeting of stockholders;

o provide that vacancies on our board of directors may be filled by a
majority of directors in office, although less than a quorum; and

o allow us to issue up to 10,000,000 shares of preferred stock with
rights senior to those of the common stock and that otherwise could
adversely affect the rights and powers, including voting rights, of
the

-55-

holders of common stock. In some circumstances, this issuance could
have the effect of decreasing the market price of our common stock,
as well as having the anti-takeover effects discussed above.

Such provisions may have the effect of discouraging a third-party from
acquiring us, even if doing so would be beneficial to our stockholders. These
provisions are intended to enhance the likelihood of continuity and stability in
the composition of our board of directors and in the policies formulated by
them, and to discourage some types of transactions that may involve an actual or
threatened change in control of our company. These provisions are designed to
reduce our vulnerability to an unsolicited acquisition proposal and to
discourage some tactics that may be used in proxy fights. We believe that the
benefits of increased protection of our potential ability to negotiate with the
proponent of an unfriendly or unsolicited proposal to acquire or restructure our
company outweigh the disadvantages of discouraging such proposals because, among
other things, negotiation of such proposals could result in an improvement of
their terms. However, these provisions could have the effect of discouraging
others from making tender offers for our shares that could result from actual or
rumored takeover attempts. These provisions also may have the effect of
preventing changes in our management.

TRANSFER AGENT AND REGISTRAR

The transfer agent for our common stock is Stalt, Inc., located at 848
Tanager Street, Suite N, Incline Village, NV 89451.

SHARES ELIGIBLE FOR FUTURE SALE

As of November 23, 2004, we had outstanding 62,125,081 shares of common
stock.

RULE 144

All of the 47,161,581 shares registered in this offering will be and
3,225,200 shares issued under our 2003 Stock Option, Deferred Stock, and
Restricted Stock Plan are freely tradable without restriction or further
registration under the Securities Act of 1933. As of November 3, 2004, we also
have outstanding an additional 21,757,900 shares of common stock outstanding
that were issued and sold in reliance on exemptions from the registration
requirements of the Securities Act of 1933. If shares are purchased by our
"affiliates" as that term is defined in Rule 144 under the Securities Act of
1933, their sales of shares would be governed by the limitations and
restrictions that are described below.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned shares of our common
stock for at least one year, including any person who may be deemed to be an
"affiliate" (as the term "affiliate" is defined under the Securities Act of
1933), would be entitled to sell, within any three-month period, a number of
shares that does not exceed the greater of:

o 1% of the number of shares of common stock then outstanding, which
as of November 3, 2004 would equal approximately 621,251 shares; or

o the average weekly trading volume of our common stock during the
four calendar weeks preceding the filing of a notice on Form 144
with respect to such sale.

Sales under Rule 144 are also governed by other requirements regarding
the manner of sale, notice filing and the availability of current public
information about us. Under Rule 144, however, a person who is not, and for the
three months prior to the sale of such shares has not been, an affiliate of the
issuer is free to sell shares that are "restricted securities" which have been
held for at least two years without regard to the limitations contained in Rule
144. The selling stockholders will not be governed by the foregoing restrictions
when selling their shares pursuant to this prospectus.

RULE 144(K)

Under Rule 144(k), a person who is not deemed to have been one of our
affiliates at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years,

-56-

including the holding period of any prior owner other than an affiliate, is
entitled to sell such shares without complying with the manner of sale, notice
filing, volume limitation or notice provisions of Rule 144.

PLAN OF DISTRIBUTION

The selling stockholders, and any of their pledgees, assignees and
successors-in-interest, may, from time to time, sell any or all of their shares
of our common stock on any stock exchange, market or trading facility on which
the shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling stockholders may use any one or more of the
following methods when selling shares:

o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

o an exchange distribution in accordance with the rules of the
applicable exchange;

o privately negotiated transactions;

o settlement of short sales entered into after the date of this
prospectus;

o broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;

o a combination of any such methods of sale;

o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise; or

o any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.

Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Each selling stockholder does not expect these commissions and
discounts relating to its sales of shares to exceed what is customary in the
types of transactions involved.

In connection with the sale of our common stock or interests therein,
the selling stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may, after the date of this prospectus, also sell shares of our
common stock short and deliver these securities to close out their short
positions, or loan or pledge the common stock to broker-dealers that in turn may
sell these securities. The selling stockholders may also enter into option or
other transactions with broker-dealers or other financial institutions or the
creation of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).

The selling stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by

-57-

them may be deemed to be underwriting commissions or discounts under the
Securities Act. Each selling stockholders has informed us that it does not have
any agreement or understanding, directly or indirectly, with any person to
distribute our common stock.

We are required to pay certain fees and expenses incurred by us
incident to the registration of the shares. We have agreed to indemnify the
selling stockholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.

Because selling stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act. In addition, any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than under this prospectus.
Each selling stockholder has advised us that they have not entered into any
agreements, understandings or arrangements with any underwriter or broker-dealer
regarding the sale of the resale shares. There is no underwriter or coordinating
broker acting in connection with the proposed sale of the resale shares by the
selling stockholders .

We agreed to keep this prospectus effective until the earlier of (i)
the date on which the shares may be resold by the selling stockholders without
registration and without regard to any volume limitations by reason of Rule
144(k) under the Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.

Under applicable rules and regulations under the Securities Exchange
Act of 1934, any person engaged in the distribution of the resale shares may not
simultaneously engage in market making activities with respect to our common
stock for a period of two business days prior to the commencement of the
distribution. In addition, the selling stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of our common stock by the selling stockholders or any other
person. We will make copies of this prospectus available to the selling
stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale.

LEGAL MATTERS

The validity of the common stock offered by this prospectus will be
passed upon for us by Kirkpatrick & Lockhart LLP, Los Angeles, California.

EXPERTS

The financial statements appearing in this Prospectus and Registration
Statement have been audited by Russell Bedford Stefanou Mirchandani LLP and
Stonefield Josephson, Inc., independent accountants; to the extent and for the
periods indicated in their report appearing elsewhere herein, and are included
in reliance upon such report and upon the authority of such firms as experts in
accounting and auditing.

ADDITIONAL INFORMATION

We filed with the Securities and Exchange Commission a registration
statement on Form SB-2 under the Securities Act of 1933 for the shares of common
stock in this offering. This prospectus does not contain all of the information
in the registration statement and the exhibits and schedule that were filed with
the registration statement. For further information with respect to us and our
common stock, we refer you to the registration statement and the exhibits and
schedule that were filed with the registration statement. Statements contained
in this prospectus about the contents of any contract or any other document that
is filed as an exhibit to the

-58-

registration statement are not necessarily complete, and we refer you to the
full text of the contract or other document filed as an exhibit to the
registration statement. A copy of the registration statement and the exhibits
and schedules that were filed with the registration statement may be inspected
without charge at the Public Reference Room maintained by the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of all or any part of the registration statement may be obtained from the
Securities and Exchange Commission upon payment of the prescribed fee.
Information regarding the operation of the Public Reference Room may be obtained
by calling the Securities and Exchange Commission at 1-800-SEC-0330. The
Securities and Exchange Commission maintains a web site that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. The address of the site is www.sec.gov.

We are subject to the information and periodic reporting requirements
of the Securities Exchange Act of 1934, and in accordance with the Securities
Exchange Act of 1934, we file annual, quarterly and special reports, and other
information with the Securities and Exchange Commission. These periodic reports,
and other information are available for inspection and copying at the regional
offices, public reference facilities and website of the Securities and Exchange
Commission referred to above.

