Edgar Filing: IR BIOSCIENCES HOLDINGS INC

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

FORM 10-KSB/A
Amendment No. 1

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

For the fiscal year ended December 31, 2003.

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

Commission File Number: 33-05384

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

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

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

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

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

NONE

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

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

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

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

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

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

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

Documents Incorporated by reference: None

Transitional Small Business Disclosure Format Yes No X
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TABLE OF CONTENTS

Page
----

PART I

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

Item 2. Description of Property............................................24

Item 3. Legal Proceedings..................................................24

Item 4. Submission of Matters to a Vote of Security Holders................25

PART II

Item 5. Market for Common Equity, Related Stockholder
Matters and Small Business Issuer Purchases
of Equity Securities...............................................25

Item 6. Management's Discussion and Analysis or Plan of Operations.........25

Item 7. Financial Statements...............................................28

Item 8. Changes in and Disagreements with Accountants......................29

Item 8a. Controls and Procedures............................................29

PART III

Item 9. Directors and Executive Officers of the Registrant.................29

Item 10. Executive Compensation.............................................31

Item 11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.........................33

Item 12. Certain Relationships and Related Transactions.....................34

Item 13. Exhibits and Reports on Form 8-K...................................34

Item 14. Principal Accountant Fees and Services.............................35

Signatures

INTRODUCTORY NOTE

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

PART I

ITEM 1. DESCRIPTION OF BUSINESS

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

BUSINESS DEVELOPMENT

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

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

CORPORATE STRUCTURE

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

BUSINESS DESCRIPTION

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

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

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

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

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

Substance P
-----------

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

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

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

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

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

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

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

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

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

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

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

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

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

o The treatment for ARS;

o The treatment of ARDS; and,

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

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

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

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

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

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

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

o Reducing the risk of cancer development;

o Prevention of the spread and metastasis of cancer;

o The treatment of lung and other cancers;

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

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

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

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

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

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

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

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

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

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

o Immune-Based Therapies for Acute Respiratory Distress Syndrome

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

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

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

o Treatment for Hair Loss Related to Traditional Cancer Treatments

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

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

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

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

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

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

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

o Immune-Based Therapies for Cigarette Smoke and Other Toxicants

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

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

o Immune-Based Therapies for the Veterinary Market

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

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

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

o Immune-Based Therapies for Cancer

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

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

o Immune-Based Therapies for the Common Cold/Flu

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

o Immune-Based Therapies for HIV/AIDS

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

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

o Immune-Based Therapies for Food Poisoning

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

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

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

o Bone infections (osteomyelitis),

o Joint infections (arthritis),

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

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

o Infection of the liver (hepatitis),

o Lung infections (pneumonia),

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

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

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

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

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

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

o Establishing and formalizing strategic partnering relationships.

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

o Accelerating current research efforts.

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

o Expanding production facility capacity.

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

o Expanding sales, production and administrative resources.

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

o Supplementing and leveraging existing advisory relationships.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FACILITIES

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

EMPLOYEES

As of December 31, 2003, ImmuneRegen had one full-time employee and three
contract employees. Our sole full time employee is our Chief Executive Officer,
Michael K. Wilhelm. None of its employees are covered by a collective bargaining
agreement.

RISK FACTORS

In evaluating our business, you should consider the following discussions of
risks, in addition to other information contained in this report as well as our
other public filings with the Securities and Exchange Commission. Any of the
following risks could materially adversely affect our business, financial
condition, results of operations and prospects.

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

We have incurred a substantial net loss for the period from our inception in
October 2002 to December 31, 2003, and currently experiencing negative cash
flow. We expect to continue to experience negative cash flow and operating
losses through at least 2004 and possibly thereafter. As a result, we will need
to generate significant revenues to achieve profitability. If our revenues grow
more slowly than we anticipate, or if our operating expenses exceed our
expectations, we may experience reduced profitability.

