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

                                   Form 10-QSB

(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 ________________________________

                                   IPEX, INC.
                                   ----------
                 (Name of small business issuer in its charter)

             NEVADA                                        41-2052984
             ------                                        ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                 7825 Fay Avenue, Suite 254, La Jolla, CA 92037
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone Number: (858) 456-3539
                                               --------------

                                 WITH COPIES TO:

                               Marc J. Ross, Esq.
                       Sichenzia Ross Friedman Ference LLP
                           1065 Avenue of the Americas
                            New York, New York 10018
                                 (212) 930-9700

      Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X]   No [_]

      Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Yes [_]   No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of April 21, 2006,, the
issuer had 14,944,721 outstanding shares of Common Stock.

      Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements
                 Consolidated Balance Sheets.................................  1
                 Consolidated Statements of Operations.......................  2
                 Consolidated Statements of Cash Flows.......................  3
                 Notes to Consolidated Financial Statements..................  4

Item 2.  Management's Discussion and Analysis or Plan of Operation........... 15

Item 3.  Controls and Procedures............................................. 19

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings................................................... 20

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

Item 3.  Defaults Upon Senior Securities..................................... 21

Item 4.  Submission of Matters to a Vote of Security Holders................. 21

Item 5.  Other Information................................................... 21

Item 6.  Exhibits ........................................................... 21

SIGNATURES................................................................... 23
<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

                           IPEX, INC. and Subsidiaries
                           Consolidated Balance Sheets
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                       March 31,       December 31,
                                                                         2006              2005
                                                                     ------------      ------------
<S>                                                                  <C>               <C>
Assets
Current assets
   Cash and cash equivalents                                         $    339,992      $    297,233
   Accounts receivable, net                                             1,281,240         1,151,555
   Deferred financing costs                                             1,951,263                --
   Prepaid expenses and other current assets                              115,651            74,185
                                                                     ------------      ------------
      Total current assets                                              3,688,146         1,522,973

Property and equipment, net                                               151,765           158,566
Intangible assets                                                       6,462,760         6,459,200
Other assets                                                               11,708             2,612
                                                                     ------------      ------------

Total assets                                                         $ 10,314,379      $  8,143,351
                                                                     ============      ============

Liabilities and Stockholders' Equity
Current liabilities
  Accounts payable                                                   $  1,379,789      $  1,396,687
  Convertible note                                                        800,000                --
  Accrued compensation - directors                                        188,972           165,469
  Accrued services - related parties                                       86,400            78,900
  Accrued expenses and other liabilities                                  162,974            49,308
                                                                     ------------      ------------
     Total current liabilities                                          2,618,135         1,690,364

Stockholders' equity
   Preferred stock, .01 par value, 52,500,000 shares authorized,
     no shares issued and outstanding at March 31, 2006 and
     December 31, 2005                                                         --                --
   Common stock, par value .001, 75,000,000 shares authorized,
     14,944,721 shares issued and outstanding at March 31, 2006
     and December 31, 2005                                                 14,944            14,944
   Additional paid in capital                                          14,826,233        13,284,174
   Common stock to be issued                                              434,687           395,587
   Accumulated deficit                                                 (7,579,620)       (7,241,718)
                                                                     ------------      ------------
      Total stockholders' equity                                        7,696,244         6,452,987
                                                                     ------------      ------------
      Total liabilities and stockholders' equity                     $ 10,314,379      $  8,143,351
                                                                     ============      ============
</TABLE>

                 See accompanying notes to financial statements


                                       1
<PAGE>

                           IPEX, INC. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)

                                                   Three Months Ended March 31,
                                                       2006            2005
                                                   ------------    ------------

Trading revenues                                   $  3,307,770       1,801,886

Cost of trading revenues
    Supplier costs                                    3,164,230       1,720,480
    Switch costs                                         22,303          14,203
                                                   ------------    ------------
Total cost of trading revenues                        3,186,533       1,734,683
                                                   ------------    ------------

Gross profit                                            121,237          67,203

Selling, general and administrative expenses            364,566         216,577

Selling, general and administrative expenses -
    related parties                                      37,500              --

                                                   ------------    ------------
Loss from operations                                   (280,829)       (149,374)

Other income (expense)
    Interest expense- net                               (56,275)             --
                                                   ------------    ------------

Net loss before income tax expense                     (337,104)       (149,374)
                                                   ------------    ------------

Income tax expense                                          800             800

                                                   ------------    ------------
Net loss                                           $   (337,904)   $   (150,174)
                                                   ============    ============

Loss per share - basic and diluted                 $      (0.02)   $      (0.01)
                                                   ============    ============

Weighted average shares outstanding -
    basic and diluted                                14,944,721      25,201,121
                                                   ============    ============

                 See accompanying notes to financial statements


                                       2
<PAGE>

                        IPEX, INC. and Subsidiaries
                   Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        Three Months Ended March 31,
                                                                            2006             2005
                                                                       ------------      ------------
<S>                                                                    <C>               <C>
Cash flows from operating activities:
  Net loss                                                             $   (337,904)     $   (150,174)
  Adjustments to reconcile net loss to net cash (used in) provided
    by operating activities:
  Depreciation and amortization                                               9,758             1,740
  Amortization of deferred financing costs                                   54,965                --
  Stock based compensation                                                 (288,069)               --
  (Increase) decrease in operating assets:
    Accounts receivable                                                    (129,685)       (2,240,124)
    Deferred costs                                                               --        (1,980,000)
    Prepaid expenses and other current assets                               (41,466)          (43,714)
    Other assets                                                             (9,096)           (2,612)
  Increase (decrease) in operating liabilities:
    Accounts payable                                                        (16,896)        1,759,686
    Accrued compensation- directors                                          23,503                --
    Accrued services - related parties                                        7,500                --
    Accrue expenses and other current liabilities                           (23,334)               --
    Deferred revenue                                                             --         2,140,000
                                                                       ------------      ------------
  Net cash used in operating activities                                    (750,724)         (515,198)

Cash flows from investing activities:
  Purchases of property and equipment                                        (2,957)          (32,325)
  Purchases of property and equipment                                        (3,560)               --
                                                                       ------------      ------------
  Net cash used in investing activities                                      (6,517)          (32,325)

Cash flows from financing activities:
  Proceeds from convertible note                                            800,000                --
  Note receivable issued                                                         --          (400,000)
  Proceeds from private placement                                                --         3,240,020
                                                                       ------------      ------------
  Net cash provided by financing activities                                 800,000         2,840,020
                                                                       ------------      ------------

Net increase in cash                                                         42,759         2,292,497

Cash and cash equivalents - beginning of period                             297,233               759
                                                                       ------------      ------------

Cash and cash equivalents - end of period                              $    339,992      $  2,293,256
                                                                       ============      ============

Supplemental disclosures of cashflow information:
Interest paid                                                          $         --      $         --
Taxes paid                                                             $         --      $         --

Non - Cash Investing and Financing Activities:
Warrants issued in connection with private placement                   $         --      $    507,662
Deferred financing costs- warrant anti-dilution adjustment             $  2,006,228      $         --
</TABLE>

                 See accompanying notes to financial statements


                                       3
<PAGE>

NOTE 1 - BUSINESS AND OPERATIONS

Business and Operations

IPEX, Inc. (formerly, Tamarack Ventures, Inc.), ("IPEX" or the "Company") was
incorporated in the State of Nevada on June 27, 2002. On March 17, 2005 the
Company entered into an Agreement and Plan of Merger with Administration for
International Credit and Investment, Inc., an Oregon corporation ("AICI") an
operating company which provides telecommunication services. The transaction has
been reflected as a reverse merger where Tamarack Ventures was the surviving
legal entity after the merger, but AICI remained the accounting acquirer. The
merger has been accounted for as a recapitalization of AICI as of the earliest
period presented. Accordingly, the historical financial statements prior to
March 17, 2005 are those of AICI. Following the merger, Tamarack Ventures
changed its name to IPEX, Inc., and the Company changed its fiscal year end from
July 31 to December 31.