-59-

INDEX TO FINANCIAL STATEMENTS

PAGE

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM......................F-2

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheet as of December 31, 2003......................F-4

Consolidated Statements of Operations for the twelve
months ended December 31, 2003 and for the period
from the date of inception (October 30,2002)
to December 31, 2002..............................................F-5

Consolidated Statements of Stockholders' Equity (Deficit)
from the date of inception (October 30,2002) to
December 31, 2003.................................................F-6

Consolidated Statements of Cash Flows for the twelve
months ended December 31, 2003 and for the period
from the date of inception (October 30,2002) to
December 31, 2002.................................................F-7

Notes to Consolidated Financial Statements for the year ended
December 31, 2003 and for the period from the date of
inception (October 30,2002) to December 31, 2002..................F-9

Consolidated Balance Sheet as of September 30, 2004 (unaudited)........F-26

Consolidated Statements of Operations for the three months and
nine months ended September 30, 2003 and 2004 (unaudited)
and for the period from the date of inception (October 30,
2002) to September 30, 2004 (unaudited)..........................F-27

Consolidated Statements of Stockholders' Equity (Deficit)
from the date of inception (October 30,2002) to
September 30, 2004 (unaudited)...................................F-28

Consolidated Statements of Cash Flows for the nine months ended
September 30, 2003 and 2004 (unaudited)..........................F-31

Notes to Consolidated Financial Statements for the three months
and nine months ended September 30, 2003 and 2004 (unaudited)....F-33

F-1

RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP

CERTIFIED PUBLIC ACCOUNTANTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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 the standards of the Public Accounting
Oversight Board (United States). 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-2

STONEFIELD JOSEPHSON, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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 these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). 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 audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company as of December 31,
2002, and the results of its operations and its 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.

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.
------------------------------
Certified Public Accountants
Irvine, California
December 8, 2003

F-3

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; 23,431,300 shares
issued and outstanding .................................. 23,431
Additional paid-in capital ................................... 1,035,441
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-4

IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS

FROM THE DATE CUMULATIVE FROM
FOR THE OF INCEPTION INCEPTION
TWELVE MONTHS (OCTOBER (OCTOBER
ENDED DECEMBER 30, 2002) TO 30, 2002) TO
31, 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 .................. $ (0.09) $ (0.01) $ (0.10)
============ ============ ============
Weighted average shares outstanding - basic and diluted . 21,317,292 4,424,084 18,644,114
------------ ------------ ------------

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

F-5

IR BIOSCIENCES HOLDING, 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
ADDITIONAL DURING
COMMON STOCK 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 .......................... 16,612,276 16,612 (7,362) -- -- 9,250
Shares of common stock issued to
founders for services rendered
in December 2002 .............. 1,405,310 1,405 (623) -- -- 782
Shares of common stock issued to
consultants for services
rendered in December 2002 ..... 53,878 54 8,946 (9,000) -- --
Sale of common stock for cash in
December 2002 ................. 185,578 186 30,815 -- -- 31,001
Net loss for the period from
inception (October 30, 2002)
to December 31, 2002 .......... -- -- -- -- (45,918) (45,918)
---------- ---------- ------- ------ ------- --------
Balance at December 31, 2002
(reflective of stock splits) . 18,257,042 18,257 31,776 (9,000) (45,918) (4,885)
Shares granted to consultants for
services rendered in January
2003 .......................... 98,776 99 13,651 -- -- 13,750
Sale of shares of common stock
for cash in January 2003 ...... 329,552 330 49,670 -- -- 50,000
Shares granted to consultants for
services rendered in March 2003 154,450 154 21,346 -- -- 21,500
Conversion of notes payable to
common stock in April 2003 .... 1,436,736 1,437 198,563 -- -- 200,000
Shares granted to consultants for
services rendered in April 2003 14,368 14 2,016 -- -- 2,030
Sale of shares of common stock
for cash in May 2003 .......... 17,960 18 4,982 -- -- 5,000
Sales of shares of common stock
for cash in June 2003 ......... 35,918 36 9,640 -- -- 10,000
Conversion of notes payable to
common stock in June 2003 ..... 718,368 718 99,282 -- -- 100,000
Beneficial conversion feature
associated with notes issued
in June 2003 .................. -- -- 55,556 -- -- 55,556
Beneficial conversion feature
associated with interest on
notes, amortized in July 2003 -- -- 5,004 -- -- 5,004
Amortization of deferred
compensation .................. -- -- -- 9,000 -- 9,000
Costs of GPN Merger in July
2003 ......................... 2,368,130 2,368 (123,168) -- -- (120,799)
Value of warrants issued with
extended notes payable in
October 2003 .................. 189,937 -- -- 189,937
Value of Company warrants issued
in conjunction with fourth
quarter notes payable issued
October through December 2003 . 207,457 -- -- 207,457
Value of warrants contributed by
founders in conjunction with
fourth quarter notes payable
issued October through
December 2003 ................. 183,543 -- -- 183,543
Value of warrants issued for
services in October through
December 2003 ................. 85,861 -- -- 85,861
Net loss for the twelve month
period ending December 31, 2003 (1,856,702) (1,856,702) (1,856,702) (1,856,702)
---------- ---------- ------- ------ ------- --------
Balance at December 31, 2003 ..... 23,431,300 23,431 1,035,441 -- (1,902,620) (843,748)

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

F-6

IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS

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

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-7

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 16,612,276 shares (post split) 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 1,346,942 shares (post split) of common
stock with a fair value of $750 to a Company founder for services provided.

In December 2002, the Company issued 112,246 shares (post split) of common stock
with a fair value of $9,000 to a service provider.

FOR THE PERIOD ENDING DECEMBER 31, 2003:

During January 2003, the Company issued 98,776 shares (post split) of its common
stock with a fair value of $13,750 to 2 service providers.

During March 2003, the Company issued 154,450 shares (post split) of its common
stock with a fair value of $21,500 to a service provider.

In April 2003, the Company issued 14,368 shares (post split) 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 (post split) shares of common stock.

In June and July 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 2,393,496 (post split).

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 2,368,130 shares (post split) of the
Company's common stock and $350,000 in cash. The Company expensed the $350,000
cash payment, and recorded an increase of $2,368 for the par value of the common
stock and a decrease of $123,168 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.

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

F-8

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 21,163,170 (post-split) shares of GPN common stock. The
value of the stock that was issued was the historical cost of GPN's net tangible
assets, which did not differ materially from their fair value.

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

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

F-9

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 granted options or warrants to employees or consultants that can be
converted into additional shares of common stock. These options and 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-10

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 16,612,276 shares (post-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-11

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-12

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 16, 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 8,980 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-13

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-14

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 64,653 shares (post-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 125,715 shares (post-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 20,000 shares of the Company's common stock at
a price of $0.125; (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 20,000 shares of the Company's
common stock at a price of $0.125.

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 30,000 (post-split) shares of
the Company's common stock at a price of $1.00 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 40,000 shares
(post-split) of the Company's common stock at a price of $1.00 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 20,000 shares
(post-split) of the Company's common stock at a price of $1.00 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-15

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

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 64,653 shares (post-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 125,715 shares (post-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 17,959 shares (post-split) of the Company's
common stock at a price of $0.14; (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 17,959 (post-split)
shares of the Company's common stock at a price of $0.125.

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-16

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 $0.84 per share (post-split). As
additional consideration, the note holder also received a warrant to purchase
26,939 shares (post reverse-split) of the Company's common stock at the price of
$0.84 per share (post-split). 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 $55,556 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.

