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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended March 31, 2006



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from __________ to ___________

Commission file number: 000-27131

INVERTED PARADIGMS CORPORATION

(Exact name of Registrant as specified in its charter)

HORIZON HOLDING CORPORATION

(Former name or former address, if changed since last report)



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|                                                               |  |                        
|-------------------------------------------------------------- |  | -----------------------
|Delaware                                                       |  | 88-0381258             
|(State or other Jurisdiction of Incorporation or Organization) |  | (IRS Employer I.D. No.)



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1800 2ndStreet East, Suite 735

Sarasota, Florida 34326

(941)
256-0436

(Address and telephone number of

principal executive offices)



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Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.

x  Yes ̈No

The number of shares of the registrants common stock, par value $0.001 per share, outstanding as of May 12, 2006 was 28,319,750 and there were 894
stockholders of record.

Transitional Small Business Issuer Format: ̈YES  x NO

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). ̈YES  x NO



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##### Table of Contents

INVERTED PARADIGMS CORPORATION

FORM 10-QSB

INDEX



|               |  |                                                                                                      |  |   
|-------------- |  | ---------------------------------------------------------------------------------------------------- |  | --
|PART I.        |  | FINANCIAL INFORMATION                                                                                |  |   
|               |  |                                                                                                     
|Item 1.        |  | Financial Statements                                                                                 |  |   
|               |  | Consolidated Balance Sheet (unaudited) at March 31, 2006                                             |  | 3 
|               |  | Consolidated Statements of Operations (unaudited) for the Three Months Ended March 31, 2006 and 2005 |  | 4 
|               |  | Consolidated Statements of Cash Flows (unaudited) for the Three months Ended March 31, 2006 and 2005 |  | 5 
|               |  | Notes to Consolidated Financial Statements (unaudited)                                               |  | 6 
|               |  |                                                                                                     
|Item 2.        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                |  | 11
|               |  |                                                                                                     
|Item 3.        |  | Controls and Procedures                                                                              |  | 18
|               |  |                                                                                                     
|PART II        |  | OTHER INFORMATION                                                                                    |  |   
|               |  |                                                                                                     
|Item 1.        |  | Legal Proceedings                                                                                    |  | 18
|Item 2.        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                          |  | 18
|Item 3.        |  | Defaults Upon Senior Securities                                                                      |  | 19
|Item 4.        |  | Submission of Matters to a Vote of Security Holders                                                  |  | 19
|Item 5.        |  | Other Information                                                                                    |  | 19
|Item 6.        |  | Exhibits                                                                                             |  | 19
|               | 
|SIGNATURE PAGE |  | 21                                                                                                  



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheet



|                                                                                                        |  |                |             |  
|------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | -
|                                                                                                        |  | March 31, 2006 |            
|                                                                                                        |  | (unaudited)    |            
|Assets                                                                                                  |  |                |             |  
|Current assets:                                                                                         |  |                |             |  
|Cash and cash equivalents                                                                               |  | $              | 183,371     |  
|Prepaid expenses                                                                                        |  |                | 21,611      |  
|                                                                                                        |  |                |             |  
|Total current assets                                                                                    |  |                | 204,982     |  
|Property and equipment, net                                                                             |  |                | 12,270      |  
|Intangible asset                                                                                        |  |                | 119,956     |  
|Deposits                                                                                                |  |                | 690         |  
|                                                                                                        |  |                |             |  
|Total assets                                                                                            |  | $              | 342,623     |  
|                                                                                                        |  |                |             |  
|Liabilities and Stockholders Equity (Capital Deficiency)                                               |  |                |             |  
|Current liabilities:                                                                                    |  |                |             |  
|Accounts payable                                                                                        |  | $              | 111,053     |  
|Other current liabilities                                                                               |  |                | 80,699      |  
|Notes payable to shareholders                                                                           |  |                | 495,275     |  
|                                                                                                        |  |                |             |  
|Total current liabilities                                                                               |  |                | 687,027     |  
|Stockholders equity (capital deficiency):                                                              |  |                |             |  
|Common stock, $0.001 par value, 100,000,000 shares authorized, 24,319,750 shares issued and outstanding |  |                | 24,320      |  
|Additional paid-in capital                                                                              |  |                | 36,864,834  |  
|Accumulated deficit                                                                                     |  |                | (37,238,233 | )
|                                                                                                        |  |                |             |  
|Total stockholders equity (capital deficiency)                                                         |  |                | (349,129    | )
|                                                                                                        |  |                |             |  
|Total liabilities and stockholders equity (capital deficiency)                                         |  | $              | 342,623     |  
|                                                                                                        |  |                |             |  

See accompanying notes to unaudited consolidated financial statements.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations



|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------- | ---------- | - | --------- | - | ---------- | -
|                                                                                                                                                               |  | For the three months endedMarch 31, |           
|                                                                                                                                                               |  | 2006                                |            |   | 2005      |  
|                                                                                                                                                               |  | Unaudited                           |            |   | Unaudited |  
|Net sales                                                                                                                                                      |  | $                                   |           |   |           | $ | 32,016     |  
|Cost of sales                                                                                                                                                  |  |                                     |           |   |           |   | 27,004     |  
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Gross profit                                                                                                                                                   |  |                                     |           |   |           |   | 5,012      |  
|Operating expenses:                                                                                                                                            |  |                                     |            |   |           |   |            |  
|Sales and marketing                                                                                                                                            |  |                                     |           |   |           |   | 4,656      |  
|General and administrative (inclusive of non-cash stock-based employee compensation of $15,740 and $153,373 in the three months ended
March 31, 2006 and 2005) |  |                                     | 307,165    |   |           |   | 501,909    |  
|Technology and content                                                                                                                                         |  |                                     | 726        |   |           |   | 12,578     |  
|Depreciation and amortization                                                                                                                                  |  |                                     | 169        |   |           |   | 320        |  
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Total operating expenses                                                                                                                                       |  |                                     | 308,060    |   |           |   | 519,463    |  
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Loss from continuing operations                                                                                                                                |  |                                     | (308,060   | ) |           |   | (514,541   | )
|Other income (expense):                                                                                                                                        |  |                                     |            |   |           |   |            |  
|Interest income                                                                                                                                                |  |                                     | 242        |   |           |   | 272        |  
|Interest expense                                                                                                                                               |  |                                     | (1,876     | ) |           |   |           |  
|Gain on extinguishment of debt                                                                                                                                 |  |                                     | 2,931      |   |           |   | 2,674      |  
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Other income, net                                                                                                                                              |  |                                     | 1,297      |   |           |   | 2,946      |  
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Net loss from continuing operations                                                                                                                            |  |                                     | (306,763   | ) |           |   | (511,505   | )
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Loss from discontinued operations                                                                                                                              |  |                                     |           |   |           |   | (4,249     | )
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Net loss                                                                                                                                                       |  | $                                   | (306,763   | ) |           | $ | (515,754   | )
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Net loss per share from continuing operations  basic and diluted                                                                                              |  | $                                   | (0.01      | ) |           | $ | (0.04      | )
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Net loss per share from discontinued operations  basic and diluted                                                                                            |  | $                                   | (0.00      | ) |           | $ | (0.00      | )
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  
|Weighted average shares used in calculating basic and diluted loss per share                                                                                   |  |                                     | 20,615,397 |   |           |   | 12,894,729 |  
|                                                                                                                                                               |  |                                     |            |   |           |   |            |  