The company operates an electronic platform that directs telecommunication
traffic and digital content. Customers and suppliers, consisting primarily of
communications service providers, anonymously exchange telecommunications
traffic. The company's automated, highly-scalable Voice Over Internet Protocol
("VoIP") routing platform updates routes based on availability, quality and
price.

In March of 2006, RGB Channel, Inc. Nevada was formed by the Company as a wholly
owned subsidiary for the purpose of owning certain assets (collectively, the
"RGB Assets") purchased by the Company pursuant to: (a) the Purchase Agreement
dated June 7, 2005 by and among the Company, B Tech Ltd., Massimo Ballerini and
Emanuele Boni; and (b) the Purchase Agreement dated June 7, 2005 by and among
the Company, RGB Channel SRL, Emanuele Boni, Massimo Ballerini and B Tech Ltd.
The Company has not yet transferred ownership of the RGB Assets to RGB Channel
Nevada. RGB Channel Nevada has no separate business operations or assets to
date.

NOTE 2 - GOING CONCERN

As shown in the accompanying financial statements, the Company has incurred
recurring losses from operations and has a working capital deficit of as of
March 31, 2006. These factors raise substantial doubt about the Company's
ability to continue as a going concern. In March 2006 the Company completed an
$800,000 bridge financing through the issuance of secured convertible notes
payable, which is expected to satisfy its working capital requirements through
June 15, 2006. Management is working on raising additional capital required to
execute its business strategy, through debt or equity financing.

In addition, the Company has implemented changes in management, and has
purchased imaging related intellectual property which it believes can be
developed and marketed successfully. Management believes its financing efforts
will provide adequate working capital and that changes in management and other
changes to the business will contribute toward achieving profitability. However,
there can be no assurances that management will be successful in raising the
additional required capital, that changes in management will be effective or
that the newly acquired technology can be successfully developed and marketed.
The accompanying financial statements do not include any adjustments that might
be necessary if the Company is unable to continue as a going concern.


                                       4
<PAGE>

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Information

The accompanying unaudited consolidated financial statements of IPEX, Inc. have
been prepared in accordance with the rules and regulations of the Securities and
Exchange Commission for interim financial information. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles in the United States of America for complete financial
statements. The consolidated balance sheet as of December 31, 2005 was derived
from the Company's audited financial statements. These statements should be read
in conjunction with the consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 2005, which has been filed with the Securities and Exchange
Commission.

In the opinion of management, all adjustments, consisting of normal, recurring
adjustments considered necessary for a fair presentation of the results of these
interim periods have been included. The results of operations for the three
months ended March 31, 2006 and 2005 may not be indicative of the results that
may be expected for the full fiscal year.

Basis of Consolidation

The accompanying consolidated financial statements include the accounts and
operations of IPEX, Inc. and its wholly owned subsidiaries, AICI, Inc and RGB
Channel, Inc. Intercompany accounts and transactions have been eliminated. The
accompanying consolidated financial statements have been prepared in conformity
with generally accepted accounting principles in the United States.

Cash and Cash Equivalents

Cash and cash equivalents includes cash on deposit and highly liquid investments
with original maturity dates of three months or less when purchased.

Accounts Receivable

The Company uses the allowance method for uncollectible accounts. The allowance
is estimated based on historical experience and periodic review of the current
status of accounts receivable. Accounts receivable are presented net of an
allowance for doubtful accounts of $200,000 at March 31, 2006 and at December
31, 2005.


                                       5
<PAGE>

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation and
amortization. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets, generally five to seven years.

Revenue Recognition

Trading revenues represent fees generated from minutes purchased through the
Company's VoIP exchange platform. Revenues from VoIP activities are recognized
in the period minutes are delivered through the telecom exchange platform.

Stock-Based Compensation

The Company has adopted the provisions of the Financial Accounting Standards
Board ("FASB") Statement No. 123R, "Share-Based Payment," that requires
corporations to recognize expense for awards of stock options or other equity
instruments to employees using the fair value method. The Company uses a
Black-Scholes valuation model to determine fair value.

Concentrations of Credit Risk

Financial instruments which subject the Company to concentrations of credit risk
consist primarily of cash and cash equivalents and trade accounts receivable.
The Company places its cash and cash equivalents with high quality financial
institutions and believes it is not exposed to any significant concentrations of
credit risk with respect to its cash and cash equivalents.

The Company's customer base is made up of a large number of geographically
diverse customers however, the Company's five top customers represent
approximately 64% of the total revenues. Also, the Company five top vendors
represent approximately 37% of the Company's cost of sales. The Company performs
credit evaluations of its customers and requires collateral if their credit
doesn't meet the Company's standards.

Fair Value of Financial Instruments

The Company's financial instruments at March 31, 2006 and 2005 consist of cash
and cash equivalents, accounts receivable, accounts payable and notes payable.
As of March 31, 2006 and 2005, the Company did not have any derivative financial
instruments. The Company believes the reported carrying amounts of its financial
instruments approximate their fair value, based upon their short-term nature.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the dates of the
financial statements and the reported amounts of revenue and expenses during the
reporting period. Actual results may differ from those estimates.


                                       6
<PAGE>

Earnings Per Share

Basic net earnings (loss) per common share is computed by dividing net earnings
(loss) applicable to common shareholders by the weighted-average number of
common shares outstanding during the period. Diluted net earnings (loss) per
common share is determined using the weighted average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon exercise of common
stock options. In periods where losses are reported, the weighted average number
of common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.

Reclassifications

Certain reclassifications have been made to prior years' financial statements to
conform to current year presentation. These reclassifications had no effect on
previously reported results of operations or accumulated deficit.

New Accounting Pronouncements

In February 2006, the FASB released Statement No. 155, Accounting for Certain
Hybrid Financial Instruments , ("SFAS No. 155"). SFAS No.155 is an amendment of
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities
, and Statement No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities. SFAS No. 155 establishes, among other
items, the accounting for certain derivative instruments embedded within other
types of financial instruments; and, eliminates a restriction on the passive
derivative instruments that a qualifying special-purpose entity may hold.
Effective for the Company beginning January 1, 2007, SFAS No. 155 is not
expected to have any impact on the Company's financial position, results of
operations or cash flows.

In March 2006, the FASB released Statement No. 156, Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140, ("SFAS No. 156"). SFAS
No. 156 amends SFAS No. 140 to require that all separately recognized servicing
assets and liabilities in accordance with SFAS No. 140 be initially measured at
fair value, if practicable. Furthermore, this standard permits, but does not
require, fair value measurement for separately recognized servicing assets and
liabilities in subsequent reporting periods. SFAS No. 156 is also effective for
the Company beginning January 1, 2007; however, the standard is not expected to
have any impact on the Company's financial position, results of operation or
cash flows.