In July 2003, the Company computed an additional beneficial conversion feature
in the amount of $5,004 for the interest accrued on the Secured Convertible
Promissory Notes. This discount was expensed in July 2003.

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 10,000 shares (post-split) 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 495,000 shares
(post-split) 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-17

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 10,000 shares (post-split) of the
Company's common stock. The exercise price of the Amended Note Warrants is $1.00
(post-split).

The total number of shares of common stock potentially issuable pursuant to the
Amended Note Warrants is 245,000 (post-split). 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-18

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 10,000 shares
(post-split) of the Company's common stock. The exercise price of the Fourth
Quarter Note Warrants is $1.00 (post-split). The total number of shares of
common stock issuable pursuant to the Fourth Quarter Note Warrants is 391,000
(post-split). 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 10,000 shares (post-split) 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 366,000
(post-split). 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-19

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 16,612,276 shares (post 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 1,346,942 shares (post split) of
common stock with a fair value of $782 to a Company founder for services
provided.

In December 2002, the Company issued 53,878 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 185,578 shares (post split) of its common
stock for net proceeds of $31,001.

F-20

6. STOCKHOLDERS' DEFICIT, continued:

During January 2003, the Company issued 98,776 shares (post split) of its common
stock with a fair value of $13,750 to 2 service providers.

During January 2003, the Company sold 329,552 (post split) shares of its common
stock for $50,000 in cash.

During March 2003, the Company issued 154,450 shares (post 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
1,436,736 shares (post split) of its common stock.

In April 2003, the Company issued 14,368 shares (post split) of its common stock
with a fair value of $2,030 to a service provider.

In May 2003, the Company sold 17,960 shares (post split) of its common stock for
$5,000 in cash.

In June 2003, the Company sold 35,918 shares (post 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
718,368 shares (post split) of common stock.

In July 2003, the Company issued 2,368,130 shares (post 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 26,937
shares (post split) of common stock at $0.84 per share.

During the twelve months ended December 31, 2003, the Company issued warrants to
purchase 169,572 shares (post split) of common stock at prices ranging from
$0.125 to $1.00 per share (post-split) 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 245,000 shares (post-split)
of its common stock at a price of $1.00 per share (post-split). 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 391,000 shares (post-split) of its common stock at a price of $1.00
per share (post split). 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-21

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 (post-split):

Warrants Weighted Average
Outstanding Exercise Price
-----------------------------------
Balance, December 31, 2001 0 0
Granted 26,937 $0.84
Exercised 0 0
------- -----
Balance, December 31, 2002 26,937 $0.84
Granted 805,572 $0.89
Exercised 0 0
------- -----
Balance, December 31, 2003 832,509 $0.89
======= =====

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 23,456,666 shares (post split) of the Company's common
stock issued and outstanding; immediately after the split, there were 21,063,170
shares (post split) 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 6,465,316 shares (post
split). 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-22

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
Exercise Exercise
Options Price Options Price
-----------------------------------------------------------------------------
Outstanding at beginning of period 63,212 $25.00 0 N/A
Granted or assumed from GPN 0 N/A 63,212 $ 25.00
Exercised 0 N/A 0
Cancelled 0 N/A 0
Outstanding at end of year 63,212 $ 25.00 63,212 $ 25.00
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-23

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 100,000 shares (post split) 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
1,200,000 shares (post split) 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 1,200,000 shares (post split) 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 3,703,222
shares (post split) 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 3,600,000 shares (post split) of
its common stock.

STOCK COMPENSATION

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

In April 2004, the Company issued 200,000 shares (post split) of common stock
and a five-year warrant to purchase 10,000 shares (post split) 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 (post split) of common stock to
its operations manager for services.

In April 2004, the Company issued 20,000 (post split) 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 500,000 shares (post split) of the Company's common
stock.

F-24

STOCK SPLIT

In April 2004, the Company effected a two-for-one forward split of its common
stock. The effect of this stock has 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 1,200,000 shares (post split) of the
Company's common stock and a warrant to purchase 1,500,000 shares (post split)
of common stock at $1.00 per share and a warrant to purchase 500,000 shares
(post split) of common stock at $1.50 per share.

NOTES PAYABLE EXTENSION:

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

F-25

IR BioSciences Holdings, Inc. and Subsidiary
(A Development Stage Company)
Condensed Consolidated Balance Sheet

September 30,
2004
-----------

Assets
Current assets

Prepaid services and other assets $ 2,300
-----------

Total current assets 2,300

Licensed proprietary rights, net 7,552
Furniture and equipment, net 2,286
-----------

Total assets $ 12,138
===========

Liabilities and Stockholders' Deficit
Current liabilities
Cash overdraft 5,153
Current portion of notes payable,
net of discount 1,044,365
Accounts payable and accrued liabilities 899,831
-----------

Total current liabilities 1,949,349

Long-term notes payable, net of discount 31,515

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; 29,621,776 shares
issued and outstanding 29,621
Additional paid-in capital 4,555,194
Deferred compensation (597,853)
Deficit Accumulated during the
Development Stage (5,955,688)
-----------

Total stockholder's deficit (1,968,726)
-----------

Total liabilities and stockholders' deficit $ 12,138
===========

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

F-26

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

Cumulative
From
Inception
For the Three For the Three For the Nine For the Nine (October 30,
Months Ended Months Ended Months Ended Months Ended 2002) to
September 30, September 30, September 30, September 30, September 30,
2004 2003 2004 2003 2004
------------ ------------ ------------ ------------ ------------

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

Operating expenses:
Selling, general and administrative expenses 1,041,152 297,587 3,546,641 666,661 4,940,437
Merger fees and costs -- 350,000 -- 350,000 350,000
Financing cost -- 90,000 -- 90,000 90,000
------------ ------------ ------------ ------------ ------------

Total operating expenses 1,041,152 737,587 3,546,641 1,106,661 5,380,437

Operating loss (1,041,152) (737,587) (3,546,641) (1,106,661) (5,380,437)

Other expense:
Interest expense (70,612) (89,020) (506,427) (111,662) (575,251)
------------ ------------ ------------ ------------ ------------

Total other expense (70,612) (89,020) (506,427) (111,662) (575,251)
------------ ------------ ------------ ------------ ------------

Loss before income taxes (1,111,764) (826,607) (4,053,068) (1,218,323) (5,955,688)

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

Net Loss $ (1,111,764) $ (826,607) $ (4,053,068) $ (1,218,323) $ (5,955,688)
============ ============ ============ ============ ============

Net loss per share - basic and diluted $ (0.04) $ (0.04) $ (0.15) $ (0.06) $ (0.27)
============ ============ ============ ============ ============

Weighted average shares outstanding -
basic and diluted 29,040,133 23,379,818 27,129,221 20,604,880 22,094,881
============ ============ ============ ============ ============

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

F-27

IR BIOSCIENCES HOLDING, INC. AND SUBSIDIARY
(A Development Stage Company)
Consolidated Statement of Deficiency in Stockholders' Equity
From date of inception (October 30, 2002) to September 30, 2004

(Unaudited)

COMMON STOCK
----------------------- AMOUNT PAID DEFERRED ACCUMULATED
SHARES AMOUNT IN CAPITAL COMPENSATION DEFICIT TOTAL
-----------------------------------------------------------------------------------