See accompanying notes to unaudited consolidated financial statements.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows



|                                                                                       |  |                              |          |   |             |   |          |  
|-------------------------------------------------------------------------------------- |  | ---------------------------- | -------- | - | ----------- | - | -------- | -
|                                                                                       |  | Three months ended March 31, |         
|                                                                                       |  | 2006                         |          |   | 2005        |  
|                                                                                       |  | (unaudited)                  |          |   | (unaudited) |  
|Operating activities:                                                                  |  |                              |          |   |             |   |          |  
|Net Loss                                                                               |  | $                            | (306,763 | ) |             | $ | (515,754 | )
|Adjustments to reconcile net loss to cash used in operations:                          |  |                              |          |   |             |   |          |  
|Amortization of deferred stock-based employee compensation                             |  |                              | 15,740   |   |             |   | 153,373  |  
|Gain on extinguishment of debt                                                         |  |                              | (2,931   | ) |             |   | (2,674   | )
|Amortization of stock issued for services                                              |  |                              |         |   |             |   | 245,250  |  
|Stock issued to directors for services                                                 |  |                              | 28,000   |   |             |   |         |  
|Stock issued to vendors for services                                                   |  |                              | 4,496    |   |             |   |         |  
|Depreciation and amortization                                                          |  |                              | 169      |   |             |   | 320      |  
|Interest expense                                                                       |  |                              | 675      |   |             |   |          |  
|(Increase) decrease in assets:                                                         |  |                              |          |   |             |   |          |  
|Investments                                                                            |  |                              |         |   |             |   | 35,000   |  
|Inventories                                                                            |  |                              |         |   |             |   | 48,172   |  
|Prepaid expenses                                                                       |  |                              | (17,444  | ) |             |   | (517     | )
|Other assets                                                                           |  |                              | (510     | ) |             |   | 800      |  
|Increase (decrease) in liabilities:                                                    |  |                              |          |   |             |   |          |  
|Accounts payable                                                                       |  |                              | (25,545  | ) |             |   | (69,294  | )
|Other current liabilities                                                              |  |                              | 41,476   |   |             |   | 10,596   |  
|                                                                                       |  |                              |          |   |             |   |          |  
|Net cash used in continuing operating activities                                       |  |                              | (262,589 | ) |             |   | (94,728  | )
|                                                                                       |  |                              |          |   |             |   |          |  
|Net cash used in discontinued operations                                               |  |                              |         |   |             |   | (10,752  | )
|                                                                                       |  |                              |          |   |             |   |          |  
|Net cash used in operating activities                                                  |  |                              | (262,589 | ) |             |   | (105,480 | )
|                                                                                       |  |                              |          |   |             |   |          |  
|Cash flows from investing activities:                                                  |  |                              |          |   |             |   |          |  
|Purchase of property and equipment                                                     |  |                              | (12,439  | ) |             |   |         |  
|Cash acquired in connection with Silent Sword                                          |  |                              | 28,894   |   |             |   |          |  
|Proceeds from collection of loan receivable                                            |  |                              | 10,000   |   |             |   |          |  
|Proceeds from disposition of property and equipment                                    |  |                              |         |   |             |   | 500      |  
|                                                                                       |  |                              |          |   |             |   |          |  
|Net cash provided by in investing activities:                                          |  |                              | 26,455   |   |             |   | 500      |  
|                                                                                       |  |                              |          |   |             |   |          |  
|Cash flows from financing activities:                                                  |  |                              |          |   |             |   |          |  
|Payments on capital lease                                                              |  |                              |         |   |             |   | (9,915   | )
|Proceeds from notes payable to stockholders                                            |  |                              | 250,000  |   |             |   |         |  
|                                                                                       |  |                              |          |   |             |   |          |  
|Net cash provided by (used in) financing activities                                    |  |                              | 250,000  |   |             |   | (9,915   | )
|                                                                                       |  |                              |          |   |             |   |          |  
|Net increase (decrease) in cash and cash equivalents                                   |  |                              | 13,866   |   |             |   | (114,895 | )
|                                                                                       |  |                              |          |   |             |   |          |  
|Cash and cash equivalents, beginning of period                                         |  |                              | 169,505  |   |             |   | 248,729  |  
|                                                                                       |  |                              |          |   |             |   |          |  
|Cash and cash equivalents, end of period                                               |  | $                            | 183,371  |   |             | $ | 133,834  |  
|                                                                                       |  |                              |          |   |             |   |          |  
|Supplemental disclosures of cash flow information:                                     |  |                              |          |   |             |   |          |  
|Cash paid during the period for Interest                                               |  | $                            |         |   |             | $ |         |  
|                                                                                       |  |                              |          |   |             |   |          |  
|Issuance of 10,000,000 shares of common stock in connection with Silent Sword software |  | $                            | 150,000  |   |             | $ |         |  
|                                                                                       |  |                              |          |   |             |   |          |  

See accompanying notes to unaudited consolidated financial statements.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 1  Basis of Presentation

The accompanying unaudited consolidated financial statements as of and for the three months ended March 31, 2006 and 2005 have been prepared in accordance with accounting principles generally accepted in the United States of America
for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-QSB. Accordingly, they do not include all the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring accruals, considered
necessary for a fair presentation of the Companys financial position, results of operations, and cash flows for the periods presented.

The results of operations for the interim periods ended March 31, 2006 and 2005 are not necessarily indicative of the results to be expected for the full year. These interim consolidated financial statements should be read in
conjunction with the December 31, 2005 consolidated financial statements and related notes included in the Companys Annual Report on Form 10-KSB for the year ended December 31, 2005.

The Companys consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has
experienced net losses since February 16, 1999 (date of inception), which losses have caused an accumulated deficit of approximately $37,240,000 as of March 31, 2006. This factor, among others, raises substantial doubt about the
Companys ability to continue as a going concern.

Management has been able, thus far, to finance the losses through a series of
private placements. The Company is continuing to seek other sources of financing and attempting to explore alternate ways of generating revenues through partnerships with other businesses. Conversely, the maintenance of our website and the
development of our software segment is expected to result in operating losses for the foreseeable future. There are no assurances that the Company will be successful in achieving its goals.