In the first quarter of 2006, the Company adopted Statement No. 154, Accounting
for Changes and Error Corrections--a replacement of APB Opinion No. 20 and FASB
Statement No. 3 , ("SFAS No. 154") which changed the requirements for the
accounting for and reporting of a voluntary change in accounting principle. The
Company also adopted Statement No. 151, Inventory Costs--an amendment of ARB No.
43, Chapter 4 ("SFAS No. 151") which, among other changes, requires certain
abnormal expenditures to be recognized as expenses in the current period versus
capitalized as a component of inventory. The adoption of SFAS No. 154 did not
impact the results presented and the impact on any future periods will depend on
the nature and significance of any future accounting changes subject to the
provisions of the statement. The adoption of SFAS No. 151 did not have any
impact on the Company's financial position, results of operations or cash flows.


                                       7
<PAGE>

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at March 31, 2006 and December
31, 2005:

                                                    2006            2005
                                                 ---------       ---------
        Equipment                                $ 184,438       $ 181,912
        Furniture and fixtures                      11,369          10,938
                                                 ---------       ---------
                                                   195,807         192,850
        Less: accumulated depreciation             (44,042)        (34,284)
                                                 ---------       ---------
     Property and equipment, net                 $ 151,765       $ 158,566
                                                 =========       =========

Depreciation expense was $9,758 and $1,740 for the quarters ended March 31, 2006
and March 31, 2005 respectively.

NOTE 5 - INTANGIBLE ASSETS - INTELLECTUAL PROPERTY RIGHTS

On June 7, 2005, the Company entered into a purchase agreement with RGB Channel
SRL, B Tech Ltd., Massimo Ballerini and Emanuele Boni. Under the agreement, the
Company purchased certain intellectual property rights including image
processing algorithms, encoder software, decoder software, digital image
enhancement tools and encryption algorithms to enhance, compact, store, encrypt,
stream and display digital image content over wireless networks and over the
internet. As of March 31, 2006, the Company capitalized a total of $337,260 in
connection with these rights including $275,000 paid for the intellectual
property rights and $62,260 in legal fees.

The Company entered into a second purchase agreement dated June 7, 2005 between
B Tech Ltd., Massimo Ballerini and Emanuele Boni (the "B Tech Agreement"). The
technology purchased under the B Tech Agreement includes quadratic, circular
transform algorithms, codes and formulas for image enhancement, compacting and
content protection applications (the "B Tech Assets"). The purchase price for
the B Tech Assets totaled $6,000,000 of the Company's common stock, which
according to the B Tech Agreement was to be paid through the issuance of the
Company's common stock. The Company issued 1,905,055 shares of common stock for
a total purchase price of $6,125,500, which includes $125,500 in legal fees. As
of March 31, 2006, the Company has intellectual property totaling $6,462,760
recorded as an asset.

NOTE 6 - CONVERTIBLE NOTES

On March 21, 2006 the Company entered into a Securities Purchase Agreement for
the sale of $800,000 principal amount of 10% Secured Convertible Notes
("Convertible Notes") to four accredited investors. The Convertible Notes bear
interest at the rate of 10% per annum and mature one year from the date of
issuance. On the maturity date the outstanding principal amount of the
Convertible Notes will automatically convert into shares of common stock of the
Company's wholly owned subsidiary RGB Channel, Inc. Before the maturity date the
holders may convert the outstanding principal amount of the Convertible Notes
into either shares of the Company's common stock or shares of RGB Channel's
common stock. In accordance with the terms of the Securities Purchase Agreement,
if the Convertible Notes are converted into shares of the Company's common
stock, the conversion price of the Convertible Notes is $1.00 per share. If the
convertible Notes are converted into shares of common stock of RGB Channel, Inc.
the conversion price will equal the lesser of (a) $0.50, or (b) the price at
which, at any time while the Convertible Notes are outstanding, RGB Channel,
Inc. sells shares of its common stock or any other securities convertible into
or exchangeable for RGB Channel, Inc. common stock. The conversion price of the
Convertible Notes is subject to adjustment based on anti-dilution provisions
included in the Securities Purchase Agreement.


                                       8
<PAGE>

In connection with the sale of the Convertible Notes, the Company and RGB
Channel entered into a Security Agreement granting the purchasers of the
Convertible Notes a security interest in the RGB Assets and all intellectual
property related to the RGB Assets to secure the Company's and RGB Channel's
obligations pursuant to the terms of the Convertible Notes. Accrued interest
expense related to the Convertible Notes is $2,192 as of March 31, 2006.

NOTE 7 - RELATED PARTY AGREEMENTS

Consulting Agreement - Significant Shareholder and Former Officer and Director

On February 2, 2006 the Company entered into a consulting agreement with a
significant shareholder who is also a former officer and director of the company
("consultant") under which the consultant would provide business consulting
services to the Company in connection with the continuing development of the RGB
intellectual property assets acquired by the Company during 2005. The term of
the agreement was for one year, with a retroactive effective date of June 22,
2005, and provided for annual compensation of $150,000. The agreement provided
that either the Company or the consultant may terminate the consulting agreement
at any time upon delivery of 30 days prior written notice of termination, and
that the Company may terminate the consulting agreement at any time for "cause,"
as defined in the agreement. During the quarter ended March 31, 2006, $37,500 is
included in related party selling, general and administrative expenses, and as
of March 31, 2006 a total of $86,400 is included in accrued services - related
parties, in connection with this agreement. On March 31, 2006 the Company
terminated this agreement.

NOTE 8 - STOCK BASED EMPLOYEE COMPENSATION

The Company accounts for stock-based compensation awards in accordance with the
provisions of SFAS No. 123(R), Share-Based Payment. SFAS 123(R) requires that
the cost of all employee stock options, as well as other equity-based
compensation arrangements, be reflected in the financial statements over the
vesting period based on the estimated fair value of the awards. The Company
adopted SFAS 123(R) as of January 1, 2005. Prior to the adoption date, there
were no stock options or other equity-based compensation awards outstanding.


                                       9
<PAGE>

A summary of stock option activity for the three months ended March 31, 2006 is
presented below:

<TABLE>
<CAPTION>
                                                               Weighted-        Weighted-
                                                               Average          Average Remaining
                                             Number of         Exercise         Contractual Life
                                             Shares            Price            (Years)
                                             ---------         ------------     -----------------
<S>                                          <C>               <C>              <C>
Outstanding- December 31, 2005               3,875,000         $    3.21        8.8
Granted                                        377,159         $    2.56        9.5
Exercised                                           --                --
Expired                                             --                --
                                             ---------
Cancelled                                   (3,500,000)               --        9.3
Options Outstanding - March 31, 2006           752,159         $    3.23        6.9
Options Exercisable - March 31, 2006           752,159         $    3.23        6.9
</TABLE>

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model. For options granted during the quarter ended
March 31, 2006, the following assumptions were used: volatility of 100%,
expected life of 10 years, risk free interest rate 4.5% and dividend yield of
0%.

No options were granted during the three months ended March 31, 2005. During the
quarter ended March 31, 2006 a total of 377,159 options were granted at exercise
prices ranging from $1.00 to $2.71 per share, and a total of 3,500,000
previously issued options were cancelled. During the three months ended March
31, 2006 stock-based compensation totaling approximately $342,193 was recorded
by the Company based on vesting of options and restricted stock grants, and
stock based compensation expense totaling 1,335,783, recognized in connection
with the 3,500,000 cancelled options, was credited. As of March 31, 2006, total
unrecognized compensation cost related to unvested stock options was $137,976
which is expected to be recognized over a weighted average period of
approximately of less than one year.