Balance at October 30, 2002 (date) -- $ -- $ -- $ -- $ -- $ --
Shares of common stock issued at
$0.0006 per share to founders
for license of proprietary right
in December 2002 ............... 16,612,276 16,612 (7,362) -- 9,250
Shares of common stock issued at
$0.0006 per share to founders
for services rendered in
December 2002 .................. 1,405,310 1,405 (623) -- 782
Shares of common stock issued at
$0.1671 per share to consultants
for services rendered in
December 2002 .................. 53,878 54 8,946 (9,000) --
Sale of common stock for cash at
$0.1671 per share in December
2002 ........................... 185,578 186 30,815 -- 31,001
Net loss for the period from
inception (October 30, 2002) to
December 31, 2002 .............. -- -- -- -- (45,918) (45,918)
---------- ----------- ----------- ----------- ----------- -----------
Balance at December 31, 2002
(reflective of stock splits) .. 18,257,042 18,257 31,776 (9,000) (45,918) (4,885)
Shares granted to consultants at
$0.1392 per share for services
rendered in January 2003 ....... 98,776 99 13,651 -- 13,750
Sale of shares of common stock for
cash at $0.1517 per share in
January 2003 ................... 329,552 330 49,670 -- 50,000
Shares granted to consultants at
$0.1392 per share for services
rendered in March 2003 ......... 154,450 154 21,346 -- 21,500
Conversion of notes payable to
common stock at
$0.1392 per share in April 2003 . 1,436,736 1,437 198,563 -- 200,000
Shares granted to consultants at
$0.1413 per share for services
rendered in April 2003 ......... 14,368 14 2,016 -- 2,030
Sale of shares of common stock for
cash at $0.2784
per share in May 2003 ........... 17,960 18 4,982 -- 5,000
Sales of shares of common stock for
cash at $0.2784 per share in
June 2003 ...................... 35,918 36 9,964 -- 10,000
Conversion of notes payable to
common stock at $0.1392 per
share in June 2003 ............. 718,368 718 99,282 -- 100,000
Beneficial conversion feature
associated with notes issued in
June 2003 ...................... -- -- 60,560 -- 60,560
Amortization of deferred
compensation ................... -- -- -- 9,000 9,000
Costs of GPN Merger in July 2003... 2,368,130 2,368 (123,168) -- (120,799)
Value of warrants issued with
extended notes payable in
October 2003 ................... -- -- 189,937 -- 189,937
Value of Company warrants issued
in conjunction with fourth
quarter notes payable issued
October through December 2003 -- -- 207,457 -- 207,457

F-28

Value of warrants contributed by
founders in conjunction with
fourth quarter notes payable
issued October through
December 2003 .................. -- -- 183,543 -- 183,543
Value of warrants issued for
services in October through
December 2003 .................. -- -- 85,861 -- 85,861
Net loss for the year ended
December 31, 2003 .............. -- -- -- -- (1,856,702) (1,856,702)
---------- ----------- ----------- ----------- ----------- -----------
Balance at December 31, 2003 ..... 23,431,300 23,431 1,035,441 -- (1,902,620) (843,748)
Shares granted at $1.00 per share
pursuant to the Senior Note
Agreement in January 2004 ...... 600,000 600 599,400 (600,000) --
Shares issued in January 2004 at
$1.00 per share to a consultant
for services ................... 800,000 800 799,200 (800,000) --
Shares issued in February 2004 to a
consultant at $0.62 per share
for services ................... 40,000 40 24,760 (24,800) --
Shares issued in March 2004 to a
consultant at $0.40 per share
for services ................... 1,051,600 1,052 419,588 (420,640) --
Shares issued in March 2004 to a
consultant at $0.50 per share
for services ................... 500,000 500 249,500 (250,000) --
Shares sold for cash in March 2004
at $0.15 per share ............. 8,000 8 1,192 -- 1,200
Shares issued in March 2004 at
$0.2857 per share to consultants
for services ................... 67,800 68 10,732 -- 10,800
Shares issued in March 2004 at
$0.64 per share to consultants
for services ................... 45,800 45 29,267 -- 29,312
Amortization of deferred
compensation through March 2004 -- -- -- 688,027 688,027
Shares to be issued to a consultant
at $0.41 per share for
contracted services ............ -- -- -- (82,000) (82,000)
Shares granted pursuant to the New
Senior Note Agreement in April
2004 ........................... 600,000 600 149,400 (150,000) --
Shares issued in April 2004 to
officer at (0.32 per share for
services ....................... 200,000 200 63,800 -- 64,000
Conversion of Note Payable to
common stock at $0.10 per share
in May 2004 .................... 350,000 350 34,650 -- 35,000
Beneficial Conversion Feature
associated with note payable in
May 2004 ....................... -- -- 52,500 -- 52,000
Issuance of warrants to officers
and founder in May 2004 for
services ....................... -- -- 250,704 -- 250,704
Shares to a consultant in May 2004
at $0.20 per share as a due
diligence fee .................. 125,000 125 24,875 -- 25,000
Shares issued to a consultant in
May 2004 at $1.00 per share for
services ....................... 500,000 500 499,500 (500,000) --
Beneficial Conversion Feature
associated with notes payable
issued in April, May, and June
2004 ........................... -- -- 20,938 -- 20,938
Issuance of warrants to employees
and consultants for services
rendered in April through June
2004 ........................... -- -- 5,427 -- 5,427
Amortization of deferred
compensation through June 2004 . -- -- -- 952,069 952,069
Shares issued in July to a
consultant at $0.10 for
services to be rendered
through July 2005............... 250,000 250 24,750 (25,000) --

F-29

Shares issued to a consultant in
July and September at $0.41
per share for services to be
rendered through April 2005..... 200,000 200 81,800 82,000
Shares issued from July to
September 2004 as interest
on note payable................. 300,000 300 35,700 36,000
Accrued deferred compensation in
August 2004 to a consultant
for 100,000 shares at $0.10 per
share, committed but unissued... -- -- -- (10,000) (10,000)
Shares issued in August 2004 at
$0.14 to a consultant for
services to be performed
through October 2004............ 100,000 100 13,900 (14,000) --
Shares issued in August 2004 at
$0.125 per share for conversion
of $30,000 demand loan.......... 200,000 200 29,800 -- 30,000
Shares issued in August 2004 at
$0.16 per share to a consultant
for services provided........... 125,000 125 19,875 -- 20,000
Shares issued to a consultant in
September at $0.12 to $0.22
for services rendered through
September 2004 127,276 127 16,783 -- 16,910
Issuance of warrants to employees
and consultants for services
through September, 2004 61,716 61,716
Amortization of deferred
compensation through
September, 2004 638,492 638,492
Loss for the nine months ended
September 30, 2004 (4,053,068) (4,053,068)
---------- ----------- ----------- ----------- ----------- -----------
Balance at September 30, 2004... 29,621,776 $ 29,621 $ 4,555,194 $ (597,853) $(5,955,688) $(1,968,726)
========== =========== =========== =========== =========== ===========

F-30

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

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

Cash flows from operating activities:
Net loss $(4,053,068) $(1,218,323) $(5,955,688)
Adjustments to reconcile net loss to to net
cash used in operating activities:
Non-cash compensation 2,636,280 28,779 2,751,703
Interest expense 74,517 -- 143,141
Amortization of discount on notes payable 406,360 60,582 708,662
Depreciation and amortization 12,454 9,470 25,216
Changes in operating assets and liabilities:
Prepaid services and other assets 33,543 (49,043) (2,299)
Accounts payable and accrued expenses 440,970 290,906 847,158
----------- ----------- -----------

Net cash used in operating activities (448,944) (877,629) (1,482,107)

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 576,057 795,000 1,777,057
Principal payments on notes payable (174,000) (200,000) (424,000)
Proceeds from third parties for advances -- 265,000 96,001
Shares of stock sold for cash 31,200 65,000 31,200
Officer repayment of amounts paid on his behalf -- -- 19,880
Cash paid on behalf of officer -- (19,880) (19,880)
Cash paid on amount due to officer -- (22,427) --
----------- ----------- -----------

Net cash provided by financing activities 433,257 882,693 1,480,258

Net increase in cash and cash equivalents (15,687) 1,760 (5,153)

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

Cash and cash equivalents at end of period $ (5,153) $ 33,915 $ (5,153)
=========== =========== ===========

Cash paid during the period for:

Interest $ 4,553 $ 40,000 $ 46,346

Taxes $ -- $ -- $ --

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

F-31

IR BIOSCIENCES HOLDINGS, INC. AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)

Non-cash investing and financing activities:

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

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

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

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

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

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

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

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

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

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

In July through September 2004, the Company issued 200,000 shares (post-split)
of common stock with a fair market value of $82,000 to a consultant.