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

We are focused on product development and have not generated any revenue to
date. We have incurred operating losses since our inception. Our net loss for
the twelve months ended December 31, 2003 was $1,856,702. As of December 31,
2003, we had an accumulated deficit of $1,902,620.

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.

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

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

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

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

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

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

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

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

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

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

We require substantial working capital to fund our operations. Since we do not
expect to generate significant revenues in the foreseeable future, in order to
fund operations, we will be completely dependent on additional debt and equity
financing arrangements. As of December 31, 2003, our cash and cash equivalents
totaled approximately $10,534. Based on our current plans, we believe these
financial resources, and interest earned thereon, will be sufficient to meet our

operating expenses and capital requirements for at least the next 30 days. There
is no assurance that any financing will be sufficient to fund our capital
expenditures, working capital and other cash requirements for the fiscal year
ending December 31, 2004. No assurance can be given that any such additional
funding will be available or that, if available, can be obtained on terms
favorable to us. If we are unable to raise needed funds on acceptable terms, we
will not be able to develop or enhance our products, take advantage of future
opportunities or respond to competitive pressures or unanticipated requirements.
A material shortage of capital will require us to take drastic steps such as
reducing our level of operations, disposing of selected assets or seeking an
acquisition partner. If cash is insufficient, we will not be able to continue
operations.

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

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

If we cannot raise additional funds when needed, or on acceptable terms, we will
not be able to continue to develop our drug candidates. We require substantial
working capital to fund our operations. Since we do not expect to generate
significant revenues in the foreseeable future, in order to fund operations, we
will be completely dependent on additional debt and equity financing
arrangements. There is no assurance that any financing will be sufficient to
fund our capital expenditures, working capital and other cash requirements for
the next 12 months. Our working capital as of December 31, 2003 was $(866,040).
No assurance can be given that any such additional funding will be available or
that, if available, can be obtained on terms favorable to us. If we are unable
to raise needed funds on acceptable terms, we will not be able to develop or
enhance our products, take advantage of future opportunities or respond to
competitive pressures or unanticipated requirements. A material shortage of
capital will require us to take drastic steps such as reducing our level of
operations, disposing of selected assets or seeking an acquisition partner. If
cash is insufficient, we will not be able to continue operations.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

o suspending manufacturing; or,

o withdrawing marketing clearance.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ITEM 2. DESCRIPTION OF PROPERTY

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

ITEM 3. LEGAL PROCEEDINGS

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

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

None.

PART II

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

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

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

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

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

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

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

EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED IN
THIS FORM 10-KSB ARE FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE SET FORTH IN SUCH FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING
STATEMENTS MAY BE IDENTIFIED BY THE USE OF CERTAIN FORWARD-LOOKING TERMINOLOGY,
SUCH AS "MAY," "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. EXCEPT FOR OUR
ONGOING OBLIGATION TO DISCLOSE MATERIAL INFORMATION AS REQUIRED BY FEDERAL
SECURITIES LAWS, WE DO NOT INTEND TO UPDATE YOU CONCERNING ANY FUTURE REVISIONS
TO ANY FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES OCCURRING
AFTER THE DATE OF THIS REPORT.

Overview
--------

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

LIQUIDITY AND CAPITAL RESOURCES

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

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

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

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

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.

On December 16, 2002 we entered into consulting agreements with David Harris and
Mark Witten, who were our two founders and research scientists. The consulting
agreements are on a month-to-month basis. Under the terms of these agreements,
Messrs. Harris and Witten agreed to place at the disposal of us their judgment
and expertise in the area of acute lung injury. In consideration for these
services, we agreed to pay each of them a non-refundable fee of $5,000 per
month.
26

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.

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

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

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

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

Revenue
-------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Net Loss
--------

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

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

ITEM 7. FINANCIAL STATEMENTS

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

RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
Certified Public Accountants

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Shareholders
IR Biosciences Holdings Inc.