NOTE 9 - STOCKHOLDERS' EQUITY

Preferred Stock

The Company has authorized 52,500,000 shares of $.001 par value preferred stock.
As of March 31, 2006 and December 31, 2005 no preferred stock is issued or
outstanding.

Common Stock

The Company has authorized 75,000,000 shares of $.01 par value common stock, of
which 14,944,721 shares are issued and outstanding as of March 31, 2006 and
December 31, 2005.


                                       10
<PAGE>

Warrants

In connection with sale of the Convertible Notes in March 2006 (see Note 6), the
anti-dilution clause related to a total of 3,500,000 warrants issued in
connection with a private placement in 2005 was triggered. This resulted in the
issuance of 2,625,000 additional warrants, with an exercise price of $1.00 per
share. In addition the exercise price with respect to 1,750,000 of the original
3.5 million warrants was reduced from $1.50 to $1.00 per share, and the exercise
price with respect to 1,750,000 of the original 3.5 million warrants was reduced
from $2.00 to $1.00 per share. The company recorded deferred financing costs and
an increase to additional paid in capital of $2,006,228 during the three months
ended March 31, 2006 in connection with these adjustments. The deferred
financing costs are being amortized as interest expense over the one-year term
of the notes.

Following is a summary of activity related to warrants as of March 31, 2006:

<TABLE>
<CAPTION>
                                      Number of         Weighted-     Weighted-
                                      Warrants          Average       Average Remaining
                                      Outstanding       Exercise      Contractual Life (years)
                                      -----------       --------      ------------------------
<S>                                    <C>             <C>              <C>
Outstanding, December 31, 2005         3,952,857       $  1.67          3.9
Granted                                2,625,000       $  1.00          4.0
Exercised                                     --            --           --
Expired                                       --            --           --
                                       ---------
Outstanding, March 31, 2006            6,577,857       $  1.01          4.0
</TABLE>

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Severance Agreement

On February 15, 2006 the Company's president and chief executive officer
resigned effective as of January 18, 2006 and also resigned as a director of the
Company effective February 15, 2006. Under a Severance Agreement entered into
February 15, 2006, the Company is obligated to: (a) issue 177,608 restricted
shares of common stock and options to purchase 291,666 shares of common stock at
a strike price of $2.71 per share with an expiration date of February 15, 2016;
(b) issue 16,369 restricted shares of common stock and options to purchase
65,493 shares of common stock at a strike price of $2.36 per share with an
expiration date of February 15, 2016 as compensation for his membership on the
Company's Board of Directors; (c) issue 2,030 restricted shares of common stock
as compensation for accrued vacation time; (d) provide six months of health
insurance; and (e) reimburse all outstanding business expenses accrued on behalf
of the Company. As of March 31, 2006 the options and shares of restricted common
stock owed pursuant to the severance agreement had not been issued. Based on the
above consideration, the company recognized non-cash expenses totaling $705,521
during the quarter ended March 31,2006. In connection with this agreement,
previously issued options to purchase 3,500,000 shares of common stock were
cancelled. Under the provisions of SFAS No.123(R), the replacement of previously
issued options with new options is considered to be a modification of the
original award. SFAS No.123(R) further provides that if, at the date of the
modification, the service condition of the original award is not expected to be
satisfied because the employee cannot render the requisite service, compensation
cost recognized as of the modification date for the original award would be
reversed at the modification date. Accordingly, during the quarter ended March
31, 2006 the Company reversed $1,335,783 of compensation cost previously
recognized in connection with the original award.


                                       11
<PAGE>

Litigation

On or about February 21, 2006, the Company's subsidiary, AICI, Inc., and its
predecessor Administration for International Credit & Investment, Inc., were
named, along with several other defendants including a former officer and
director of the Company, in an action filed, along in the Superior Court of the
State of California for the County of San Diego by a German corporation. The
complaint alleges fraud, conversion, unjust enrichment and breach of contract
based on allegations, among others, that the plaintiff was fraudulently induced
into depositing $2,454,158 into an escrow account as an investment in a
corporation controlled by the former Company officer and director, and such
money was disbursed without the plaintiff's authorization. The plaintiff is
seeking damages in the amount of $2,454,158 plus interest at the rate of 10% per
annum and costs, as well as a judicial accounting, injunctive and declaratory
relief. The Company is not able to predict the outcome of this litigation at
this time.

On April 20, 2006, the Company filed a lawsuit filed in the Superior Court of
the State of California for the County of San Diego against a customer who, by
the end of fiscal year 2005, accounted for approximately 30% of the company's
monthly revenue. The Company is seeking to recover $525,314 plus interest owed
to it by the defendants for telecommunications services provided by the Company
during 2006 pursuant to a carrier services agreement. The Company is not able to
predict the outcome of this litigation at this time.

On May 11, 2006, a former officer and director of the Company, filed a lawsuit
against the Company in the Superior Court of the State of California for the
County of San Diego. The complaint alleges that the Company breached its
severance agreement, with the former officer and director among other things,
failing to issue certain securities to the plaintiff and that the Company
breached the employment agreement by breaching the severance agreement. The
former officer and director is seeking to rescind his severance agreement with
the Company and is seeking a judicial determination that his employment
agreement is valid and enforceable, that the Company breached the employment
agreement, that the severance agreement is rescinded, alternatively that the
Company has breached the severance agreement, and that the Company's indemnity
obligations under the former officer's and director's indemnification agreement
with the Company have arisen. The former officer and director is also seeking an
unspecified amount of damages. The Company is not able to predict the outcome of
this litigation at this time.

Threatened Litigation and Claims

On February 7, 2006, a former director of the Company sent a demand letter
threatening legal action against the Company and several former officers and
directors claiming breach of a previously entered into settlement agreement and
various other torts. Claims include $270,000 in cash, and 875,028 shares of the
Company's stock. To the Company's knowledge, no lawsuit has been filed to date
in connection with this threatened action, and the Company cannot predict the
outcome of the claims at this time.


                                       12
<PAGE>

In addition, on February 7, 2006, a demand letter threatening legal action was
sent by the former director's attorney to parties who provided investment
banking services and legal services to the Company demanding payment of $5
million to investors and disgorgement of remuneration and fees. Subsequently,
the parties who provided investment banking services named in the demand letter
made a demand for indemnity to the Company with respect to the claims made by
the former director. Specific claims against the Company were not made in this
demand letter, and to the Company's knowledge, no lawsuit has been filed to date
by the former director. However, the Company cannot be assured that claims
against it related to these actions will not be forthcoming, and it cannot
predict the outcome of any such potential claims at this time.

On April 4, 2006, a former officer and director of the Company, made a written
demand to one of the insurance carriers for the Company, asserting claims
against the Company and several current and former officers and directors. The
former officer and director alleges claims for "conversion" of various wage and
employee benefits, as well as contract damages including alleged oral promises
to provide Company stock with an alleged value of over $3.7 million, and also
claims that various unspecified torts caused him special and general damages,
including severe emotional distress, of not less than $2 million. To the
Company's knowledge, no lawsuit has been filed to date in connection with this
threatened action, and the Company cannot predict the outcome of the claims at
this time.