In July 2004, the Company issued 250,000 shares (post-split) of common stock
with a fair market value of $25,000 to a consultant.

In August 2004, the Company issued 100,000 shares (post-split) of common stock
with a fair market value of $14,000 to a consultant.

In August 2004, the Company issued 200,000 shares (post-split) of common stock
for conversion of a note payable of $30,000.

In July through August 2004, the Company issued 300,000 shares (post-split) of
common stock with a fair market value of $36,000 to as interest on a note.

In September 2004, the Company issued 127,276 shares (post-split) of common
stock with a fair market value of $16,910 to a consultant.

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

F-32

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

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

General
-------

The accompanying unaudited condensed financial statements have been prepared in
accordance with the instructions to Form 10-QSB, and therefore, do not include
all the information necessary for a fair presentation of financial position,
results of operations and cash flows in conformity with accounting principles
generally accepted in the United States of America for a complete set of
financial statements.

In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. The
results from operations for the three-month and nine-month periods ended
September 30, 2004 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2004. The unaudited condensed
consolidated financial statements should be read in conjunction with the
December 31, 2003 financial statements and footnotes thereto included in the
Company's Securities and Exchange Commission Form 10-KSB.

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

ImmuneRegen BioSciences, Inc. ("Company" or "ImmuneRegen") is currently a
development stage company under the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 7. The Company was incorporated under the laws
of the State of Delaware on October 30, 2002, and has a December 31 year-end.
ImmuneRegen is a biotechnology company and plans to develop and market
applications utilizing modified substance P, a naturally occurring
immunomodulator.

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

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

Stock Based Compensation
------------------------

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

Reverse acquisition
-------------------

ImmuneRegen BioSciences, Inc., a private corporation, was formed on October 30,
2002 according to the laws of Delaware. On July 2, 2003, GPN Network, Inc.
("Registrant") and ImmuneRegen entered into and consummated an Agreement and
Plan of Merger (the "Merger"). In accordance with the Merger, on July 2, 2003,
the Registrant, through its wholly-owned subsidiary, GPN Acquisition
Corporation, a Delaware corporation ("Merger Sub"), acquired ImmuneRegen in
exchange for 21,063,170 shares (post split) of the Registrant's 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.

F-33

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

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

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

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

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

The accompanying balance sheet as of September 30, 2004, the statements of
operations for the three months and nine months ended September 30, 2004 and
2003, and for the period from inception to September 30, 2004, and the
statements of cash flows for the nine months ended September, 2004 and 2003, and
from the period of inception (October 30, 2002) to September 30, 2004 are
unaudited. These unaudited interim financial statements include all adjustments
(consisting of normal recurring accruals), which, in the opinion of management,
are necessary for a fair presentation of the results of operations for the
periods presented. Interim results are not necessarily indicative of the results
to be expected for a full year.

Use of Estimates
----------------

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

Prepaid services consist of outside services that the Company has paid for in
advance. At September 30, 2004 this amount was $2,300 consisting of an employee
advance.

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

The Company has licensed from its founders certain proprietary rights which the
Company intends to utilize in the execution of its business plan. These
proprietary rights are being amortized over the term of the license agreement,
or ten years. The amount amortized during the three months and nine months ended
September 30, 2004 was $232 and $696, respectively.

F-34

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

Computer equipment 3 years
Furniture 7 years

The amounts depreciated for the three months and nine months ended September 30,
2004 were $170 and $510, respectively. The amounts depreciated for the three
months and nine months ended September, 2003 were $170 and $340, respectively.
The amount depreciated from the date of inception (October 30, 2002) through
June 30, 2004 was $1,019.

NOTE 2 - RELATED PARTY TRANSACTIONS

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

During the three months and nine months ended September 30, 2004, the Company
accrued $30,000 and $90,000, respectively, in consulting fees payable to two of
the Company's founders.

In-One Contract
---------------

The Company has entered into a series of contracts for marketing, website
development, and website hosting with In-One Advertising "(In-One"), a company
run by the spouse of the Company's CEO. Pursuant to these contracts, during the
nine months ended September 30, 2004, the Company issues 91,600 shares
(post-split) of its common stock to with a value of $29,312 to In-One.

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

The Company subleases its office space from Foresight Capital Partners, a
company controlled by the Company's CEO. The rent cost is passed through to the
Company at the same rental rate that Foresight Capital Partners is charged by
the facility's primary landlord. Rent expense amounted to $7,196 and $24,332,
respectively, for the three and nine month periods ended September 30, 2004.

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

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

During the three months ended September 30, 2004, the Company issued 127,776
shares (post reverse-split) of common stock to Stratum, and accrued $7,500 in
cash fees. At September 30, 2004, the Company has accrued a total of $12,500 in
cash fees due to Stratum.

NOTE 3 - DEBT

At September 30, 2004, the Company had the following debt outstanding:

Principal Discount Net Book Value
Current: --------- -------- --------------

Amended Secured Convertible
Promissory Notes $ 245,000 $ -- $ 245,000

Fourth Quarter Secured Convertible
Promissory Notes 337,000 -- 337,000

Senior Secured Promissory Note 154,500 -- 154,500

Other Notes Payable 310,653 (2,788) 307,865
--------- -------- --------------
$1,047,153 $ (2,788) $ 1,044,365
========= ======== ==============
Long term:

Other Notes Payable $ 35,000 $ (3,485) $ 31,515
========= ======== ==============

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

At September 30, 2004, the Company had outstanding five Amended Secured
Convertible Promissory Notes in the aggregate amount of $245,000. Interest
accrued for the three and nine months ended September 30, 2004 was $4,940 and
$14,576, respectively. Total accrued interest due on the Amended Notes at
September 30, 2004 was $18,908. At September 30, 2004, these notes were in
default as they had not been paid at their maturity date. All of the Amended
Secured Convertible Promissory Notes were either paid or converted to common
stock in October and November 2004.

F-35

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

At September 30, 2004, the Company had outstanding nine Amended Secured
Convertible Promissory Notes in the aggregate amount of $337,000. Interest
accrued for the three and nine months ended September 30, 2004 was $6,795 and
$21,622, respectively. Total accrued interest due on the Fourth Quarter Notes at
September 30, 2004 was $28,330. At September 30, 2004, eight of the nine Fourth
Quarter Notes were in default as they had not been paid at their maturity date.
All of the Fourth Quarter Secured Convertible Promissory Notes were either paid
or converted to common stock in October and November 2004.