Scottsdale, Arizona

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

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

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

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

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

New York, New York
May 18, 2004

F-1

STONEFIELD JOSEPHSON, INC.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
ImmuneRegen BioSciences, Inc.
Scottsdale, Arizona

We have audited the balance sheet of ImmuneRegen BioSciences, Inc. as of
December 31, 2002 (not included herein), and the accompanying 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 audit 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 ImmuneRegen BioSciences, Inc.
as of December 31, 2002, and the results of its operations and cash flows for
the period from October 30, 2002 (inception) to December 31, 2002, in conformity
with accounting principles generally accepted in the United States.

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-2

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

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

F-3

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

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

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

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

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

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

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

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

F-4

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

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

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

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

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

Cash flows from investing activities:

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

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

Cash flows from financing activities:

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

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

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

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

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

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

F-5

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

NON-CASH INVESTING AND FINANCING ACTIVITIES:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

F-6

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. Summary of Significant Accounting Policies:

NATURE OF BUSINESS

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

GOING CONCERN

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

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

ACQUISITION AND CORPORATE RESTRUCTURE

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

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

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

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

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

F-8

1. Summary of Significant Accounting Policies, continued:

USE OF ESTIMATES

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

CASH EQUIVALENTS

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

CASH CONCENTRATION

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

BASIC AND DILUTED LOSS PER SHARE

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

COMPREHENSIVE INCOME

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

INCOME TAXES

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

F-9

1. Summary of Significant Accounting Policies, continued:

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

STOCK-BASED COMPENSATION

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

PREPAID SERVICES

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

LICENSED PROPRIETARY RIGHTS

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

CAPITALIZED WEBSITE COSTS

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

FURNITURE AND EQUIPMENT

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

Computer equipment 3 years
Furniture 7 years

F-10

1. Summary of Significant Accounting Policies, continued:

ADVERTISING

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

NEW ACCOUNTING PRONOUNCEMENTS

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

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

LONG-LIVED ASSETS

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

F-11

1. Summary of Significant Accounting Policies (Continued)

NEW ACCOUNTING PRONOUNCEMENTS (Continued)

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

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

2. Related-Party Transactions:

EMPLOYMENT CONTRACTS

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

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

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

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

F-12

2. Related-Party Transactions, continued:

CONSULTING AGREEMENTS

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

PROPRIETARY RIGHTS AGREEMENT

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

DUE TO RELATED PARTIES

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

OFFICE LEASE

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

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

F-13

2. Related-Party Transactions, continued:

InOne CONTRACT

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

NOTES PAYABLE

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

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

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

3. Commitments and Contingencies:

MINIMUM FEE - ADVERTISING AND DESIGN

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

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

F-14

3. Commitments and Contingencies, continued:

OFFICE LEASE

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

InOne CONTRACT

4. Convertible Notes:

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

Convertible Promissory Note $ 15,000

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

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

F-15

4. Convertible Notes, continued:

CONVERTIBLE PROMISSORY NOTE

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

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

SECURED CONVERTIBLE PROMISSORY NOTES

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

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

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

F-16

4. Convertible Notes, continued:

AMENDED SECURED CONVERTIBLE PROMISSORY NOTES

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

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

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

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

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

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

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

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

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

F-17

4. Convertible Notes, continued:

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

FOURTH QUARTER SECURED CONVERTIBLE PROMISSORY NOTES

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

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

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

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

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

F-18

4. Convertible Notes, continued:

FOURTH QUARTER SECURED CONVERTIBLE PROMISSORY NOTES (CONTINUED)

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

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

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

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

5. Notes Payable - Shareholder:

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

6. Stockholders' Deficit:

PREFERRED STOCK

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

COMMON STOCK

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

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

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

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

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

F-19

6. Stockholders' Deficit, continued:

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

COMMON STOCK (CONTINUED)

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

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

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

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

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

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

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

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

WARRANTS

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

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

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

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

F-20

6. Stockholders' Deficit, continued:

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

The following represents a summary of warrant transactions:

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

REVERSE STOCK SPLIT

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

7. Stock Option Plan:

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

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

F-21

7. Stock Option Plan, continued:

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

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

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

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

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

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

9. Income Taxes

The Company has adopted Financial Accounting Standard No. 109 which
requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in
the financial statement or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between
financial statements and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are
expected to reverse. Temporary differences between taxable income
reported for financial reporting purposes and income tax purposes are
insignificant.