On April 19, a former officer and director of the Company, demanded that the
Company pay the sums allegedly due, estimated to be at least $98,000 under a
previously entered into consulting agreement with the Company. To the Company's
knowledge, no lawsuit has been filed to date in connection with this threatened
action, and the Company cannot predict the outcome of the claims at this time.

Indemnification Agreements

On January 23, 2006 two independent member of the Company's board of directors
resigned, effective as of February 2, 2006. In connection with their
resignations, the Company entered into indemnification agreements with each of
the former directors, which requires the Company to indemnify the former
directors to the extent not covered by the Company's directors' and officers'
liability insurance.

On February 15, 2006 the Company's president and chief executive officer
resigned effective as of January 18, 2006 and also resigned as a director of the
Company effective February 15, 2006. In connection with the resignation, the
Company entered into an indemnification agreement with the former president,
chief executive officer and director which requires the Company to indemnify him
to the extent not covered by the Company's directors' and officers' liability
insurance.

On or about October 7, 2005, the Company was informed that it is a party to an
informal SEC investigation.


                                       13
<PAGE>

Lease Agreement

Effective February 28, 2006, the Company entered into an office lease agreement
for an office located at 1900 N.W. Corporate Boulevard, Suite 205W, Boca Raton,
Florida 33431. The premises consist of 1,394 rentable square feet of office
space. The term of the lease is for 38 months beginning March 1, 2006. Base rent
under the lease is approximately $1,859 per month.

Effective March 15, 2006, the Company entered into a new lease agreement for its
principal executive office located at 7825 Fay Avenue, Suite 254, La Jolla, CA
92037. The premises consist of 600 square feet of office space. The term of the
lease is for six months and automatically renews for another six months at the
current base rent plus a seven percent increase unless the Company notifies the
landlord on or before July 15, 2006 of its intention not to renew. Base rent
under the lease agreement is $2,400 per month. In addition, the Company pays
$645 per month pursuant to the lease agreement for phone lines and equipment
rental, voicemail, high speed internet and other administrative services.

Effective April 1, 2005, the Company cancelled its prior sublease agreement and
entered into a new lease for office facilities located at 9255 Towne Center
Drive, Suite 235, San Diego, California 92121. The premises consist of 896
square feet of office space. The term of the lease is for one year beginning
April 1, 2005 and ending March 31, 2006. Monthly base rent under the lease
agreement is $2,374.

Commitments to Issue Common Stock

In connection with employment agreements with officers of the Company, the
Company is obligated as of March 31, 2006 to issue a total of 1,784,234 shares
of common stock.

 On July 11, 2005, the Company entered into a consulting agreement for the
period of June 1, 2005 to December 31, 2005. In addition to a cash payment, the
Company agreed to issue 2,500 shares on the last day of each month over the
contract period. The Company is obligated to issue 15,000 shares as of December
31, 2005 of which the fair value of the shares to be issued is $48,325. As of
March 31, 2006 the shares had not been issued.

On October 17, 2005 the Board of Directors agreed to award the Company's Chief
Financial Officer 30,000 restricted common shares of the Company, valued at
$2.36 per share, for his service to the Company. The shares are restricted to
the earlier of one year or termination of employment. As of March 31, 2006 the
shares had not yet been issued.


                                       14
<PAGE>

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

FORWARD-LOOKING STATEMENTS

      The information in this annual report contains forward-looking statements.
All statements other than statements of historical fact made in this
registration statement are forward looking. In particular, the statements herein
regarding industry prospects and future results of operations or financial
position are forward-looking statements. Forward-looking statements reflect
management's current expectations and are inherently uncertain. The Company's
actual results may differ significantly from management's expectations.

      The following discussion and analysis should be read in conjunction with
the consolidated financial statements of IPEX, Inc. included herewith. This
discussion should not be construed to imply that the results discussed herein
will necessarily continue into the future, or that any conclusion reached herein
will necessarily be indicative of actual operating results in the future. Such
discussion represents only the best present assessment of the Company's
management.

OVERVIEW OF BUSINESS

VOIP TELECOM

      The Company operates a Voice over Internet Protocol ("VoIP") network that
directs long distance telecommunication traffic globally. Customers and
suppliers, consisting primarily of communications service providers, gain access
to the Company's international routes via the Internet from virtually anywhere
in the world. Using VoIP technology, voice, fax and other information can be
sent over the Internet far more economically than through a traditional
fixed-line telephone network. The Company's VoIP platforms route international
traffic based on cost, quality and availability. Its revenues are derived by
selling its telecommunications routes to customers worldwide. Through the
Company's VoIP platform, customers and suppliers have access to routes and
related information in nearly every country in the world.

RGB IMAGING

      The purchased RGB Assets and B Tech Assets are the foundation of unique
digital image enhancement and compression technologies that the current
management believes are patentable for the purposes of producing marketable
imaging applications. The company is working to develop applications that range
from still image enhancement to improved streaming compression ratios.

LIQUIDITY AND CAPITAL RESOURCES

      The Company has incurred losses during each the past two fiscal years. For
the years ended December 31, 2005 and 2004, the Company generated revenue of
$12,332,093 and $6,716,114, respectively, and incurred net losses of $6,843,098
and $398,620, respectively. For the three months period, ending March 31, 2006
and March 31, 2005 the Company incurred losses of 337,904 and 150,174,
respectively, and as of March 31, 2006, had an accumulated deficit of
$7,579,620. These factors raise substantial doubt about the Company's ability to
continue as a going concern.

      The Company received $800,000 from a private placement of 10% Secured
Convertible Notes to accredited investors on March 21, 2006. Based on the
Company's current cash and other current assets including accounts receivable
and available for sale securities, management believes the Company has
sufficient liquidity to fund operations for the next month. Beyond that,
additional funding is required for the Company to continue as a going concern.
Management believes the Company will require an additional $4,000,000 to develop
its VoIP operations and the RGB technology and to continue operations for the
twelve months subsequent to the date this report is filed. The Company intends
to seek outside debt and/or equity financing through private placements to
accredited investors and may request voluntary exercise of outstanding warrants.
The Company has no definitive plans or agreements in place to obtain such
additional financing and the Company cannot guarantee that any additional equity
or debt financing will be available in sufficient amounts or on acceptable terms
when needed. If such financing is not available in sufficient amounts or on
acceptable terms, the Company may have to discontinue operations. In addition,
any equity financing obtained may result in dilution to existing stockholders
and may involve securities that have rights, preferences, or privileges that are
senior to the Company's common stock, and any debt financing obtained must be
repaid regardless of whether or not the Company generates profits or cash flows
from its business activities and may worsen the Company's financial condition.

                                       15
<PAGE>

      The Company's cash and cash equivalents totaled $339,992 and $297,233 on
March 31, 2006 and March 31, 2005, respectively. Cash (including cash
equivalents) used in operating activities was $750,724 for the quarter ended
March 31, 2006 compared to cash used by operating activities of $515,198 in the
quarter ended March 31, 2005. The increase in cash used resulted primarily from
the increased net loss and other changes in operating assets and liabilities.

      Accounts receivable, net at March 31, 2006 was $1,281,240 as compared to
$1,151,555 on March 31, 2005. The increase in accounts receivable is
attributable to the increase in telecommunications traffic on longer payment
cycles as result of the Company extending higher levels of credit.