In view of these conditions, the Companys ability to continue as a going concern is dependent upon its ability to obtain additional financing or
capital sources, to meet its financing requirements, and ultimately to achieve profitable operations. Management believes that its current and future plans provide an opportunity to continue as a going concern. The accompanying consolidated
financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that may be necessary in the event the Company cannot continue as a going
concern.

Note 2  Organization

Reporting Entity. INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES (Inverted Paradigms or the Company) were incorporated in the State of Nevada on December 18, 1997. On September 29, 2003, the
Company completed a re-incorporation merger into a Delaware Corporation thus changing the state of incorporation from Nevada to Delaware. The Company is in the businesses of operating a golf retail website (where manufactures can link to their
products) and developing our antivirus software called Silent SwordTMfor future sale.

Name Change.On August 12, 2004 a majority of the stockholders approved changing the name of the Company from LiquidGolf Holding
Corporation to Horizon Holding Corporation. On April 28, 2006 a majority of the stockholders approved changing the name of the Company from Horizon Holding Corporation to Inverted Paradigms Corporation.

Note 3  Summary of Significant Accounting Policies

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



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 3  Summary of Significant Accounting Policies , Continued



liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could
differ from those estimates.

Net Loss Per Share Information.Basic and diluted loss per share is calculated by dividing net
loss by the weighted-average number of common shares outstanding during the reporting period. The Companys common stock warrants have been excluded from the diluted loss per share computation since their effect is anti-dilutive.

Long Lived Assets.In accordance with Statement of Financial Accounting Standards (SFAS) 144, Accounting for the Impairment or
Disposal of Long-lived Assets, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is assessed by a
comparison of the carrying amount of the asset to the estimated future net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying amount of the asset or group of assets, the asset
is considered impaired and an expense is recorded in an amount required to reduce the carrying amount of the asset to its then fair value.

Goodwill and Other Intangible Assets. The Company follows SFAS 142, Goodwill and Other Intangible Assets. SFAS 142 requires that intangible assets with estimable useful lives be amortized over their
respective estimated useful lives to their estimated residual values and reviewed for impairment in accordance with SFAS 144. If facts and circumstances lead the Companys management to believe that one of the Companys amortized
intangible assets may be impaired, the Company will evaluate the extent to which the related cost is recoverable by comparing the future undiscounted cash flows estimated to be associated with that asset to the assets carrying amount and
write-down that carrying amount to fair value to the extent necessary.

Stock-Based Compensation.Before January 1,
2006, the Company accounted for stock-based compensation under the recognition and measurement principles of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees (APB
25), and related interpretations. The Company did not recognize compensation expense related to stock options granted to employees and directors where the exercise price was at or above fair value at the date of grant. Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation, established accounting and disclosure requirements using a fair-value-based method of accounting for stock-based employee compensation plans. As permitted by SFAS No.
123, the Company elected to continue to apply the intrinsic-value-based method of APB No. 25 described above, and adopted only the disclosure requirements of SFAS No. 123, as amended by SFAS No. 148, Accounting For Stock-Based
CompensationTransition and Disclosure.

On January 1, 2006, the start of the first quarter of fiscal 2006, the Company
adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS No. 123(R)) which requires that the costs resulting from all share-based payment transactions
be recognized in the financial statements at their fair values. The Company adopted SFAS No. 123(R) using the modified prospective application method under which the provisions of SFAS No. 123(R) apply to new awards and to awards modified,
repurchased, or cancelled after the adoption date. Additionally, compensation cost for the portion of the awards for which the requisite service has not been rendered that are outstanding as of the adoption date is recognized in the Statement of
Operations over the remaining service period after the adoption date based on the grant date of fair value. In accordance with SFAS 123(R), results for prior periods have not been restated.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 4  Asset Purchase

On January 31, 2006, the Company closed a Software Purchase and Development Agreement
with Delta Insights, LLC to purchase its Silent Sword software and all trademarks, service marks, and logos. To acquire the software, the Company issued 10,000,000 shares of restricted common shares and may issue an additional 10,000,000 shares,
subject to certain restrictions. The 10,000,000 issued shares have been valued at $150,000 which has been allocated to intangible assets, net of cash received in the amount of $28,894 and equipment valued at $1,550. The remaining 10,000,000
contingent shares have not been recorded as a liability or shown as outstanding securities since the outcome of the contingency is not yet determinable. The Company plans on developing Silent SwordTMas a new segment of the business to grow revenues. The software will be amortized over its expected life which has not been determined.

Note 5  Discontinued Operations

Acquisition
of Leather Craft. On December 22, 2003, the Company acquired certain assets from LeatherCraft Technology, Inc. (Leather Craft), including the name, for a single cash payment of $45,000. In addition to the single cash payment,
the Company incurred a finders fee of $22,500 relating to the acquisition. Leather Craft sells leather bound notebooks and related products. The Company acquired Leather Craft in order to diversify its revenue streams. In connection with the
purchase of assets, the Company entered into consulting agreements with the two principals of Leather Craft to provide the Company consulting services for a period of three years. As compensation for services, each consultant may annually elect to
receive: (i) cash payments in arrears of $37,500; or (ii) 12,500 shares of our common stock.

The acquisition was accounted for
under the purchase method of accounting; accordingly, the purchase price has been allocated to reflect the fair value of assets and liabilities acquired at the date of acquisition The results of operations of the acquired business have been included
in the accompanying consolidated financial statements since the date of acquisition. The Company recorded Goodwill of $67,500 as the purchase price exceeds the fair values of the assets acquired by that amount. The Company expects all of the
goodwill to be deducted for tax purposes.

Acquisition of Game Fore Golf. On June 30, 2004 the Company acquired the Game Fore
Golf business including the name, for common stock. The Company issued 10,000 shares of its common stock for this acquisition. Game Fore Golf was accounted for as a part of Leather Craft. Game For Golf distributed specialty golf bags and head covers
adorned with wildlife artist works that Game Fore Golf is licensed, by the artist, to distribute.

The acquisition was accounted for under
the purchase method of accounting; accordingly, the purchase price has been allocated to reflect the fair value of assets and liabilities acquired at the date of acquisition The results of operations of the acquired business have been included in
the accompanying consolidated financial statements since the date of acquisition. The Company recorded Goodwill of $40,900 as the purchase price exceeded the fair values of the assets acquired by that amount. The Company expects all of the goodwill
to be deducted for tax purposes.

Discontinued Operations. In November 2004, the Company decided to discontinue the operations of
Leather Craft and Game Fore Golf, due to significantly fewer orders than expected for leather goods from Leather Crafts largest customer (the Companys leather goods product segment). As a result of this the Company recorded losses from
discontinued operations of $4,249 for the quarter ended March 31, 2005.