At December 31, 2003, the Company has available for federal income tax
purposes a net operating loss carryforward of approximately $
1,900,000, expiring in the year 2023, that may be used to offset future
taxable income. The Company has provided a valuation reserve against
the full amount of the net operating loss benefit, since in the opinion
of management based upon the earnings history of the Company, it is
more likely than not that the benefits will not be realized. Due to
significant changes in the Company's ownership, the future use of its
existing net operating losses may be limited.

Components of deferred tax assets as of December 31, 2003 are as follows:

Non Current:
Net operating loss carryforward $ 650,000
Valuation allowance (650,000)
------------
Net deferred tax asset $ -
============

F-22

10. 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.

11. Subsequent Events:

FINANCIAL PUBLIC RELATIONS

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

12% SENIOR SECURED PROMISSORY NOTE

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

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

MARKETING AGREEMENTS

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

S-8 REGISTRATION

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

STOCK COMPENSATION

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

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

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

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

STRATEGIC PLANNING CONSULTING AGREEMENT

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

F-23

STOCK SPLIT

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

CORPORATE PLANNING CONSULTING AGREEMENT

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

NOTES PAYABLE EXTENSION:

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

F-24

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

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

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

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

ITEM 8A. CONTROLS AND PROCEDURES.

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

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

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

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

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

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

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

MICHAEL K. WILHELM, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR. Mr. Wilhelm
has 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 has
served as a Research Professor at the University of Arizona since July 2000.
Since July 1998 Dr. Witten has served as the Director of the Joan B. and Donald
R. Diamond Lung Injury Laboratory in the Department of Pediatrics at the
University of Arizona College of Medicine. Dr. Witten obtained his Ph.D. from
Indiana University in 1983 with a double major in physiology and exercise
physiology. He conducted a post-doctoral fellowship in Respiratory Sciences at
the University of Arizona College of Medicine from 1983 to 1988. He then spent
two years as an Assistant Biologist at Massachusetts General Hospital and
Instructor in Medicine at Harvard Medical School. He returned to The University
of Arizona College of Medicine in 1990. Dr. Witten has authored over 200
published manuscripts, book chapters and abstracts.

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

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

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

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

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

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

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

ITEM 10. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information concerning all compensation
awarded to, earned by, or paid to (1) our Chief Executive Officer and President,
(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 ($) Bonus($)
---- ---------- --------

Michael K. Wilhelm 2003 125,000 0
Chief Executive Officer 2002 5,208 0
and President(1).......................... 2001 0 0

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

----------

(1) Michael K. Wilhelm has served as Chief Executive Officer and President
of IR BioSciences Holdings, 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. 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 year ended December 31, 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.

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

None.

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

None.

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

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

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

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

The following summarizes the stock option transactions:

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

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

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

Warrants
--------

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

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

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

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

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

The following represents a summary of warrant transactions:

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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

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

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

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

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

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

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

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

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

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

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

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

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

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

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

(a) Financial Statements, Financial Statement Schedules and Exhibits

Independent Auditor's Report.

Consolidated Balance Sheet as of December 31, 2003.

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

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

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

Notes to Consolidated Financial Statements.

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

23.1 Consent of Stonefield Josephson, Inc.

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

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

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

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

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

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

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

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

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

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

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

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

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

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

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

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

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on July 20, 2005

IR BioSciences Holdings, Inc.

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