      Net cash used in investing activities was $6,517 and $32,325 for the
quarters ended March 31, 2006 and March 31, 2005 respectively. The cash used was
for the purchase of office furniture and equipment.

      Net cash provided by financing activities was $800,000 and $2,840,020 for
the quarters ended March 31, 2006 and March 31, 2005 respectively. The $800,000
is from the sale of short term notes at 10% interest and convertible to stock
one year from March 21, 2006 sold to four accredited investors. The $2,840,020
was the result of the private placement of $3,240,020 on March 18, 2005 less a
note receivable issued for $400,000.

      As of March 31, 2006 trade payables were $1,379,789 as compared to
$1,396,687 as of March 31, 2005. This is a decrease of $16,898 even though
vendor costs increased to $3,186,533 from $1,734,683 from the prior year quarter
ending March 31.

RESULTS OF OPERATIONS

      Sales for the quarter ended March 31, 2006 rose by 84% to $3,307,770 as
compared to sales of $1,801,886 from the prior year quarter ended March 31,
2005. Due to prior working capital constraints the Company could only maintain
selling to Tier 3 customers on a weekly net 5 basis. The additional working
capital provided by the private placement on March 18, 2005 allowed the Company
to extend credit to five Tier 2 carriers under net 15 terms and two Tier 1
carriers under net 30 terms thereby increasing the number of overall customers.
The 84% increase in sales is almost entirely attributable to the extension of
credit that was made possible by the increase in working capital. The addition
of a few new Tier 3 customers added marginally to the increase in sales.

      Cost of sales for the quarter ended March 31, 2006 rose by 84% to
$3,186,533 as compared to cost of sales of $1,734,683 from the prior year
quarter ended quarter ended March 31, 2005. The increase in cost of sales is
directly attributable to the increase in sales. The cost of sales as a
percentage of sales for the quarter ended March 31, 2006 remained relatively
constant at 96% compared to 96% for the quarter ended March 31, 2005.

      Gross profit for the quarter ended March 31, 2005 was $121,237 as compared
to $67,203 from the prior year quarter ended March 31, 2005. The gross profit
percentage has remained constant at approximately 4% of sales.

      Selling, general and administrative expenses for the quarter ended March
31, 2006 were $364,566 compared to $216,577 for the quarter ended March 31,
2005, representing an increase of $147,989. Selling, general and administrative
expenses increased during 2006 primarily due to increased salaries and wages
related to management personnel.

      Net loss for the year ended quarter ended March 31, 2006 was $337,904
compared to the net loss of $150,174 for the year ended March 31, 2006. The net
loss for the year ended is primarily attributable to the increased expenses
discussed above.


                                       16
<PAGE>

Convertible Notes

      On March 21, 2006 the Company entered into a Securities Purchase Agreement
for the sale of $800,000 principal amount of 10% Secured Convertible Notes to
four accredited investors. The sale of the 10% Secured Convertible Notes closed
on March 21, 2006. The 10% Secured Convertible Notes bear interest at the rate
of 10% per annum and mature one year from the date of issuance. On the maturity
date the outstanding principal amount of the 10% Secured Convertible Notes will
automatically convert into shares of common stock of the Company's wholly owned
subsidiary RGB Channel, Inc., a Nevada corporation. Before the maturity date the
holders may convert the outstanding principal amount of the Notes into either
shares of the Company's common stock or shares of common stock of the Company's
subsidiary RGB Channel, Inc. If converted into shares of the Company's common
stock the conversion price of the Notes is $1.00 per share (the "IPEX Conversion
Price"). If converted into shares of common stock of RGB Channel, Inc. the
conversion price will equal the lesser of (the "RGB Conversion Price"): (a)
$0.50, or (b) the price at which, at any time while the Notes are outstanding,
RGB Channel, Inc. sells shares of its common stock or any other securities
convertible into or exchangeable for RGB Channel, Inc. common stock.

      The conversion price of the 10% Secured Convertible Notes is subject to
adjustment in the event the Company issues shares of its common stock or
securities convertible into or exchangeable for shares of its common stock at a
price less than the IPEX Conversion Price, if the Company pays a stock dividend,
subdivides or combines outstanding shares of common stock into a greater or
lesser number of shares, or takes any other actions that would otherwise result
in dilution of the holders' position. In addition, if at any time when the 10%
Secured Convertible Notes are outstanding there is a period of 60 trading days
during which the volume weighted average price of the Company's common stock is
less than $1.00 per share, then: (a) there will be a one time adjustment to the
IPEX Conversion Price to equal the lowest volume weighted average price of the
Company's common stock during such 60-trading day period; and (b) there will be
a one time adjustment to the RGB Conversion Price to equal 50% of the lowest
volume weighted average price of the Company's common stock during such
60-trading day trading period.

      In connection with the sale of the 10% Secured Convertible Notes, the
Company and RGB Channel entered into a Security Agreement granting the
purchasers of the Notes a security interest in the RGB Assets and all
intellectual property related to the RGB Assets to secure the Company's and RGB
Channel's obligations pursuant to the terms of the Notes.

Resignation of Directors and Officers

      On January 23, 2006, Darrell Grimsley, Jr. submitted a letter resigning as
a director of the Company. The resignation was contingent upon the Company
entering into an indemnification agreement with Mr. Grimsley and payment of
compensation for past service as a Board member, 25% of which was paid in cash
equal to $10,165 and the balance was paid in the form of 12,922 shares of the
Company's common stock. Mr. Grimsley's resignation was effective February 2,
2006.

      On January 27, 2006, Alice Campbell submitted a letter resigning as a
director of the Company. Ms. Campbell's resignation was contingent upon the
Company entering into an indemnification agreement with her and payment of
compensation for past service as a Board member, 25% of which was paid in cash
equal to $16,453 and the balance was paid in the form of 20,950 shares and the
resignation was effective February 2, 2006.

      On February 15, 2006, Gerald Beckwith resigned as the Company's President
and Chief Executive Officer effective as of January 18, 2006. Mr. Beckwith also
resigned as a director of the Company effective February 15, 2006. Mr. Beckwith
was Chairman of the Company's Board of Directors at the time he resigned as a
director. On February 15, 2006, the Company entered into a severance agreement
with Gerald Beckwith, pursuant to which Mr. Beckwith acknowledged that he
resigned effective as of January 18, 2006 as the Company's President and Chief
Executive Officer. Mr. Beckwith and the Company agreed to a mutual general
release of each other from any and all claims relating to Mr. Beckwith's
employment or Board membership except with respect to rights pursuant to the
severance agreement. Pursuant to the terms of the severance agreement the
Company agreed to: (a) issue Mr. Beckwith 177,608 restricted shares of common
stock and options to purchase 291,666 shares of common stock at a strike price
of $2.71 per share and an expiration date of February 15, 2016; (b) issue Mr.
Beckwith 16,369 restricted shares of common stock and options to purchase 65,493
shares of common stock at a strike price of $2.36 per share with an expiration
date of February 15, 2016 as compensation for his membership on the Company's
Board of Directors; (c) issue Mr. Beckwith 2,030 restricted shares of common
stock as compensation for accrued vacation time; (d) provide Mr. Beckwith six
months of health insurance; and (e) reimburse Mr. Beckwith for all outstanding
business expenses accrued on behalf of the Company. In connection with Mr.
Beckwith's resignation, the Company entered into an indemnification agreement
with Mr. Beckwith on February 15, 2006. The indemnification agreement requires
the Company to indemnify Mr. Beckwith to the extent not covered by the Company's
directors' and officers' liability insurance. The options and restricted shares
of common stock have not yet been delivered to Mr. Beckwith.