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INVERTED PARADIGMS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (unaudited)

Note 6  Stockholders Equity

2006 Secured Promissory Note. On March 9, 2006, we sold in a private
placement, a secured promissory note in the amount of $250,000 to a stockholder. Interest accrues on the outstanding principal balance from and after March 6, 2006 at a rate of 11 percent per annum. At maturity, October 31, 2006, in
addition to the payment of principal and accrued interest, we will deliver as additional incentive for making the loan, 75,000 shares of our common stock. The stock is considered restricted securities as defined by the Securities Act of 1933, as
amended. The fair value of these shares is considered to be insignificant and no charge has been reflected in the financial statements. Also, as part of the transactions, the broker acquired a warrant as compensation, issued by the Company, to
purchase 50,000 shares of common stock at $0.50 per share and the warrant is exercisable at issuance. The fair value of the warrant amounts to $5,400 based on the Black-Scholes pricing model and will be amortized over the life of the loan. The
Company used the following assumptions in determining this value:



|               |  |        
|-------------- |  | -------
|Risk-free rate |  | 5%     
|Expected life  |  | 3 years
|Volatility     |  | 121%   
|Dividend Yield |  | 0%     

In addition, $675 has been amortized in the three months ended March 31, 2006.



|     |  |                                          |  |               |   |  |               |      |                 |                  |             |   |       
|---- |  | ---------------------------------------- |  | ------------- | - |  | ------------- | ---- | --------------- | ---------------- | ----------- | - | ------
|Year |  | Warrant Type                             |  | WarrantShares |   |  | ExercisePrice |      | Expiration Date |                  | NetProceeds
|2002 |  | Class A warrants                         |  | 1,220,000     |   |  | $             | 1.00 |                 | April - May 2007 |             |   |       
|2003 |  | Class A warrants cancelled               |  | (160,000      | ) |  |               |      |                 |                  |             |   |       
|2003 |  | Class A warrants exercised               |  | (63,000       | ) |  |               | 1.00 |                 |                  |             | $ | 63,000
|     |  |                                          |  |               |   |  |               |      |                 |                  |             |   |       
|     |  |                                          |  | 997,000       |   |  |               |      |                 |                  |             |   |       
|2002 |  | Class B warrants                         |  | 1,220,000     |   |  |               | 1.50 |                 | April - May 2007 |             |   |       
|2002 |  | Class B warrants cancelled               |  | (160,000      | ) |  |               |      |                 |                  |             |   |       
|     |  |                                          |  |               |   |  |               |      |                 |                  |             |   |       
|     |  | Total Class B warrants outstanding       |  | 1,060,000     |   |  |               |      |                 |                  |             |   |       
|     |  | Total Notes payable warrants outstanding |  |              |   |  |               |      |                 |                  |             |   |       
|     |  | Convertible Notes payable warrants       |  | 744,505       |   |  |               | 1.50 |                 | June 2006        |             |   |       
|2004 |  | Notes payable warrants                   |  | 50,000        |   |  |               | 0.92 |                 | None             |             |   |       
|2004 |  | Private placement warrants               |  | 3,718,491     |   |  |               | 0.75 |                 | Aug. - Oct. 2007 |             |   |       
|2005 |  | Broker warrants                          |  | 50,000        |   |  |               | 0.50 |                 | Dec. 2008        |             |   |       
|2006 |  | Broker warrants                          |  | 50,000        |   |  |               | 0.50 |                 | Mar. 2009        |             |   |       
|     |  |                                          |  |               |   |  |               |      |                 |                  |             |   |       
|     |  | Total warrants outstanding               |  | 6,669,996     |   |  |               |      |                 |                  |             |   |       
|     |  |                                          |  |               |   |  |               |      |                 |                  |             |   |       
|     |  | Total proceeds from warrants exercised   |  |               |   |  |               |      |                 |                  |             | $ | 63,000
|     |  |                                          |  |               |   |  |               |      |                 |                  |             |   |       



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Note 7  Restricted Stock Based Compensation

On June 10, 2003, the Board of Directors adopted the Horizon Holding Corporation 2003 Restricted Stock Plan (the 2003 Plan) and
recommended that it be submitted to our stockholders for their approval at the 2003 Annual Meeting. The 2003 Plan was approved by the stockholders on August 13, 2003. The terms of the 2003 Plan provide for grants of restricted stock awards.

Under the 2003 Plan, the total number of shares of restricted common stock that may be subject to the granting of Awards during the term
of the 2003 Plan shall be equal to 1,500,000 shares. Shares with respect to which awards previously granted that are forfeited, cancelled or terminated are returned to the plan and may be reissued. As of March 31, 2006, 1,354,000 shares had
been issued under this Plan.

On January 31, 2006, the Board of Directors issued 850,000 shares of restricted common stock as director
compensation in lieu of cash. An expense of $3,150 is include in General and Administrative expense for this issuance and $20,000 was expense in 2005.

Note 8  Commitments and Contingencies

Employment Agreement. On February 23, 2006 we entered into an
Employment Agreement with Chuck Wernicke to become the Chief Technology Officer. Mr. Wernicke will earn an annual salary of $96,000. He will also participate in the executive benefit package offered to other executives in the Company during the
term of his employment. The length of this agreement is for one year.

Settlement Agreement. February 9, 2006, we
entered into a settlement agreement with a stockholder. The settlement called for a cash payment of $25,000 immediately and $75,000 payment to be made as funds are raised for the company. The settlement of $100,000 is included in General and
Administrative expenses and the unpaid portion is included in Other Current Liabilities.

Note 9  Extinguishment of Debt

The Company had $8,431 of certain accounts payable that the Company was able to settle with the vendor for $5,500. Therefore, the Company recognized a
gain on the extinguishment of debt in the amount of $2,931 for the three months ended March 31, 2006.

Note 10  Subsequent Events

Stock Purchase Agreement.On April 3, 2006, the Company entered into a stock purchase agreement with an investor
(the Investor). This agreement allows the investor to purchase a maximum of 35,000,000 shares of common stock of the Company at a purchase price of 20% of the bid price. These shares are deemed restricted securities as defined in Rule
144 of the Securities Act of 1933. The investor purchased 4,000,000 shares on April 17, 2006 for $180,000. The Investor group is under no obligation to purchase any further amounts of stock from the Company.

2006 Restricted Stock Plan. On March 21, 2006, the Board of Directors adopted the Horizon Holding Corporation 2006 Restricted Stock
Plan (the 2006 Plan) and recommended that it be submitted to our stockholders for their approval at the 2006 Annual Meeting. The 2006 Plan was approved by the stockholders on April 28, 2006. The terms of the 2006 Plan provide for
grants of restricted stock awards.