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

At September 30, 2004, the Company had outstanding one Senior Secured Promissory
Notein the amount of $154,500 (the "New Senior Note"). The New Senior Note bears
interest at the rate of 12% per annum and has a term of 90 days. Interest
accrued on the New Senior Secured Note for the three and nine months period
ending September 30, 2004 was $4,672 and $7,924, respectively. The New Senior
Note is senior secured indebtedness of the Company and is secured by certain
collateral. As additional incentive to enter into the New Senior Note, the
Company provided 600,000 shares (post-split) of the Company's common stock
valued at $150,000. During the three months ended September 30, 2004, the New
Senior Note was extended to October 11, 2004. As compensation for extending the
due date of this note, the Company issued 300,000 shares of its common stock
with a fair value of $36,000. The New Senior Note was paid in November 2004.

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

At June 30, 2004, the Company had outstanding eight other notes payable in the
aggregate principal amount of $211,581. These notes bear interest at rates
ranging from 6% to 12% per annum. During the three months ended September 30,
2004, the Company entered into five new note agreements in the aggregate amount
of $133,100 bearing interest at rates ranging from 8% to 12% per annum. At
September 30, 2004 the Company had outstanding a total of thirteen other notes
in the aggregate amount of $344,681. Accrued interest on these notes amounted to
$5,725 for the $9,430 for the three and nine months ended September 30, 2004,
respectively. Two notes with an aggregate amount of $35,000 are due twenty-four
months from inception, or April and May 2006. Three notes in the aggregate
amount of $84,081 are in default at September 30, 2004 as they have not been
paid by their due dates; the Company expects to negotiate conversion or payment
of these notes. Eight notes in the aggregate amount of $225,600 were either paid
or converted to common stock in October and November 2004.

NOTE 4 - EQUITY

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

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

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

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

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

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

F-36

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

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

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

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

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

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

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

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

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

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

In July 2004, the Company issued 250,000 shares (post-split) of stock with a
market value of $25,000 to a consultant for services to be rendered through July
2005. This amount was charged to deferred compensation.

In July and September 2004, the Company issued 200,000 shares of stock with a
market value of $82,000 to a consultant for services to be rendered through
April 2005. This amount was charged to deferred compensation at the time the
contract with this consultant was signed in April 2005.

In July, August, and September 2004, the Company issued 300,000 shares of stock
with a market value of $36,000 to a lender as consideration for extending the
due date of a note payable. This amount was charged to interest expense.

In August 2004, the Company committed to issue 100,000 shares of common stock to
a consultant for services rendered through July 2005. These shares are to be
issued in October 2005. The Company charged the $10,000 fair value of these
shares to deferred compensation.

In August 2004, the Company issued 100,000 shares of common stock at a fair
value of $14,000 to a consultant for services to be rendered through October
2004. The Company charged this amount to deferred compensation.

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

F-37

In August 2004, the Company issued 125,000 shares of common stock at a fair
value of $20,000 to a consultant for services provided.

In September 2004, the Company issued 127,276 shares of common stock at a fair
value of $16,910 to a consultant for services provided through September 2004.

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

NOTE 5 - SUBSEQUENT EVENTS

In October 2004, Company completed the private placement (the "Private
Placement") of 19,600,000 shares of its common stock at a price of $0.125 per
share for gross proceeds of $2,450,000. The Company also converted approximately
$837,893 in notes payable and $157,218 in vendor payables at the same terms as
the Private Placement into 6,703,151 and 1,257,746 shares of common stock,
respectively. Pursuant to the terms of the Private Placement, the Company also
issued five-year warrants to purchase approximately 13,900,449 shares of the
Company's common stock at a price of $0.50.

F-38

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24 INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under Section 145 of the General Corporation Law of the State of
Delaware, we can indemnify our directors and officers against liabilities they
may incur in such capacities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act"). Our certificate of incorporation
provides that, pursuant to Delaware law, our directors shall not be liable for
monetary damages for breach of the directors' fiduciary duty of care to us and
our stockholders. This provision in the certificate of incorporation does not
eliminate the duty of care, and in appropriate circumstances equitable remedies
such as injunctive or other forms of nonmonetary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to us or our
stockholders, for acts or omissions not in good faith or involving intentional
misconduct or knowing violations of the law, for actions leading to improper
personal benefit to the director, and for payment of dividends or approval of
stock repurchases or redemptions that are unlawful under Delaware law. The
provision also does not affect a director's responsibilities under any other
law, such as the federal securities laws or state or federal environmental laws.

Our bylaws provide for the indemnification of our directors to the
fullest extent permitted by the Delaware General Corporation Law. Our bylaws
further provide that our Board of Directors has sole discretion to indemnify our
officers and other employees. We may limit the extent of such indemnification by
individual contracts with our directors and executive officers, but have not
done so. We are required to advance, prior to the final disposition of any
proceeding, promptly on request, all expenses incurred by any director or
executive officer in connection with that proceeding on receipt of an
undertaking by or on behalf of that director or executive officer to repay those
amounts if it should be determined ultimately that he or she is not entitled to
be indemnified under our bylaws or otherwise. We are not, however, required to
advance any expenses in connection with any proceeding if a determination is
reasonably and promptly made by our Board of Directors by a majority vote of a
quorum of disinterested Board members that (a) the party seeking an advance
acted in bad faith or deliberately breached his or her duty to us or our
stockholders and (b) as a result of such actions by the party seeking an
advance, it is more likely than not that it will ultimately be determined that
such party is not entitled to indemnification pursuant to the applicable
sections of our bylaws.

We also have directors' and officers' liability insurance.

ITEM 25 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, if any, payable by the Registrant
relating to the sale of common stock being registered. All amounts are estimates
except the SEC registration fee.

SEC registration fee ........................... $ 1,076
Printing and engraving expenses ................ 5,000
Legal fees and expenses ........................ 75,000
Accounting fees and expenses ................... 50,000
Transfer agent and registrar's fees and expenses 2,000
Miscellaneous expenses ......................... 6,924
--------
Total ..................................... $140,000
========

ITEM 26 RECENT SALES OF UNREGISTERED SECURITIES

During the last three years, we have issued unregistered securities to
the persons, as described below. None of these transactions involved any
underwriters, underwriting discounts or commissions, except as specified below,

II-1

or any public offering, and we believe that each transaction was exempt from the
registration requirements of the Securities Act of 1933 by virtue of Section
4(2) thereof and/or Regulation D promulgated thereunder. All recipients had
adequate access, through their relationships with us, to information about us.

In January 2002, we sold to Todd M. Ficeto, who was the sole director
and officer of GPN Network, Inc., 250,000 units at $0.60 per unit for an
aggregate purchase price of $150,000. Each unit sold included two shares of our
common stock and one five-year warrant to purchase one share of our common stock
at $0.30 per share. The sale of the units resulted in the issuance of 500,000
shares of our common stock and warrants exercisable for an additional 250,000
shares of our common stock.

On July 20, 2003, we entered into and consummated an agreement and plan
of merger, pursuant to which we acquired ImmuneRegen BioSciences, Inc. in a
reverse merger, which resulted in the issuance of 2,368,130 shares of our common
stock.

In May and June 2003, ImmuneRegen BioSciences, Inc. had sold and issued
eight secured convertible promissory notes in the aggregate principal amount of
$495,000 that were due 120 days from the date of issuance. When the notes were
due, three were paid and five were exchanged for 8% amended secured convertible
notes ("Amended Notes") in the aggregate principal amount of $245,000 in October
2003. The five investors who received the Amended Notes were also issued
five-year warrants to purchase a total of 122,500 shares of our common stock at
an exercise price of $2.00 per share.

In October through December 2003, we sold and issued ten 8% secured
convertible promissory notes ("Fourth Quarter Notes") in the aggregate principal
amount of $391,000 that were due 180 days from the date of issuance. The ten
investors who received the Fourth Quarter Notes were also issued five-year
warrants to purchase a total of 195,500 shares of our common stock at an
exercise price of $2.00 per share.