                                       17
<PAGE>

Consulting Agreement

      On February 2, 2006 the Company entered into a consulting agreement with
Wolfgang Grabher, a significant shareholder who is also a former officer and
director of the Company, to provide business consulting services to the Company.
The consulting agreement is retroactive to June 22, 2005 and expires on June 22,
2006. The Company agreed to pay Mr. Grabher $150,000 per year pursuant to the
agreement and to reimburse Mr. Grabher for any reasonable out-of-pocket
expenses, provided that Mr. Grabher must obtain the prior written approval from
the Company for any such expenses that individually or in the aggregate, exceed
$150. Either the Company or Mr. Grabher may terminate the consulting agreement
at any time upon delivery of 30 days prior written notice of termination. In
addition, the Company may terminate the consulting agreement at any time for
"cause," defined as the willful misconduct of Mr. Grabher or his agents, Mr.
Grabher's failure to perform the services required by the agreement, the causing
of intentional damage to the tangible or intangible property of the Company by
Mr. Grabher or his agents, the conviction of Mr. Grabher of any felony or other
crime involving moral turpitude, the performance of any dishonest or fraudulent
act by Mr. Grabher or any of his agents which is determined in good faith by the
Company's Board of Directors to be materially detrimental to the best interests
of the Company or its stockholders or affiliates, or a breach of the consulting
agreement by Mr. Grabher. A payment of $30,000 was made to Mr. Grahber on the
date the consulting agreement was entered into. The agreement was terminated by
the Company on March 31, 2006. No payment other than the initial $30,000 has
been made to Mr. Grabher

Leases

      Effective February 28, 2006, the Company entered into an office lease
agreement for an office located at 1900 N.W. Corporate Boulevard, Suite 205W,
Boca Raton, Florida 33431. The premises consist of 1,394 rentable square feet of
office space. The term of the lease is for 38 months beginning March 1, 2006.
Base rent under the lease is approximately $1,859 per month.

      Effective March 15, 2006, the Company entered into a new lease agreement
for its principal executive office located at 7825 Fay Avenue, Suite 254, La
Jolla, CA 92037. The premises consist of 600 square feet of office space. The
term of the lease is for six months and automatically renews for another six
months at the current base rent plus a seven percent increase unless the Company
notifies the landlord on or before July 15, 2006 of its intention not to renew.
Base rent under the lease agreement is $2,400 per month. In addition, the
Company pays $645 per month pursuant to the lease agreement for phone lines and
equipment rental, voicemail, high speed internet and other administrative
services.

Commitments and Contingencies

      On February 7, 2006, a former board member of the Company, sent a letter
threatening legal action against the Company and several former officers and
directors claiming breach of an executed settlement agreement and various torts.
In addition, on the same date the former director sent a demand letter to
parties who provided investment banking services and legal services to the
Company demanding payment of $5 million and disgorgement of remuneration and
fees. These parties made a demand for indemnity to the Company which the Company
granted with respect to the claim by the former director. To the Company's
knowledge no lawsuit has been filed to date with respect to either of the above
matters.

      On April 4, 2006, a former Officer of the Company, made a written demand
to one of the insurance carriers for the Company, asserting claims against the
Company and several current and former officers and directors. The former
Officer alleges claims for "conversion" of various wage and employee benefits on
or about July 6, 2005, as well as contract damages including alleged oral
promises to provide Company stock with an alleged value of over $3.7 million,
and also claims that various unspecified torts caused him special and general
damages, including severe emotional distress, of not less than $2 million. To
the Company's knowledge, no lawsuit has yet been filed.


                                       18
<PAGE>

      On April 19, 2006, Mr. Grabher sent a letter demanding that the Company
pay sums allegedly due to him under the terminated consulting agreement, which
Mr. Grabher estimates as at least $98,000. To the Company's knowledge no lawsuit
has been filed to date.

ITEM 3. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures

      As of the end of the period covered by this report, the Company conducted
an evaluation, under the supervision and with the participation of its chief
executive officer and chief financial officer of the Company's disclosure
controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the
Exchange Act). Based upon this evaluation, and because of the material
weaknesses discussed below, the Company's chief executive officer and chief
financial officer concluded that as of the end of such period, the Company's
disclosure controls and procedures were not effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is: (1) accumulated and communicated to the
Company's management, including its chief executive officer and chief financial
officer, as appropriate to allow timely decisions regarding required disclosure;
and (2) recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms.

(b) Management's Assessment on Internal Control Over Financial Reporting

      The Company's management is responsible for establishing and maintaining
adequate internal control over financial reporting as defined in Rules 13a-15(f)
or 15d-15(f) promulgated under the Securities Exchange Act of 1934. Those rules
define internal control over financial reporting generally as a process designed
by, or under the supervision of, the issuer's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
issuer's board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.

      Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projection of any
evaluation of effectiveness to future periods is subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

      A material weakness is a control deficiency (as defined in PCAOB Auditing
Standard No. 2), or combination of control deficiencies, that results in there
being more than a remote likelihood that a material misstatement of the annual
or interim financial statements will not be prevented or detected.

      Management assessed the effectiveness of the Company's internal control
over financial reporting as of March 31, 2006. The assessment identified the
following material weaknesses in the Company's internal control over financial
reporting:

      o     An ineffective control environment resulting from the lack of
            effective oversight and active participation by the Company's Board
            of Directors in the establishment of required internal controls, and
            from the numerous Board member and executive management changes that
            occurred during the year.

      o     Insufficient written policies and procedures for accounting and
            financial reporting with respect to the requirements and application
            of US GAAP and SEC disclosure requirements.

      o     Lack of sufficient knowledge and experience among the Company's
            internal accounting personnel regarding application of US GAAP and
            SEC requirements.

      o     Insufficient personnel resources and technical accounting expertise
            within the accounting function to resolve non-routine or complex
            accounting matters.

      o     Failure to maintain effective controls over the Company's year end
            financial closing process and the Company's ability to produce
            accurate and timely financial statements.


                                       19
<PAGE>

      o     Failure to perform timely reviews and reconciliations of general
            ledger account balances.

      o     Ineffective controls related to the extension of credit to
            customers.

      o     Ineffective controls related to the safeguarding of Company assets
            and restriction of access to confidential Company data.

(c) Changes in Internal Control Over Financial Reporting

      There was no change to the Company's internal controls or in other factors
that could affect these controls during the Company's last fiscal quarter that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting. However, during the last
fiscal quarter, and during first quarter of the Company's subsequent fiscal
year, significant changes in the Company's executive management were effected
including the appointment of a new Chief Executive Officer and new President of
Telecommunications. The new executive management team has committed to
addressing the identified weaknesses and establishing and implementing
appropriate internal controls.

                                     PART II

ITEM 1. LEGAL PROCEEDINGS.

      On or about October 7, 2005, the Company was informed that it is a party
to an informal SEC investigation.