Under the 2006 Plan, the total number of shares of restricted common stock that may be subject to the
granting of Awards during the term of the 2006 Plan shall be equal to 6,000,000 shares. Shares with respect to which awards previously granted that are forfeited, cancelled or terminated are returned to the plan and may be reissued.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operation.
|------- | -------------------------------------------------------------------------------------

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding the Companys expectations, beliefs, intentions or future strategies that are signified by the words expects,
anticipates, intends, believes, or similar language. These forward-looking statements, including those with respect to our operating results for 2006, are based upon current expectations and beliefs of the
Companys management and are subject to risks and uncertainties that could cause results to differ materially from those indicated in the forward-looking statements. Some, but not all, of the factors, which could cause actual results to differ
materially include those set forth in the risks discussed below under the subheading Risk Factors and elsewhere in this report. The Company undertakes no obligation to revise or publicly release the results of any revision to these
forward-looking statements, or to explain why actual results differ. Readers should carefully review the risk factors described in this section below and in any reports filed with the Securities and Exchange Commission (SEC).

Overview

We were incorporated
under the name DP Charters in Nevada on December 18, 1997. On April 18, 2002, we changed our name to Nomadic Collaboration International, Inc. Effective May 30, 2003, LGC Acquisition Company, a Delaware
corporation and wholly owned subsidiary of Nomadic Collaboration International, Inc., a Nevada corporation, merged with and into LiquidGolf Corporation, a Delaware corporation, such that LiquidGolf Corporation was the surviving entity, and by virtue
thereof, LiquidGolf corporation became a wholly owned subsidiary of Nomadic Collaboration.

As a result of a merger, the name of the
Company changed to LiquidGolf Holding Corporation. On September 29, 2003, the Company completed a re-incorporation merger into a Delaware Corporation thus changing the state of incorporation from Nevada to Delaware.

On December 22, 2003, we acquired certain assets from Leather Craft Technology, Inc. (Leather Craft), including the name, for a single
cash payment of $45,000. In addition to the single cash payment, the Company incurred a finders fee of $22,500 relating to the acquisition. Leather Craft sold leather bound notebooks and related products. The Company acquired Leather Craft in
order to diversify its revenue streams.

On June 30, 2004, we acquired the Game Fore Golf business including the name, for common
stock. The Company issued 10,000 shares of its common stock for this acquisition. Game Fore Golf was accounted for by us as part of the leather goods product segment. Game Fore Golf distributed specialty golf bags and head covers adorned with
wildlife artist works that Game Fore Golf is licensed, by the artist, to distribute.

On August 12, 2004 a majority of our
stockholders approved changing the name of the Company from LiquidGolf Holding Corporation to Horizon Holding Corporation to reflect our business direction of diversifying its revenue streams.

In November 2004, we decided to discontinue the operations of Leather Craft including Game Fore Golf, due to significantly fewer orders than expected for
leather goods from Leather Crafts largest customer.

Since the date of the merger with LiquidGolf Corporation in May 2003, our goal
has been to create an online community for golfers that provided an e-commerce marketplace for the sale of golf-related equipment and apparel, golf-related news and information and e-commerce solutions for other golf-related businesses. In February
2005, we closed our retail golf operation in Apopka, Florida to focus on our golf web site operations, by seeking to partner with an experienced golf e-tailer. As of March 2006, we have been unable to find an experienced partner in the golf
industry.



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In January 2006, in a continuing effort to build a revenue stream, we purchased the Silent
SwordTMsoftware and all trademarks, service marks, and logos. As of March 31, 2006, we have issued a total of
10,000,000 shares of our common stock for Silent SwordTM.Under the purchase agreement, we may issue a
maximum of 20,000,000 common shares subject to certain contingent provisions in the agreement. The stock issued is considered restricted securities as defined by the Securities Act of 1933, as amended. We anticipate this product to be available for
sale in the third quarter of 2006.

On April 28, 2006 a majority of our stockholders approved changing the name of the Company from
Horizon Holding Corporation to Inverted Paradigms Corporation.

Plan of Operation

We plan to grow our business with the purchase of the Silent SwordTMsoftware. The software will offer a comprehensive set of security solutions. The solutions include anti-virus, anti-spyware, anti-spam,
intrusion prevention, secure messaging, web filtering and vulnerability management. We will offer management tools to keep threat-protection systems up-to-date. The purchase of the software will help diversify our revenue beyond golf retailing. We
are currently designing and testing our software, Silent SwordTM, and we anticipate this product will be available to end consumers in the third quarter of 2006. We are continuing to explore opportunities for our golf retailing segment. We are constantly reviewing our segments to determine our
best overall strategy.

We have not generated sufficient operating revenue or had access to sufficient capital to implement
our business plan to grow and expand our segments. Since our revenues from operations alone are not likely to provide sufficient capital to allow us to implement our acquisition and merger plans, we must secure a source of additional capital.

Cash Requirements

We currently
have very limited operating funds, and we will require additional cash to maintain our operations for the next twelve months. Based on the cash we currently have, we will likely need additional financing to continue operations beyond June 2006.
Thus, our success is greatly dependent upon our ability to raise additional capital. In the event that we obtain only modest amounts of additional capital to fund our operations, we will be forced to seek such additional capital or discontinue
operations

Results of Operations

We
are in the early stages of operations as a public company with the pending release of our software. As a result, the relationships between revenue, cost of revenue, and operating expenses reflected in the financial information included in this
quarterly report do not represent future expected financial relationships. We expect that total cash expenses will decrease with the implementation of our operating plan, but at a much slower rate of decline than the corresponding revenue decrease.

Comparison of the three months ended March 31, 2006 and March 31, 2005.

CONSOLIDATED FINANCIAL INFORMATION



|                                       |  |                             |         |      |   |        
|-------------------------------------- |  | --------------------------- | ------- | ---- | - | -------
|                                       |  | Three months endedMarch 31,
|                                       |  | 2006                        |         | 2005
|Net sales                              |  | $                           |        |      | $ | 32,000 
|Cost of sales                          |  |                             |        |      |   | 27,000 
|Operating expenses                     |  |                             | 309,700 |      |   | 519,400
|(Gain) Loss on Discontinued Operations |  |                             |        |      |   | 4,200  
|Gain on extinguishment of debt         |  |                             | 2,900   |      |   | 2,700  



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Net Sales. Net sales from continuing operations were $0 in 2006 a decrease of 100% from
approximately $32,000 in 2005. This decrease was due to the closing of the retail store activity during 2005.

Cost of Sales.
Cost of sales from continuing operations was $0 in 2006, a decrease of 100% from approximately $27,000 in 2004. This decrease was due to the closing of the retail store activity during 2005.