In October 2003 through December 2003, we issued in exchange for
services rendered five-year warrants to eight investors for the purchase of an
aggregate of 90,500 shares of our common stock at exercise prices ranging from
$0.25 to $2.00 per share.

In January 2004, we entered into a 12% senior secured promissory note
("Senior Note") that had a term of 90 days. As an additional incentive to enter
into the Senior Note, we issued 600,000 shares of our common stock to the
noteholder, and such shares were valued at $600,000. In April 2004, the Senior
Note was paid and we entered into a new 12% senior secured promissory note ("New
Senior Note") that had a term of 90 days. As an additional incentive to enter
into the New Senior Note, we issued another 600,000 shares of our common stock
to the noteholder, and such shares were also valued at $600,000.

In January 2004, we issued 800,000 shares of our common stock at $1.00
per share to a consultant in exchange for services to be provided through
January 2005.

In February 2004, we issued 40,000 shares of our common stock at $0.62
per share to a consultant in exchange for services to be provided through August
2004.

In March 2004, we issued 1,051,600 shares of our common stock at $0.40
per share to a consultant in exchange for services to be provided through March
2005 and 500,000 shares of our common stock at $0.50 per share to a consultant
in exchange for services to be rendered through September 2004. In March 2004,
we sold and issued 8,000 shares of our common stock at $0.15 per share for an
aggregate purchase price of $1,200. In March 2004, we also issued 67,800 shares
of our common stock with an aggregate market value of $10,800 to various
consultants for services rendered and 45,800 shares of our common stock to a
creditor as payment of outstanding claims in the amount of $29,312.

In April 2004, we issued 200,000 shares of our common stock at $0.32
per share to our Chief Financial Officer, Eric Hopkins, for services rendered,
and we issued 350,000 shares of our common stock to a noteholder upon conversion
of a note payable in the principal amount of $35,000 plus accrued interest.

II-2

In May 2004, we issued five-year warrants to purchase 500,000 shares of
our common stock at an exercise price of $0.25 per share to each of one of our
founders and our Chief Executive Officer, Michael Wilhelm, and we issued 125,000
shares of our common stock at $0.20 per share to a consultant as a due diligence
fee. We also issued 500,000 shares of our common stock to a consultant in
exchange for services to be provided through December 2004, and the stock price
of $1.00 per share was determined as of the date that we entered into the
related consulting agreement in December 2003.

In April 2004 through June 2004, we issued five year warrants to
purchase an aggregate of 544,100 shares of our common stock at an exercise price
of from $0.09 to $2.00 per share to employees and consultants for services
rendered.

In October 2004, we completed a private placement, whereby we sold an
aggregate of $2,450,000 worth of units to accredited investors (the "Private
Placement"). Each unit was sold for $10,000 (the "Unit Price") and consisted of
(a) a number of shares of our common stock determined by dividing the Unit Price
by $0.125, and (b) a warrant to purchase, at any time prior to the fifth
anniversary following the date of issuance of the warrant, a number of shares of
our common stock equal to fifty percent (50%) of the number of shares included
within the unit, at a price equal to $0.50 per share of common stock. Thus, each
unit consisted of 80,000 shares of our common stock and a five-year warrant to
purchase an additional 40,000 shares of our common stock at an exercise price of
$0.50 per share. In consideration of the investment, we granted to each investor
certain registration rights and anti-dilution rights.

ITEM 27 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
-------- -----------------------------------------------------------------
2.1 Agreement and Plan of Merger dated July 2, 2003 among the
Registrant, GPN Acquisition Corporation and ImmuneRegen
BioSciences, Inc. (incorporated by reference to exhibit 2 of the
Registrant's current report on Form 8-k filed with the Securities
and Exchange Commission on July 7, 2003).

3.1 Certificate of Incorporation filed with the Delaware Secretary of
State on June 4, 1985 (incorporated by reference to exhibit 3.1
of the Registrant's annual report on Form 10-KSB for the year
ended December 31, 2001 filed with the Securities and Exchange
Commission on April 16, 2002).

3.1(a) Certificate of Amendment filed with the Delaware Secretary of
State on July 16, 1987 (incorporated by reference to exhibit
3.1(a) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

II-3

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
-------- -----------------------------------------------------------------
3.1(b) Certificate of Amendment filed with the Delaware Secretary of
State on February 3, 1992 (incorporated by reference to exhibit
3.1(b) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

3.1(c) Certificate of Amendment filed with the Delaware Secretary of
State on November 23, 1992 (incorporated by reference to exhibit
3.1(c) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

3.1(d) Certificate of Amendment filed with the Delaware Secretary of
State on December 15, 1994 (incorporated by reference to exhibit
3.1(d) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

3.1(e) Certificate of Amendment filed with the Delaware Secretary of
State on November 7, 1995 (incorporated by reference to exhibit
3.1(e) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

3.1(f) Certificate of Amendment filed with the Delaware Secretary of
State on December 30, 1996 (incorporated by reference to exhibit
3.1(f) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

3.1(g) Certificate of Amendment filed with the Delaware Secretary of
State on November 8, 2000 (incorporated by reference to exhibit
3.1(h) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

3.2 Amended and Restated Bylaws of the Registrant dated as of January
1, 2002 (incorporated by reference to exhibit 3(b) of the
Registrant's annual report on Form 10-KSB for the year ended
December 31, 2001 filed with the Securities and Exchange
Commission on April 16, 2002).

4.1 Specimen Common Stock Certificate.

4.2 2003 Stock Option, Deferred Stock and Restricted Stock Plan
(incorporated by reference to exhibit 4.1 of the Registrant's
registration statement on Form S-8 (file no. 333-113511) filed
with the Securities and Exchange Commission on March 11, 2004).

4.3 Form of Warrant by and between the Registrant and each of the
Investors or Creditors, as the case may be, who entered into an
Agreement filed as Exhibit 10.6, 10.7, 10.8 or 10.9 herewith
(incorporated by reference to exhibit 4.1 of the Registrant's
current report on Form 8-K filed with the Securities and Exchange
Commission on October 19, 2004).

4.4 Form of Registration Rights (Annex A to Subscription Agreement)
by and between the Registrant and each of the Investors who
entered into the Agreements filed as Exhibits 10.6 and 10.8
herewith (incorporated by reference to exhibit 4.2 of the
Registrant's current report on Form 8-K filed with the Securities
and Exchange Commission on October 19, 2004).

4.5 Form of Anti-Dilution Rights (Annex B to Subscription Agreement)
by and between the Registrant and each of the Investors who
entered into the Agreements filed as Exhibits 10.6 and 10.8
herewith (incorporated by reference to exhibit 4.3 of the
Registrant's current report on Form 8-K filed with the Securities
and Exchange Commission on October 19, 2004).

4.6 Promissory Note issued from the Registrant to SBM Certificate
Company as of April 28, 2004.

5.1* Opinion of Kirkpatrick & Lockhart LLP

10.1 Employment Agreement dated December 16, 2002 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and Michael
Wilhelm.

10.2 Consulting Agreement dated December 16, 2002 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and David
Harris.

II-4

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
-------- -----------------------------------------------------------------
10.2(a) First Amendment to Consulting Agreement dated January 2003
between ImmuneRegen BioSciences, Inc., a subsidiary of the
Registrant, and David Harris.