      The Company's subsidiary AICI, Inc., a Nevada corporation, and its
predecessor Administration for International Credit & Investment, Inc., an
Oregon corporation, is named in an action filed on or about February 21, 2006 in
the Superior Court of the State of California for the County of San Diego (Case
No. GIC 861542). The plaintiff in the action is Triagon Holding AG, against
defendants Interphotonic, Inc., Wolfgang Grabher, Administration for
International Credit & Investment, Inc., AICI, Inc., Eureca Marketing GmbH and
Does 1-50. The complaint alleges fraud, conversion, unjust enrichment and breach
of contract based on allegations, among others, that he was fraudulently induced
into depositing $2,454,157.98 into an escrow account as an investment in
Interphotonic, Inc. and such money was closed on with out the plaintiff's
authorization. The plaintiff is seeking damages in the amount of $2,454,157.98
plus interest at the rate of 10% per annum and costs, as well as a judicial
accounting, injunctive and declaratory relief.

      On April 20, 2006 the Company filed a lawsuit against Inzon Corporation, a
Nevada corporation, and Does 1-50 in the Superior Court of the State of
California for the County of San Diego (Case No. GIC 864677). The Company is
seeking to recover $525,313.96 plus interest owed to it by the defendants for
telecommunications services provided by the Company during 2006 pursuant to a
carrier services agreement.

      On May 11, 2006, Gerald Beckwith, a former Chief Executive Officer and
former Chairman of the Board of Directors of the Company, filed a lawsuit
against the Company in the Superior Court of the State of California for the
County of San Diego (Case No. GIC 865854). The complaint alleges that the
Company breached its severance agreement with Mr. Beckwith by, among other
things, failing to issue certain securities to the plaintiff and that the
Company breached Mr. Beckwith's employment agreement by breaching the severance
agreement. Mr. Beckwith is seeking to rescind his severance agreement with the
Company and is seeking a judicial determination that his employment agreement is
valid and enforceable, that the Company breached the employment agreement, that
the severance agreement is rescinded, alternatively that the Company has
breached the severance agreement, and that the Company's indemnity obligations
under Mr. Beckwith's indemnification agreement with the Company have arisen. Mr.
Beckwith is also seeking an unspecified amount of damages.


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<PAGE>

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

      On March 21, 2006 the Company sold $800,000 principal amount of 10%
Secured Convertible Notes (the "Notes") to four accredited investors. The Notes
bear interest at the rate of 10% per annum and mature one year from the date of
issuance. On the maturity date the outstanding principal amount of the Notes
will automatically convert into shares of common stock of the Company's wholly
owned subsidiary RGB Channel, Inc., a Nevada corporation ("RGB Channel"). Before
the maturity date the holders may convert the outstanding principal amount of
the Notes into either shares of the Company's common stock or shares of RGB
Channel's common stock. If converted into shares of the Company's common stock
the conversion price of the Notes is $1.00 per share (the "IPEX Conversion
Price"). If converted into shares of common stock of RGB Channel the conversion
price will equal the lesser of (the "RGB Conversion Price"): (a) $0.50, or (b)
the price at which, at any time while the Notes are outstanding, RGB Channel
sells shares of its common stock or any other securities convertible into or
exchangeable for RGB Channel common stock. The conversion price of the Notes is
subject to adjustment in certain circumstance described in the Notes. The sale
of the Notes was exempt from registration requirements pursuant to Section 4(2)
of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506
of Regulation D promulgated thereunder. No advertising or general solicitation
was employed in offering the securities, the sales were made to a limited number
of persons, all of whom represented to the Company that they are accredited
investors, and transfer of the securities is restricted in accordance with the
requirements of the Securities Act.

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.

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

4.1               Form of Class A Warrant (Incorporated by reference to the
                  Company's Form 8-K filed with the Securities and Exchange
                  Commission on March 22, 2005)

4.2               Form of Class B Warrant (Incorporated by reference to the
                  Company's Form 8-K filed with the Securities and Exchange
                  Commission on March 22, 2005)

4.3               Form of 10% Secured Convertible Note issued March 21, 2006
                  (Incorporated by reference to the Company's Form 8-K filed
                  with the Securities and Exchange Commission on March 21, 2006)

10.1              Indemnification Agreement with Darrell Grimsley, Jr.
                  (Incorporated by reference to the Company's Form 8-K filed
                  with the Securities and Exchange Commission on February 6,
                  2006)

10.2              Indemnification Agreement with Alice Campbell (Incorporated by
                  reference to the Company's Form 8-K filed with the Securities
                  and Exchange Commission on February 6, 2006)

10.3              Severance Agreement and Covenants dated February 15, 2006
                  between IPEX, Inc. and Gerald Beckwith (Incorporated by
                  reference to the Company's Form 8-K filed with the Securities
                  and Exchange Commission on February 17, 2006)

10.4              Indemnification Agreement dated February 15, 2006 between
                  IPEX, Inc. and Gerald Beckwith (Incorporated by reference to
                  the Company's Form 8-K filed with the Securities and Exchange
                  Commission on February 17, 2006)

10.5              Consulting Agreement entered into as of February 2, 2006 by
                  and between Wolfgang Grabher and IPEX, Inc. (Incorporated by
                  reference to the Company's annual report on Form 10-KSB for
                  the fiscal year ended December 31, 2005, filed with the
                  Securities and Exchange Commission on May 11, 2006)


                                       21
<PAGE>

10.6              Lease dated March 8, 2006 by and between LJMG, Inc. d.b.a.
                  First Choice Executive Suites and IPEX, Inc. (Incorporated by
                  reference to the Company's annual report on Form 10-KSB for
                  the fiscal year ended December 31, 2005, filed with the
                  Securities and Exchange Commission on May 11, 2006)

10.7              Office Lease Agreement dated as of February 28, 2006 by and
                  between Gehr Development Florida, LLC and IPEX, Inc.
                  (Incorporated by reference to the Company's annual report on
                  Form 10-KSB for the fiscal year ended December 31, 2005, filed
                  with the Securities and Exchange Commission on May 11, 2006)

10.8              Securities Purchase Agreement dated March 21, 2006 by and
                  among IPEX, Inc., RGB Channel, Inc. and the purchasers set
                  forth on the signature page thereto (Incorporated by reference
                  to the Company's Form 8-K filed with the Securities and
                  Exchange Commission on March 21, 2006)

10.9              Security Agreement dated March 21, 2006 by and among IPEX,
                  Inc., RGB Channel, Inc. and the secured parties signatory
                  thereto (Incorporated by reference to the Company's Form 8-K
                  filed with the Securities and Exchange Commission on March 21,
                  2006)

31.1*             Certification by Chief Executive Officer, required by Rule
                  13a-14(a) or Rule 15d-14(a) of the Exchange Act

31.2*             Certification by Chief Financial Officer, required by Rule
                  13a-14(a) or Rule 15d-14(a) of the Exchange Act

32.1*             Certification by Chief Executive Officer, required by Rule
                  13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section
                  1350 of Chapter 63 of Title 18 of the United States Code

32.2*             Certification by Chief Financial Officer, required by Rule
                  13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section
                  1350 of Chapter 63 of Title 18 of the United States Code

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


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<PAGE>

                                   SIGNATURES

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

                                        IPEX, INC.


Date: June 9, 2006                      By:   /s/ Sothi Thillairajah
                                             -----------------------------------
                                             Sothi Thillairajah
                                             Chief Executive Officer


Date: June 9, 2006                      By:   /s/ Russell Ingledew
                                             -----------------------------------
                                             Russell Ingledew
                                             Chief Financial Officer


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