Operating Expenses

Operating expenses were
approximately $309,700 in 2006, a decrease of 40% from approximately $519,400 in 2005. In 2005, a $245,250 non-cash expense was recorded for the amortization of a prepaid expense recorded in connection with an investment banking commitment retaining
PanAmerica Capital Group, Inc. to assist the Company in all financial activities of the Company. The compensation was 1,800,000 shares of common stock and the prepaid expense was fully amortized as of May 30, 2005.

Other Income and Expenses

Gain on
extinguishment of debt. Gain on settlement of liabilities was approximately $2,900 for 2006 compared to approximately $2,700 for the same period in 2005. This increase was the result of our determination that these amounts were not
owed for obligations in 2006 and 2005 or were obtained through negotiations with our vendors in the corresponding year.

Liquidity and Capital Resources

We had cash balances totaling approximately $183,000 as of March 31, 2006. Historically, our principal source of funds has been
cash generated from financing activities.

We currently intend to satisfy our long-term liquidity requirements from cash flow from
operations and to the extent such funds are insufficient, we must raise additional funds to sustain operations. However, our long-term liquidity requirements will depend on many factors, including but not limited to various risks associated with our
business that affect our sales levels and pricing, our ability to recover all of our up-front costs related to future acquisitions, capital expenditures and operating expense requirements, and there can be no assurance that we will not need to raise
additional funds to satisfy them.

Cash flow from operations. We have been unable to generate either significant liquidity or
cash flow to fund our current operations. We anticipate that cash flows from operations will be insufficient to fund our business operations for the next twelve-month period.

Variables and Trends

We have a limited operating history in connection with the current operation of
our web site and software development. Accordingly, the comparison of the financial data for the periods presented may not be a meaningful indicator of our future performance and must be considered in light of our limited operating history and our
outsourcing of certain operations of our golf Internet website.

Critical Accounting Policies

We make use of estimates and assumptions that impact the reported amounts of assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to bad debts, inventories and goodwill. These estimates and assumptions are based on historical results and
trends as well as our forecasts as to how these might change in the future.



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We believe the following critical accounting policies, among others, impact the significant judgments and
estimates we use in the preparation of our financial statements:

Stock-Based Compensation

Before January 1, 2006, the Company accounted for stock-based compensation under the recognition and measurement principles of Accounting Principles
Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees (APB 25), and related interpretations. The Company did not recognize compensation expense related to stock options granted to employees and
directors where the exercise price was at or above fair value at the date of grant. Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, established accounting and disclosure requirements using a
fair-value-based method of accounting for stock-based employee compensation plans. As permitted by SFAS No. 123, the Company elected to continue to apply the intrinsic-value-based method of APB No. 25 described above, and adopted only the
disclosure requirements of SFAS No. 123, as amended by SFAS No. 148, Accounting For Stock-Based Compensation - Transition and Disclosure.

On January 1, 2006, the start of the first quarter of fiscal 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment
(SFAS No. 123(R)) which requires that the costs resulting from all share-based payment transactions be recognized in the financial statements at their fair values. The Company adopted SFAS No. 123(R) using the modified
prospective application method under which the provisions of SFAS No. 123(R) apply to new awards and to awards modified, repurchased, or cancelled after the adoption date. Additionally, compensation cost for the portion of the awards for which the
requisite service has not been rendered that are outstanding as of the adoption date is recognized in the Statement of Operations over the remaining service period after the adoption date based on the grant date fair value. In accordance with SFAS
123(R). Results for prior periods have not been restated.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

RISKS FACTORS

A more comprehensive list of risk factors are set forth in the Companys Annual Report on Form 10-KSB
for the year ended December 31, 2005 and our other filings with the Securities and Exchange Commission. In addition to those risk factors, you should consider the following:

We have limited operating funds, and our ability to continue as a going concern is dependent upon our ability to obtain additional capital to operate our business.

We have incurred net losses and negative cash flows from operations in all of the quarters since our inception. Our lack of sufficient financing to
implement our business plan, and our expectation of continued operating losses for the foreseeable future raises substantial doubt about our ability to continue as a going concern. Our independent registered certified public accounting firm has
issued its report, which includes an explanatory paragraph for going concern uncertainty on our financial statements as of December 31, 2005. Our ability to continue as a going concern is heavily dependant upon our ability to obtain additional
capital to sustain operations. Currently, we have no commitments to obtain additional capital, and there can be no assurance additional capital will be available on acceptable terms, if at all.



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We will need additional financing, the availability of which is uncertain, to fund our business and to implement our
business plan.

We will require additional financing in order to carry out our business plan. Such financing may take the form of the
issuance of common or preferred stock or debt securities, or may involve bank financing. There can be no assurance that we will obtain such additional capital on a timely basis, on favorable terms, or at all. If we are unable to generate the
required amount of additional capital, our ability to meet our financial obligations and to implement our business plan may be adversely effected.

We
will need additional capital, the availability of which is uncertain, to fund our business and complete the implementation of our business plan.

We will require additional financing in order to carry out our business plan. Such financing may take the form of the issuance of common or preferred stock or debt securities, or may involve bank financing. There can be no assurance that we
will obtain such additional capital on a timely basis, on favorable terms, or at all. If we are unable to generate the required amount of additional capital, our ability to meet our financial obligations and to implement our business plan may be
adversely effected.

We may dilute existing stockholders by issuing more of our common stock

It is likely that in order to obtain additional funds as needed, we will have to sell additional securities including, but not limited to, its common
stock, the effect of which may result in a substantial dilution of the present equity interests of our shareholders.

We rely heavily on our
intellectual property rights which offer only limited protection against potential infringers.

We rely on a combination of pending
patents, copyright and trademark laws, trade secrets, confidentiality procedures and contractual provisions to protect our proprietary rights. Despite such efforts to protect our proprietary rights, unauthorized parties from time to time have copied
aspects of our software products or have obtained and used information that we regard as proprietary. Policing unauthorized use of our software products could be time-consuming and costly. Furthermore, our means of protecting our proprietary rights
may not be adequate, and our competitors may independently develop similar technology.

Intellectual property litigation in the network and system
security market is common and can be expensive.

As more and more software patents are granted worldwide, as the number of products and
competitors in our industry segments grows and as the functionality of products in different industry segments overlap, we expect that software product developers will be increasingly subject to infringement claims. Infringement or misappropriation
claims may be asserted against us, and any such assertions could harm our business. Additionally, certain patent holders have become more aggressive in threatening litigation in attempts to obtain fees for licensing the right to use patents. Any
such claims or threats, whether with or without merit, could be time-consuming to defend, result in costly litigation and diversion of resources, or could cause product shipment delays or require us to enter into royalty or licensing agreements. In
addition, such royalty or license agreements, if required, may not be available on acceptable terms, if at all, which would likely harm our business.