10.3 Consulting Agreement dated December 16, 2002 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and Mark
Witten.

10.3(a) First Amendment to Consulting Agreement dated January 2003
between ImmuneRegen BioSciences, Inc., a subsidiary of the
Registrant, and Mark Witten.

10.4 License Agreement dated December 16, 2002 among ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, David Harris
and Mark Witten.

10.4(a) First Amendment to License Agreement dated December 20, 2002
among ImmuneRegen BioSciences, Inc., a subsidiary of the
Registrant, David Harris and Mark Witten.

10.4(b) Second Amendment to License Agreement dated June 26, 2003 among
ImmuneRegen BioSciences, Inc., a subsidiary of the Registrant,
David Harris and Mark Witten.

10.5 Lease Agreement dated July 1, 2004 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and The
Clayton Companies.

10.6 Form of Subscription Agreement entered into as of October 13,
2004 between the Registrant and each of the Investors set forth
on the Schedule of Investors thereto (incorporated by reference
to exhibit 10.1 of the Registrant's current report on Form 8-K
filed with the Securities and Exchange Commission on October 19,
2004).

10.7 Form of Settlement Agreement entered into as of October 13, 2004
between the Registrant and each of the Creditors set forth on the
Schedule of Creditors thereto (incorporated by reference to
exhibit 10.2 of the Registrant's current report on Form 8-K filed
with the Securities and Exchange Commission on October 19, 2004).

10.8 Form of Subscription Agreement entered into as of October 26,
2004 between the Registrant and each of the Investors set forth
on the Schedule of Investors thereto (incorporated by reference
to exhibit 10.1 of the Registrant's current report on Form 8-K
filed with the Securities and Exchange Commission on October 27,
2004).

10.9 Form of Settlement Agreement entered into as of
October 26, 2004 between the Registrant and each of the Creditors
set forth on the Schedule of Creditors thereto (incorporated by
reference to exhibit 10.2 of the Registrant's current report on
Form 8-K filed with the Securities and Exchange Commission on
October 27, 2004).

21.1 Subsidiaries of Registrant.

23.1 Consent of Russell Bedford Stefanou Mirchandani LLP.

23.2 Consent of Stonefield Josephson, Inc.

23.3 Consent of Kirkpatrick & Lockhart, LLP (contained in Exhibit
5.1).

24.1 Power of Attorney (included on signature page).
----------
* To be filed by amendment.

(B) FINANCIAL STATEMENT SCHEDULES

All such schedules have been omitted because the information required
to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.

II-5

ITEM 28 UNDERTAKINGS

The undersigned small business issuer hereby undertakes to:

(1) For determining any liability under the Securities Act, treat the
information omitted from this form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the small business issuer under Rule 424(b)(1), or (4) or
497(h) under the Securities Act of 1933 as part of this registration statement
as of the time the Securities and Exchange Commission declared it effective.

(2) For determining any liability under the Securities Act of 1933,
treat each post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in this registration
statement, and that offering of the securities at that time as the initial BONA
FIDE offering of those securities.

The undersigned small business issuer hereby undertakes with respect to
the securities being offered and sold in this offering:

(1) To file, during any period in which it offers or sells securities,
a post- effective amendment to this Registration Statement to:

(a) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(b) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
this registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation
from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and

(2) For determining liability under the Securities Act of 1933, treat
each post- effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial BONA
FIDE offering.

(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

Insofar as indemnification by the undersigned small business issuer for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the small business issuer
pursuant to the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933, and is, therefore, unenforceable.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Scottsdale, State of
Arizona, on the 24th day of November, 2004.

IR BioSciences Holdings, Inc.

By: /S/ MICHAEL K. WILHELM
-------------------------------------
Michael K. Wilhelm
President and Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael Wilhelm as his true and lawful
attorneys-in-fact and agents, with full power of substitution for him in any and
all capacities, to sign (1) any and all amendments (including post-effective
amendments) to this Registration Statement and (2) any registration statement or
post-effective amendment thereto to be filed with the Securities and Exchange
Commission pursuant to Rule 462(b) under the Securities Act of 1933, and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:

SIGNATURE TITLE DATE
-------------------------------------------------------------------------------------------------

/s/ Michael K. Wilhelm
--------------------------- Chief Executive Officer, President and November 24, 2004
Michael K. Wilhelm Director (Principal Executive Officer)

/s/ Eric J. Hopkins
--------------------------- Chief Financial Officer (Principal Financial November 24, 2004
Eric J. Hopkins and Accounting Officer)

/s/ Mark L.Witten
---------------------------
Mark L. Witten, Ph.D. Director and Research Scientist November 24, 2004

/s/ David T. Harris
---------------------------
David T. Harris, Ph.D. Director and Research Scientist November 24, 2004

/s/ Theodore E. Staahl
---------------------------
Theodore E. Staahl, M.D. Director November 24, 2004

II-7

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- -----------------------------------------------------------------
2.1 Agreement and Plan of Merger dated July 2, 2003 among the
Registrant, GPN Acquisition Corporation and ImmuneRegen
BioSciences, Inc. (incorporated by reference to exhibit 2 of the
Registrant's current report on Form 8-k filed with the Securities
and Exchange Commission on July 7, 2003).

3.1(b) Certificate of Amendment filed with the Delaware Secretary of
State on February 3, 1992 (incorporated by reference to exhibit
3.1(b) of the Registrant's annual report on Form 10-KSB for the
year ended December 31, 2001 filed with the Securities and
Exchange Commission on April 16, 2002).

4.1 Specimen Common Stock Certificate of the Registrant.

II-8

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- -----------------------------------------------------------------

4.6 Promissory Note issued from the Registrant to SBM Certificate
Company as of April 28, 2004.

5.1* Opinion of Kirkpatrick & Lockhart LLP.

10.1 Employment Agreement dated December 16, 2002 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and Michael
Wilhelm.

10.2 Consulting Agreement dated December 16, 2002 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and David
Harris.

10.2(a) First Amendment to Consulting Agreement dated January 2003
between ImmuneRegen BioSciences, Inc., a subsidiary of the
Registrant, and David Harris.

10.3 Consulting Agreement dated December 16, 2002 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and Mark
Witten.

10.3(a) First Amendment to Consulting Agreement dated January 2003
between ImmuneRegen BioSciences, Inc., a subsidiary of the
Registrant, and Mark Witten.

10.4 License Agreement dated December 16, 2002 among ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, David Harris
and Mark Witten.

10.4(a) First Amendment to License Agreement dated December 20, 2002
among ImmuneRegen BioSciences, Inc., a subsidiary of the
Registrant, David Harris and Mark Witten.

10.4(b) Second Amendment to License Agreement dated June 26, 2003 among
ImmuneRegen BioSciences, Inc., a subsidiary of the Registrant,
David Harris and Mark Witten.

10.5 Lease Agreement dated July 1, 2004 between ImmuneRegen
BioSciences, Inc., a subsidiary of the Registrant, and The
Clayton Companies.

10.9 Form of Settlement Agreement entered into as of October 26, 2004
between the Registrant and each of the Creditors set forth on the
Schedule of Creditors thereto (incorporated by reference to
exhibit 10.2 of the Registrant's current report on Form 8-K filed
with the Securities and Exchange Commission on October 27, 2004).

21.1 Subsidiaries of Registrant.

23.1 Consent of Russell Bedford Stefanou Mirchandani LLP.

II-9

EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- -----------------------------------------------------------------
23.2 Consent of Stonefield Josephson, Inc.

23.3 Consent of Kirkpatrick & Lockhart, LLP (contained in Exhibit
5.1).

24.1 Power of Attorney (included on signature page).
----------
* To be filed by amendment.