Our management may be unable to effectively integrate our software purchase and to manage our growth and we may be unable to fully realize any anticipated benefits.

In the event our software is successful, we could experience rapid growth in revenues, personnel, complexity of administration and in other areas. There
can be no assurance that we will be able to manage the significant strains that future growth may place on our administrative infrastructure, systems, and controls. If we are unable to manage future growth effectively, our business, operating
results and financial condition may be materially adversely affected.

If we are unable to hire and retain key personnel, then we may not be able to
implement our business plan.

We are dependent on our ability to hire and retain highly skilled and qualified personnel. We face
competition for qualified personnel from numerous industry sources, and there can be no assurance that we will be able to attract and retain qualified personnel on acceptable terms. We do not have key man insurance on any of our employees. The loss
of service of any of our key personnel could have a material adverse effect on our operations or financial condition.



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We face product development risks associated with rapid technological changes in our market.

Any decline in the market acceptance of operating systems we support may require us to ensure that all of our products and services are compatible with
other operating systems to meet the demands of our customers. If potential customers do not want to use the Microsoft operating systems we support, we will need to develop more products that run on other operating systems adopted by our customers.
If we cannot successfully develop these products in response to customer demands, our business could be adversely impacted. The development of new products in response to these risks would require us to commit a substantial investment of resources,
and we might not be able to develop or introduce new products on a timely or cost-effective basis, or at all, which could lead potential customers to choose alternative products.

Risks Specific to Our Industry

General economic conditions may affect consumer and business purchases.

We will become increasingly subject to the risks arising from adverse changes in domestic and global economic and political conditions.
If economic growth in the United States and other countries economies is slowed, many customers may delay or reduce technology purchases. This could result in reductions in sales of our products, longer sales cycles, slower adoption of new
technologies and increased price competition.

We are subject to intense competition in the system and network protection markets, and we expect to face
increased competition in the future.

The software industry has limited barriers to entry, and the availability of desktop computers
with continually expanding performance at progressively lower prices contributes to the ease of market entry. The markets in which we compete are characterized by vigorous competition, both by entry of competitors with innovative technologies and by
consolidation of companies with complementary products and technologies.

In addition, some of our competitors have greater financial,
technical, sales and marketing and other resources. Furthermore, a reduction in the number and availability of compatible third-party applications may adversely affect the sale of our products. Because of these and other factors, competitive
conditions in the industry are likely to intensify in the future. Increased competition could result in continued price reductions, reduced net revenues and profit margins and loss of market share, any of which would likely harm our business.

Government Regulations and Legal Uncertainties Could Burden Our Business

The adoption or modification of laws or regulations applicable to software and the Internet could harm our business. New laws may be imposed relating to
intellectual property, privacy, libel and taxation apply to the software industry. New laws and regulations and interpretations of existing laws and regulations could subject us and/or our customers to potential liability, which could have an
adverse effect on our business, operating results and financial condition. The adoption of any future laws or regulations might decrease the growth of the Internet, decrease demand for our products and services, impose taxes or other costly
technical requirements or otherwise increase the cost of doing business or in some other manner have a significant adverse effect on us or our customers, which, in turn, could have a significant adverse effect on our business and operating results.
In addition, applying existing laws governing issues such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and personal privacy to the Internet is uncertain. The vast majorities of these laws were
adopted prior to the advent of the Internet and related technologies and, as a result, do not contemplate or address the unique issues of the Internet and related technologies. Changes to these laws intended to address these issues, including some
recently proposed changes, could create uncertainty in the marketplace which could reduce demand for our services or increase the cost of doing business as a result of costs of litigation or increased service delivery costs, or could in some other
manner have a significant adverse effect on our business and operating results. As our services are available over the Internet in multiple states and foreign countries, and as we facilitate sales by our customers to end users located in these
states and foreign countries, these



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jurisdictions may claim that we are required to qualify to do business as a foreign corporation in each of these states or foreign countries. Any new
legislation or regulation, or the application of laws or regulations from jurisdictions whose laws may not currently apply to our business, could have a significant adverse effect on our business and operating results.

Risks Related to Our Securities

Our common stock is
subject to the penny stock rules of the sec and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a penny stock, for the purposes relevant to
us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:



| |  |  | that a broker or dealer approve a persons account for transactions in penny stocks; and
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

In order to approve a persons account for transactions in penny stocks, the broker or dealer must:



| |  |  | obtain financial information and investment experience objectives of the person; and
| | - |  | ------------------------------------------------------------------------------------



| |  |  | make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be
capable of evaluating the risks of transactions in penny stocks.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The broker or dealer must also deliver, prior to any
transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:



| |  |  | sets forth the basis on which the broker or dealer made the suitability determination; and
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
| | - |  | ----------------------------------------------------------------------------------------------------------

Generally, brokers may be less willing to execute transactions in securities subject to the penny stock rules. This may make it more
difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be
made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights
and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in
penny stocks.

Our share price may be highly volatile.

The market prices of equity securities of small companies have experienced extreme price volatility in recent years not necessarily related to the individual performance of specific companies. Factors such as
announcements by us, or our competitors concerning products, technology, governmental regulatory actions, other events affecting healthcare companies generally and general market conditions may have a significant impact on the market price of our
shares and could cause it to fluctuate substantially.



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ITEM 3 - CONTROLS AND PROCEDURES

We have evaluated, with the participation of our Chief Executive Officer
and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of March 31, 2006. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and
procedures are effective to ensure that we record, process, summarize, and report information required to be disclosed by us in our quarterly reports filed under the Securities Exchange Act within the time periods specified by the Securities and
Exchange Commissions rules and forms.

During the quarterly period covered by this report, there were no changes in our internal
controls over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. There were no significant changes in the Companys internal controls or in other factors
that could significantly affect its internal controls subsequent to the Evaluation Date.

PART II - OTHER INFORMATION



|Item 1. | Legal Proceedings.
|------- | ------------------

From time to time we are
engaged in various legal and regulatory proceedings arising in the normal course of business. While it is not possible to determine with certainty the outcome of these matters, we are of the opinion that the eventual resolution of such proceedings
will not have a material adverse impact on our financial position or operating results. The Company is not a party to any pending legal proceedings nor is any of its property subject to pending legal proceedings.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.
|------- | ------------------------------------------------------------



| | (a) | Not applicable.
| | --- | ---------------



| | (b) | Not applicable.
| | --- | ---------------



| | (c) | On March 9, 2006, we sold in a private placement, a secured promissory note in the amount of $250,000 to a stockholder. Interest accrues on the outstanding principal balance
from and after March 6, 2006 at a rate of 11 percent per annum. At maturity, October 31, 2006, in addition to the payment of principal and accrued interest, we will deliver as additional incentive for making the loan, 75,000 shares of our
common stock. The stock is considered restricted securities as defined by the Securities Act of 1933, as amended.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On
December 6, 2005, we sold in a private placement, a secured promissory note in the amount of $50,000 to a stockholder. Interest accrues on the outstanding principal balance from December 6, 2005 at a rate of 8 percent per annum. The note
holder has the sole option of converting the principal represented by this note into our common stock at a strike price equal to a 50 percent discount to the average closing bid price of the stock for the ten days immediately prior to the
conversion. The note holder may convert all or any part of the principal represented by this note. The maturity date for the promissory is December 5, 2006.

On November 15, 2005, we sold in a private placement, a secured promissory note in the amount of $200,000 to a stockholder. Interest accrues on the outstanding principal balance from and after November 15,
2005 at a rate of 11 percent per annum. At maturity, April 18, 2006, in addition to the payment of principal and accrued interest, we will deliver as additional incentive for making the loan, 50,000 shares of our common stock. Any stock issued
pursuant to this promissory note will be restricted securities as defined by the Securities Act of 1933, as amended.

On July 7, 2005,
we sold in a private placement, a secured promissory note in the amount of $5,000 to a stockholder. Interest accrued on the outstanding principal balance from July 7, 2005 at a rate of 8 percent per annum. The note holder had the sole option of
converting the principal represented by this note into our common stock at a strike price equal to a 50 percent discount to the average closing bid price of the stock for the ten days immediately prior to the conversion. The note holder could
convert all or any part of the principal and accrued interest



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represented by this note. On December 6, 2005, we issued 57,076 shares of our common stock to satisfy the promissory note conversion agreement.

On July 7, 2005, we sold in a private placement, a secured promissory note in the amount of $10,000 to a stockholder. Interest accrued
on the outstanding principal balance from July 7, 2005 at a rate of 8 percent per annum. The note holder has the sole option of converting the principal represented by this note into our common stock at a strike price equal to a 50 percent
discount to the average closing bid price of the stock for the ten days immediately prior to the conversion. The note holder may convert all or any part of the principal and accrued interest represented by this note. On November 28, 2005 we
issued 129,595 shares of our common stock to satisfy the promissory note conversion agreement.

On February 16, 2004, we sold in a
private placement, a secured promissory note in the amount of $600,000 to a stockholder. Interest accrued on the outstanding principal balance from and after February 16, 2004 at a rate of 18 percent per annum. The note holder had the sole
option of converting the principal represented by this note into our common stock at a strike price equal to a 40 percent discount to the average closing bid price of the stock for the twenty days immediately prior to the conversion. The note holder
may convert all or any part of the principal represented by this note. As part of the same transaction, the note holder acquired a warrant, issued by the us, to purchase 50,000 shares of our common stock at $1.25 per share. On June 14, 2004,
the Company entered into a promissory note conversion agreement (the Agreement) with this stockholder. The agreement called for the holder of the note to exercise the option to convert the principal sum of $600,000 into shares of the
Companys common stock at the lesser of $1.25 per share or a 40% discount to the average closing bid price for the thirty days after the signing of the agreement. In addition, per the agreement, the Company paid the accrued interest on the note
in cash. On August 4, 2004 the Company issued 714,285 shares of common stock to satisfy the promissory note conversion agreement.

On
August 14, 2004 we offered $1,500,000 in $0.30 units. Each unit consists of one share of common stock and a warrant to purchase three shares of our common stock at a purchase price of $0.75 per share. As of March 15, 2006 we had sold
$371,185 in units to 12 accredited investors. Each of the investors had access to and was provided with relevant information concerning the company. The securities were exempt from registration pursuant to Rule 506 of Regulation D and
Section 4(2) of the Securities Act of 1933, as amended.



|Item 3. | Defaults Upon Senior Securities.
|------- | --------------------------------

Not Applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders.
|------- | ----------------------------------------------------

Not Applicable



|Item 5. | Other Information.
|------- | ------------------

Not Applicable.



|Item 6. | Exhibits
|------- | --------



| | (a) | Exhibits
| | --- | --------



19



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##### Table of Contents

|              |  |                                                                                                                                                           
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                                                                                               
|10.1          |  | Stock purchase agreement with Ischian Holdings, Ltd. dated April 3, 2006                                                                                  
|              | 
|10.2          |  | Investment advisory agreement with Galileo Asset Management, SA dated March 6, 2006                                                                       
|              | 
|10.3          |  | Consulting agreement with Brunswick Growth Ventures, LLC date February 3, 2006                                                                            
|              | 
|10.4          |  | Settlement agreement with Dennis Rush dated February 9, 2006                                                                                              
|              | 
|31.1          |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended*
|              | 
|31.2          |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended*
|              | 
|32.1          |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.*       
|              | 
|32.2          |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.*       

---

|* | Filed herewith.
|- | ---------------



20



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##### Table of Contents

SIGNATURES

In accordance with the requirements of the Exchange Act of 1934, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 15, 2006



INVERTED PARADIGMS CORPORATIONBy:

/s/ Stewart YorkName:

Stewart YorkTitle:

Chief Executive Officer, Secretary and Director


Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has
been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.



|       |  |                         |  |  |  |              |  | 
|------ |  | ----------------------- |  |  |  | ------------ |  | 
|       |  |                         | 
|By:    |  | /s/ Steven Weldon       |  |  |  | May 15, 2006
|Name:  |  | Steven Weldon           |  |  |  | (Date)      
|Title: |  | Chief Financial Officer |  |  |  |              |  | 
|       |  |                         | 
|By:    |  | /s/ William Parsons     |  |  |  | May 15, 2006
|Name:  |  | William Parsons         |  |  |  | (Date)      
|Title: |  | Director                |  |  |  |              |  | 
|       |  |                         | 
|By:    |  | /s/ Dwight Day          |  |  |  | May 15, 2006
|Name:  |  | Dwight Day              |  |  |  | (Date)      
|Title: |  | Director                |  |  |  |              |  | 



21



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##### Table of Contents

EXHIBIT INDEX



|              |  |                                                                                                                                                           
|------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                                                                                               
|10.1          |  | Stock purchase agreement with Ischian Holdings, Ltd. dated April 3, 2006                                                                                  
|              | 
|10.2          |  | Investment advisory agreement with Galileo Asset Management, SA dated March 6, 2006                                                                       
|              | 
|10.3          |  | Consulting agreement with Brunswick Growth Ventures, LLC date February 3, 2006                                                                            
|              | 
|10.4          |  | Settlement agreement with Dennis Rush dated February 9, 2006                                                                                              
|              | 
|31.1          |  | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended*
|              | 
|31.2          |  | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended*
|              | 
|32.1          |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.*       
|              | 
|32.2          |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002.*       

---

|* | Filed herewith.
|- | ---------------